attracting qualified personnel to fulfill Seelos' current or future needs and there is
no guarantee that any of these individuals will join Seelos on a full-time employment basis, or at all. In the event Seelos is unable to fill critical open employment positions, the company may
need to delay its operational activities and goals, including the development of the company's product candidates, and may have difficulty in meeting its obligations as a public company. Seelos
does not maintain "key person" insurance on any of its employees.
In addition, competitors and others are likely in the future to attempt to recruit Seelos' employees. The loss of the services of any of Seelos' key personnel, the inability
to attract or retain highly qualified personnel in the future or delays in hiring such personnel, particularly senior management and other technical personnel, could materially and adversely affect
Seelos' business, financial condition and results of operations. In addition, the replacement of key personnel likely would involve significant time and costs, and may significantly delay or
prevent the achievement of Seelos' business objectives.
From time to time, Seelos' management seeks the advice and guidance of certain scientific advisors and consultants regarding clinical and regulatory development
programs and other customary matters. These scientific advisors and consultants are not Seelos' employees and may have commitments to, or consulting or advisory contracts with, other
entities that may limit their availability to Seelos. In addition, Seelos' scientific advisors may have arrangements with other companies to assist those companies in developing products or
technologies that may compete with Seelos'.
Seelos will need to increase the size of Seelos' organization and may not successfully manage Seelos' growth.
Seelos is a clinical-stage biopharmaceutical company with a small number of planned employees, and Seelos' management systems currently in place are not
likely to be adequate to support Seelos' future growth plans. Seelos' ability to grow and to manage its growth effectively will require Seelos to hire, train, retain, manage and motivate additional
employees and to implement and improve its operational, financial and management systems. These demands also may require the hiring of additional senior management personnel or the
development of additional expertise by Seelos' senior management personnel. Hiring a significant number of additional employees, particularly those at the management level, would increase
Seelos' expenses significantly. Moreover, if Seelos fails to expand and enhance its operational, financial and management systems in conjunction with Seelos' potential future growth, it could
have a material adverse effect on Seelos' business, financial condition and results of operations.
Seelos' management's lack of public company experience could put Seelos at greater risk of incurring fines or regulatory actions for failure to comply with
federal securities laws and could put Seelos at a competitive disadvantage, and could require Seelos' management to devote additional time and resources to ensure compliance
with applicable corporate governance requirements.
Seelos' executive officers do not have experience in managing and operating a public company, which could have an adverse effect on their ability to quickly
respond to problems or adequately address issues and matters applicable to public companies. Any failure to comply with federal securities laws, rules or regulations could subject Seelos to
fines or regulatory actions, which may materially adversely affect Seelos' business, financial condition and results of operations. Further, since Seelos' executive officers do not have experience
managing and operating a public company, Seelos may need to dedicate additional time and resources to comply with legally mandated corporate governance policies relative to Seelos'
competitors whose management teams have more public company experience.
Seelos is exposed to product liability, non-clinical and clinical liability risks which could place a substantial financial burden upon Seelos, should lawsuits
be filed against Seelos.
Seelos' business exposes it to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing of pharmaceutical
formulations and products. In addition, the use in Seelos' clinical trials of pharmaceutical products and the subsequent sale of these products by Seelos or its potential collaborators may cause
Seelos to bear a portion of or all product liability risks. A successful liability claim or series of claims brought against Seelos could have a material adverse effect on Seelos' business, financial
condition and results of operations.
Because Seelos does not currently have any clinical trials ongoing, it does not currently carry product liability insurance. Seelos anticipates obtaining such insurance
upon initiation of its clinical development activities; however, Seelos may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. On
occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated adverse effects. A successful product liability claim or series of claims brought
against Seelos could cause Seelos' stock price to decline and, if judgments exceed Seelos' insurance coverage, could adversely affect Seelos' results of operations and business.
Seelos' research and development activities involve the use of hazardous materials, which subject Seelos to regulation, related costs and delays and
Seelos' research and development activities involve the controlled use of hazardous materials, chemicals and various radioactive compounds, and Seelos will
need to develop additional safety procedures for the handling and disposing of hazardous materials. If an accident occurs, Seelos could be held liable for resulting damages, which could be
substantial. Seelos is also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures,