Financial Position - The company has incurred an accumulated deficit of $117.3 million as of December 31, 2021, and expects to experience negative cash flow for the foreseeable future [40]. - The company had approximately $17.4 million in cash and cash equivalents and working capital of $15.4 million as of December 31, 2021, which is expected to fund operations for at least the next 12 months [41]. - The company may require substantial additional financing to achieve its goals, and failure to obtain necessary capital could delay or terminate product development efforts [41]. - The company may seek additional capital through private and public equity offerings, debt financings, and strategic partnerships, which could lead to dilution of existing shareholders [53]. - The company’s balance sheet is expected to primarily consist of cash and cash equivalents, impacting its PFIC status based on asset composition [197]. Product Development and Pipeline - The company does not currently have any product candidates that generate revenue and does not expect to become profitable in the near future [38]. - The company’s business strategy is evolving from being a one-product company focused on M-001 to building a diversified pipeline of assets [45]. - The company has a pipeline of products aimed at preventing and treating infectious diseases, with various routes of drug delivery and at different stages of clinical development [50]. - The company has entered into a licensing and collaboration arrangement for its Covid-19 NanoAbs program, although it currently has no product candidates in clinical trials or on the market [54]. - The company’s NanoAbs program is at an earlier stage of clinical development compared to M-001, and its success is uncertain [45]. Regulatory and Compliance Challenges - Regulatory approval processes for current and future product candidates are extensive and can take many years, with no guarantee of success [63]. - Ongoing regulatory requirements will apply even after obtaining approval for product candidates, and failure to comply could result in loss of approvals [66]. - The company faces significant regulatory challenges that could hinder the approval and commercialization of current and future product candidates, potentially impacting financial performance [104]. - The FDA may not accept data from clinical trials conducted outside the U.S., potentially requiring additional costly trials [77]. - The company is subject to extensive government regulations that increase the cost and risk associated with research, development, and sales of pharmaceutical products [105]. Market and Competitive Landscape - The company faces significant competition in the biopharmaceutical market, which may impact its marketing and sales efforts [39]. - Current and future product candidates may encounter competition sooner than expected, particularly from biosimilar products, impacting market exclusivity [68]. - The twelve-year exclusivity period for biological products may not be granted or could be shortened, leading to earlier generic competition [69]. - The company operates in a highly competitive environment, facing challenges from larger pharmaceutical firms with greater resources and experience [117]. Risks and Liabilities - The company may face product liability lawsuits, which could result in substantial financial liabilities and affect commercialization efforts [123]. - Serious side effects reported during clinical trials could lead to regulatory refusal of product approvals or revocation of existing authorizations [86]. - The company is exposed to risks associated with insider trading allegations, which could negatively impact its reputation and stock price [127]. - Employee misconduct or fraud could lead to significant regulatory sanctions and reputational harm, impacting business operations [126]. - The company may struggle with market acceptance and sales of product candidates if coverage and reimbursement policies are not favorable, which could affect profitability [95]. Intellectual Property Concerns - The company faces significant risks related to intellectual property, including potential challenges to patent rights that could limit competitive advantage [157]. - The ability to enforce patent rights may be hampered by financial resources, leading to potential loss of exclusivity and market position [165]. - Litigation related to intellectual property claims could result in substantial costs and divert management's attention from core business activities [169]. - The company may need to initiate costly litigation to protect its intellectual property rights, which could strain resources and impact financial stability [164]. Operational and Strategic Considerations - The company must establish and maintain strategic collaborations to successfully commercialize its pipeline candidates, as its long-term viability depends on these partnerships [59]. - The company relies on third parties for clinical trials and product development, which may lead to delays if these parties do not perform satisfactorily [145]. - The company must attract and retain qualified personnel to effectively operate its business, which may be challenging due to limited financial resources [113]. - The company may face difficulties in managing growth, which could adversely affect its business and financial condition [128]. Economic and Market Conditions - Future economic conditions, influenced by the COVID-19 pandemic, may disrupt global financial markets and affect the company's liquidity and financial position [91]. - The ongoing COVID-19 pandemic has created uncertainty regarding the company's ability to identify and develop product candidates, which may adversely affect future revenues [90]. - The market price for the ADSs has been and is likely to remain highly volatile, influenced by factors such as clinical trial authorizations and regulatory approvals [209]. - The trading prices for securities of other biopharmaceutical companies have been highly volatile, particularly due to the COVID-19 pandemic [212]. Corporate Governance and Shareholder Issues - Angels Investments in High Tech Ltd. holds approximately 22.7% of the voting power of the outstanding ADSs, allowing it to significantly influence corporate actions [195]. - The company has not paid any cash dividends on the ADSs since inception and does not anticipate paying any in the foreseeable future [203]. - Holders of ADSs do not have the same rights as ordinary shareholders and may face limitations in exercising voting rights [206]. - The company’s articles of association stagger the election of directors, which may hinder a potential acquirer from easily changing the board [189].
Scinai Immunotherapeutics .(SCNI) - 2021 Q4 - Annual Report