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Item 7. Management’s Discussion and Analysis

2024-04-16 compared with 2023-04-17 · 343 added, 341 removed, 68 unchanged (91% of the section changed)

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

The following discussion

5 unchanged sentences

See “Cautionary Note Regarding Forward-Looking Statements.”

We are an innovation company with a mission of

Making Promising Innovations Possible, Together.

We develop, build, and grow innovations with a focus on monitoring and modulating the

immune system.

We take a socialized approach to innovation by engaging stakeholders into all aspects of the process.

Our innovation portfolio includes

the following programs:

- Adimune™ - Immune modulation technologies which are

currently at the pre-clinical stage and are designed to retrain the immune system to induce tolerance with an objective of addressing

rejection of transplanted organs, autoimmune diseases, and allergies.

- AditxtScore™ - Immune monitoring technologies designed

to provide a personalized comprehensive profile of the immune system.

Modulation Program)

The discovery of immunosuppressive

(anti-rejection and monoclonal) drugs over 40 years ago has made possible life-saving organ transplantation procedures and blocking of

unwanted immune responses in autoimmune diseases.

However, immune suppression leads to significant undesirable side effects, such as

increased susceptibility to life-threatening infections and cancers, because it indiscriminately and broadly suppresses immune function

throughout the body.

While the use of these drugs has been justifiable because they prevent or delay organ rejection, their use for treatment

of autoimmune diseases and allergies may not be acceptable because of the aforementioned side effects.

Furthermore, transplanted organs

often ultimately fail despite the use of immune suppression, and about 40% of transplanted organs survive no more than 5 years.

New, focused therapeutic

approaches are needed that modulate only the immune cells involved in rejection of the transplanted organ, as this approach can be safer

for patients than indiscriminate immune suppression.

Such approaches are referred to as immune tolerance, and when therapeutically induced,

may be safer for patients and potentially allow longer-term survival of transplanted tissues and organs.

In the late 1990s, academic

research on these approaches was conducted at the Transplant Center in Loma Linda University (“LLU”) in connection with a

project that secured initial grant funding from the U.S.

Department of Defense.

The focus of that project was induction of tolerance

for skin allografting for burn victims.

Twenty years of research at LLU and an affiliated incubator led to a series of discoveries that

have been translated into a large patent portfolio of therapeutic approaches that may be applied to the modulation of the immune system

to induce tolerance to self and transplanted organs.

We have an exclusive worldwide

license for commercializing Apoptotic DNA Immunotherapy™ (ADI™), a nucleic acid-based technology (which is currently at the

pre-clinical stage), from LLU.

ADI™ utilizes a novel approach that mimics the way the body naturally induces tolerance to our own

tissues (“therapeutically induced immune tolerance”).

While immune suppression requires continuous administration to prevent

rejection of a transplanted organ, induction of tolerance has the potential to retrain the immune system to accept the organ for longer

periods of time.

Thus, ADI™ may allow patients to live with transplanted organs with significantly reduced immune suppression.

ADI™ is a technology platform which we believe can be engineered to address a wide variety of indications.

We are developing ADI™

products for organ transplantation including skin allografting, autoimmune diseases, and allergies, with the initial focus on psoriasis,

type 1 diabetes and skin allografting, indications for which we have compelling preclinical data.

To submit a Biologics License Application

(“BLA”) for a biopharmaceutical product, clinical safety and efficacy must be demonstrated in clinical studies conducted

with human subjects.

For products in our class of drugs, the first-in-human trials will be a combination of Phase I (safety/tolerability)

and Phase II (efficacy) in affected subjects.

To obtain approval to initiate the Phase I/IIa studies, an Investigational New Drug or

Clinical Trial Application will be submitted that will include a compilation of non-clinical efficacy data as well as manufacturing and

pre-clinical safety/toxicology data.

To date, we have conducted non-clinical studies in a stringent model of skin transplantation using

genetically mismatched donor and recipient animals demonstrating a 3-fold increase in the survival of the skin allograft in animals that

were tolerized with ADI™ compared to animals that receive immune suppression alone.

Prolongation of graft life was observed despite

discontinuation of immune suppression after the first 5 weeks.

In a non-obese diabetic mouse model of type 1 diabetes, we showed reversal

of hyperglycemia with 80% of the animals showing durable glycemic control for the 40-week study period.

Additionally, in an induced non-clinical

model for psoriasis, ADI™ treatment resulted in a 69% reduction in skin thickness and a 38% decrease in skin flaking (two clinical

parameters for assessment of psoriasis skin lesions).

The Phase I/IIa studies in psoriasis will evaluate the safety/tolerability of ADI™

in patients diagnosed with psoriasis.

Since the drug will be administered in subjects diagnosed with psoriasis, effectiveness of the

drug to improve psoriatic lesions will also be evaluated.

In the type 1 diabetes clinical studies, newly diagnosed subjects will receive

ADI™ treatment to evaluate safety and efficacy.

In another Phase I/IIa study, patients requiring skin allografts will receive weekly

intra-dermal injections of ADI™ in combination with standard immune suppression to assess safety/tolerability and possibility of

reducing levels of immunosuppressive drugs as well as prolongation of graft life.

(Immune Monitoring Program)

We believe that understanding

the status of an individual’s immune system is key to understanding health by the numbers and for developing therapeutics that

result in better outcomes for more individuals.

We have secured an exclusive worldwide license for commercializing a technology platform

named AditxtScore™, which provides a personalized comprehensive profile of the immune system.

AditxtScore™ is intended to

be informative for individual immune responses to viruses, bacteria, peptides, drugs, supplements, bone marrow and solid organ transplants

It has broad applicability to many other agents of clinical interest impacting the immune system, including those not yet

identified such as emerging infectious agents.

AditxtScore™ is being

designed to allow individuals to understand, manage and monitor their immune profiles in order to be informed about attacks on or by

their immune system.

We believe AditxtScore™ can also assist the medical community in anticipating possible immune responses and

reactions to viruses, bacteria, allergens and foreign tissues such as transplanted organs.

This capability may be possible by having

the ability to determine the body’s potential response and for developing a plan to deal with an undesirable reaction by the immune

Its advantages include the ability to provide a simple, rapid, accurate, high throughput assays that can be multiplexed to determine

the immune status with respect to several factors simultaneously, in 3-16 hours.

In addition, it can determine and differentiate between

various types of cellular and humoral immune responses (T and B cells and other cell types).

It also provides for simultaneous monitoring

of cell activation and levels of cytokine release (i.e., cytokine storms).

We plan to utilize AditxtScore™

in our upcoming pre-clinical and clinical studies to monitor subjects’ immune response before, during and after ADI™ drug

administration.

We are also evaluating plans to obtain regulatory approval for AditxtScore™’s use as a clinical assay and

seeking to secure manufacturing, marketing and distribution partnerships for application in the various markets.

To obtain regulatory

approval to use AditxtScore™ as a clinical assay, we have conducted validation studies to evaluate its performance in detection

of antibodies and plan to continue conducting additional validation studies for new applications in autoimmune diseases and transplantation.

Overview and Mission

believe the world needs—and deserves—a new approach to innovating that harnesses the power of large groups of stakeholders

who work together to ensure that the most promising innovations make it into the hands of people who need them most.

were incorporated in the State of Delaware on September 28, 2017, and our headquarters are in Richmond, Virginia.

The company was founded

with a mission of bringing stakeholders together, to transform promising innovations into products and services that could address some

of the most challenging needs.

The socialization of innovation through engaging stakeholders in every aspect of it, is key to transforming

more innovations, more rapidly, and more efficiently.

inception, the first innovation we took on was an immune modulation technology titled ADI/Adimune with a focus on prolonging life and

enhancing life quality of patients that have undergone organ transplants.

Since then, we expanded our portfolio of innovations, and we

continue to evaluate a variety of promising health innovations.

ADIMUNE, INC.

in January 2023, Adimune™, Inc.

(“Adimune”) is focused on leading our immune modulation therapeutic programs.

proprietary immune modulation product candidate, ADI-100™, based on the Apoptotic DNA Immunotherapy™ platform technology,

utilizes a novel approach that mimics the way our bodies naturally induce tolerance to our own tissues.

It includes two DNA molecules

designed to deliver signals to induce tolerance.

ADI-100 has been successfully tested in several preclinical models (e.g., skin grafting,

psoriasis, type 1 diabetes, multiple sclerosis).

May 2023, Adimune entered into a clinical trial agreement with Mayo Clinic to advance clinical studies targeting autoimmune diseases of

the central nervous system (“CNS”) with the initial focus on the rare, but debilitating, autoimmune disease Stiff Person Syndrome

According to the National Organization of Rare Diseases, the exact incidence and prevalence of SPS is unknown;

one estimate places the incidence at approximately one in one million individuals in the general population.

approval by the International Review Board and U.S.

Food and Drug Administration, a human trial for SPS is expected get underway in the first half of 2024 with

enrollment of up to 20 patients, some of whom may also have type 1 diabetes.

ADI-100 will initially be tested for safety and

ADI-100 is designed to tolerize against an antigen known as glutamic acid decarboxylase (“GAD”), which is

implicated in type-1 diabetes, psoriasis, stiff person syndrome, and in many autoimmune diseases of the CNS.

IND-enabling work is also near completion in support of a Clinical Trial Application submission to the Paul Ehrlich

Institute, the regulatory agency in Germany, to initiate clinical trials in psoriasis and type 1 diabetes.

discovery of immunosuppressive (anti-rejection and monoclonal) drugs over 40 years ago has made possible life-saving organ transplantation

procedures and blocking of unwanted immune responses in autoimmune diseases.

However, immune suppression leads to significant undesirable

side effects, such as increased susceptibility to life-threatening infections and cancers, because it indiscriminately and broadly suppresses

immune function throughout the body.

While the use of these drugs has been justifiable because they prevent or delay organ rejection,

their use for treatment of autoimmune diseases and allergies may not be acceptable because of the aforementioned side effects.

often transplanted organs ultimately fail despite the use of immune suppression, and about 40% of transplanted organs survive no more

than five years.

Aditxt, Adimune has the right of use to the exclusive worldwide license for commercializing ADI nucleic acid-based technology (which is

currently at the pre-clinical stage) from Loma Linda University.

ADI uses a novel approach that mimics the way the body naturally induces

tolerance to our own tissues (“therapeutically induced immune tolerance”).

While immune suppression requires continuous administration

to prevent rejection of a transplanted organ, induction of tolerance has the potential to retrain the immune system to accept the organ

for longer periods of time.

ADI may allow patients to live with transplanted organs with significantly reduced immune suppression.

is a technology platform which we believe can be engineered to address a wide variety of indications.

is a nucleic acid-based technology ( e.g.

, DNA-based), which we believe selectively suppresses only those immune cells involved

in attacking or rejecting self and transplanted tissues and organs.

It does so by tapping into the body’s natural process of cell

turnover (i.e., apoptosis) to retrain the immune system to stop unwanted attacks on self or transplanted tissues.

