Proxy Statement - Merger or Acquisition (definitive) (defm14a)

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON June 23, 2023

TO THE STOCKHOLDERS OF MOUNTAIN CREST ACQUISITION CORP. V:

NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Mountain Crest Acquisition Corp. V, a Delaware corporation (“Mountain Crest”), will be held on June 23, 2023 at 10:00 AM Eastern Time. Due to the public health concerns relating to the coronavirus pandemic, and our concerns about protecting the health and well-being of our stockholders, the board of directors of Mountain Crest (the “Mountain Crest Board”) has determined to convene and conduct the Special Meeting in a virtual meeting format at https://www.cstproxy.com/mcacquisitionv/2023. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. Stockholders will NOT be able to attend the Special Meeting in person. This proxy statement includes instructions on how to access the virtual Special Meeting and how to listen and vote from home or any remote location with Internet connectivity. The Special Meeting will be held for the following purposes:

At the Special Meeting, Mountain Crest stockholders will be asked to consider and vote upon the following proposals:

All of the proposals set forth above are sometimes collectively referred to herein as the “Proposals.” The Business Combination Proposal and the Redomestication Proposal are dependent upon each other. It is important for you to note that in the event that either of the Business Combination Proposal or the Redomestication Proposal is not approved, then Mountain Crest will not consummate the Business Combination. If Mountain Crest does not consummate the Business Combination and fails to complete an initial business combination by May 16, 2023, or as otherwise set forth in Mountain Crest Charter, the Mountain Crest will be required to dissolve and liquidate. The Mountain Crest Board has approved (1) an amendment to the Mountain Crest Charter to extend the Combination Period from May 16, 2023 to February 16, 2024 and (2) to submit such proposed amendment to the Mountain Crest Charter to Mountain Crest’s stockholders for approval. On May 12, 2023, Mountain Crest’s stockholders approved an amendment to the Mountain Crest Charter extending the Combination Period from May 16, 2023 to February 16, 2024. On May 12, 2023, the Company filed such amendment with the Delaware Secretary of State, by which the Company extended the Business Combination Period from May 16, 2023 to February 16, 2024.

As of May 17, 2023, there were 2,654,874 shares of Mountain Crest Common Stock issued and outstanding and entitled to vote, consisting of 528,974 shares held by public stockholders and 2,125,900 shares held by the Initial Stockholders and Chardan. Only Mountain Crest stockholders who hold shares of record as of the close of business on May 17, 2023 are entitled to vote at the Special Meeting or any adjournment of the Special Meeting. This proxy statement/prospectus is first being mailed to Mountain Crest stockholders on or about May 22, 2023. Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding Mountain Crest Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof. Assuming that a quorum is present, attending the Special Meeting either virtually or by proxy and abstaining from voting will have the same effect as voting against the Proposals and failing to instruct your bank, brokerage firm or nominee to attend and vote your shares will have the effect of a vote against the Business Combination Proposal and no effect on the Adjournment Proposal. Whether or not you plan to attend the Special Meeting virtually, please submit your proxy card without delay to Advantage Proxy not later than the time appointed for the Special Meeting or adjourned meeting. Voting by proxy will not prevent you from voting your shares at the meeting if you subsequently choose to attend the Special Meeting. If you fail to return your proxy card and do not attend the Special Meeting virtually, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. You may revoke a proxy at any time before it is voted at the Special Meeting by executing and returning a proxy card dated later than the previous one, by attending the Special Meeting virtually and casting your vote by ballot or by submitting a written revocation to Advantage Proxy, P.O. Box 13581, Des Moines, WA 98198, that is received by the proxy solicitor before we take the vote at the Special Meeting. If you hold your shares through a bank or brokerage firm, you should follow the instructions of your bank or brokerage firm regarding revocation of proxies.

The Mountain Crest Board unanimously recommends that you vote “FOR” approval of each of the Proposals.

