UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Commission file number: 001-39717

LIXTE BIOTECHNOLOGY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number: (631) 830-7092

Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.0001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If the securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2023 was approximately $1,125,215.

The Company had 2,249,290 shares of common stock, $0.0001 par value, issued and outstanding as of March 1, 2024.

Documents incorporated by reference: None.

TABLE OF CONTENTS

Introductory Comment

Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,” “Lixte,” the “Company” and the “Registrant” refer to Lixte Biotechnology Holdings, Inc., a Delaware corporation, and Lixte Biotechnology, Inc., a Delaware corporation, our wholly-owned subsidiary.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Report”) contains certain forward-looking statements. For example, statements regarding our financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions about future product demand, supply, manufacturing, costs, marketing and pricing factors are all forward-looking statements. These statements are generally accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “potential(ly),” “continue,” “forecast,” “predict,” “plan,” “may,” “will,” “could,” “would,” “should,” “expect” or the negative of such terms or other comparable terminology. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, based on information available to us on the date hereof, but we cannot assure you that these assumptions and expectations will prove to have been correct or that we will take any action that we may presently be planning. However, these forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual results or experience may differ materially from those expected or anticipated in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, regulatory policies, competition from other similar businesses, and market and general policies, competition from other similar businesses, and market and general economic factors. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in this Report.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we project. Any forward-looking statement you read in this Report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy, and liquidity. All subsequent forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified in this Report, which would cause actual results to differ before making an investment decision. We are under no duty to update any of these forward-looking statements after the date of this Report or to conform these statements to actual results.

PART I

ITEM 1. BUSINESS

Company Overview

The Company is a clinical-stage biopharmaceutical company dedicated to improving patients’ lives by developing a drug class called Protein Phosphatase 2A inhibitors. The Company’s corporate office is located in Pasadena, California.

The Company’s product pipeline is primarily focused on inhibitors of protein phosphatase 2A, used in combination with cytotoxic agents and/or x-ray, immune checkpoint blockers and other cancer therapies. The Company believes that inhibitors of protein phosphatases have significant therapeutic potential for a broad range of cancers. The Company is focusing on the clinical development of a specific protein phosphatase inhibitor, referred to as LB-100, which has been shown to have clinical anti-cancer activity at doses that produce little or no toxicity.

The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. The Company has not yet commenced any revenue-generating operations, does not have positive cash flows from operations, relies on stock-based compensation for a substantial portion of employee and consultant compensation, and is dependent on periodic infusions of equity capital to fund its operating requirements.

Description of Business

Most cancer patients are treated with either chemotherapy or immunotherapy or both. These therapies often have limited benefit and there is a high unmet medical need to enhance their effects. In many preclinical models we have shown that LB-100 enhances the effect of both chemotherapy and Immunotherapy

LB-100, a small molecule potent inhibitor of PP2A was designed and developed by the Company. Numerous preclinical studies have documented that LB-100 potentiates most if not all anti-cancer drugs that damage DNA. LB-100 is not associated with any increase in cytotoxicity when given with cytotoxic drugs. This synergy involves transient interruption of several DNA damage repair pathways by LB-100 and an increase in cell division rate. LB-100 has FDA Investigational New Drug status in the US and Investigational Medicinal Product Dossier approval in the European Union.

In its initial Phase 1 clinical trial, LB-100 given alone daily for 3 days was non-toxic, except for a transient increase in serum creatinine believed to be caused by inhibition of PP2A in the renal tubules. In the Phase 1 clinical trial, the Maximally Tolerated Dose (“MTD”) was 2.33mg/m2 daily for 3 days every 3 weeks. Of the 25 patients with heavily-treated advanced solid tumors with measurable disease, 3 patients had stable disease for 2 cycles, 3 patients had stable disease for 4 cycles, and 3 patients had stable disease for 6 cycles. One patient with pancreatic cancer had a partial response after 12 cycles lasting 534 days.

Based on the DNA damage enhancing effect of PP2A inhibition with LB-100, the Company initiated a study in Advanced Soft Tissue Sarcoma (“ASTS”) with the Spanish Sarcoma Group (Grupo Español de Investigación en Sarcomas or “GEIS”) for a collaborative clinical trial in Madrid, Spain.

Low doses of LB-100 have now been shown to enhance immune checkpoint inhibition (“ICI”) by several different mechanisms affecting the tumor compartment and immune T-cell compartment. LB-100 increases CD8+T-cell infiltration and CD8-Treg ratio, CD8+T-cell proliferation, and cytokine production induces microsatellite instability, neoantigen production and immune responsiveness, converting immunologically “cold” to “hot” cancers.

Ovarian clear cell carcinoma patients with inactivating mutations in PPP2R1A, a gene coding for a scaffold component of PP2A, and treated with immune checkpoint inhibitors, were recently found to have markedly longer survival than patients without the mutation in their cancers. Retrospective reviews of patients with a variety of cancers treated with ICI or chemotherapy show much longer survival of ICI-treated patients with a PPP2R1A mutation in their tumors.

Based on the observations in ovarian clear cell carcinoma, the Company has initiated a clinical trial in this disease combining LB-100 with a monoclonal antibody blocking PD-1, a protein found on T-cells (NCT06065462). Further, in an ongoing Phase 1b clinical trial in previously untreated patients with small cell lung cancer, LB-100 is being escalated with a combination of full dose carboplatin, etoposide, and atezolizumab (NCT04560972). This clinical trial is being sponsored and conducted at the City of Hope National Medical Center in Duarte, California.

Given these preclinical and clinical observations, it is likely that LB-100 may be a general way to enhance immunotherapy responses.

The research on the LB-100 series was initiated in 2006 under a Cooperative Research and Development Agreement (“CRADA”) with the National Institute of Neurologic Disorders and Stroke or NINDS of the National Institutes of Health or NIH dated March 22, 2006 that was subsequently extended through a series of amendments until it terminated on April 1, 2013.

The Company has also designed and developed the LB-200 series, which consists of histone deacetylase inhibitors (HDACi). LB-200 has not advanced to the clinical stage and would require additional capital to fund further development. Accordingly, because of our focus on the clinical development of LB-100 and analogs for cancer therapy as described below in more detail, we have decided not to actively pursue the preclinical development of our LB-200 series of compounds at this time.

Clinical Trial Agreements

Spanish Sarcoma Group Collaboration Agreement

Effective July 31, 2019, the Company entered into a Collaboration Agreement for an Investigator-Initiated Clinical Trial with the Spanish Sarcoma Group (Grupo Español de Investigación en Sarcomas or “GEIS”), Madrid, Spain, to carry out a study entitled “Randomized phase I/II trial of LB-100 plus doxorubicin vs. doxorubicin alone in first line of advanced soft tissue sarcoma”. The purpose of this clinical trial is to obtain information with respect to the efficacy and safety of LB-100 combined with doxorubicin in soft tissue sarcomas. Doxorubicin is the global standard for initial treatment of advanced soft tissue sarcomas (“ASTS”). Doxorubicin alone has been the mainstay of first line treatment of ASTS for over 40 years, with little improvement in survival from adding cytotoxic compounds to or substituting other cytotoxic compounds for doxorubicin. In animal models, LB-100 consistently enhances the anti-tumor activity of doxorubicin without apparent increases in toxicity.

GEIS has a network of referral centers in Spain and across Europe that have an impressive track record of efficiently conducting innovative studies in ASTS. The Company agreed to provide GEIS with a supply of LB-100 to be utilized in the conduct of this clinical trial, as well as to provide funding for the clinical trial. The goal is to enter approximately 150 to 170 patients in this clinical trial over a period of two to four years. The Phase 1 portion of the study began in the quarter ended June 30, 2023 to determine the recommended Phase 2 dose of the combination of doxorubicin and LB-100. As advanced sarcoma is a very aggressive disease, the design of the Phase 2 portion of the study assumes a median progression-free survival (“PFS”), no evidence of disease progression or death from any cause) of 4.5 months in the doxorubicin arm and an alternative median PFS of 7.5 months in the doxorubicin plus LB-100 arm to demonstrate a statistically significant decrease in relative risk of progression or death by adding LB-100. There is a planned interim analysis of the primary endpoint when approximately 50% of the 102 events required for final analysis is reached.

The Company had previously expected that this clinical trial would commence during the quarter ended June 30, 2020. However, during July 2020, the Spanish regulatory authority advised the Company that although it had approved the scientific and ethical basis of the protocol, it required that the Company manufacture new inventory of LB-100 under current Spanish pharmaceutical manufacturing standards. These standards were adopted subsequent to the production of the Company’s existing LB-100 inventory.

In order to manufacture a new inventory supply of LB-100 for the GEIS clinical trial, the Company engaged a number of vendors to carry out the multiple tasks needed to make and gain approval of a new clinical product for investigational study in Spain. These tasks included the synthesis under good manufacturing practices (GMP) of the active pharmacologic ingredient (API), with documentation of each of the steps involved by an independent auditor. The API was then transferred to a vendor that prepares the clinical drug product, also under GMP conditions documented by an independent auditor. The clinical drug product was then sent to a vendor to test for purity and sterility, provide appropriate labels, store the drug, and distribute the drug to the clinical centers for use in the clinical trials. A formal application documenting all steps taken to prepare the clinical drug product for clinical use was submitted to the appropriate regulatory authorities for review and approval before being used in a clinical trial.

On October 13, 2022, the Company announced that the Spanish Agency for Medicines and Health Products (Agencia Española de Medicamentos y Productos Sanitarios or “AEMPS”) had authorized a Phase 1b/randomized Phase 2 study of LB-100, the Company’s lead clinical compound, plus doxorubicin, versus doxorubicin alone, the global standard for initial treatment of advanced soft tissue sarcomas (ASTS). Consequently, this clinical trial commenced during the quarter ended June 30, 2023 and to be completed and a report prepared by December 31, 2026. In April 2023, GEIS completed its first site initiation visit in preparation for the clinical trial at Fundación Jiménez Díaz University Hospital (Madrid). Up to 170 patents will be entered into the clinical trial. The Phase 1b portion of the protocol is expected to be completed by June 30, 2024, at which time the Company expects to have data on both response and toxicity from this portion of the clinical trial, and subject to clinical results, anticipates that it will be able to proceed to a related Phase 2 study.

The interim analysis of this clinical trial will be done before full accrual of patients is completed to determine whether the study has the possibility of showing superiority of the combination of LB-100 plus doxorubicin compared to doxorubicin alone. A positive study would have the potential to change the standard therapy for this disease after four decades of failure to improve the marginal benefit of doxorubicin alone.

Clinical Research Support Agreement with the City of Hope National Medical Center

Effective January 18, 2021, the Company executed a Clinical Research Support Agreement with the City of Hope National Medical Center, an NCI-designated comprehensive cancer center, and City of Hope Medical Foundation (collectively, “City of Hope”), to carry out a Phase 1b clinical trial of LB-100, the Company’s first-in-class protein phosphatase inhibitor, combined with an FDA-approved standard regimen for treatment of untreated extensive-stage disease small cell lung cancer (“ED-SCLC”). LB-100 will be given in combination with carboplatin, etoposide and atezolizumab, an FDA-approved standard of care regimen, to previously untreated ED-SCLC patients. The dose of LB-100 will be escalated with the standard fixed doses of the 3-drug regimen to reach a recommended Phase 2 dose (“RP2D”). Patient entry will be expanded so that a total of 12 patients will be evaluable at the RP2D to confirm the safety of the LB-100 combination and to look for potential therapeutic activity as assessed by objective response rate, duration of overall response, progression-free survival and overall survival.

