Financial Condition and Funding - As of April 30, 2024, the company had 376,000incashandcashequivalents,withexpectationsofneedingsubstantialadditionalfundingforongoingclinicaltrials[144].−Thecompanyhasagoingconcernopinionfromitsindependentregisteredpublicaccountingfirm,indicatingsubstantialdoubtaboutitsabilitytocontinueoperationswithoutadditionalcapital[147].−Thecompanydoesnotexpecttogeneraterevenueforseveralyears,ifatall,andmaynotachieveprofitabilityformanyyearsaftergeneratingmaterialrevenue[149].−Thecompanyhasidentifiedmaterialweaknessesinitsinternalcontroloverfinancialreporting,whichcouldaffecttheaccuracyandtimelinessoffinancialreporting[273].−Thecompanydoesnotintendtopaydividendsintheforeseeablefuture,relyinginsteadonstockappreciationforreturnsoninvestment[272].ClinicalTrialsandProductDevelopment−ThecompanyhasinitiatedclinicaltrialsforAL001andALZN002buthasnotyetcompletedpivotaltrialsorobtainedmarketingapprovals,indicatingalackofnear−termrevenue[148].−ClinicaltrialsforAL001andALZN002areexpectedtobeexpensive,time−consuming,andmayfacedelaysorterminationduetovariousfactors[187].−ThecompanyplanstosubmitAL001andALZN002forregulatoryapprovalinthefuture,butneitherhasbeensubmittedyet[162].−Successfuldevelopment,FDAapproval,andcommercializationofAL001orALZN002arecriticalforthecompany′snear−termprospectsandrevenuegeneration[162].−TheanticipateddevelopmentofaRiskEvaluationandMitigationStrategy(REMS)forAL001orALZN002couldcausedelaysintheapprovalprocessandimpactmarketpotential[205].RegulatoryandComplianceRisks−Thecompanyisrequiredtopaya410 million for AL001 upon FDA approval [152]. - The reimbursement approval process is time-consuming and may significantly affect the commercial viability of AL001 and ALZN002 [175]. - Regulatory approval processes vary by country and can involve additional studies, which may delay commercialization [183]. - Failure to obtain necessary regulatory approvals could materially and adversely affect the company's business and financial condition [181]. - The company may face significant penalties if it fails to comply with ongoing FDA and regulatory body obligations after receiving approval for its products [195]. Market and Competitive Landscape - Market acceptance of AL001 and ALZN002 is uncertain and depends on factors such as safety, efficacy, physician willingness, and reimbursement from third-party payers [166]. - The company faces substantial competition from major pharmaceutical and biotechnology companies, which may have greater resources and expertise in research, development, and marketing [215]. - If competitors develop safer or more effective products, the company's commercial opportunity could be significantly reduced or eliminated [216]. - The high rate of failure for drug candidates in clinical trials could materially and adversely affect the company's business and financial condition [185]. Intellectual Property and Legal Risks - The company may need to litigate to enforce its intellectual property rights, which could be costly and distract management from core business operations [222]. - The company relies on a combination of patents and trade secret protection to safeguard its intellectual property, but there is a risk of inadequate protection [230]. - The company may face third-party claims alleging patent infringement, which could result in substantial expenses and hinder the development of its products [228]. - The company is at risk of losing its competitive edge if it cannot adequately protect its proprietary information and trade secrets [224]. Stock and Market Performance - The company was notified by Nasdaq that the minimum Market Value of Listed Securities (MVLS) for its common stock was below the 35millionrequirementforcontinuedlisting[251].−ThecompanyhasuntilMarch25,2024,toregaincompliancewiththeMVLSRule[251].−OnMarch26,2024,Nasdaqdeterminedthatthecompanyhadnotregainedcompliance,leadingtoascheduleddelistingonApril4,2024[252].−Themarketpriceofthecompany′scommonstockhasfluctuatedbetween6.76 and $115.95 per share during the year ended April 30, 2024 [257]. - Delisting from Nasdaq could impair the liquidity of the company's common stock and harm its ability to raise capital [255]. Operational and Management Challenges - The company has limited operating history since its incorporation in February 2016, making future operating results uncertain [150]. - The company relies heavily on senior management, particularly key individuals such as the CEO and CFO, and their loss could delay the development and commercialization of its product candidates AL001 and ALZN002 [214]. - The company anticipates difficulties in hiring qualified personnel due to intense competition in the biopharmaceutical field [280]. - Increased costs associated with operating as a public company will require management to devote substantial time to compliance initiatives and corporate governance practices [298]. Internal Control and Compliance Measures - The company is implementing measures to improve internal control over financial reporting, including formalizing documentation and strengthening supervisory reviews [275]. - There is a risk that the measures taken may not be sufficient to remediate identified material weaknesses, potentially leading to misstatements in financial statements [276]. - The company is subject to the Sarbanes-Oxley Act, requiring effective internal controls over financial reporting, which may incur significant costs and management efforts [291].
