OncoSec Medical (ONMA) Risk Analysis

As the date hereof, our two largest shareholders own approximately 51% of the Company's common stock. As a result, these stockholders may exercise significant influence over all matters requiring stockholder approval, including the appointment of our directors and the approval of significant corporate transactions. This ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination that may be in the best interest of the Company and any other stockholders. This ownership and control may be used to prevent the Company from raising additional funds through the sale of equity which may make it more difficult for the Company to finance its operations.

On December 27, 2022, we received a notice from Nasdaq indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on Nasdaq to maintain a minimum of $2.5 million in stockholders' equity for continued listing. We reported a stockholders' deficit of approximately $5.5 million in our quarterly report on Form 10-Q for the period ended January 31, 2023, and, as a result, do not currently satisfy Listing Rule 5550(b)(1). The notice has no immediate impact on the listing of our Common Stock, which will continue to be listed and traded on Nasdaq, subject to our compliance with the other continued listing requirements. The notice provided us with 45 calendar days, or until February 10, 2023, to submit a plan to regain compliance. The Company submitted such plan to Nasdaq on February 10, 2023, and on February 21, 2023, the Company received a notice from Nasdaq that it has granted 180 calendar days from December 27, 2022, or June 26, 2023, to regain compliance. There can be no assurance that we will be able to regain compliance with all applicable continued listing requirements. In the event we fail to regain compliance within the compliance period, we would have the right to a hearing before an independent panel. The hearing request would halt any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing. If we are unable to obtain regain compliance with a minimum $2.5 million in stockholders' equity by June 26, 2023 or fail to satisfy any of the other continued listing requirements, Nasdaq may take steps to delist our common stock. Such a delisting would likely have an adverse effect on the market liquidity of our securities, decrease the market price of our securities, result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities, and adversely affect our ability to obtain financing for the continuation of our operations.

The Convertible Note provides for certain terms that may have a negative impact on our business. Our obligations under the Convertible Note mature on November 25, 2025. The obligations under the Convertible Note are secured and the lenders thereunder will have a claim against right, title and interest, in and to certain of the Company's intellectual property rights in Hong Kong, Taiwan, China and South Korea, as specified in the Convertible Note. If we are unable to make the necessary payments, we will be in default under the terms of the Convertible Note. As a result, the noteholders would be able to foreclose on their security interests in our intellectual property. An event of default would adversely affect our business, financial condition, results of operations and prospects. Additionally, the Convertible Notes are convertible into common stock, subject to certain terms and conditions, which may result in dilution to our other equity securityholders.

The trading volume and market price of our common stock has experienced, and is likely to continue to experience, significant volatility. This volatility could negatively impact our ability to raise additional capital or utilize equity as consideration in any acquisition transactions we may seek to pursue, and could make it more difficult for existing stockholders to sell their shares of our common stock at a price they consider acceptable or at all. This volatility is caused by a variety of factors, including, among the other risks described in these risk factors: - adverse research and development or clinical trial results;         - our liquidity and ability to obtain additional capital, including the market's reaction to any capital-raising transaction we may pursue;         - declining working capital to fund operations, or other signs of financial uncertainty;         - any negative announcement by the FDA or comparable regulatory bodies outside the U.S., including that it has denied any request to approve any of our product candidates for commercialization;         - conducting open-ended clinical trials, which could lead to results (either positive or negative) being available to the public prior to a formal announcement;         - market assessments of any strategic transaction or collaboration arrangement we may pursue;         - potential negative market reaction to the terms or volume of any issuance of shares of our common stock or other securities to new investors pursuant to strategic or capital-raising transactions or to employees, directors or other service providers;         - sales of substantial amounts of our common stock, or the perception that substantial amounts of our common stock may be sold, by stockholders in the public market;         - issuance of new or updated research or reports by securities analysts or changed recommendations for our common stock;         - significant advances made by competitors that adversely affect our competitive position;         - the loss of key management and scientific personnel and the inability to attract and retain additional highly-skilled personnel; and         - general market and economic conditions, including factors not directly related to our operating performance or the operating performance of our competitors, such as increased uncertainty in the U.S. healthcare regulatory environment following the results of the 2020 U.S. presidential election. In addition, the stock market in general, and the market for stock of companies in the life sciences and biotechnology industries in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of specific companies. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against a company. This type of litigation, if instituted against us, could result in substantial costs and a diversion of our Management's attention and resources.

Our articles of incorporation authorize the issuance of up to 100,000,000 shares of our common stock. In addition to capital-raising activities, on which we have historically relied for cash to fund our operations, other possible business and financial uses for our authorized common stock include, among others, stock splits, acquiring other businesses or assets in exchange for shares of our common stock, issuing shares of our common stock to collaborators in connection with strategic alliances, issuing common stock to vendors for services performed, attracting and retaining employees with equity compensation or other transactions and corporate purposes that our Board of Directors deems to be in the best interest of our Company. Additionally, issuances of common stock could be used for anti-takeover purposes or to delay or prevent changes in control or management of our Company. Any future issuances of our common stock may be consummated on terms that are not favorable, may not enhance stockholder value and may adversely affect the trading price of our common stock. Further, any such issuance will reduce the book value per share of our common stock and reduce the proportionate ownership and voting power of our existing stockholders.

As of July 31, 2022, we had outstanding (i) options to purchase approximately 2.9 million shares of our common stock, (ii) warrants to purchase approximately 1.7 million shares of our common stock, and (iii) approximately 0.06 million restricted stock units. In addition, as of July 31, 2022, there were approximately 1.8 million shares reserved for future issuance under our stock incentive and stock purchase plans. The exercise of options and warrants, the vesting and settlement of restricted stock units or the issuance of additional equity awards under our stock incentive and stock purchase plans could have an adverse effect on the market for our common stock, including the price that any stockholder could obtain for its shares. Further, our existing stockholders could experience significant dilution in the net tangible book value of their investment upon the issuance of additional shares of our common stock through the exercise of derivative securities that are currently outstanding or that we may issue in the future.