Apoptosis is a natural

process used by the body to clear dying cells and to allow recognition and tolerance to self-tissues.

ADI triggers this process by enabling

the cells of the immune system to recognize the targeted tissues as “self.” Conceptually, it is designed to retrain the immune

system to accept the tissues, similar to how natural apoptosis reminds our immune system to be tolerant to our own “self”

various groups have promoted tolerance through cell therapies and ex vivo manipulation of patient cells (i.e., takes

place outside the body), to our knowledge, we will be unique in our approach of using in-body induction of apoptosis to promote tolerance

to specific tissues.

In addition, ADI treatment itself will not require additional hospitalization but only an injection of minute

amounts of the therapeutic drug into the skin.

preclinical studies have demonstrated that ADI treatment significantly and substantially prolongs graft survival, in addition to successfully

“reversing” other established immune-mediated inflammatory processes.

License Agreement

with Loma Linda University

On March 8, 2018, we entered

into an Assignment Agreement (the “Assignment Agreement”) with Sekris Biomedical, Inc.

a party to a license agreement with LLU, entered and made effective on May 25, 2011, and amended on June 24, 2011, July 16, 2012 and

December 27, 2012 (the “Original Agreement,” and together with the Assignment Agreement, the “Sekris Agreements”).

Pursuant to the Assignment Agreement, Sekris transferred and assigned all of its rights, obligations and liabilities under the Original

Agreement, of whatever kind or nature, to us.

In exchange, on March 8, 2018, we issued a warrant to Sekris to purchase up to 10,000 shares

of our common stock (the “Sekris Warrant”).

The warrant was immediately exercisable and has an exercise price of $200.00

The expiration date of the warrant is March 8, 2023.

On March 15, 2018, as amended on July 1, 2020, we entered into a LLU

License Agreement directly with Loma Linda University, which amends and restates the Sekris Agreements.

with Loma Linda University (“LLU”)

March 15, 2018, we entered into a License Agreement with LLU, which was subsequently amended on July 1, 2020.

Pursuant to the LLU License

Agreement, we obtained the exclusive royalty-bearing worldwide license in and to all intellectual property, including patents, technical

information, trade secrets, proprietary rights, technology, know-how, data, formulas, drawings, and specifications, owned or controlled

by LLU and/or any of its affiliates (the “LLU Patent and Technology Rights”) and related to therapy for immune-mediated inflammatory

diseases (the ADI™ technology).

Agreement, we obtained the exclusive royalty-bearing worldwide license to all intellectual property, including patents, technical information,

trade secrets, proprietary rights, technology, know-how, data, formulas, drawings, and specifications, owned or controlled by LLU and/or

any of its affiliates (the “LLU Patent and Technology Rights”) and related to therapy for immune-mediated inflammatory diseases

(the ADI™ technology).

In consideration for the LLU License Agreement, we issued 13 shares of common stock to LLU.

Pursuant to the LLU License

Agreement, we are required to pay an annual license fee to LLU.

Also, we paid LLU $455,000 in July 2020 for outstanding milestone payments

and license fees.

We are also required to pay to LLU milestone payments in connection with certain development milestones.

Specifically,

we are required to make the following milestone payments to LLU:

$175,000 on March 31, 2022;

$100,000 on March 31, 2024;

March 31, 2026;

and $500,000 on March 31, 2027.

In lieu of the $175,000 milestone payment due on March 31, 2022, the Company paid LLU

an extension fee of $100,000.

Upon payment of this extension fee, an additional year will be added for the March 31, 2022 milestone.

Additionally, as consideration for prior expenses incurred by LLU to prosecute, maintain and defend the LLU Patent and Technology Rights,

we made the following payments to LLU:

$70,000 at the end of December 2018, and a final payment of $60,000 at the end of March 2019.

We are required to defend the LLU Patent and Technology Rights during the term of the LLU License Agreement.

Additionally, we will owe

royalty payments of (i) 1.5% of Net Product Sales (as such terms are defined under the LLU License Agreement) and Net Service Sales on

any Licensed Products (defined as any finished pharmaceutical products which utilizes the LLU Patent and Technology Rights in its development,

manufacture or supply), and (ii) 0.75% of Net Product Sales and Net Service Sales for Licensed Products and Licensed Services (as such

terms are defined under the LLU License Agreement) not covered by a valid patent claim for technology rights and know-how for a three

(3) year period beyond the expiration of all valid patent claims.

We also are required to produce a written progress report to LLU, discussing

our development and commercialization efforts, within 45 days following the end of each year.

All intellectual property rights in and

to LLU Patent and Technology Rights shall remain with LLU (other than improvements developed by or on our behalf).

The LLU License Agreement

shall terminate on the last day that a patent granted to us by LLU is valid and enforceable or the day that the last patent application

licensed to us is abandoned.

The LLU License Agreement may be terminated by mutual agreement or by us upon 90 days written notice to

LLU may terminate the LLU License Agreement in the event of (i) non-payments or late payments of royalty, milestone and license

maintenance fees not cured within 90 days after delivery of written notice by LLU, (ii) a breach of any non-payment provision (including

the provision that requires us to meet certain deadlines for milestone events (each, a “Milestone Deadline”)) not cured within

90 days after delivery of written notice by LLU and (iii) LLU delivers notice to us of three or more actual breaches of the LLU License

Agreement by us in any 12-month period.

