Enzon Pharmaceuticals (ENZN) Risk Analysis

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Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

Enzon Pharmaceuticals disclosed 23 risk factors in its most recent earnings report. Enzon Pharmaceuticals reported the most risks in the “Finance & Corporate” category.

Risk Overview Q3, 2025

Risk Distribution

87% Finance & Corporate

9% Production

4% Legal & Regulatory

0% Tech & Innovation

0% Ability to Sell

0% Macro & Political

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

2022

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

Enzon Pharmaceuticals Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q3, 2025

Main Risk Category

Finance & Corporate

With 20 Risks

Finance & Corporate

With 20 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

6Risks added

0Risks removed

0Risks changed

Since Sep 2025

6Risks added

0Risks removed

0Risks changed

Since Sep 2025

Number of Risk Changed

No changes from last report

S&P 500 Average: 1

No changes from last report

S&P 500 Average: 1

See the risk highlights of Enzon Pharmaceuticals in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 23

Finance & Corporate

Total Risks: 20/23 (87%)Above Sector Average

Share Price & Shareholder Rights13 | 56.5%

Share Price & Shareholder Rights - Risk 1

Added

Carl C. Icahn, IEH and their respective affiliates will exert significant influence on the Company after the Merger and non-IEH stockholders will have limited governance rights.

Upon completion of the Merger, the Company expects that IEH and its affiliates will hold a substantial majority of the voting power of the combined company. As of October 24, 2025, the Company believes that IEH, through its control of its affiliates, beneficially owned approximately (i) 48.6% of the issued and outstanding shares of the Company's common stock, (ii) 98.2% of the issued and outstanding shares of the Company's Series C Preferred Stock and (iii) in excess of 90% of the issued and outstanding shares of Viskase's common stock. Mr. Icahn is the controlling stockholder and chairman of the board of the general partner of IEH. Because of their substantial ownership and voting power, Mr. Icahn, IEH and their respective affiliates may exert significant influence over the management and strategic direction of the combined company following the Merger. This concentration of ownership may also discourage or prevent a third party from seeking to acquire control of the combined company, even if such a transaction might be beneficial to other stockholders. As a result, the interests of Mr. Icahn, IEH and their respective affiliates may not always align with the interests of Enzon or its other stockholders.

Share Price & Shareholder Rights - Risk 2

Added

Our stockholders (other than Carl Icahn, IEH and their respective affiliates) will experience immediate dilution as a consequence of the issuance of shares of our common stock in connection with the Merger. Having a minority share position will reduce the influence that our current stockholders (other than Carl Icahn, IEH and their respective affiliates) have on the management of the combined company following the Merger.

It is anticipated that, upon completion of the Merger our current stockholders, including holders of shares of our Series C Preferred Stock, will own approximately 45% of our common stock following the Merger, and the current Viskase stockholders will own approximately 55% of our common stock following the Merger. Upon completion of the Merger, the issuance of the Company's common stock in connection with the Merger and the other transactions contemplated by the Merger Agreement will result in significant dilution of the ownership and voting interests of the Company's current stockholders (other than Carl Icahn, IEH and their respective affiliates), as described above. As a result, the Company's current stockholders (other than Carl Icahn, IEH and their respective affiliates) will experience a significant reduction in their relative influence over the Company following the Merger, which, following the Merger, will encompass the combined businesses of Enzon and Viskase.

Share Price & Shareholder Rights - Risk 3

There is no public market for the Series C Preferred Stock.

There is no established public trading market for the Series C Preferred Stock, and we do not expect a market to develop. We do not currently intend to apply for listing of the Series C Preferred Stock on any securities exchange or recognized trading system. Purchasers of the Series C Preferred Stock may be unable to resell their shares of Series C Preferred Stock or sell them only at an unfavorable price for an extended period of time, if at all.

Share Price & Shareholder Rights - Risk 4

Holders of shares of Series C Preferred Stock have no voting rights.

