Rocket One (RKTO) Risk Analysis

Our three core platforms - the nanomagnetic matrix multiplier, skyrmion-mediated spintronic memory, and Swarm Stage AI - are at early stages of development. We license our intellectual property Virginia Commonwealth University and our technologies have only been validated in laboratory or simulation environments, not in commercial products. Our development path depends on advancing device simulation, chip architecture modeling, and experimental device characterization through sponsored university research, and we currently lack our own manufacturing capabilities. There can be no assurance that these technologies, which operate on potentially novel principles, can be successfully translated into commercially viable, manufacturable products Even if these technologies are commercially viable, there is no guarantee that they will achieve market acceptance.. If we are unable to advance these technologies beyond their current developmental stage, our business, financial condition, and prospects could be materially adversely affected.

Our initiatives to develop our nanomagnetic matrix multiplier, skyrmion-mediated spintronic memory, and Swarm Stage AI are in developmental stages of conception, design and development and have not yet been proven at commercial scale, or at all, and may ultimately be unsuccessful. In particular, the timeline for these initiatives, may be difficult or impossible to determine. These efforts require substantial and ongoing investments of financial, technical, and human resources over extended time horizons, including, but not limited to, research and development, testing, infrastructure, regulatory approvals, and mission execution. The technologies, systems, and operational capabilities required for each of these initiatives involve significant technical complexity and are subject to design, engineering, and performance risks, many of which may only become apparent as development and testing progress. Many of these technologies, systems and operational capabilities are novel and untested, and we expect to incur significant capital expenditures before our products and services and other strategic initiatives become profitable, which may never occur. We may be required to devote financial, technical, human or other resources in excess of our current expectations, and there can be no assurance that these investments will generate adequate revenue, which could adversely affect our business, financial condition, results of operations, and future prospects.

We may, in the future, experience delays or other complications in the design, manufacture, launch, production, delivery and servicing ramp of satellites and related technology. Our ability to sell our products and generate revenue may be impacted by delays in the manufacturing of satellites and related technology. If delays like this arise or recur, we could experience issues in sustaining sales of our products which could result in adverse publicity and damage to our brand and reputation, all of which could have a material adverse effect on our business and results of operations.

We do not currently generate revenues from any of our product candidates, and we may not be successful in obtaining regulatory approvals to commence our clinical trials. If we do not obtain such approvals, the time in which we expect to commence clinical programs for our product candidates will be extended and such extension may increase our expenses and our need for additional capital. Moreover, there is no guarantee that our clinical trials will be successful or that we will continue clinical development in support of an approval from the regulatory agencies for any indication. We note that most drug candidates never reach the clinical stage and even those that do commence clinical development have only a small chance of successfully completing clinical development and gaining regulatory approval. Therefore, our business currently depends entirely on the successful development, regulatory approval and commercialization of our product candidates, which may never occur.

Each modification to the protocol during a clinical trial has to be submitted to the FDA. This could result in the delay or halt of a clinical trial while the modification is evaluated. In addition, depending on the quantity and nature of the changes made, the FDA could take the position that the data generated by the clinical trial is not poolable because the same protocol was not used throughout the trial. This might require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance or approval of a product. Any such delay could have a material adverse effect on our business and results of operations.

Patient enrollment in clinical trials and completion of patient participation and follow-up depends on many factors, including the size of the patient population; the nature of the trial protocol; the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects; the availability of appropriate clinical trial investigators; support staff; proximity of patients to clinical sites; ability to comply with the eligibility and exclusion criteria for participation in the clinical trial; and patient compliance. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness of our product candidates or if they determine that the treatments received under the trial protocols are not attractive or involve unacceptable risks or discomforts. Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products.

Once a particular product receives FDA approval or clearance, expanded uses or uses in new indications of our products may require additional human clinical trials and new regulatory approvals or clearances, including additional IND and NDA/BLA submissions or premarket approvals before we can begin clinical development, and/or prior to marketing and sales. If the FDA requires new clearances or approvals for a particular use or indication, we may be required to conduct additional clinical studies, which would require additional expenditures and harm our operating results. If the products are already being promoted for these new indications, we may also be subject to significant enforcement actions. Conducting clinical trials and obtaining clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals could adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.