TABLE OF CONTENTS

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed by Holdco (File No. 333- 270483) with the SEC, constitutes a prospectus of Holdco under Section 5 of the United States Securities Act of 1933, as amended (the “Securities Act”), with respect to the issuance of the Holdco Ordinary Shares to Mountain Crest’s stockholders, if the Business Combination is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act, with respect to the Special Meeting at which Mountain Crest’s stockholders will be asked to consider and vote upon the Proposals to approve the Business Combination Proposal, the Redomestication Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Holdco Charter Proposal, the Escrow Proposal and the NTA Requirement Amendment Proposal.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is not lawful to make any such offer or solicitation in such jurisdiction.

WHERE YOU CAN FIND MORE INFORMATION

As a foreign private issuer, after the consummation of the Business Combination, Holdco will be required to file its Annual Report on Form 20-F with the SEC no later than four months following its fiscal year end. Mountain Crest files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read Mountain Crest’s SEC filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.

Information and statements contained in this proxy statement/prospectus, or any annex to this proxy statement/prospectus, are qualified in all respects by reference to the copy of the relevant contract or other annex filed with this proxy statement/prospectus.

If you would like additional copies of this proxy statement/prospectus, or if you have questions about the Business Combination, you should contact Mountain Crest’s proxy solicitor, Advantage Proxy, P.O. Box 13581, Des Moines, WA 98198, individuals call toll-free at 877-870-8565.

None of Mountain Crest, Holdco, AUM nor the other Acquisition Entities has authorized anyone to give any information or make any representation about the Business Combination or their companies that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that have been incorporated into this proxy statement/prospectus by reference. Therefore, if anyone does give you any such information, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements, including statements about the parties’ ability to close the Business Combination, the anticipated benefits of the Business Combination, the financial conditions, results of operations, earnings outlook and prospects of Holdco, Mountain Crest and/or AUM and may include statements for the period following the consummation of the Business Combination. Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of AUM,” and “Business of AUM.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of Mountain Crest and AUM, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Risk Factors,” those discussed and identified in public filings made with the SEC by Mountain Crest and the following:

Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by the management of Mountain Crest, AUM and Holdco prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this proxy statement/prospectus and attributable to AUM, Mountain Crest, Holdco or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this proxy statement/prospectus. Except to the extent required by applicable law or regulation, Holdco, AUM and Mountain Crest undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
AND THE SPECIAL MEETING

Approval of the Business Combination will require the affirmative vote of the holders of a majority of the issued and outstanding Mountain Crest Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof.

Approval of each of the Proposals requires the affirmative vote of the holders of a majority of the issued and outstanding Mountain Crest Common Stock present and entitled to vote at the Special Meeting or any adjournment thereof. As of the record date, 2,125,900 shares held by the Initial Stockholders and Chardan, or approximately 52.4% of the outstanding Mountain Crest Common Stock, would be voted in favor of each of the Proposals.

Any corrected or changed written demand of redemption rights must be received by Mountain Crest’s transfer agent two business days prior to the Special Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two business days prior to the vote at the Special Meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of Mountain Crest Common Stock as of the record date. Any public stockholder who holds Mountain Crest Common Stock on or before June 21, 2023 (two (2) business days before the Special Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the consummation of the Business Combination. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company
1 State Street, 30 floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com 

Deferred Underwriting Commission

The $2,070,000 in deferred underwriting commissions in connection with the IPO, will be released to the underwriters only on completion of the Business Combination, in an amount equal to 3.00% of the gross proceeds of the IPO. Below is a summary of the total deferred underwriting commission to be paid upon closing of the Business Combination, assuming, other than the 6,371,026 shares already redeemed by Mountain Crest stockholders as of May 17, 2023, (i) no redemptions, (ii) 75% of the maximum redemptions and (iii) maximum redemptions, based on approximately $5.5 million in the Trust Account as of May 17, 2023 and approximately $10.41 per share (before deducting estimated taxes payable) being paid to the public investors exercising their redemption rights.

Q:

Are AUM’s shareholders required to approve the Merger?

A:

Yes. Approval by AUM’s shareholders’ of the Merger and the Business Combination Agreement is required to consummate the Business Combination. In the event that the Merger or the Business Combination Agreement fails to be authorized or approved by AUM’s shareholders, Mountain Crest can terminate the Business Combination Agreement.

