IMMUNIC, INC.

effective July 1, 2020 and then adjusted on March 1, 2021 and August 1, 2022 to add more square footage, expired on June 30, 2024, however, the Company is currently operating on a one-year monthly rolling lease. The Company or landlord may terminate the lease by providing one-years notice. In February 2023, we entered into a lease agreement for our research facility in Planegg, Germany which started in October 2023 and expires in October 2028.

• Clinical drug development involves a lengthy and expensive process with an uncertain outcome.
• Use of patient-reported outcomes in our clinical trials may delay the development of our product candidates or increase development costs.
• Clinical failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive marketing approval.
• Our product candidates may cause undesirable adverse effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if obtained.
• We are heavily dependent on the success of our product candidates, most of which are in the early to late stages of clinical development. We may not be able to generate data for any product candidates sufficient to receive regulatory approval in its planned indications, which will be required before it can be commercialized.
• We may use our limited financial and operational resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success.
• We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for which some of our product candidates are being studied. Difficulty in enrolling patients could delay or prevent clinical trials of our product candidates.
• Even if we receive marketing approval for any of our product candidates, such approved products will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, any approved product candidates could be subject to labeling and other restrictions, and we may be subject to penalties and legal sanctions if we fail to comply with regulatory requirements or experience unanticipated problems with any of our approved products.
• If we fail to obtain regulatory approval in jurisdictions outside the United States, we will not be able to market our products in those jurisdictions.
• Agencies like the FDA and national competition regulators in European countries strictly regulate the marketing and promotion of drugs. If we are found to have improperly promoted any of our product candidates for uses beyond those that are approved, we may become subject to significant liability.
• Our current and future relationships with healthcare professionals, investigators, consultants, collaborators, actual customers, potential customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to sanctions.
• We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as import and export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties and other remedial measures, and incur legal expenses, which could adversely affect our business, financial condition, results of operations, stock price and prospects.
• The impact on us of recent and future healthcare reform legislation and other changes in the healthcare industry and healthcare spending is currently unknown, and may adversely affect our business model.
• If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business, financial condition or results of operations.
• Other Risks Related to Our Business
• Due to our limited resources and access to capital, we must decide to prioritize development of our current product candidates for certain indications and at certain doses. These decisions may prove to have been wrong and may materially adversely affect our business, financial condition, results of operations and prospects.
• We may not be able to win contracts or grants from governments, academic institutions or non-profits.
• If we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize our product candidates.
• If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of applicable insurance coverage, we could be forced to pay substantial damage awards.
• We could have liability if our employees, independent contractors, investigators, CROs, consultants, collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.
• We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations.
• Our internal computer systems, or those of our development collaborators, third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.
• Risks Related to Commercialization of Our Product Candidates
• Even if we obtain the required regulatory approvals in the United States and other territories, the commercial success of our product candidates will depend on market awareness and acceptance of our product candidates.
• We currently have no marketing and sales experience. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, if and when regulatory approval is received, we may be unable to generate any revenue.
• If we fail to enter into strategic relationships or collaborations, our business, financial condition, commercialization prospects and results of operations may be materially adversely affected.
• Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our products profitably.
• We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do.
• The size of the potential market for our product candidates is difficult to estimate and, if any of our assumptions are inaccurate, the actual markets for our product candidates may be substantially smaller than our estimates.
• Negative developments in the field of oral therapies for chronic inflammatory and autoimmune diseases could damage public perception of our product candidates and negatively affect our business.
• Price controls may be imposed in foreign markets, which may adversely affect our future profitability.
• Risks Related to Third Parties
• We rely on third-party suppliers and other third parties for production of our product candidates, and our dependence on these third parties may impair the advancement of our research and development programs and the development of our product candidates.
• We currently rely on and plan to continue to rely on third parties to conduct clinical trials for our product candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, it may cause delays in commencing and completing clinical trials of our product candidates or we may be unable to obtain marketing approval for or commercialize our product candidates.
• We may be unable to realize the potential benefits of any collaboration.
• We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract. In the event we have to perform under these indemnification provisions, it could have a material adverse effect on our business, financial condition and results of operations.
• If our contract manufacturers fail to comply with continuing regulations, resulting enforcement action could adversely affect us.
• A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedings.
• Risks Related to Our Intellectual Property
• Our proprietary rights may not adequately protect our technologies and product candidates.
• We are a party to license agreements under which we license intellectual property and receive commercialization rights relating to certain of our product candidates. If we fail to comply with obligations in such agreements or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business; any termination of such agreements would adversely affect our business.
• We may not be able to protect our intellectual property rights throughout the world.
• If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, we may be unable to extend the term of marketing exclusivity for our product candidates and our business may be materially harmed.
• We may not identify relevant patents or may incorrectly interpret the relevance, scope or expiration of a patent issued to others, which could adversely affect our ability to develop and market our product candidates.
• Obtaining and maintaining patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• The patent protection for our product candidates may expire before we are able to maximize their commercial value, which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue.
• We may become involved in lawsuits or interference proceedings to protect patents held by us or our licensors or other intellectual property rights, which could be expensive, time-consuming and ultimately unsuccessful.
• Third-party claims of intellectual property infringement or misappropriation may adversely affect our business and could prevent us from developing or commercializing our product candidates.
• Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
• Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.
• Intellectual property rights do not protect against all potential threats to our potential competitive advantage.
• Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.
• We may need to license certain intellectual property from third parties, and such licenses may not be available on commercially reasonable terms, or at all.
• We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
• We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
• Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
• If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
• Risks Related to Being a Public Company
• We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
• We are required to report on internal control over financial reporting, which has increased our costs as a public company and increased the demands on management.
• Risks Related to Our Common Stock
• If we fail to regain compliance by June 22, 2026 with the $1.00 minimum bid price requirement of Nasdaq, our common stock will be delisted from the Nasdaq Capital Market (subject to appeal), which would negatively impact the market price and liquidity of our common stock and our ability to access the capital markets.
• If our stockholders fail to approve a reverse stock split of our common stock, our business and operations will be materially negatively impacted, because we will be unable to issue additional shares of common stock and our common stock may be delisted from The Nasdaq Capital Market.
• We intend to effect a reverse stock split, which may not achieve its intended objectives and could negatively affect the market price and liquidity of our common stock. We also have a significant number of warrants which are either exercisable for shares of common stock now, or will be exercisable for shares of common stock following receipt of the Reverse Split Stockholder Approval, and we are obligated to file a resale registration statement with the SEC to cover a significant number of shares of common stock for resale by certain selling stockholders.
• The market price of our common stock has been and is expected to continue to be volatile.
• Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for the Company that stockholders might consider favorable.
• Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
• We may experience adverse consequences because of required indemnification of officers and directors.