Except as otherwise provided by law, the holders of Series C Preferred Stock have no special voting rights and their consent will not be required for taking any corporate action. As a result, all matters submitted to stockholders will be decided by the vote of holders of our common stock. Holders of Series C Preferred Stock have no ability to influence corporate matters and, as a result, we may take actions that holders of our Series C Preferred Stock do not view as preferable.

Share Price & Shareholder Rights - Risk 5

The Series C Preferred Stock is not convertible into common stock.

The Series C Preferred Stock is not convertible into shares of common stock and, therefore, holders of Series C Preferred Stock have no rights with respect to shares of our common stock. In addition, the Series C Preferred Stock accrues dividends at a fixed rate. Accordingly, an increase in market price of our common stock will not necessarily result in an increase in the value of the Series C Preferred Stock. The value of the Series C Preferred Stock may depend more on dividend and interest rates for other preferred stock, commercial paper and other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation preference with respect to, the Series C Preferred Stock.

Share Price & Shareholder Rights - Risk 6

The Series C Preferred Stock is equity and is subordinate to our existing and future indebtedness and other liabilities, and your interests may be diluted in the event we issue additional shares of preferred stock.

Shares of the Series C Preferred Stock represent equity interests and do not constitute indebtedness. As such, the Series C Preferred Stock will rank junior to all of our indebtedness and other non-equity claims of our creditors with respect to assets available to satisfy our claims, including in our liquidation, dissolution or winding up. Our future debt, if any, may include restrictions on our ability to pay distributions to preferred stockholders. Unlike indebtedness, where principal and interest would customarily be payable on specified due dates, in the case of preferred stock such as the Series C Preferred Stock, dividends are payable only if declared by our Board of Directors (or a duly authorized committee thereof). Our ability to pay dividends on the Series C Preferred Stock may be limited by the terms of our agreements governing any future indebtedness and by the provisions of any other future agreements. Subject to limitations prescribed by Delaware law and our charter, our Board of Directors is authorized to issue, from our authorized but unissued shares of capital stock, preferred stock in such classes or series as our Board of Directors may determine and to establish from time to time the number of shares of preferred stock to be included in any such class or series. The issuance of additional shares of Series C Preferred Stock or additional shares of preferred stock designated as ranking on parity with the Series C Preferred Stock would dilute the interests of the holders of shares of the Series C Preferred Stock, and the issuance of shares of any class or series of our capital stock expressly designated as ranking senior to the Series C Preferred Stock or the incurrence of additional indebtedness could affect our ability to pay distributions on, redeem or pay the liquidation preference on the Series C Preferred Stock.

Share Price & Shareholder Rights - Risk 7

In the event of any dissolution, liquidation, or winding up of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if required, we may not be able to redeem such shares.

The Series C Preferred Stock ranks senior to our common stock, but we may in the future issue one or more series of preferred stock that ranks senior to, junior to or pari passu with our Series C Preferred Stock. In the event of any dissolution, liquidation, winding up or change of control of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if requested by such holders upon a change of control, to redeem the Series C Preferred Stock, in which case holders of the Series C Preferred Stock could lose some or all of the entire value of their investment.

Share Price & Shareholder Rights - Risk 8

Anti-takeover provisions in our charter documents and under Delaware corporate law may make it more difficult to acquire us, even though such acquisitions may be beneficial to our stockholders.

In addition to our Section 382 rights plan, provisions of our certificate of incorporation and bylaws, as well as provisions of Delaware corporate law, could make it more difficult for a third party to acquire us, even though such acquisitions may be beneficial to our stockholders. These anti-takeover provisions include: - lack of a provision for cumulative voting in the election of directors;- the ability of our Board to authorize the issuance of "blank check" preferred stock to increase the number of outstanding shares and thwart a takeover attempt;- advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and - limitations on who may call a special meeting of stockholders. The provisions described above, our Section 382 rights plan and provisions of Delaware corporate law relating to business combinations with interested stockholders, along with the significant amount of common stock beneficially owned by Mr. Icahn, may discourage, delay or prevent a third party from acquiring us. These provisions may also discourage, delay or prevent a third party from acquiring a large portion of our securities, or initiating a tender offer, even if our stockholders might receive a premium for their shares in the acquisition over the then current market price.

