Ovid Therapeutics (OVID) - 2022 Q4 - Annual Report

Financial Reporting and Internal Controls - The company is required to include an attestation from its independent registered public accounting firm on the effectiveness of internal control over financial reporting starting from December 31, 2022 [316]. - The company’s internal control over financial reporting may have material weaknesses, which could impact its ability to accurately report financial conditions and results [316]. Capital Structure and Stock Ownership - As of December 31, 2022, the company had outstanding options to purchase an aggregate of 12,961,238 shares of common stock at a weighted average exercise price of $4.13 per share [326]. - Approximately 45.2$250.0 million of common stock, preferred stock, debt securities, and/or warrants [324]. - The company may need to raise additional capital through equity or debt financings, which could result in dilution for existing stockholders [323]. Dividends and Investor Returns - The company does not anticipate paying any cash dividends on its capital stock in the foreseeable future, with capital appreciation being the sole source of gain for investors [331]. Market Risks and Volatility - The company is subject to risks related to market volatility, which may adversely affect its stock price and investor confidence [317]. - The company may face significant costs and management distraction due to potential securities litigation resulting from stock price volatility [336]. - Sales of a substantial number of shares in the public market could significantly reduce the market price of the company's common stock [341]. - Holders of the company's securities have rights to require registration statements for their shares, which could lead to increased market volatility [341]. Liquidity and Investment Strategy - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $129.0 million [397]. - The company aims to ensure liquidity and preserve capital through its investment activities [397]. - The company intends to maintain its portfolio in institutional market funds, including U.S. Treasury and U.S. Treasury-backed repurchase agreements, as well as high-quality short-term corporate bonds [397]. - The company's primary exposure to market risk is interest rate sensitivity, which is influenced by changes in U.S. interest rates [397]. - An immediate 100 basis point change in interest rates would not materially affect the fair market value of the company's cash equivalents and marketable securities [397]. Governance and Management Control - The company has provisions that may frustrate stockholder attempts to replace or remove current management, including prohibiting cumulative voting and stockholder action by written consent [340]. - Under Delaware law, the company cannot engage in a business combination with any holder of 15% or more of its capital stock unless certain conditions are met [340]. - The company is governed by provisions that could limit stockholders' opportunities to receive a premium for their shares [340].