{"url_path":"/sec/otlk/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1649989/0001104659-26-062632-index.html","accession_number":"0001104659-26-062632","cik":"0001649989","ticker":"OTLK","issuer_name":"Outlook Therapeutics, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1649989/0001104659-26-062632-index.html","primary_entity_key":"0001649989","primary_entity_name":"Outlook Therapeutics, Inc."},"word_count":2577,"has_tables":true,"body_markdown":"Item 1A. Risk Factors\n\nThe following risk factors supplement and, to the extent inconsistent therewith, supersede the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on December 19, 2025 (the “Annual Report”). You should carefully consider these risk factors together with all other information contained in this Quarterly Report on Form 10-Q and in our Annual Report before making any investment decision. If any of these risks occurs, our business, financial condition, results of operations and prospects could be materially adversely affected.\n\n​\n\nThere is substantial doubt about our ability to continue as a going concern. We will continue to need to raise substantial additional funding to complete the development of ONS-5010/LYTENAVA outside the EU and UK and support our operations until we are able to generate sufficient revenue from the sales of ONS-5010/LYTENAVA in the EU and UK. This additional funding may not be available on acceptable terms or at all. Failure to obtain this\n\n38\n\n[Table of Contents](#TOC)\n\nnecessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.\n\n​\n\nDeveloping product candidates is an expensive, risky and lengthy process. We have received a marketing authorization from the European Commission and the MHRA for ONS-5010/LYTENAVA for the treatment of wet AMD in the EU and UK, respectively. We are currently advancing ONS-5010/LYTENAVA through the regulatory approval process in the United States, which may ultimately require additional clinical and/or non-clinical studies. Our expenses may increase in connection with our ongoing activities, particularly as we continue the research and development of, continue and initiate clinical trials of, and seek marketing approval for, ONS-5010/LYTENAVA outside the EU and UK.\n\n​\n\nAs of March 31, 2026, our cash and cash equivalents balance was $7.7 million. We do not believe that our cash and cash equivalents as of March 31, 2026, together with the $4.5 million of net proceeds of the Registered Direct Offering and concurrent private placement in April 2026 are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. On March 13, 2025, we issued a $33.1 million promissory note, or the March 2025 Note, to Avondale Capital, LLC, or Avondale. The March 2025 Note bears interest at the prime rate plus 3%, with a minimum rate of 9.5%, and is convertible into common stock. We must repay at least $3.0 million (by cash or conversions into common stock) of the outstanding balance on the March 2025 Note each quarter starting in the second calendar quarter of 2025 (subject to adjustments for conversions and to payment of a 7.5% exit fee), or the Quarterly Debt Reduction Obligations. Any amount converted by Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters. The failure to make this required payment constituted a Major Trigger Event under the March 2025 Note. This Major Trigger Event has not resulted in an Event of Default. During the three months ended March 31, 2026, we completed multiple conversions of outstanding principal and accrued interest under the March 2025 Note into shares of our common stock and accordingly the Quarterly Debt Reduction Obligation was satisfied as of March 31, 2026. On March 16, 2026, we entered into a Note Purchase Agreement with Atlas, pursuant to which we agreed to issue to Atlas the March 2026 Note, which we agreed to use for the partial repayment of $17 million of the March 2025 Note. As of March 31, 2026, there were approximately $9.7 million in remaining obligations under the March 2025 Note. In connection with entry into the Note Purchase Agreement with Atlas, we and Avondale entered into an amendment to the March 2025 Note to extend the maturity thereof to December 31, 2026.\n\n​\n\nWe do not believe our cash and cash equivalents, together with net proceeds of $[__] million from the April 2026 Offering, will be adequate to fund our currently planned operations through at least the next 12 months from the date of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. As a result, there is substantial doubt about our ability to continue as a going concern. We will require substantial additional capital to continue to operate as a going concern. Although we continue to pursue discussions with additional potential strategic partners for ONS-5010/LYTENAVA outside of the United States, there is no guarantee that we will be successful in reaching any such agreement, nor that such agreement, if successful, will cover the anticipated commercialization costs for ONS-5010/LYTENAVA. Moreover, on December 31, 2025, we reported that we had received a third CRL with respect to our BLA for ONS-5010, and the FDA has again recommended that confirmatory evidence of efficacy be submitted to support the application. However, the FDA did not indicate in the CRL what type of confirmatory evidence would be acceptable, and it is possible that we may need to conduct additional clinical and/or non-clinical studies of ONS-5010 in order to satisfy the FDA’s requirements, which would require substantial resources, which may be difficult to obtain or which may be unavailable to us on acceptable terms or at all. Our operating plan may also change as a result of many factors currently unknown to us, and, we will continue to actively seek substantial additional capital through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as through other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. Additionally, we may not achieve the expected benefits of these cost reduction measures and other cost reduction plans on the anticipated timeline, or at all, which could otherwise accelerate our liquidity needs and could force us to further curtail or suspend our operations. If we are unable to obtain the substantial additional funding needed to operate our business, our business and prospects would be materially and adversely affected, and we may be required to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code, and you may lose all or part of your investment.\n\n​\n\n39\n\n[Table of Contents](#TOC)\n\nAny additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. We may experience difficulties in accessing the capital markets due to external factors beyond our control, such as volatility in the equity markets for emerging biotechnology companies and general economic and market conditions both in the United States and abroad. For example, our ability to raise additional capital may be adversely impacted by global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide, such as has been experienced recently due in part to, among other things, the impacts of inflation, geopolitical instability and uncertainty, and disruptions in access to bank deposits and lending commitments due to bank failure. In addition, our financial position may make it more difficult for us to secure additional funding. We cannot be certain that we will be able to obtain financing on terms acceptable to us, or at all. Our failure to obtain adequate and timely funding will adversely affect our business and our ability to develop our technology and products candidates. Moreover, the terms of any financing may negatively impact the holdings or the rights of our stockholders, and the issuance of additional securities, whether equity or debt, by us or the possibility of such issuance may cause the market price of our securities to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, in order to obtain necessary funding, any of which may harm our business, operating results and prospects. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or for specific strategic considerations. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our development programs or the commercialization of ONS-5010/LYTENAVA or any product candidates, if approved. We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business, financial condition and results of operations.\n\n​\n\nRaising additional capital, modifications to our existing convertible securities, may cause dilution to our securityholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.\n\nUntil such time, if ever, as we can generate sufficient product revenues, we expect to finance our cash needs through a combination of equity and debt financings, as well as selectively continuing to enter into collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funding. To the extent that we raise additional capital through the sale of equity, including via the HCW ATM Agreement, or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.\n\n​\n\nWe are obligated to repay a minimum of $3.0 million of the outstanding balance of the March 2025 Note each calendar quarter starting with the second calendar quarter of 2025, subject to adjustments for conversions by Avondale and the payment of an exit fee of 7.5%. Any amount converted by Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters.\n\n​\n\nAvondale may convert any portion of the March 2025 Note into common stock at a conversion price of $2.26, as further described in the March 2025 Note. In addition, we may convert the March 2025 Note if our stock trades at or above $3.00 per share for 30 consecutive days with an average daily trading volume of at least $1.0 million. Trigger Events (e.g., payment default, covenant breaches) may increase the March 2025 Note balance by 5-10%. Unresolved issues after 10 trading days trigger default, accelerating the March 2025 Note with 22% interest. If the Conversion Price drops below $0.404, conversions must be paid in cash. Conversions of amounts outstanding under the March 2025 Note may result in the issuance of a substantial number of shares of common stock. On December 31, 2025, we did not satisfy the required $3.0 million Quarterly Debt Reduction Obligation, which constituted a Major Trigger Event under the March 2025 Note. As of March 31, 2026, Avondale had converted $6.9 million of principal and accrued interest on the March 2025 Note into shares of common stock at a weighted average conversion price of $0.46. If we are unable to satisfy future repayment obligations under the March 2025 Note, Avondale may continue to effectuate conversions at prices\n\n40\n\n[Table of Contents](#TOC)\n\nsignificantly below the initial $2.26 conversion price, with such conversion price to be determined in accordance with the terms set out in the March 2025 Note. Such conversion could result in significant dilution.\n\n​\n\nAdditional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by all or a portion of our assets. If we secure development funds for ONS-5010/LYTENAVA or any future product candidate through entering into collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish additional valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts, including for ONS-5010/LYTENAVA, or grant rights to develop and market ONS-5010/LYTENAVA or other product candidates that we would otherwise prefer to develop and market ourselves, terminate product development or future commercialization efforts, including for ONS-5010/LYTENAVA, or to cease operations altogether.\n\n​\n\nOur common stock may be delisted from The Nasdaq Capital Market and begin trading in the over-the-counter markets if we are not successful in regaining compliance with Nasdaq’s continued listing standards, which may negatively impact the price of our common stock and our ability to access the capital markets.\n\n​\n\nOn February 18, 2026, we received a letter from the Listing Qualifications Staff, or the Nasdaq Staff, of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that for the last 30 consecutive business days, the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq Listing Rule 5550(a)(2).\n\n​\n\nIn accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until August 17, 2026, or the Compliance Date, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days before the Compliance Date. If we do not achieve compliance by the Compliance Date, we may be eligible for an additional 180-day period to regain compliance if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq Staff that we will not be able to cure the deficiency, or if we are otherwise not eligible for the additional compliance period, and we do not regain compliance by the Compliance Date, The Nasdaq Capital Market will provide written notification to us that our common stock is subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq listing rules. However, there can be no assurance that, if we do appeal the delisting determination by Nasdaq to the panel, such appeal would be successful.\n\n​\n\nWe intend to actively monitor the closing bid price of our common stock between now and the Compliance Date and will evaluate available options to resolve the deficiency and regain compliance with the minimum bid price rule.\n\n​\n\n​"}