Evoke Pharma Inc

Item 1A. Risk Factors

There have been no material changes to the risk factors included in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 13, 2025 and in Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025 filed with the SEC on May 13, 2025,  and August 14, 2025, respectively, other than the following:

EnacRisks Related and future legislato the Pending Transaction with QOL Medical

We may increasnot complete the difficulty and cost for us to commercialize Gimoti and affect tpending transaction with QOL Medical within the pricestimeframe we may obtain. 

In the United Statesanticipate, or at all, which could have and some foreign jurisdict adverse effect on our business, financial results and/or operations, th.

On November 3, 2025, we entere have been, ad into the Merger Agreement with QOL Medical and we expecMerger Sub, pursuant there o which Merger Sub will continue mmence the Offer to be, a number of legislative acquire all of the Shares for the Offer Price. Upon the terms and regulatory changes and proposed changes regardisubject to the conditions set forth in the Merger Agreement, as soon as practicable following the healthcare systemconsummation of the Offer, QOL Medical will effect that could restrict or regulate post-approval acte Merger of Merger Sub with and into the Company, with the Company survivitieng the Merger as and aff wholly owned indirect our ability to profitably sell Gimoti. 

Legislsubsidiary of QOL Medical.

Merger Subs obligative and regulatory proposals have been made to expon to purchase the Shares validly tendered and post-appronot val requirements and restriidly withdrawn pursuant to the Offer is subject sales and promoto the satisfactional activities for pharmaceutical products. We are n or waiver of customary conditions, including, among others, (i) there being validly tendered and not sure whether additional legislvalidly withdrawn immediately prior to the Expirative changes will be enacted, or whon Time (as defined in the Merger Agreement) a number of Shares that, together FDA regulations, guidance with any Shares held by QOL Medical, Merger Sub or interpretations will be changed, or what any of their direct or indirect wholly owned subsidiaries, represents at least one more Share than 50% of the impact total number of such changes onoutstanding Shares, plus the commercialization of Gimoti, if any, may be.

In 2010, aggregate number of Shares issuable to holders of Company options or warrants for which the Patient ProtectionCompany has received valid notices of exercise and Affordafor which payment of any applicable Care Act, exercise price has amended by the Health Care and Education Reconciliabeen made in accordance with the terms of such Company option Act, s or warrants prior collectively, to the expiration of the ACA, was signeOffer (and into law. The ACA was intend respect of which Shares have not yet been issued to broaden access to health insurancthe exercising holder), as of immediately prior to the Expiration Time, redu(ii) the absence or f any law or order that prohibits constrain ummation of the growth of healthcare spendOffer or the Merger or that has the effect of making, enhance remedies against fraud the Offer or Merger illegal, (iii) the accuracy of the representations and abuse, add new transparency requirewarranties of the Company contained in the Merger Agreements for the healthcare , subject to certain materiality stand health insurards, (iv) the Companys compliance and performance industries, impose new taxe all material respects with its covenants and fees on agreements contained in the health industryMerger Agreement and impose additional health policy reforms. The ACA, among other things, increased the (v) the absence of any change, occurrence, effect, event, circumstatutory minimum rebates a manufacturer must pay undernce or development that has occurred since the Medicaid Drug Rebate Program to 23.1% and 13.0% of the date of the Merger Agreement that has had, or would reasonably be expected to haverage, a manufacturer price for brandedterial adverse effect on the Company and generic drugs, respectively; modified the AMP definition under tis continuing, as well as other customary conditions set forth in Annex A to the MDRP for drugs that are inhaled, infused, instilled, implanted, or injected; imposed a non-deductible annual fee on pharmaceuterger Agreement. The Merger Agreement also contains certain customary termination rights in favor of each of the Company and QOL Medical manufacturers or importers who sell branded prescript, including the Companys right, subject to certain limitation drugss, to specified federal governterminate the Merger Agreement programs, and increased the number of entities eligible for discounts under the 340B program. 

Since its enactment,in certain circumstances to accept a Superior Proposal (as defined in the Merger Agreement) and QOL Medicals right, subject to certain limitations, to terminate there have been judicial, executive and Congressional Merger Agreement if the Companys board of directors challenges to certain aspectits recommendation that stockholders of the ACA. On June 17, 2021, Company tender the U.S. Supreme Coir Shares in the Offer (as furt dismissher described in the most recent judicial challenge toMerger Agreement). As a result, we cannot assure you the ACAat the transaction without specifi QOL Medically ruling on will be completed, or the constitutionalitat, if completed, it will be exactly ofn the ACA. 

There have been a number of receterms set forth in the Merger Agreement regulatory and legislative initiatives designeas of its date or within the expected to encourage generic imeframe.

