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Item 1. Business

2025-03-28 compared with 2024-04-08 · 483 added, 416 removed, 566 unchanged (61% of the section changed)

(formerly known as Appliance Recycling Centers of America, Inc.) and subsidiaries (collectively, “we,” the “Company,” or “JanOne”) is focused on being a clinical-stage pharmaceutical company committed to finding treatments for conditions that cause severe pain and bringing drugs to market with non-addictive pain-relieving properties.

One of the Company’s goals is to reduce the need for prescriptions for dangerous opioid drugs by treating underlying diseases that cause severe pain.

The Company’s first drug candidate is a treatment for Peripheral Artery Disease (“PAD”), a condition that can cause severe pain and affects over 8.5 million people in the United States.

The Company intends to champion new initiatives—digital technologies, educational advocacy, and revolutionary painkilling drugs that address what we believe is a multibillion dollar a year market—to help combat the opioid crisis, which claims tens of thousands of lives each year.

On December 28, 2022, we entered into a Purchase Agreement (the “Soin Purchase Agreement”) with Soin Therapeutics, LLC.

Under the Soin Purchase Agreement, the Company acquired Soin Therapeutics and its LDN product, now known as JAN123.

JAN123 is a novel formulation of 2.0 mg of LDN that results in a biphasic release of the product.

The release properties of JAN123 provide for an immediate release of less than half the product with a slow, sustained release of the remaining product.

Importantly, the rapid release of LDN has been reported to lead to vivid and lucid unpleasant dreams, which should be eliminated with the formulation of JAN123.

Initially, a single tablet of JAN123 will be administered orally, once a day before sleep, with eventual titration up to two tablets (4 mg) before sleep.

The name of the Company, JanOne Inc., was strategically chosen to express the start of a new day in the fight against the opioid epidemic.

January one is the first day of a New Year—universally considered as a day of optimism, resolution, and hope.

JanOne stands by its strategic commitment to fresh thinking and innovative means to assist in ending the worst drug crisis in our nation’s history.

Through March 8, 2023, the Company operated its legacy businesses through its Recycling Subsidiaries, consisting of:

ALT5 Sigma Corporation, (formerly known as JanOne Inc.) and subsidiaries (collectively, “we,” “us,” the “Company,” or “ALT5”).

Through our Fintech segment, the Company provides next generation blockchain-powered technologies to enable a migration to a new global financial paradigm, and, through our Biotechnology segment, we are focused on finding treatments for conditions that cause chronic pain and bringing to market drugs with non-addictive and non-sedative pain-relieving properties.

On May 15, 2024, the Company acquired ALT5 Sigma, Inc., and on July 15, 2024, changed its corporate name from JanOne Inc.

to ALT5 Sigma Corporation.

ALT5 Sigma, Inc., is a financial services and Fintech holding company.

ALT5 Sigma, Inc.

was created by financial industry specialists out of the necessity to provide the digital asset economy with the best practices of the industry and state of the art over-the-counter trading.

Through March 8, 2023, the Company operated its discontinued legacy businesses through its Recycling Subsidiaries, consisting of:

(a) ARCA Recycling, Inc., a California corporation (“ARCA Recycling”), (b) ARCA Canada Inc., a corporation organized under the laws of Ontario, Canada (“ARCA Canada”), and (c) Customer Connexx, LLC, a Nevada limited liability company (“Connexx”).

6 unchanged sentences

We have included our website address in this Form 10-K solely as an inactive textual reference.

The Company was incorporated in Minnesota in 1983, although, through its predecessors, began operating its legacy recycling business in 1976.

In 2018, the Company reincorporated in the State of Nevada.

The Company’s principal office is located at 325 E.

Warm Springs Road, Suite 102, Las Vegas, Nevada 89119.

The Company’s legal address is located at 325 E Warm Springs Rd #102, Las Vegas, NV 89119, with subsidiary offices in Newmarket, and Montreal, Canada.

ALT5 Sigma, Inc., through its subsidiaries, offers two main platforms to its customers:

“ALT5 Pay” and “ALT5 Prime.” ALT5 Pay is a crypto-currency payment gateway that enables registered and approved global merchants to accept and make crypto-currency payments or to integrate the ALT5 Pay payment platform into their application or operations using the plugin with WooCommerce and or ALT5 Pay’s checkout widgets and APIs.

Merchants have the option to convert to fiat currency (US Dollars, Canadian Dollars, Euros, and British Pounds Sterling) automatically or to receive their payment in digital assets.

ALT5 Prime is an electronic over-the-counter trading platform that enables registered and approved customers to buy and sell digital assets.

Customers can purchase digital assets with fiat and, equally, can sell digital assets and receive fiat.

ALT5 Prime is available through a browser-based access, mobile phone application named “ALT5 Pro” that can be downloaded from the Apple App Store, from Google Play, through ALT5 Prime’s FIX API, as well as through Broadridge Financial Solutions’ NYFIX gateway for approved customers.

ALT5 Sigma, Inc., has two wholly owned subsidiaries, ALT5 Sigma Canada, Inc., and ALT5 Securities, Inc.

ALT5 Sigma Canada, Inc.

has four wholly owned subsidiaries, ALT5 AI, Inc.

(Canada), ALT5 Pro, LLC.

(Saint-Vincent and the Grenadines), UAB ALT5 Sigma Prudentia (Lithuania), and ALT5 Sigma Prudentia s.r.o.

(Czech Republic) formerly Cypherlynx s.r.o.

ALT5 Sigma develops, commercializes products and services based on four key fundamental principles of 1) Safety, Security and Trust, 2) Accessibility 3) Regulations, 4) Transparency:

Safety, Security and Trust

Develop and deploy products and services that increase our clients and customers' trust in our organization.

Accessibility

Develop and deploy products and services that are easy to use, accessible everywhere and with no barriers.

Deploy and deploy the best practices in the industry to comply with KYC, KYT, AML reporting and always be at the forefront of all regulatory requirements.

Develop and deploy the best practices in financial reporting, as well as best practices in communication of all material events for all stakeholders i.e.

customers, shareholders, suppliers and employees.

Corporate History and Organizational Structure

ALT5 Sigma, Inc.

was formed and incorporated in the State of Delaware on March 5, 2018 under the name Buttonwood ARCA Inc.

On March 28, 2018, the Company filed a Certificate of Amendment with the State of Delaware changing our name to ALT5 Sigma.

The Company entered into a Share Exchange and Reorganization Agreement on March 21, 2018 with Société AVA Inc., a Canadian corporation, and as a result Société AVA Inc.

became a wholly owned subsidiary of the Company.

On March 28, 2018 the Company changed the name of Société AVA Inc.

to ALT5 Sigma Canada Inc.

On August 14, 2019, ALT5 Sigma Canada Inc., acquired 100% of Miningcrypt Inc., a Canadian crypto currency mining company, and on November 25, 2019, Miningcrypt Inc., changed its name to ALT5 AI Inc.

On October 31, 2020, due to a severe storm, the mining equipment suffered fatal damages and the mining operations ceased.

is intended to be used to hold intellectual properties and develop machine learning and or artificial intelligence software.

ALT5 AI Inc., does not currently have any assets and is not currently operating.

On February 21, 2020, ALT5 Sigma Canada Inc., formed a wholly owned limited liability company named ALT5 Pro LLC in the country of Saint-Vincent and the Grenadines.

On February 10, 2023, ALT5 Sigma Canada Inc., formed a wholly owned corporation in the country of Lithuania named UAB ALT5 Sigma Prudentia and have applied for a cryptocurrency exchange license with the Central Bank of Lithuania.

The application was filed and is pending approval.

On March 16, 2023, ALT5 Sigma, Inc., formed a wholly owned corporation in the State of New York, by the name of ALT5 Securities Inc.

On June 28, 2023, ALT5 Sigma Canada Inc., acquired all of the shares of a company in the Czech Republic by the name of Cypherlynx s.r.o.

Cypherlynx s.r.o.

has limited operating history and is licensed in the Czech Republic to operate a cryptocurrency exchange.

The company has filed a name change to ALT5 Sigma Prudentia s.r.o.

and the name change is pending.

On May 10, 2024, ALT5 Sigma, Inc.

was acquired by JanOne Inc.

Organizational Structure Chart

Executive Summary

ALT5 Sigma, Inc., is a financial services and Fintech holding company.

ALT5 Sigma, Inc.

was created by financial industry specialists out of the necessity to provide the digital asset economy with the best practices of the industry and state of the art over-the-counter trading of securities.

ALT5 Sigma, Inc., operates two distinct wholly owned subsidiaries, ALT5 Sigma Canada Inc., and ALT5 Securities Inc.

ALT5 Sigma Canada Inc., provides next generation blockchain-powered technologies for tokenization, trading, clearing, settlement, payment and custodianship of digital assets through its wholly owned subsidiaries.

ALT5 Sigma Canada has four wholly owned subsidiaries, ALT5 AI Inc., ALT5 Pro LLC, UAB ALT5 Sigma Prudentia and ALT5 Prudentia s.r.o.

ALT5 Sigma Canada group of companies’ products and services are target at business two business (B2B) only and not a retail clientele.

The global target market for ALT5 Sigma Canada group of companies are banks, broker dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, and merchants.

Business Model/ Revenue Model

The Company obtains its revenue from initial installation fees or setup fees, monthly maintenance fees, spreads and transaction commissions fees.

Our products and services are marketed to banks, broker dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, payment processing partners and merchants.

The Company has a total of approximately 1,900 corporate clients’ customers located in 50 countries.

Product Overview

ALT5 Prime is an electronic over-the-counter trading platform, enabling registered and approved customers to buy and sell digital assets.

Customers can purchase digital assets with US dollars, Canadian dollars, Euros, and British Pounds and customers may sell digital assets and receive US dollars, Canadian dollars, Euros and British Pounds.

ALT5 Prime is available through a browser-based access, mobile phone application named ALT5 Pro that can be downloaded from the Apple store and Google Play store, or through the company’s FIX API as well as through Broadridge’s NYFIX gateway to approved customers.

Depending on their geographic location, registered and approved Customers may buy and sell a number of digital assets including, but not limited to:

Symbol Name Symbol Name Symbol Name

AAVE Aave DASH Dash SNX Synthetix

APE Apecoin DOGE Dogecoin SOL Solana

ADA Cardano DOT Polkadot SUSHI Sushiswap

ALGO Algorand ETH Ethereum TRUMP Official Trump

ATOM Cosmos FTM Fantom / Sonic TRX Tron

AU AutoCrypto HKD HongKongDao UNI Uniswap

AVAX Avalanche LINK Chainlink USDC USD Coin

BCH Bitcoin-Cash LTC Litecoin USDT Tether USD

BNB BNB MANA Decentraland UST TerraClassicUSD

BSV Bitcoin SV MATIC Polygon XLM Stellar

BTC Bitcoin MKR Maker XRP Ripple

BTCN BitcoinNote MXN Moneta Digital XTZ Tezos

COMP Compound QNT Quant YFI Yearn.finance

DAI Dai SHIB Shiba-inu

ALT5 Prime screen sample:

ALT5 Pay is a crypto currency payment gateway enabling registered and approved global merchants to accept and make crypto currency payments or integrate the payment platform into their application or operations using the plug in with WooCommerce and or the company’s checkout widgets and APIs.

Merchants have the option to automatically convert to US dollars, Canadian Dollars, Euros and/or British Pound or hold the digital assets.

ALT5 Pay screen sample:

▪ Ability to offer multiple digital assets

▪ Support 24/7

▪ Complete backend control through customizable administration dashboard.

▪ Audit trades for clients

▪ Automated trade confirmation email and customized Monthly statements

▪ Ability to place edit and cancel limit orders into order book via API

▪ Unlimited Accounts per user

▪ Accept fiat deposits (USD, CAD, EUR and GBP).

▪ Supported order types including market, limit and stop

▪ Endpoints supporting connections to trading interfaces, API, and related user-directed systems

▪ Integrated system to document customer KYC for onboarding process

▪ Connect to FIX, Binary, WebSocket, REST and custom APIs.

▪ Run reports, transactions, treasury

▪ Unlimited user profile

▪ Global setting protections in force to prevent unauthorized account activity, including unusual withdrawal requests.

▪ All platform data is replicated and backed up in real-time.

▪ Built in protection against brute force denial of service (DoS) and distributed denial of service (DDoS) attacks and active whitelist/blacklist management control.

▪ Internal Service interaction utilize separate authentication contexts and are not exposed to the Internet

▪ All website data is transmitted via encrypted transport layer security (TLS) connections (i.e.

▪ Cold Storage Wallet Management

▪ Encrypted User Information

▪ Two Factor authentication

Trading Features

▪ Multiple available views, including price chart, depth chart, order book and recent trades ticker.

▪ Live order book displays buy and sell orders with live spread calculation.

▪ Six chart styles including line, bar, area and candles.

▪ Ability to set custom chart durations ranging from one minute to years

▪ Ability to customize color and styles of bars, borders, wicks, price lines, backgrounds and grid

▪ Multiple scale styles including auto, percentage and logarithmic

▪ Ability to report block trade Integrated ability to save current chart view to jpeg

▪ 58 available indicators including linear

▪ Regression curves, moving averages and oscillators

▪ Ability to draw custom trendlines, pitchforks, and more that scales and move with chart.

▪ 11 available trendlines styles including rays, angles and arrows

▪ 18 available pitchforks styles including pitchforks, Gann boxes, and Fibonacci’s

▪ 9 available brushes including ellipses, triangles and rectangles

▪ 12 available test box styles including flag marks, arrows and price labels

▪ 14 available pattern descriptors including cypher, ABCD and Elliott formations

▪ 9 available forecasting markers including bars, ghosts, spreads and areas

▪ 300+ available icons to markup charts.

▪ Custom area measurement tool to find duration percentage change and price change Automatic calculation of fees included in order price

▪ Multiple custom user reports including trade activity, transaction activity, and treasury activity

The digital assets market for our ALT5 Prime and ALT5 Pay products and services is a relatively new industry and only a hand full of companies have emerged as recognized brands providing exchange or trading platforms such as Coinbase, Kraken, and Binance.

These platforms target the retail digital asset investors but currently account for the largest trading volume in dollar equivalent and number of coins traded.

We believe that some of the leading financial institutions license or buy the technology and services necessary to be able to be effectively and quickly provide these services to their customers and prevent the attrition of assets under management due to the movement of same to digital assets investments and whereby the ALT5 products are services are highly advantageous for these customers as they provide a best-of-breed solutions.

The Company’s products and services are designed for banks, broker dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, and merchants.

Our main target market and focus are FINRA-registered broker dealers and global merchants.

According to the most recent information from FINRA, there are 3,712 broker-dealers registered and under FINRA’s supervision, representing 629,112 registered representatives.

As of December 2024, the U.S.

equity markets remain the largest globally, with a market capitalization of approximately $63 trillion, accounting for over 50% of the global equity market's value ( Morningstar) .

This reflects significant growth from previous years, with the U.S.

market adding nearly $11 trillion in value in 2024 alone.

In comparison, the global digital assets market experienced substantial growth in 2024, with its market capitalization nearly doubling to approximately $3.91 trillion by mid-December, before consolidating at $3.40 trillion ( Crowdfund Insider) .

Bitcoin continues to lead the digital assets market, maintaining a significant share of the total market capitalization.

The Company projects that 3% of assets currently allocated to U.S.

equities will transition to digital assets over the next 36 to 60 months.

Based on the current U.S.

equity market capitalization of $63 trillion, this 3% shift represents approximately $1.89 trillion.

