What changed in this filing

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Item 1A. Risk Factors

2022-06-28 compared with 2021-06-24 · 477 added, 386 removed, 1136 unchanged (43% of the section changed)

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It is possible that we may not be able to enter into future government contracts beyond our current contract with

Future profitability, if any, will require the successful commercialization of our Hemopurifier technology, other products that

may emerge from our potential diagnostic products or from additional government contract or grant income.

We may not be able to successfully

commercialize the Hemopurifier or any other products, and even if commercialization is successful, we may never be profitable.

the NIH that ends in September 2022.

Future profitability, if any, will require the successful commercialization of our Hemopurifier technology,

other products that may emerge from our potential diagnostic products or from additional government contract or grant income.

be able to successfully commercialize the Hemopurifier or any other products, and even if commercialization is successful, we may never

be profitable.

We will require additional financing to sustain our operations,

achieve our business objectives and satisfy our cash obligations, which may dilute the ownership of our existing stockholders.

We will require significant

additional financing for our operations and for expected additional future clinical trials in the U.S., as well as to fund all of our

continued research and development activities for the Hemopurifier and other future products.

In addition, as we expand our activities,

our overhead costs to support personnel, laboratory materials and infrastructure will increase.

If the financing we may require to sustain

our working capital needs is unavailable to us on reasonable terms, or at all, we may be unable to support our research and FDA development

activities, including our planned clinical trials.

The failure to implement our research and clearance activities would have a material

adverse effect on our ability to commercialize our products or continue our business.

We also will need to raise additional funds

through debt or equity financings to achieve our business objectives and to satisfy our cash obligations, which may dilute the ownership

of our existing stockholders.

We will need to raise additional

funds through debt and/or equity financings in order to complete our ultimate business objectives, including funding working capital to

support development and regulatory clearance of our potential products.

We also may choose to raise additional funds in debt or equity

financings if they are available to us on reasonable terms to increase our working capital and to strengthen our financial position.

sales of additional equity or convertible debt securities could result in dilution of the equity interests of our existing stockholders,

which could be substantial.

Also, new investors may require that we and certain of our stockholders enter into voting arrangements that

give them additional voting control or representation on our Board of Directors.

additional financing for our operations and for expected additional future clinical trials in the U.S., regulatory clearances, and continued

research and development activities for the Hemopurifier and other future products.

In addition, as we expand our activities, our overhead

costs to support personnel, laboratory materials and infrastructure will increase.

We may also choose to raise additional funds in debt

or equity financings if they are available to us on reasonable terms to increase our working capital and to strengthen our financial position.

Any sale of additional equity or convertible debt securities could result in dilution of the equity interests of our existing stockholders.

Additionally, new investors may require that we and certain of our stockholders enter into voting arrangements that give them additional

voting control or representation on our Board of Directors.

If required financing is unavailable to us on reasonable terms, or at all,

we may be unable to support our operations, including our research and development activities, which would have a material adverse effect

on our ability to commercialize our products or continue our business.

Risks Related to Our Business Operations

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If we fail to develop or acquire, and manufacture and sell, products that satisfy our

customers’

demands, or we fail to respond effectively to new product announcements by our competitors by quickly introducing competitive

customers’ demands, or we fail to respond effectively to new product announcements by our competitors by quickly introducing competitive

products, then market acceptance of our products could be reduced and our business could be adversely affected.

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key executive officers which would assist us in recouping our costs in the event of the loss of those officers.

If either of our key officers

If any of our key officers

were to leave us, it could make it impossible, if not cause substantial delays and costs, to implement our long-term business objectives

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personnel could impede our ability to achieve our business objectives.

We have ten full-time employees,

consisting of our Chief Executive Officer, our Chief Financial Officer, a Chief Medical Officer, a Chief Business Officer, a Vice President,

Manufacturing and Product Development, a Vice President, Clinical Operations, a Project Manager, and three research scientists.

whenever appropriate, consultants in order to conserve cash and resources.

We have 14 full-time employees.

We utilize, whenever appropriate, consultants in order to conserve cash and resources.

Although we believe that these

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in the near term, we will nevertheless be required over the longer-term to hire highly skilled managerial, scientific and administrative

personnel to fully implement our business plan and growth strategies, including to mitigate the material weakness in our internal control

over financial reporting described above.

Due to the specialized scientific nature of our business, we are highly dependent upon our ability

to attract and retain qualified scientific, technical and managerial personnel.

Competition for these individuals, especially in San Diego,

California, where many biotechnology companies are located, is intense and we may not be able to attract, assimilate or retain additional

highly qualified personnel in the future.

We may not be able to engage the services of qualified personnel at competitive prices or at

all, particularly given the risks of employment attributable to our limited financial resources and lack of an established track record.

personnel to fully implement our business plan and growth strategies.

Due to the specialized scientific nature of our business, we are

highly dependent upon our ability to attract and retain qualified scientific, technical and managerial personnel.

Competition for these

individuals, especially in San Diego, California, where many biotechnology companies are located, is intense and we may not be able to

attract, assimilate or retain additional highly qualified personnel in the future.

We may not be able to engage the services of qualified

personnel at competitive prices or at all, particularly given the risks of employment attributable to our limited financial resources

and lack of an established track record.

Also, if we are required to attract personnel from other parts of the U.S.

or abroad, we may have significant difficulty doing so due

to the high cost of living in the Southern California area and due to the costs incurred with transferring personnel to the area.

cannot attract and retain qualified staff and executives, we will be unable to develop our products and achieve regulatory clearance,

and our business could fail.

or abroad, we may

have significant difficulty doing so due to the high cost of living in the Southern California area and due to the costs incurred with

transferring personnel to the area.

If we cannot attract and retain qualified staff and executives, we will be unable to develop our products

and achieve regulatory clearance, and our business could fail.

We plan to expand our operations, which

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personnel, systems and resources, particularly given the limited amount of financial resources and skilled employees that may be available

We cannot assure you that we will institute, in a timely manner or at all, the improvements to our managerial, operational

and financial systems, procedures and controls necessary to support our anticipated increased levels of operations and to coordinate our

various corporate functions, or that we will be able to properly manage, train, motivate and retain our anticipated increased employee

If we cannot manage our growth initiatives, we will be unable to commercialize our products on a large-scale in a timely manner,

if at all, and our business could fail.

We may not be able to institute, in a timely manner or at all, the improvements to our managerial, operational and financial

systems, procedures and controls necessary to support our anticipated increased levels of operations and to coordinate our various corporate

functions, or that we will be able to properly manage, train, motivate and retain our anticipated increased employee base.

manage our growth initiatives, including our expansion of our clinical trials in India and potentially in other countries, we will be

unable to commercialize our products on a large-scale in a timely manner, if at all, and our business could fail.

As a public company with limited financial resources undertaking

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Due to these perceived risks, directors and management

are also becoming increasingly concerned with the availability of directors’

and officers’

liability insurance to pay on a

are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a

timely basis the costs incurred in defending such claims.

While we currently carry directors’

and officers’

liability insurance,

While we currently carry directors’ and officers’ liability insurance,

such insurance is expensive and difficult to obtain.

If we are unable to continue or provide directors’

and officers’

If we are unable to continue or provide directors’ and officers’ liability

insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified outside directors to

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We may lose potential independent board members and management candidates to other companies in the biotechnology

field that have greater directors’

and officers’

liability insurance to insure them from liability or to biotechnology companies

field that have greater directors’ and officers’ liability insurance to insure them from liability or to biotechnology companies

that have revenues or have received greater funding to date which can offer greater compensation packages.

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Furthermore, our inability to

complete our clinical trials in a timely manner could jeopardize our ability to obtain regulatory approval.

complete our clinical trials in a timely manner could jeopardize our ability to obtain regulatory approval for our Hemopurifier or any

other potential product candidates.

If we or our suppliers fail to comply with

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Any product for which we obtain

clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities

clearance or approval, if any, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities

for such product, will be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and

foreign regulatory bodies.

In particular, we and our third-party suppliers may be required to comply with the FDA’s Quality System

Regulation, or QSR.

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unanticipated expenditures to address or defend such actions;

customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;

notifications or repair, replacement, refunds, recall,

detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

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In particular, a product may not be promoted for uses that

are not approved by the FDA as reflected in the product’s approved labeling.

However, companies may share truthful and not misleading

information that is otherwise consistent with a product’s FDA approved labeling.

The FDA and other agencies actively enforce the

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In addition, an uncorrected

impurity, a supplier’s variation in a raw material or testing, either unknown to us or incompatible with its manufacturing process,

or any other problem with our materials, testing or components, would prevent or delay the release of our Hemopurifiers for use in our

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component that was not produced to our specifications.

Although no affected Hemopurifiers were released to us or to any trial sites, we

are working to resolve the issue, and concurrently are working to identify alternative suppliers for this component.

We believe that our

current Hemopurifier inventory is sufficient for the conduct of our current ongoing clinical trials, but it is possible that the need

for our Hemopurifiers could increase or the resolution of the issue with one of our current suppliers and identification of an alternative

supplier could take longer than expected.

Although we intend to procure alternative supply sources for our component and our current supplier

intends to correct their issue, we can provide no assurance that we will do so in a timely manner.

Any such delays could limit our ability

to meet demand for the Hemopurifier and delay our ongoing clinical trials, which would have a material adverse impact on our business,

results of operations and financial condition.

Although no affected Hemopurifiers were released into our inventory or to any clinical

trial sites, we believe we have resolved this issue both with that initial supplier and with an additional supplier and that our current

Hemopurifier inventory combined with expected near term production runs from raw materials on hand will be sufficient for the conduct

of our current ongoing clinical trials, but it is possible that the need for our Hemopurifiers could increase and exceed our production.

Any such delays could limit our ability to meet demand for the Hemopurifier and delay our ongoing clinical trials, which would have a

material adverse impact on our business, results of operations and financial condition.

Difficulties in manufacturing our Hemopurifier

could have an adverse effect upon our expenses and our product revenues.

could have an adverse effect upon our expenses, our product revenues and our ability to complete our clinical trials.

We currently outsource most

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The manufacture of our products may be impacted

availability or contamination of raw materials

and components used in the manufacturing process, particularly those for which we have no other source or supplier;

our ability to comply with new regulatory requirements,

including our ability to comply with cGMP;

inclement weather and natural disasters;

changes in forecasts of future demand for product

potential facility contamination by microorganisms

availability or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier;

our ability to comply with new regulatory requirements, including our ability to comply with cGMP;

natural disasters;

changes in forecasts of future demand for product components;

potential facility contamination by microorganisms or viruses;

updating of manufacturing specifications;

product quality success rates and yields;

global viruses and pandemics, including the current

COVID-19 pandemic.

global viruses and pandemics, including the current COVID-19 pandemic.

If efficient manufacture and

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If we fail to report these events to the FDA within the

required timeframes, or at all, FDA could take enforcement action against us.

required timeframes, or at all, the FDA could take enforcement action against us.

Any such adverse event involving our products also could

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We rely on third-party consultants

or other vendors to manage and implement the much of the day-to-day conduct of conducting clinical trials and manufacturing our current

product candidates.

Accordingly, we are and will continue to be dependent on the timeliness and effectiveness of the efforts of these

third parties.

or other vendors to manage and implement much of the day-to-day conduct of our clinical trials and the manufacturing our Hemopurifier

product candidate.

Accordingly, we are and will continue to be dependent on the timeliness and effectiveness of the efforts of these third

Our dependence on third parties includes key suppliers and third-party service providers supporting the development, manufacture

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by our management team, but all other activities are the responsibility of third-party vendors.

It is possible that the current COVID-19

epidemic might constrain the ability of needed third-party vendors to provide services that we require.

It is possible that the ongoing COVID-19

pandemic might constrain the ability of needed third-party vendors to provide services that we require.

If a clinical research organization

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procedures and policies, compliance with FDA regulations and the need for further FDA approval of any new manufacturing processes and

If any of these occur, the development and commercialization of our product candidates could be delayed, curtailed or terminated

because we may not have sufficient financial resources or capabilities to continue such development and commercialization on our own.

If any of these occur, the development and commercialization of our Hemopurifier product candidate could be delayed, curtailed

or terminated, because we may not have sufficient financial resources or capabilities to continue such development and commercialization

If we or our contractors or service providers

fail to comply with regulatory laws and regulations, we or they could be subject to regulatory actions, which could affect our ability

to develop, market and sell our product candidates and any other or future product candidates that we may develop and may harm our reputation.

to develop, market and sell our Hemopurifier product candidate and any other future product candidates that we may develop, if any, and

may harm our reputation.

If we or our manufacturers

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regulatory actions, which could affect our ability to successfully develop, market and sell our Hemopurifier product candidate or any

future product candidates under development and could harm our reputation and lead to reduced or non-acceptance of our proposed product

candidates by the market.

Even technical recommendations or evidence by the FDA through letters, site visits, and overall recommendations

to academia or biotechnology companies may make the manufacturing of a clinical product extremely labor intensive or expensive, making

the product candidate no longer viable to manufacture in a cost-efficient manner.

The mode of administration may make the product candidate

not commercially viable.

future product candidates, if any, and could harm our reputation and lead to reduced or non-acceptance of our proposed product candidates

by the market.

Even technical recommendations or evidence by the FDA through letters, site visits, and overall recommendations to academia

or biotechnology companies may make the manufacturing of a clinical product extremely labor intensive or expensive, making the product

candidate no longer viable to manufacture in a cost-efficient manner.

The mode of administration may make the product candidate not commercially

The required testing of the product candidate may make that candidate no longer commercially viable.

of clinical trials may be critiqued by the FDA, or a clinical trial site’s Institutional Review Board or Institutional Biosafety

Committee, which may delay or make impossible clinical testing of a product candidate.

The Institutional Review Board for a clinical trial

may stop a trial or deem a product candidate unsafe to continue testing.

This would have a material adverse effect on the value of the

product candidate and our business prospects.

The conduct of clinical trials

may be critiqued by the FDA, or a clinical trial site’s Institutional Review Board or Institutional Biosafety Committee, which may

delay or make impossible clinical testing of a product candidate.

The Institutional Review Board for a clinical trial may stop a trial

or deem a product candidate unsafe to continue testing.

This would have a material adverse effect on the value of the product candidate

and our business prospects.

We will need to outsource and rely on third

parties for the clinical development and manufacture, sales and marketing of Hemopurifier or any future product candidates that we may

develop, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.

parties for the clinical development and manufacturing, sales and marketing of our Hemopurifier or any future product candidates that

we may develop, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.

We do not have the required

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which is a higher standard than a 510(k) clearance, is used to demonstrate to the FDA that a new or modified device is safe and effective.

The 510(k) is used to demonstrate that a device is “substantially equivalent”

to a predicate device (one that has been cleared

The 510(k) is used to demonstrate that a device is “substantially equivalent” to a predicate device, that is, one that has

been cleared by the FDA.

We expect that any product we seek regulatory approval for, including the Hemopurifier, will require a PMA.

The FDA approval

process involves, among other things, successfully completing clinical trials and filing for and obtaining a PMA.

The PMA process requires

us to prove the safety and effectiveness of our products to the FDA’s satisfaction.

This process, which includes preclinical studies

and clinical trials, can take many years and requires the expenditure of substantial resources and may include post-marketing surveillance

to establish the safety and efficacy of the product.

Notwithstanding the effort and expense incurred, the process may never result in

the FDA granting a PMA.

Data obtained from preclinical studies and clinical trials are subject to varying interpretations that could delay,

limit or prevent regulatory approval.

Delays or rejections may also be encountered based upon changes in governmental policies for medical

devices during the period of product development.

The FDA can delay, limit or deny approval of a PMA application for many reasons, including:

our inability to demonstrate safety or effectiveness of the Hemopurifier or any other product we develop to the FDA’s satisfaction;

FDA approval process involves, among other things, successfully completing clinical trials and filing for and obtaining a PMA.

process requires us to prove the safety and effectiveness of our products to the FDA’s satisfaction.

This process, which includes

preclinical studies and clinical trials, can take many years and requires the expenditure of substantial resources and may include post-marketing

surveillance to establish the safety and efficacy of the product.

Notwithstanding the effort and expense incurred, the process may never

result in the FDA granting a PMA.

Data obtained from preclinical studies and clinical trials are subject to varying interpretations that

could delay, limit or prevent regulatory approval.

Delays or rejections may also be encountered based upon changes in governmental policies

for medical devices during the period of product development.

The FDA can delay, limit or deny approval of a PMA application for many

reasons, including:

our inability to demonstrate safety or effectiveness of the Hemopurifier, or any other product we develop, to the FDA’s satisfaction;

insufficient data from our preclinical studies and clinical trials, including for our Hemopurifier, to support approval;

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inadequate compliance with preclinical, clinical or other regulations;

our failure to meet the FDA’s statistical requirements for approval;

changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical studies.

our failure to meet the FDA’s statistical requirements for approval;

changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical trials.

Modifications to products

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a 510(k) may require a new 510(k).

The FDA’s 510(k) clearance process usually takes from three to 12 months, but may last longer.

The process of obtaining a PMA is much costlier and more uncertain than the 510(k) clearance process and generally takes from one to three

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We continue to investigate the potential for the use of the Hemopurifier

in viral diseases under an open IDE and our FDA Breakthrough Designation for “…the treatment of life-threatening glycosylated

viruses that are not addressed with an approved therapy.”

We currently have an open FDA approved Expanded Access Protocol for the

in viral diseases under an open IDE and our FDA Breakthrough Designation for “…the treatment of life-threatening glycosylated

viruses that are not addressed with an approved therapy.” We currently have an open FDA approved Expanded Access Protocol for the

treatment of Ebola infected patients in the U.S.

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Based on our studies to date, the

Hemopurifier can potentially clear many viruses that are pathogenic in humans, including HCV, HIV and Ebola.

We do have preclinical data

suggesting that it could clear a closely related coronavirus (MERS).

On June 17, 2020, the FDA

approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with

SARS-CoV-2/COVID-19 in a New Feasibility Study.

That study’s plan is to enroll up to 40 subjects

Hemopurifier can potentially clear many viruses that are pathogenic in humans, including HCV, HIV, Monkeypox and Ebola.

Additionally, in June 2020,

the FDA approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients

with SARS-CoV-2/COVID-19 in a New Feasibility Study.

This study is designed to enroll up to 40 subjects

at up to 20 centers in the U.S.

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Endpoints for this study, in

addition to safety, will include reduction in circulating virus as well as clinical outcomes (NCT # 04595903).

The initial sites for this

trial, Hoag Memorial Hospital Presbyterian in Newport Beach, CA and Hoag Hospital –

Irvine in Irvine, CA and Loma Linda Hospital

in Loma Linda, CA, have completed clinical trial agreements, and have received IRB approval in the case of the Hoag hospitals, and are

preparing to open for patient enrollment.

Under Single Patient Emergency Use regulations, the Company has also treated two patients with

COVID-19 with the Hemopurifier.

Additionally, we have a very

limited supply of Hemopurifiers and therefore any use in this pandemic will be only investigational in a very small number of patients,

even if it appears that the device can help those patients.

Thus, we may not be able to

demonstrate the effectiveness of our treatment countermeasures through controlled human efficacy studies.

Additionally, a change in government

policies could impair our ability to obtain regulatory approval and the FDA may not approve any of our product candidates.

addition to safety, will include reduction in circulating virus as well as clinical outcomes.

However, we have a very limited

supply of Hemopurifiers and therefore any use in this pandemic will be only investigational in a very small number of patients, even if

it appears that the device can help those patients.

Thus, we may not be able to demonstrate the effectiveness of our treatment countermeasures

through controlled human efficacy studies.

Additionally, a change in government policies could impair our ability to obtain regulatory

approval for the Hemopurifier.

The results of our clinical trials may not

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It is also possible that patients enrolled in clinical trials will experience adverse side

effects that are not currently part of the product candidate’s profile.

legislative or FDA regulatory reforms

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It is impossible to predict whether legislative

changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be or

new product development efforts.

changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be on

our product development efforts.

Our current and future business activities

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federal government and the states in which we will conduct

our business once our product candidates are approved by the FDA and commercialized in the United States.

In addition to the FDA’s

our business if our product candidates are approved by the FDA and commercialized in the United States.

In addition to the FDA’s

restrictions on marketing of approved products, the U.S.

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federal transparency laws related to payments and/or other transfers of value made to physicians (defined to include doctors, dentists,

optometrists, podiatrists and chiropractors) and other healthcare professionals (beginning January 1, 2022) and teaching hospitals.

states have similar laws and regulations that may differ from each other and federal law in significant ways, thus complicating compliance

These laws may adversely affect our sales, marketing and other activities with respect to any product candidate for which we

receive approval to market in the United States by imposing administrative and compliance burdens on us.

optometrists, podiatrists and chiropractors) and other healthcare professionals (such as physicians assistants and nurse practitioners)

and teaching hospitals.

Many states have similar laws and regulations that may differ from each other and federal law in significant ways,

thus complicating compliance efforts.

These laws may adversely affect our sales, marketing and other activities with respect to any product

candidate for which we receive approval to market in the United States by imposing administrative and compliance burdens on us.

Because of the breadth of

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We are subject to stringent and changing

privacy laws, regulations and standards as well as policies, contracts and other obligations related to data privacy and security.

actual or perceived failure to comply with such obligations could lead to government enforcement actions (that could include fines and

penalties), a disruption of our clinical trials or commercialization of our products, private litigation, harm to our reputation, or other

adverse effects on our business or prospects.

We collect, receive, store,

process, use, generate, transfer, disclose, make accessible, protect and share personal information and other information, including information

we collect in connection with clinical trials, or “Process”

or “Processing”, as necessary to operate our business,

for legal and marketing purposes, and for other business-related purposes.

There are numerous federal,

state, local and international laws, regulations and guidance regarding privacy, information security and Processing, the number and scope

of which is changing, subject to differing applications and interpretations, and which may be inconsistent.

We are, or may become, subject

to these laws, regulations, and guidance, and we are also subject to the terms of our external and internal privacy and security policies,

representations, certifications, standards, publications, frameworks, and contractual obligations to third parties related to privacy,

information security and Processing, or Data Protection Obligations.

and foreign laws, regulations and standards as well as policies, contracts and other obligations related to data privacy and security.

Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, fines and penalties,

a disruption of our clinical trials or commercialization of our products, private litigation, harm to our reputation, or other adverse

effects on our business or prospects.

In the ordinary course of

business, we collect, receive, store, process, use, generate, transfer, disclose, make accessible, protect, secure, dispose of, transmit,

and share (collectively, “Process” or “Processing”) personal information and other information, including proprietary

and confidential business data, trade secrets, intellectual property, information we collect in connection with clinical trials, as necessary

to operate our business, for legal and marketing purposes, and for other business-related purposes.

Our data processing activities may

subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external

and internal privacy and security policies, representations, certifications, standards, publications, frameworks, and contractual obligations

to third parties related to privacy, information security and Processing (collectively, “Data Protection Obligations”).

In the United States, federal,

state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data

privacy laws, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act).

For example, the federal Health Insurance

Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical

Health Act (“HITECH”), imposes specific requirements relating to the privacy, security, and transmission of individually identifiable

health information.

In addition, the California Consumer Privacy Act of 2018, CCPA, imposes obligations on covered businesses, including

giving California residents expanded rights to access and require deletion of their personal information, opt-out of certain personal

information sharing, and receive detailed information about how their personal information is used.

The CCPA also provides for statutory

fines for noncompliance(up to $7,500 per violation).

Although there are limited exemptions for clinical trial data under the CCPA, the

CCPA could increase compliance costs and potential liability with respect to other personal data we may maintain about California residents.

In addition, it is anticipated that the California Privacy Rights Act of 2020 (“CPRA”), effective January 1, 2023, will expand

The CPRA establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the

risk of enforcement.

Other states, including Colorado, Connecticut, Utah and Virginia, have enacted data privacy laws which become effective

in 2023 and similar laws are being considered in other states and at the federal level, reflecting a trend toward more stringent privacy

legislation in the United States.

The enactment of such laws could have potentially conflicting requirements that would make compliance

challenging and expose us to additional liability.

Outside the United States,

an increasing number of laws, regulations, and industry standards apply to data privacy and security.

For example, the European Union’s

General Data Protection Regulation, or EU GDPR and the United Kingdom’s GDPR (“UK GDPR”) impose strict requirements

for processing personal data..

The GDPR requires covered businesses to, among other requirements, provide detailed disclosures, contractually

commit to data protection measures in our contracts, maintain adequate data security measures, notify regulators and affected individuals

of certain data breaches and meet extensive privacy governance and documentation requirements.

Companies that violate the GDPR can face

private litigation, restrictions on data processing, and fines of up to the greater of 20 million Euros or 4% of their worldwide annual

GDPR litigation risk may increase as a result of a recent decision of the EU’s highest court finding that a consumer protection

association may bring representative actions alleging violations of the GDPR even without a mandate to do so from any specific individuals

and whether or not specific individuals’ data protection rights have been violated.

Certain jurisdictions have

enacted data localization laws and cross-border personal data transfer laws, which could make it more difficult to transfer information

across jurisdictions (such as transferring or receiving personal data that originates in the EU or in other foreign jurisdictions).

mechanisms that facilitate cross-border personal data transfers may change or be invalidated and recent legal challenges and increasingly

strict interpretive guidance have created significant uncertainty about what measures would suffice to make such transfers lawful.

example, absent appropriate safeguards or other circumstances, the EU GDPR generally restricts the transfer of personal data to countries

outside of the European Economic Area (“EEA”) that the European Commission does not consider to provide an adequate level

of data privacy and security, such as the United States.

The European Commission released a set of “Standard Contractual Clauses”

(“SCCs”) that are designed to be a valid mechanism to facilitate personal data transfers out of the EEA to these jurisdictions.

Currently, these SCCs are a valid mechanism to transfer personal data outside of the EEA, but there exists some uncertainty regarding

whether the SCCs will remain a valid mechanism.

Additionally, the SCCs impose additional compliance burdens, such as conducting transfer

impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data.

the UK similarly restricts personal data transfers outside of those jurisdictions to countries such as the United States that do not provide

an adequate level of personal data protection, and certain countries outside Europe have also passed or are considering laws requiring

local data residency or otherwise impeding the transfer of personal data across borders, any of which could increase the cost and complexity

of doing business.

If we cannot implement a valid

compliance mechanism for cross-border data transfers, we may face increased exposure to regulatory actions, substantial fines, and injunctions

against processing or transferring personal data from Europe or other foreign jurisdictions.

The inability to import personal data to

the United States could significantly and negatively impact our business operations, including by limiting our ability to conduct clinical

trial activities;

limiting our ability to collaborate with parties that are subject to such cross-border data transfer or localization

or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant

Data Protection Obligations

are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the effective future legal framework.

Additionally,

these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.

Preparing for and complying with these obligations requires significant resources and may necessitate changes to our information technologies,

systems, and practices and to those of any third parties that process personal data on our behalf.

Although we endeavor to comply

with all applicable Data Protection Obligations, we may at times fail (or be perceived to have failed) to do so.

Moreover, despite our

efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our

business operations and compliance posture.

For example, any failure by a third-party processor to comply with applicable law, regulations,

or contractual obligations could result in adverse effects, including inability to or interruption in our ability to operate our business

and proceedings against us by governmental entities or others.

If we fail, or are perceived

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harm our business operations

or financial results or otherwise result in a material harm to our business, or each, a Material Adverse Impact.

Additionally, given that

Data Protection Obligations impose complex and burdensome obligations and that there is substantial uncertainty over the interpretation

and application of these obligations, we may be required to incur material costs, divert management attention, and change our business

operations, including our clinical trials, in an effort to comply, which could materially adversely affect our business operations and

financial results.

The California Consumer Privacy

Act of 2018, CCPA, is an example of the increasingly stringent data protection legislation in the United States.

The CCPA gives California

residents expanded rights to access and require deletion of their personal information, opt-out of certain personal information sharing,

and receive detailed information about how their personal information is used.

The CCPA provides for civil penalties for violations, as

well as a private right of action for data breaches and statutory damages ranging from $100 to $750 per violation, which is expected to

increase data breach class action litigation and result in significant exposure to costly legal judgements and settlements.

Although there

are limited exemptions for clinical trial data under the CCPA, the CCPA and other similar laws could impact our business activities depending

on how they are interpreted.

The European Union’s

General Data Protection Regulation, or GDPR, is an example of the type of data protection legislation being passed in international jurisdictions.

The GDPR requires covered businesses to, among other requirements, provide detailed disclosures, contractually commit to data protection

measures in our contracts, maintain adequate data security measures, notify regulators and affected individuals of certain data breaches

and meet extensive privacy governance and documentation requirements.

Companies that violate the GDPR can face private litigation, restrictions

on data processing, and fines of up to the greater of 20 million Euros or 4% of their worldwide annual revenue.

In addition, the GDPR

includes restrictions on cross-border data transfers.

A Recent decision by the Court of Justice of the European Union, or the “Schrems

ruling, however, has created substantial uncertainty regarding how to legally transfer personal data from Europe to the United

There are few, if any, viable options for us or our vendors to legally transfer personal data from Europe to the United States,

which could materially impact our business.

If our security measures, or those maintained

on our behalf, are compromised, or the security, confidentiality, integrity or availability of our information technology, software, services,

networks, communications or data is compromised, limited or fails, this could result in a Material Adverse Impact .

or financial results or otherwise result in a material harm to our business, or other material adverse impact on our business, results

of operations and financial condition.

Additionally, given that Data Protection Obligations impose complex and burdensome obligations

and that there is substantial uncertainty over the interpretation and application of these obligations, we may be required to incur material

costs, divert management attention, and change our business operations, including our clinical trials, in an effort to comply, which could

materially adversely affect our business operations and financial results.

Any of these events could

have a material adverse effect on our reputation, business, or financial condition, including but not limited to:

loss of customers;

interruptions

or stoppages in our business operations including, as relevant, clinical trials;

interruptions or stoppages of data collection needed

to train our algorithms;

inability to process personal data or to operate in certain jurisdictions;

limited ability to develop or commercialize

our products;

expenditure of time and resources to defend any claim or inquiry;

adverse publicity;

or revision or restructuring of our

If our information technology systems or

data, or those maintained on our behalf, are or were compromised we could experience adverse consequences resulting from such compromise,

including but not limited to:

regulatory investigations or actions;

fines and penalties;

disruptions of our business operations;

reputational harm;

loss of revenue or profits;

and other adverse consequences.

In the ordinary course of

our business, we Process proprietary, confidential and sensitive information, including personal data, intellectual property, trade secrets,

and proprietary business information owned or controlled by ourselves or other third parties, or collectively, Sensitive Information.

our business, we may process proprietary, confidential and sensitive information, including personal data, intellectual property, trade

secrets, and proprietary business information owned or controlled by ourselves or other third parties, or collectively, Sensitive Information.

We may use and share Sensitive Information with service providers and subprocessors and other third parties upon whom we rely to help

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disclosure, or exposure of, Sensitive Information, or compromise related to the security, confidentiality, integrity of our (or their)

information technology, software, services, communications or data (any, a “Security Breach”), it may result in a Material

Adverse Impact (as defined above), including the diversion of funds to address the breach, and interruptions, delays, or outages in our

operations and development programs.

information technology, software, services, communications or data (any, a “Security Breach”), it may result in a material

adverse impact on our business, results of operations and financial condition, including the diversion of funds to address the breach,

and interruptions, delays, or outages in our operations and development programs.

Cyberattacks, malicious internet-based

activity and online and offline fraud are prevalent and continue to increase.

In addition to threats from traditional computer “hackers,”

threat actors, software bugs, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks (such as

credential stuffing) and ransomware attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including

advanced persistent threat intrusions).

We may also be the subject of phishing attacks, viruses, malware installation, server malfunction,

software or hardware failures, loss of data or other computer assets, or other similar issues.

These threats are becoming increasingly difficult to detect.

These threats come from a variety of sources, including traditional computer “hackers,” threat actors, sophisticated nation

states, and nation-state-supported actors.

During times of war and other major conflicts, we and the third parties upon which we rely

may be vulnerable to a heightened risk of these attacks, including cyber-attacks, that could materially disrupt our systems and operations,

supply chain, and ability to produce, sell and distribute our goods and services.

We and the third parties upon

which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through

phishing attacks), supply-chain attacks, loss of data or other information technology assets, adware, software bugs, malicious code (such

as viruses and worms), employee theft or misuse, denial-of-service attacks (such as credential stuffing) and ransomware attacks.

also be the subject of phishing attacks, viruses, malware (including as a result of advanced persistent threat intrusions), server malfunction,

software or hardware failures, loss of data or other computer assets, telecommunications failures, earthquakes, fires, floods, or other

similar issues.

Ransomware attacks, including

by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe,

and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.

payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for

example, applicable laws or regulations prohibiting such payments.

Similarly, supply-chain attacks

have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party

partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a

breach of or disruption to our information technology systems (including our services) or the third-party information technology systems

that support us and our services

Any of the previously identified

or similar threats could cause a security incident or other interruption.

A security incident or other interruption could result in unauthorized,

unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive

A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide

our services.

We may be required to expend

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or those of third parties upon whom we rely will be effective in protecting against Security Incidents.

While we have implemented

security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

may be unable in the future to detect vulnerabilities in our information technology systems (including our products) because such threats

and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.

Despite our efforts to identify and address vulnerabilities, if any, in our information technology systems (including our products), our

efforts may not be successful.

Further, we may experience delays in developing and deploying remedial measures designed to address any

such identified vulnerabilities.

Applicable Data Protection

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Such disclosures are costly, and the disclosures or the failure to comply

with such requirements could lead to Material Adverse Impacts.

There can be no assurances that any limitations or exclusions of liability

in our contracts would be adequate or would otherwise protect us from liabilities or damages if we fail to comply with Data Protection

Obligations related to information security or Security Breaches.

with such requirements could lead to a material adverse impact on our business, results of operations and financial condition.

a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience

adverse consequences.

These consequences may include:

government enforcement actions (for example, investigations, fines, penalties, audits,

and inspections);

additional reporting requirements and/or oversight;

restrictions on processing sensitive information (including personal

litigation (including class claims);

indemnification obligations;

negative publicity;

reputational harm;

monetary fund diversions;

interruptions in our operations (including availability of data);

financial loss;

and other similar harms.

Security incidents and attendant

consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability

to grow and operate our business.

There can be no assurances

that any limitations or exclusions of liability in our contracts would be adequate or would otherwise protect us from liabilities or damages

if we fail to comply with Data Protection Obligations related to information security or Security Breaches.

We cannot be sure that our

insurance coverage, if any, will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to

claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or Material Adverse Impacts arising

out of our Processing operations, privacy and security practices, or Security Breaches that we may experience.

The successful assertion

of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies

(including premium increases or the imposition of large excess or deductible or co-insurance requirements), could have a Material Adverse

claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or other material adverse impact on

our business, results of operations and financial condition arising out of our Processing operations, privacy and security practices,

or Security Breaches that we may experience.

The successful assertion of one or more large claims against us that exceeds our available

insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large excess or

deductible or co-insurance requirements), could have a material adverse impact on our business, results of operations and financial condition.

Should our products be approved for commercialization,

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Further, Medicare coverage is based on our ability to demonstrate that the treatment

is “reasonable and necessary”

for Medicare beneficiaries.

is “reasonable and necessary” for Medicare beneficiaries.

Even if products utilizing our Aethlon Hemopurifier technology receive

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Should any of our potential products, including

the Hemopurifier, be approved for commercialization, adverse changes in reimbursement policies and procedures by payors may impact our

ability to market and sell our products.

the Hemopurifier, be approved for commercialization, certain health reform measures and adverse changes in reimbursement policies and

procedures may impact our ability to market and sell our products.

Healthcare costs have risen

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the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively,

PPACA, among other things, reduced and/or limited Medicare reimbursement to certain providers.

However, on December 14, 2018, a Texas

District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate”

ACA, among other things, reduced and/or limited Medicare reimbursement to certain providers.

However, on December 14, 2018, a Texas U.S.

District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress as part of the Tax Cuts and Jobs Act of 2017.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for

the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District

Court to determine whether the remaining provisions of the PPACA are invalid as well.

Supreme Court is currently reviewing the

case, although it is unclear when a decision will be made or how the Supreme Court will rule.

The Budget Control Act of 2011, as amended

by subsequent legislation, further reduces Medicare’s payments to providers by two percent through fiscal year 2030.

However, COVID-19

relief legislation suspended the two percent Medicare sequester from May 1, 2020 through December 31, 2021.

These reductions may reduce

providers’

revenues or profits, which could affect their ability to purchase new technologies.

Furthermore, the healthcare industry

has experienced a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing

lower payment rates and negotiating reduced contract rates with service providers.

Legislation could be adopted in the future that limits

payments for our products from governmental payors.

It is possible that additional governmental action is taken to address the COVID-19

In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical

device manufacturers’

Therefore, it is possible that our product or the procedures or patient care performed using our

product will not be reimbursed at a cost-effective level.

We face similar risks relating to adverse changes in reimbursement procedures

and policies in other countries where we may market our products.

Reimbursement and healthcare payment systems vary significantly among

international markets.

Our inability to obtain international reimbursement approval, or any adverse changes in the reimbursement policies

of foreign payors, could negatively affect our ability to sell our products and have a material adverse effect on our business and financial

Additionally, on June 17, 2021, the U.S.

Supreme Court dismissed

a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress.

Thus, the ACA will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, on

January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health

insurance coverage through the ACA marketplace, which began on February 15, 2021 and remained open through August 15, 2021.

The executive

order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare,

including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that

create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA

will be subject to judicial or Congressional challenges in the future.

It is unclear how any such challenges and litigation, and the healthcare

reform measures of the Biden administration will impact the ACA and our business.

The Budget Control Act of 2011, as amended by subsequent

legislation, further reduces Medicare’s payments to providers by two percent through fiscal year 2031.

However, COVID-19 relief

legislation suspended the two percent Medicare sequester from May 1, 2020 through March 31, 2022.

Under current legislation, the actual

reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year of this sequester.

These reductions may

reduce providers’ revenues or profits, which could affect their ability to purchase new technologies.

Furthermore, the healthcare

industry in the U.S.

has experienced a trend toward cost containment as government and private insurers seek to control healthcare costs

by imposing lower payment rates and negotiating reduced contract rates with service providers.

In July 2021, the Biden Administration

released an executive order, “Promoting Competition in the American Economy,” which contained provisions relating to prescription

On September 9, 2021, in response to this executive order, the U.S.

Department of Health and Human Services, or HHS, released a

Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential

legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

In addition, Congress is considering drug

pricing as part of other reform initiatives.

Furthermore, the healthcare industry in the U.S.

has experienced a trend toward cost containment

as government and private insurers seek to control healthcare costs by imposing lower payment rates and negotiating reduced contract rates

with service providers.

Legislation could be adopted

in the future that limits payments for our products from governmental payors.

In addition, Congress is considering additional health reform

It is also possible that additional governmental action is taken in response to the COVID-19 pandemic.

In addition, commercial

payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products.

Therefore, it is possible that our product or the procedures or patient care performed using our product will not be reimbursed at a cost-effective

We face similar risks relating to adverse changes in reimbursement procedures and policies in other countries where we may market

our products.

Reimbursement and healthcare payment systems vary significantly among international markets.

Our inability to obtain international

reimbursement approval, or any adverse changes in the reimbursement policies of foreign payors, could negatively affect our ability to

sell our products and have a material adverse effect on our business and financial condition.

Our ability to use net operating loss carryforwards

and certain other tax attributes to offset future taxable income or taxes may be limited.

Under the Tax Cuts and Jobs

Act of 2017, as modified by the CARES Act, federal net operating losses incurred in tax years beginning after December 31, 2017, may be

carried forward indefinitely, but the deductibility of such federal net operating losses in tax years beginning after December 31, 2020,

is limited to 80% of taxable income.

It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act of

2017 or the CARES Act.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions

of state law, if a corporation undergoes an “ownership change,”

which is generally defined as a greater than 50% change in

its equity ownership value over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards

and other pre-change tax attributes to offset its post-change income or taxes may be limited.

We believe we have not experienced an ownership

change in the past three years, however, we could experience ownership changes in the future as a result of subsequent shifts in our stock

ownership, some of which may be outside of our control.

If we achieve profitability and an ownership change occurs and our ability to

use our net operating loss carryforwards is materially limited, it would harm our future operating results by effectively increasing our

future tax obligations.

In addition, at the state level, there may be periods during which the use of net operating loss carryforwards

is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

For example, California imposed limits

on the usability of California state net operating losses to offset taxable income in tax years beginning after 2019 and before 2023.

Under current law, federal

net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility

of such federal net operating losses in tax years beginning after December 31, 2020, is limited to 80% of taxable income.

It is uncertain

if and to what extent various states will conform to federal tax laws.

In addition, under Sections 382 and 383 of the Internal Revenue

Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which

is generally defined as a greater than 50% change in its equity ownership value over a three-year period, the corporation’s ability

to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may

We believe we have not experienced an ownership change in the past three years, however, we could experience ownership changes

in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

If we achieve profitability

and an ownership change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future

operating results by effectively increasing our future tax obligations.

In addition, at the state level, there may be periods during which

the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes

Our use of hazardous materials, chemicals

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The FDA requires that certain classifications of recalls be reported

to the FDA within 10 working days after the recall is initiated.

to the FDA within ten working days after the recall is initiated.

A government-mandated or voluntary recall by us or one of our international

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have an adverse effect on our reputation, results of operations and financial condition, which could impair our ability to produce our

products in a cost-effective and timely manner in order to meet our customers’

products in a cost-effective and timely manner in order to meet our customers’ demands.

We may also be subject to liability claims,

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from the recent COVID-19 pandemic.

The current COVID-19 worldwide

The ongoing COVID-19 worldwide

pandemic has presented substantial public health and economic challenges and is affecting our employees, patients, communities and business

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International and U.S.

authorities in impacted regions are taking actions in an effort to slow the spread of COVID-19, including issuing varying forms of “stay-at-home”

orders, and restricting business functions outside of one’s home.

In response, we have implemented a work from home policy for all

non-laboratory employees, following the guidelines or directives issued by federal, state and local government agencies in the U.S.

authorities in impacted regions have been taking actions in an effort to slow the spread of COVID-19.

In response, we have implemented

a hybrid work from home policy for all non-laboratory employees, following the guidelines or directives issued by federal, state and local

government agencies in the U.S.

To date, we do not currently

anticipate any interruptions in supply.

In addition, while we are continuing the process of getting our clinical trial underway, we expect

that COVID-19 precautions may directly or indirectly impact the timeline for the trial.

As the COVID-19 pandemic continues to spread around

the globe, we may experience disruptions that could severely impact our business, clinical trials and manufacturing and supply chains,

In addition, while we are continuing with our clinical trials, we expect that COVID-19 precautions

may directly or indirectly impact the timeline for the trials.

As the COVID-19 pandemic continues to spread around the globe, we may experience

disruptions that could severely impact our business, clinical trials and manufacturing and supply chains, including:

further delays or difficulties in enrolling patients in our clinical trials;

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procedure does not ensure that we will ultimately obtain regulatory approval for the product.

Compliance with laws, regulations, and related

interpretations and related legal claims or other regulatory enforcement actions could impact our business, and we face additional risks

and uncertainties related to any potential actions resulting from the Securities and Exchange Commission’s, or the SEC, ongoing

investigation, or any other investigation or action.

On February 7, 2020, the SEC

issued an Order of Suspension of Trading, or SEC Order, temporarily suspending trading in our stock for a period of ten days.

Order stated that the suspension was due to concerns regarding the accuracy and adequacy of information in the marketplace that appeared

to be disseminated by third party promotors and recent and unusual market activity since at least January 22, 2020.

Although our stock

resumed trading upon expiration of the SEC Order, we are unable to predict the outcome of the SEC investigation or any other actions the

SEC may take in connection therewith.

Furthermore, the Company’s reputation may be negatively impacted.

As a result, the potential

impact to the Company’s business, if any, cannot be determined.

Our bylaws designate the Eighth Judicial

District Court of Clark County, Nevada, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated

by our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for disputes with us or our

by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our

directors, officers, employees or agents.

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any derivative action or proceeding brought in the name or right of the Company or on its behalf,

any action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or the Company’s stockholders,

any action arising or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles of incorporation or bylaws, or

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We could become subject to intellectual

property litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, prevent

us from selling our commercially available products and/or reduce the margins we may realize from our products.

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claims may be brought against us increases as the number of participants in the infectious market increases and as we achieve more visibility

in the market place and introduce products to market.

in the marketplace and introduce products to market.

Any infringement claim against

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patent applications.

We also have 33 issued foreign patents and have applied for six additional international

Our issued patents begin to expire in 2024, with the last of these patents expiring in 2036, although terminal disclaimers, patent

term extension or patent term adjustment can shorten or lengthen the patent term.

We rely on a combination of patent protection, trade

secret laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology.

However, these

may not adequately protect our rights or permit us to gain or keep any competitive advantage.

We also have 43 issued foreign patents and have applied for four additional foreign

and international patents.

Our issued patents begin to expire in 2024, with the last of these patents expiring in 2036, although terminal

disclaimers, patent term extension or patent term adjustment can shorten or lengthen the patent term.

We rely on a combination of patent

protection, trade secret laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology.

However, these may not adequately protect our rights or permit us to gain or keep any competitive advantage.

The issuance of a patent is

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infringes upon any of our patents or other intellectual property rights, enforcing our rights may be difficult, time consuming and expensive,

and would divert management’s attention from managing our business.

We may not be successful on the merits in any enforcement effort.

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We may not prevail in any such

If we are found to have infringed on a third-party’s intellectual property rights, we may be liable for money damages,

encounter significant delays in bringing products to market or be precluded from manufacturing particular products or using particular

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Government budgetary constraints could lead to changes in the procurement

environment, including the Department of Defense’s recent initiative focused on efficiencies, affordability and cost growth and

other changes to its procurement practices.

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If we fail to satisfy the

continued listing requirements of The Nasdaq Capital Market, or Nasdaq, such as the minimum stockholders’

equity requirement or

continued listing requirements of The Nasdaq Capital Market, or Nasdaq, such as the minimum stockholders’ equity requirement or

the minimum closing bid price requirement, Nasdaq may take steps to de-list our common stock.

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In July 2019, we received another letter from Nasdaq indicating that Nasdaq has determined

that we have failed to comply with the minimum stockholder’s equity requirement of Nasdaq Listing Rule 5550(b)(1).

Nasdaq Listing

Rule 5550(b)(1) requires that companies listed on the Nasdaq Capital Market maintain a minimum of $2,500,000 in stockholder’s equity.

If we fail to maintain compliance with these, or any other of the continued listing requirements of The Nasdaq Capital Market, Nasdaq

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In the event of a de-listing, we would take actions

to restore our compliance with Nasdaq’s listing requirements, but any such action taken by us may not be successful.

Historically we have not paid dividends

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announcements regarding our ongoing development of the Hemopurifier;

results from our clinical trials with the Hemopurifier;

results regarding the progress of our clinical trials with the Hemopurifier;

· results reported from our clinical trials with the Hemopurifier;

failure to meet the continued listing requirements of and maintain our listing on Nasdaq;

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changes in interest rates;

changes in investors’

beliefs as to the appropriate price-earnings ratios for us and our competitors;

changes in investors’ beliefs as to the appropriate price-earnings ratios for us and our competitors;

changes in recommendations or financial estimates by securities analysts who track our common stock or the stock of other medical device companies;

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general market conditions;

domestic or international terrorism and other factors, including the effects of the ongoing pandemic;

domestic or international terrorism and other factors, including the effects of the ongoing COVID-19 pandemic;

the other factors described in this section.

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in the price of our common stock.

Defending against any such suits could result in substantial cost and divert management’s attention

and resources.

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If at any time our common stock is subject

to the SEC’s penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity

in our securities may be adversely affected.

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of less than $6,000,000 for the last three years, and our common stock has a market price per share of less than $5.00, transactions in

our common stock will be subject to the SEC’s “penny stock”

If our common stock is subject to the “penny

rules promulgated under the Exchange Act, broker-dealers may find it difficult to effectuate customer transactions and trading

activity in our securities may be adversely affected.

For any transaction involving a penny stock, unless exempt, the rules require:

that a broker or dealer approve a person’s account for transactions in penny stocks;

our common stock will be subject to the SEC’s “penny stock” rules.

Currently, our common stock is subject to the SEC’s

“penny stock” rules promulgated under the Exchange Act and as a result, broker-dealers may find it difficult to effectuate

customer transactions and trading activity in our securities may be adversely affected.

For any transaction involving a penny stock, unless

exempt, the rules require:

that a broker or dealer approve a person’s account for transactions in penny stocks;

furnish the investor a disclosure document describing the risks of investing in penny stocks;

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The broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s

account for transactions in penny stocks, the broker or dealer must:

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Generally, brokers may be

less willing to execute transactions in securities subject to the “penny stock”

less willing to execute transactions in securities subject to the “penny stock” rules.

This may make it more difficult for

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to be more volatile than a seasoned issuer for the indefinite future.

During the 52-week period ended June 10, 2021, the high and low

During the 52-week period ended March 31, 2022, the high and low

closing sale prices for a share of our common stock were $10.79 and $1.16, respectively.

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We have reserved for issuance 2,243,838 of those shares of

common stock for outstanding restricted stock units, stock options and warrants.

As of March 31, 2021, we had issued and outstanding 12,150,597

shares of common stock.

As a result, as of March 31, 2021 we had 15,013,341 shares of common stock available for issuance to new investors

or for use to satisfy indebtedness or pay service providers.

common stock for outstanding restricted stock units, stock options and warrants, excluding an aggregate of 181,464 contingent issuances

of restricted stock units and options made subsequent to March 31, 2022, which are subject to approval by the stockholders of the Company

at the 2022 annual meeting of stockholders of an increase in the number of shares of common stock authorized for issuance under our 2020

Equity Incentive Plan.

As of March 31, 2022, we had issued and outstanding 15,419,163 shares of common stock.

As a result, as of March

31, 2022 we had 12,336,999 shares of common stock available for issuance to new investors or for use to satisfy indebtedness or pay service

On March 24, 2022, we entered

into an At the Market Offering Agreement, or the 2022 ATM Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright, which established

an at-the-market equity program pursuant to which we may offer and sell shares of our common stock from time to time as set forth in the

2022 ATM Agreement.

The 2022 ATM Agreement provides for the sale of shares of our common stock having an aggregate offering price of up

to $15,000,000.

As of March 31, 2022, we had not sold any shares under the 2022 ATM Agreement.

Our Board of Directors may

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benefit our stockholders.

Nevada’s “combinations

with interested stockholders”

statutes (NRS 78.411 through 78.444, inclusive) prohibit specified types of business “combinations”

between certain Nevada corporations and any person deemed to be an “interested stockholder”

for two years after such person

first becomes an “interested stockholder”

unless the corporation’s board of directors approves the combination (or the

transaction by which such person becomes an “interested stockholder”) in advance, or unless the combination is approved by

the board of directors and sixty percent of the corporation’s voting power not beneficially owned by the interested stockholder,

Nevada’s “combinations

with interested stockholders” statutes (NRS 78.411 through 78.444, inclusive) prohibit specified types of business “combinations”

between certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after such person

first becomes an “interested stockholder” unless the corporation’s board of directors approves the combination (or the

transaction by which such person becomes an “interested stockholder”) in advance, or unless the combination is approved by

the board of directors and sixty percent of the corporation’s voting power not beneficially owned by the interested stockholder,

its affiliates and associates.

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after the person first became an interested stockholder.

For purposes of these statutes, an “interested stockholder”

For purposes of these statutes, an “interested stockholder” is any

person who is (1) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares

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The definition

of the term “combination”

is sufficiently broad to cover most significant transactions between a corporation and an “interested

stockholder.”

A Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if

such election is not made in the corporation’s original articles of incorporation, the amendment (1) must be approved by the affirmative

of the term “combination” is sufficiently broad to cover most significant transactions between a corporation and an “interested

stockholder.” A Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if

such election is not made in the corporation’s original articles of incorporation, the amendment (1) must be approved by the affirmative

vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested

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We did not make such an election in our original articles of incorporation and have not amended our articles of incorporation to so elect.

Nevada’s “acquisition

of controlling interest”

statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling

Nevada’s “acquisition

of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling

interest in certain Nevada corporations.

These “control share”

laws provide generally that any person that acquires a “controlling

interest”

in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the

These “control share” laws provide generally that any person that acquires a “controlling

interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the

corporation elects to restore such voting rights.

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interest provide otherwise.

These laws provide that a person acquires a “controlling interest”

whenever a person acquires

These laws provide that a person acquires a “controlling interest” whenever a person acquires

shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1)

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transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered

to acquire a controlling interest become “control shares”

to which the voting restrictions described above apply.

to acquire a controlling interest become “control shares” to which the voting restrictions described above apply.

may have a chilling effect on certain transactions if our articles of incorporation or bylaws are not amended to provide that these provisions

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resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative

expenses and may divert management’s time and attention from product development and commercialization activities.

If our efforts

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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 1A. Risk Factors