If the Merger is not competition fleted within the expected timeframe or pharmaceuticat all, we may be subject to a number of material products, including expedited reviewrisks. The price of our common stock may decline to the extent that current market procedures for generic manufacturers and incentives designice reflects a market assumption that the Merger will be completed. We could be required to spur generic competipay QOL Medical a termination fee of branded drugs. In particular, FDA and Federal Trade Commission, or FTC, have been focused on brand $1.5 million if the Merger Agreement is terminated under specific circumstances described in the Merger Agreement. The failure to companies denial of drug supply to potential generic competitors for testing. In December 2019, the Creatinglete the Merger also may result in negative publicity and negatively affect our relationship with our stockholders, employees, vendors, suppliers, customers. regulators and Restoring Equal Accother business to Epartners. We may also be requivalent Samples Act (the CREATES Act) was enacred to devote significant time and resources to litigation related, which provides a legis to any failure to complete the Merger or relatively defineded to any enforcement private right of acoceeding commenced against us to perform our obligations under which eligible product developthe Merger Agreement.

The pendency of the Merger could advers can bring suit against ely affect our business, financial results and/or operations.

Our efforts to companies who refuse to selllete the Merger could cause sufficient qubstantities of their bral disruptions in, anded products on commerc create uncertainty surrounding, our business, which may materially reasonable, market-based termadversely affect our results of operation and our business. Uncertainty as to support such eligible produwhether the Merger will be completed may affect developers marketing applicationour ability to retain and motivate existing employees. We cannot currently predict the specific outcome or impact on our businessA substantial amount of our managements and employees attention is being directed toward the Offer and completion of such regulatorythe Merger and legislative initiativethus is being diverted from our day-to-day operations. However, it is oUncertainty as to our policy, which is in compliancefuture could adversely affect our business and our relationship with the CREATES Act, to evaluate requests fcollaborators, vendors, customers, regulators, and other business partners. For sexamples of our branded product, vendors, collaborators, and to provide samples in responseother counterparties may defer decisions concerning working with us, or seek to bona fide requests from qualified third parties, including generic manufacturers, subject to specifiedchange existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our results of operations and financial conditions. 

In addition, o, as well as ther legislative changes have been proposed and adopted in  market price of our common stock. The adverse effects of the United States since pendency of the ACA was enacMerger could be exacerbated. These change by any delays include aggregate reduc completion of the Merger or terminations to Medicare pay of the Merger Agreements.

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While to providers, which wehe Merger Agreement intos in effect on April 1, 2013, and due, we are subject to subsequent legislarestrictions on our business active amendities.

While the Merger Agreements, will rema is in in effect through the first six month, we are subject to restrictions of 2032, with the exception of a temporn our business activities, generally requiring us to conduct our business in the ordinary suspension from May 1, 2020 through March 31, 2022, unless additioncourse and consistent with past practice in all material Congressional apects, and subjection ing us taken. The Ameo a variety of specified restrican Taxpayer Relief Act of 2012tions absent QOL Medicals prior consent. These limitations include, among other things, further reduced Medicare payments to several types of providerrestrictions on our ability to acquire other businesses and assets, including hospitaldispose of our assets, imaging cmake investments, enters and cancer treatment center into certain contracts, and increased the statute of limitarepurchase or issue securities, pay dividends, make capital expenditures, take certain actions period for the governrelating to intellectual property, ament to recover overpayd our organizational documents to provider, and incur indebtedness. These restrictions could prevent us from three to five years. In addipursuing strategic business opportunities, taking action, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on the Medicaid drug rebate, beginning January 1, 2024. Thes with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may, as a rebsult, mate was previousrially and adversely capped at 100% of a drug's AMP.

The costaffect our business, results of prescripoperation pharmaceuticals in ts and financial condition.

The United States has been the subject of cMerger Agreement contains provisionsiderable that could discussion. There have been severourage a potential Congressional incompeting acquiries and proposed and enacted legislation designed to, among other ther of our company or could result in any competings, reform government program reimbursement methodologies. Most proposal being at a lower price than it might otherwise be, and in certain instances recently, on August 16, 2022, the Inflquires us to pay a termination Reduction Act of 2022 (IRA) was signed into law. Among other thingfee.

We are subject to certain restrictions on our ability to solicit alternative acquisition proposals from third parties, the IRA requires manufacturers of certain drugs o provide information to third parties and to engageter in price nto or continue discussions or negotiations with Medicare (beginning in 2026), with prices that can be negotiatedthird parties regarding alternative acquisition proposals, subject to a cap; imposes rebates under Medicare Part B and customary exceptions. In addition, we may be required to pay QOL Medicare Part D to penalize 

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l a termination fee of $1.5 million under sprice increases that outpace inflation (first due ecific circumstances described in the Merger Agreement, including, but not limited to, in 2023); and replaces the Part D coverage gap discount program with a newthe event we accept and enter into an agreement for the consummation of a transaction which our board of discounting program (which beganrectors determines is a Superior Proposal (as defined in 2025the Merger Agreement). The IRA permits the Secretary of the Department of Health and Humse provisions could discourage a potential competing acquirer that might have an Services (HHS) to implement minterest in acquiring all or a significant part of our company of those from considering or provisions through guidance, as opposed to regulation, forposing such an acquisition, including, if the initial years. CMS has published the negotiMerger Agreement is terminated prices for to the initial ten drugs, whiconsummation of the Merger, after such will first be effective in 2026, antermination of the Merger Agreement, even if it were prepared the list ofo pay a purchase price per share higher the subsequent 15 drugs that will be subjectan the purchase price per share proposed to negotiation, although thbe paid in the Medicare drug price negotiation program is currently subjectrger, or might result in a potential competing acquirer proposing to legal challenges. Whilpay a lower price the impacan it might of the IRA on the pharmaceutical industry cannot yet be fully derwise have proposed to pay because of the added expense of the termined, it is likely to be signation fee that may become payable in specificant. 

In addition,ed circumstances under the One Big Beautiful Bill AcMerger Agreement, which was enacted in July 2025including, imposes significant reductions in the fundingn certain circumstances, after a valid termination of the Medicaid program. Such reductions are expected to decreaserger Agreement in accordance with the terms the number of persons enrolled in Medicaid and reducereof. If the Merger Agreement is terminated under the services covered by Medicaid, which cforegoing circumstances, the termination fee we would adversely affect our sales of Gimoti.

Inbe required to pay under the coming years, additional legislative andMerger Agreement may regulatory changes could be made to governmental health programsquire us to use available cash that cwould significantly impact pharmaceutical companies and the success of our product.

Individual stathave otherwise been available for general corporate purposes in and othe United Statesr uses.

 We have increasingly passed legislation and implemented regulations designed tourred, and will continue to incur, direct and indirect control pharmaceutical product pricing, including price or patient reimbursement sts as a result of the pending transaction with QOL Medical.

We have incurred, and will constraints, discounts, restrictions on certain product accestinue to incur, significant costs and expenses, marketing cost disclosure, drug price increase disclosureincluding fees for professional services and other transparency measureaction costs, and, in some cases, measures designed to encourage importation from oconnection with the pending transaction. We must pay substantially all of therse countriests and bulk purchasing. Some statexpenses have enacted legislawhether or not the transaction creating so-called prescription drug affordability boards, which ultimately may attemptis completed. There are a number of factors beyond our control that could affect the to impose price ltal amount or the timits on certain drugs inng of these states, while some states are also seeking to implement general, acrosscosts and expenses.

Litigation may arise in connection with the Offer or the board price caps for pharmaceuticals, or are seeking to regulate drug distribution. In addition, regional healthcare authorities and individual hospitals are increasingly using biddiMerger, which could be costly and divert managements attention and otherwise materially harm our business.

Lawsuits may be filed challenging procedthe disclosures to determcontaine what pharmaceutical productsd in the Offer and which suppliers will be included in /or challenging otheir prescription drug and or aspects of the proposed Merger. Regardless of ther healthcare  outcome of any future litigation related to the programs. Furthermore, there has been increased interest by third party payors and governposed Offer or Merger, such litigation may be time-consuming and expensive and may distract our managemental authorities in reference pricing system from running the day-to-day operations of our business. The litigation costs and publicatdiversion of discounmanagements and list prices. Thesettention and reforms could reducesources to address the ultimate demclaims and for our products, if approved, or put pressure on ourcounterclaims in any litigation related to the product pricing, which could negativeposed Offer and Merger may materially adversely affect our business, results of operations, finfinancial condition and prospects.

These laws and the regulations and policies implementing them, as well as other healthcare reform measures operating results. The outcome of any lawsuit filed or that may be adoptfiled inchallenging the future, may have a material adverse effect on our industry generally and on our ability toOffer or the Merger is uncertain. If any lawsuit is successfully develop in obtaining and commercialize our products. We expect order enjoining the Offer or the Merger, thaten these healthcare reform measures that transaction may not be adopconsummated iwithin the future expected timeframe, or at all, and could result in more rigoroussubstantial coverage criteria, new payment methodologies and addists, including but not limited to, costs associated with the indemnificational downward pressure on the pr of our directors and office that we receivers. If the Merger is not consummated for any approved product. Any reducreason, litigation could be filed in connection in reimbursement from Medicare or owith the failure to consummate the Merger. Any litigation related to ther government programs proposed Offer or Merger may result in a similar reduction in payments from private payors. The negative publicity or an unfavorable implementatression of cost containment measures or other healthcare reforms may prevent us from being ableus, which could adversely affect the price of our common stock, impair our ability to generate revenue, attain profitabilityretain employees, damage our relationships with our partners, or commercotherwise materialize our future product cly harm our operations andidates, if approved financial performance.