The clinical trial was initiated on March 9, 2021, with patient accrual expected to take approximately two years to complete. However, as patient accrual was slower than expected, the Company has been seeking to add additional sites to increase the rate of patient accrual. Effective March 6, 2023, the Sarah Cannon Research Institute (“SCRI”), Nashville, Tennessee, joined the City of Hope’s ongoing Phase 1b clinical trial. The Company is continuing its efforts to add additional sites. The addition of SCRI is expected to expedite and expand the accrual of patients to this clinical trial, thus reducing the time required to demonstrate the feasibility, tolerability, and efficacy of adding LB-100 to the current standard treatment regimen. With the addition of SCRI, the Company currently expects that this clinical trial will be completed by March 31, 2026.

The Company currently expects that enrollment in this clinical trial will range from approximately 18 to 30 enrollees, with 24 enrollees as the most likely number. Should fewer than 42 enrollees be required, the Company has agreed to compensate City of Hope on a per enrollee basis. If a significant improvement in outcome is seen with the addition of LB-100, this would be an important advance in the treatment of a very aggressive disease.

MD Anderson Cancer Center Clinical Trial

On September 20, 2023, the Company announced an investigator-initiated Phase 1b/2 collaborative clinical trial to assess whether adding LB-100 to a human programmed death receptor-1 (“PD-1”) blocking antibody of GSK plc (“GSK”), dostarlimab-gxly, may enhance the effectiveness of immunotherapy in the treatment of ovarian clear cell carcinoma (“OCCC”). The clinical trial is being sponsored by The University of Texas MD Anderson Cancer Center (“MD Anderson”) and is being conducted at The University of Texas - MD Anderson Cancer Center. The Company is providing LB-100 and GSK is providing dostarlimab-gxly and financial support for the clinical trial. On January 29, 2024, the Company announced the entry of the first patient into this clinical trial. The Company currently expects that this clinical trial will be completed by July 31, 2025.

National Cancer Institute Pharmacologic Clinical Trial

In May 2019, the National Cancer Institute (NCI) initiated a glioblastoma (GBM) pharmacologic clinical trial. This study was being conducted and funded by the NCI under a Cooperative Research and Development Agreement, with the Company being required to provide the LB-100 clinical compound.

Primary malignant brain tumors (gliomas) are very challenging to treat. Radiation combined with the chemotherapeutic drug temozolomide has been the mainstay of therapy of the most aggressive gliomas (glioblastoma multiforme or GBM) for decades, with little further benefit gained by the addition of one or more anti-cancer drugs, but without major advances in overall survival for the majority of patients. In animal models of GBM, the Company’s novel protein phosphatase inhibitor, LB-100, has been found to enhance the effectiveness of radiation, temozolomide chemotherapy treatments and immunotherapy, raising the possibility that LB-100 may improve outcomes of standard GBM treatment in the clinic. Although LB-100 has proven safe in patients at doses associated with apparent anti-tumor activity against several human cancers arising outside the brain, the ability of LB-100 to penetrate tumor tissue arising in the brain was not known. Many drugs potentially useful for GBM treatment do not enter the brain in amounts necessary for anti-cancer action.

The NCI study was designed to determine the extent to which LB-100 enters recurrent malignant gliomas. Patients having surgery to remove one or more tumors received one dose of LB-100 prior to surgery and had blood and tumor tissue analyzed to determine the amount of LB-100 present and to determine whether the cells in the tumors showed the biochemical changes expected to be present if LB-100 reached its molecular target. As a result of the innovative design of the NCI study, it was believed that data from a few patients would be sufficient to provide a sound rationale for conducting a larger clinical trial to determine the effectiveness of adding LB-100 to the standard treatment regimen for GBMs. Blood and brain tumor tissue were analyzed from seven patients after intravenous infusion of a single dose of LB-100. Results of the investigation demonstrated that there was virtually no entry of LB-100 into the brain tumor tissue. Accordingly, alternative methods of drug delivery will be required to determine if LB-100 has meaningful clinical anti-cancer activity against glioblastoma multiforme and other aggressive brain tumors.

Moffitt Cancer Center Clinical Trial Research Agreement

Effective August 20, 2018, the Company entered into a Clinical Trial Research Agreement with the Moffitt Cancer Center and Research Institute Hospital Inc., Tampa, Florida (“Moffitt”), effective for a term of five years, unless terminated earlier by the Company pursuant to 30 days written notice. Pursuant to the Clinical Trial Research Agreement, Moffitt agreed to conduct and manage a Phase 1b/2 clinical trial to evaluate the toxicity and therapeutic benefit of the Company’s lead anti-cancer clinical compound LB-100 to be administered intravenously in patients with low or intermediate-1 risk myelodysplastic syndrome (“MDS”).

In November 2018, the Company received approval from the U.S. Food and Drug Administration for its Investigational New Drug (“IND”) Application to conduct a Phase 1b/2 clinical trial to evaluate the toxicity and therapeutic benefit of LB-100 in patients with low and intermediate-1 risk MDS who have failed or are intolerant of standard treatment. Patients with MDS, although usually older, are generally well except for severe anemia requiring frequent blood transfusions. This Phase 1b/2 clinical trial utilized LB-100 as a single agent in the treatment of patients with low and intermediate-1 risk MDS.

The clinical trial began at a single site in April 2019 and the first patient was entered into the clinical trial in July 2019. During the year ended December 31, 2023, the clinical trial was closed. In this clinical trial, single agent LB-100 was used on a new schedule of days 1, 3, and 5 every 3 weeks. Although the MTD was not achieved, there was no dose-limiting toxicity on this schedule at doses that were greater than the MTD in the Phase 1 clinical trial of LB-100 on the Monday, Tuesday, Wednesday schedule.

Patent and License Agreements

National Institute of Health

Effective February 23, 2024, the Company entered into a Patent License Agreement (the “License Agreement”) with the National Institute of Neurological Disorders and Stroke (“NINDS”) and the National Cancer Institute (“NCI”), each an institute or center of the National Institute of Health (“NIH”). Pursuant to the License Agreement, the Company has licensed exclusively NIH’s intellectual property rights claimed for a Cooperative Research and Development Agreement (“CRADA”) subject invention co-developed with the Company, and the licensed field of use, which focuses on promoting anti-cancer activity alone, or in combination with standard anti-cancer drugs. The scope of this clinical research extends to checkpoint inhibitors, immunotherapy, and radiation for the treatment of cancer. The License Agreement is effective, and shall extend, on a licensed product, licensed process, and country basis, until the expiration of the last-to-expire valid claim of the jointly owned licensed patent rights in each such country in the licensed territory, unless sooner terminated.

The License Agreement contemplates that the Company will seek to work with pharmaceutical companies and clinical trial sites (including comprehensive cancer centers) to initiate clinical trials within timeframes that will meet certain benchmarks. Data from the clinical trials will be the subject of various regulatory filings for marketing approval in applicable countries in the licensed territories. Subject to the receipt of marketing approval, the Company would be expected to commercialize the licensed products in markets where regulatory approval has been obtained.

Moffitt Cancer Center

Effective August 20, 2018, the Company entered into an Exclusive License Agreement with Moffitt. Pursuant to the License Agreement, Moffitt granted the Company an exclusive license under certain patents owned by Moffitt (the “Licensed Patents”) relating to the treatment of MDS and a non-exclusive license under inventions, concepts, processes, information, data, know-how, research results, clinical data, and the like (other than the Licensed Patents) necessary or useful for the practice of any claim under the Licensed Patents or the use, development, manufacture or sale of any product for the treatment of MDS which would otherwise infringe a valid claim under the Licensed Patents. The clinical trial began at a single site in April 2019 and the first patient was entered into the clinical trial in July 2019.

On October 4, 2023, the Company received a counter-signed termination letter dated September 29, 2023 with respect to the Exclusive License Agreement dated August 20, 2018 between the Company and Moffitt, effective September 30, 2023. The Company and Moffitt agreed that no termination fee shall be due or payable by the Company, and Moffitt acknowledged that no payments are owed by the Company under the Agreement.

Other Significant Agreements and Contracts

Netherlands Cancer Institute

On October 8, 2021, the Company entered into a Development Collaboration Agreement with the Netherlands Cancer Institute, Amsterdam (“NKI”), one of the world’s leading comprehensive cancer centers, and Oncode Institute, Utrecht, a major independent cancer research center, for a term of three years. The Development Collaboration Agreement was subsequently modified by Amendment No. 1 thereto. The Development Collaboration Agreement is intended to identify the most promising drugs to be combined with LB-100, and potentially LB-100 analogues, to be used to treat a range of cancers, as well as to identify the specific molecular mechanisms underlying the identified combinations. The Company agreed to fund the study and provide a sufficient supply of LB-100 to conduct the study. On October 3, 2023, the Company entered into Amendment No. 2 to the Development Collaboration Agreement with NKI, which provides for additional research activities and extends the termination date of the Development Collaboration Agreement by two years to October 8, 2026.

Effective as of June 15, 2022, Dr. René Bernards was appointed to the Company’s Board of Directors as an independent director. Dr. Bernards is a leader in the field of molecular carcinogenesis and is employed by NKI.

Potential Future Clinical Trials

Our objective is to initiate a Phase 1b/2 clinical trial of LB-100 in combination with immunotherapy. Our ability to conduct such a clinical trial, and possibly other clinical trials, is dependent on the conclusion and results of our ongoing clinical trials and is subject to the availability of additional financial resources. The clinical trial would study the ability of LB-100 to enhance the effectiveness of an immunoblocker by adding LB-100 in treatment of one of several cancers in which immunotherapy alone has modest activity.

The Phase 1b/2 clinical trial in LB-100 plus a PD-1 blocker in yet to be specified solid tumors would require additional financing in excess of that currently budgeted and/or partnering relationships with other pharmaceutical companies. From time to time, we engage in discussions with various parties with respect to financing clinical trials evaluating the benefit of adding LB-100 to immunotherapy. There can be no assurance that we will be able to obtain such financing and/or partnering relationships on acceptable terms or at all. Our longer-term objective is to secure one or more strategic partnerships with pharmaceutical companies with major programs in cancer research and drug development.

Intellectual Property

Our products will ultimately be based on our intellectual property and are expected to be covered by our patents. These patents now cover sole rights to the composition and synthesis of our LB-100 series of drugs, which is the Company’s lead clinical compound in development. The Company has filed patent applications covering the treatment of cancer with LB-100. The Company has also filed joint patent applications with the NIH and the Netherlands Cancer Institute for the treatment of cancer using LB-100 in combination with other drugs, including, but not limited to, immune checkpoint inhibitors and WEE1 inhibitors.

Patent applications for the LB-100 series (oxabicycloheptanes and heptenes) have been filed in the United States and internationally under the Patent Cooperation Treaty. Patents for composition of matter and for several uses of the LB-100 series have been issued in the United States, Mexico, Australia, Japan, China, Hong Kong, Canada, Germany, France, the United Kingdom, and by the European Patent Office and the Eurasian Patent Office.

Because we do not plan to allocate resources to further develop our LB-200 series of drug candidates, we decided to abandon patents that cover sole rights to the composition and synthesis of the LB-200 series of drugs, with coverage of the LB-200 series now limited to maintenance of those patents issued in the United States. We also decided to abandon patents that cover rights in treating other diseases than cancer, including, but not limited to, diabetes, neurodegenerative disease and reperfusion injury.

The Company strives to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to the development of its business, including seeking, maintaining, and defending its patent rights, which are owned solely by our wholly-owned Delaware subsidiary, Lixte Biotechnology, Inc., except in several  instances where they are jointly owned with one of our collaborators. The Company also relies on trade secrets relating to its proprietary pipeline of product candidates and on know-how and continuing technological innovation to develop and strengthen its pipeline. The Company intends to rely on regulatory protection afforded by regulatory agencies through data exclusivity, market exclusivity, and patent term extensions, where available.