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

Moreover, Section 367(a) of the Code and the applicable Treasury regulations promulgated thereunder provide that, where a U.S. person exchanges stock or securities in a U.S. corporation for stock or securities in a non-U.S. (“foreign”) corporation in a transaction that qualifies as a reorganization, the U.S. person is required to recognize any gain, but not loss, realized on such exchange unless certain additional requirements are met. There are significant factual and legal uncertainties concerning the determination of whether these requirements will be satisfied and there is limited guidance as to their application, particularly with regard to indirect stock transfers in cross-border reorganizations.

Additionally, if U.S. Holders of Mountain Crest Rights were to be treated for U.S. federal income tax purposes as receiving Holdco Ordinary Shares in discharge of Mountain Crest’s obligations under the Mountain Crest Rights (instead of as receiving such Holdco Ordinary Shares in exchange for transferring the Mountain Crest Rights to Holdco), the Merger would generally be a fully taxable transaction for U.S. federal income tax purposes with respect to the Mountain Crest Rights. Due to the absence of authority on the U.S. federal income tax treatment of the Mountain Crest Rights, there can be no assurance on the characterization of the Mountain Crest Rights that would be adopted by the Internal Revenue Service (“IRS”) or a court of law. Accordingly, U.S. Holders of Mountain Crest Rights are urged to consult with their tax advisors regarding the treatment of their Mountain Crest Rights in connection with the Merger.

If the Merger qualifies as a transaction governed by Section 351 of the Code and the requirements of Section 367(a) of the Code described above are satisfied, and subject to the discussion above regarding Mountain Crest Rights, a U.S. holder that exchanges its Mountain Crest securities in the Business Combination for Holdco Ordinary Shares generally should not recognize any gain or loss on such exchange. In such case, the aggregate adjusted tax basis of the Holdco Ordinary Shares received in the Business Combination by a U.S. holder should be equal to the adjusted tax basis of the Mountain Crest securities surrendered in the Business Combination in exchange therefor. The holding period of the Holdco Ordinary Shares should include the holding period of the Mountain Crest securities surrendered in the Business Combination in exchange therefor.

If the Merger does not qualify as a tax-free exchange, then a U.S. Holder that exchanges its Mountain Crest Common Stock or Mountain Crest Rights, as applicable, for Holdco Ordinary Shares pursuant to the Merger will recognize gain or loss equal to the difference between (i) the fair market value of the Holdco Ordinary Shares received and (ii) the U.S. Holder’s adjusted tax basis in the Mountain Crest Common Stock or Mountain Crest Rights exchanged.

The tax consequences of the Merger are complex and will depend on your particular circumstances. For a more detailed discussion of certain U.S. federal income tax considerations of the Merger and the Business Combination, see the section titled “Material U.S. Federal Income Tax Considerations — Material U.S. Federal Income Tax Considerations of the Business Combination” in this proxy statement/prospectus. Holders should consult their own tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Business Combination.

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

You may also obtain additional information about Mountain Crest from documents filed with the SEC by following the instructions in the section titled “Where You Can Find Additional Information.”

DELIVERY OF DOCUMENTS TO MOUNTAIN CREST’S sTOCKholders

Pursuant to the rules of the SEC, Mountain Crest and vendors that it employs to deliver communications to its stockholders are permitted to deliver to two or more stockholders sharing the same address a single copy of this proxy statement/prospectus, unless Mountain Crest has received contrary instructions from one or more of such stockholders. Upon written or oral request, Mountain Crest will deliver a separate copy of this proxy statement/ prospectus to any stockholder at a shared address to which a single copy of this proxy statement/prospectus was delivered and who wishes to receive separate copies in the future. Stockholders receiving multiple copies of the proxy statement may likewise request that Mountain Crest deliver single copies of this proxy statement/prospectus in the future. Stockholders may notify Mountain Crest of their requests by contacting our proxy solicitor as follows:

Advantage Proxy
P.O. Box 13581
Des Moines, WA 98198
Toll Free: 877-870-8565
Collect: 206-870-8565
Email: KSmith@advantageproxy.com