Such a reallocation could increase the global digital assets market capitalization to approximately $5.29 trillion.

Given that average trading volumes of digital assets have been around 19% of the total market capitalization, this would correspond to daily trading volumes of approximately $1.0 trillion globally and $380 billion in the U.S.

The Company further believes that retail and institutional investors will continue to seek advice, trade execution, and safekeeping of their assets, including digital assets such as Bitcoin, through their FINRA-registered broker-dealers.

Therefore, we anticipate that our main target market, FINRA broker-dealers, will aggregate 90% of the daily trading volume, representing $342 billion of daily trading volume or $124.8 trillion in annual trading volume and potential revenues of $8.64 billion.

According to a McKinsey report, the global payments industry revenue reached $2.1 trillion in 2021.

If calculated at an annualized growth rate of 9%, global payments industry revenue is projected to reach $3.3 trillion in 2026.

Specifically, the crypto payment gateway market size is expected to reach $4.12 billion by 2029, growing at a CAGR of 16.8% from $1.19 billion in 2022, according to Maximize Market Research Private Limited.

Looking ahead, the Boston Consulting Group (BCG) projects that global payments revenues will continue to grow, albeit at a moderated pace.

BCG's Global Payments Report 2023 forecasts an annual growth rate of 6.2%, with revenues expected to reach $2.2 trillion by 2027 ( BCG Global) .

This adjustment reflects a combination of market dynamics and macroeconomic factors influencing the industry.

In the realm of cryptocurrency payments, the market is experiencing significant growth.

Future Market Insights projects that the crypto payment gateways market will expand from $1.29 billion in 2023 to approximately $4.85 billion by 2033, representing a compound annual growth rate (CAGR) of 14.1% ( Future Market Insights).

This growth is driven by increasing adoption of cryptocurrencies and advancements in payment technologies.

Sales and Marketing

ALT5 Sigma has outsourced a portion of its sales and business development to resellers.

It is the company’s strategy to target its primary market through conferences, tradeshows, direct mailing and other digital advertising.

The company intends on concentrating its marketing efforts in the United States and Canada as well as establish partnerships in other markets such as Europe, and Asia.

Revenue Model

ALT5 Sigma generates revenue through three main line items.

Installation or a onetime setup fee, which may vary depending on size and depth of installation.

Monthly maintenance, which may also vary depending on the size and depth of installation.

Transaction fees, which range from 0.25% to 5% on all transactions, buy and or sell or payment processing depending on industry and volume.

Historical Transaction Volume, Revenue, Profit

ALT5 Sigma, Inc., transaction volume reached a cumulative of $4.5 billion since inception and more specifically was $39.0 million in 2020, $442.0 million in 2021, $743.0 million in 2022 and has $1.1 billion in 2023 and $2.2 billion in 2024 with corresponding consolidated revenue of $12.5 million and profit of $0.7 million in revenue and $4.3 million in net loss for 2020, $3.5 million in revenue and $12.3 million in net loss for 2021, $9.1 million and $0.5 million in net profit for 2022 and $11.9 million in revenue and $3.4 million in profit for 2023.

Biotechnology

We are a clinical-stage biopharmaceutical company focused on becoming the leader in identifying, acquiring, licensing, developing, partnering, and commercializing novel, non-opioid, and non-addictive therapies to address the large, unmet medical need for the treatment of pain and addiction.

We are also a clinical-stage biopharmaceutical company focused on becoming the leader in identifying, acquiring, licensing, developing, partnering, and commercializing novel, non-opioid, and non-addictive therapies to address the large, unmet medical need for the treatment of pain and addiction.

JAN101 (formerly known as TV1001SR) is a potential treatment for PAD, a vascular disease that affects more than 8.5 million people in the U.S.

and more than 60 million people worldwide.

We expect to commence Phase IIb/III clinical trials for the treatment of PAD in 2025.

JAN101, formerly known as TV1001SR, is a patented oral, sustained-release pharmaceutical composition of sodium nitrite that targets poor blood flow to the extremities, such as those with vascular complications of diabetes or PAD and treats pain.

A conclusion from a round of human studies found JAN101 prevents the prevalent reports of headaches by patients treated with an immediate release formulation of sodium nitrite.

In a previous study of patients with PAD, a 40 mg BID treatment with immediate release sodium nitrite led to a statistically significant reduction in reported pain, while an 80 mg BID treatment had a more pronounced effect on bioactivity and Flow Mediated Dilation, a measure of vascular function.

However, a number of subjects in both treatment groups reported headaches and dizziness following treatment.

Although this did not result in subjects discontinuing treatment, JAN101 was developed to overcome this side effect.

JAN101 was tested in a bridging study of diabetic neuropathy subjects and, during that bridging study, the subjects did not report headaches or dizziness.

Subjects in this bridging study also reported less pain following treatment and improvements in bioactivity (quantitative sensory testing, a measure of nerve function) were similar to the PAD study, where the 80 mg dosing group had the greatest improvement in Flow Mediated Dilation.

The ability to alleviate pain with BID treatment of JAN101 offers promise for a new non-addictive, non-sedating treatment of chronic pain.

Clinical Studies in Humans JAN101 Attributes

• Well-established safety profile

• Excellent bioavailability

• Lack of induced tolerance

• Non-narcotic

JAN101 does not mask pain, but instead treats the cause of pain by improving tissue and vascular function.

Benefits of Sodium Nitrite on Vascular Health

In initial research studies, sodium nitrite effectively restored ischemic tissue blood flow and was effective in a wide range of pathologies involving alterations of angiogenesis – development of new blood vessels – including diabetes, wound healing, and tissue necrosis.

Beneficial effects include enhancing angiogenesis, endothelial cell proliferation, and arteriogenesis.

There is also a strong association between reduced circulating nitrite levels and cardiovascular diseases in humans.

We describe some of the associations and beneficial effects of sodium nitrite/nitrite below.

Plasma nitrite levels are negatively correlated to cardiovascular disease

Plasma nitrite levels were inversely related to number of cardiovascular risk factors a subject had and decreased plasma nitrite was associated with decreased flow mediated vasodilation (FMD) and increased intimal medial thickness (IMT) (both are indicators of vascular pathology).

Kleinbongard, et al.

(2006) Free Radic Biol and Medicine 40:295-302.

Plasma nitrite levels are reduced in diabetic and PAD patients

Exercise is a well-known stimulator of endothelial nitric oxide synthase activity, an enzyme that enhances nitric oxide (NO) production, which leads to increased plasma nitrite.

In the study by Allen, et al., these authors revealed that baseline plasma levels of nitrite were less in patients with diabetes mellitus (DM) or DM + PAD.

Importantly, increases in plasma nitrite levels were not observed in either DM, PAD, or DM + PAD patients after supervised exercise.

These data reveal that

baseline nitrite availability is compromised in DM patients and that supervised exercise is unable to increase plasma nitrite levels but actually results in a decrease in nitrite, highlighting a physiological efficiency of this molecule.

Allen, et al., Nitric Oxide 2009 20:231-2377.

Skeletal Muscle Nitrite and Metabolite Levels are Reduced in Critical Limb Ischemia (CLI) Patients

Skeletal muscle nitrite, nitrosothiol (RSNO), nitric oxide-heme, and cGMP are all significantly reduced in CLI (the most severe form of PAD) patients.

Diabetic patients with CLI show even further nitrite reductions.

In summary, nitrite levels in various cardiovascular and vascular diseases appear to be inversely related to the severity of the disease in humans:

• Lower nitrite levels are associated with higher level of heart failure;

• Lower nitrite levels are observed in diabetic patients with PAD and are not compensated by exercise;

• Nitrite levels are lower in the muscles of patients with critical limb ischemia and are further reduced in diabetic subjects with critical limb ischemia.

Given the association between low levels of circulating nitrite and human diseases, supplementation with sodium nitrite has been studied preclinically in animals.

Below are summaries of some of the more important findings:

• Promotes angiogenesis

• Stimulates wound healing

• Prevents tissue necrosis

From Arya, et al.

Nitrite Therapy Selectively Increases Ischemic Tissue Vascular Density in a NO-dependent Manner

Chronic sodium nitrite therapy increases ischemic tissue vascular density in a NO-dependent manner.

A and B show representative images of CD31 (red) and DAPI nuclear (blue) staining from sodium nitrite and sodium nitrate ischemic gastrocnemius muscle tissue at day 7.

C and D report the vascular density of ischemic gastrocnemius muscle tissue at days 3 and 7 for 165 μg/kg sodium nitrite and nitrate treatments, respectively.

E and F demonstrate the vascular density of ischemic gastrocnemius muscle tissue at days 3 and 7 from 165 μg/kg sodium nitrite plus carboxy PTIO.

(Scale bar, 150 μm.) n = 10 mice per treatment group.

Kumar D., et al., PNAS;

105:7540-7545.

Nitrite Therapy Augments Arterial Perfusion of Ischemic Tissue

Chronic sodium nitrite therapy acutely increases ischemic tissue blood flow and stimulates arteriogenesis.

A and B report 165 μg/kg sodium nitrite-induced acute changes in blood flow of chronically ischemic tissues at various time points with or without cPTIO, respectively.

C reports the number of arterial branches between PBS and nitrite therapies.

D and E illustrate vascular casting of the arterial vasculature in ischemic hind limbs of day 7 nitrite or PBS-treated mice, respectively.

*, P < 0.01 vs.

sodium nitrite.

N = 10 mice per treatment group.

Kumar D., et.al., PNAS;2008;

105:7540-7545.

Nitrite Therapy Restores Diabetic Ischemic Hind-Limb Blood Flow and Promotes Wound Heal

Unilateral femoral artery ligation was performed on 18-20 week old male Db/Db mice.

Mice were randomized to PBS or sodium nitrite (165 μg/kg) therapy twice daily via I.P.

Laser doppler flowmetry was performed at the indicated time points.

Increased wound dehiscence was noted in the PBS treated animals at day 7 but not in nitrite treated animals.

(Bir, et al., Diabetes 2014, 63(1):270-81).

Nitrite Therapy Increases Diabetic Ischemia Induced Angiogenesis

Nitrite therapy prevented ischemia mediated endothelial cell density loss in normal C57BL/6J ischemic limbs.

Nitrite therapy significantly restored endothelial cell density in ischemic limbs of diabetic mice to normal C57BL/6J levels compared to PBS therapy of non-ischemic and ischemic conditions.

These data suggest that nitrite therapy may be useful in attenuating microvascular rarefaction due to loss of nitric oxide that is observed during metabolic dysfunction (Frisbee JC AJP Integr Comp Physiol 2005 289(2):R307-16;

Stepp et al Microcirculation 2007 14(4-5):

Delayed Nitrite Therapy Restores Ischemic Hind-Limb Blood Flow

Studies were performed to determine whether nitrite mediated therapy would be effective in tissue that had been left ischemic for 5 days after femoral artery ligation.

Femoral artery ligation was performed in C57BL/6J mice and the animals

randomized to either PBS or sodium nitrite therapy 5 days after artery ligation.

Treatments were given b.i.d.

Ischemic limb blood flow was measured using laser doppler flowmetry.

(Bir, et al., Diabetes 2014, 63(1):270-81).

Delayed nitrite therapy increases SPY angiogram arteriogenesis

Delayed nitrite therapy increases SPY angiogram arteriogenesis.

Representative temporal SPY angiogram image stills (3–6s) are shown at 11 days following ligation and 6 days after beginning therapy (either PBS or sodium nitrite).

PBS control angiogram.

sodium nitrite angiogram following injection of ICG.

n = 5 animals per cohort.

Circles identify limb anatomical regions of vascular blush, whereas arrows indicate perfused vessels that progressively occur over time.

Bir, et al., Am J Physiol Heart Circ Physiol 2012;303:H178-H188.

Nitrite Therapy Prevents Tissue Necrosis in Aged Db/Db Mice

Delayed sodium nitrite (165 ug/kg) or control PBS therapy was stated 5 days post-femoral artery ligation in nine-month old Db/Db mice.

Nitrite therapy significantly prevented tissue necrosis (panel B) compared to control PBS therapy (panel A).

Panel D reports tissue necrosis severity as a function of degree of limb and digit involvement.

Nitrite therapy, but not PBS control or sodium nitrate, significantly prevented tissue necrosis.

(Bir, et al., Diabetes 2014, 63(1):270-81).

Nitrite and Hind Limb Ischemia Summary

Sodium nitrite has long been known to be a potent vasodilator (transiently increasing blood vessel diameter) that can lead to a drop in blood pressure when given acutely.

The above studies indicate that chronic administration at low doses promotes angiogenesis, unlike one-time nitrite therapy, which does not stimulate angiogenesis.

In addition, these studies and a large number of other studies not reviewed above show:

• Nitrite therapy is very specific, acting only in damaged, ischemic tissue;

• Delayed nitrite therapy effectively restores ischemic tissue blood flow;

• Nitrite therapy is effective in a wide range of pathologies involving alterations of angiogenesis including critical limb ischemia, heart failure, and tissue necrosis;

• Nitrite supplementation has had positive effects in various diabetes models, including diabetic nephropathy and diabetic wound healing;

• Beneficial effects center on enhancing angiogenesis, endothelial cell proliferation, and arteriogenesis;

• Sustained release nitrite therapy, unlike immediate release therapy, does not lead to vasodilation or a drop in blood pressure.

JAN 101 is designed to treat diseases associated with poor vascular function.

The following table summarizes our current product candidate:

and more than 60 million people

We expected to commence Phase IIb/III clinical trials for the treatment of PAD in 2025.

We are also working with a novel formulation of LDN that we call JAN 123, which includes a biphasic release of the product.

The release properties of JAN123 provide for an immediate release of a portion of the product with a slow, sustained release of the remaining product.

Importantly, the rapid release of LDN has been reported to lead to vivid and lucid unpleasant dreams, which should be eliminated with the formulation of JAN123.

Initially, we expect that a single tablet of JAN123 will be administered orally, once a day before sleep, with eventual titration up to two tablets before sleep.

In the fourth quarter of our 2024 fiscal year, our board of directors determined that we would form a new subsidiary and capitalize it with JAN123 and certain of our other biopharma assets.

Accordingly, we incorporated a Nevada corporation known as Alyea Therapeutics Corporation (“Alyea”) and expect to build upon and complete the capitalization of Alyea during the first half of our current fiscal year.

In that context, our financial statements for the 2023 and 2024 fiscal years will show some, if not all, of our biopharmacy segment as a discontinued operation.

Pain is a protective reaction that alerts the body to the presence of actual or potential tissue damage so that necessary corrective responses can be mounted.

10 unchanged sentences

Given the properties of JAN101, we have made the strategic decision to focus initially on pain associated with PAD by treating the underlying cause of PAD.

Peripheral artery disease

Peripheral artery disease (“PAD”) is a general term for conditions in which arterial blood flow to the limbs is partially blocked.

When there is less blood present in the extremities relative to demand, muscle pain and fatigue result, especially in the calf, which is also known as “intermittent claudication.” In many patients, pain and fatigue are relieved through rest.

Roughly half of patients with PAD are asymptomatic.

The most common cause of PAD / intermittent claudication is atherosclerosis.

Diabetes, chronic kidney disease, hypertension, and smoking are all risk factors that can increase the likelihood of PAD.

In atherosclerosis, fat deposits (plaques) build up along arterial walls, resulting in a reduction in blood flow in the legs.

This same process can cause strokes if the arteries leading up to the brain are affected.

Because of the high rate of asymptomatic patients, prevalence figures vary widely.

Some estimate that up to 200 million people worldwide have PAD, ranging from asymptomatic disease to severe.

Prevalence increases as a function of patient age, rising sharply after the age of 60.

Thus, in countries with an aging population, it is expected that the prevalence of PAD will only increase.

There is also a strong ethnic and racial component to PAD prevalence, which may be due to cultural differences in diet and exercise, along with genetic differences.

Some suggest a prevalence of eight to 12 million in the United States alone, with roughly one-third experiencing pain when walking, which improves upon resting.

The diagnosis of PAD usually begins with patient complaints of pain in the extremities.

If the patient is already being treated or monitored for diabetes or other risk factors, then the physician will check for a weak or absent pulse in the extremity.

Decreased blood pressure, poor wound healing, and whooshing sounds (via stethoscope) in the legs are also tell-tale signs

of PAD / intermittent claudication.

Angiograms, electrocardiograms, and ultrasounds can also be used to image and confirm the diagnosis.

Ethnic-specific prevalence of PAD in men in the US, by age.

NHW = Non-Hispanic Whites,

AA = African American, HS = Hispanics, AS = Asian Americans, AI = American Indians.

(Criqui, 2015)

The non-drug treatment of PAD / intermittent claudication may be divided into four general categories:

• Lifestyle – Primarily changes in diet and smoking cessation.

• Exercise – Patients who walk, cycle, stretch, or swim can experience marked improvement.

Formal programs involving treadmills and track walking (usually three to five times per week) are frequently provided to patients.

However, if the pain is triggered by exercise (claudication) and is significant, it can discourage the patient from exercise.

• Angioplasty – A procedure by which the affected artery is stretched with a balloon-like device.

This procedure has limited effectiveness and is reserved for severely blocked arteries.

• Bypass Surgery – Arteries that are beyond angioplasty can be bypassed entirely.

This procedure is typically reserved for cases where the blockage is considered very long (~10 centimeters) and nearly complete.

The underlying condition is not addressed by surgery.

Surgical approaches will not, in the long run, improve exercise capacity and walking distance.

Only exercise itself, coupled with lifestyle changes and drug approaches, has this benefit.

Prescription drugs for the treatment of the underlying PAD may be divided into multiple categories, depending on the underlying condition and severity:

• Cholesterol-Lowering Agents – Statins and bile acid sequestrants.

• Antiplatelet Medications – Aspirin and related drugs, such as clopidogrel.

Cilostazol also has antiplatelet properties.

• Antihypertensives – Patients with underlying high blood pressure can and will receive any number of medications to reduce blood pressure, such as ACE inhibitors and diuretics.

• Diabetes Therapies – While a substantial portion of PAD patients may have pre-diabetes or fulminant diabetes, it is unknown if aggressive treatment of diabetes has a positive effect on PAD.

• Pain – To our knowledge, no drugs are specifically indicated for PAD-associated pain.

Pentoxifylline, for example, is indicated “…for the treatment of patients with intermittent claudication on the basis of chronic occlusive arterial disease of the limbs.” (Sanofi-Aventis U.S.

However, the evidence supporting the effectiveness of pentoxifylline is mixed.

Short-term courses of NSAIDs, such

as ibuprofen, may be used, provided the patient is not on another anticoagulant, like aspirin.

Non-drug pain relievers, such as TENS and massage therapy, may also be used in these patients.

Opioids may also be used, which creates a risk for addiction and potential misuse at the medicine cabinet by family members.

The lack of any truly effective treatment of PAD, along with encouraging early trial results using JAN101 on both improving vascular function and reducing pain in PAD patients, has created an opportunity potentially to treat this large unmet medical need.

By improving vascular function, JAN101 has the potential to reduce associated pain and improve PAD patients’ quality of life.

Our focus is to develop and commercialize novel, non-opioid, and non-addictive therapies to address, safely and effectively, the significant unmet medical need of chronic pain or treat conditions that cause pain.

The principal elements of our strategy to achieve this mission are the following:

• License, acquire, develop, and create novel, non-opioid and non-addictive therapies by leveraging our understanding of pain biology to address the large and growing problem of pain.

While innovation in medical sciences has led to exciting new treatment options in many disease areas, pain has seen limited innovation in recent years.

We have a deep understanding of the pathophysiology of pain and diseases that cause pain.

We intend to leverage this understanding to bring innovation in the pain treatment paradigm through targeted acquisitions of companies or assets in development.

Our advisors and doctors have years of collective experience in leadership positions at institutions and substantial scientific experience and understand the complexity of designing and executing clinical trials for and developing therapies.

• Advance the development of JAN101, designed for the treatment of patients with PAD and pain associated with the disease.

There are limited therapeutic options available for patients with PAD and we believe that JAN101 has the potential to transform the standard of care to a twice-a-day pill to improve moderate-to-severe PAD substantially.

• Leverage clinical activity of JAN101 possibly to expand into new indications.

The Company is in discussion with multiple researchers about expanding JAN101’s use into other indications.

JanOne will provide the researchers previously manufactured clinical supplies of JAN101 for use in their clinical trials.

• Advance JAN101 through clinical development and pursue development of additional product candidates through acquisitions.

Our objective is to build a well-balanced, multi-asset portfolio targeting the large population of patients with chronic and acute pain.

To achieve this, in addition to

JAN101, we intend to pursue partnerships, licensing agreements, and potential acquisitions of other pharma companies.

We continue our search for assets with indications where we believe they could have meaningful impact and address the large unmet medical need.

In addition, we may choose to selectively in-license or acquire complementary product candidates by leveraging the insights, network, and experience of our team.

• Maximize the commercial potential of all our product candidates.

We currently intend to retain all commercial rights to JAN101 in the United States and selectively partner outside of the United States.

Because we believe that PAD is an attractive market for many major pharmaceutical companies, we may sub-license or partner certain indications if we believe it may enhance stockholder value.

As we continue to build and develop our product portfolio, we may opportunistically pursue strategic partnerships that maximize the value of our pipeline while seeking to develop other indications.

• Leverage our management team background and expertise.

We have assembled a team with extensive experience described above.

The NIH defines chronic pain as pain that persists either beyond the normal healing time of an injury or longer than three months.

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When central sensitization occurs, the nervous system goes through a process called wind-up and gets regulated in a persistent state of high reactivity.

This persistent, or up-regulated, state of reactivity lowers the threshold for what triggers the sensation of pain and can result in the sensation of pain even after the initial injury might have healed.

This persistent, or up-regulated, state of

reactivity lowers the threshold for what triggers the sensation of pain and can result in the sensation of pain even after the initial injury might have healed.

When there is dysfunction in pain signaling, injury to the nervous system, or an unhealed injury, pain becomes no longer just a symptom, but a disease in itself.

Current Therapeutic Approaches to Treating Chronic Pain and Their Limitations

Some of the most widely used therapies to treat chronic inflammatory pain are non-steroidal anti-inflammatory drugs (“NSAIDs”).

NSAIDs can have significant side effects that include gastrointestinal bleeding, gastritis, high blood pressure, fluid retention, kidney problems, heart problems, and rashes.

On April 7, 2005, the FDA announced a decision to require boxed warnings of potential cardiovascular risk for all NSAIDs.

Corticosteroids

Corticosteroids, or steroids, also possess anti-inflammatory properties and are commonly used in the practice of pain management, either systemically or locally, depending on the condition.

Steroids work by decreasing inflammation and reducing the activity of the immune system.

While steroids are commonly used, they may have numerous and serious side effects.

These side effects may include allergic or hypersensitivity reactions, increased risk for infection, adrenal insufficiency, diabetes or decreased glucose tolerance, hypertension, loss of bone density, and loss of joint cartilage volume.

In addition, steroids should not be administered when there is an infection present because steroids can inhibit the body’s natural infection-fighting immune response.

Also, if a joint is already damaged or is subject to chronic deterioration, intra-articular, or IA steroid injections are not likely to provide any long-term restorative benefit.

For the above reasons, IA steroid injections are generally recommended to be administered no more often than every six weeks and not more than three to four times per year.

Opioids are some of the most widely prescribed therapeutics for chronic and acute pain, and sales of these drugs have quadrupled between 1999 and 2010.

According to a National Survey on Drug Use and Health report, in 2016 more than one-third of adult Americans were prescribed opioids and 230 million opioid prescriptions were written that year in the United States.

Opioids act by binding to specific receptors located on neurons in both the central and peripheral nervous system throughout the body including in the brain, spinal cord, and other nervous tissue.

Although they can be effective in providing pain relief, the increased medical use of opioids has been accompanied by an increase in the abuse and misuse of prescription opioids.

In addition, for most patients, chronic opioid use is a poor option due to an intolerance to the many side effects, including nausea, vomiting, drowsiness, and constipation, and the propensity for opioids to become less effective with long-term use.

According to the Centers for Disease Control and Prevention (the “CDC”), almost two million individuals abused or were dependent on prescription opioids in 2014.

CDC figures show that the number of opioid-related overdose deaths has quadrupled between 1999 and 2010, and currently approximately 40% of opioid overdose deaths in the United States involve a prescription opioid.

This increase in prescription opioid-related deaths in the United States prompted former President Trump to declare the opioid crisis a national Public Health Emergency in October 2017.

Opioid abuse has become an epidemic in the United States, ranking as the nation’s second most prevalent illegal drug problem.

These major issues create the need to find new approaches to treating chronic pain.

Our Approach to Treating PAD and Chronic Pain

The unmet medical need for treating PAD and chronic pain reflects the historic failure to develop novel classes of analgesics with comparable or greater efficacy, an acceptable level of adverse effects and a lower abuse liability than those currently available.

Some of the reasons for this include the heterogeneity of chronic pain and its related conditions, and the complexity and diversity of the underlying pathophysiological mechanisms for pain.

However, recent advances in the understanding of the neurobiology of pain are beginning to offer opportunities to identify new drug targets and develop new therapeutic strategies.

We have taken an innovative and targeted approach to identifying treatments for chronic pain that leverages our understanding of the pathophysiology of pain.

Pain is variable.

For example, it can be inflammatory or neuropathic in nature, and it may be localized to a specific area of the body or it may be generalized throughout.

We believe that the most effective way to treat chronic pain is through therapies that specifically target the origin of the pain signal.

We strive to maximize JAN 101’s potential based on its unique mechanism of action related to the origin of the pain signal.

A Randomized, Double-Blind Study of the Effects of a Sustained Release Formulation of Sodium Nitrite (SR-nitrite) on Patients with Diabetic Neuropathy

Sodium nitrite has been reported to be effective in reducing chronic peripheral pain.

To evaluate the safety and efficacy of 40 and 80 mg, BID, of an oral sustained-release formulation of sodium nitrite (SR-nitrite) in patients suffering from diabetic neuropathy, and to determine whether SR-nitrite would reduce the frequency of headaches reported previously by subjects receiving the same doses of an immediate release formulation.

Study Design:

Phase II, single-center, randomized, double-blind, placebo-controlled clinical trial.

The Ohio Pain Clinic and Kettering Medical Center.

Twenty-four patients were randomized to 40 mg or 80 mg SR-nitrite or placebo twice daily for 12 weeks.

The primary objective was to determine whether headaches would be reduced using SR-nitrite.

The primary efficacy endpoint was the mean difference in the change of the Neuropathic Pain Symptom Inventory (NPSI) pain score from baseline to that

reported after 12 weeks of treatment.

Secondary endpoints included changes from baseline for the Brief Pain Inventory (BPI) Scale, the RAND 36 questionnaire, Short-Form McGill Questionnaire, daily patient reported score for neuropathic pain, changes in HbA1c, PulseOx, and quantitative sensory testing.

The number of subjects reporting adverse events and the number of adverse events did not change with dose.

There were no reports of treatment-related headaches.

Although no significant differences were identified in patient responses to the questionnaires, a trend was observed.

In the NPSI assessment, patients in the 40 mg and 80 mg dosing groups reported a 12.7% and 22.0% reduction in pain, respectively, compared to an 8.4% reduction by patients in the placebo group.

A trend was also observed with the BPI total severity score.

However, the 40 mg dosing group reported the greatest reduction in pain using the McGill Pain index and via patient logs of daily pain scores, where the mean of pain scores reported by subjects in the 40 mg group dropped by day 41 and generally stayed lower than the mean of scores reported by subjects in either of the other two groups.

Patients in the 80 mg SR-nitrite group had an improvement in both Nerve Sensory Conductance and Nerve Sensory Velocity.

No changes were observed in HbA1c levels or PulseOx.

Small sample size.

Sustained release sodium nitrite prevents the prevalent reports of headaches by patients treated with an immediate release formulation of sodium nitrite.

In a previous study of patients with peripheral arterial disease (PAD), 40 mg BID treatment led to a statistically significant reduction in reported pain.

Similar trends were observed at the end of the trial period for most of the pain questionnaires used in the study.

The 80 mg BID treatment had the more pronounced effect on bioactivity (quantitative sensory testing), which was similar to the PAD study, where this dosing group had the greatest improvement in Flow Mediated Dilation .

The ability to alleviate pain with BID treatment of SR-nitrite offers promise for a new non-addictive, non-sedating treatment of chronic pain and warrants further study.

Microcirculatory injury, which is common in diabetic patients, can lead to a number of problems.

Prominent among these is diabetic peripheral neuropathy (DPN).

About 10% of patients will have evidence of DPN at the time they are initially evaluated, and almost 50% of diabetic patients will ultimately develop DPN.

Of diabetic patients with DPN, 40% to 50% suffer from chronic pain, as well as paresthesia, sensory loss, and weakness, and have at least an eight-fold increased risk of undergoing a distal lower extremity amputation compared to similar non-diabetics.

Endothelial cells play an important part in the regulation of microcirculation, as they maintain vascular tone by secreting both vasodilators and vasoconstrictors.

A central feature of diabetic microvascular disease (MVD) is endothelial dysfunction, which, in turn, plays an important role in the development and progression of DPN.

The pathophysiological factors leading to endothelial dysfunction in diabetes include chronic hyperglycemia and protein glycosylation, insulin resistance, inflammation, and increased oxidative stress.

Studies have now shown a close relationship between endothelial dysfunction and diminished nitric oxide (NO) bioavailability.

Endogenously produced NO has a half-life measured in seconds, and is rapidly oxidized to nitrite (NO 2 –) and nitrate (NO 3 –) end-products, the latter of which is biologically inert.

In the presence of microcirculatory ischemia and endothelial cell dysfunction, however, endogenous NO production by eNOS is much more limited.

In such circumstances, circulating NO 2 can be non-enzymatically reduced to increase NO availability.

In addition to serving as a circulating NO reservoir, nitrite itself has also been shown to have direct and potent vasodilatory effects in vitro and in vivo.

The findings that NO 2 – mediates vasodilatation, both directly and through NO generation, has led to growing interest in the potential effectiveness of nitrite as a therapeutic agent in conditions associated with DPN and endothelial dysfunction.

Such conditions include diabetic microvascular disease, DPN, and retinopathy, in which low levels of NO and NO 2 –, as well as elevated levels of nitrate (NO 3 –), suggest that the complete oxidation of NO occurs during diabetes with insufficient NO 2 – reserves to restore NO bioavailability.

Previous human studies with an oral formulation of NaNO 2 have shown that administration twice daily improves vascular function.

In the peripheral arterial disease study, subjects who received the lower dose of NaNO 2 reported a significant reduction in pain.

Although side effects were minimal, headaches and dizziness were reported by a large number of subjects, likely due to the rapid release of NaNO 2 leading to vasodilation.

An oral, sustained-release formulation of NaNO 2 (SR-nitrite) was developed in an attempt to overcome these problems and was tested in a porcine model of metabolic syndrome with critical limb ischemia.

SR-nitrite-treated animals showed increased myocardial NO bioavailability, diminished oxidative stress, and cytoprotection in ischemic tissue.

Importantly, 24-hour telemetry recordings of blood pressure showed no evidence of vasodilation.

In the above study, we hypothesized that the SR-nitrite would reduce or eliminate headaches reported in patients following administration of the immediate release formulation.

Given the promising results on reducing pain in diabetic patients with PAD reported in the previous study, patients with diabetic neuropathy were utilized in this study to determine whether any trends in reducing pain could be observed.

The study design was a randomized, placebo controlled, double-blind phase II study was carried out to investigate the safety and potential biological activity of multiple doses of an oral, sustained-release formulation of sodium nitrite (SR-nitrite;

TheraVasc Inc., Cleveland, OH, USA), BID in doses of 40 mg and 80 mg over a 12-week treatment period, in human subjects with diabetes and neuropathic pain in the lower extremities and feet.

The trial was approved by the Copernicus Group Institutional Review Board and listed on ClinicalTrials.gov:

www.clinicaltrials.gov/ct2/show/NCT02412852.

The study was funded by TheraVasc Inc.

(“TheraVasc”).

JAN101—Regulatory Strategy

Sodium nitrite has been previously approved as one of the active components of cyanide poisoning antidote.

This means the approval path for JAN101 is through a 505(b)(2) (“NDA”), which we intend to pursue.

JAN101—Commercial Strategy

We currently intend to use third-party providers and manufacturers to support the commercialization JAN101, if we are successful in obtaining FDA approval.

We believe that we can promote JAN101 to the patients suffering from PAD in a cost effective manner.

We anticipate our commercial operation will include outside sales management, outside sales support, distribution support, and an internal marketing group.

Additional requisite capabilities will include focused management of key accounts, such as managed-care organizations, group purchasing organizations, and government accounts.

We intend selectively to partner with third parties with vast experience in the space, as we have been partnering for every aspect of development.

The biotechnology and pharmaceutical industries are characterized by extensive research and development efforts, rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.

We are currently focused on the development and commercialization of our asset pipeline of novel, non-opioid, and non-addictive therapies for PAD.

The number of patients suffering from chronic PAD is large and growing.

While we believe that JAN 101 and our Chief Scientific Officer’s development experience and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including pharmaceutical, biotechnology, and specialty pharmaceutical companies that market or develop therapeutics to treat chronic pain.

Academic research institutions, governmental agencies, as well as public and private institutions are also potential sources of competitive products and technologies.

Our competitors may have significantly greater financial resources, robust drug pipelines, established presence in the market, and expertise in research and development, manufacturing, pre-clinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products than we do.

These competitors also compete with us in recruiting and retaining qualified clinical, regulatory, scientific, sales, marketing, and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of JAN 101 (as well as other subsequent product candidates), if and when approved, is likely to be its efficacy, durability, safety, price, and the availability of reimbursement from government and other third-party payors.

Significant competition exists in the PAD pain field.

Although we believe our approach to developing novel treatments for pain is unique from most other existing or investigational therapies, such as NSAIDs, corticosteroids, and opioids, we will need to compete with all currently available and future therapies within the indications where our development is focused.

With respect to JAN101, the main classes of marketed products that are available for the treatment of PAD pain include NSAIDs and opioids.

Furthermore, numerous monoclonal antibodies targeting nerve growth factor, or NGF inhibitors, are in clinical development, including two product candidates in Phase III.

There are a number of companies developing or marketing therapies for the treatment and management of pain that may compete with JAN 101, including many major pharmaceutical and biotechnology companies.

Intellectual Property

Our success depends in large part upon our ability to obtain and maintain proprietary protection for our products and technologies, and to operate without infringing or otherwise violating the proprietary rights of others.

We endeavor to protect our products using a combination of intellectual property protections and available government regulatory and marketing exclusivities afforded to new medicines.

For example, we endeavor to protect our products by, among other methods, filing United States and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development and implementation of our business.

We also use other forms of protection, such as confidential information, trade secrets, and know-how, and trademarks to protect our intellectual property, particularly where we do not believe patent protection is appropriate or obtainable.

The proprietary nature of, and protection for, JAN 101, processes, and know-how are important to our business.

Our policy is to pursue, maintain, and defend intellectual property rights, and to protect the technology, inventions, and improvements that are commercially important to our business.

Trade Secrets and Other Proprietary Information

In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position.

For example, we have developed methods for more efficient manufacture of sustained released sodium nitrite tablets.

We seek to protect our proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors, and commercial partners.

License Agreement

On November 19, 2019, we entered into a Patent and Know How License Agreement (the “License Agreement”) with UAB Research Foundation (“UABRF”), TheraPAD, and the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, acting on behalf of LSU Health Shreveport, together with UABRF and TheraPAD collectively, the “Licensors”).

Under the License Agreement, the Licensors have agreed to grant to JanOne an exclusive, worldwide license, including the right to sublicense, to the Licensors’ patent rights and know-how related to the Licensors’ sustained release formulation of sodium nitrite.

Under the License Agreement, we have agreed to pay a non-refundable upfront license fee and certain milestone payments upon the achievement of certain milestones of up to approximately $6.5 million and certain royalty payments and annual license maintenance fees.

The License Agreement requires us to use commercially reasonable efforts to develop and commercialize JAN101.

Soin Therapeutics

JanOne acquired Soin Therapeutics, a company focused on the development of a novel formulation of low-dose naltrexone (“LDN”) for the treatment of chronic regional pain syndrome (“CRPS”) in 2022.

ALT5 Sigma Corporation acquired Soin Therapeutics, a company focused on the development of a novel formulation of low-dose naltrexone (“LDN”) for the treatment of chronic regional pain syndrome (“CRPS”) in 2022.

CRPS is a rare pain disorder, characterized by a complex set of symptoms, affecting approximately 200,000 patients annually in the US.

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Low-Dose Naltrexone (LDN)

Compared to the standard dose, LDN is defined as a daily dose of Naltrexone of 1 to 5 mg, which is 10- to 100-fold lower than the dose used to manage substance use disorders (LDN Research Trust, Toljan and Vrooman 2018, Low-Dose

Naltrexone (LDN)-Review of Therapeutic Utilization.

Med Sci (Basel) 6 (4)).

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Mediators of Inflammation 2017 :

Thus, LDN presents a promising therapeutic avenue for the treatment of CRPS, a condition in which TLR4 upregulation is a primary pathway, through attenuation of glial activation and direct targeting of TLR4 activity (Del Valle, Schwartzman et al.

Thus, LDN presents a promising therapeutic avenue for the treatment of CRPS, a condition in which TLR4 upregulation is a

primary pathway, through attenuation of glial activation and direct targeting of TLR4 activity (Del Valle, Schwartzman et al.

2009, Spinal cord histopathological alterations in a patient with longstanding complex regional pain syndrome.

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In CRPS type I, there are no nerve injuries or lesions identified.

CRPS type I is also known as “reflex sympathetic dystrophy,”

and it comprises about 90 percent of all cases of CRPS.

CRPS type I is also known as “reflex sympathetic dystrophy,” and it comprises about 90 percent of all cases of CRPS.

CRPS type II (causalgia), on the other hand, is diagnosed when there is evidence of nerve damage.

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It is expected that patients will complete all required surveys and testing requirements of the study.

Through March 8, 2023, the Company operated its legacy businesses, ARCA Recycling, Inc.

(“ARCA Recycling”), ARCA Canada Inc.

(“ARCA Canada”), and Customer Connexx, LLC (“Connexx”), in its Recycling segment.

ARCA Recycling and ARCA Canada recycle major household appliances in North America by providing turnkey appliance recycling and replacement services for utilities and other sponsors of energy efficiency programs.

Connexx is a company that provides call center services for recycling businesses.

On March 9, 2023, we entered into a Stock Purchase Agreement with VM7 Corporation, a Delaware corporation, under which the Buyer agreed to acquire all of the outstanding equity interests of (a) ARCA Recycling, Inc., a California corporation, (b) Customer Connexx LLC, a Nevada limited liability company, and (c) ARCA Canada Inc., a corporation organized under the laws of Ontario, Canada.

The principal of the Buyer is Virland A.

Johnson, our Chief Financial Officer

Early termination is also a possible way to end the study due to issues such as side effects, adverse events or patient desire to withdraw from the study, among other reasons.

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In addition, claims are made to the titration of the LDN for treating chronic pain.

While there is no guarantee that the pending applications or future pending claims will issue, the issued US patent will provide protection of JAN123 through 2040 and the Orphan Drug Designation provides 7 years of market exclusivity after drug approval in the event that there are any challenges to this patent.

While there is no guarantee that the pending applications or future pending claims will issue, the

issued US patent will provide protection of JAN123 through 2040 and the Orphan Drug Designation provides 7 years of market exclusivity after drug approval in the event that there are any challenges to this patent.

Trade Secrets and Other Proprietary Information

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For example, we have developed methods for more efficient manufacture of the biphasic LDN.

We seek to protect our

proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors, and commercial partners.

Soin Purchase Agreement

On December 28, 2022, we entered into a Purchase Agreement (the “Soin Purchase Agreement”) with Soin Therapeutics, LLC.

Under the Soin Purchase Agreement, JanOne acquired Soin Therapeutics and its LDN product, now known as JAN123.

Under the Soin Purchase Agreement, ALT5 Sigma Corporation acquired Soin Therapeutics and its LDN product, now known as JAN123.

This all- stock transaction has a value of $13M, with up to an additional $17M depending on revenues generated by the product, for a total value of up to $30M.

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focused in Molecular Genetics from The Ohio State University and completed Fellowships at the NIH National Cancer Institute and the NIH National Institute of Aging.

In November 2019, we formed a Scientific Board of Advisors (the “SBA”) and the following doctors and scientists currently are members of our SBA:

Chris Kevil, Ph.D., Chair of the Scientific Board of Advisors – Dr.

Kevil, an internationally known expert in vascular pathophysiology, PAD, and nitric oxide biology, discovered the role of sodium nitrite in promoting angiogenesis that led to the development of TV1001, now known as JAN101.

Kevil earned his Ph.D.

from LSU Health Shreveport in Molecular and Cellular Physiology, followed by a fellowship at the University of Alabama at Birmingham (UAB) with an emphasis on redox pathophysiology.

Returning to LSU Health Shreveport in the Department of Pathology, he established cutting edge research programs regarding redox biology regulation of peripheral vascular diseases.

This led to ground-breaking insights on how glutathione, nitrite/nitric oxide, and hydrogen sulfide regulate vascular health during ischemia.

Edgar Ross, MD – Dr.

Ross is the current Director of the Pain Management Center at Brigham and Women’s Hospital and a professor of anesthesia at Harvard Medical School.

Ross is recognized as Castle Connolly’s America’s top doctors for the fifth year in a row.

In addition to serving as chairman of Pfizer’s partnership on pain, Dr.

Ross also has served as a member of the Blue Cross and Blue Shield Opioid Prescribing Policy Committee.

John Cooke, MD, Ph.D.

Cooke is the Chair of the Department of Cardiovascular Sciences at the Houston Methodist Research Institute, Director of the Center for Cardiovascular Regeneration, and Medical Director of the RNA Therapeutics Program in the Houston Methodist DeBakey Heart & Vascular Center in Houston, Texas.

He trained in cardiovascular medicine and obtained a Ph.D.

in physiology at the Mayo Clinic.

He was recruited to Harvard Medical School as an assistant professor of medicine.

In 1990, he was recruited to Stanford University to spearhead its program in vascular biology and medicine, and was appointed professor in the Division of Cardiovascular Medicine at Stanford University School of Medicine, and associate director of the Stanford Cardiovascular Institute until his recruitment to Houston Methodist in 2013.

Cooke has published over 500 research papers, position papers, reviews, book chapters, and patents in the arena of vascular medicine and biology with over 30,000 citations.

He has served on national and international committees that deal with cardiovascular diseases, including the American Heart Association, American College of Cardiology, Society for Vascular Medicine, and the National Heart, Lung and Blood Institute.

He has served as president of the Society for Vascular Medicine, as a director of the American Board of Vascular Medicine, and as an associate editor of Vascular Medicine.

Joshua Beckman, MD – Dr.

Beckman is the Director of Vascular Medicine and the Gayle and Paul Stoffel Distinguished Chair in Cardiology at UT Southwestern Medical Center.

Prior to this, he founded and is director of the Section of Vascular Medicine in the Division of Cardiovascular and is Professor of Medicine at Vanderbilt University Medical Center.

The overriding theme linking all of his career activities is vascular function in health and disease.

Beckman’s primary research focuses on the mechanisms by which diabetes mellitus impairs vascular function.

investigations involve studying the effect on endothelial function of non-diabetes-related insulin resistance, androgen deprivation, and vascular function in venous bypass grafts.

Beckman has been involved in numerous clinical studies and has published over 300 research papers with over 30,000 citations.

In addition to a number of other journals, Dr.

Beckman serves in editorial roles at Vascular Medicine and Circulation, two of the premier journals in the cardiovascular space.

Nicolas Goeders, Ph.D.

Goeders is a Professor and Head of the Department of Pharmacology, Toxicology and Neuroscience at LSU Health Shreveport.

He has conducted addiction research for the past 30 years and is regarded as one of the world’s leaders on the role for stress in substance abuse disorder.

His work has helped to determine the mechanisms responsible for how stress contributes to relapse to drug use.

He has published over 100 manuscripts, has written 15 book chapters, and was issued five patents, one of which is a drug currently in clinical development.

Goeders also serves as the Executive Director of the Louisiana Addiction Research Center.

A conclusion from a round of human studies found JAN101 prevents the prevalent reports of headaches by patients treated with an immediate release formulation of sodium nitrite.

However, a number of subjects in both treatment groups reported headaches and dizziness following treatment.

Although this did not result in subjects discontinuing treatment, JAN101 was developed to overcome this side effect.

JAN101 was tested in a bridging study of diabetic neuropathy subjects and, during that bridging study, the subjects did not report headaches or dizziness.

The ability to alleviate pain with BID treatment of JAN101 offers promise for a new non-addictive, non-sedating treatment of chronic pain.

Clinical Studies in Humans JAN101 Attributes

• Well-established safety profile

• Excellent bioavailability

• Lack of induced tolerance

• Non-narcotic

JAN101 does not mask pain, but instead treats the cause of pain by improving tissue and vascular function.

Benefits of Sodium Nitrite on Vascular Health

Beneficial effects include enhancing angiogenesis, endothelial cell proliferation, and arteriogenesis.

There is also a strong association between reduced circulating nitrite levels and cardiovascular diseases in humans.

We describe some of the associations and beneficial effects of sodium nitrite/nitrite below.

Plasma nitrite levels are negatively correlated to cardiovascular disease

Kleinbongard, et al.

(2006) Free Radic Biol and Medicine 40:295-302.

Plasma nitrite levels are reduced in diabetic and PAD patients

Exercise is a well-known stimulator of endothelial nitric oxide synthase activity, an enzyme that enhances nitric oxide (NO) production, which leads to increased plasma nitrite.

In the study by Allen, et al., these authors revealed that baseline plasma levels of nitrite were less in patients with diabetes mellitus (DM) or DM + PAD.

Importantly, increases in plasma nitrite levels were not observed in either DM, PAD, or DM + PAD patients after supervised exercise.

These data reveal that baseline nitrite availability is compromised in DM patients and that supervised exercise is unable to increase plasma nitrite levels but actually results in a decrease in nitrite, highlighting a physiological efficiency of this molecule.