The Company’s success will depend in large part on its ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to its business; defend and enforce its patents; preserve the confidentiality of its trade secrets; and operate without infringing valid and enforceable patents or proprietary rights of third parties. The Company’s ability to stop third parties from making, using, selling, offering to sell, or importing our technology may depend on the extent to which the Company has rights under valid and enforceable licenses, patents, or trade secrets that cover these activities. In some cases, enforcement of these rights may depend on cooperation of the owners of our jointly owned patents and patent applications.

With respect to both the Company’s solely and jointly owned intellectual property, the Company cannot be sure that patents will be granted on any of its pending patent applications or on any patent applications filed solely or jointly by the Company in the future; we cannot be sure that any of the Company’s existing patents or any patents that may be granted to us in the future will be commercially useful in protecting the Company’s intended commercial products or therapeutic methods; and the Company cannot be sure that an agency or court would determine that the Company’s solely or jointly owned patents are valid and enforceable.

The patent portfolios for the Company’s most important programs involving the development of the LB-100 series are summarized and presented below, along with related information, as of December 31, 2023, followed by a detailed listing of U.S. and non-U.S. patents that have been issued. The projected patent expiration dates assume that that all required maintenance or annuity fees for the patents are timely paid and that a court or agency does not determine that the patents are invalid or unenforceable.

In September 2023, the Company appointed a new President and Chief Executive Officer, who, with the assistance of the Company’s management, Board of Directors and patent legal counsel, conducted a comprehensive analysis of the Company’s extensive patent portfolio in order to implement a program to balance patent prosecution costs with intellectual property protection benefits. As a result, the Company identified certain patent filings that it does not intend to continue to support in 2024 and thereafter.

LB-100. The Company’s lead compound LB-100 is covered by U.S. Patent Nos. 8,822,461 and 7,998,957, which are solely owned by Lixte Biotechnology, Inc., the Company’s wholly-owned subsidiary. These patents are projected to expire in 2030 or 2028, exclusive of any available patent term extension. Counterpart non-U.S. patents are projected to expire in 2028. Pharmaceutical compositions of LB-100 are covered by U.S. Patent Nos. 10,532,050, 10,023,587 and 8,822,461, which are solely owned by Lixte Biotechnology, Inc. These patents and their non-U.S. counterparts are projected to expire in 2034 or 2028, exclusive of any available patent term extension.

LB-100 Combination Therapy with a Checkpoint Inhibitor. LB-100 combination therapy with a checkpoint inhibitor for treating cancer is covered by a pending U.S. patent application and by non-U.S. patents and patent applications. These patents and patent applications are jointly owned by Lixte Biotechnology, Inc., and The United States of America, as represented by the Secretary, Department of Health and Human Services. These patents and patents issuing from these patent applications are projected to expire in 2037, exclusive of any patent term extension.

LB-100 Combination Therapy with Carboplatin, Etoposide and Atezolizumab. LB-100 combination therapy with carboplatin, etoposide and atezolizumab for treating small-cell lung cancer is covered by pending U.S., and non-U.S.  patent applications that are solely owned by Lixte Biotechnology, Inc. Patents issuing from these patent applications are projected to expire in 2041, exclusive of any patent term extension.

LB-100 Combination Therapy with Another Investigational Compound. LB-100 combination therapy with one of several other investigational compounds for treating cancer, or preventing, inhibiting or reducing risk of metastasis of the cancer, is covered by pending U.S. and non-U.S. patent applications that are jointly owned by Lixte Biotechnology, Inc., and Stichting Het Nederlands Kanker Instituut – Antoni Van Leeuwenhoek Ziekenhuis. Patents issuing from these patent applications are projected to expire in 2043, exclusive of any patent term extension.

LB-100 for Treating Cancer. LB-100 for treating breast cancer, colon cancer, large cell lung cancer, adenocarcinoma of the lung, small cell lung cancer, stomach cancer, liver cancer, ovary adenocarcinoma, pancreas carcinoma, prostate carcinoma, promyelocytic leukemia, chronic myelocytic leukemia or acute lymphocytic leukemia, is covered by U.S. Patent No. 9,079,917, which is solely owned by Lixte Biotechnology, Inc. This patent and its non-U.S. counterparts are projected to expire in 2028, exclusive of any patent term extension.

LB-100 Prodrugs and Analogs. LB-100 prodrugs and analogs are covered by U.S. Patent Nos. 10,618,908, 9,988,394, 8,822,461, 8,227,473 and 7,998,957, which are solely owned by Lixte Biotechnology, Inc. These patents and their non-U.S. counterparts are projected to expire in 2036, 2030 or 2028, exclusive of any patent term extension. Pharmaceutical compositions of LB-100 prodrugs or analogs are covered by U.S. Patent Nos. 11,931,354 ,11,236,102, 10,532,050, 10,023,587, 8,822,461, 8,227,473 and 7,998,957, which are solely owned by Lixte Biotechnology, Inc. These patents and their non-U.S. counterparts are projected to expire in 2034, 2030 or 2028, exclusive of any patent term extension.

Our portfolio of solely or jointly owned U.S. and non-U.S. issued patents is summarized below . We have additional U.S. and non-U.S. patent applications pending.

LB-100 Series of Compounds - Phosphatase Inhibitors – Composition and Use in Cancer Treatment

Oxabicycloheptanes and Oxabicycloheptenes, Their Preparation and Use

Formulations of Oxabicycloheptanes and Oxabicycloheptenes

Process of Synthesizing 3-(4-Methylpiperazine-1-Carbonyl)-7-Oxabicyclo [2.2.1] Heptane-2-Carboxylic Acid

Protein Phosphatase 2A Inhibitors for Treating Myelodysplastic Syndromes

Oxabicycloheptane Prodrugs

The Market

Anti-Cancer Drugs

We believe that the mechanism by which compounds of the LB-100 series affects cancer cell growth is different from cancer agents currently approved for clinical use. Lead compounds of the LB-100 series have activity against a broad spectrum of common and rarer human cancers in cell culture systems. In addition, lead compounds of the LB-100 series have anti-cancer activity in animal models of glioblastoma multiforme, neuroblastoma, and medulloblastoma, all cancers of neural tissue. Lead compounds of the LB-100 series also have activity against melanoma, breast cancer and sarcoma in animal models and enhance the effectiveness of commonly used anti-cancer drugs in animal models. The enhancement of anti-cancer activity of these commonly-used anti-cancer drugs occurs at doses of LB-100 that do not significantly increase toxicity in animals. It is therefore hoped that when combined with standard anti-cancer regimens against many tumor types, LB-100 will improve therapeutic benefit without unacceptable toxicity in humans.

Marketing Plan

Our primary goal to date has been to take our primary compound, LB-100, through Phase 2 clinical trials evaluating whether LB-100 will enhance anti-cancer therapies. Because of the novelty and spectrum of activity of LB-100, we believe it is reasonably likely we may find a partner in the pharmaceutical industry with interest in this compound at some stage of its clinical development. However, we would prefer to delay the partnering/licensing decision until the potential value of our products are augmented by demonstrating there is no impediment to clinical evaluation and a therapeutic dose level is determined in clinical trials. Demonstration of clinical usefulness would be expected to substantially increase the value of our product.

Research and Development

Further development of lead compounds in addition to LB-100 will require pharmacokinetic/ pharmacodynamic characterization (i.e., how long a drug persists in the blood and how long the drug is active at the intended target) and large animal toxicologic evaluation under conditions meeting FDA requirements. Most anti-cancer drugs fail in development because of unacceptable toxicity. However, by analogy with mechanistically related compounds, there is good reason to believe that lead compounds in addition to LB-100 will be able to be given to humans safely by routes and at doses resulting in concentration of drug producing anti-cancer activity in animal models.

Product Development

We are subject to FDA regulations as it conducts clinical trials. Additionally, any product for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data and promotional activities for such product, will be subject to continual review and periodic inspections by the FDA and other regulatory bodies. Even if regulatory approval of a product is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturer or manufacturing processes, or failure to comply with regulatory requirements, may result in restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recall, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties.

Competition

The life sciences industry is highly competitive and subject to rapid and profound technological change. Our present and potential competitors include major pharmaceutical companies, as well as specialized biotechnology and life sciences firms in the United States and in other countries. Most of these companies have considerably greater financial, technical and marketing resources than we do. Additionally, mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated in our competitors. Our existing or prospective competitors may develop processes or products that are more effective than ours or be more effective at implementing their technologies to develop commercial products faster. Our competitors may succeed in obtaining patent protection and/or receiving regulatory approval for commercializing products before we do. Developments by our competitors may render our product candidates obsolete or non-competitive.

We also experience competition from universities and other research institutions, and we are likely to compete with others in acquiring technology from those sources. There can be no assurance that other organizations will not develop technologies with significant advantages over those that we are seeking to develop. Any such development could harm our business.

We compete with universities and other research institutions engaged in research in these areas. Many of our competitors have greater technical and financial resources than we do.

Our ability to compete successfully is based on numerous factors, including:

If we are unable to distinguish our products from competing products, or if competing products reach the market first, we may be unable to compete successfully with current or future competitors.

Employees and Human Capital Resources

As of March 1, 2024, we had three full-time officer/employees and one part-time officer/employee. The Company relies to a significant extent on outside consultants and advisors with various technical skills and expertise that the Company can draw on as necessary to conduct its research and development and clinical trial programs. We consider our relationship with our employees to be good. Our future performance depends significantly upon the continued service of our key personnel and our ability to attract highly skilled employees. We provide our employees with opportunities for equity ownership.

Facilities

As of March 1, 2024, we do not operate any facilities. We contract out research and development activities, drug production, and drug storage to various commercial laboratories, drug manufacturers and storage facilities.

Government Regulation

Our business is subject to the regulations of the FDA as it conducts clinical trials. Clinical trials are research studies to answer specific questions about new therapies or new ways of using known treatments. Clinical trials determine whether new drugs or treatments are both safe and effective and the FDA has determined that carefully conducted clinical trials are the fastest and safest way to find treatments that work in people.

The FDA also requires that an independent review body consider the benefits and risks of a clinical trial and grant approval for the proposed study including selecting of initial doses, plans for escalation of dose, plans for modification of dose if toxicity is encountered, plans for monitoring the wellbeing of individuals participating in the study, and for defining and measuring, to the extent possible, any untoward effects related to drug administration. Serious adverse effects, such as life-threatening toxicities and death, are immediately reportable to the review body and to the FDA. To minimize risk when studying a new drug, the initial dose is well below that expected to cause any toxicity. No more than three patients are entered at a given dose. In general, a dose is not escalated within an individual patient. Once safety is established by the absence of toxicity or low toxicity in a group of three patients, a planned higher dose is then evaluated in a subsequent group of three individuals and so on until dose-limiting toxicity is encountered. The dose level producing acceptable toxicity is then selected as the dose level to be evaluated in Phase 2 trials. Thus, the goal of Phase 1 studies is to determine the appropriate dose level for evaluation of drug efficacy in patients with cancer.

In addition to regulations imposed by the FDA, depending on our future activities, we may become subject to regulation under various federal and state statutes and regulations, such as the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Research Conservation and Recovery Act, national restrictions on technology transfer, and import, export and customs regulations. From time to time, other federal agencies and congressional committees have indicated an interest in implementing further regulation of biotechnology applications. We are not able to predict whether any such regulations will be adopted or whether, if adopted, such regulations will apply to our business, or whether we or our collaborators would be able to comply with any applicable regulations.

In addition, as we intend to market our products in international markets, we will be required to obtain separate regulatory approvals from the European Union and many other foreign jurisdictions. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any market.

Legal Proceedings

The Company may be subject to legal claims and actions from time to time as part of its business activities. We are not currently subject to any threatened or pending lawsuits, legal claims or legal proceedings.

ITEM 1A. RISK FACTORS

The following risk factors, together with the other information presented in this document, including the financial statements and the notes thereto, should be considered by investors.

Risks Related to Our Financial Resources and Capital Needs

We are engaged in early-stage research and as such might not be successful in our efforts to develop a portfolio of commercially viable products.

A key element of our strategy is to develop LB-100 in combination with other anti-cancer therapies to treat cancer. We are seeking to do so through our internal research programs or strategic partnerships. A significant portion of the research and development that we are conducting involves new and unproven technologies. Research programs to identify new disease targets and product candidates or to develop them require substantial technical, financial and human resources whether or not any candidates or technologies are ultimately identified or proven successful. Our research programs might initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for the following reasons:

If we are unable to discover suitable potential product candidates, develop additional delivery technologies through internal research programs or strategic partnerships, or in-license suitable products or delivery technologies on acceptable business terms, our business prospects will suffer. Even if we discover additional product candidates, new clinical trials of one or more additional drug candidates may show that these product candidates are unsafe or ineffective.

We have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future.

We are a clinical-stage biopharmaceutical company that uses biomarker technology to identify enzyme targets associated with serious common diseases and then design novel compounds to attack those threats. We do not have any products approved by a regulatory authority and have not generated any revenue from collaboration or licensing agreements or product sales to date, and have incurred significant research, development and other expenses related to our ongoing operations and expect to continue to incur such expenses. As a result, we have not been profitable and have incurred significant operating losses since our inception. For the years ended December 31, 2023 and 2022, we reported a net loss of $5,087,029 and $6,312,535, respectively. As of December 31, 2023 and 2022, we had an accumulated deficit of $48,481,728 and $43,394,699, respectively.

We do not expect to generate revenues for many years, if at all. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate these losses to increase as we continue to research, develop and seek regulatory approvals for one or more of our product candidates and any additional product candidates we might acquire, and potentially begin to commercialize product candidates that might achieve regulatory approval. We might also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that could adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. Our expenses will further increase as we:

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

The Company’s consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has no recurring source of revenue and has experienced negative operating cash flows since inception, and management has determined that substantial doubt exists about the Company’s ability to continue as a going concern. As a result, our independent registered public accounting firm has included an explanatory paragraph in their report with respect to this uncertainty that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2023. This going concern opinion could materially limit our ability to raise additional funds through the sale of equity securities in the future, and subsequent reports by our independent registered public accounting firm on our consolidated financial statements may also include an explanatory paragraph with respect to our ability to continue as a going concern.

We need significant additional financing to fund our operations and complete the development and, if approved, the commercialization of our lead product candidate, LB-100. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

We expect that our existing cash resources as of December 31, 2023 will provide sufficient working capital resources to fund our operations, including our clinical trial programs with respect to the development of our lead anti-cancer clinical compound LB-100, through approximately September 30, 2024. Our existing cash resources will not be sufficient to complete development of and obtain regulatory approval for our lead product candidate, and we will need to raise significant additional capital to be able to continue our efforts in this regard. The Company estimates that it will need to raise additional capital to fund its operations by mid-2024, including its various clinical trial commitments, to be able to proactively manage its current business plan during the remainder of 2024 and during 2025. In addition, our operating plan might change as a result of many factors currently unknown to us, including possible additional clinical trials, and we might need additional funds sooner than planned. The Company is considering various strategies and alternatives to obtain the required additional capital.

We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of our lead product candidate and the advancement and expansion of our preclinical research pipeline. These expenditures will include costs associated with research and development, potentially acquiring new product candidates or technologies, conducting preclinical studies and clinical trials and potentially obtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for sale, if any.

Budgets and future capital requirements depend on many factors, including:

Additional funds might not be available when we need them on terms that are acceptable to us, or at all. We have no committed source of additional capital. If adequate funds are not available to us on a timely basis, we might not be able to continue as a going concern or we might be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our lead product candidate.

We currently have no source of revenues. We might never generate revenues or achieve profitability.

Currently, we do not generate any revenues from product sales or otherwise. Even if we are able to successfully achieve regulatory approval for our lead product candidate, we do not know when we will generate revenues or become profitable, if at all. Our ability to generate revenues from product sales and achieve profitability will depend on our ability to successfully commercialize products, including our lead product candidate, LB-100, and any other product candidates that we might develop, in-license or acquire in the future. Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to:

Our revenues for any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which it gains regulatory approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable-disease patients is not as significant as our estimates, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we might not generate significant revenues from sales of such products, even if approved. In addition, we anticipate incurring significant costs associated with commercializing any approved product candidate. As a result, even if we generate revenues, we might not become profitable and might need to obtain additional funding to continue operations. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we might be unable to continue our operations at planned levels and might be forced to reduce our operations.

Our ability to use net operating losses to offset future taxable income might be subject to limitations.

At December 31, 2023, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $28,111,000 and $32,617,000, respectively. Federal net operating losses from tax years preceding 2018, if not utilized earlier, expire through 2038. Federal net operating losses generated in a tax year beginning after 2017 have an indefinite carryforward period, but the deductibility of such federal NOL’s may be limited.

The state net operating loss carryovers include approximately $19,141,000 that were incurred in the State of New York and approximately $13,476,000 that were incurred in the State of California, which are subject to various restrictions and limitations.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and certain corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in the ownership of its equity over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income might be limited.

Risks Related to the Development and Regulatory Approval of Our Product Candidates

Clinical-stage biopharmaceutical companies with product candidates in clinical development face a wide range of challenging activities which might entail substantial risk.

We are a clinical-stage biopharmaceutical company with a lead product candidate in clinical development. The success of our lead product candidate will depend on several factors, including the following:

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our lead product candidate, which could materially harm our business.

We might find it difficult to enroll patients in our clinical trials which could delay or prevent the start of clinical trials for our product candidate.

Identifying and qualifying patients to participate in clinical trials of our lead product candidate is essential to our success. The timing of our clinical trials depends in part on the rate at which we can recruit patients to participate in clinical trials of our lead product candidate, and we might experience delays in our clinical trials if we encounter difficulties in enrollment. If we experience delays in our clinical trials, the timeline for obtaining regulatory approval of our lead product candidate will most likely be delayed.

Many factors might affect our ability to identify, enroll and maintain qualified patients, including the following:

We might not be able to initiate or continue to support clinical trials of LB-100, our lead product candidate, for one or more indications, or any future product candidates if we are unable to locate and enroll a sufficient number of eligible participants in these trials as required by the FDA or one or more other regulatory authorities. Even if we are able to enroll a sufficient number of patients in our clinical trials, if the pace of enrollment is slower than we expect, the development costs for our lead product candidate might increase and the completion of our trials might be delayed or our trials could become too expensive to complete.

If we experience delays in the completion of, or termination of, any clinical trials of our lead product candidate, the commercial prospects of our lead product candidate could be harmed, and our ability to generate product revenue from any of our product candidates could be delayed or prevented. In addition, any delays in completing our clinical trials would likely increase our overall costs, impair product candidate development and jeopardize our ability to obtain regulatory approval relative to our current plans. Any of these occurrences might harm our business, financial condition, and prospects significantly.

The results of preclinical studies or earlier clinical trials are not necessarily predictive of future results. Our lead product candidate in clinical trials, and any other product candidates that might advance into clinical trials, might not have favorable results in later clinical trials or receive regulatory approval.

Success in preclinical studies and early clinical trials does not ensure that later clinical trials will generate adequate data to demonstrate the efficacy and safety of an investigational drug. A number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience than we have, have suffered significant setbacks in clinical trials, even after seeing promising results in earlier preclinical studies or clinical trials.

Despite the results reported in earlier preclinical studies or clinical trials for our lead product candidate, we do not know whether the clinical trials that we might conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market our lead product candidate for a particular indication, in any particular jurisdiction. Efficacy data from prospectively designed trials might differ significantly from those obtained from retrospective subgroup analyses. If later-stage clinical trials do not produce favorable results, our ability to achieve regulatory approval for our lead product candidate might be adversely impacted. Even if we believe that we have adequate data to support an application for regulatory approval to market our lead product candidate or any future product candidates, the FDA or other regulatory authorities might not agree and might require that we conduct additional clinical trials.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

Clinical testing is expensive and can take many years to complete, with the outcome inherently uncertain. Failure can occur at any time during the clinical trial process. Before obtaining approval from regulatory authorities for the sale of our lead product candidate, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our lead product candidate in humans. Prior to initiating clinical trials, a sponsor must complete extensive preclinical testing of a product candidate, including, in most cases, preclinical efficacy experiments as well as IND-enabling toxicology studies. These experiments and studies might be time-consuming and expensive to complete. The necessary preclinical testing might not be completed successfully for a preclinical product candidate and a potentially promising product candidate might therefore never be tested in humans. Once it commences, clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials might not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. We might experience numerous unforeseen events during drug development that could delay or prevent our ability to receive marketing approval or commercialize our lead product candidate. In particular, clinical trials of our lead product candidate might produce inconclusive or negative results. We have limited data regarding the safety, tolerability and efficacy of our lead product candidate. Clinical trials also require the review and oversight of an institutional review board (“IRB”). An inability or delay in obtaining IRB approval could prevent or delay the initiation and completion of clinical trials, and the FDA might decide not to consider any data or information derived from a clinical investigation not subject to initial and continuing IRB review and approval.

We might experience delays in our ongoing or future clinical trials, and we do not know whether planned clinical trials will begin or enroll subjects on time, will need to be redesigned or will be completed on schedule, if at all. There can be no assurance that the FDA or another regulatory agency will not put clinical trials of our lead product candidate on hold in the future. Clinical trials might be delayed, suspended or prematurely terminated for a variety of reasons, such as:

If we experience delays in the completion or termination of any clinical trial of our lead product candidate, the approval and commercial prospects of our lead product candidate will be harmed, delaying our ability to generate product revenues from such product candidate and our costs will most likely increase. The required regulatory approvals may also be delayed, thereby jeopardizing our ability to commence product sales and generate revenues and the period of commercial exclusivity for our intended product may be shortened. Regulatory approval of our lead product candidate may be denied for the same reasons that caused the delay.

Risks associated with operating in foreign countries could materially adversely affect our product development.

We have entered into an agreement to conduct a clinical trial in Spain. Consequently, we will also be subject to risks related to operating in foreign countries. Risks associated with conducting operations in foreign countries include:

Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval.

Undesirable side effects caused by our current or future product candidates, their delivery methods or dosage levels could cause us, our collaborators or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval or termination of clinical trials by the FDA or other foreign regulatory authorities; or an IRB, that approves and, monitors biomedical research to protect the rights and welfare of human subjects. As a result of safety or toxicity issues that we might experience in our clinical trials, or negative or inconclusive results from the clinical trials of others for drug candidates that might be similar to our own, we might not receive approval to market our current lead product candidate or any product candidates we may pursue, which could prevent us from ever generating revenues or achieving profitability. Results of our trials could reveal an unacceptably high severity or incidence of side effects. In such an event, our trials or those or our collaborators could be suspended or terminated, and the FDA or foreign regulatory authorities could order us or our collaborators to cease further development of or deny approval of our current or any future product candidates for any or all targeted indications. Any drug-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete clinical trials or result in potential product liability claims. Any of these occurrences could have a material adverse effect on our business, results of operations, financial condition, cash flows and future prospects.

Additionally, if our lead product candidate receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including that:

Any of these events could prevent us from achieving or maintaining market acceptance of our lead product candidate, if approved.