RISK FACTORS

Investing in the securities of AUM involves a high degree of risk. In addition to the other information contained in this proxy statement/prospectus, including the matters addressed under the headings “Forward-Looking Statements,” “AUM’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Mountain Crest’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes contained herein, you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus and before making a decision to invest in AUM Inc.’s securities. The risks associated with AUM, Mountain Crest, the Business Combination and Holdco have been generally organized according to these categories discussed below, and many of these risks may have ramifications in more than one category. These categories, therefore, should be viewed as a starting point for understanding the significant risks relating to AUM, Mountain Crest, the Business Combination and Holdco, and not as a limitation on the potential impact of the matters discussed. The business, results of operations, financial condition and prospects of AUM and Holdco could also be harmed by risks and uncertainties that are not presently known to them or that they currently believe are not material. If any of the risks actually occur, the business, results of operations, financial condition and prospects of AUM and Holdco could be materially and adversely affected. Unless otherwise indicated, references to business being harmed in these risk factors include harm to business, reputation, brand, financial condition, results of operations and future prospects.

Risks Related to AUM’s Business and Industry

In addition to the other information included in this registration statement, the considerations listed below could have a material adverse effect on AUM’s business, financial condition or results of operations, cash flows, or ability to pay dividends, future prospects, or financial performance. The risks set forth below comprise all material risks currently known to AUM. These factors should be considered carefully, together with the information and financial data set forth in this Registration Statement.

Unless the context otherwise requires, all references in this subsection to “we,” “us” or “our” refer to the business of AUM prior to the Closing and to the Combined Company following the Closing. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the Combined Company, in which event the market price of the Combined Company’s common stock could decline, and you could lose part or all of your investment.

Risks Related to AUM’s Business, Financial Condition, and Need for Additional Capital

We are in the early stages of clinical drug development and have a limited operating history and no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.

We are an early clinical-stage biopharmaceutical company with a limited operating history. AUM was incorporated and commenced operations in 2018. We have no products approved for commercial sale and have not generated any revenue from commercial product sales. Our operations to date have been limited to performing research and development activities in support of our product development and licensing efforts, hiring personnel, raising capital to support and expand such activities, providing general and administrative support for these operations, developing potential product candidates, conducting preclinical studies and clinical trials, including clinical trials of AUM001, our lead product candidate, and our other wholly-owned product candidates, and entering into, and performing our obligations under, licensing arrangements that have resulted in additional product candidates in clinical development or commercialization by our licensees. Other than AUM001 and AUM601, all of our wholly-owned programs are in preclinical or research development. We have not yet demonstrated our ability to successfully complete any large-scale pivotal clinical trials, obtain marketing approvals, manufacture a drug on a commercial scale or arrange for a third party to do so on our behalf, or conduct sales and marketing activities. In addition, none of our licensees has obtained marketing approvals for product candidates we have out-licensed. As a result, it may be more difficult for you to accurately predict our future success or viability than it could be if we had a longer operating history.

In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown factors and risks frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields. We also would need to transition from a company with a research and development focus to a company capable of supporting commercial activities after approval of any of our product candidates. We have not yet demonstrated an ability to successfully overcome such risks and difficulties, or to make such a transition. If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer.

AUM has incurred net losses since inception and expects to continue to incur significant net losses for the foreseeable future.

AUM has incurred net losses since inception, has not generated any significant revenue to date, and has financed its operations prior to this business combination primarily through the issuance of convertible preferred stock, ordinary stock, proceeds from collaborative research and development and out-license agreements, certain non-dilutive funding sources, and borrowings under debt arrangements. AUM’s net loss was approximately SGD$ 13.1 million for the year ended March 31, 2022 and SGD$ 1.3 million for the year ended March 31, 2021.

As of March 31, 2022, AUM had an accumulated deficit of SGD$ 16.9 million. Our clinical-stage pipeline currently consists of multiple product candidates, including our lead product candidate, AUM001, and our other internal programs are in preclinical or research development. As a result, we expect that it will be several years, if ever, before we generate revenue from product sales. Even if we succeed in receiving marketing approval for and commercializing one or more of our product candidates, we expect that we will continue to incur substantial research and development and other expenses in order to develop and market additional potential products. In addition, for certain of our licensees from whom we are entitled to receive royalty payments if they successfully develop and commercialize any products covered by licenses we have with them, there is no guarantee that their product development and commercialization will lead to any such payments even if any such product candidates receive regulatory approval for commercial sale, including for those which will be commercialized by Newsoara Biopharma Co. Ltd (“Newsoara”), from whom AUM will receive milestone payments as discussed below.

Our financial statements for the year ended March 31, 2022 included elsewhere in this proxy statement/prospectus have been prepared assuming we will continue as a going concern. As a development stage company, we expect to incur significant and increasing losses until regulatory approval is granted for AUM001, our lead product candidate. Regulatory approval is not guaranteed and may never be obtained. As a result, these conditions raise substantial doubt about our ability to continue as a going concern.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future after the Business Combination. The net losses we incur may fluctuate significantly from quarter-to-quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our expected future losses will continue to have an adverse effect on our working capital and our ability to achieve and maintain profitability.

Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve a number of objectives.

Our business depends entirely on the successful development and commercialization of our product candidates. AUM currently generates no revenue from commercial sales of any products. AUM has no products approved for commercial sale and, after the Business Combination, we do not anticipate generating any revenue from product sales unless and until sometime after we have successfully completed clinical development and received marketing approval for the commercial sale of a product candidate, if ever. In addition, we may not receive significant amounts of royalty revenue, if any, from our licensees for their product candidates if and when such candidates receive regulatory approval for commercial sale and are commercialized, including for those which will be commercialized by Newsoara, from whom AUM will receive milestone payments as discussed below. Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve a number of objectives, including:

We may never be successful in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability. If we do achieve profitability, we may not sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to maintain or further our research and development efforts, raise additional necessary capital, grow our business, and/or continue our operations.

We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce, and/or eliminate one or more of our research and drug development programs or future commercialization efforts.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for AUM001 and our other product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to drug sales, marketing, manufacturing, and distribution. Commencing upon the Closing, we also expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce, and/or eliminate one or more of our research and drug development programs or future commercialization efforts. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

We plan to continue to use our cash on hand to fund our development of our product candidates and for other research and development activities, working capital, and other general corporate purposes. This may include additional research, hiring additional personnel, capital expenditures, and the costs of operating as a public company. Advancing the development of our current and any future product candidates will require a significant amount of capital. The cash and cash equivalents available to us upon the Closing will not be sufficient to fund all of the actions that are necessary to complete the development of AUM001 or any of our other product candidates. We will be required to obtain further funding through public or private equity offerings, debt financings, partnerships, collaborations, and licensing arrangements or other sources, which may dilute our stockholders or restrict our operating activities. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

Risks Related to the Discovery, Development, and Commercialization of AUM’s Product Candidates

We are dependent on the success of our product candidates, including our lead product candidate, AUM001, which is currently being evaluated in a Phase II clinical trial with planning for an additional trial subject to funding availability. If we are unable to obtain approval for and commercialize our product candidates for one or more indications in a timely manner, our business will be materially harmed.

Our success is dependent on our ability to timely complete clinical trials and obtain marketing approval for, and then successfully commercialize, our product candidates, including our lead product candidate, AUM001, for one or more indications. Our product candidates are in the early stages of development and we are investing the majority of our efforts and financial resources in the research and development of AUM001 for multiple indications, both directly through our own efforts and indirectly through clinical collaboration arrangements, including investigator- and cooperative group-sponsored trials (“ISTs”). Our product candidates will require additional clinical development, preclinical and manufacturing activities, marketing approval from government regulators, substantial investment, and significant marketing efforts before we generate any revenue from licensing arrangements. We are not permitted to market or promote any product candidates, in a jurisdiction before receiving marketing approval from the relevant regulatory authority, including, for example, the Food and Drug Administration (the “FDA”) for marketing in the United States and the European Medicines Agency (the “EMA”) for marketing in the European Union, and we may never receive such marketing approvals.

The success of our product candidates will depend on numerous factors, including the following:

We do not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, including trial design, implementation, and timely provision of data in our collaboration based clinical trials and ISTs; potential threats to our intellectual property rights; and the manufacturing, marketing, distribution, and sales efforts of any future collaborator. If we are unable to achieve one or more of the objectives set forth above, our business will be materially harmed.

The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of AUM’s clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities.

AUM will be required to demonstrate with substantial evidence through well-controlled clinical trials that its product candidates are safe and effective for use in a diverse population before it can seek marketing approvals for their commercial sale. Preclinical and clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the preclinical study and clinical trial processes, and, because AUM’s product candidates are in early stages of developments, there is a high risk of failure and AUM may never succeed in developing marketable products.

The results of preclinical studies may not be predictive of the results of clinical trials of AUM’s product candidates. Moreover, the results of early clinical trials may not be predictive of the results of later-stage clinical trials. Although product candidates may demonstrate promising results in preclinical studies and early clinical trials, they may not prove to be safe or effective in subsequent clinical trials. Favorable results from certain animal studies may not accurately predict the results of other animal studies or of human trials, due to the inherent biologic differences in species, the differences between testing conditions in animal studies and human trials, and the particular goals, purposes, and designs of the relevant studies and trials.

There is typically an extremely high rate of attrition from the failure of product candidates proceeding through preclinical studies and clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. Likewise, early, smaller-scale clinical trials may not be predictive of eventual safety or effectiveness in large-scale pivotal clinical trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence preclinical studies and clinical trials are never approved as products. The development of AUM’s product candidates and AUM’s stock price may also be impacted by inferences, whether correct or not, that are drawn between the success or failure of preclinical studies or clinical trials of AUM’s competitors or other companies in the biopharmaceutical industry, in addition to AUM’s own preclinical studies and clinical trials.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dose and dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. Patients treated with AUM’s product candidates may also be undergoing surgical, radiation and chemotherapy treatments and may be using other approved products or investigational new drugs, which can cause side effects or adverse events that are unrelated to AUM’s product candidates. As a result, assessments of efficacy can vary widely for a particular patient, and from patient to patient and site to site within a clinical trial. This subjectivity can increase the uncertainty of, and adversely impact, AUM’s clinical trial outcomes.

Any preclinical studies or clinical trials that AUM conducts may not demonstrate the safety and efficacy necessary to obtain regulatory approval to market its product candidates. If the results of AUM’s ongoing or future preclinical studies and clinical trials are inconclusive with respect to the safety and efficacy of its product candidates, if it does not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with its product candidates, AUM may be prevented or delayed in obtaining marketing approval for such product candidates. In some instances, there can be significant variability in safety or efficacy results between different preclinical studies and clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants.

AUM does not know whether any preclinical studies or clinical trials it may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain approval to market any of its product candidates.

Our clinical trials may reveal serious adverse events, toxicities, or other side effects of our current and any future product candidates that result in a safety profile that could inhibit regulatory approval or market acceptance of our product candidates.

In order to obtain marketing approval for our current or any future product candidates, we must demonstrate the safety and efficacy of the product candidate for the relevant clinical indication or indications through preclinical studies and clinical trials as well as additional supporting data. If our product candidates are associated with undesirable side effects in preclinical studies or clinical trials, or have unexpected characteristics, we may need to interrupt, delay, or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective.

Although we have conducted various preclinical studies and have data from various early-stage clinical trials, we do not know the predictive value of these studies and trials for our future clinical trials, and we cannot guarantee that any positive results in preclinical studies or previous clinical trials will successfully translate to patients in our future clinical trials. It is not uncommon to observe results in clinical trials that are unexpected based on preclinical testing or previous clinical trials, and many product candidates fail in clinical trials despite promising preclinical or early-stage clinical results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for their products.

While we believe that AUM001 has been reasonably well tolerated in our clinical trials to date, subjects have experienced adverse events (“AEs”) that have been considered treatment-related. Some of the more common adverse events included diarrhea, dry mouth, headache, disturbance in attention, dizziness, reduction in white cell count, elevated creatinine kinase and elevated liver enzymes. The majority of these events were mild/moderate in severity, responded to symptomatic treatment and/or were transient and resolved with time.

No serious adverse events (“SAEs”) have been reported in AUM001 clinical studies involving healthy volunteers to date. However, one subject was discontinued from the multiple ascending dose (“MAD”) study due to a report of left ventricular tachycardia, which was reported by the investigator as being possibly related to AUM001. Although no SAEs have been reported in AUM001 clinical studies involving healthy volunteers to date, this does not guarantee that no SAEs, including death, will not be observed in future trials with patients and when given in combination with other treatments.

