Aditxt (ADTX) Risk Analysis

On May 6, 2026, we received a Staff Determination letter (the "Staff Determination") from The Nasdaq Stock Market LLC ("Nasdaq") notifying us that the Nasdaq staff has determined to delist our securities from The Nasdaq Capital Market for failure to comply with Nasdaq Listing Rule 5550(a)(2), which requires that listed securities maintain a minimum bid price of at least $1.00 per share. The Staff Determination further notified us that we are not eligible for an additional compliance period pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv) due to the fact we have effected a reverse stock split over the prior one-year period and have effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more. We intend to appeal the Staff Determination to the Nasdaq Hearings Panel (the "Panel") in accordance with Nasdaq Listing Rule 5815(a), and the delisting action will be stayed pending the outcome of such appeal. However, there can be no assurance that the Panel will grant our request for continued listing or that we will be able to satisfy the conditions, if any, imposed by the Panel for continued listing. If our common stock is delisted from Nasdaq, it will likely be traded on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. A delisting of our common stock from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners. In addition, certain institutional investors are restricted from investing in securities not listed on a national securities exchange, which could further reduce the liquidity and market price of our common stock.

As previously reported in a Current Report on Form 8-K filed by the Company, on December 1, 2025, the Company received written notice from the Listing Qualifications Department of The Nasdaq Capital Market LLC stating that, based upon the stockholders' equity reported by the Company in its Form 10-Q for the period ended September 30, 2025, the Company was no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires a company to maintain a minimum of $2,500,000 in stockholders' equity, a market value of listed securities of at least $35 million, or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years. In accordance with the Nasdaq Listing Rules, the Company had 45 calendar days, or until January 15, 2026, to submit a plan to regain compliance. The Company submitted its plan of compliance on January 15, 2026, and was granted an extension by Nasdaq until May 15, 2026, to regain compliance. A delisting could materially and adversely affect our business, financial condition and results of operations and could reduce the liquidity and market price of our common stock. Although Nasdaq granted the extension, we must satisfy the requirements for continued listing by the end of the extension period. Our ability to regain compliance may depend on factors that are outside our control, including market conditions, our operating performance, our ability to improve our stockholders' equity, and our ability to access capital on acceptable terms, if at all. In addition, Nasdaq may require that we meet interim milestones or other conditions during the extension period, and there can be no assurance that we will satisfy any such conditions. Even if we regain compliance, Nasdaq may subsequently determine that we fail to satisfy other continued listing requirements, and we may again become subject to delisting. As of the date of this Annual Report, our common stock has traded below $1.00 for 6 consecutive trading days. Under Nasdaq's continued listing requirements, if our common stock trades below $1.00 for 30 consecutive trading days, we would be subject to a minimum bid price deficiency and Nasdaq would generally provide notice that we are not in compliance. As of the date of this Annual Report, we have not received a deficiency notice from Nasdaq; however, there can be no assurance that we will not receive such notice if our common stock continues to trade below the minimum bid price threshold for the required period. In addition, on January 26, 2026, Nasdaq filed a rule proposal with the SEC that, if approved and implemented, could require the immediate suspension and delisting of companies whose market capitalization falls below a specified minimum threshold, including a proposed threshold of $5.0 million, for 30 consecutive business days. On March 11, 2026, the SEC issued a release extending the period to approve, disapprove or institute proceedings to determine whether to disapprove the proposed new continued listing standard from March 16, 2026 to April 29, 2026. Because the rule is proposed, it may be modified, delayed or not adopted, and any final rule could differ materially from the proposal, including with respect to the applicable market capitalization test, measurement period, cure period, compliance deadlines, and available remedies. However, if a minimum market capitalization requirement at or near the proposed level is adopted and becomes applicable to us, and our market capitalization falls below the applicable threshold for the relevant period, we could be deemed noncompliant and become subject to delisting from Nasdaq. Our market capitalization has fluctuated in the past and may continue to fluctuate significantly due to factors beyond our control, including overall market conditions, volatility in the trading price or volume of our common stock, industry developments, the availability of research coverage, and investor sentiment. In addition, events such as equity issuances, reverse stock splits, or other corporate actions may not increase our market capitalization and could adversely affect it. As of March 30, 2026, our market capitalization is approximately $713,000. As a result, there can be no assurance that we would be able to satisfy any new minimum market capitalization continued listing standard, if adopted. Unlike most Nasdaq continued listing deficiencies, the proposed rule would allow suspension and delisting to take effect without a prior hearing and without any automatic stay. Although an affected company could seek review of a delisting determination and appeal to the Nasdaq Listing and Hearing Review Council, its securities would remain suspended from Nasdaq trading during that process and would generally trade in the over-the-counter market. The scope of any hearing would be narrowly limited to whether Nasdaq staff made a factual error, with no discretion to grant additional time or consider subsequent compliance. If our common stock were delisted from Nasdaq, we could face significant adverse consequences, including: reduced trading liquidity; increased volatility; reduced analyst coverage and diminished investor interest; decreased ability to raise capital; and potential defaults, penalties or other adverse consequences under agreements that include listing-related covenants or that are affected by a reduced trading market. Delisting could also impair our ability to use equity or equity-linked securities for strategic transactions, employee compensation and other corporate purposes, and could increase our cost of capital. If our common stock were to trade on an over-the-counter market, the market price and liquidity of our common stock could be adversely affected and investors may have difficulty selling their shares.

We may change our strategy at any time without the consent of our stockholders, which may result in our acquiring businesses or assets that are different from, and possibly riskier than, the strategy described in this prospectus. A change in our strategy may increase our exposure to interest rate and currency fluctuations, subject us to regulation under the Investment Company Act or subject us to other risks and uncertainties that affect our operations and profitability.

If additional shares are issued in connection with the proposed acquisition transactions or additional capital is raised through the sale of equity or convertible debt securities, the issuance of those securities could result in further dilution to our stockholders.

We are a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders.

Our Amended and Restated Certificate of Incorporation provides for the authorization to issue up to 3,000,000 shares of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors. Our board of directors is empowered, without stockholder approval, to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our company. In addition, advanced notice is required prior to stockholder proposals, which might further delay a change of control.

Our Amended and Restated Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum, the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company's stockholders, (iii) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL") or our Amended and Restated Certificate of Incorporation or the Company's Amended and Restated Bylaws, or (iv) any action asserting a claim against the Company, its directors, officers, employees or agents governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. This exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. However, our Amended and Restated Bylaws contain a federal forum provision which provides that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation are deemed to have notice of and consented to this provision. The Supreme Court of Delaware has held that this type of exclusive federal forum provision is enforceable. There may be uncertainty, however, as to whether courts of other jurisdictions would enforce such a provision, if applicable. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find our choice of forum provisions contained in either our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

As of January 1, 2026 we no longer qualify as an emerging growth company within the meaning of Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us due to our status as an emerging growth company.