Climate Change Data

Environmental Metrics

ESG Focus Areas

• Board Diversity

Climate Goals & Targets

Environmental Challenges

• Lack of responsiveness to CalPERS shareowner engagement requests to address board composition related to diversity.
• Combined Chair/CEO
• Does not allow proxy access
• Has plurality vote standard for uncontested director elections

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Board Diversity

Climate Goals & Targets

Environmental Challenges

• Lack of responsiveness to CalPERS’ requests to engage the company regarding improving its board diversity
• Combined Chair/CEO
• Plurality vote standard for uncontested director elections
• Does not allow proxy access

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Cybersecurity incident at Journey Medical Corporation resulting in approximately $9.5 million in misdirected wire transfers.
• Disruption of clinical trials in Ukraine due to the Russian invasion.
• Dispute with a contract manufacturing organization (CMO) regarding termination of a Master Services Agreement (MSA).

Mitigation Strategies

• Investigation of the cybersecurity incident with the assistance of third-party cybersecurity experts and reporting to the FBI.
• Seeking alternative clinical trial sites to compensate for disruptions in Ukraine.
• Obtaining a temporary restraining order and preliminary injunction to prevent the CMO from terminating the MSA.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Competitor development of treatments for target indications.
• Need for additional financing.
• Risks related to revenue stream from Journey Medical Corporation (including patent protection and generic competition).
• Reliance on third parties for manufacturing, clinical trials, and commercial supply.
• Potential intellectual property disputes.
• Generic competition and Paragraph IV litigation.
• Challenges in commercialization of product candidates.
• Risks related to legislation and regulation.
• Nasdaq minimum bid price non-compliance.

Mitigation Strategies

• Securing a temporary restraining order and preliminary injunction in a dispute with a contract manufacturing organization.
• Intending to raise additional funding through various means.
• Monitoring the closing bid price of common stock and considering options to regain compliance with Nasdaq requirements.
• Implementing an At Market Issuance Sales Agreement for common stock sales.
• Closely monitoring inventory prophylactically.
• Obtaining product liability insurance coverage for clinical trials.
• Intending to expand insurance coverage to include commercial products.
• Implementing internal security and business continuity measures.
• Developing information technology infrastructure.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• The Company's bid price of common stock closed below $1.00 per share for 30 consecutive business days, resulting in non-compliance with Nasdaq Listing Rule 5550(a)(2).

Mitigation Strategies

• The Company was granted a second 180-calendar day grace period to regain compliance with the bid price requirement. The Company intends to closely monitor the closing bid price and consider all available options to remedy the deficiency.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Cybersecurity incident at Journey Medical Corporation resulting in misdirected funds.
• Competition from generic drug companies.
• Challenges in obtaining and maintaining patent protection.
• Reliance on third-party manufacturers and suppliers.
• Need for substantial additional funding.
• Potential conflicts of interest due to shared officers and directors across subsidiaries and partner companies.
• Potential for product liability claims.
• Compliance with extensive healthcare laws and regulations.
• Volatility in the market price of securities.
• Managing anticipated growth and integration of acquired companies and products.
• Vulnerability to damage from natural disasters or other significant business interruptions.
• Limitations on using pre-change NOLs and other tax attributes to offset post-change taxable income or taxes.

Mitigation Strategies

• Implementing internal security and business continuity measures.
• Closely monitoring inventory to mitigate supply disruptions.
• Seeking funds through equity or debt financings, joint ventures, sales of subsidiaries/partner companies, or other arrangements.
• Establishing policies and procedures to identify and mitigate conflicts of interest.
• Obtaining limited product liability insurance coverage.
• Efforts to ensure compliance with healthcare laws and regulations.
• Diversifying sources of funding.
• Improving infrastructure to address anticipated growth.
• Maintaining property, liability, and business interruption insurance.

Supply Chain Management

Climate-Related Risks & Opportunities