We expect that subjects in our ongoing and planned clinical trials for our product candidates may in the future suffer AEs, SAEs or other side effects, including those not observed in our preclinical studies or previous clinical trials. Results of these trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates could result in the delay, suspension, or termination of clinical trials by us or the FDA, EMA or comparable foreign regulatory authority for a number of reasons. Additionally, a number of the subjects in these clinical trials are expected to die during a trial due to the underlying cancers they suffer and any of the treatment regimens they may have previously experienced, which could impact the development of our product candidates. If we elect or are required to delay, suspend, or terminate any clinical trial, the commercial prospects of our product candidates will be harmed and our ability to generate product revenue from this product candidate will be delayed or eliminated. SAEs observed in clinical trials could hinder or prevent market acceptance of our drug candidates. Any of these occurrences may harm our business, prospects, financial condition, and results of operations significantly.

Even in circumstances in which we do not believe that an AE is related to our product candidates, the required investigation into the circumstances of such AE may be time-consuming or inconclusive. In particular, patients may face serious medical issues associated with the underlying cancer indications that our product candidates target, as well as AEs from toxicities and other complications related to other study drugs administered alongside or in combination with our product candidates in clinical trials. For example, some of our clinical trials involve combination therapies of our product candidate with other cancer therapies, such as standard-of-care chemotherapy, chemoradiation or anti-PD-(L)1 agents. In these trials, it is difficult to ascertain whether treatment-related AEs are attributable to our product candidates or to the other agents, and the combination of therapies may have a complicating multiplier effect on such AEs that cannot be determined. As a result, while not directly associated with our product candidates, there are attendant risks with the space in which our product candidates operate, and any related investigations may interrupt our development and commercialization efforts, delay our regulatory approval process or impact and limit the type of regulatory approvals our product candidates receive or maintain.

If further SAEs or other side effects are observed in any of our current or future clinical trials, we may have difficulty recruiting patients to the clinical trials, patients may discontinue treatment or withdraw from our trials or we may be required to abandon the trials or our development efforts of that product candidate altogether. We, the FDA, the EMA, other applicable regulatory authorities or an Institutional Review Board (“IRB”)/Ethics Committee may suspend clinical trials of a product candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to unacceptable health risks or adverse side effects. Some potential therapeutics developed in the biotechnology industry that initially showed therapeutic promise in early-stage studies have later been found to cause side effects that prevented their further development. Even if the side effects do not preclude a drug from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance of the approved product due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition, and prospects.

Further, if any of our product candidates obtains marketing approval, toxicities associated with our product candidates may also develop after such approval and lead to a requirement to conduct additional clinical safety trials, additional warnings being added to the labeling, significant restrictions on the use of the product, or the withdrawal of the product from the market. We cannot predict whether our product candidates will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval based on preclinical studies or early-stage clinical testing.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.

We may not initiate, continue or complete clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA, EMA, or comparable foreign regulatory authorities.

Patient enrollment is a significant factor in the timing of clinical trials, and our ability to enroll eligible patients may be limited or may result in slower enrollment than we anticipate. Patient enrollment may also be affected by other factors, including:

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more of our clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain marketing approval for the sale of our product candidates.

The clinical trials of our current and any future product candidates may not demonstrate safety and efficacy to the satisfaction of regulatory authorities or otherwise be timely conducted or produce positive results.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and its ultimate outcome is uncertain. A failure of one or more clinical trials can occur at any stage of the process. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs. In addition, in our clinical trials of AUM001 that are in combination with other available therapies, the results may be uncertain as to the efficacy of the AUM001 combination when compared to the efficacy of other therapies that are being applied in the trial.

We do not know whether our future clinical trials will begin on time or enroll patients on time, or whether our ongoing and/or future clinical trials will be completed on schedule or at all. Clinical trials can be delayed for a variety of reasons, including delays related to:

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent receipt of marketing approval or our ability to commercialize our product candidates, including: