RISK FACTORS 4 and could result in substantial costs and diversion of resources subsequently file a patent application covering such intellectual and could adversely impact our financial condition or results of property. operations. Should any of these events occur, they could significantly harm our In addition, there could be potential trade name or trademark business, financial condition, results of operations or prospects. infringement claims brought by owners of other registered trademarks al leging that the use of a corporate name or logo, product names or other signs by which we distinguish our 4.9 products and services are infringing their trade mark or allied MARKET RISKS rights. The outcome of such claims is uncertain and may adversely affect our business and/or our freedom to use our corporate Interest Rate Risk name or other relevant signs as well as all the risks identified in We believe we have very low exposure to interest rate risk. Such the above paragraph. If litigation arises in this area it may lead exposure primarily involves money market funds and time deposit to significant costs and diversion of management and employee accounts. Changes in interest rates have a direct impact on the attention. rate of return on these investments and the cash flows generated. Intellectual property rights do not necessarily address all potential We have no credit facilities. The repayment flows of the threats. conditional advances from Bpifrance Financement are not subject The degree of future protection afforded by our intel lectual to interest rate risk. property rights is uncertain because intellectual property rights Foreign Currency Exchange Risk have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example: We are exposed to foreign exchange risk inherent in certain • others may be able to make products that are similar to our services provided in the United States, which have been invoiced product candidates but that are not covered by the claims of in U.S. dollars. We do not currently have revenues in euros, dollars the patents that we in-license or may own in the future; nor in any other currency. Due to the relatively low level of these expenditures, the exposure to foreign exchange risk is unlikely to • we, or our current or future licensors or collaborators, might have a material adverse impact on our results of operations or not have been the first to make the inventions covered by the financial position. issued patent or pending patent application that we in-license or that we own or may own in the future; Our exposure to currencies other than the U.S. dollar is negligible. • we, or our current or future licensors or collaborators, might For the year ended December 31, 2017, less than 23% of our not have been, or might not be, the first to file the patent purchases and other external expenses were made in U.S. dollars, applications covering certain of our or their inventions; generating foreign exchange losses of €77 K. In light of these insignificant amounts, we have not adopted, at this stage, a hedging • others may independently develop similar or alternative mechanism in order to protect our business activity against technologies or duplicate any of our technologies without fluctuations in exchange rates. As we further increase our business infringing our owned or in-licensed intellectual property rights; activity, particularly in the United States, we expect to face greater • it is possible that the pending licensed patent applications of our exposure to exchange rate risk and would then consider adopting licensors or those that we own or may own in the future will not an appropriate policy for hedging against these risks. lead to issued patents; Liquidity Risk • issued patents that our licensors hold rights to, or that our licensors or we may hold rights to in the future, may be held We do not currently believe that we are exposed to short- invalid or unenforceable, including as a result of legal challenges term (12 months) liquidity risk, considering the cash and by our competitors; cash equivalents that we had available as of March 31, 2018 • other may conduct research and development activities in amounting to €49.2 million which was primarily cash and money countries where we do not have patent rights and then use the market funds, terms deposits and marketable securities that are information learned from such activities to develop competitive convertible into cash immediately without penalty. In addition, products for sale in our major commercial markets; we have undertaken a specific risk review regarding liquidity risk and we consider that we are able to meet our future repayments • we may not develop additional proprietary technologies that of conditional advances from Bpifrance Financement. We believe are patentable; and that our existing cash and cash equivalents will enable us to fund • we may choose not to file a patent application for certain trade our operating expenses and capital expenditure requirements secrets or other proprietary information, and a third party may until the end of the third quarter of 2019. GENSIGHT BIOLOGICS – 2017 Registration Document– 53