If one or more of our product candidates receives marketing approval, the commercial success of such product may depend in part on our ability to obtain and maintain periods of regulatory exclusivity under the FDCA. However, there can be no assurance that our product candidates will qualify for or retain any such exclusivity. We have orphan drug designation from the FDA for HT-KIT for the treatment of mastocytosis and we may seek orphan drug designation for other product candidates. As discussed above, regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as "orphan drugs." Under the Orphan Drug Act, the FDA may designate a drug candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or if the disease or condition affects more than 200,000 individuals in the United States and there is no reasonable expectation that the cost of developing and making a drug product available in the United States for the type of disease or condition will be recovered from sales of the product. ODD entitles a party to financial incentives, such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers; however, the orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process. Additionally, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, as codified by the Consolidated Appropriations Act of 2026. This means that the FDA may not approve any other applications to market the same drug or biological product for the same "same approved use or indication within such rare disease or condition" for seven years, except in certain circumstances, including proving clinical superiority (i.e., another product is safer, more effective or makes a major contribution to patient care) to the product with orphan exclusivity. We may not obtain any future orphan drug designations that we apply for. Orphan drug designations do not guarantee that we will be able to successfully develop our product candidates, and there is no guarantee that we will be able to maintain any orphan drug designations that we receive. For instance, orphan drug designations may be revoked if the FDA determines that our request for orphan drug designation was materially defective, if the FDA determines that the product candidate was not eligible for designation at the time of the submission of the request, or if we are unable to assure sufficient quantities of the commercial product for which the designation was granted to meet the needs of patients. Moreover, even if we are able to receive and maintain orphan drug designations, we may ultimately not receive any period of regulatory exclusivity if our product candidates are approved. For instance, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective. Orphan exclusivity may further be lost if we are unable to assure a sufficient quantity of the product to meet the needs of patients with the rare disease or condition. Even if we obtain orphan exclusivity for any of our current or future product candidates, that exclusivity may not effectively protect the product from competition as different products can be approved for the same condition or products that are the same as ours can be approved for different conditions. Even after an orphan product is approved, competitors may receive approval of different products for the indication for which the orphan product has exclusivity, or obtain approval for the same product but for a different indication than that for which the orphan product has exclusivity. If another sponsor receives FDA approval for such product before we do, we would be prevented from launching our product in the United States for the orphan indication for a period of at least seven years, unless we can demonstrate clinical superiority. Moreover, third-party payors may reimburse for products off-label even if not indicated for the orphan condition. Further, our product candidates may not be able to obtain and/or maintain NCE exclusivity. The FDA may determine that a product candidate does not contain a new active moiety if the active ingredient has been previously approved, if the molecule is determined to be a salt, ester, metabolite, or other derivative of a previously approved active moiety, or if the FDA otherwise interprets the statutory requirements in a manner that limits the availability of NCE exclusivity. If the FDA determines that our product candidates are not eligible for NCE exclusivity, competing applicants could submit abbreviated applications that rely on our safety and efficacy data earlier than would be permitted if we do obtain NCE exclusivity. Our product candidates may also not be able to obtain and/or maintain NCI exclusivity. The FDA may determine that the clinical studies supporting approval do not qualify as "new clinical investigations" within the meaning of the statute or that the studies were not essential to approval. In addition, as discussed above, NCI exclusivity protects only the specific conditions of approval supported by the qualifying studies and does not prevent the FDA from approving competing products that rely on our data for other conditions of use or that rely on independently generated data. As a result, even if we obtain NCI exclusivity, competitors may still be able to obtain approval for competing products. Our product candidates may also not be able to obtain and/or maintain pediatric exclusivity. As discussed above, pediatric exclusivity is granted only if the FDA issues a written request for pediatric studies and we complete those studies in accordance with the request and within the required timeframes. There can be no assurance that the FDA will issue such a request, that we will be able to complete the required studies within the specified timelines, that the studies will be deemed responsive to the written request, or that we will otherwise satisfy the regulatory requirements necessary to obtain pediatric exclusivity. In addition, pediatric exclusivity relies on our ability to obtain some other exclusivity period or patent protection, as it extends existing exclusivity periods and/or patent protection but does not create an independent exclusivity period if no underlying exclusivity or patent protection exists. Finally, any exclusivity that we obtain could be subject to challenge, reinterpretation, or limitation by the FDA, legislative changes, or judicial decisions. Changes in law, regulation, or FDA policy regarding the scope or availability of regulatory exclusivity could also reduce the period of protection afforded to our product candidates. If we fail to obtain or maintain regulatory exclusivity for any approved product, competitors may be able to rely on our clinical and nonclinical data to support approval of competing products earlier than if we had obtained exclusivity, which could materially adversely affect our business, financial condition, and results of operations.