Additional Milestone Deadlines include:

(i) the requirement to have regulatory approval of an

IND application to initiate first-in-human clinical trials on or before March 31, 2022, which has been extended to March 31, 2023 due

to payment of a $100,000 extension fee paid in March 2022, (ii) the completion of first-in-human (phase I/II) clinical trials by March

31, 2024, (iii) the completion of Phase III clinical trials by March 31, 2026 and (iv) biologic licensing approval by the FDA by March

License Agreement

with Leland Stanford Junior University (“Stanford”)

On February 3, 2020, we entered

into an exclusive license agreement (the “February 2020 License Agreement”) with Stanford regarding a patent concerning a

method for detection and measurement of specific cellular responses.

Pursuant to the February 2020 License Agreement, we received an

exclusive worldwide license to Stanford’s patent regarding use, import, offer, and sale of Licensed Products (as defined in the

The license to the patented technology is exclusive, including the right to sublicense, beginning on the effective date of

the agreement, and ending when the patent expires.

Under the exclusivity agreement, we acknowledged that Stanford had already granted

a non-exclusive license in the Nonexclusive Field of Use, under the Licensed Patents in the Licensed Field of Use in the Licensed Territory

(as those terms are defined in the February 2020 License Agreement”).

However, Stanford agreed to not grant further licenses under

the Licensed Patents in the Licensed Field of Use in the Licensed Territory.

On December 29, 2021, we entered into an amendment to the

February 2020 License Agreement which extended our exclusive right to license the technology deployed in AditxtScore TM and

securing worldwide exclusivity in all fields of use of the licensed technology.

We were obligated to pay

and paid a fee of $25,000 to Stanford within 60 days of February 3, 2020.

We also issued 375 shares of the Company’s common stock

An annual licensing maintenance fee is payable by us on the first anniversary of the February 2020 License Agreement in

the amount of $40,000 for 2021 through 2024 and $60,000 starting in 2025 until the license expires upon the expiration of the patent.

The Company is required to pay and has paid $25,000 for the issuances of certain patents.

The Company will pay milestone fees of $50,000

on the first commercial sales of a licensed product and $25,000 at the beginning of any clinical study for regulatory clearance of an

in vitro diagnostic product developed and a potential licensed product.

The Company paid a milestone fee for a clinical study for regulatory

clearance of an in vitro diagnostic product developed and a potential licensed product of $25,000 in March of 2022.

We are also required

(i) provide a listing of the management team or a schedule for the recruitment of key management positions by March 31, 2020 (which

has been completed), (ii) provide a business plan covering projected product development, markets and sales forecasts, manufacturing

and operations, and financial forecasts until at least $10,000,000 in revenue by June 30, 2020 (which has been completed), (iii) conduct

validation studies by September 30, 2020 (which has been completed), (iv) hold a pre-submission meeting with the FDA by September 30,

2020 (which has been completed), (iv) submit a 510(k) application to the FDA, Emergency Use Authorization (“EUA”), or a Laboratory

Developed Test (“LDT”) by March 31, 2021 (which has been completed), (vi) develop a prototype assay for human profiling by

December 31, 2021 (which has been completed), (vii) execute at least one partnership for use of the technology for transplant, autoimmunity,

or infectious disease purposes by March 31, 2022 (which has been completed) and (viii) provided further development and commercialization

milestones for specific fields of use in writing prior to December 31, 2022.

In addition to the annual

license maintenance fees outlined above, we will pay Stanford royalties on Net Sales (as such term is defined in the February 2020 License

Agreement) during the of the term of the agreement as follows:

4% when Net Sales are below or equal to $5 million annually or 6% when

Net Sales are above $5 million annually.

The February 2020 License Agreement may be terminated upon our election on at least 30 days

advance notice to Stanford, or by Stanford if we:

(i) are delinquent on any report or payment;

(ii) are not diligently developing and

commercializing Licensed Product;

(iii) miss certain performance milestones;

(iv) are in breach of any provision of the February 2020

License Agreement;

or (v) provide any false report to Stanford.

Should any events in the preceding sentence occur, we have a thirty (30)

day cure period to remedy such violation.

PEARSANTA, INC.

in January 2023, our subsidiary Pearsanta™, Inc.

(“Pearsanta”) seeks to take personalized medicine to a whole new level

by delivering “Health by the Numbers.” Since its founding, Pearsanta has been building the platform for enabling our vision

of lab quality testing, anytime, anywhere.

Our plan for Pearsanta’s platform is for it to be the transactional backbone for sample

collection, sample processing (on- and off-site), and reporting.

This will require the development and convergence of multiple components

developed by Pearsanta, or through transactions with third parties, including collection devices, “lab-on-a-chip” technologies,

Lab Developed Test (LDT) assays, a data-driven analysis engine, and telemedicine.

According to a comprehensive research report by Market

Research Future, the clinical and consumer diagnostic market is estimated to hit $429.3 billion by 2030.

We believe that timely and

personalized testing enables far more informed treatment decisions.

Pearsanta’s platform is being developed as a seamless digital

healthcare solution.

This platform will integrate at-location sample collection, Point-of-Care (“POC”) and LDT assays, and

an analytical reporting engine, with telemedicine-enabled visits with licensed physicians to review test results and, if necessary, order

a prescription.

Pearsanta’s goal of extending its platform to enable consumers to monitor their health more proactively as the goal

is to provide a more complete picture about someone’s dynamic health status, factoring in genetic makeup and their response to medication.

The POC component of Pearsanta would enable diagnostic testing at-home, at work, in pharmacies, and more to generate results quickly so

that an individual can access necessary treatment faster.

With certain infections, prescribing the most effective treatment according

to one’s numbers can prevent hospital emergency room admissions and potentially life-threatening consequences.

of indication-focused tests for the Test2Treat platform will include the evaluation for advanced urinary tract infections (“UTIs”),

COVID-19/flu/respiratory syncytial virus, sexually transmitted infections, gut health, pharmacogenomics (i.e., how your genes affect the

way your body responds to certain therapeutics), and sepsis.

We believe that these offerings are novel and needed as the current standard

of care using broad spectrum antibiotic treatment can be ineffective and potentially life-threatening.

For example, improperly prescribed

antibiotics may approach 50% of outpatient cases.

Further, according to an article published in Physician’s Weekly, only 1% of board-certified

critical care medicine physicians are trained in infectious disease.

Licensed Technologies

– AditxtScore TM

issued Pearsanta an exclusive worldwide sub-license for commercializing the AditxtScore™ technology which provides a personalized

comprehensive profile of the immune system.

AditxtScore is intended to detect individual immune responses to viruses, bacteria, peptides,

drugs, supplements, bone marrow and solid organ transplants, and cancer.

It has broad applicability to many other agents of clinical interest

impacting the immune system, including those not yet identified such as emerging infectious agents.

is being designed to enable individuals and their healthcare providers to understand, manage and monitor their immune profiles and to

stay informed about attacks on or by their immune system.

We believe AditxtScore can also assist the medical community and individuals

by being able to anticipate the immune system’s potential response to viruses, bacteria, allergens, and foreign tissues such as

transplanted organs.

This technology may be able to serve as a warning signal, thereby allowing for more time to respond appropriately.

Its advantages include the ability to provide simple, rapid, accurate, high throughput assays that can be multiplexed to determine the

immune status with respect to several factors simultaneously, in approximately 3-16 hours.

In addition, it can determine and differentiate

between distinct types of cellular and humoral immune responses (e.g., T and B cells and other cell types).

It also provides for simultaneous

monitoring of cell activation and levels of cytokine release (i.e., cytokine storms).

are actively involved in the regulatory approval process for AditxtScore assays for clinical use and securing manufacturing, marketing,

and distribution partnerships for application in the various markets.

To obtain regulatory approval to use AditxtScore as a clinical assay,

we have conducted validation studies to evaluate its performance in detection of antibodies and plan to continue conducting additional

validation studies for new applications in autoimmune diseases.

sophistication of the AditxtScore technology includes the following:

greater sensitivity/specificity.

20-fold higher dynamic range, greatly reducing signal to noise compared to conventional assays.

ability to customize assays and multiplex a large number of analytes with speed and efficiency.

ability to test for cellular immune responses (i.e., T and B cells and cytokines).

proprietary reporting algorithm.

License Agreement with Leland Stanford Junior University (“Stanford”)

February 3, 2020, we entered into an exclusive license agreement (the “February 2020 License Agreement”) with Stanford with

regard to a patent concerning a method for detection and measurement of specific cellular responses.

Pursuant to the February 2020 License

Agreement, we received an exclusive worldwide license to Stanford’s patent with regard to use, import, offer, and sale of Licensed

Products (as defined in the agreement).

The license to the patented technology is exclusive, including the right to sublicense, beginning

on the effective date of the agreement, and ending when the patent expires.

Under the exclusivity agreement, we acknowledged that Stanford

had already granted a non-exclusive license in the Nonexclusive Field of Use, under the Licensed Patents in the Licensed Field of Use

in the Licensed Territory (as those terms are defined in the “February 2020 License Agreement”).

However, Stanford agreed

not to grant further licenses under the Licensed Patents in the Licensed Field of Use in the Licensed Territory.

On December 29, 2021,

we entered into an amendment to the February 2020 License Agreement which extended our exclusive right to license the technology deployed

in AditxtScore TM and securing worldwide exclusivity in all fields of use of the licensed technology.

in April of 2023, Adivir™, Inc.

is a wholly owned subsidiary, dedicated to the clinical and commercial development efforts of innovative

products for population health, including antiviral and other antimicrobial products, which have the potential to address a wide range

of infectious diseases, including those that currently lack viable treatment options.

April 18, 2023, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Cellvera Global Holdings

LLC (“Cellvera Global”), Cellvera Holdings Ltd.

(“BVI Holdco”), Cellvera, Ltd.

(“Cellvera Ltd.”),

Cellvera Development LLC (“Cellvera Development” and together with Cellvera Global, BVI Holdco, Cellvera Ltd.

Development (the “Sellers”), AiPharma Group Ltd.

(“Seller Owner” and collectively with the Sellers, “Cellvera”),

and the legal representative of Cellvera, pursuant to which, the Company will purchase Cellvera’s 50% ownership interest in G Response

Aid FZE (“GRA”), certain other intellectual property and all goodwill related thereto (the “Acquired Assets”).

expressly stated otherwise herein, capitalized terms used but not defined herein have the meanings ascribed to them in the Asset Purchase

Pursuant to the Asset Purchase Agreement, the consideration for the Acquired Assets consists of (A) $24.5 million, comprised

(i) the forgiveness of the Company’s $14.5 million loan to Cellvera Global, and (ii) approximately $10 million in cash, and

(B) future revenue sharing payments for a term of seven years.

GRA holds an exclusive, worldwide license for the antiviral medication,

Avigan® 200mg, excluding Japan, China and Russia.

The other 50% interest in GRA is held by Agility, Inc.

Additionally,

upon the closing, the Share Exchange Agreement previously entered into as of December 28, 2021, between Cellvera Global Holdings, LLC

f/k/a AiPharma Global Holdings, LLC (together with other affiliates and subsidiaries) and the Company, and all other related agreements

will be terminated.

obligations of the Company to consummate the Closing under the Asset Purchase Agreement are subject to the satisfaction or waiver, at

or prior to the Closing of certain conditions, including but not limited to, the following:

Satisfactory completion of due diligence;

Completion by the Company of financing sufficient to consummate the transactions contemplated by the Asset Purchase Agreement;

Receipt by the Company of all required Consents from Governmental Bodies for the Acquisition, including but not limited to, any consents required to complete the transfer and assignment of Cellvera’s membership interests in GRA;

Receipt of executed payoff letters reflecting the amount required to be fully pay all of each of Seller’s and Seller Owner’s Debt to be paid at Closing;

Receipt by the Company of a release from Agility;

Execution of an agreement acceptable to the Company with respect to the acquisition by the Company of certain intellectual property presently held by a third party;

Execution of an amendment to an asset purchase agreement previously entered into by Cellvera with a third party that effectively grants the Company the rights to acquire the intellectual property from the third party under such agreement;

Receipt of a fairness opinion by the Company with respect to the transactions contemplated by the Asset Purchase Agreement;

Receipt by the Company from the Seller Owner of written consent, whether through its official liquidator or the Board of Directors of Seller Owner, to the sale and purchase of the Acquired Assets and Assumed Liabilities pursuant to the Assert Purchase Agreement.

can be no assurance that the conditions to closing will be satisfied or that the proposed acquisition will be completed as proposed or

commitment to building our antiviral portfolio is strategic and timely.

We believe that there has never has there been a more important

time to address the growing global need to uncover new treatments or commercialize existing ones that treat life-threatening global viral

have assembled a team of experts from a variety of scientific fields and commercial backgrounds, with many years of collective experience

3 unchanged sentences

were incorporated on September 28, 2017 and have not generated significant revenues to date.

During the year ended December 31, 2022,

we had a net loss of $27,649,876 and cash of $2,768,640 as of December 31, 2022.

The Company will require significant additional capital

to operate in the normal course of business and fund clinical studies in the long-term.

As a result of the May 2022 purchase and sale

of future receipts (a “Future Receipts Agreement”), the August 2022 Senior Secured Convertible Note, the August 2022 Future

Receipts Agreement and the September 2022 public offering we received net proceeds of approximately $21,000,000 during the last twelve

We believe that the remaining funds on hand will not be sufficient to fund our operations for the next 12 months and such creates

substantial doubt about our ability to continue as a going concern beyond one year.

During the year ended and as of December

31, 2023, we had a net loss of $32,390,447 and cash of $97,102.

We are currently over 90 days past due on a significant number of vendor

The Company will require significant additional capital to operate in the normal course of business and fund clinical studies

in the long-term.

We believe our remaining funds on hand will not be sufficient to fund our operations for the next 12 months and such

creates substantial doubt about our ability to continue as a going concern beyond one year.

Financial Results

7 unchanged sentences

Results of Operations

of operations for the years ended December 31, 2022 and 2021

generated revenue of $933,715 and $105,034 for the years ended December 31, 2022 and 2021, respectively.

Cost of sales for the years

ended December 31, 2022 and 2021 was $766,779 and $77,979, respectively.

the years ended December 31, 2022, we incurred a loss from operations of $25,480,098.

This is due to general and administrative expenses

of $15,985,552, which includes $1,516,805 in stock-based compensation, research and development of $7,268,084, which includes $591,518

in stock-based compensation, sales and marketing expenses of $1,849,460, which includes $1,023,045 in stock-based compensation and impairment

on note receivable of $534,938.

The $7,268,084 in research and development is mainly comprised of $2,145,382 in consulting expenses,

and $3,375,757 in compensation offset by a one-time adjustment to research and development purchases.

During the year, the Company transitioned

from purchasing certain inventory items to internally manufacturing these items.

the year ended December 31, 2021, we incurred a loss from operations of $41,934,928.

This is due to general and administrative expenses

of $22,084,389, which includes $3,927,551 in stock-based compensation, research and development of $5,042,617, which includes $713,130

in stock-based compensation, sales and marketing expenses of $334,977, and impairment on note receivable of $14,500,000.

The $5,042,617

in research and development is comprised of $76,455 in licensing fees, $1,960,196 in product development, $2,039,533 in compensation,

and $966,433 in other research and development expense.

decrease in expenses during the year ended December 31, 2022 compared to the year ended December 31, 2021 was due to the impairment on

note receivable during the year ended December 31, 2021.

Results of operations

for the years ended December 31, 2023 and 2022

We generated revenue of $645,176

and $933,715 for the years ended December 31, 2023 and 2022, respectively.

Cost of sales for the years ended December 31, 2023 and 2022

was $756,836 and $766,779, respectively.

During the year ended December

31, 2023, we incurred a loss from operations of $26,062,425.

This is due primarily to general and administrative expenses of $18,607,142.

This includes approximately $9,641,000 in payroll expenses, $4,484,000 in professional fees, and $1,133,077 in stock-based compensation.

Research and development expenses were $7,074,339 which includes $1,815,068 in consulting expenses and $262,154 in stock-based compensation.

Sales and marketing expenses were $269,284, which includes $6,787 in stock-based compensation.

During the year ended December

31, 2022, we incurred a loss from operations of $25,480,098.

This is due to general and administrative expenses of $15,985,552, which

includes $1,516,805 in stock-based compensation, research and development of $7,268,084, which includes $591,518 in stock-based compensation,

sales and marketing expenses of $1,849,460, which includes $1,023,045 in stock-based compensation and impairment on note receivable of

The $7,268,084 in research and development is mainly comprised of $2,145,382 in consulting expenses, and $3,375,757 in compensation

offset by a one-time adjustment to research and development purchases.

During the year, the Company transitioned from purchasing certain

inventory items to internally manufacturing these items.

The decrease in expenses during

the year ended December 31, 2023 compared to the year ended December 31, 2022 was due to decreased research and development spend and

the termination of a sales and marketing vendor.

Liquidity and Capital

have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable

future and may never become profitable.

As of December 31, 2022, we had an accumulated deficit of $95,040,362 We had working capital

of $1,099,839 as of December 31, 2022.

During year ended December 31, 2022, we purchased $367,079 in fixed assets.

These fixed assets

were purchased to continue the buildout of our operations.

Approximately $300,000 of purchased fixed assets were lab equipment, $62,000

were computers, and $5,000 were office furniture.

financial statements have been prepared assuming that we will continue as a going concern.

We have incurred substantial

operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future and may never

become profitable.

As of December 31, 2023, we had an accumulated deficit of $127,635,389.

We had working capital of $(18,976,866) as

of December 31, 2023.

During the year ended December 31, 2023, we purchased $14,407 in fixed assets, for which we made cash payments of

Of the $14,407, $12,356 of these purchased fixed assets were lab equipment and $2,051 was for computers.

Our consolidated financial

statements have been prepared assuming that we will continue as a going concern.

have funded our operations from proceeds from the sale of equity and debt securities.

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of approximately $9.6 million.

January 25, 2021, we entered into a securities purchase agreement with an institutional accredited investor (the “Investor”)

January 25, 2021, the Company entered into a securities purchase agreement with an institutional accredited investor (the “Investor”)

for the sale of a $6,000,000 senior secured convertible note (the “Convertible Note”).

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24 months, was originally convertible at a price of $8,000.00 per share and was issued at an original issuance discount of $1,000,000.

On August 30, 2021, the Company entered into a defeasance and waiver agreement with the Investor, pursuant to which the Investor has

agreed in exchange for (a) a cash payment by the Company to the Investor of $1.2 million (the Cash Payment”), (b) a waiver, in

part of the conversion price adjustment provision such that the January 2021 Note shall be convertible into 96,050 shares of common stock

(without giving effect to the conversion notice received by the Company from the Investor prior to the date hereof totaling (20,115 shares),

and (c) a voluntary and permanent reduction by the Company of the exercise price of the warrant to purchase 16,000 shares of the common

stock of the Company (the “January 2021 Warrant”) to $126.50 per share.

As of December 31, 2022, the outstanding principle

of the convertible note had been converted to 96,050 shares of common stock.

August 30, 2021, we completed a registered direct;

offering and raised approximately $10.1 million in net proceeds.

October 20, 2021, we completed an offering for net proceeds of $3.8 million.

As part of this offering, we issued 56,667 shares of the

Company’s common stock.

December 6, 2021, we completed an offering for net proceeds of $16.0 million.

As part of this offering, we issued 164,929 units consisting

of shares of the Company’s common stock and warrant to purchase shares of the Company’s common stock and 166,572 prefunded

The warrant issued as part of the units had an exercise price of $57.50 and the prefunded warrants had an exercise price of

September 20, 2022, we completed a public offering for net proceeds of $17.2 million (the “September 2022 Offering”).

As part of the September 2022 Offering, we issued 1,224,333 of shares of the Company’s common stock, pre-funded warrants to

purchase 2,109,000 shares of the Company’s common stock and warrants to purchase 3,333,333 shares of the Company’s common

The warrants had an exercise price of $6.00 and the pre-funded warrants had an exercise price of $0.001.

may need to raise significant additional capital to continue to fund our operations and the clinical trials for our product candidates.

We may seek to sell common stock, preferred stock or convertible debt securities, enter into a credit facility or another form of third-party

On August 30, 2021, the Company entered into a defeasance and waiver agreement with the Investor, pursuant to which the Noteholder has

agreed in exchange for (a) a cash payment by the Company to the Investor of $1.2 million (the Cash Payment”), (b) a waiver, in part

of the conversion price adjustment provision such that the January 2021 Note shall be convertible into 2,401 shares of common stock (without

giving effect to the conversion notice received by the company form the Noteholder prior to the date hereof totaling (503 shares) (the

“Shares”), and (c) a voluntary and permanent reduction by the Company of the exercise price of the warrant to purchase 400

shares of the common stock of the Company (the “January 2021 Warrant”) to $5,060 per share.

As of December 31, 2022, the outstanding

principle of the convertible note had been converted to 2,401 shares of common stock.

August 30, 2021, the Company completed a registered direct offering and raised approximately $10.1 million in net proceeds.

October 20, 2021, the Company completed a public offering for net proceeds of $3.8 million.

As part of this offering, we issued 1,417

shares of the Company’s common stock

December 6, 2021, the Company completed a public offering for net proceeds of $16.0 million.

As part of this offering, we issued 4,123

units consisting of shares of the Company’s common stock and warrant to purchase shares of the Company’s common stock and

4,164 pre-funded warrants.

The warrant issued as part of the units had an exercise price of $2,300.00 and the prefunded warrants had an

exercise price of $0.001.

September 20, 2022, the Company completed a public offering for net proceeds of $18.1 million (the “September 2022 Offering”).

As part of the September 2022 Offering, we issued 30,608 of shares of the Company’s common stock, pre-funded warrants to purchase

52,725 shares of the Company’s common stock and warrants to purchase 83,333 shares of the Company’s common stock.

warrants have an exercise price of $240.00 and the pre-funded warrants have an exercise price of $0.004.

April 20, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional

investor, pursuant to which the Company agreed to sell to such investor pre-funded warrants (the “Pre-Funded Warrants”) to

purchase up to 39,634 shares of common stock of the Company (the “Common Stock”) at a purchase price of $48.76 per Pre-Funded

Concurrently with the sale of the Pre-Funded Warrants, pursuant to the Purchase Agreement in a concurrent private placement,

for each Pre-Funded Warrant purchased by the investor, such investor received from the Company an unregistered warrant (the “Warrant”)

to purchase two shares of Common Stock.

The warrants have an exercise price of $34.40 per share and are exercisable for a three-year period.

In addition, the Company issued a warrant to the placement agent to purchase up to 2,378 shares of common stock at an exercise price of

$61.00 per share.

August 31, 2023, the Company entered into a securities purchase agreement (the “August Purchase Agreement”) with an institutional

investor for the issuance and sale in a private placement (the “Private Placement”) of (i) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $0.001 per share, and

(ii) warrants (the “Common Warrants”) to purchase up to 1,000,000 shares of the Company’s Common Stock at an exercise

price of $10.00 per share.

The Private Placement closed on September 6, 2023.

The net proceeds to the Company from the Private Placement

were approximately $9 million, after deducting placement agent fees and expenses and estimated offering expenses payable by the Company.

The Company utilized net proceeds received from the Private Placement for (i) payment of approximately $3.1 million in outstanding obligations,

(ii) repayment of approximately $0.4 million of outstanding debt, and (iii) continuing operating expenses and working capital.

On December 29, 2023, the

Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (“the

“Purchaser”) for the issuance and sale in a private placement (the “Private Placement”) of (i) pre-funded warrants

(the “Pre-Funded Warrants”) to purchase up to 1,237,114 shares of the Company’s common stock, par value $0.001 (the

“Common Stock”) at an exercise price of $0.001 per share, and (ii) warrants (the “Common Warrants”) to purchase

up to 2,474,228 shares of the Company’s Common Stock, at a purchase price of $4.85 per share.

The Private Placement closed on January

The net proceeds to the Company from the Private Placement are expected to be approximately $5.5 million, after deducting placement

agent fees and expenses and estimated offering expenses payable by the Company.

The Company intends to use the net proceeds received from

the Private Placement for continuing operating expenses and working capital.

will need significant additional capital to continue to fund our operations and the clinical trials for our product candidates.

seek to sell common stock, preferred stock or convertible debt securities, enter into a credit facility or another form of third-party

funding or seek other debt financing.

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Contractual Obligations

following table shows our contractual obligations as of December 31, 2022:

The following table shows

our contractual obligations as of December 31, 2023:

Payment Due by Year

Financed asset

Total contractual obligations

Critical Accounting

Polices and Estimates

financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The preparation of

our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount

Critical Accounting Polices and Estimates

Our consolidated financial

statements are prepared in accordance with generally accepted accounting principles in the United States.

The preparation of our consolidated

financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount

of assets, liabilities, revenue, costs and expenses, and related disclosures.

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The following involve the most judgment and complexity:

and development

● Stock-based

compensation expense

we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations.

If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our

reported financial condition and results of operations could be materially affected.

Off-Balance Sheet

time to time the Company enters short term research and development contracts.

These contracts have payment provisions which require payment

once regulatory and completion milestones are met.

As of December 31, 2022, the Company has approximately $1.6 million outstanding, subject

to these milestones.

April 5, 2012, the JOBS Act was enacted.

Section 107 of the JOBS Act provides that an “emerging growth company”

can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new

or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption of certain accounting

standards until those standards would otherwise apply to private companies.

favorable, we have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS

Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided

under the JOBS Act.

are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act.

to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions,

including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial

reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted

by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the

auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion

and analysis.

We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year

in which we have total annual gross revenues of $1.07 billion or more;

(ii) the last day of our fiscal year following the fifth

anniversary of the date of the completion of our IPO (December 31, 2025);

(iii) the date on which we have issued more than $1 billion

in nonconvertible debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer

under the rules of the SEC.

Recently Issued and

Adopted Accounting Pronouncements

Note 3 - Summary of Significant Accounting Policies to the accompanying financial statements for a description of other accounting policies

and recently issued accounting pronouncements.

Research and development

Stock-based compensation expense

Preferred Stock

Accordingly, we believe the

policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations.

results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported

financial condition and results of operations could be materially affected.

Off-Balance Sheet Arrangements

We did not have during the

periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

On April 5, 2012, the

JOBS Act was enacted.

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the

extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards

would otherwise apply to private companies.

When favorable, we have chosen

to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new

or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act.

We are in the process of evaluating

the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act.

Subject to certain

conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including

without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting

pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public

Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s

report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis.

will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total

annual gross revenues of $1.07 billion or more;

(ii) the last day of our fiscal year following the fifth anniversary of the

date of the completion of our IPO (December 31, 2025);

(iii) the date on which we have issued more than $1 billion in nonconvertible

debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer under the rules of

Recently Issued and Adopted Accounting Pronouncements

See Note 3 - Summary of Significant

Accounting Policies to the accompanying consolidated financial statements for a description of other accounting policies and recently

issued accounting pronouncements.

Recent Developments

Note 12 – Subsequent Event to the accompanying financial statements for a description of material recent developments.

Quantitative and Qualitative Disclosures

About Market Risk.

See Note 12 – Subsequent

Event to the accompanying consolidated financial statements for a description of material recent developments.

Quantitative and Qualitative Disclosures About Market Risk.

We are not required to provide

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following the Exhibit Index of this Annual Report on Form 10-K.

Changes in and Disagreements with

Accountants on Accounting and Financial Disclosure.

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis