DRMAW — what changed in the latest 10-Q

Text added vs the prior filing · source: 10-Q · 2026-05-13

• ● our current and future capital requirements to support our development and commercialization efforts for our products and our ability to satisfy our capital needs;

• ● our dependence on our products, which are still in various stages of development;

• ● our ability to acquire sufficient quantities of raw material needed to manufacture our products;

• ● our, or that of our third-party manufacturers, ability to manufacture current Good Manufacturing Practices (“cGMPs”) quantities of our products as required to support commercial quantities of our products;

• ● the possibility that an over the counter (“OTC”) formulation, dosage, combinations, or indication will fall outside the scope of applicable OTC monographs, will require new drug applications (“NDA”), or are otherwise challenged by the U.S. Food and Drug Administration (“FDA”), state boards, or oth…

Text removed vs the prior filing · source: 10-Q · 2025-11-14

• ● the expectation that any planned OTC formulation, dosage, combination, or indications fall inside the scope of an applicable OTC monograph, will not require a new drug application, and are otherwise not challenged by FDA, state boards, or other regulators, any of which could delay or prevent launc…

• ● the possibility that positive clinical data generated in the Rx setting are not predictive of consumer experience or commercial performance in the OTC context, and the limits such data may impose on the scope of permissible OTC claims;

• ● our ability to timely secure and scale manufacturing, packaging, and quality systems suitable for OTC commercialization, including meeting lot release, stability, shelf life, and container-closure requirements, and to manage product returns, recalls, or withdrawals if quality issues arise;

• ● our ability to successfully execute our strategic pivot from Rx to OTC, including our capacity to design, formulate, manufacture, package and distribute products that comply with applicable federal, state and international OTC requirements and standards, including FDA OTC monographs, current good …

• ● our ability to establish and maintain distribution and sales channels, including direct-to-consumer e-commerce, professional/clinic channels, and any retail partners, and to manage channel economics, chargebacks, returns, and working capital needs;

Text added vs the prior filing · source: 10-Q · 2026-05-13

• We are involved in litigation with Villani, Inc. relating to our Spongilla-based products and commercialization activities, which could adversely affect our business, operations, financial condition and ability to commercialize our products.

• On April 23, 2026, Villani, Inc. (“Villani”) filed a complaint against us in the U.S. District Court for the Central District of California asserting claims for false advertising under the Lanham Act, breach of contract, and conversion, and seeking injunctive relief. Villani has also stated that it …

• In connection with the litigation, Villani sought a temporary restraining order (“TRO”) and preliminary injunction against us. On May 6, 2026, the Court denied the TRO in part related to a breach of contract and conversion claims and granted the TRO in part on the false or misleading advertising sta…

• While we are not currently restrained from manufacturing, promoting, advertising, using, selling, offering for sale, distributing, or delivering in commerce any product or regimen containing Spongilla, if Villani were to obtain a preliminary injunction, arbitration award, or otherwise, we could be r…

Text removed vs the prior filing · source: 10-Q · 2025-11-14

• Risk Related to Our Transition from the Prescription (“Rx”) Regulatory Framework to OTC Pathways

• Our shift from an Rx regulatory framework to OTC monograph pathways could introduce significant regulatory risks that could delay or prevent product launches, require reformulation or relabeling, restrict indications or target populations, and materially increase costs.

• Unlike prescription drugs, OTC products must be shown to be safe and effective for consumer self-selection and self-use without a healthcare professional’s supervision. For products marketed under the OTC monograph system (implemented through FDA administrative orders), our products must meet all ap…

• While we were pursuing XYNGARI as a prospective candidate for approval under the FDA New Drug Application process, we have since withdrawn the investigational new drug application for XYNGARI and no longer consider it an investigational product. While we believe that our prospective OTC acne kit is …

• For products that do not fit within an OTC monograph or for which we seek novel claims, actives, or conditions of use, we may pursue an OTC NDA. OTC NDAs generally require consumer behavior evidence that differs from Rx approvals, including label comprehension, self selection, and, in many cases, ac…

Text removed vs the prior filing · source: 10-Q · 2025-11-14

• On November 10, 2025, we received the Notice from Villani alleging that we breached the License Agreement as a result of our recent strategic shift to focus on over-the-counter pharmaceutical products. The Notice alleges that we (i) failed to use Commercially Reasonable Efforts (as defined in the Li…