Share Price & Shareholder Rights - Risk 9

We have adopted a Section 382 rights plan, which may discourage a corporate takeover.

On August 14, 2020, our Board of Directors adopted the Section 382 rights plan and declared a dividend distribution of one right for each outstanding share of our common stock to stockholders of record at the close of business on August 24, 2020. Each share of our common stock issued thereafter will also include one right. Each right entitles its holder, under certain circumstances, to purchase from us one one-thousandth of a share of our Series A-1 Junior Participating Preferred Stock at an exercise price of $1.20 per right, subject to adjustment. The Board adopted the Section 382 rights plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs. We may utilize these NOLs in certain circumstances to offset future United States taxable income and reduce our United States federal income tax liability. Because the Section 382 rights plan could make it more expensive for a person to acquire a controlling interest in us, it could have the effect of delaying or preventing a change in control even if a change in control was in our stockholders' interest.

Share Price & Shareholder Rights - Risk 10

Our common stock is quoted on the OTCQX market of the OTC Markets Group, Inc., which has a very limited trading market and, therefore, market liquidity for our common stock is low and our stockholders' ability to sell their shares of our common stock may be limited.

Our common stock is quoted on the OTCQX market of the OTC Markets Group, Inc. and the quotation of our common stock on the OTCQX market does not assure that a liquid trading market exists or will develop. Stocks traded on the OTCQX market generally have very limited trading volume and exhibit a wider spread between the bid/ask quotations than stocks traded on national exchanges. Moreover, a significant number of institutional investors have investment policies that prohibit them from trading in stocks on the OTCQX marketplace. As a result, investors may find it difficult to dispose of, or to obtain accurate quotations of the price of, our common stock. This significantly limits the liquidity of our common stock and may adversely affect the market price of our common stock. We do not currently, and are not expected in the future to, meet the listing standards of any national exchange. On June 10, 2024, we were notified by the OTCQX Markets Group that we had regained compliance with the OTCQX's standards for continued qualification as a result of our stock price trading at, or in excess of, $0.10 for the period of time that was required to regain compliance. We presently anticipate that our common stock will continue to be quoted on the OTCQX market. As a result of not expecting to meet the listing standards of any national exchange, investors must bear the economic risk of holding their shares of our common stock for an indefinite period of time. In the future, our common stock could become subject to "penny stock" rules which impose additional disclosure requirements on broker-dealers and could further negatively impact market liquidity for our common stock and our stockholders' ability to sell their shares of our common stock.

Share Price & Shareholder Rights - Risk 11

The price of our common stock has historically been volatile and may decline significantly if we are unable to consummate a business acquisition or investment.

Historically, the market price of our common stock has fluctuated over a wide range for a variety of reasons, including Company-specific factors and global and industry-wide conditions and events such as the COVID-19 pandemic and resulting recession, as well as the fact that only a few stockholders, in the aggregate, hold more than a majority of our common stock, and, therefore, there is a small public float with limited trading activity in our common stock. In the future, the value of our common stock may be impacted by our lack of royalty revenues, our ability to monetize our remaining assets, including our NOLs, and any unexpected liabilities or expenses that impact our continued operations, our ability to pay dividends or make distributions to our stockholders and the success of any future activities which we undertake, including our ability to consummate a business acquisition or investment. In addition, financings that may be available to us under current market conditions frequently involve sales at prices below the prices at which our common stock currently trades on the OTCQX, as well as the issuance of warrants or convertible equity that require exercise or conversion prices that are calculated in the future at a discount to the then market price of our common stock.

Share Price & Shareholder Rights - Risk 12

The interests of our significant stockholders may conflict with the interests of other stockholders.

Mr. Carl C. Icahn, directly and indirectly, beneficially owns approximately 49% of the outstanding shares of our common stock, as well as approximately 98% of the outstanding Series C Preferred Stock. Mr. Icahn may have interests that are different from, in addition to or not always consistent with our interests or with the interests of our other common or preferred stockholders. To the extent that conflicts of interest may arise between us and Mr. Icahn and his affiliates, those conflicts may be resolved in a manner adverse to us or our other stockholders. In addition, the existence of significant stockholders may have the effect of making it difficult for, or may discourage or delay, a third party from seeking to acquire a majority of our outstanding common stock, which may adversely affect the market price of our common stock. In addition, such stockholders may exert significant influence over our operations. Accordingly, the interests of these significant stockholders may not always coincide with our interests or the interests of other stockholders, or otherwise be in the best interests of us or all stockholders.

Share Price & Shareholder Rights - Risk 13

Our common stock ranks junior to our Series C Preferred Stock.

With respect to the payment of cash dividends and amount payable in the event our liquidation, dissolution or winding up, our common stock will rank junior to our Series C Non-Convertible Redeemable Preferred Stock ("Series C Preferred Stock"). This means that, unless full dividends have been (i) paid, (ii) redeemed in an amount in excess of the initial liquidation value of $1,000 per share of Series C Preferred Stock or (iii) set aside for payment on all outstanding Series C Preferred Stock for all dividends or increases in the liquidation value in excess of the initial liquidation amount of $1,000 of such Series C Preferred Stock, no cash dividends may be declared or paid on our common stock. Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding up, no distribution of our assets may be made to holders of our common stock until we have paid to the holders of our Series C Preferred Stock the liquidation preference related to such Series C Preferred Stock, plus in each case any accrued and unpaid dividends. In addition, the holders of Series C Preferred Stock have the right to demand that we redeem their shares in the event that we undergo a change of control. Accordingly, if such demands were made, there could be limited or no cash available to declare or make any dividends to holders of our common stock.

Accounting & Financial Operations4 | 17.4%

Accounting & Financial Operations - Risk 1

While we may, potentially, acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we may be unable to do so and, accordingly, we may be unable to realize our deferred income tax assets.

The ultimate realization of our deferred income tax assets is dependent upon generating future taxable income, executing tax planning strategies, and reversals of existing taxable temporary differences. We have recorded a partial valuation allowance against our deferred income tax assets, which may fluctuate as conditions change. While we are positioned as a public company acquisition vehicle and may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we cannot provide any assurance that we will be able to do so. If we fail to do so, approximately 97% of our current federal NOLs will expire by 2036 and more than 90% of our current federal NOLs will expire by the end of 2031. As a result of the expiration dates of our NOLs and our efforts to date to identify acquisition candidates, we may consider transactions that could result in a change of control of us in an effort to enhance stockholder value. Our ability to utilize our NOLs to offset our future taxable income and/or to recover previously paid taxes would be limited or could be non-existent if we were to undergo an "ownership change" within the meaning of Section 382 of the Internal Revenue Code. In general, an "ownership change" occurs whenever the percentage of the stock of a corporation owned by "5-percent shareholders" (within the meaning of Section 382 of the Internal Revenue Code) increases by more than 50 percentage points over the lowest percentage of the stock of such corporation owned by such "5-percent shareholders" at any time over the testing period. An ownership change under Section 382 of the Internal Revenue Code would establish an annual limitation to the amount of NOLs we could utilize to offset our taxable income in any single year. The application of these limitations might prevent full utilization of the deferred tax assets attributable to our NOLs. Although we have adopted a Section 382 rights plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs, we cannot assure you that we will not undergo an ownership change within the meaning of Section 382. (See Notes 9 and 11 to the Consolidated Financial Statements.)

Accounting & Financial Operations - Risk 2

The declaration of common stock dividends is within the discretion of our Board, subject to any applicable limitations under Delaware corporate law, as well as the requirements of the Series C Preferred Stock. Our ability to pay dividends in the future depends on, among other things, our fulfillment of the conditions of the Series C Preferred Stock, declining royalty revenues, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations.

