Titan Pharmaceuticals Inc. (TTNP) 2023年年度報告「AMEX」.pdf

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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF

2、 1934 For the transition period from to .Commission file number 001-13341 TITAN PHARMACEUTICALS,INC.(Exact name of registrant as specified in its charter)Delaware 94-3171940(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification Number)400 Oyster Point Blvd.,Suite

3、505,South San Francisco,California 94080(Address of principal executive offices)(Zip code)Registrants telephone number,including area code:(650)244-4990 Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon Stoc

4、k,par value$0.001 TTNP Nasdaq Capital Market Securities registered pursuant to Section 12(g)of the Act:None 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 re

5、ports pursuant to Section 13 or Section 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 Exchange Act during the preceding 12 months(orfor such shorter period that the registrant was required to f

6、ile such reports),and(2)has been subject to the 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 pr

7、eceding 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,smaller reporting company,or an emerging growthcompany.See the definition

8、s of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filerAccelerated filer Non-accelerated filerSmaller Reporting Company Emerging growth company If an emerging growth company,indica

9、te by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial 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 it

10、s managements assessment of the effectiveness of its internal control over financialreporting 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 securities are registered pursuant to Section 12(b)of the A

11、ct,indicate by check mark whether the financial statements of the registrant included in the filing reflect thecorrection 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 incentiv

12、e-based compensation received by any of theregistrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and no

13、n-voting common equity held by non-affiliates of the registrant based on the closing price on June 30,2023 wasapproximately$7.3 million.As of March 25,2024,914,234 shares of common stock,$0.001 par value,of the registrant were issued and outstanding.DOCUMENTS INCORPORATED BY REFERENCE:NONE Titan Pha

14、rmaceuticals,Inc.Annual Report on Form 10-KFor the Fiscal Year Ended December 31,2023 Table of Contents Page#PART I 1 Item 1.Business 2Item 1A.Risk Factors 8Item 1B.Unresolved Staff Comments 17Item 1C.Cybersecurity 17Item 2.Properties 17Item 3.Legal Proceedings 17Item 4.Mine Safety Disclosures 17 PA

15、RT II 18 Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 18Item 6.Reserved 18Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations 19Item 7A.Quantitative and Qualitative Disclosures About Market R

16、isk 25Item 8.Financial Statements and Supplementary Data 25Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 25Item 9A.Controls and Procedures 25Item 9B.Other Information 26Item 9C.Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 26 PART I

17、II 27 Item 10.Directors,Executive Officers and Corporate Governance 27Item 11.Executive Compensation 30Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 34Item 13.Certain Relationships and Related Transactions,and Director Independence 35Item 14.P

18、rincipal Accounting Fees and Services 36 PART IV 38 Item 15.Exhibits,Financial Statement Schedules 38Item 16.Form 10-K Summary 38 SIGNATURES 41 i PART I CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K or in the documents incorporated by reference herein may conta

19、in“forward-looking statements”within the meaning of Section 27A ofthe Securities Act of 1933(the“Securities Act”)and Section 21E of the Securities Exchange Act of 1934(the“Exchange Act”)that involve substantial risks and uncertainties.We have attempted to identify forward-looking statements by termi

20、nology including“anticipates,”“believes,”“can,”“continue,”“could,”“estimates,”“expects,”“intends,”“may,”“plans,”“potential,”“predicts,”“should,”or“will”or the negative of these terms or other comparable terminology.Although we do not make forward lookingstatements unless we believe we have a reasona

21、ble basis for doing so,we cannot guarantee their accuracy.Forward-looking statements included or incorporated by reference inthis report or our other filings with the Securities and Exchange Commission(the“SEC”)include,but are not necessarily limited to,those relating to uncertainties relating to:Ou

22、r ability to complete one or more strategic transactions that will maximize our assets or otherwise provide value to stockholders;our ability to raise capital when needed;difficulties or delays in the product development and regulatory approval process;and protection for our patents and other intell

23、ectual property or trade secrets.Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at,or by which,that performance or those results will be achieved.Forward-looking statements are based on infor

24、mation available at the time they are made and/or managements good faithbelief as of that time with respect to future events,and are subject to risks and uncertainties,including the risks outlined under“Risk Factors”or elsewhere in this report,thatcould cause actual performance or results to differ

25、materially from what is expressed in or suggested by the forward-looking statements.Forward-looking statements speak only as of the date they are made.You should not put undue reliance on any forward-looking statements.We assume no obligation toupdate forward-looking statements to reflect actual res

26、ults,changes in assumptions or changes in other factors affecting forward-looking information,except to the extentrequired by applicable securities laws.If we do update one or more forward-looking statements,no inference should be drawn as to whether we will make additional updateswith respect to th

27、ose or other forward-looking statements.We caution you not to give undue weight to such projections,assumptions and estimates.References herein to“we,”“us,”“Titan,”and“our company”refer to Titan Pharmaceuticals,Inc.unless the context otherwise requires.Probuphine and ProNeura are trademarks of Fedso

28、n,Inc.This Annual Report on Form 10-K also includes trade names and trademarks of other companies besides Titan.All share and per share data in this report gives retroactive effect to a 1-for-20 reverse stock split effected on January 9,2024.1 Item 1.Business Overview Titan is a pharmaceutical compa

29、ny incorporated as a Delaware corporation in 1992.Prior to the sale of assets that occurred in September 2023(as described below),wefocused on developing therapeutics utilizing the proprietary long-term drug delivery platform,ProNeura,for the treatment of select chronic diseases for which steady sta

30、tedelivery of a drug has the potential to provide an efficacy and/or safety benefit.ProNeura consists of a small,solid implant made from a mixture of ethylene-vinyl acetate(“EVA”)and a drug substance.The resulting product is a solid matrix that is designed to be administered subdermally in a brief,o

31、utpatient procedure and is removed in asimilar manner at the end of the treatment period.Our first product based on the ProNeura technology was Probuphine(buprenorphine implant),which is approved in the United States,Canada and the European Union(“EU”)for the maintenance treatment of opioid use diso

32、rder in clinically stable patients taking 8 mg or less a day of oral buprenorphine.While Probuphine continues to becommercialized in the EU(as Sixmo)by another company that had acquired the rights from Titan,we discontinued commercialization of the product in the United Statesduring the fourth quart

33、er of 2020 and subsequently sold the product in September 2023.Discontinuation of our commercial operations has allowed us to focus our limitedresources on important product development programs and transition back to a product development company.In December 2021,we announced our intention to work

34、with our financial advisor to explore strategic alternatives to enhance stockholder value,potentially including anacquisition,merger,reverse merger,other business combination,sales of assets,licensing or other transaction.In June 2022,we implemented a plan to reduce expenses andconserve capital that

35、 included a company-wide reduction in salaries and a scale back of certain operating expenses to enable us to maintain sufficient resources as we pursuedpotential strategic alternatives.In July 2022,David Lazar and Activist Investing LLC(collectively,“Activist”)acquired an approximately 25%ownership

36、 interest in Titan,fileda proxy statement and nominated six additional directors,each of whom was elected to our board of directors(the“Board”)at a special meeting of stockholders held onAugust 15,2022(the“Special Meeting”).The exploration and evaluation of possible strategic alternatives by the Boa

37、rd has continued following the Special Meeting.Following the election of the new directors at the Special Meeting,Dr.Marc Rubin was replaced as our Executive Chairman,and David Lazar assumed the role of ChiefExecutive Officer.In connection with the termination of his employment as Executive Chairman

38、,Dr.Rubin received aggregate severance payments of approximately$0.4million.In December 2022,we implemented additional cost reduction measures including a reduction in our workforce.In June 2023,David Lazar sold his approximately 25%ownership interest in Titan to Choong Choon Hau,an outside investor

39、.Mr.Lazar remains Titans Chief Executive Officer.On September 1,2023,(the“Closing Date”),we closed on the sale of certain ProNeura assets including our portfolio of drug addiction products and other earlydevelopment programs based on the ProNeura drug delivery technology(collectively,the“ProNeura As

40、sets”).In July 2023,we entered into an asset purchase agreement(the“Asset Purchase Agreement”)with Fedson,Inc.,a Delaware corporation(“Fedson”)for the sale of the ProNeura Assets.Our addiction portfolio consisted of the Probuphineand Nalmefene implant programs.The ProNeura Assets constituted only a

41、portion of our assets.In August 2023,we entered into an Amendment and Extension Agreement(the“Amendment”)to the Asset Purchase Agreement,pursuant to which Fedson agreed to purchase our ProNeura Assets for a purchase price of$2.0 million,consisting of(i)$500,000 in readily available funds,paid in ful

42、l on the Closing Date,(ii)$500,000 in the form of a promissory note due and payable on October 1,2023(the“Cash Note”)and(iii)$1,000,000 in the form of a promissory note due and payable on January 1,2024(the“Escrow Note”).We will also be eligible to receive potential milestone payments ofup to$50 mil

43、lion on future net sales of the products and certain royalties on future net sales of the products.As further consideration,Fedson assumed all liabilities related to apending employment claim against us.On the Closing Date,Fedson delivered a written guaranty by a principal of Fedson of Fedsons oblig

44、ations under both the Cash Note andEscrow Note.The Cash Note included provisions,which Fedson has exercised,allowing Fedson to extend the payment of the Cash Note to November 1,2023 and again toDecember 1,2023 upon payment of$5,000 for each extension.The Cash Note and Escrow Note were paid in Decemb

45、er 2023 and January 2024,respectively.We received thefunds from the escrow account in February 2024.2 ProNeura Continuous Drug Delivery Platform The ProNeura continuous drug delivery system consists of a small,solid rod-shaped implant made from a mixture of EVA and a given drug substance.The resulti

46、ngproduct is a solid matrix that is placed subdermally,normally in the inside part of the upper arm in a brief procedure using a local anesthetic and is removed in a similar mannerat the end of the treatment period.The drug substance is released continuously through the process of dissolution-contro

47、lled diffusion.This results in a continuous,steady rateof release generally similar to intravenous administration.We believe that such long-term,near linear release characteristics are desirable as they avoid the fluctuating peak andtrough drug levels seen with oral dosing that often poses treatment

48、 problems in a range of diseases.The ProNeura platform was developed to address the need for a simple,practical method to achieve continuous long-term drug delivery,and,depending on thecharacteristics of the compound to be delivered,can potentially provide treatment on an outpatient basis over exten

49、ded periods of up to 12 months.We believe that the benefitsof this technology have been demonstrated by the clinical results seen to date with Probuphine,and,in addition,that the development and regulatory process have beenaffirmed by the U.S.Food and Drug Administration(“FDA”)the European Medicines

50、 Agency(“EMA”),and Health Canada approvals of this product.We have furtherdemonstrated the feasibility of the ProNeura platform with small molecules,hormones,and bio-active peptides.The delivery system works with both hydrophobic andhydrophilic molecules.We have also shown the flexibility of the pla

51、tform by experimenting with the release characteristics of the EVA implants,layering the implants withvarying concentrations of drug,and generating implants of different sizes and porosity to achieve a desired delivery profile.Development Programs Below is a description of our existing development p

52、rogram for which activities have been substantially curtailed while we are exploring several financing and strategicalternatives.TP-2021 Several years ago,we began limited non-clinical laboratory experiments in collaboration with JT Pharmaceuticals,Inc.(“JT Pharma”)to assess the feasibility of deliv

53、eringJT Pharmas kappa opioid agonist peptide(“TP-2021”)utilizing our ProNeura system.Following our acquisition of TP-2021 in October 2020,we successfully manufactured aprototype implant containing TP-2021(TP-2021-ProNeura)to be used in appropriate small animal models.While our initial work focused o

54、n TP-2021s ability to activateperipheral kappa opioid receptors,potentially providing a non-addictive treatment for certain types of pain,in January 2021,our research pivoted to explore the feasibility ofusing TP-2021 in the treatment of chronic pruritus,a severe and debilitating condition defined a

55、s itching of the skin lasting longer than six weeks.According to a 2015 reviewby Mollanazar,N.,et al.,an estimated 23 44 million Americans suffer from chronic pruritus of both cutaneous and systemic etiologies.Current treatments includeantihistamines,corticosteroids,and over-the-counter lotions,all

56、of which are relatively ineffective and/or have undesirable side-effect profiles.The antipruritic effect of kappaopioid agonists is thought to be related to their binding to kappa opioid receptors on keratinocytes,immune cells,and peripheral itch neurons.In February 2021,we announced that early non-

57、clinical studies of TP-2021 showed very high affinity and specificity for the human kappa opioid receptor anddemonstrated potent antipruritic activity when injected subcutaneously in a mouse model for moderate to severe pruritus.TP-2021-ProNeura implants were then formulatedand tested in this model.

58、In November 2021,data presented at the annual meeting of the Society for Neuroscience demonstrated that significant reduction in scratching behaviorin this proven animal model for pruritus was maintained in mice who received the TP-2021-ProNeura implant through Day 56 post-implantation,when compared

59、 with controluntreated mice,with no safety issues observed for the implanted animals over the three-month duration of treatment.Subsequently,efficacy in this pruritus model has beenextended through Day 84 post-implantation.In addition,the TP-2021-ProNeura implant provided sustained supra-therapeutic

60、 plasma levels of the peptide through Day 84post-implantation in a separate pharmacokinetic study in mice.We believe that subdermal implantation of TP-2021-ProNeura could potentially deliver therapeuticconcentrations of TP-2021 in human subjects for up to six months or longer following a single in-o

61、ffice procedure.Investigational New Drug(“IND”)enabling non-clinicalsafety and pharmacology studies will need to be conducted in preparation for regulatory approval to enter human clinical studies.Additional funding from external sources forprogression of the non-clinical program is required but wil

62、l be dependent on finding a suitable partner.3 Agreements JT Pharmaceuticals In October 2020,we entered into an asset purchase agreement with JT Pharma(the“JT Agreement”)to acquire JT Pharmas kappa opioid agonist peptide,TP-2021,for usein combination with our ProNeura long-term,continuous drug deliv

63、ery technology for the treatment of chronic pruritus and other potential medical applications.Under theterms of the JT Agreement,JT Pharma received a$15,000 closing payment and is entitled to receive future milestone payments,payable in cash or in stock,based on theachievement of regulatory mileston

64、es,and single-digit percentage earn-out payments on net sales of the product if successfully developed and approved for commercialization.In January 2022,in connection with our entry into a clarification agreement with JT Pharma,we made the first milestone payment under the JT Agreement of$100,000 a

65、ndissued 2,552 shares of our common stock related to the successful completion of a proof-of-concept study in an animal model.Knight Pursuant to an agreement executed in February 2016,Knight Therapeutics Inc.(“Knight”)obtained an exclusive license to commercialize Probuphine in Canada as well asa ri

66、ght of first negotiation in the event we intend to license commercialization rights to any other products in Canada(as amended,the“Knight Agreement”).The KnightAgreement was included in the ProNeura Assets sold to Fedson in September 2023.Prior to being sold to Fedson,we were entitled to receive roy

67、alty payments from Knight onnet sales of Probuphine in Canada ranging in percentage from the low-teens to the mid-thirties.In addition,we had agreed to be the exclusive supplier of Probuphine to Knightsubject to a supply agreement between us and Knight.During the term of the Knight Agreement,we coul

68、d not commercialize any product in Canada containing buprenorphinethat is intended for a treatment duration of six months or more.Intellectual Property Our goal is to obtain,maintain and enforce patent protection for our product candidates,formulations,processes,methods and any other proprietary tec

69、hnologies,preserveour trade secrets,and operate without infringing on the proprietary rights of other parties,both in the United States and in other countries.Our policy is to actively seek toobtain,where appropriate,the broadest intellectual property protection possible for our current product cand

70、idates and any future product candidates,proprietary informationand proprietary technology through a combination of contractual arrangements and patents,both in the United States and abroad.However,patent protection may not afford uswith complete protection against competitors who seek to circumvent

71、 our patents.We also depend upon the skills,knowledge,experience and know-how of our management and research and development personnel,as well as that of our advisors,consultants and other contractors.To help protect our proprietary know-how,which may not be patentable,and for inventions for which p

72、atents may be difficult to enforce,wecurrently rely and will in the future rely on trade secret protection and confidentiality agreements to protect our interests.To this end,we require all of our employees,consultants,advisors and other contractors to enter into confidentiality agreements that proh

73、ibit the disclosure of confidential information and,where applicable,requiredisclosure and assignment to us of the ideas,developments,discoveries and inventions important to our business.We have filed patent applications to the use of a kappa-opioid receptor agonist implant for the treatment of prur

74、itus.The applications are pending in the United States,Australia,Canada,China,Europe,Japan,and Mexico.Any patents issuing from these applications will expire in 2042,absent any adjustment or extension of patent term.Future court decisions or changes in patent law might materially affect the patent a

75、pplications or any resulting patents,including,but not limited to,their expiration dates.4 Competition The pharmaceutical and biotechnology industries are characterized by rapidly evolving technology and intense competition.Our product development programs arecurrently in non-clinical stages of deve

76、lopment and once these commence clinical development we can assess and provide details on specific competitive environment.Manufacturing Prior to the sale of our ProNeura Assets to Fedson,formulation development was conducted at a dedicated facility established at Southwest Research Institute(“SwRI”

77、),in San Antonio,Texas that included current good manufacturing practices(“cGMP”)manufacturing and testing capabilities.We also received support services from the vastarray of SwRI groups with expertise in manufacturing and material sciences.The facilities were compliant with both FDA and Drug Enfor

78、cement Agency(“DEA”)requirements enabling us to work with controlled substances,and the manufacturing scale was ideal for product development during non-clinical and clinical testing stages.Manufacturing of Probuphine was primarily conducted at DPT Laboratories,Inc.(“DPT”),pursuant to a commercial m

79、anufacturing agreement with DPT that governed theterms of the production and supply of Probuphine for the United States,Canada and EU.In October 2020,we entered into a Debt Settlement and Release Agreement(“DSRA”),which transferred the manufacturing facility at DPT to L.Molteni&C.Dei Frattelli Alitt

80、i Societa Di Esercizio S.P.A.(“Molteni”).Under the DSRA,we retainedaccess to the facility,through Molteni,for the manufacture and supply of Probuphine to Knight for Canada.Government Regulation Government authorities in the United States at the federal,state and local level and in other countries ex

81、tensively regulate,among other things,the research,development,testing,manufacture,quality control,approval,labelling,packaging,storage,record-keeping,promotion,advertising,distribution,post-approval monitoring and reporting,marketing and export and import of drug products.Generally,before a new dru

82、g can be marketed,considerable data demonstrating its quality,safety and efficacy must beobtained,organized into a format specific to each regulatory authority,submitted for review and approved by the regulatory authority.In the United States,the FDA regulates drugs and devices under the Food,Drug a

83、nd Cosmetics Act(“FDCA”).Drugs and devices are also subject to other federal,stateand local statutes and regulations.Products composed of both a drug product and device product are deemed combination products.If marketed individually,each componentwould be subject to different regulatory pathways an

84、d reviewed by different centers within the FDA.A combination product,however,is assigned to a center that will haveprimary jurisdiction over its regulation based on a determination of the combination products primary mode of action,which is the single mode of action that provides the mostimportant t

85、herapeutic action.In the case of some of our product candidates,we expect the primary mode of action to be attributable to the drug component of the product,which means that the FDAs Center for Drug Evaluation and Research would have primary jurisdiction over the premarket development,review and app

86、roval.The process ofobtaining regulatory approvals and the subsequent compliance with appropriate federal,state,local and foreign statutes and regulations require the expenditure of substantialtime and financial resources and includes the following:Our product candidates must be approved by the FDA

87、through the New Drug Application(“NDA”)process before they may be legally marketed in the United States.The process required by the FDA before a drug may be marketed in the United States generally involves the following:Completion of extensive nonclinical laboratory tests,animal studies and formulat

88、ion studies in accordance with applicable regulations,including the FDAs GoodLaboratory Practice(“GLP”)regulations;Submission to the FDA of an IND application,which must become effective before human clinical trials may begin;5 Approval by an independent institutional review board(“IRB”)or ethics co

89、mmittee at each clinical trial site before each trial may be initiated;Performance of adequate and well-controlled human clinical trials in accordance with applicable IND and other clinical trial-related regulations,referred to as goodclinical practices(“GCPs”)to establish the safety and efficacy of

90、 the proposed drug for each proposed indication;Submission to the FDA of an NDA for a new drug;A determination by the FDA within 60 days of its receipt of an NDA to file the NDA for review;Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the

91、 drug is produced to assess compliance with cGMPrequirements to assure that the facilities,methods and controls are adequate to preserve the drugs identity,strength,quality and purity;Potential FDA audit of the nonclinical study and/or clinical trial sites that generated the data in support of the N

92、DA;and FDA review and approval of the NDA,including consideration of the views of any FDA advisory committee,prior to any commercial marketing or sale of the drug inthe United States.The nonclinical and clinical testing and approval process requires substantial time,effort and financial resources,an

93、d we cannot be certain that any approvals for ourproduct candidates will be granted on a timely basis,if at all.The data required to support an NDA is generated in two distinct development stages:nonclinical and clinical.For new chemical entities,the nonclinical developmentstage generally involves s

94、ynthesizing the active component,developing the formulation and determining the manufacturing process,as well as carrying out non-humantoxicology,pharmacology and drug metabolism studies in the laboratory,which support subsequent clinical testing.These nonclinical tests include laboratory evaluation

95、 ofproduct chemistry,formulation,stability and toxicity,as well as animal studies to assess the characteristics and potential safety and efficacy of the product.The conduct of thenonclinical tests must comply with federal regulations,including GLPs.The sponsor must submit the results of the nonclini

96、cal tests,together with manufacturing information,analytical data,any available clinical data or literature and a proposed clinical protocol,to the FDA as part of the IND.An IND is a request for authorization from the FDA toadminister an investigational drug product to humans.Some nonclinical testin

97、g may continue even after the IND is submitted,but an IND must become effective before humanclinical trials may begin.The central focus of an IND submission is on the general investigational plan and the protocol(s)for human trials.The IND automatically becomeseffective 30 days after receipt by the

98、FDA,unless the FDA raises concerns or questions regarding the proposed clinical trials,including concerns that human research subjectswill be exposed to unreasonable health risks,and places the IND on clinical hold within that 30-day time period.In such a case,the IND sponsor and the FDA must resolv

99、e anyoutstanding concerns before the clinical trial can begin.The FDA may also impose clinical holds on a drug candidate at any time before or during clinical trials due to safetyconcerns or non-compliance.Accordingly,we cannot be sure that submission of an IND will result in the FDA allowing clinic

100、al trials to begin,or that,once begun,issues willnot arise that could cause the trial to be suspended or terminated.The clinical stage of development involves the administration of the drug candidate to healthy volunteers or patients under the supervision of qualified investigators,generally physici

101、ans not employed by or under the trial sponsors control,in accordance with GCPs,which include the requirement that all research subjects provide theirinformed consent for their participation in any clinical trial.Clinical trials are conducted under protocols detailing,among other things,the objectiv

102、es of the clinical trial,dosingprocedures,subject selection and exclusion criteria and the parameters to be used to monitor subject safety and assess efficacy.Each protocol,and any subsequent amendmentsto the protocol,must be submitted to the FDA as part of the IND.Further,each clinical trial must b

103、e reviewed and approved by an IRB at or servicing each institution at whichthe clinical trial will be conducted.An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individualsparticipating in the clinical trials are minimize

104、d and are reasonable in relation to anticipated benefits.The IRB also approves the informed consent form that must be providedto each clinical trial subject or his or her legal representative and must monitor the clinical trial until completion.There are also requirements governing the reporting ofo

105、ngoing clinical trials and completed clinical trial results to public registries.6 Failure to comply with the applicable U.S.requirements at any time during the product development process,approval process or after approval,may subject an applicantto administrative or judicial sanctions.These sancti

106、ons could include,among other actions,the FDAs refusal to approve pending applications,withdrawal of an approval,aclinical hold,untitled or warning letters,product seizures,total or partial suspension of production or distribution injunctions,fines,refusals of government contracts,restitution,disgor

107、gement,or civil or criminal penalties.Additionally,a manufacturer may need to recall a product from the market.Any agency or judicial enforcement actioncould have a material adverse effect on us.Employees As of March 25,2024,we had four full-time employees.Corporate Information We were incorporated

108、under the laws of the State of Delaware in February 1992.Our principal executive offices are located at 400 Oyster Point Blvd.,Suite 505,SouthSan Francisco,CA 94080.Our telephone number is(650)244-4990.We make our SEC filings available on the Investor Relations page of our website,http:/.Information

109、 contained on our website is not part of this Annual Report on Form 10-K.7 Item 1A.Risk Factors Risks Related to Our Financial Condition and Need for Additional Capital We have incurred net losses in almost every year since our inception,which losses will continue for the foreseeable future and rais

110、e substantial doubt about our abilityto continue as a going concern.We have incurred net losses in almost every year since our inception.Our financial statements have been prepared assuming that we will continue as a going concern.Forthe years ended December 31,2023 and 2022,we had net losses of app

111、roximately$5.6 million and$10.2 million,respectively,and had net cash used in operating activities ofapproximately$7.1 million and$8.2 million,respectively.These net losses and negative cash flows have had,and will continue to have,an adverse effect on our stockholdersequity and working capital,whic

112、h have declined in the past year.At December 31,2023,we had working capital of approximately$6.6 million compared to working capital ofapproximately$1.0 million at December 31,2022.At December 31,2023,we had cash and cash equivalents of approximately$6.8 million.We expect to continue to incur netlos

113、ses and negative operating cash flow for the foreseeable future.The amount of future net losses will depend,in part,on the rate of future growth of our expenses and ourability to obtain third-party funding for our development programs.We will require additional proceeds to fund our product developme

114、nt programs and working capital requirements.We currently estimate that our available cash and cash equivalents will be sufficient to fund our working capital needs into the second quarter of 2025.We will requiresubstantial additional funds to advance our kappa opioid agonist program beyond the proo

115、f-of-concept stage,and to fund any other development programs into the clinic and tocomplete the regulatory approval process necessary to commercialize any products we might develop.Investment in pharmaceutical product development is highly speculativebecause it entails substantial upfront capital e

116、xpenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable.While we are currently evaluating the alternatives available to us,including government grants,third-party collaborations,and potential merger opportunities,our efforts toadd

117、ress our liquidity requirements may not be successful.Furthermore,there can be no assurance that any source of capital will be available to us on acceptable terms or willnot involve substantial dilution to our stockholders.Our failure to obtain substantial funds would likely result in the cessation

118、of our development programs or the wind-downof our business.Our net operating losses and research and development tax credits may not be available to reduce future federal and state income tax payments.At December 31,2023,we had federal net operating loss and tax credit carryforwards of approximatel

119、y$214.7 million and approximately$5.9 million,respectively,andstate net operating loss and tax credit carryforwards of approximately$116.6 million and approximately$9.2 million,respectively,available to offset future taxable income,ifany.Current federal and state tax laws include substantial restric

120、tions on the utilization of net operating loss and tax credits in the event of an ownership change and we cannotassure you that our net operating loss and tax carryforwards will continue to be available.8 Risks Related to Our Business and Industry Our development program is at a very early stage and

121、 will require substantial additional resources that may not be available to us.To date,other than our work on Probuphine in OUD and our work on Nalmefene,which were sold to Fedson in September 2023,we have conducted only limited researchand development activities assessing our kappa opioid agonist p

122、rogram.We will also require substantial additional funds to advance our kappa opioid agonist program beyondthe proof-of-concept stage and to support further research and development activities,including the anticipated costs of nonclinical studies and clinical trials,regulatoryapprovals,and eventual

123、 commercialization of any therapeutic based on kappa opioid agonist or other programs.If we are unable to obtain substantial government grants orenter into third party collaborations to fund our programs,we will need to seek additional sources of financing,which may not be available on favorable ter

124、ms,if at all.If weare unsuccessful in obtaining the requisite funding for our programs,we could be forced to discontinue product development.Furthermore,funding arrangements withcollaborative partners or others may require us to relinquish rights to technologies,product candidates or products that w

125、e would otherwise seek to develop or commercializeourselves or license rights to technologies,product candidates or products on terms that are less favorable to us than might otherwise be available.Our ability to successfully develop any future product candidates is subject to the risks of failure a

126、nd delay inherent in the development of new pharmaceutical products,including:delays in product development,clinical testing,or manufacturing;unplanned expenditures in product development,clinical testing,or manufacturing;failure toreceive regulatory approvals;emergence of superior or equivalent pro

127、ducts;inability to manufacture on our own,or through any others,product candidates on a commercialscale;and failure to achieve market acceptance.Because of these risks,our research and development efforts may not result in any commercially viable products and ourbusiness,financial condition,and resu

128、lts of operations could be materially harmed.Clinical trials required for new product candidates are expensive and time-consuming,and their outcome is uncertain.Conducting clinical trials is a lengthy,time-consuming,and expensive process.The length of time may vary substantially according to the typ

129、e,complexity,novelty,andintended use of the product candidate,and often can be several years or more per trial.Delays associated with products for which we are directly conducting clinical trials maycause us to incur additional operating expenses.The commencement and rate of completion of clinical t

130、rials may be delayed by many factors,including,for example:inability to manufacture sufficient quantities of qualified materials under cGMP for use in clinical trials;slower than expected rates of patient recruitment;failure to recruit a sufficient number of patients;modification of clinical trial p

131、rotocols;changes in regulatory requirements for clinical trials;the lack of effectiveness during clinical trials;the emergence of unforeseen safety issues;delays,suspension,or termination of the clinical trials due to the institutional review board responsible for overseeing the study at a particula

132、r study site;and government or regulatory delays or“clinical holds”requiring suspension or termination of the trials.The results from early clinical trials are not necessarily predictive of results obtained in later clinical trials.Accordingly,even if we obtain positive results from earlyclinical tr

133、ials,we may not achieve the same success in future clinical trials.Clinical trials may not demonstrate statistically significant safety and effectiveness to obtain therequisite regulatory approvals for product candidates.The failure of clinical trials to demonstrate safety and effectiveness for the

134、desired indications could cause us to abandona product candidate and could delay development of other product candidates.Any delay in,or termination of,our clinical trials could materially harm our business,financialcondition,and results of operations.9 We face risks associated with third parties co

135、nducting preclinical studies and clinical trials of our products.We depend on third-party laboratories and medical institutions to conduct preclinical studies and clinical trials for our products and other third-party organizations toperform data collection and analysis,all of which must maintain bo

136、th good laboratory and good clinical practices.We also depend upon third party manufacturers for theproduction of any products we may successfully develop to comply with cGMP of the FDA,which are similarly outside our direct control.If third party laboratories andmedical institutions conducting stud

137、ies of our products fail to maintain both good laboratory and clinical practices,the studies could be delayed or have to be repeated.We face risks associated with product liability lawsuits that could be brought against us.The testing,manufacturing,marketing and sale of human therapeutic products en

138、tail an inherent risk of product liability claims.We currently have a limited amount ofproduct liability insurance,which may not be sufficient to cover claims that may be made against us in the event that the use or misuse of our product candidates causes,ormerely appears to have caused,personal inj

139、ury or death.In the event we are forced to expend significant funds on defending product liability actions,and in the event thosefunds come from operating capital,we will be required to reduce our business activities,which could lead to significant losses.Adequate insurance coverage may not beavaila

140、ble in the future on acceptable terms,if at all.If available,we may not be able to maintain any such insurance at sufficient levels of coverage and any such insurance maynot provide adequate protection against potential liabilities.Whether or not a product liability insurance policy is obtained or m

141、aintained in the future,any claims against us,regardless of their merit,could severely harm our financial condition,strain our management and other resources or destroy the prospects for commercialization of the productwhich is the subject of any such claim.We may be unable to protect our patents an

142、d proprietary rights.Our future success will depend to a significant extent on our ability to:obtain and keep patent protection for our products,methods and technologies on a domestic and international basis;enforce our patents to prevent others from using our inventions;maintain and prevent others

143、from using our trade secrets;and operate and commercialize products without infringing on the patents or proprietary rights of others.We cannot assure you that our patent rights will afford any competitive advantages,and these rights may be challenged or circumvented by third parties.Further,patents

144、may not be issued on any of our pending patent applications in the United States or abroad.Because of the extensive time required for development,testing and regulatoryreview of a potential product,it is possible that before a potential product can be commercialized,any related patent may expire or

145、remain in existence for only a short periodfollowing commercialization,reducing or eliminating any advantage of the patent.If we sue others for infringing our patents,a court may determine that such patents areinvalid or unenforceable.Even if the validity of our patent rights is upheld by a court,a

146、court may not prevent the alleged infringement of our patent rights on the grounds thatsuch activity is not covered by our patent claims.In addition,third parties may sue us for infringing their patents.In the event of a successful claim of infringement against us,we may be required to:pay substanti

147、al damages;stop using our technologies and methods;stop certain research and development efforts;develop non-infringing products or methods;and obtain one or more licenses from third parties.10 If required,we cannot assure you that we will be able to obtain such licenses on acceptable terms,or at al

148、l.If we are sued for infringement,we could encounter substantialdelays in development,manufacture and commercialization of our product candidates.Any litigation,whether to enforce our patent rights or to defend against allegations thatwe infringe third party rights,will be costly,time consuming,and

149、may distract management from other important tasks.We also rely in our business on trade secrets,know-how and other proprietary information.We seek to protect this information,in part,through the use of confidentialityagreements with employees,consultants,advisors and others.Nonetheless,we cannot as

150、sure you that those agreements will provide adequate protection for our trade secrets,know-how or other proprietary information and prevent their unauthorized use or disclosure.To the extent that consultants,key employees or other third parties applytechnological information independently developed

151、by them or by others to our proposed products,disputes may arise as to the proprietary rights to such information,whichmay not be resolved in our favor.We must comply with extensive government regulations.The research,development,manufacture,labelling,storage,record-keeping,advertising,promotion,imp

152、ort,export,marketing and distribution of pharmaceutical productsare subject to an extensive regulatory approval process by the FDA in the United States and comparable health authorities in foreign markets.The process of obtaining requiredregulatory approvals for drugs is lengthy,expensive and uncert

153、ain.Approval policies or regulations may change,and the FDA and foreign authorities have substantial discretionin the pharmaceutical approval process,including the ability to delay,limit or deny approval of a product candidate for many reasons.Despite the time and expense invested inclinical develop

154、ment of product candidates,regulatory approval is never guaranteed.Regulatory approval may entail limitations on the indicated usage of a drug,which mayreduce the drugs market potential.Even if regulatory clearance is obtained,post-market evaluation of the products,if required,could result in restri

155、ctions on a productsmarketing or withdrawal of the product from the market,as well as possible civil and criminal sanctions.Of the large number of drugs in development,only a small percentagesuccessfully complete the regulatory approval process and are commercialized.We face intense competition.With

156、 respect to our product development programs,we face competition from numerous companies that currently market,or are developing,products for the treatment ofthe diseases and disorders we have targeted,many of which have significantly greater research and development capabilities,experience in obtai

157、ning regulatory approvals andmanufacturing,marketing,financial and managerial resources than we have.We also compete with universities and other research institutions in the development of products,technologies and processes,as well as the recruitment of highly qualified personnel.Our competitors ma

158、y succeed in developing technologies or products that are moreeffective than the ones we have under development or that render our proposed products or technologies non-competitive or obsolete.In addition,our competitors may achieveproduct commercialization or patent protection earlier than we will.

159、We depend on a small number of employees and consultants.We are highly dependent on the services of a limited number of personnel and the loss of one or more of such individuals could substantially impair our ongoingcommercialization efforts.We compete in our hiring efforts with other pharmaceutical

160、 and biotechnology companies,and it may be difficult and could take an extended periodof time because of the limited number of individuals in our industry with the range of skills and experience required and because of our limited resources.In addition,we retain scientific and clinical advisors and

161、consultants to assist us in all aspects of our business.Competition to hire and retain consultants from a limitedpool is intense.Further,because these advisors are not our employees,they may have commitments to,or consulting or advisory contracts with,other entities that may limittheir availability

162、to us,and typically they will not enter into non-compete agreements with us.If a conflict of interest arises between their work for us and their work for anotherentity,we may lose their services.In addition,our advisors may have arrangements with other companies to assist those companies in developi

163、ng products or technologies thatmay compete with ours.11 We face potential liability related to the privacy of health information we obtain from clinical trials sponsored by us or our collaborators,from research institutionsand our collaborators,and directly from individuals.Numerous federal and sta

164、te laws,including state security breach notification laws,state health information privacy laws,and federal and state consumer protection laws,govern the collection,use,and disclosure of personal information.In addition,most health care providers,including research institutions from which we or our

165、collaboratorsobtain patient health information,are subject to privacy and security regulations promulgated under the Health Insurance Portability and Accountability Act of 1996(“HIPAA”)as amended by the Health Information Technology for Economic and Clinical Health Act.Although we are not directly s

166、ubject to HIPAA,we could potentially be subject tocriminal penalties if we,our affiliates,or our agents knowingly obtain or disclose individually identifiable health information maintained by a HIPAA-covered entity in amanner that is not authorized or permitted by HIPAA.Rising inflation and interest

167、 rates could negatively impact our revenues,profitability and borrowing costs.In addition,if our costs increase and we are not able tocorrespondingly adjust our commercial relationships to account for this increase,our net income would be adversely affected,and the adverse impact may be material.Inf

168、lation rates,particularly in the United States,have increased recently to levels not seen in years before retreating in the latter part of 2023.Increased inflation may resultin decreased demand for our products,increased operating costs(including our labor costs),reduced liquidity,and limitations on

169、 our ability to access credit or otherwise raisedebt and equity capital.In addition,the United States Federal Reserve has raised,and may again raise,interest rates in response to concerns about inflation.Increases in interestrates have had,and could continue to have,a material impact on our borrowin

170、g costs.In an inflationary environment,we may be unable to raise the sales prices of our productsat or above the rate at which our costs increase,which could reduce our profit margins and have a material adverse effect on our financial results and net income.We also mayexperience lower than expected

171、 sales if there is a decrease in spending on products in our industry in general or a negative reaction to our pricing.A reduction in our revenuewould be detrimental to our profitability and financial condition and could also have an adverse impact on our future growth.We face risks related to healt

172、h epidemics,such as the COVID-19 global pandemic,that could adversely affect our operations or financial results.The COVID-19 pandemic had a material adverse effect on our business and caused significant disruption in the healthcare industry.Although we expect that the primaryimpacts of the COVID-19

173、 pandemic are behind us,as we have seen with the spread of the Delta and Omicron variants,the extent to which COVID-19 continues to impact ourbusiness,healthcare systems in general or the global economy as a whole will depend on future developments that are highly uncertain and cannot be predicted a

174、nd may resultin a sustained economic downturn that could affect our ability to access capital on reasonable terms,or at all.We are increasingly dependent on information technology systems,infrastructure and data.Cybersecurity breaches could expose us to liability,damage our reputation,compromise our

175、 confidential information or otherwise adversely affect our business.We are increasingly dependent upon information technology systems,infrastructure and data.Our computer systems may be vulnerable to service interruption ordestruction,malicious intrusion and random attack.Security breaches pose a r

176、isk that sensitive data,including intellectual property,trade secrets or personal information maybe exposed to unauthorized persons or to the public.Cyber-attacks are increasing in their frequency,sophistication and intensity,and have become increasingly difficult todetect.Cyber-attacks could includ

177、e the deployment of harmful malware,denial-of service,social engineering and other means to affect service reliability and threaten dataconfidentiality,integrity and availability.Our key business partners face similar risks,and a security breach of their systems could adversely affect our security p

178、osture.Whilewe continue to invest in data protection and information technology,there can be no assurance that our efforts will prevent service interruptions,or identify breaches in oursystems,that could adversely affect our business and operations and/or result in the loss of critical or sensitive

179、information,which could result in financial,legal,business orreputational harm.12 Risks Related to our Common Stock Our share price may be volatile,which could prevent you from being able to sell your shares at or above your purchase price.The market price of shares of our common stock has been and

180、may continue to be subject to wide fluctuations in response to many risk factors listed in this section,andothers beyond our control,including:results of our product development efforts;regulatory actions with respect to our products under development or our competitors products;actual or anticipate

181、d fluctuations in our financial condition and operating results;actual or anticipated fluctuations in our competitors operating results or growth rate;announcements by us,our potential future collaborators or our competitors of significant acquisitions,strategic collaborations,joint ventures,or capi

182、tal commitments;issuance of new or updated research or reports by securities analysts;fluctuations in the valuation of companies perceived by investors to be comparable to us;inconsistent trading volume levels of our shares;additions or departures of key personnel;disputes or other developments rela

183、ted to proprietary rights,including patents,litigation matters and our ability to obtain patent protection for our technologies;announcement or expectation of additional financing efforts;sales of our common stock by us,our insiders or our other stockholders;market conditions for biopharmaceutical s

184、tocks in general;and general economic and market conditions.The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of manycompanies.These fluctuations often have been unrelated or disproportionate to t

185、he operating performance of those companies.These broad market and industry fluctuations,aswell as general economic,political and market conditions such as recessions,interest rate changes or international currency fluctuations,may negatively impact the marketprice of shares of our common stock and

186、could subject us to securities class action litigation.If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business,our share price and trading volume coulddecline.The trading market for our common stock will depend on the research and r

187、eports that securities or industry analysts publish about us or our business.We do not have anycontrol over these analysts.There can be no assurance that analysts will cover us or provide favorable coverage.If one or more of the analysts who cover us downgrade ourstock or change their opinion of our

188、 stock,our share price would likely decline.If one or more of these analysts cease coverage of our company or fail to regularly publishreports on us,we could lose visibility in the financial markets,which could cause our share price or trading volume to decline.13 Provisions in our corporate charter

189、 documents and under Delaware law could make an acquisition of our company,which may be beneficial to our stockholders,moredifficult and may prevent attempts by our stockholders to replace or remove our current management.Provisions in our certificate of incorporation and our bylaws may discourage,d

190、elay or prevent a merger,acquisition or other change in control of our company thatstockholders may consider favorable,including transactions in which you might otherwise receive a premium for your shares.These provisions could also limit the price thatinvestors might be willing to pay in the future

191、 for shares of our common stock,thereby depressing the market price of our common stock.In addition,because our Board isresponsible for appointing the members of our management team,these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our currentmanagement

192、by making it more difficult for stockholders to replace members of our Board.Among other things,these provisions provide that:the authorized number of directors can be changed only by resolution of our Board;our bylaws may be amended or repealed by our Board or our stockholders;stockholders may not

193、call special meetings of the stockholders or fill vacancies on the Board;our Board is authorized to issue,without stockholder approval,preferred stock,the rights of which will be determined at the discretion of the Board and that,if issued,could operate as a“poison pill”to dilute the stock ownership

194、 of a potential hostile acquirer to prevent an acquisition that our Board does not approve;our stockholders do not have cumulative voting rights,and therefore our stockholders holding a majority of the shares of common stock outstanding will be able toelect all of our directors;and our stockholders

195、must comply with advance notice provisions to bring business before or nominate directors for election at a stockholder meeting.If we cannot continue to satisfy the Nasdaq Capital Market continued listing standards and other Nasdaq rules,our common stock could be delisted,whichwould harm our busines

196、s,the trading price of our common stock,our ability to raise additional capital and the liquidity of the market for our common stock.Our Common Stock is currently listed on the Nasdaq Capital Market(“Nasdaq”).The listing standards of Nasdaq require that a company maintain stockholders equity ofat le

197、ast$2.5 million and a minimum bid price subject to specific requirements of$1.00 per share.There is no assurance that we will be able to maintain compliance with theminimum closing price requirement or the minimum stockholders equity requirement.Should we fail to comply with the minimum listing stan

198、dards applicable to issuers listedon Nasdaq,our common stock may be delisted from Nasdaq.If our common stock is delisted,it could reduce the price of our common stock and the levels of liquidity availableto our stockholders.If our common stock were to be delisted from Nasdaq and was not eligible for

199、 quotation or listing on another market or exchange,trading of our common stock could beconducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.In suchevent,it could become more difficult t

200、o dispose of,or obtain accurate price quotations for,our common stock,and there would likely also be a reduction in our coverage bysecurities analysts and the news media,which could cause the price of our common stock to decline further.In addition to the foregoing,if our common stock is delisted fr

201、om Nasdaq and it trades on the over-the-counter market,the application of the“penny stock”rules couldadversely affect the market price of our common stock and increase the transaction costs to sell those shares.The SEC has adopted regulations which generally define a“pennystock”as an equity security

202、 that has a market price of less than$5.00 per share,subject to specific exemptions.If our common stock is delisted from Nasdaq and it trades on theover-the-counter market at a price of less than$5.00 per share,our common stock would be considered a penny stock.The SECs penny stock rules require a b

203、roker-dealer,before a transaction in a penny stock not otherwise exempt from the rules,to deliver a standardized risk disclosure document that provides information about penny stocks andthe risks in the penny stock market.The broker-dealer must also provide the customer with current bid and offer qu

204、otations for the penny stock,the compensation of the broker-dealer and the salesperson in the transaction,and monthly account statements showing the market value of each penny stock held in the customers account.In addition,thepenny stock rules generally require that before a transaction in a penny

205、stock occurs,the broker-dealer must make a special written determination that the penny stock is asuitable investment for the purchaser and receive the purchasers agreement to the transaction.If applicable in the future,these rules may restrict the ability of brokers-dealersto sell our common stock

206、and may affect the ability of investors to sell their shares,until our common stock no longer is considered a penny stock.14 Future sales of our common stock,or the perception that future sales may occur,may cause the market price of our common stock to decline,even if our businessis doing well.Sale

207、s by our stockholders of a substantial number of shares of our common stock in the public market could occur in the future.These sales,or the perception in the marketthat the holders of a large number of shares of common stock intend to sell shares,could reduce the market price of our common stock.W

208、e will seek to raise additional funds and may finance acquisitions or develop strategic relationships by issuing securities that would dilute your ownership.Depending onthe terms available to us,if these activities result in significant dilution,it may negatively impact the trading price of our shar

209、es of common stock.We have financed our operations,and we expect to continue seeking to finance our operations,acquisitions,if any,and the development of strategic relationships byissuing equity and/or convertible securities,which could significantly reduce the percentage ownership of our existing s

210、tockholders.Further,any additional financing that wesecure,including any debt financing,may require the granting of rights,preferences or privileges senior to,or pari passu with,those of our common stock.Any issuances by usof equity securities may be at or below the prevailing market price of our co

211、mmon stock and in any event may have a dilutive impact on your ownership interest,which couldcause the market price of our common stock to decline.We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities orinstruments senior to our shares of commo

212、n stock.The holders of any securities or instruments we may issue may have rights superior to the rights of our commonstockholders.If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over common stockholders,it may negativelyimpact the

213、trading price of our shares of common stock,and you may lose all or part of your investment.Certain of our stockholders have significant voting power over our common stock and may vote their shares in a manner that is not in the best interest of otherstockholders.One of our stockholders,Choong Choon

214、 Hau,controls approximately 26.42%of the voting power represented by our outstanding shares of common stock.In addition,TheSire Group Ltd.(“Sire”)owns 950,000 shares of Series AA Convertible Preferred Stock.Each share of Series AA Preferred Stock is convertible into shares of our commonstock,subject

215、 to ownership limitations set forth in the Certificate of Designations,Preferences and Rights of Series AA Convertible Preferred Stock(the“Certificate ofDesignations”).The Series AA Preferred Stock has certain voting rights set forth in the Certificate of Designations.Such stockholders may be able t

216、o exert significant control over our management and affairs requiring stockholder approval,including approval of significant corporatetransactions.This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our comm

217、onstock.This concentration of ownership may not be in the best interests of all of our stockholders.We identified a material weakness in our internal control over financial reporting as of December 31,2023 and this or other material weaknesses could continueto materially impair our ability to report

218、 accurate financial information in a timely manner.Our management,with the participation of our principal executive officer and principal financial officer,evaluated the effectiveness of its disclosure controls andprocedures as defined in Rules 13a-15(e)and 15d-15(e)under the Exchange Act for the ye

219、ar ended December 31,2023.Based on such evaluation,the principal executiveofficer and principal financial officer has concluded that our disclosure controls and procedures were not effective as of December 31,2023 due to the identified materialweakness in internal control over financial reporting as

220、 discussed below.Our management is responsible for establishing and maintaining adequate internal control over financial reporting(as defined in Rules 13a-15(f)and 15d-15(f)of theExchange Act).Our management,under the supervision and with the participation of the principal executive officer and prin

221、cipal financial officer,conducted an assessment ofthe effectiveness of internal control over financial reporting as of December 31,2023,based on the framework and criteria established in Internal Control-IntegratedFramework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Com

222、mission(the COSO framework).Based on this assessment,managementconcluded that,as of December 31,2023,its internal control over financial reporting was not effective due to the existence of the material weakness described below.A material weakness is a deficiency,or a combination of deficiencies,in i

223、nternal control over financial reporting,such that a reasonable possibility exists that a materialmisstatement of the annual or interim financial statements would not be prevented or detected on a timely basis.Our management identified a deficiency in our internal controlover financial reporting tha

224、t gave rise to a material weakness.The deficiency primarily related to limited finance and accounting staffing levels not commensurate with ourcomplexity and our financial accounting and reporting requirements.We underwent organizational changes in 2023 and 2022,including multiple reductions in our

225、workforce,and operate with a very lean finance and accounting department.This limited staffing resulted in a lack of resources to fully monitor and operate our internal controls overfinancial reporting as of December 31,2023,resulting in a deficiency being discovered during our annual auditing proce

226、ss.15 Our management continues to evaluate the material weakness discussed above and is implementing its remediation plan as further described in Item 9A below.However,assurance as to when the remediation efforts will be complete cannot be provided and the material weakness cannot be considered reme

227、died until the applicable controls haveoperated for a sufficient period of time and management has concluded,through testing,that these controls are operating effectively.Our management cannot provideassurances that the measures that have been taken to date,and are continuing to be implemented,will

228、be sufficient to remediate the material weakness identified or to avoidpotential future material weaknesses.If we fail to maintain an effective system of internal control over financial reporting,we may not be able to accurately report our financial results in a timelymanner or prevent fraud,which w

229、ould adversely affect investor confidence in our company and harm our business.Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and,together with adequate disclosure controls and procedures,are designed to prevent fraud.Any failure to im

230、plement required new or improved controls,or difficulties encountered in their implementation,could cause us to fail to meetour reporting obligations in a timely manner,or at all.Testing by us conducted in connection with Section 404(a)of the Sarbanes Oxley Act may reveal material weaknesses inour i

231、nternal controls over financial reporting related to our limited finance,accounting and IT staffing levels.While we are implementing our remediation plan as furtherdescribed in Item 9A below,we cannot provide assurances that the measures that have been taken to date,and are continuing to be implemen

232、ted,will be sufficient to remediatethe material weakness identified or to avoid potential future materials weaknesses.Subsequent testing by our independent registered public accounting firm in connection withSection 404(b)of the Sarbanes Oxley Act may reveal continued or additional deficiencies in o

233、ur internal controls over financial reporting that are deemed to be significantdeficiencies or material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention orimprovement.Ineffective internal controls could also c

234、ause investors to lose confidence in our reported financial information,which could have a negative effect on the tradingprice of our common stock.We are required to disclose material changes made in our internal controls over financing reporting and procedures on a quarterly basis and our managemen

235、t are required toassess the effectiveness of these controls annually.We are also required to make a formal assessment of the effectiveness of our internal control over financial reporting,andonce we cease to be an emerging growth company or a non-accelerated filer,we will be required to include an a

236、ttestation report on internal control over financial reportingissued by our independent registered public accounting firm.However,for as long as we are a smaller reporting company under the JOBS Act or a non-accelerated filer,ourindependent registered public accounting firm will not be required to a

237、ttest to the effectiveness of our internal controls over financial reporting pursuant to Section 404(b)of theSarbanes-Oxley Act.To achieve compliance with Section 404(a)of the Sarbanes-Oxley Act,we engage in a process to document and evaluate our internal control over financial reporting,which is bo

238、th costly and challenging.In this regard,we will need to implement our remediation plan,continue to dedicate internal resources,potentially engage additionaloutside consultants to assess the adequacy of our internal control over financial reporting,continue steps to improve control processes as appr

239、opriate,validate through testingthat controls are designed and operating effectively and implement a continuous reporting and improvement process for internal control over financial reporting.We have determined that,as of December 31,2023,our disclosure controls and procedures were not effective due

240、 to the identified material weakness in internal controland financial reporting as described herein.The effectiveness of our internal controls in future periods is subject to the risk that our controls may become further inadequatebecause of changes in conditions.We may be unable to timely remediate

241、 our material weakness and may discover additional weaknesses in our system of internal financial andaccounting controls and procedures that could result in a material misstatement of our financial statements.Our internal control over financial reporting will not prevent ordetect all errors and all

242、fraud.A control system,no matter how well designed and operated,can provide only reasonable,not absolute,assurance that the control systemsobjectives will be met.Because of the inherent limitations in all control systems,no evaluation of controls can provide absolute assurance that misstatements due

243、 to error orfraud will not occur or that all control issues and instances of fraud will be detected.If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner,or if we are unable to maintain proper and effectiveinternal controls over financial repo

244、rting,we may not be able to produce timely and accurate financial statements.If that were to happen,our investors could lose confidence inour reported financial information,the market price of our stock could decline,and we could be subject to sanctions or investigations by the SEC or other regulato

245、ry authoritiesincluding equivalent foreign authorities.We have never paid any cash dividends and have no plans to pay any cash dividends in the future.Our common stockholders are entitled to receive such dividends as may be declared by our Board.To date,we have paid no cash dividends on our shares o

246、f our preferredor common stock,and we do not expect to pay cash dividends in the foreseeable future.In addition,the declaration and payment of cash dividends is restricted under the termsof our existing Loan Agreement.We intend to retain future earnings,if any,to provide funds for operations of our

247、business.Therefore,any return investors in our preferred orcommon stock may have will be in the form of appreciation,if any,in the market value of their shares of common stock.16 Item 1B.Unresolved Staff Comments.None.Item 1C.Cybersecurity.Risk Management and Strategy We identify and address cyberse

248、curity threats and risks related to our business using a multi-faceted approach that includes assessments by our management,external ITprovider,and third-party service providers.To defend,detect and respond to cybersecurity incidents,we,among other things:conduct proactive privacy and cybersecurityr

249、eviews of systems and applications,audit applicable data policies,conduct employee training,monitor emerging laws and regulations related to data protection andinformation security and implement appropriate changes.Our management performs an annual review of third-party service providers Service Org

250、anization Controls(“SOC”)reports to verify appropriate controls are in place.In 2023,we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy,results of operations,or financial condition.However,despite our ongoin

251、g efforts,we cannot eliminate all risks from cybersecurity threats,or provide assurances that we have not experiencedundetected cybersecurity incidents.Please refer to the risk factor titled“We are increasingly dependent on information technology systems,infrastructure and data.Cybersecurity breache

252、s could expose us to liability,damage our reputation,compromise our confidential information or otherwise adversely affect our business.”in“RiskFactors”in Part I,Item 1A of this Form 10-K for more information on the risks posed to us by cybersecurity threats.Cybersecurity Governance Cybersecurity is

253、 an important part of our risk management processes and is an area of focus for our Board and management.Our Board,as a whole,has oversightresponsibility for our strategic and operational risks,and ensures that appropriate risk mitigation strategies are implemented by management.Our Board periodical

254、ly reviewsand discusses our risk assessment and risk management practices,including cybersecurity risks,with members of management.In addition,our management is responsible forday-to-day assessment and management of cybersecurity risks.Item 2.Properties Our executive offices are located in approxima

255、tely 3,295 square feet of office space in South San Francisco,California that we occupy under a three-year operating leaseexpiring in June 2024.We believe that our existing facilities are adequate for our existing needs.Item 3.Legal Proceedings In September 2023,Fedson,as further consideration for t

256、he Asset Purchase Agreement,agreed to assume all liabilities related to a pending employment claim initiated by aformer employee alleging wrongful termination,retaliation,infliction of emotional distress,negligent supervision,hiring and retention and slander.See Note 5.Commitmentsand Contingencies.I

257、tem 4.Mine Safety Disclosures.Not applicable.17 PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.Our common stock is listed on the Nasdaq Capital Market under the symbol“TTNP.”Approximate Number of Equity Security Holders At Ma

258、rch 25,2024,there were 914,234 shares of our common stock outstanding held by 98 holders of record.The number of record holders was determined from therecords of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers,d

259、ealers,and registeredclearing agencies.Dividends We have never declared or paid any cash dividends on our common stock,and we do not anticipate paying any cash dividends to stockholders in the foreseeable future.Any future determination to pay cash dividends will be at the discretion of our Board an

260、d will be dependent upon our financial condition,results of operations,capitalrequirements,and such other factors as the Board deems relevant.Equity Compensation Plan Information The following table sets forth aggregate information regarding our equity compensation plans in effect as of December 31,

261、2023:Plan category Number ofsecurities tobe issued uponexerciseof outstandingoptions,warrant andrights(a)Weighted-averageexercise price ofoutstandingoptions,warrants andrights(b)Number ofsecuritiesremainingavailable forfuture issuanceunderequitycompensationplans(c)Equity compensation plans approved

262、by security holders(1)93,059$70.23 3,750 Equity compensation plans not approved by security holders(2)30$10,101.02 -Total 93,089$73.46 3,750 (1)In June 2023,our stockholders approved an amendment to the 2015 Omnibus Equity Incentive plan to increase the number of authorized shares to 125,000 shares.

263、(2)Includes 30 non-qualified stock options granted to employees,directors and consultants under our 2014 Incentive Plan.For a description of the 2014 Plan,see Note 8 StockPlans to the accompanying financial statements.Item 6.Reserved 18 Item 7.Managements Discussion and Analysis of Financial Conditi

264、on and Results of Operations.Overview Titan is a pharmaceutical company incorporated as a Delaware corporation in 1992.Prior to the sale of assets that occurred in September 2023(as described below),wefocused on developing therapeutics utilizing the proprietary long-term drug delivery platform,ProNe

265、ura,for the treatment of select chronic diseases for which steady statedelivery of a drug has the potential to provide an efficacy and/or safety benefit.ProNeura consists of a small,solid implant made from a mixture of EVA and a drug substance.The resulting product is a solid matrix that is designed

266、 to be administered subdermally in a brief,outpatient procedure and is removed in a similar manner at the end of thetreatment period.Our first product based on the ProNeura technology was Probuphine(buprenorphine implant),which is approved in the United States,Canada and the European Union(“EU”)for

267、the maintenance treatment of opioid use disorder in clinically stable patients taking 8 mg or less a day of oral buprenorphine.While Probuphine continues to becommercialized in the EU(as Sixmo)by another company that had acquired the rights from Titan,we discontinued commercialization of the product

268、 in the United Statesduring the fourth quarter of 2020 and subsequently sold the product in September 2023.Discontinuation of our commercial operations has allowed us to focus our limitedresources on important product development programs and transition back to a product development company.In Decem

269、ber 2021,we announced our intention to work with our financial advisor to explore strategic alternatives to enhance stockholder value,potentially including anacquisition,merger,reverse merger,other business combination,sales of assets,licensing or other transaction.In June 2022,we implemented a plan

270、 to reduce expenses andconserve capital that included a company-wide reduction in salaries and a scale back of certain operating expenses to enable us to maintain sufficient resources as we pursuedpotential strategic alternatives.In July 2022,Mr.Lazar and Activist acquired an approximately 25%owners

271、hip interest in Titan,filed a proxy statement and nominated sixadditional directors,each of whom was elected to our Board at the Special Meeting on August 15,2022.The exploration and evaluation of possible strategic alternatives by theBoard has continued following the Special Meeting.Following the e

272、lection of the new directors at the Special Meeting,Dr.Marc Rubin was replaced as our ExecutiveChairman,and David Lazar assumed the role of Chief Executive Officer.In connection with the termination of his employment as Executive Chairman,Dr.Rubin receivedaggregate severance payments of approximatel

273、y$0.4 million.In December 2022,we implemented additional cost reduction measures including a reduction in our workforce.In June 2023,David Lazar sold his approximately 25%ownership interest in Titan to Choong Choon Hau,an outside investor.Mr.Lazar remains Titans Chief ExecutiveOfficer.In July 2023,w

274、e entered into the Asset Purchase Agreement with Fedson for the sale of the ProNeura Assets,with closing occurring on September 1,2023.Our addictionportfolio consisted of the Probuphine and Nalmefene implant programs.The ProNeura Assets constituted only a portion of our assets.In August 2023,we ente

275、red into anAmendment and Extension Agreement pursuant to which Fedson agreed to purchase our ProNeura Assets for a purchase price of$2.0 million,consisting of(i)$500,000 inreadily available funds,paid in full on the Closing Date,(ii)$500,000 in the form the Cash Note and(iii)$1,000,000 in the form o

276、f the Escrow Note.We will also be eligible toreceive potential milestone payments of up to$50 million on future net sales of the products and certain royalties on future net sales of the products.As further consideration,Fedson assumed all liabilities related to a pending employment claim against us

277、.On the Closing Date,Fedson delivered a written guaranty by a principal of Fedson of Fedsonsobligations under both the Cash Note and Escrow Note.The Cash Note included provisions,which Fedson has exercised,allowing Fedson to extend the payment of the CashNote to November 1,2023 and again to December

278、 1,2023 upon payment of$5,000 for each extension.The Cash Note and Escrow Note were paid in December 2023 andJanuary 2024,respectively.We received the funds from the escrow account in February 2024.Critical Accounting Policies and Estimates The preparation of our financial statements in conformity w

279、ith accounting principles generally accepted in the United States requires management to make estimates andassumptions that affect the amounts reported in our financial statements and accompanying notes.Actual results could differ materially from those estimates.We believe thefollowing accounting po

280、licies and estimates for the years ended December 31,2023 and 2022 to be applicable:19 Revenue Recognition We generate revenue principally from collaborative research and development arrangements,sales or licenses of technology and government grants.Considerationreceived for revenue arrangements wit

281、h multiple components is allocated among the separate performance obligations based upon their relative estimated standalone sellingprice.In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreements,we perform the following steps for our revenu

282、erecognition:(i)identification of the promised goods or services in the contract;(ii)determination of whether the promised goods or services are performance obligations,including whether they are distinct in the context of the contract;(iii)measurement of the transaction price,including the constrai

283、nt on variable consideration;(iv)allocation ofthe transaction price to the performance obligations based on estimated selling prices;and(v)recognition of revenue when(or as)we satisfy each performance obligation.Grant Revenue We have contracts with National Institute on Drug Abuse(“NIDA”),the Bill&M

284、elinda Gates Foundation,and other government-sponsored organizations for research anddevelopment related activities that provide for payments for reimbursed costs,which may include overhead and general and administrative costs.We recognize revenue fromthese contracts as we perform services under the

285、se arrangements when the funding is committed.Associated expenses are recognized when incurred as research anddevelopment expense.Revenues and related expenses are presented gross in the statements of operations.Performance Obligations A performance obligation is a promise in a contract to transfer

286、a distinct good or service to the customer.Our performance obligations include commercialization licenserights,development services and services associated with the regulatory approval process.We have optional additional items in contracts,which are accounted for as separate contracts when the custo

287、mer elects such options.Arrangements that include a promisefor future commercial product supply and optional research and development services at the customers discretion are generally considered as options.We assess if theseoptions provide a material right to the customer and,if so,such material ri

288、ghts are accounted for as separate performance obligations.If we are entitled to additional paymentswhen the customer exercises these options,any additional payments are recorded in revenue when the customer obtains control of the goods or services.Transaction Price We have both fixed and variable c

289、onsideration.Non-refundable upfront payments are considered fixed,while milestone payments are identified as variable considerationwhen determining the transaction price.Funding of research and development activities is considered variable until such costs are reimbursed at which point,they areconsi

290、dered fixed.We allocate the total transaction price to each performance obligation based on the relative estimated standalone selling prices of the promised goods orservices for each performance obligation.At the inception of each arrangement that includes milestone payments,we evaluate whether the

291、milestones are considered probable of being achieved and estimate theamount to be included in the transaction price using the most likely amount method.If it is probable that a significant revenue reversal would not occur,the value of theassociated milestone is included in the transaction price.Mile

292、stone payments that are not within our control,such as approvals from regulators,are not considered probable ofbeing achieved until those approvals are received.For arrangements that include sales-based royalties or earn-out payments,including milestone payments based on the level of sales,and the l

293、icense or purchase agreementis deemed to be the predominant item to which the royalties or earn-out payments relate,we recognizes revenue at the later of(a)when the related sales occur,or(b)when theperformance obligation to which some or all of the royalty or earn-out payment has been allocated has

294、been satisfied(or partially satisfied).20 Allocation of Consideration As part of the accounting for these arrangements,we must develop assumptions that require judgment to determine the stand-alone selling price of each performanceobligation identified in the contract.Estimated selling prices for li

295、cense rights are calculated using the residual approach.For all other performance obligations,we use a cost-plus margin approach.Timing of Recognition Significant management judgment is required to determine the level of effort required under an arrangement and the period over which we expect to com

296、plete ourperformance obligations under an arrangement.We estimate the performance period or measure of progress at the inception of the arrangement and re-evaluate it each reportingperiod.This re-evaluation may shorten or lengthen the period over which revenue is recognized.Changes to these estimate

297、s are recorded on a cumulative catch-up basis.If wecannot reasonably estimate when our performance obligations either are completed or become inconsequential,then revenue recognition is deferred until we can reasonablymake such estimates.Revenue is then recognized over the remaining estimated period

298、 of performance using the cumulative catch-up method.Revenue is recognized forlicenses or sales of functional intellectual property at the point in time the customer can use and benefit from the license.For performance obligations that are services,revenueis recognized over time proportionate to the

299、 costs that we have incurred to perform the services using the cost-to-cost input method.Inventories Inventories are recorded at the lower of cost or net realizable value.Cost is based on the first in,first out method.We regularly review inventory quantities on hand andwrite down to its net realizab

300、le value any inventory that we believe to be impaired.The determination of net realizable value requires judgment,including consideration ofmany factors,such as estimates of future product demand,product net selling prices,current and future market conditions and potential product obsolescence,among

301、 others.Share-Based Payments We recognize compensation expense for all share-based awards made to employees,directors and consultants.The fair value of share-based awards is estimated at thegrant date based on the fair value of the award and is recognized as expense,net of estimated pre-vesting forf

302、eitures,ratably over the vesting period of the award.We use the Black-Scholes option pricing model to estimate the fair value method of our awards.Calculating stock-based compensation expense requires the input of highlysubjective assumptions,including the expected term of the share-based awards,sto

303、ck price volatility,and pre-vesting forfeitures.We estimate the expected term of stockoptions granted for the years ended December 31,2023 and 2022 based on the historical experience of similar awards,giving consideration to the contractual terms of theshare-based awards,vesting schedules and the ex

304、pectations of future employee behavior.We estimate the volatility of our common stock at the date of grant based on thehistorical volatility of our common stock.The assumptions used in calculating the fair value of stock-based awards represent our best estimates,but these estimates involveinherent u

305、ncertainties and the application of management judgment.As a result,if factors change and we use different assumptions,our stock-based compensation expensecould be materially different in the future.In addition,we estimate the expected pre-vesting forfeiture rate and only recognize expense for those

306、 shares expected to vest.Weestimate the pre-vesting forfeiture rate based on historical experience.If our actual forfeiture rate is materially different from our estimate,our stock-based compensationexpense could be significantly different from what we have recorded in the current period.Income Taxe

307、s We make certain estimates and judgments in determining income tax expense for financial statement purposes.These estimates and judgments occur in the calculation ofcertain tax assets and liabilities,which arise from differences in the timing of recognition of revenue and expense for tax and financ

308、ial statement purposes.21 As part of the process of preparing our financial statements,we are required to estimate our income taxes in each of the jurisdictions in which we operate.This processinvolves us estimating our current tax exposure under the most recent tax laws and assessing temporary diff

309、erences resulting from differing treatment of items for tax andaccounting purposes.We assess the likelihood that we will be able to recover our deferred tax assets.We consider all available evidence,both positive and negative,expectations and risksassociated with estimates of future taxable income a

310、nd ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.If it is not morelikely than not that we will recover our deferred tax assets,we will increase our provision for taxes by recording a valuation allowance against the deferred tax assets that weest

311、imate will not ultimately be recoverable.Clinical Trial Accruals We also record accruals for estimated ongoing clinical trial costs.Clinical trial costs represent costs incurred by Contract Research Organizations(“CROs”)and clinicalsites.These costs are recorded as a component of research and develo

312、pment expenses.Under our agreements,progress payments are typically made to investigators,clinicalsites and CROs.We analyze the progress of the clinical trials,including levels of patient enrollment,invoices received and contracted costs when evaluating the adequacy ofaccrued liabilities.Significant

313、 judgments and estimates must be made and used in determining the accrued balance in any accounting period.Actual results could differ fromthose estimates under different assumptions.Revisions are charged to expense in the period in which the facts that give rise to the revision become known.The act

314、ual clinicaltrial costs for studies conducted in the past two years have not differed materially from the estimated projection of expenses.Warrants Issued in Connection with Equity Financing We generally account for warrants issued in connection with equity financings as a component of equity,unless

315、 there is a deemed possibility that we may have to settlewarrants in cash.For warrants issued with deemed possibility of cash settlement,we record the fair value of the issued warrants as a liability at each reporting period and recordchanges in the estimated fair value as a non-cash gain or loss in

316、 the statements of operations.Leases We determine whether the arrangement is or contains a lease at inception.Operating lease right-of-use assets and lease liabilities are recognized at the present value of thefuture lease payments at commencement date.The interest rate implicit in lease contracts i

317、s typically not readily determinable,and therefore,we utilize our incrementalborrowing rate,which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.Certain adjustments to the right-of-use asset may be

318、required for items such as initial direct costs paid or incentives received.Lease expense is recognized over the expected term on a straight-line basis.Operating leases are recognized on our balance sheet as right-of-use assets,operating leaseliabilities,current and operating lease liabilities,non-c

319、urrent.Liquidity and Capital Resources We have funded our operations since inception primarily through the sale of our securities and the issuance of debt,as well as with proceeds from warrant and optionexercises,corporate licensing and collaborative agreements,the sale of royalty rights,and governm

320、ent-sponsored research grants.At December 31,2023,we had workingcapital of approximately$6.6 million compared to working capital of approximately$1.0 million at December 31,2022.2023 2022 As of December 31:Cash and cash equivalents$6,761$2,937 Working capital$6,574$973 Current ratio 5.55:1 1.37:1 Fo

321、r the Years Ended December 31:Cash used in operating activities$(7,092)$(8,183)Cash provided by investing activities$732$-Cash provided by financing activities$10,000$4,984 22 Net cash used in operating activities for the year ended December 31,2023 consisted primarily of the net loss for the period

322、 of approximately$5.6 million,approximately$1.8 million of gains related to the sale of assets and approximately$1.2 million related to net changes in operating assets and liabilities.This was partially offset byapproximately$1.3 million of non-cash stock-based compensation and approximately$0.1 mil

323、lion of depreciation and amortization expense.Uses of cash in operatingactivities were primarily to fund our product development programs and administrative expenses.Net cash provided by investing activities for the year ended December 31,2023 was primarily related to net proceeds from the sale of a

324、ssets and liabilities to Fedson.Net cash provided by financing activities for the year ended December 31,2023 consisted of approximately$9.5 million of net cash proceeds from the issuance ofpreferred stock and approximately$0.8 million of proceeds from short-term debt.This was partially offset by ap

325、proximately$0.3 million related to payments on short-termnotes payable.In September 2023,we entered into a purchase agreement with Sire Group,pursuant to which we agreed to issue 950,000 shares of our Series AA Convertible PreferredStock at a price of$10.00 per share,for an aggregate purchase price

326、of$9.5 million.The purchase price consisted of(i)$5.0 million in cash at closing and(ii)$4.5 million inthe form of a promissory note from Sire Group which was paid in September 2023.The net cash proceeds from this transaction were approximately$9.5 million.In September 2023,we closed on the sale of

327、the ProNeura Assets pursuant to the Asset Purchase Agreement with Fedson.The ProNeura Assets constituted only a portionof our assets.In August 2023,we entered into an Amendment to the Asset Purchase Agreement,pursuant to which Fedson agreed to purchase our ProNeura Assets for apurchase price of$2.0

328、million,consisting of(i)$500,000 in readily available funds,paid in full on the Closing Date,(ii)$500,000 in the form of the Cash Note and(iii)$1,000,000 in the form of the Escrow Note.We will also be eligible to receive potential milestone payments of up to$50 million on future net sales of the pro

329、ducts and certainroyalties on future net sales of the products.As further consideration,Fedson assumed all liabilities related to a pending employment claim against us.On the Closing Date,Fedson delivered a written guaranty by a principal of Fedson of all of Fedsons obligations under both the Cash N

330、ote and Escrow Note.The Cash Note included provisions,which Fedson has exercised,allowing Fedson to extend the payment of the Cash Note to November 1,2023 and again to December 1,2023 upon payment of$5,000 for eachextension.The Cash Note and Escrow Note were paid in December 2023 and January 2024,re

331、spectively.We received the funds from the escrow account in February 2024.In August 2023,we received$500,000 in funding in exchange for the issuance of a convertible promissory note for that principal amount to Choong Choon Hau(the“HauPromissory Note”).Pursuant to the Hau Promissory Note,the princip

332、al amount will accrue interest at a rate of 10%per annum and will be payable monthly.All principal andaccrued interest shall be due and payable on January 8,2024,unless extended as provided.All or part of the Hau Promissory Note can be converted into our common stock at aconversion price of$9.32 per

333、 share from time to time following the issuance date and ending on the maturity date.In March 2024,the Hau Promissory Note,along withaccrued interest,was converted into 54,132 shares of our common stock.In February 2022,we completed a registered direct offering with an accredited investor pursuant to which we issued an aggregate of 55,000 shares of our common stockand 113,713 pre-funded warrants t