We may seek marketing authorization in the United States under Section 505(b)(2) of the FDCA which permits use of a marketing application, referred to as a 505(b)(2) application, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use. The FDA interprets this to mean that an applicant may rely for approval on such data as that found in published literature or the FDA's finding of safety or effectiveness, or both, of a previously approved drug product owned by a third-party. There is no assurance that the FDA would find third-party data relied upon by us in a 505(b)(2) application sufficient or adequate to support approval and may require us to generate additional data to support the safety and efficacy of a product candidate. Consequently, we may need to conduct substantial new research and development activities beyond those we currently plan to conduct. Such additional new research and development activities would be costly and time-consuming and there is no assurance that such data generated from such additional activities would be sufficient to obtain approval. If the data to be relied upon in a 505(b)(2) application is related to drug products previously approved by the FDA and covered by patents that are listed in the FDA's Orange Book, we would be required to submit with our 505(b)(2) application a Paragraph IV Certification in which we must certify that we do not infringe the listed patents or that such patents are invalid or unenforceable, and provide notice to the patent owner or the holder of the approved NDA. The patent owner or NDA holder would have 45 days from receipt of the notification of our Paragraph IV Certification to initiate a patent infringement action against us. If an infringement action is initiated, the approval of our NDA would be subject to a stay of up to 30 months or more while we defend against such a suit. Approval of our product candidates under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents to our product candidates. Alternatively, we may elect to generate sufficient clinical data so that we would no longer need to rely on third-party data, which would be costly and time consuming and there would be no assurance that such data generated from such additional activities would be sufficient to obtain approval. We may not be able to obtain shortened review of our applications, and the FDA may not agree that a product candidate qualifies for marketing approval. If we are required to generate additional data to support approval, we may be unable to meet anticipated or reasonable development and commercialization timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval. If the FDA changes its interpretation of Section 505(b)(2) allowing reliance on data in a previously approved drug application owned by a third-party, or there is a change in the law affecting Section 505(b)(2), this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.

Even if our clinical trials are completed as planned, we cannot be certain that their results will support our drug candidate claims or that the FDA or foreign regulatory agencies will agree with our conclusions regarding them. Success in pre-clinical studies and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the later trials will replicate the results of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate that our drug candidates are safe and effective for the proposed indicated uses. If the FDA or other regulatory agencies conclude that the clinical trials for any of our product candidates has failed to demonstrate safety and effectiveness, we would not receive clearance from the FDA or other regulatory agencies to market that product in the United States or internationally for the indications sought. In addition, such an outcome could cause us to abandon the product candidate and might delay development of other product candidates. Any delay or termination of our clinical trials will delay the filing of any product submissions with the FDA and, ultimately, our ability to commercialize our product candidates and generate revenues. It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part of the product candidate's profile. In addition, our clinical trials may involve a relatively small patient population. Because of the small sample size, our results may not be indicative of future results.