Our product development program might not uncover all possible adverse events that patients who take our lead product candidate may experience. The number of subjects exposed to our lead product candidate and the average exposure time in the clinical development program might be inadequate to detect rare adverse events or chance findings that might only be detected once the product is administered to more patients and for greater periods of time.

Clinical trials by their nature utilize a sample of the potential patient population. However, with a limited number of subjects and limited duration of exposure, we cannot be fully assured that rare and severe side effects of our lead product candidate will be uncovered. Such rare and severe side effects might only be uncovered with a significantly larger number of patients exposed to our lead product candidate. If such safety problems occur or are identified after our lead product candidate reaches the market, the FDA might require that we amend the labeling of the product or recall the product, or might even withdraw approval for the product.

Our future success is dependent on the regulatory approval of our lead product candidate.

Our business is dependent on our ability to obtain regulatory approval for our lead product candidate in a timely manner. We cannot commercialize our lead product candidate in the United States without first obtaining regulatory approval for the product from the FDA. Similarly, we cannot commercialize our lead product candidate outside of the United States without obtaining regulatory approval from one or more foreign regulatory authorities. Before obtaining regulatory approvals for the commercial sale of our lead product candidate for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and clinical trials, that the product candidate is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate.

The time required to obtain approval by the FDA and foreign regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

Even if a product candidate were to successfully obtain approval from the FDA and one or more foreign regulatory authorities, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. Also, any regulatory approval of our lead product candidate or any future product candidates we may pursue, once obtained, may be withdrawn.

Our lead product candidate and future product candidates could fail to receive regulatory approval from the FDA.

We have not obtained regulatory approval for our lead product candidate, and it is possible that our lead product candidate or any future product candidates will not obtain regulatory approval, for many reasons, including:

The FDA or a foreign regulatory authority might require more information, including additional preclinical or clinical data, to support approval or additional studies, which might delay or prevent approval or our commercialization plans, or we might decide to abandon the development program. The FDA or a foreign regulatory authority might also require the manufacture of a new lead product candidate in accordance with new or revised standards. If we were to obtain approval, regulatory authorities might approve our lead product candidate and any future product candidates we might pursue for fewer or more limited indications than we request (including failing to approve the most commercially promising indications), might grant approval contingent on the performance of costly post-marketing clinical trials, or might approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

If we are unable to obtain regulatory approval for our lead product candidate in one or more jurisdictions, or if any approval contains significant limitations, we might not be able to obtain sufficient funding to continue the development of that product or generate revenues attributable to that product candidate.

Failure to obtain regulatory approval in international jurisdictions would prevent our lead product candidate from being marketed abroad.

In addition to regulations in the United States, to market and sell our lead product candidate in the European Union, in the United Kingdom, in many Asian countries and in other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. The approval procedure varies among countries and can require additional data or involve additional testing. The time required to obtain foreign approval may differ substantially from that required to obtain FDA approval. We might not be able to obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Clinical trials accepted in one country might not be accepted by regulatory authorities in other countries. In addition, many countries outside the United States require that a product be approved for reimbursement before it can be approved for sale in that country. A product candidate that has been approved for sale in a particular country might not receive reimbursement approval in that country.

We might not be able to file for regulatory approvals and might not receive necessary approvals to commercialize our intended product in any market. If we are unable to obtain approval of any of our current product candidate or any future product candidates we might pursue by regulatory authorities in the European Union, United Kingdom, Asia or elsewhere, the commercial prospects of that product candidate might be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition.

Even if our current primary product candidate received regulatory approval, it might still face future development and regulatory difficulties.

Even if we obtain regulatory approval for our lead product candidate, LB-100, that approval would be subject to ongoing requirements by the FDA and foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information. These requirements can include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance by us and/or our CMOs and CROs for any post-approval clinical trials that we or our collaborators might conduct. The safety profile of any product will continue to be closely monitored by the FDA and foreign regulatory authorities after approval. If the FDA or foreign regulatory authorities become aware of new safety information after approval of our lead product candidate, they might require labeling changes or establishment of a risk evaluation and mitigation strategy, impose significant restrictions on such product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with CGMP, GCP, and other regulations. If we, a collaborator or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency might impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. If we, our lead product candidate or the manufacturing facilities for our lead product candidate fail to comply with applicable regulatory requirements, a regulatory agency might:

The occurrence of any event or penalty described above might inhibit our ability to successfully commercialize our intended product and generate revenues.

Advertising and promotion of any product candidate that obtains approval in the United States is heavily scrutinized by the FDA, the Department of Justice, the Office of Inspector General of Health and Human Services, state attorneys general, members of Congress and the public. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. Additionally, advertising and promotion of any product candidate that obtains approval outside of the United States is heavily scrutinized by foreign regulatory authorities. Violations, including actual or alleged promotion of our intended product for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil and criminal sanctions by the FDA, as well as prosecution under the federal False Claims Act. Any actual or alleged failure to comply with labeling and promotion requirements can have a negative impact on our business.

Risks Related to Our Dependence on Third Parties

We depend on certain key scientific personnel for our success who do not work full time for us. The loss of any such personnel could adversely affect our business, financial condition and results of operations.

Effective September 26, 2023, Bas van der Baan, a director of the Company since June 17, 2022, replaced the Company’s founder, Dr. John S. Kovach, as President and Chief Executive Officer. Dr. Kovach passed away on October 5, 2023. Effective October 6, 2023, Mr. van der Baan was appointed as Chairman of the Board of Directors. Dr. Kovach was also the Company’s Chief Scientific Officer. 

Although our success depended, in part, on the continued availability and contributions of Dr. Kovach, we were able to replace Dr. Kovach on a timely basis with a qualified replacement in Mr. van der Baan. Furthermore, recruiting and retaining qualified scientific personnel to perform future research and development work is critical to our success. Our inability to attract or retain qualified personnel or advisors in the future could significantly weaken our management, harm our ability to compete effectively, and harm our business. The competition for qualified personnel in the pharmaceutical field is intense and, as a result, we might be unable to attract and retain qualified personnel necessary for the development of our business.

Additionally, we employ Dr. James S. Miser on a half-time basis as Chief Medical Officer, and we promoted Eric J. Forman to Vice President and Chief Operating Officer on November 6, 2022. We believe that Dr. Miser and Mr. Forman, led by Mr. van der Baan as President and Chief Executive Officer, are capable of managing the Company’s research and clinical activities.

We expect to rely heavily on third parties for the conduct of clinical trials of our product candidates. If these clinical trials are not successful, or if we or our collaborators are not able to obtain the necessary regulatory approvals, we will not be able to commercialize our product candidates.

In order to obtain regulatory approval for the commercial sale of our product candidates, we or our collaborators will be required to complete extensive preclinical studies as well as clinical trials in humans to demonstrate to the FDA and foreign regulatory authorities that our product candidates are safe and effective.

Dr. Miser is experienced in the design and conduct of early stage clinical trials. However, we expect to rely on collaborative partners and CROs for their performance and management of clinical trials of our product candidates.

Our intended products under development might not be effective in treating any of our targeted disorders or might prove to have undesirable or unintended side effects, toxicities or other characteristics that might prevent or limit their commercial use. Institutional review boards or regulators, including the FDA, might hold, suspend or terminate our clinical research or the clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements or if, in their opinion, the participating subjects are being exposed to unacceptable health risks. Additionally, failure of third parties conducting or overseeing the operation of the clinical trials to perform their contractual or regulatory obligations in a timely fashion could delay the clinical trials. Failure of clinical trials can occur at any stage. Any of these events would adversely affect our ability to market a product candidate.

The development process necessary to obtain regulatory approval is lengthy, complex and costly. If we or our collaborative partners do not obtain necessary regulatory approvals, then our business would not be successful, and the market price of our common stock could decline substantially.

To the extent that we, or our collaborative partners, are able to successfully advance a product candidate through the clinic, we, or such partner, will be required to obtain regulatory approval prior to marketing and selling such product. The process of obtaining FDA and other required regulatory approvals is costly and lengthy. The time required for FDA and other approvals is uncertain and can typically take several or many years, depending on the complexity and novelty of the product.

Any regulatory approval to market a product might be subject to limitations on the indicated uses for which we, or our collaborative partners, may market the product. These limitations might restrict the size of the market for the product and affect reimbursement by third party payors. In addition, regulatory agencies might not grant approvals on a timely basis or might revoke or significantly modify previously granted approvals.

We, or our collaborative partners, also are subject to numerous foreign regulatory requirements governing the manufacturing and marketing of our potential future products outside of the United States. The approval procedure varies among countries, additional testing might be required in some jurisdictions, and the time required to obtain foreign approvals often differs from that required to obtain FDA approvals. Moreover, approval by the FDA does not ensure approval by regulatory authorities in other countries, and vice versa.

As a result of these factors, we, or our collaborative partners, might not successfully complete clinical trials in the time periods estimated, if at all. Moreover, if we, or our collaborative partners, incur unanticipated costs and/or delays in development programs or if we fail to successfully develop and commercialize products based upon our technologies, we might not be able to generate significant operating revenues or sustainable profitability, as a result of which our stock price could decline substantially.

Business interruptions could adversely affect future operations, revenues, and financial conditions, and might increase our costs and expenses.

Our operations, and those of our directors, advisors, contractors, consultants, CROs, and collaborators, could be adversely affected by earthquakes, floods, hurricanes, typhoons, extreme weather conditions, fires, water shortages, power failures, business systems failures, medical epidemics and other natural and man-made disaster or business interruptions. Our phones, electronic devices and computer systems and those of our directors, advisors, contractors, consultants, CROs, and collaborators are vulnerable to damages, theft and accidental loss, negligence, unauthorized access, terrorism, war, electronic and telecommunications failures, and other natural and man-made disasters. Operating as a virtual company, our employees conduct business outside of our headquarters and leased or owned facilities. These locations might be subject to additional security and other risk factors due to the limited control of our employees. If such an event as described above were to occur in the future, it might cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Likewise, we will rely on third parties to manufacture our product candidates and conduct clinical trials, and similar events as those described previously relating to their business systems, equipment and facilities could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or misappropriation or disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our lead product candidate could be delayed or altogether terminated.

Our failure to find third party collaborators to assist or share in the costs of product development could materially harm our business, financial condition or results of operations.

Our strategy for the development and commercialization of our proprietary product candidates might include the formation of collaborative arrangements with third parties. We have entered into a number of agreements with third parties as described elsewhere in this document. Existing and future collaborators have significant discretion in determining the efforts and resources they apply and might not perform their obligations as expected. Potential third party collaborators include biopharmaceutical, pharmaceutical and biotechnology companies, academic institutions, government agencies and other entities. Third party collaborators may assist us in:

If we are not able to establish further collaboration agreements, we might be required to undertake product development and commercialization at our own expense. Such an undertaking might limit the number of product candidates that we will be able to develop, significantly increase our capital requirements and place additional strain on our internal resources. Our failure to enter into additional collaborations could materially harm our business, financial condition and results of operations.

In addition, our dependence on licensing, collaboration and other agreements with third parties might subject us to a number of risks. If we fail to comply with our obligations under these agreements, of if one or more third parties allege that we fail to comply, then one or more third parties might terminate the agreements. In this event, we might not be able to develop, manufacture or market our product candidates. This would materially adversely affect our business prospects.

These agreements might not be on terms that prove favorable to us and might require us to relinquish certain rights in our product candidates. To the extent we agree to work exclusively with one collaborator in a particular territory, research area, or therapeutic field of use, our opportunities to collaborate with other entities could be curtailed. Lengthy negotiations with potential new collaborators might lead to delays in the research, development or commercialization of product candidates. The decision by our collaborators to pursue alternative technologies or the failure of our collaborators to develop or commercialize successfully any product candidate to which they have obtained rights from us could materially harm our business, financial condition and results of operations.

In addition, our agreements might not be assignable by us without the consent of the respective other party or parties, which might limit or delay our ability to consummate transactions, adversely impact the value of those transactions, or limit our ability to pursue research, development or other activities.

We might be subject to claims by third parties asserting that our employees, consultants, collaborators contractors or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Our employees, consultants, collaborators or contractors have been previously employed at universities or third party pharmaceutical companies, including our actual or possible competitors, and received confidential and proprietary information from them. Although we try to ensure that our employees, consultants, collaborators or contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these employees, consultants, collaborators or contractors, or we, have used or disclosed intellectual property, including trade secrets or other proprietary information, of any former employer. We might also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. We might not be successful in defending these claims, and if we fail in defending any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Even if we are successful, litigation could result in substantial cost and reputational loss and be a distraction to our business.

In addition, while it is our policy to require our employees, consultants, collaborators and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we might be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Such assignment agreements might not be self-executing or may be breached, and we might be forced to bring claims against third parties, or defend claims that third parties might bring against us, to determine the ownership of what we regard as our intellectual property.

Risks Related to Our Intellectual Property

We cannot be certain we will be able to obtain patent protection to protect our product candidates and technology.

Our patents and patent applications are owned solely by our wholly-owned subsidiary, Lixte Biotechnology, Inc., except in several  instances where they are jointly owned with one of our collaborators.

The patent prosecution process is expensive and time-consuming, and we might not be able to file or prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research or development before it is too late to obtain patent protection. Therefore, these patents and applications might not be prosecuted and enforced in a manner consistent with the best interests of our business.

The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries might not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our solely owned or jointly owned patents or pending patent applications, or that we were the first inventors to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications might not result in patents being issued that protect our technology or products, in whole or in part, or that effectively prevent others from commercializing competitive technologies and products. Changes in the patent laws or their interpretation by courts or patent offices might diminish the value of our patents or patent applications, or narrow their scope.

The issuance of a patent is not conclusive as to its inventorship, scope, term, validity or enforceability, and our solely or jointly owned patents might be challenged in a U.S. or non-U.S. court or patent office. Such challenges might result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time required for research, development, testing or regulatory review of product candidates, patents protecting such candidates might expire before or shortly after such candidates are approved or commercialized. As a result, our solely or jointly owned patents might not provide us with sufficient rights to exclude others from commercializing intended products similar or identical to ours.

We cannot be certain that all patents applied for will be issued. If a third party has also filed a patent application relating to an invention claimed by us, solely or jointly with one of our collaborators, we might be required to participate in an interference or derivation proceeding declared or instituted by the United States Patent and Trademark Office, which could result in substantial uncertainties and cost for us, even if the eventual outcome is favorable to us. The degree of future protection for our proprietary rights is uncertain. For example:

In addition, we solely or jointly own patents or patent applications in jurisdictions having, or that might in the future have, geopolitical disputes, including over sovereignty. We cannot guarantee that patents granted in these jurisdictions will be enforceable. An inability to enforce patents in these jurisdictions could have a material adverse effect on our business.

If we do not obtain patent term extension in the United States under the Hatch-Waxman Act or in foreign countries under similar legislation, our business might be materially harmed.

In the United States, the term of a patent that covers an FDA-approved drug, its method for use or method for manufacture, can be eligible for patent term extension. U.S. law provides a patent term extension of up to five years beyond the expiration of the patent for time during which the drug is under regulatory review. Patent term extension cannot extend the term of a patent beyond a total of 14 years from the date of regulatory approval; only one patent can be extended for the same regulatory review period; and the scope of a patent’s enforceability during a patent term extension is limited to the scope of FDA approval. There is no guarantee that the relevant agencies, including the United States Patent and Trademark Office (“USPTO”), will agree with our assessment of whether such extensions should be granted, and even if granted, the term of these extensions. We might not be granted patent term extension in the United States or in any foreign country because of, for example, expiration of our patents before obtaining regulatory approval, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the length of a patent term extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request. If we are unable to obtain any patent term extension or if the term of any such extension is less than we request, our competitors might obtain approval of competing products following the expiration of our patent rights, and our business, financial condition, results of operations and prospects could be materially harmed.

It is possible that we will not obtain patent term extension under the Hatch-Waxman Act for a U.S. patent covering any of our product candidates that we may identify even where that patent is eligible for patent term extension, or if we obtain such an extension, it may be for a shorter period than we had sought.

If we fail to comply with our obligations in agreements under which we have licensed or, might license, intellectual property rights from third parties, or if we otherwise experience disruptions to our business relationships with our licensors, we could lose rights that are important to our business.

We have entered into, and might in the future enter into, one or more intellectual property license agreements that are important to our business. These license agreements might impose various diligence, milestone payment, royalty and other obligations on us. For example, we might be required to use commercially reasonable efforts to engage in various development and commercialization activities with respect to licensed products, and might need to satisfy specified milestone and royalty payment obligations. If we fail to comply with any obligations under our agreements with any of these licensors, we might be subject to termination of the license agreement in whole or in part, increased financial obligations to our licensors or loss of exclusivity in a particular field or territory, in which case our ability to develop or commercialize products covered by the license agreement will be impaired.

In addition, disputes might arise regarding intellectual property subject to a license agreement, including:

If disputes over intellectual property that we have licensed, or might in the future license, prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may be unable to successfully develop or commercialize the affected product candidates.

We might need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a commercially reasonable cost or on commercially reasonable terms, if at all. Other companies might have a competitive advantage over us due to their larger size or cash resources or greater clinical development and commercialization capabilities. We might be unable to further develop or commercialize one or more of our product candidates, which could harm our business significantly.

We might infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates.

Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our intended products or our product candidates, or manufacture or use of our intended products or our product candidates, will not infringe third party patents. Furthermore, a third party might claim that we are using without permission one or more inventions covered by the third party’s patent rights and might go to court to stop us from engaging in our normal operations and activities, including making, offering to sell or selling our product candidates. Still further a third party might go to court seeking judgment that our patents are invalid or unenforceable. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. Some of these third parties might be better capitalized and have more resources than us. There is a risk that a court would decide that we are infringing the third party’s patents and would order us to stop the activities covered by the patents. In that event, we might not have a viable way around the patent and might need to halt commercialization of the relevant product candidate. In addition, there is a risk that a court will order us to pay the other party damages for having violated the other party’s patents. There is also a risk that a court would decide that one or more of our patents are invalid or unenforceable. In addition, we might be obligated to indemnify our licensors and collaborators against intellectual property infringement claims brought by third parties, which could require us to expend additional resources. The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

We cannot guarantee that we have identified all third party patents or pending patent applications that are or might be necessary for the commercialization of our intended products and technologies in any jurisdiction. Patent applications in the United States and elsewhere are not published until approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our technologies and intended products could have been filed by others without our knowledge.

Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies or intended products. The scope of a patent claim is determined by the interpretation of the law, the words of a patent claim, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending patent application may be incorrect, which may negatively impact our ability to market our intended products. We might incorrectly determine that our technologies or intended products are not covered by a third party patent or might incorrectly predict whether a third party’s pending patent application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant might be incorrect, and we might incorrectly conclude that a third party patent does not cover our technology or intended products, is invalid or is unenforceable. Our inability to identify or correctly interpret relevant patents might negatively impact our ability to develop or market our technologies or intended products. If we fail to identify or correctly interpret relevant patents, we might be subject to infringement claims. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we fail in any such dispute, in addition to being liable for damages, we might be temporarily or permanently enjoined or otherwise prohibited from commercializing any of technologies or intended products that are held to be infringing. We might, if possible, also be forced to redesign intended products or product formulations so that we no longer infringe the third party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

As the pharmaceutical or biotechnology industry expands and more patents are issued, the risk increases that our product candidates or intended products give rise to claims of infringement of the patent rights of others. There may be third party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, negotiate and obtain a license under reasonable terms to us or discontinue performing the allegedly infringing activities. We might not be able to do any of these. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we might incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we might be required to seek a license, which might not be available, and then we will have to defend an infringement action, challenge the validity of the patents in the USPTO or in court, or discontinue performing the allegedly infringing activities. Patent litigation is costly and time consuming. We might not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or fail to have infringed patents declared invalid or unenforceable, we might incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.

We cannot be certain that others have not filed patent applications for technology covered by our pending applications, that we were the first to invent the technology or that we were the first to file patent applications covering our technology, because:

Our competitors might have filed, and might in the future file, patent applications covering technology similar or identical to ours. Any such patent applications might dominate our patent applications, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed US patent applications that cover inventions similar or identical to ours and claim priority to any applications filed prior to the priority dates of our applications, we might have to participate in an interference proceeding declared or a derivation proceed instituted by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if the other party had independently arrived at the same or similar inventions before us, possibly resulting in a loss of our U.S. patent position with respect to such inventions. Other countries might have similar laws that permit secrecy of patent applications. Either way, the third party’s patents or patent applications might be entitled to priority over our applications in such jurisdictions.

Some of our competitors might be able to sustain the costs of a patent challenge more effectively than we can because they have substantially greater resources. In addition, uncertainties regarding the outcome of the challenge could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

We might be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed alleged trade secrets of one or more third parties.

As is common in the biotechnology and pharmaceutical industries, we employ, and might employ in the future, individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we might be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation might be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Our intellectual property might not be sufficient to protect our intended products from competition, which might negatively affect our business as well as limit our partnership or acquisition appeal.

We might be subject to competition despite the existence of intellectual property we license or own. We can give no assurance that our intellectual property claims will be sufficient to prevent third parties from designing around patents we own or license and developing and commercializing competitive products. The existence of competitive products that avoid our intellectual property could materially adversely affect our operating results and financial condition. Furthermore, any actual or perceived limitations, in our intellectual property might lessen the interest of third parties to partner, collaborate or otherwise transact with us, if third parties perceive a higher than acceptable risk to commercialization of our intended products or future products.

Our approach includes filing patent applications covering combination therapy with known, studied and/or marketed drugs. Although the protection afforded by our patent applications might be significant, when looking at our patents’ ability to block competition, the protection offered by our patents might be, to some extent, more limited than protection provided by patents claiming a composition of matter that is entirely new and previously unknown. If a competitor were able to successfully design around any combination therapy patents we have or might have in the future, our business and competitive advantage could be significantly affected.

We might elect to sue a third party, or otherwise make a claim, alleging infringement or other violation of patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights that we either own or license. We might alternatively elect to sue a third party, or otherwise make a claim, alleging that we don’t infringe a third party’s patents or that the third party’s patents are invalid or unenforceable. Any claims that we assert against a third party could provoke the third party to assert one or more counterclaims against us, for example, alleging that we infringe their patents. In addition, in a patent infringement proceeding, a court might decide that a patent of ours is invalid or unenforceable, in whole or in part; construe the patent’s claims narrowly; or refuse to stop the other party from using the technology at issue. Any litigation proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Even if we prevail in a lawsuit, a court might not award remedies that sufficiently compensate us for our losses.

If we do not prevail in either type of litigation, we might be subject to:

A third party might also challenge the validity, enforceability or scope of the intellectual property rights that we license or own, and the result of these challenges might narrow the scope or claims of or invalidate patents that are integral to our product candidates in the future. There can be no assurance that we will be able to successfully defend patents we own in an action against third parties due to the unpredictability of litigation and the high costs associated with intellectual property litigation, among other factors.

The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws or rules and regulations of the United States, and many companies have encountered significant difficulties in protecting and defending such rights in non-U.S. jurisdictions. The legal systems of some countries are less supportive of enforcement of patents, trade secrets and other intellectual property protection, than the United States. This could make it difficult for us to enforce our patents or market competing products outside the United States, in violation of our proprietary rights generally. Proceedings to enforce our patent rights in non-U.S. jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We might not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, might not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights in all jurisdictions where we have the rights might be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Furthermore, while we seek to protect our intellectual property rights in significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we might wish to market our intended products or our product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries might be inadequate, which might have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets. If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights might be diminished, and we might face additional competition from others in those jurisdictions.

Changes to patent law, for example the Leahy-Smith America Invests Act, AIA or Leahy-Smith Act, of 2011 and the Patent Reform Act of 2009 and other future article of legislation in the U.S., might substantially change the regulations and procedures surrounding patent applications, issuance of patents, prosecution of patents, challenges to patent validity, and patent enforcement. We can give no assurance that our patents or those of our licensor(s) can be defended or will protect us against future intellectual property challenges, particularly as they pertain to changes in patent law and future patent law interpretations.

In addition, enforcing and maintaining our intellectual property protection depends on compliance with various procedural, document-submission, fee-payment and other requirements imposed by the U.S. Patent and Trademark Office and courts, and foreign government patent agencies and courts, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Filing, prosecuting and defending patents covering our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some jurisdictions outside the United States can be less extensive than those in the United States. And filing, prosecuting and defending patents even in only those jurisdictions in which we develop or commercialize our product candidates might be prohibitively expensive or impractical. Competitors might use our technologies in jurisdictions where we have not obtained patent protection to develop their own products or technologies and, further, may export otherwise infringing products or technologies to territories where we and have patent protection, but where enforcement is not as strong as that in the United States. These third party products or technologies might compete with our product candidates, and our intellectual property rights may not be effective or sufficient to prevent third parties from competing.

In addition, we might decide to abandon national or regional patent applications while they are still pending or to abandon granted patents. This might invite or encourage third parties to develop their products or technologies in jurisdictions where we abandon patent applications or patents.

If we are not able to protect and control our unpatented trade secrets, know-how and other technological innovation, we might suffer competitive harm.

We also rely on proprietary trade secrets and unpatented know-how to protect our research and development activities, particularly when we do not believe that patent protection is appropriate or available. However, trade secrets are difficult to protect. We will attempt to protect our trade secrets and unpatented know-how by requiring our employees, consultants, collaborators, and advisors to execute a confidentiality and non-use agreement. We cannot guarantee that these agreements will provide meaningful protection; that these agreements will not be breached, by, e.g., a misappropriating or disclosing our confidential information; that we will have an adequate remedy for any such breach; or that our trade secrets will not otherwise become known or independently developed by a third party. Our trade secrets, and those of our present or future collaborators that we utilize by agreement, might become known or might be independently discovered by others, which could adversely affect the competitive position of our product candidates.

We might incur substantial costs prosecuting our patent applications, maintaining our patents and patent applications, enforcing our patents, defending against third party patent infringement suits, seeking invalidation of third party patents or in-licensing third party intellectual property, as a result of litigation or other proceedings relating to patent and other intellectual property rights.

We might be unaware of or unfamiliar with prior art and/or interpretations of prior art that could potentially impact the validity or scope of our patents or pending patent applications, or patent applications that we will file. We might have elected, or elect now or in the future, not to maintain or pursue intellectual property rights that, at some point in time, might be considered relevant to or enforceable against a competitor.

We take efforts and enter into agreements with employees, consultants, collaborators, and advisors to confirm ownership of and chain of title in intellectual property rights. However, an inventorship or ownership dispute could arise that might permit one or more third parties to practice our intellectual property rights, including possible efforts to enforce rights against us.

We might not have rights under some patents or patent applications that cover technologies that we use in our research, drug targets that we select, product candidates and particular uses thereof that we seek to develop and commercialize, as well as synthesis of our product candidates. Third parties might own or control these patents and patent applications in the United States and elsewhere. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. We or our collaborators therefore might choose to seek, or be required to seek, a license from the third party and would most likely be required to pay license fees or royalties or both. These licenses might not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights might be nonexclusive, which would give our competitors access to the same intellectual property. Ultimately, we could be prevented from commercializing a product or product candidate, or forced to cease some aspect of our business operations, as a result of patent infringement claims, which could harm our business.

Periodic maintenance fees on issued U.S. patents are due to be paid to the USPTO, and periodic maintenance fees on issued non-U.S. patents and pending non-U.S. patent applications are due to be paid to non-U.S. patent offices. Patent offices require compliance with many procedural, documentary, fee payment and other requirements during the patent application process and after a patent issues or grants. While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance, for example, caused by geopolitical events such as civil or political unrest (including the ongoing conflict between Ukraine and Russia), can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of a patent or patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to patent office actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

The USPTO and various non-U.S. government agencies require compliance with certain foreign filing requirements during the patent application process. For example, in some countries, including the United States, a foreign filing license is required before certain patent applications are filed outside that country. The foreign filing license requirements can vary by country. In some cases, a foreign filing license may be obtained retroactively in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment of a pending patent application or can be grounds for revoking or invalidating an issued patent, resulting in the loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the relevant markets with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

There has been substantial litigation and other legal proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. Although we are not currently a party to any patent litigation or any other adversarial proceeding, including any interference or derivation proceeding declared or instituted before the United States Patent and Trademark Office, regarding intellectual property rights with respect to our intended products, our product candidates and our technology, it is possible that we might become one in the future. We are not currently aware of any actual or reasonably foreseeable third party infringement claim involving our product candidates. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. The outcome of patent litigation is subject to uncertainties that cannot be adequately quantified in advance, including the dispute forum, demeanor and credibility of witnesses and the identity of the adverse party, especially in pharmaceutical and biotechnology related patent cases that might turn on the testimony of experts as to technical facts upon which experts might reasonably disagree. Some of our competitors might be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. If a patent or other proceeding is resolved against us, we might be enjoined from researching, developing, manufacturing or commercializing our intended products or our product candidates without a license from the other party and we might be held liable for significant damages. We might not be able to obtain any required license on commercially acceptable terms or at all.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could harm our ability to compete in the marketplace. Patent litigation or other proceedings might also absorb significant management time.

If we are unable to protect our intellectual property rights, our competitors might develop and market products with similar or identical features that might reduce demand for our potential products.

The following factors are important to our success:

We will be able to protect our intellectual property rights in patents and trade secrets from unauthorized use by third parties only to the extent that such intellectual property rights are covered by valid and enforceable patents or are effectively maintained as trade secrets and we enforce these rights.

Because issues of patentability involve complex legal and factual questions, the issuance, scope or enforceability of patents cannot be predicted with certainty. Patents can be challenged, invalidated, found unenforceable, or circumvented. United States patents and patent applications can be subject to interference or derivation proceedings. United States patents can also be subject to post grant proceedings, including re-examination, derivation, Inter Partes Review and Post Grant Review, in the United States Patent and Trademark Office. Foreign patents can be subject to opposition or comparable proceedings in corresponding foreign patent offices. Any of these challenges might result in loss of the patent, rejection of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, these proceedings can be costly. Thus, any patents that we own or license from others might not provide any protection against competitors. Furthermore, an adverse decision in an interference or derivation proceeding can result in a third party receiving the patent rights sought by us, which in turn could affect our ability to market a potential product to which that patent filing was directed. Our pending patent applications, those that we might file in the future, or those that we might license from third parties might not result in patents being issued. If issued, they might not provide us with proprietary protection or competitive advantages against competitors with similar or identical technology. Furthermore, others might independently develop similar technologies or duplicate any technology that we have developed. Some countries have compulsory licensing laws under which a patent owner might be compelled to grant licenses to third parties. For example, compulsory licenses might be required in cases such as where the patent owner has failed to “work” the invention in that country or where a third party has patented improvements. In addition, some countries might limit the enforceability of patents against government agencies or government contractors. In these countries, we might have limited infringement remedies, which could materially diminish the value of our patents. Moreover, the legal systems of some countries are less supportive of enforcement of patents, trade secrets and other intellectual property protection, than the United States, which might make it difficult to stop infringement in these countries.

In addition, our ability to enforce our patent rights depends on our ability to detect infringement. It is difficult to detect infringers who do not advertise or otherwise promote the compounds that are used in their products. Any litigation to enforce or defend our patent rights, even if we prevail, could be costly and time-consuming and would divert the attention of management and key personnel from business operations.

We will also rely on trade secrets, know-how and technology, which are not protected by patents, to maintain our competitive position. We will seek to protect this information by entering into confidentiality agreements with parties that have access to it, such as strategic partners, collaborators, employees, contractors and consultants. Any of these parties might breach these agreements and misappropriate or disclose our confidential information or our competitors might learn of the information in some other way. If any trade secret, know-how or other technology not protected by a patent were disclosed to, or independently developed by, a competitor, our business, financial condition and results of operations could be materially adversely affected.

Risks Related to Commercialization of Our Current Product Candidate and Future Product Candidates

Our commercial success depends upon attaining significant market acceptance of our current product candidate and future product candidates, if approved, among physicians, patients, healthcare payors and cancer treatment centers.

Even if we obtain regulatory approval for our lead product candidate or any future product candidates, the products might not gain market acceptance among physicians, healthcare payors, patients or the medical community, including cancer treatment centers. Market acceptance of any product candidates for which we receive approval depends on a number of factors, including:

If our lead product candidate and any future product candidates are approved but fail to achieve market acceptance among physicians, patients, healthcare payors or cancer treatment centers, we will not be able to generate significant revenues, which would compromise our ability to become profitable.

Even if we are able to commercialize our lead product candidate or any future product candidates, the products might not receive coverage or adequate reimbursement from third party payors in the United States and in other countries in which we seek to commercialize our intended products, which could harm our business.

Our ability to commercialize any product successfully will depend, in part, on the extent to which coverage and adequate reimbursement for such product and related treatments will be available from third party payors, including government health administration authorities, private health insurers and other organizations.

Third party payors determine which medications they will cover and establish reimbursement levels. A primary trend in the healthcare industry is cost containment. Third party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Third party payors might also seek additional clinical evidence, beyond the data required to obtain regulatory approval, demonstrating clinical benefit and value in specific patient populations before covering our intended product for those patients. We cannot be sure that coverage and adequate reimbursement will be available for any product that we commercialize and, if coverage is available, what the level of reimbursement will be. Coverage and reimbursement might impact the demand for, or the price of, any product candidate for which we obtain regulatory approval. If reimbursement is not available or is available only at limited levels, we might not be able to successfully commercialize any product candidate for which we obtain regulatory approval.

There might be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage might be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, might also not be sufficient to cover our costs and might only be temporary. Reimbursement rates might vary according to the use of the drug and the clinical setting in which it is used, might be based on reimbursement levels already set for lower cost drugs and might be incorporated into existing payments for other services. Net prices for drugs might be reduced by mandatory discounts or rebates required by third party payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they might be sold at lower prices than in the United States. No uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third party payors can rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but also have their own methods and approval process apart from Medicare determinations. Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved product that we develop could have a material adverse effect on our operating results, ability to raise capital needed to commercialize our intended product and overall financial condition.

Healthcare legislative measures aimed at reducing healthcare costs might have a material adverse effect on our business and results of operations.

Third party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain international jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our intended product profitably. In particular, in 2010, the Affordable Care Act (“ACA”) was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs, and provided incentives to programs that increase the federal government’s comparative effectiveness research.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that might be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls might adversely affect:

We expect that the ACA, as well as other healthcare reform measures that might be adopted in the future, might result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement and new payment methodologies. This could lower the price that we receive for any approved product. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs might result in a similar denial or reduction in payments from private payors, which might prevent us from being able to generate sufficient revenue, attain profitability or commercialize our product candidate, if approved.

Price controls might be imposed in foreign markets, which might adversely affect our future profitability.

In some countries, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments might further complicate pricing negotiations, and pricing negotiations might continue after reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.

In some countries, we or our collaborators might be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidate to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third party payors or authorities might lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of our intended product is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.

Risks Related to Healthcare Compliance Regulations

Our relationships with customers and third party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings. If we or they are unable to comply with these provisions, we might become subject to civil and criminal investigations and proceedings that could have a material adverse effect on our business, financial condition and prospects.

Healthcare providers, physicians and third party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain regulatory approval. Our current and future arrangements with healthcare providers, healthcare entities, third party payors and customers might expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that might constrain the business or financial arrangements and relationships through which we research, develop and will market, sell and distribute our intended product. As a pharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are applicable to our business. Restrictions under applicable federal and state healthcare laws and regulations that might affect our ability to operate include the following:

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices might not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that might apply to us, we might be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, and the curtailment or restructuring of our operations. If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they might be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Our employees might engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity might not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and integrity oversight and reporting obligations.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we might develop.

We face an inherent risk of product liability exposure related to the testing of our lead product candidate or future product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we might develop. Product liability claims might be brought against us by subjects enrolled in our clinical trials, patients, healthcare providers or others using, administering or selling our intended product. If we cannot successfully defend ourselves against claims that our lead product candidate or product caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims might result in:

Prior to engaging in future clinical trials, we intend to obtain product liability insurance coverage at a level that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks; however, we might be unable to obtain such coverage at a reasonable cost, if at all. If we are able to obtain product liability insurance, we might not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that might arise and such insurance might not be adequate to cover all liabilities that we might incur. Furthermore, we intend to expand our insurance coverage for products to include the sale of commercial products if we obtain regulatory approval for our lead product candidate in development, but we might be unable to obtain commercially reasonable product liability insurance for any products that receive regulatory approval. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.

Risks Related to our Business Operations

We face substantial competition, which might result in others discovering, developing or commercializing products before or more successfully than we do.

We will face competition from numerous pharmaceutical and biotechnology enterprises, as well as from academic institutions, government agencies and private and public research institutions for our lead product candidate. Our commercial opportunities will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects or are less expensive than any products that we might develop. Competition could result in reduced sales and pricing pressure on our lead product candidate, if approved, which in turn would reduce our ability to generate meaningful revenues and have a negative impact on our results of operations. In addition, significant delays in the development of our lead product candidate could allow our competitors to bring products to market before we do and impair our ability to commercialize our lead product candidate. The biotechnology industry, including the cancer immunotherapy market, is intensely competitive and involves a high degree of risk. We compete with other companies that have far greater experience and financial, research and technical resources than us. Potential competitors in the United States and worldwide are numerous and include pharmaceutical and biotechnology companies, educational institutions and research foundations, many of which have substantially greater capital resources, marketing experience, research and development staffs and facilities than ours. Some of our competitors might develop and commercialize products that compete directly with those incorporating our technology or might introduce products to market earlier than our intended product or on a more cost-effective basis. Our competitors compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring technologies complementary to our technology. We might face competition with respect to product efficacy and safety, ease of use and adaptability to various modes of administration, acceptance by physicians, the timing and scope of regulatory approvals, availability of resources, reimbursement coverage, price and patent position, including the potentially dominant patent positions of others. An inability to successfully complete our product development or commercializing our lead product candidate could result in our having limited prospects for establishing market share or generating revenue.

Many of our competitors or potential competitors have significantly greater established presence in the market, financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do, and as a result might have a competitive advantage over us. Mergers and acquisitions in the pharmaceutical and biotechnology industries might result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies might also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary to our programs or potentially advantageous to our business.

As a result of these factors, these competitors might obtain regulatory approval of their products before we are able to obtain patent protection or other intellectual property rights, which will limit our ability to develop or commercialize our lead product candidate. Our competitors might also develop drugs that are safer, more effective, more widely used and cheaper than ours, and might also be more successful than us in manufacturing and marketing their products. These appreciable advantages could render our lead product candidate obsolete or non-competitive before we can recover the expenses of development and commercialization.

Our business might be adversely affected by the ongoing coronavirus pandemic.

The global outbreak of the novel coronavirus (Covid-19) in early 2020 led to disruptions in general economic activities throughout the world as businesses and governments implemented broad actions to mitigate this public health crisis. Although the Covid-19 outbreak has subsided, the extent to which the coronavirus pandemic may reappear and impact the Company’s clinical trial programs and capital raising efforts in the future is uncertain and cannot be predicted.

Significant disruptions of information technology systems, computer system failures or breaches of information and cyber security could adversely affect our business.

We rely to a large extent upon sophisticated information technology systems to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, but not limited to, personal information and intellectual property). The size and complexity of our information technology and information security systems, and those of our third party vendors with whom we might contract, make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from malicious attacks by third parties. Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage and market manipulation) and expertise. While we intend to invest in the protection of data and information technology, there can be no assurance that our efforts will prevent service interruptions or security breaches.

Our internal computer systems, and those of our CROs, our CMOs, and other business vendors on which we might rely, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, fire, terrorism, war and telecommunication and electrical failures. We exercise little or no control over these third parties, which increases our vulnerability to problems with their systems. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. Any interruption or breach in our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us or allow third parties to gain material, inside information that they use to trade in our securities. For example, the loss of clinical trial data from completed or ongoing clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or misappropriation or disclosure of confidential or proprietary information, we could incur liability, the further development of our lead and future product candidates could be delayed and our business could be otherwise adversely affected.

We might need to grow the size of our organization in the future, and we might experience difficulties in managing this growth.

As of March 1, 2024, we had three full-time officer/employees and one part-time officer/employee. The Company relies to a significant extent on outside consultants and advisors with various technical skills and expertise that the Company can draw on as necessary to conduct its research and development and clinical trial programs. We might need to grow the size of our organization in order to support our continued development and potential commercialization of our lead product candidate. As our development and commercialization plans and strategies continue to develop, our need for additional managerial, operational, manufacturing, sales, marketing, financial and other resources might increase. Our management, personnel and systems currently in place might not be adequate to support this future growth. Future growth would impose significant added responsibilities on members of management, including:

If our operations expand, we will likely also need to manage additional relationships with various strategic partners, suppliers and other third parties. Our future financial performance and our ability to commercialize our lead product candidate and to compete effectively will depend, in part, on our ability to manage any future growth effectively, as well as our ability to develop a sales and marketing force when appropriate for our company. To that end, we must be able to manage our development efforts and preclinical studies and clinical trials effectively and hire, train and integrate additional management, research and development, manufacturing, administrative and sales and marketing personnel. The failure to accomplish any of these tasks could prevent us from successfully growing our company.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business might rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations might rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies might also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, inflationary pressures and interest rate changes, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, between Israel and Gaza, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. Future adverse developments with respect to financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business plans and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to conduct our business plans on schedule and on budget.

Risks Related to Owning our Securities

We are a “smaller reporting company” and we have elected to comply with certain reduced reporting and disclosure requirements which could make its common stock less attractive to investors.

We are a “smaller reporting company,” as defined in the Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”), which allows us to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and (2) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements in this document. As a result of these reduced reporting and disclosure requirements our financial statements might not be comparable to SEC registrants not classified as emerging growth companies.

We cannot predict if investors will find our common stock less attractive because we might rely on these exemptions. If some investors find our common stock less attractive as a result, there might be a less active trading market for our common stock and our stock price might be more volatile.

Our independent registered public accounting firm is not be required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer a “smaller reporting company”. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls in the future.

Investors might find our common stock less attractive as a result of our election to utilize these exemptions, which could result in a less active trading market for our common stock and/or the market price of our common stock might be more volatile.

The Warrants are speculative in nature.

The Warrants offered in our November 2020 public offering do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, holders of the Warrants may exercise their right to acquire the common stock and pay an effective exercise price of $57.00 per share, which is substantially in excess of the current market price of the Company’s common stock. Furthermore, each Warrant will expire five (5) years from the original issuance date. In the event our common stock price does not exceed the exercise price of the Warrants during the period when the Warrants are exercisable, the Warrants may not have any value.

Holders of the Warrants will have no rights as a common stockholder until they acquire our common stock.

Until the acquisition of shares of our common stock upon exercise of the Warrants, a holder will have no rights with respect to shares of our common stock issuable upon exercise of the Warrant. Upon exercise of a Warrant, a holder will be entitled to exercise the rights of a common stockholder as to the security exercised only as to matters for which the record date occurs after the exercise.

There is a limited market for the Warrants to purchase shares of our common stock.

Although the Warrants are currently trading on The Nasdaq Capital Market, there can be no assurance that there will be an active trading market for the Warrants. Without an active trading market, the liquidity of the Warrants will be limited.

Provisions of the Warrants could discourage an acquisition of us by a third party.

Certain provisions of the Warrants could make it more difficult or expensive for a third party to acquire us. The Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the Warrants. These and other provisions of the Warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you.

July 20, 2023 sale of common stock and warrants.

In July 2023, we sold common stock and warrants to an institutional investor and raised gross proceeds of approximately $3,500,000. As part of this financing, the Company sold warrants to the institutional investor to purchase 583,334 shares of common stock. Each common warrant had an initial exercise price of $6.00 per share, was immediately exercisable upon issuance, and expires five years thereafter on July 20, 2028. The Company also issued warrants to the placement agent to purchase 35,000 shares of common stock at an exercise price of $6.60 per share and expiring on July 20, 2028.

The exercise prices of the warrants issued to the institutional investor and to the placement agent are subject to customary adjustments for stock splits, stock dividends, stock combinations, reclassifications, reorganizations, or similar events affecting the Company’s common stock. In addition, the warrants issued to the institutional investor contain a “fundamental transaction” provision whereby in the event of a fundamental transaction (a sale or transfer of assets or ownership of the Company as defined in the warrant agreement) within the Company’s control, the holder of the unexercised common stock warrants would be entitled to receive, in exchange for extinguishment of the warrants, cash consideration equal to a Black-Scholes valuation, as defined in the warrant agreement. If such fundamental transaction is not within the Company’s control, the warrant holder would only be entitled to receive the same form of consideration (and in the same proportion) as the holders of the Company’s common stock.

Accordingly, in the event of a change in control of the Company or a sale or transfer of all or substantially all of the Company’s assets, to the extent that the warrants issued to the institutional investor are outstanding at the effective date that such a transaction is closed, this “fundamental transaction” provision would entitle the institutional investor to substantial cash consideration, thus reducing the amounts to be retained by the Company or potentially distributable to the Company’s stockholders.

The price of our common stock or Warrants might fluctuate substantially.

You should consider an investment in our common stock and Warrants to be risky. Some factors that might cause the market price of our common stock or Warrants to fluctuate, in addition to the other risks mentioned in this “Risk Factors,” are:

In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and might expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Risks Related to the Company’s Common Stock

Nasdaq Listing.

The Company’s common stock and the warrants are traded on The Nasdaq Capital Market under the symbols “LIXT” and “LIXTW”, respectively.

In order to achieve compliance with the $1.00 minimum closing bid price requirement of the Nasdaq Capital Market, the Company held a special meeting of stockholders on May 26, 2023 to seek approval for an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its issued and outstanding shares of common stock. As a result of the approval of this amendment, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock effective on Friday, June 2, 2023. Commencing with the opening of trading on the Nasdaq Capital Market on Monday, June 5, 2023, the Company’s common stock began trading on a post-split basis under the same symbol LIXT. The Company subsequently received confirmation from Nasdaq that it had regained compliance with the minimum bid price requirement of $1.00 per share under Nasdaq Listing Rule 5550(a)(2) and currently meets all other applicable criteria for continued listing.