Kiromic Biopharma (KRBPQ) Risk Analysis

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation. In addition, as an emerging growth company, we are required to provide only two years of audited financial statements and two years of selected financial data in our initial registration statement, compared to three and five years, respectively, for comparable data reported by other public companies. We could be an emerging growth company for up to five years from our initial public offering ("IPO"), although circumstances could cause us to lose that status earlier, including if the market value of our shares held by non-affiliates equals or exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time or if we have total annual gross revenues of $1.07 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31 (our fiscal year end); or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately. Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company," which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our securities less attractive because we may rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile. When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort towards ensuring compliance with them, and we cannot predict or estimate the amount or timing of such additional costs.

We may be subject to additional claims for rescission (under which a successful claimant would have the right to receive the total amount paid for his or her shares, plus interest and less any income earned on the shares, in exchange for surrender of the shares), damages (under which a successful claimant would have the right to receive the total amount paid for his or her shares, plus interest and less any income earned on the shares, in exchange for surrender of the shares) or other securities law claims resulting from our failure to timely disclose that the Company had received communications from the FDA on June 16 and June 17, 2021 that the FDA was placing the Company's IND applications that the Company submitted to the FDA on May 14 and May 17, 2021 for the ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates, respectively, on clinical hold (the "June 16 and 17, 2021 FDA Communications"). On July 2, 2021, we consummated a public offering of $40 million of our common stock. Neither the Registration Statement on Form S-1 with respect to this offering that was filed on June 25, 2021, nor the final prospectus dated June 29, 2021, with respect to this offering contained any disclosure with respect to the June 16 and 17, 2021 FDA Communications. Our Form S-1 and final prospectus for the offering stated the following with respect to our ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates: "These products are in the pre-IND stage of the FDA clinical trial process. We are currently going through the IND enabling trials process for these product candidates and we expect that first in human dosing in Phase I of clinical trials will commence in the third quarter of 2021."Anyone who purchased shares of our common stock in the offering and anyone who purchased or sold shares of our common stock in the public market after June 16, 2021 could claim that they were misled by our failure to disclose the clinical hold on studies under the INDs for these product candidates and that they suffered damages. On March 7, 2022, certain shareholders who had purchased shares of our common stock in our public offering that closed on July 2, 2021, filed a complaint against us and certain of our current and former officers and directors for alleged violations of Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the purchase of common stock in the offering. The plaintiffs sought unspecified damages; rescission to the extent they still hold Kiromic securities, or if sold, rescissory damages; reasonable costs and expenses, including attorneys' and experts' fees; and other unspecified equitable and injunctive relief. We subsequently reached agreement with the plaintiffs on all settlement materials and terms including with respect to payment of up to $2,300,000 and, on September 29, 2023, counsel for plaintiffs submitted the proposed settlement materials to the Court for approval. Of this amount, insurance covered $570,000, resulting in a net settlement of $1,730,000 covered by the Company.

The market price for our common stock is likely to be volatile. In addition, the market price of our common stock may fluctuate significantly in response to several factors, most of which we cannot control, including: - Quarterly variations in our operating results compared to market expectations. - Adverse publicity about us, the industries we participate in or individual scandals. - Announcements of new offerings or significant price reductions by us or our competitors. - Stock price performance of our competitors. - Fluctuations in stock market prices and volumes. - Changes in senior management or key personnel. - Regulatory actions with respect to our products or our competitors' products. - Competition from existing products or new products that may emerge. - Announcements by us, our potential future collaborators or our competitors of significant acquisitions, strategic collaborations, joint ventures, or capital commitments. - Disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies. - Actual or anticipated fluctuations in our competitors' operating results or growth rate. - Sales of our common stock by us, our insiders or our other stockholders. - The outcome of any pending or threatened litigation. - Changes in financial estimates and/or the issuance of new or updated research reports by securities analysts. - The market's reaction to our reduced disclosure as a result of being an ‘‘emerging growth company'' under the JOBS Act. - Negative earnings or other announcements by us or our competitors. - Defaults on indebtedness, incurrence of additional indebtedness, or issuances of additional capital stock. - Global economic, legal and regulatory factors unrelated to our performance. We may incur rapid and substantial decreases in our stock price in the future that are unrelated to our operating performance or prospects. Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a "short squeeze." Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above the purchase price. As a result, you may suffer a loss on your investment.

As of February 10, 2025, a principal stockholder beneficially owns 19.99% pursuant to a 19.99% blocker provision provided for in the shares of preferred stock and notes owned by such investor. As a result, this stockholder has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, this stockholder has the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by: - Delaying, deferring or preventing a change in corporate control;- Impeding a merger, consolidation, takeover or other business combination involving us; or - Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, the market price for our common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline.

Our charter allows us to issue up to a total of 300,000,000 shares of our common stock and to issue and designate the rights of, without stockholder approval, up to 60,000,000 shares of preferred stock. To raise additional capital, we may in the future sell or issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that are lower than the prices paid by existing stockholders or in settlement of claims against us, which could result in substantial dilution to the interests of existing stockholders.