The declaration of dividends is within the discretion of our Board, subject to any applicable limitations under Delaware corporate law, and, therefore, our Board could decide in the future not to declare dividends. In addition, as described elsewhere, our common stock ranks junior to the Series C Preferred Stock, and we cannot declare or pay cash dividends on our common stock unless we satisfy the dividend requirements of such Series C Preferred Stock. Also, our ability to pay dividends in the future depends on, among other things, interest rates, our future revenues, including any revenues from existing and any future royalties and/or milestone payments, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations. We expect little or no future royalties from existing products for which we have the right to receive royalties. In addition, while we may acquire or invest in businesses, entities or revenue streams and we may be entitled to a share of milestone and royalty payments from the approval and sale of Vicineum, we cannot assure you that we will be able to do so or that we will have sufficient royalty or milestone revenues to be able to pay dividends in the future.

Accounting & Financial Operations - Risk 3

The dividends on our Series C Preferred Stock can be paid either in cash or be paid in kind by increasing the liquidation value of the shares of Series C Preferred Stock.

The terms of the Series C Preferred Stock allow dividends on the shares of Series C Preferred Stock to be paid either in cash or be paid in kind by increasing the liquidation value of the shares of Series C Preferred Stock and, therefore, allow the repayment of the principal and accrued dividends on the Series C Preferred Stock to be deferred until the earliest of the redemption of the Series C Preferred Stock or upon our dissolution, liquidation or winding up. We may not have enough capital to repay the full amount of the principal and accrued dividends when the payment of principal and accrued dividends on the Series C Preferred Stock becomes due.

Accounting & Financial Operations - Risk 4

Our sources of revenue are limited and, as a result of our cash reserves, we expect only limited revenue and profitability for the foreseeable future; while we increased our cash reserve by completing the Rights Offering and generate revenue from such cash reserve, unanticipated liabilities and expenses could adversely affect our ability to engage in a public company acquisition or investment, as currently intended, or to continue operations.

Prior to 2023, we incurred losses and, in 2023 and 2024, our primary source of revenue was from interest income. We received approximately $43.1 million of net proceeds in the fourth quarter of 2020 from the Rights Offering, which we are using to position us as a public company acquisition vehicle, unless and until we can consummate an acquisition or investment that generates income, and other than interest income, we do not anticipate generating any additional cash or revenues. As interest rates may fluctuate in the future, there can be no assurance that we will continue to receive interest income at our existing levels, or at levels that allow us to achieve a profit. Accordingly, there can be no assurance that we will continue to generate a profit based on our interest income. In addition, because the patents have expired in all jurisdictions, we will receive no further royalties on sales of PegIntron, although there may be a potential liability to Merck for product returns and rebates. Based on current estimates, we do not expect any future liability for those returns and rebates to be material. Moreover, our right to receive royalty revenues from other products is limited and we currently do not intend to acquire new sources of royalty revenues. For those remaining existing or potential sources of royalty revenue, our licensees may be unable to maintain regulatory approvals for currently licensed products or obtain regulatory approvals for new products. Safety issues could also result in the failure to maintain regulatory approvals or decrease revenues. While we have substantially reduced our operating expenses, including ceasing our research and development activities, eliminating our workforce in favor of independent contractors and consultants, and discontinuing our significant lease commitments,we may incur unanticipated liabilities or expenses, including expenses to defend unasserted product liability claims or greater than expected liabilities for PegIntron and expenses incurred in our search for a target business to acquire or in which to invest. Any such expenses or liabilities could impact the availability of assets that we expect to use to fund future operations or adversely affect our ability to pay dividends or make distributions to shareholders upon a liquidation of the Company.

Corporate Activity and Growth3 | 13.0%

Corporate Activity and Growth - Risk 1

Our search for a business, company or assets to acquire or in which to invest may be unsuccessful, or it could result in a change of control, and we may fail to utilize the proceeds of our Rights Offering and/or realize the value of our NOLs.

We are positioned as a public company acquisition vehicle, where we can become an acquisition platform and potentially utilize our NOLs and enhance stockholder value. Although we may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our approximately $101.4 million in federal NOLs, there can be no assurance we will be able to do so. In addition, we do not have any current plans, arrangements or understandings with respect to any acquisitions or investments, and we may pursue acquisitions that could result in a change of control of us. Although we have had significant discretion in the use of the net proceeds of our Rights Offering, it is possible that we may not utilize such proceeds and if a transaction is pursued that results in a change of control, as defined in the Certificate of Designation of the Series C Non-Convertible Preferred Stock, holders of the Series C Non-Convertible Redeemable Preferred Stock will be entitled to redemption rights, and if exercised would require the Company to redeem such preferred stock. Further, if such change of control occurs, it would likely substantially limit the utilization of our NOLs. We cannot assure you that we will be able to realize the value of all or any of our NOLs. For example, as discussed in Note 15 to the Condensed Consolidated Financial Statements, we have been contacted with respect to exploring a potential business combination transaction with an affiliate of our significant stockholder, Carl C. Icahn. The Company, through a special committee of the Board, is currently in discussions regarding such a transaction. There can be no assurances that any agreement will be reached or that a transaction will be consummated, or that if such a transaction is consummated, it won't result in a change of control, or that we will be able to realize the value of all or any of our NOLs.

Corporate Activity and Growth - Risk 2

Added

The Merger Agreement limits our ability to pursue alternatives to the Merger.

The Merger Agreement contains provisions that make it more difficult for us to enter into alternative transactions. As is typical for transactions like the Merger, the Merger Agreement contains certain provisions that restrict our ability to, among other things, solicit, initiate or knowingly facilitate or encourage (including by way of furnishing non-public information) the submission of inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an offer regarding a potential alternative transaction to the Merger from a third party. The Merger Agreement also provides that our Board of Directors and the Special Committee of our Board of Directors may only change their recommendation that the Enzon stockholders approve the Merger in certain limited circumstances. In the event that a third party makes a superior offer to the transaction with Viskase, the Board of Directors and the Special Committee of our Board of Directors may change their recommendation, and the Company may be required to pay Viskase a termination fee of $1,000,000, under certain circumstances, in connection with such change of recommendation and termination of the Merger Agreement. In addition, the significant ownership by Mr. Icahn, IEH and their respective affiliates of our common stock and our Series C Preferred Stock may hinder a third party from making a proposal or offer for the Company.

Corporate Activity and Growth - Risk 3

Added

If the Merger is not completed, the business, financial results and stock prices of Enzon and Viskase could be adversely affected.

The Merger is subject to a number of conditions, and there can be no assurance that it will be completed. If the Merger is not consummated for any reason, our ongoing business may be adversely affected. In addition, we will be subject to a number of risks, including, among others: - the obligation to pay a termination fee to the other party under certain circumstances, as provided in the Merger Agreement;- if we terminate the Merger Agreement or the termination date passes and the Merger has not been effected, we will have incurred substantial costs from the Merger that we will not be able to recover, and we may incur further costs before the Merger is consummated, and such expenses could have an adverse impact on our business, financial results and operations;- potential declines in the market prices of the Company's common stock to the extent that such prices reflect a market assumption that the Merger will be completed;- negative reactions from the financial markets; and - potential litigation related to the Merger (whether or not the Merger is completed) or to any failure to complete the Merger or to enforcement proceedings to perform the parties' respective obligations under the Merger Agreement. If the Merger is not completed, we cannot assure our stockholders that these risks will not materialize or will not materially adversely affect their businesses, financial results or stock prices.

Production

Total Risks: 2/23 (9%)Below Sector Average

Supply Chain1 | 4.3%

Supply Chain - Risk 1

We have outsourced all corporate functions, which makes us more dependent on third parties to perform these corporate functions.

We have outsourced all corporate functions, which makes us more dependent on third parties for the performance of these functions. To the extent that we are unable to effectively reallocate employee responsibilities, retain key officers as consultants, maintain effective internal control over financial reporting and effective disclosure controls and procedures, establish and maintain agreements with competent third-party contractors on terms that are acceptable to us, or effectively manage the work performed by any retained third-party contractors, our ability to manage the operations effectively could be compromised.

Costs1 | 4.3%

Costs - Risk 1

Added

We have incurred direct and indirect costs as a result of the Merger and we may incur additional direct and indirect costs whether or not the Merger is consummated.

We have incurred significant non-recurring costs in connection with the Merger and the integration of our business with Viskase's business. These costs include legal, financial advisory, accounting, consulting and other professional fees, as well as regulatory filing fees and other transaction-related expenses. We have incurred these costs and expect that we will continue to incur additional costs whether or not the Merger is consummated. In addition, if we terminate the Merger Agreement or the termination date passes and the Merger has not been effected, we will have incurred substantial costs from the Merger that we will not be able to recover, and we may incur further costs before the Merger is consummated, and such expenses could have an adverse impact on our business, financial results and operations.

Legal & Regulatory

Total Risks: 1/23 (4%)Below Sector Average

Taxation & Government Incentives1 | 4.3%

Taxation & Government Incentives - Risk 1

Added

We may not be able to realize our deferred income tax assets.

The combined company's ability to utilize NOLs, certain credits, and other tax attributes to offset the combined company's future taxable income and/or to recover previously paid taxes would be limited if the combined company experiences an "ownership change" within the meaning of Section 382 of the IRC. An ownership change under Section 382 of the IRC would establish an annual limitation to the amount of our NOL carryforwards, certain credits, and other tax attributes that the combined company could utilize to offset its taxable income in any single year, thereby resulting in potentially higher cash tax obligations for the combined company than if it were able to utilize our NOLs, which could adversely affect the combined company's financial condition, results of operations, and cash flows if that occurred. Historically, we have not been able to utilize much of our NOLs because we have had minimal or no taxable income. If the Merger results in future taxable profits, the ability of the combined company to use our unexpired NOL carryforwards annually to offset future taxable income would result in a deferred tax asset. However, the restrictions imposed by Section 382 of the IRC, if applicable, could materially reduce or eliminate the future benefit of these NOL carryforwards even if the combined company becomes profitable after the Merger. The loss of these tax benefits could be significant, and there can be no assurance that subsequent ownership changes-whether through additional equity issuances, strategic transactions, or other events-would not impose additional limitations on the combined company's ability to use our NOLs and other tax attributes. In addition, similar rules under state and foreign tax laws could further limit utilization of our NOLs and other tax attributes. The Company's accountants have performed an analysis under Section 382 of the IRC through the date of this filing, the results of which conclude that utilization of the Company's NOLs and certain other credit carryforwards should not be subject to an annual limitation under Section 382 of the IRC. It is therefore intended that the Merger, pursuant to the terms of the Merger Agreement, as amended by the Merger Agreement Amendment, should not limit our NOL carryforwards and other tax attributes under Section 382 of the IRC. However, the Section 382 of the IRC rules and the application of such rules to the Merger are complex and there is no assurance that our view is correct. If such an ownership change is found to have occurred, the amount of the combined company's taxable income that could be offset by our pre-ownership change NOL carryforwards and other tax attributes would be severely limited. We had previously adopted a Rights Agreement specifically designed to reduce the risk of an ownership change that would limit our ability to use our NOLs carryforwards. The Merger Agreement, however, requires that the Rights Agreement be terminated prior to the Merger becoming effective. Accordingly, on August 13, 2025, we amended the Rights Agreement to set the Final Expiration Date as the close of business on September 30, 2025, and, again, amended the Rights Agreement on September 30,2025 to set the Final Expiration Date as the close of business on December 31, 2025. Once the Rights Agreement terminates, we will have no similar protections in place.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.