What changed in this filing

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Item 1A. Risk Factors

2023-07-27 compared with 2022-07-19 · 571 added, 510 removed, 1064 unchanged (50% of the section changed)

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and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Risks Related to Our Company, Early Clinical-Stage

of Development and Financial Condition

We are at an early clinical-stage of development

Risks Related to Our Company, Early Stage of

Clinical Development and Financial Condition

We need to obtain

substantial additional funding to complete the development and any commercialization of AL001 and ALZN002.

If we are unable to raise this

capital when needed, we may be forced to delay, reduce or eliminate our research and development programs and other operations.

We expect our expenses to

increase substantially during the next few years.

The development of biotechnology product candidates is capital intensive.

As we conduct

non-clinical research and clinical development of our product candidates, we will need substantial additional funds to maintain and expand

our capabilities in a variety of areas including discovery and non-clinical research, clinical development, regulatory affairs, product

development, product quality assurance, and pharmacovigilance.

In addition, if we obtain marketing approval for any of our product candidates,

we expect to incur significant commercialization expenses for marketing, sales, manufacturing and distribution.

Some of those commercialization

investments may be made at-risk in advance of receiving an approval.

of April 30, 2023, we had $5.1 million in cash and cash equivalents.

Based on our current operating plan, we believe that without

additional funding, our existing cash and cash equivalents will enable us to fund our operations for approximately six months.

In particular,

we need additional funds to allow us to fund Phase II clinical trials for AL001 in Alzheimer’s, BD, MDD and PTSD and to complete

the on-going phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type.

However, changing

circumstances or inaccurate estimates by us may cause us to use capital significantly faster than we currently anticipate, and we may

need to spend more money than currently expected because of circumstances beyond our control.

For example, our ongoing clinical trial

for ALZN002 or our planned clinical trials for AL001 may encounter technical, enrollment or other issues that could cause our development

costs to increase more than we expect.

We will not have sufficient funds to complete any of these planned or ongoing clinical trials or

the clinical development of either AL001 or ALZN002 through regulatory approval.

We will need to raise substantial additional capital

to complete the development and commercialization of each of those product candidates, which additional capital, if available on reasonable

terms if at all, may be raised through the sale of our common stock or other securities or through the entering into of alternative strategic

transactions, or cause our stockholders to incur substantial dilution.

Our future capital requirements

will depend on many factors, including:

• the initiation, progress, timing, costs and results of our planned clinical trials for our product candidates;

• the number and scope of indications we decide to pursue for product development;

• the cost, timing and outcome of regulatory review of any NDA or BLA we may submit for our product candidates;

• the costs and timing of manufacturing for our product candidates, if approved;

• the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual

property rights and defending intellectual property-related claims;

• our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel,

including personnel to support the development of our product candidates;

• the costs associated with being a public company;

• our ability to enter into partnerships or otherwise monetize our pipeline through strategic transactions

on a timely basis, on terms that are favorable to us, or at all;

• the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;

• the extent to which we acquire or in-license other product candidates and technologies;

• the cost associated with commercializing our product candidates, if any are approved for commercial sale.

Our commercial revenues, if

any, will be derived from sales of products that we do not expect to be commercially available for sale for at least the next several

years, if ever.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

additional financing may not be available to us on acceptable terms, or at all.

In addition, we may seek additional capital due to favorable

market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development

programs or other operations.

Our independent registered public accounting

firm has expressed substantial doubt about our ability to continue as a going concern.

Our auditors have issued a

going concern opinion on our financial statements for the year ended April 30, 2023, expressing substantial doubt that we can continue

as an ongoing business due to insufficient capital for us to fund our operations.

Our financial statements do not include any adjustments

that may result from the outcome of this uncertainty.

If we are unable to successfully raise additional capital, we will need to create

and implement alternate operational plans to continue as a going concern, and investors or other financing sources may be unwilling to

provide additional funding to us on commercially reasonable terms or at all.

We are at an early stage of clinical development

and currently have no source of near-term revenue and may never become profitable.

We are an early clinical-stage

biopharmaceutical company.

We have recently initiated clinical trials for our AL001 and AL002 programs.

To date, we have not initiated

or completed a pivotal clinical trial, obtained marketing approval for any product candidates, manufactured a commercial scale product

or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization.

We are a clinical-stage biopharmaceutical

We have recently initiated clinical trials for our AL001 and ALZN002 programs.

To date, we have not initiated or completed a

pivotal clinical trial, obtained marketing approval for any product candidates, manufactured a commercial scale product or arranged for

a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization.

Our ability to generate revenue depends heavily on, among other developments:

• demonstration to the satisfaction of the FDA and comparable regulatory bodies that AL001 and AL002 are

• demonstration to the satisfaction of the FDA and comparable regulatory bodies that AL001 and ALZN002 are

safe and effective in future clinical trials;

• our ability to seek and obtain regulatory approvals, including with respect to the indications we are

• if approved by the FDA, successful manufacture and commercialization of AL001 and AL002;

• market acceptance of AL001 and AL002.

We only have two product candidates, AL001

and AL002, which will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial

investment before either or both of them, and any respective successors, will provide us with any revenue.

As a result, if we do not successfully

develop, achieve regulatory approval for and commercialize AL001 or AL002, we will be unable to generate any revenue for many years,

We do not anticipate that we will generate revenue for a few years, at the earliest, or that we will achieve profitability

for at least several years after generating material revenue, if at all.

If we are unable to generate revenue, we will not become

profitable, and we may be unable to continue our operations.

• if approved by the FDA, successful manufacture and commercialization of AL001 and ALZN002;

• market acceptance of AL001 and ALZN002.

We only have two product candidates,

AL001 and ALZN002, which will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and

substantial investment before either or both of them, and any respective successors, will provide us with any revenue.

As a result, if

we do not successfully develop, achieve regulatory approval for and commercialize AL001 or ALZN002, we will be unable to generate any

revenue for many years, if at all.

We do not anticipate that we will generate revenue for a few years, at the earliest, or that

we will achieve profitability for at least several years after generating material revenue, if at all.

If we are unable to generate

revenue, we will not become profitable, and we may be unable to continue our operations.

We have a limited operating history on which

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that we will successfully address any of these contingencies.

We will need, but may be unable to obtain, funding on

satisfactory terms, which could dilute our stockholders and investors, and/or impose burdensome financial restrictions on our business.

We have relied upon cash from

financing activities and in the future, we hope to rely on revenues generated from operations to fund all of the cash requirements of

our activities.

However, it is extremely unlikely that we will be able to generate any significant cash from our operating activities

in the foreseeable future.

Future financings may not be available on a timely basis, in sufficient amounts or on terms acceptable to us,

Any debt financing or other financing of securities senior to our common stock will likely include financial and other covenants

that will restrict our flexibility.

Any failure to comply with these covenants may cause an event of default and acceleration of the obligation

to pay the debt, which would have a material adverse effect on our business, prospects, financial condition and results of operations

and we could lose our existing sources of funding and impair our ability to secure new sources of funding.

There can be no assurance that

we will be able to generate any further investor interest in our securities or other types of funding, in which case you would likely

lose the entirety of your investment in us.

Risks Related to Our Product Candidates

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Research Foundation.

There are certain license fees and milestone

payments required to be paid by us to the Licensor, pursuant to the terms of license agreements we have entered into with the Licensor.

The license agreements for AL002 require us to pay royalty payments of 4% on net sales of products developed from the licensed technology

for AL002 while the license agreements for AL001 require that we pay combined royalty payments of 4.5% on net sales of products developed

from the licensed technology for AL001.

We have already paid an initial license fee of $200,000 for AL002 and an initial license fee of

$200,000 for AL001.

As an additional licensing fee for the license of AL002, the Licensor received 3,601,809 shares of our common stock.

As an additional licensing fee for the license of the AL001 technologies, the Licensor received 2,227,923 shares of our common stock.

Minimum royalties for AL001 are $25,000 in 2023, $45,000 in 2024 and $70,000 in 2025 and every year thereafter, for the life of the agreement.

Minimum royalties for AL002 are $20,000 in 2022, $40,000 in 2023 and $50,000 in 2024 and every year thereafter, for the life of the respective

Additionally, we are required to pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies

and for the AL002 technology, as follows:

Original AL001 License :

There are certain license

fees and milestone payments required to be paid by us to the Licensor, pursuant to the terms of license agreements we have entered into

with the Licensor.

The license agreements for ALZN002 require us to pay royalty payments of 4% on net sales of products developed from

the licensed technology for ALZN002 while the license agreements for AL001 require that we pay combined royalty payments of 4.5% on net

sales of products developed from the licensed technology for AL001.

We have already paid an initial license fee of $200,000 for ALZN002

and an initial license fee of $200,000 for AL001.

As an additional licensing fee for the license of ALZN002, the Licensor received 3,601,809

shares of our common stock.

As an additional licensing fee for the license of the AL001 technologies, the Licensor received 2,227,923

shares of our common stock.

Minimum royalties for AL001 License Agreements are $40,000 on the first anniversary of the first commercial

sale, $80,000 on the second anniversary first commercial sale and $100,000 on the third anniversary of the first commercial sale and every

year thereafter, for the life of the AL001 License Agreements.

Minimum royalties for ALZN002 are $20,000 on the first anniversary of the

first commercial sale, $40,000 on the second anniversary first commercial sale and $50,000 on the third anniversary of the first commercial

sale and every year thereafter, for the life of the ALZN002 License Agreement.

Minimum royalties for November AL001 License Agreements

are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000

on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements

.Additionally, we are required to pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and

for the ALZN002 technology, as follows:

Original AL001 Licenses :

Completed September 2019

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8 years from the effective date of the agreement

Upon FDA approval

Upon FDA NDA approval

* Milestone met and completed

have met the pre-IND meeting, IND application filing, and successfully completed the Phase I clinical trial milestones encompassing AL001.

If we fail to meet a milestone payment by the specified date, the Licensor may terminate the respective license agreement.

If the Licensor

were to terminate either license agreement for whatever reason, it would materially and adversely affect our business, financial position

and future prospects and you would likely lose the entirety of your investment in us.

AL002 License:

We have met the pre-IND meeting,

IND application filing, and successfully completed the Phase I clinical trial milestones encompassing AL001.

If we fail to meet a milestone

payment by the specified date, the Licensor may terminate the respective license agreement.

If the Licensor were to terminate either license

agreement for whatever reason, it would materially and adversely affect our business, financial position and future prospects and you

would likely lose the entirety of your investment in us.

ALZN002 License:

Completed January 2022

Upon IND application filing

12 months from IND application filing date

September 2023

Upon first dosing of patient in first Phase I clinical trial

12 months from first patient dosed in Phase I

Upon completion of first Phase I clinical trial

24 months from completion of first Phase I clinical trial

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* Milestone met and completed

On June 10, 2020, we

obtained two additional royalty-bearing exclusive worldwide licenses from the Licensor to a therapy named AL001.

One of the additional

licenses is for the treatment of neurodegenerative diseases excluding Alzheimer’s and the other license is for the treatment of

psychiatric diseases and disorders.

There are certain license fees and milestone payments required to be paid pursuant to the terms of

the June AL001 License Agreements.

Under each of the June AL001 License Agreements, a royalty payment of 3% is required on net sales of

products developed from the licensed technology.

For the two additional AL001 licenses, in the aggregate, we paid initial license fees

Additionally, under each of the June AL001 License Agreements, we are required to pay milestone payments on the due dates

to the Licensor for the license of the technology, as follows:

Additional AL001 Licenses:

Upon IND application filing

IND application filing

12 months from IND filing date

Upon first dosing of patient in a clinical trial

12 months from first patient dosing

Upon Completion of first clinical trial

36 months from completion of the first Phase II clinical trial

Upon first patient treated in a Phase III clinical trial

8 years from the effective date of the agreement

August 1, 2029

First commercial sale

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In the future, we plan to

submit AL001 and AL002 and, potentially, other product candidates for regulatory approval.

Currently, however, neither AL001 nor AL002

submit AL001 and ALZN002 and, potentially, other product candidates for regulatory approval.

Currently, however, neither AL001 nor ALZN002

has been submitted for regulatory approval, which would be required before we seek to initiate commercial distribution.

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invested nearly all of our resources in establishing our company and the acquisition of the intellectual property of our product candidates,

AL001 and AL002.

AL001 and ALZN002.

Our near-term prospects, including our ability to finance our company and to enter into strategic collaborations and,

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• our demonstration to the satisfaction of the FDA and comparable regulatory bodies of the safety and efficacy

of AL001 or AL002, as well as to obtain regulatory and marketing approval for AL001 or AL002 in the United States, Europe and elsewhere;

• our continued compliance with all clinical and regulatory requirements applicable to AL001 and AL002;

• our maintenance of an acceptable safety profile of AL001 and AL002 following regulatory approval;

of AL001 or ALZN002, as well as to obtain regulatory and marketing approval for AL001 or ALZN002 in the United States, Europe, the United

Kingdom and elsewhere;

• our continued compliance with all clinical and regulatory requirements applicable to AL001 and ALZN002;

• our maintenance of an acceptable safety profile of AL001 and ALZN002 following regulatory approval;

• competition with other treatments;

• our creation, maintenance and protection of our intellectual property portfolio, including patents and

trade secrets, and regulatory exclusivity for AL001 and AL002;

trade secrets, and regulatory exclusivity for AL001 and ALZN002;

• the effectiveness of our and our eventual partners’ marketing, sales and distribution strategy and

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and to develop, validate and maintain commercially viable manufacturing processes;

• our ability to launch commercial sales of AL001 or AL002 following regulatory approval, whether alone

• our ability to launch commercial sales of AL001 or ALZN002 following regulatory approval, whether alone

or in collaboration with others;

• the acceptance of AL001 and AL002 by physicians, health care payers, patients and the medical community.

• the acceptance of AL001 and ALZN002 by physicians, health care payers, patients and the medical community.

Many of these factors are

beyond our control, and we cannot assure you that we will ever be able to generate sufficient revenue, or any revenue at all, from the

sale of AL001 or AL002.

Our failure in any of the above factors, or in successfully commercializing AL001 or AL002 on a timely basis,

sale of AL001 or ALZN002.

Our failure in any of the above factors, or in successfully commercializing AL001 or ALZN002 on a timely basis,

could have a material adverse effect on our business, results of operations and financial condition, and the value of your investment

could substantially decline.

AL001 and AL002 may not achieve market acceptance, which would

AL001 and ALZN002 may not achieve market acceptance, which would

significantly limit our ability to generate revenue.

Even if we develop AL001 or AL002 and gain

regulatory approvals for either or both candidates, unless physicians and patients accept our product candidates, we may not be able to

sell them and generate significant revenues.

We cannot assure you that AL001, AL002 or any other potential product candidates we may eventually

develop will achieve market acceptance and revenue if and when they obtain the requisite regulatory approvals.

Market acceptance of any

product candidate depends on a number of factors, including but not limited to:

Even if we develop AL001 or

ALZN002 and gain regulatory approvals for either or both candidates, unless physicians and patients accept our product candidates, we

may not be able to sell them, whether directly or indirectly, and generate significant revenues.

We cannot assure you that AL001, ALZN002

or any other potential product candidates we may eventually develop will achieve market acceptance and revenue if and when they obtain

the requisite regulatory approvals.

Market acceptance of any product candidate depends on a number of factors, including but not limited

• the indication and warnings approved by regulatory authorities in the product label;

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• the effectiveness of marketing and distribution support.

Any failure by AL001 or AL002

Any failure by AL001 or ALZN002

to achieve market acceptance or commercial success could have a material adverse effect on our business, results of operations and financial

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We are responsible for the

manufacture and supply of AL001 and AL002, independently of each other.

The manufacturing of AL001 and AL002 necessitates compliance with

applicable regulatory requirements of the FDA and the European Union, as well as with international cGMP and other international regulatory

requirements.

manufacture and supply of AL001 and ALZN002 independently of each other.

The manufacturing of AL001 and ALZN002 necessitates compliance

with applicable regulatory requirements of the FDA and the European Union, as well as with international cGMP and other international

regulatory requirements.

As of the date of this Annual Report, we do not have our own manufacturing facilities.

We have contracted with a third-party

manufacturer for the clinical supply of AL001 using GMP manufacturing for our planned AL001 clinical trials and plan to contract with

established third parties for the long-term commercial production of AL001 and AL002.

The responsibility to obtain market authorization

for AL001 and AL002 remains with us.

As such, even if we could potentially have a claim against one or more third parties, we are legally

liable for any noncompliance related to AL001 and AL002 and we expect to retain legal responsibility for any future product candidates

Additionally, we may have limited control

over the associated manufacturing costs and potential unexpected increases in those costs over time.

If costs increase, we may choose

to pass on such costs to our customers, which could reduce our ability to compete by increasing the prices of our products (which we expect

to be priced at a significant premium over competing generic products).

See “Risks Related to Our Business and Industry — We

expect to face substantial competition, with other entities possibly discovering, developing or commercializing products before, or more

successfully than, we do.” If we cannot pass on all such costs to our customers, then our profitability would be adversely affected.

We have contracted with

a third-party manufacturer for the clinical supply of AL001 using GMP manufacturing for our planned AL001 clinical trials and plan to

contract with established third parties for the long-term commercial production of AL001 and ALZN002.

The responsibility to obtain market

authorization for AL001 and ALZN002 remains with us.

As such, even if we could potentially have a claim against one or more third parties,

we are legally liable for any noncompliance related to AL001 and ALZN002 and we expect to retain legal responsibility for any future product

candidates as well.

Additionally, we may have

limited control over the associated manufacturing costs and potential unexpected increases in those costs over time.

If costs increase,

we may choose to pass on such costs to our customers, which could reduce our ability to compete by increasing the prices of our products

(which we expect to be priced at a significant premium over competing generic products).

See “Risks Related to Our Business and

Industry — We expect to face substantial competition, with other entities possibly discovering, developing or commercializing

products before, or more successfully than, we do.” If we cannot pass on all such costs to our customers, then our profitability

would be adversely affected.

If we are unable to manufacture,

or contract to manufacture, AL001 and AL002 in accordance with regulatory specifications, or if there are disruptions in the manufacturing

or contract to manufacture, AL001 and ALZN002 in accordance with regulatory specifications, or if there are disruptions in the manufacturing

process due to damage, loss or failure to meet regulatory requirements (including passing inspections) of manufacturing facilities, we

may not be able to meet the demand for our products or supply sufficient product for use in clinical trials, and this may harm our ability

to commercialize AL001 and AL002 on a timely or cost-competitive basis, or preclude us from doing so at all, which could harm our business,

to commercialize AL001 and ALZN002 on a timely or cost-competitive basis, or preclude us from doing so at all, which could harm our business,

results of operations and financial condition.

Before we or any future commercial

partners can begin commercial manufacture of AL001 and AL002 or any other product candidate that we may develop in the future, we must

partners can begin commercial manufacture of AL001 and ALZN002 or any other product candidate that we may develop in the future, we must

obtain FDA regulatory approval for the product, which requires a successful FDA inspection of our manufacturing facilities (or those we

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Due to the complexity

of the processes that we anticipate will eventually be used to manufacture AL001 and AL002, we may be unable to pass federal, state or

international regulatory inspections in a cost-effective manner, whether initially or at any time thereafter.

of the processes that we anticipate will eventually be used to manufacture AL001 and ALZN002, we may be unable to pass federal, state

or international regulatory inspections in a cost-effective manner, whether initially or at any time thereafter.

If we are unable to comply

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Serious adverse events or other safety risks

could require us to abandon development and preclude, delay or limit approval of AL001 or AL002, or limit the scope of any approved label

or market acceptance.

If AL001, AL002 or any other

could require us to abandon development and preclude, delay or limit approval of AL001 or ALZN002, or limit the scope of any approved

label or market acceptance.

If AL001, ALZN002 or any other

product candidate that we may develop in the future, prior to or after any approval for commercial sale, causes serious or unexpected

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• regulatory authorities may interrupt, delay or halt clinical trials;

• regulatory authorities may deny regulatory approval of AL001 or AL002;

• regulatory authorities may deny regulatory approval of AL001 or ALZN002;

• regulatory authorities may require certain labeling statements, such as warnings or contraindications

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or terminate our clinical trials if at any time we believe that they present an unacceptable risk to participants or if preliminary data

demonstrate that either AL001 or AL002 is unlikely to receive regulatory approval or is unlikely to be successfully commercialized.

addition, regulatory agencies, an Ethics Committee or Institutional Review Board (an “IRB”), or data safety monitoring boards

may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators

demonstrate that either AL001 or ALZN002 is unlikely to receive regulatory approval or is unlikely to be successfully commercialized.

In addition, regulatory agencies, an Ethics Committee or Institutional Review Board (an “IRB”), or data safety monitoring

boards may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators

in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements,

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If we elect or are forced to suspend or terminate a clinical trial of

AL001, AL002 or any other product candidate that we may in the future develop, the commercial prospects for that product will be harmed

AL001, ALZN002 or any other product candidate that we may in the future develop, the commercial prospects for that product will be harmed

and our ability to generate product revenue from that product may be delayed or eliminated.

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us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs

of commercializing AL001 or AL002 and materially impair our ability to generate revenue from the commercialization of AL001 or AL002 either

by us or by any future commercial partners with which we may develop a relationship, which and could have a material adverse effect on

our reputation, business, results of operations and financial condition.

of commercializing AL001 or ALZN002 and materially impair our ability to generate revenue from the commercialization of AL001 or ALZN002

either by us or by any future commercial partners with which we may develop a relationship, which and could have a material adverse effect

on our reputation, business, results of operations and financial condition.

If we fail to obtain and sustain an adequate

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Accordingly, it is unlikely

that there will be a commercially viable market for AL001 or AL002, if approved, without reimbursement and coverage from third-party payers.

Obtaining reimbursement approval and coverage from third-party payers is a time consuming and expensive process, and we cannot be certain

that reimbursement will be approved and coverage obtained for our current product candidates or any other product candidate we may develop.

Additionally, even if there is some form of reimbursement and coverage from third-party payers, if the level of third-party reimbursement

is insufficient from the patient’s perspective or coverage is limited, our revenue and gross margins will be materially and adversely

that there will be a commercially viable market for AL001 or ALZN002, if approved, without reimbursement and coverage from third-party

Obtaining reimbursement approval and coverage from third-party payers is a time consuming and expensive process, and we cannot

be certain that reimbursement will be approved and coverage obtained for our current product candidates or any other product candidate

we may develop.

Additionally, even if there is some form of reimbursement and coverage from third-party payers, if the level of third-party

reimbursement is insufficient from the patient’s perspective or coverage is limited, our revenue and gross margins will be materially

and adversely affected.

A current trend in the U.S.

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requires us to utilize significant resources, and may prevent us or our future commercial partners from obtaining approvals for the commercialization

of AL001 or AL002.

of AL001 or ALZN002.

The research, testing, manufacturing,

labeling, approval, sale, marketing and testing of AL001 and AL002 are and will be subject to extensive regulation by regulatory authorities

labeling, approval, sale, marketing and testing of AL001 and ALZN002 are and will be subject to extensive regulation by regulatory authorities

in the United States, Europe and elsewhere, and regulatory requirements applicable to our product differ from country to country.

we nor any commercial partner is permitted to market any of our current or future product candidates in the United States until we receive

approval from the FDA of either a NDA or BLA for AL001 and AL002, respectively.

Obtaining approval of an NDA or a BLA can be an uncertain

process that requires us to utilize significant resources.

Furthermore, regulatory authorities possess broad discretion regarding processing

time and usually request additional information and raise questions which have to be answered.

There is considerable uncertainty regarding

the times at which products may be approved and we have no control over the FDA review process.

In addition, failure to comply with FDA

and other applicable U.S.

and foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including:

warning letters, civil and criminal penalties, injunctions, withdrawal of approved products from the market, product seizure or detention,

product recalls, total or partial suspension of production, and refusal to approve pending applications or supplements to approved applications.

we nor any commercial partner will be permitted to market any of our current or future product candidates in the United States until we

receive approval from the FDA of either a NDA or BLA for AL001 and ALZN002, respectively.

Obtaining approval of an NDA or a BLA is an

uncertain process that requires us to utilize significant resources.

Furthermore, regulatory authorities possess broad discretion regarding

processing time and usually request additional information and raise questions which have to be answered.

There is considerable uncertainty

regarding the times at which products may be approved and we have no control over the FDA review process.

In addition, failure to comply

with FDA and other applicable U.S.

and foreign regulatory requirements may subject us to administrative or judicially imposed sanctions,

warning letters, civil and criminal penalties, injunctions, withdrawal of approved products from the market, product seizure

or detention, product recalls, total or partial suspension of production, and refusal to approve pending applications or supplements to

approved applications.

Even if we fully comply with

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Economic Area, which consists of the 27 Member States (known as the “EU Member States”) of the European Union plus Norway,

Iceland and Liechtenstein, and many others.

Approval procedures vary among countries and can involve additional studies and testing, and

the time required to obtain approval may differ from that required to obtain FDA approval.

Studies conducted in one country may not be

accepted by regulatory authorities in other countries.

Approval by the FDA does not ensure approval by regulatory authorities in other

countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign

countries or by the FDA.

However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the

regulatory process in others.

Iceland and Liechtenstein, and others.

Approval procedures vary among countries and can involve additional studies and testing, and the

time required to obtain approval may differ from that required to obtain FDA approval.

Studies conducted in one country may not be accepted

by regulatory authorities in other countries.

Approval by the FDA does not ensure approval by regulatory authorities in other countries,

and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries

or by the FDA.

However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory

process in others.

The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval.

We may be unable to file for regulatory approvals or do so on a timely basis and, even if we are able to, we may not receive necessary

approvals to commercialize our products in any market.

Any of these results could have a material adverse effect on our business, results

of operations and financial condition.

be unable to file for regulatory approvals or do so on a timely basis and, even if we are able to, we may not receive necessary approvals

to commercialize our products in any market.

Any of these results could have a material adverse effect on our business, results of operations

and financial condition.

There is a high rate of failure for drug

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In the event that:

(i) we obtain negative or inconclusive results from the AL001 or AL002 from a clinical trial,

(i) we obtain negative or inconclusive results from the AL001 or ALZN002 from a clinical trial;

(ii) the FDA places a clinical hold on our clinical trials due to potential chemistry, manufacturing and controls

issues or other hurdles, or

(iii) the FDA does not approve our NDA for AL001 or our BLA for AL002, then:

issues or other hurdles;

(iii) the FDA does not approve our NDA for AL001 or our BLA for ALZN002, then:

• we may not be able to generate sufficient revenue or obtain financing to continue our operations;

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materially and adversely affect our business, results of operations or financial condition.

Nearly every attempt

at drug approval for Alzheimer’s has failed.

billions of dollars invested by the National Institute of Health and the biopharmaceutical industry in research programs to develop novel

therapeutics for Alzheimer’s, the FDA has not approved any new drugs for Alzheimer’s

since 2003, except, however, that in June 2021, aducanumab (Biogen, Inc) received approval from the FDA for the treatment of Alzheimer’s

using the accelerated approval pathway.

Since 2003, many new types and classes of drugs have been developed and tested in Alzheimer’s,

including monoclonal antibodies, gamma secretase modulators and inhibitors, β-site amyloid precursor protein cleaving enzyme (BACE)

inhibitors, receptor for advanced glycation end-products (RAGE) inhibitors, nicotinic partial agonists and allosteric modulators, serotonin

subtype receptor (5HT6) antagonists, and others.

Except for Biogen’s approval, referred to above, virtually all of these scientific

programs have failed in clinical testing.

Clinical trials for AL001 or AL002 can be

expensive, time consuming, uncertain and susceptible to change, delay or termination.

Clinical trials are expensive, time consuming

and difficult to design and implement.

The result of a clinical trial may be undesirable and can result in a clinical trial cancellation

or the need for re-evaluation and supplementation.

Even if the results of our clinical trials are favorable, the clinical trials for AL001

or AL002 are expected to continue for a few years and may even take significantly longer to complete.

In addition, we, the FDA, an

IRB, or other regulatory authority, whether in the United States, European Union or elsewhere, may suspend, delay or terminate our clinical

trials at any time, for various reasons, including, without limitation:

• lack of effectiveness of AL001 or AL002 during clinical trials;

Nearly every attempt at drug approval for

Alzheimer’s has failed.

billions of dollars invested by the NIH and the biopharmaceutical industry in research programs to develop novel therapeutics for Alzheimer’s,

the FDA has only approved two new drugs for Alzheimer’s since 2003;

in June 2021, aducanumab

(Biogen, Inc) received approval from the FDA for the treatment of Alzheimer’s using the accelerated approval pathway and in July

2023, Leqembi (Eisai) received full approval by the FDA for treatment of Alzheimer’s disease.

Since 2003, many new types and classes

of drugs have been developed and tested in Alzheimer’s, including monoclonal antibodies, gamma secretase modulators and inhibitors,

β-site amyloid precursor protein cleaving enzyme inhibitors, receptor for advanced glycation end-products inhibitors, nicotinic partial

agonists and allosteric modulators, serotonin subtype receptor antagonists, and others.

Except for Biogen’s and Eisai’s approvals,

referred to above, virtually all of these scientific programs have failed in clinical testing.

Clinical trials for AL001 or ALZN002 can

be expensive, time consuming, uncertain and susceptible to change, delay or termination.

Clinical trials are expensive,

time consuming and difficult to design and implement.

The result of a clinical trial may be undesirable and can result in a clinical trial

cancellation or the need for re-evaluation and supplementation.

Even if the results of our clinical trials are favorable, the clinical

trials for AL001 or ALZN002 are expected to continue for a few years and may even take significantly longer to complete.

we, the FDA, an IRB, or other regulatory authority, whether in the United States, European Union or elsewhere, may suspend, delay or terminate

our clinical trials at any time, for various reasons, including, without limitation:

• lack of effectiveness of AL001 or ALZN002 during clinical trials;

• discovery of serious or unexpected toxicities or side effects experienced by trial participants or other

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We plan to seek breakthrough therapy

designation for both AL001 and AL002.

However, we have not received breakthrough therapy designation or have qualified for

expedited development, and no assurance can be given that we will.

designation for both AL001 and ALZN002.

However, we have neither received breakthrough therapy designation nor have we qualified

for expedited development, and no assurance can be given that we will.

Even if we qualify for breakthrough therapy designation or expedited

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The breakthrough therapy designation,

while advantageous for the development process for the reasons identified above, may nevertheless have little or no positive impact on

our development process.

while at times advantageous for the development process for the reasons identified above, may nevertheless have little or no positive

impact on our development process.

There is no guarantee that, even with the FDA’s assistance through the breakthrough therapy designation,

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In summary, we cannot guarantee

that our product candidates will receive breakthrough therapy designations and, even if they do, we cannot guarantee that such designations

that our product candidates will receive breakthrough therapy designations and, even if one does, we cannot guarantee that such designations

will have any bearing on the FDA’s review or approval of our product candidates.

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Any regulatory approvals that

we or any of our collaborators receive for AL001, AL002 or any future product candidate may be subject to conditions of approval or limitations

on the approved indicated uses for which the product may be marketed or may contain requirements for potentially costly surveillance to

monitor the safety and efficacy of the product candidate.

In addition, AL001, AL002 and any of our future product candidates, if approved

by the FDA or other regulatory bodies, will be subject to extensive and ongoing regulatory requirements regarding the manufacturing processes,

labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping.

These requirements will

include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP,

Good Laboratory Practice and Good Clinical Practice, the three types of audits related to the progressive stages needed to bring a pharmaceutical

product to market, for any studies that we conduct post-approval.

Later discovery of previously unknown problems with a product, including

adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to

comply with regulatory requirements, may result in, among other things:

we or any of our collaborators receive for AL001, ALZN002 or any future product candidate may be subject to conditions of approval or

limitations on the approved indicated uses for which the product may be marketed or may contain requirements for potentially costly surveillance

to monitor the safety and efficacy of the product candidate.

In addition, AL001, ALZN002 and any of our future product candidates, if

approved by the FDA or other regulatory bodies, will be subject to extensive and ongoing regulatory requirements regarding the manufacturing

processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping.

These requirements

will include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with

cGMP, Good Laboratory Practice and Good Clinical Practice, the three types of audits related to the progressive stages needed to bring

a pharmaceutical product to market, for any studies that we conduct post-approval.

Later discovery of previously unknown problems with

a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes,

or failure to comply with regulatory requirements, may result in, among other things:

• restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market,

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other regulatory bodies may change, and additional government regulations may be promulgated that could prevent, limit or delay regulatory

approval of AL001 or AL002.

approval of AL001 or ALZN002.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation

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results of operations and financial condition.

AL001 or AL002 and any of our future product

AL001 or ALZN002 and any of our future product

candidates, if approved, may cause or contribute to adverse medical events that we are required to report to the FDA and regulatory authorities

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If we are successful in commercializing

AL001, AL002 or any of our future product candidates, regulations promulgated by the FDA and by the regulatory authorities in other countries

require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse

The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature

of the event.

AL001, ALZN002 or any of our future product candidates, regulations promulgated by the FDA and by the regulatory authorities in other

countries require that we report certain information about adverse medical events if those products may have caused or contributed to

those adverse events.

The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well

as the nature of the event.

We may fail to report adverse events we become aware of within the prescribed timeframe.

We may also fail to appreciate

that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse

event that is unexpected or removed in time from the use of our products.

If we fail to comply with our reporting obligations, the FDA

and regulatory authorities in other countries could take action including criminal prosecution, the imposition of civil monetary penalties,

seizure of our products, or delay in approval or clearance of future products, which could have a material adverse effect on our business,

results of operations and financial condition.

We may also fail

to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if

it is an adverse event that is unexpected or removed in time from the use of our products.

If we fail to comply with our reporting obligations,

the FDA and regulatory authorities in other countries could take action including criminal prosecution, the imposition of civil monetary

penalties, seizure of our products, or delay in approval or clearance of future products, which could have a material adverse effect on

our business, results of operations and financial condition.

Legislative or regulatory reforms with respect

to products may make it more difficult and costly for us to obtain regulatory clearance or approval of AL001, AL002 or any of our future

to products may make it more difficult and costly for us to obtain regulatory clearance or approval of AL001, ALZN002 or any of our future

product candidates and to produce, market, and distribute our products after clearance or approval is obtained.

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Any new regulations or revisions or reinterpretations of existing regulations in

the United States or in other countries may impose additional costs or lengthen review times of AL001, AL002 and any of our future product

the United States or in other countries may impose additional costs or lengthen review times of AL001, ALZN002 and any of our future product

We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated,

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and adversely affect our business, results of operations and financial condition.

Our ability to market AL001, AL002 and any

future product candidates in the United States, if approved, will be limited to use for the treatment of the indications for which they

are approved, and if we want to expand the indications for which we may market AL001, AL002 and any future product candidates, we will

need to obtain additional FDA approvals, which may not be granted.

Our ability to market AL001, ALZN002 and

any future product candidates in the United States, if approved, will be limited to use for the treatment of the indications for which

they are approved, and if we want to expand the indications for which we may market AL001, ALZN002 and any future product candidates,

we will need to obtain additional FDA approvals, which may not be granted.

We plan to seek full FDA approval

in the United States for AL001 and AL002 to treat neurodegenerative diseases and psychiatric disorders, including Alzheimer’s.

addition, we have submitted a pre-IND meeting request with the FDA to explore AL001 for the treatment of bipolar disorder, MDD and PTSD.

If AL001 or AL002 is approved, the FDA will restrict our ability to market or advertise it for the treatment of indications other than

the one for which it is approved, which would limit its use.

If we decide to attempt to develop, promote and commercialize new treatment

indications and protocols for AL001, AL002 and potentially other product candidates in the future, we could not predict when, or if, we

would ever receive the approvals required to do so.

We would be required to conduct additional studies to support such applications for

additional use, which would consume additional resources and may produce results that do not result in FDA approvals.

If we do not obtain

additional FDA approvals, our ability to expand our business in the United States would be adversely affected, which could materially

and adversely affect our business, results of operations and financial condition.

in the United States for AL001 and ALZN002 to treat neurodegenerative diseases and psychiatric disorders, including Alzheimer’s.

In addition, we have submitted a pre-IND meeting request with the FDA to explore AL001 for the treatment of BD, MDD and PTSD.

or ALZN002 is approved, the FDA will restrict our ability to market or advertise it for the treatment of indications other than the one

for which it is approved, which would limit its use.

If we decide to attempt to develop, promote and commercialize new treatment indications

and protocols for AL001, ALZN002 and potentially other product candidates in the future, we could not predict when, or if, we would ever

receive the approvals required to do so.

We would be required to conduct additional studies to support such applications for additional

use, which would consume additional resources and may produce results that do not result in FDA approvals.

If we do not obtain additional

FDA approvals, our ability to expand our business in the United States would be adversely affected, which could materially and adversely

affect our business, results of operations and financial condition.

The anticipated development of a REMS for

AL001 or AL002 could cause delays in the approval process and would add additional layers of regulatory requirements that could impact

our ability to commercialize AL001 and AL002 in the United States and reduce their market potential.

AL001 or ALZN002 could cause delays in the approval process and would add additional layers of regulatory requirements that could impact

our ability to commercialize AL001 and ALZN002 in the United States and reduce their market potential.

As a condition of approval

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to monitor the drug’s safety or efficacy.

We may be required to adopt a REMS for AL001 or AL002 to ensure that the benefits outweigh

We may be required to adopt a REMS for AL001 or ALZN002 to ensure that the benefits outweigh

the risks of abuse, misuse, diversion and other potential safety concerns.

Even if the risk of abuse, misuse or diversion are not as high

as for some other products, there can be no assurance that the FDA will approve a manageable REMS for AL001 or AL002, which could create

material and significant limits on our ability to successfully commercialize AL001 and AL002 in the U.S.

Delays in the REMS approval process

could result in delays in the NDA or BLA approval process, respectively.

In addition, as part of the REMS, the FDA could require significant

restrictions, such as restrictions on the prescription, distribution and patient use of the product, which could significantly impact

our ability to effectively commercialize AL001 or AL002, and dramatically reduce their market potential thereby adversely impacting our

business, financial condition and results of operations.

Even if initial REMS are not highly restrictive, if, after launch, AL001, AL002

and other drug candidates were to become subject to significant abuse/non-medical use or diversion from licit channels, this could lead

to negative regulatory consequences, including a more restrictive REMS, which could materially and adversely affect our business, results

of operations and financial condition.

as for some other products, there can be no assurance that the FDA will approve a manageable REMS for AL001 or ALZN002, which could create

material and significant limits on our ability to successfully commercialize AL001 and ALZN002 in the U.S.

Delays in the REMS approval

process could result in delays in the NDA or BLA approval process, respectively.

In addition, as part of the REMS, the FDA could require

significant restrictions, such as restrictions on the prescription, distribution and patient use of the product, which could significantly

impact our ability to effectively commercialize AL001 or ALZN002, and dramatically reduce their market potential thereby adversely impacting

our business, financial condition and results of operations.

Even if initial REMS are not highly restrictive, if, after launch, AL001,

ALZN002 and other drug candidates were to become subject to significant abuse/non-medical use or diversion from licit channels, this could

lead to negative regulatory consequences, including a more restrictive REMS, which could materially and adversely affect our business,

results of operations and financial condition.

If we are found in violation of “fraud

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If we fail to attract and keep senior management

and key scientific personnel, we may be unable to successfully develop AL001, AL002 or any future product candidates, conduct our in-licensing

and development efforts or commercialize AL001, AL002 or any of our future product candidates.

and key scientific personnel, we may be unable to successfully develop AL001, ALZN002 or any future product candidates, conduct our in-licensing

and development efforts or commercialize AL001, ALZN002 or any of our future product candidates.

Our future growth and success

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We are highly

dependent upon our senior management, particularly Stephan Jackman, our Chief Executive Officer, Lien Escalona, our Chief Financial Officer,

Cragun, our Senior Vice President of Finance, Henry C.W.

Nisser, our Executive Vice President and General Counsel, and David

Katzoff, our Chief Operating Officer, as well as our consultants, Milton C.

Ault, III, our Founder and Chairman Emeritus, Dr.

Cao, the neuroscientist who developed AL002, and Dr.

Roland (Doug) Shytle, one of the inventors of AL001.

The loss of services of

any of these individuals could delay or prevent the successful development of our current or future product pipeline, completion of our

planned development efforts or the commercialization of AL001 or AL002.

It is possible that current or former employees of ours could

put forward claims for an alleged right to our patents and demand compensation therefor.

If one or more of the key personnel were to leave

us and engage in competing operations, our business, results of operations and financial condition could be materially and adversely affected.

dependent upon our senior management, particularly Stephan Jackman, our Chief Executive Officer, David J.

Katzoff, our Chief Financial

Officer, Kenneth S.

Cragun, our Senior Vice President of Finance and Henry Nisser, our Executive Vice President and General Counsel.

loss of services of any of these individuals could delay or prevent the successful development of our current or future product pipeline,

completion of our planned development efforts or the commercialization of AL001 or ALZN002.

It is possible that current or former employees

of ours could put forward claims for an alleged right to our patents and demand compensation therefor.

If one or more of the key personnel

were to leave us and engage in competing operations, our business, results of operations and financial condition could be materially and

adversely affected.

We expect to face substantial competition,

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and commercialization of new therapy and vaccine products is highly competitive.

We will face competition with respect to AL001, AL002

We will face competition with respect to AL001, ALZN002

and any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty

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In addition to existing therapeutic treatments for the indications we

are targeting with AL001 and AL002, we also face potential competition from other drug candidates in development by other companies.

potential competitors include large health care companies, such as Celgene Corporation, Merck & Co., Inc., Sanofi S.A., Eli Lilly

and Company, Bayer AG, Novartis AG, Johnson and Johnson and Boehringer Ingelheim GmbH.

We also know of several smaller early-stage

companies that are developing products for use in our segment of the market.

Some of the potential competitive compounds referred to above

are being developed by large, well-financed and established pharmaceutical and biotechnology companies or have been partnered with such

companies, which may give them development, regulatory and marketing advantages over our products.

are targeting with AL001 and ALZN002, we also face potential competition from other drug candidates in development by other companies.

Our potential competitors include, without limitation, large health care companies, such as Biogen Inc., Eisai Co., Ltd., Takeda Pharmaceuticals,

Bristol Myers Squibb, Pfizer Inc., Merck & Co., Inc., Sanofi S.A., Eli Lilly and Company, Bayer AG, Novartis AG, Johnson and Johnson

and Boehringer Ingelheim GmbH.

We also know of several smaller early-stage companies that are developing products for use

in our segment of the market.

Some of the potential competitive compounds referred to above are being developed by large, well-financed

and established pharmaceutical and biotechnology companies or have been partnered with such companies, which may give them development,

regulatory and marketing advantages over our products.

Our commercial opportunity

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cases by insurers or other third-party payers seeking to encourage the use of generic products.

If AL001 or AL002 achieves marketing approval,

we expect that it will be priced at a significant premium over competing generic products.

If AL001 or ALZN002 achieves marketing

approval, we expect that it will be priced at a significant premium over competing generic products.

Some of the companies against

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and financial condition.

Changes in funding

for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise

prevent our product candidates from being developed or commercialized in a timely manner, which could negatively impact our business.

rely on the FDA to assist with the development our product candidates.

The ability of the FDA to review and approve new drug products

can be affected by a variety of factors outside of our control, including government budget and funding levels, ability to hire and retain

key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the agency have

fluctuated in recent years as a result.

In addition, government funding of other government agencies that fund research and development

activities is subject to the political process, which is inherently fluid and unpredictable.

at the FDA and other agencies may also slow the time necessary for our product candidates to be reviewed and/or potentially approved by

necessary government agencies, which would adversely affect our business.

For example, over the last several years, including for 35 days

beginning on December 22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA, have

had to furlough critical FDA employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly

impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our

If the timing of FDA’s review and approval of new products is delayed, the estimated timing of our drug development program

may be delayed which would materially increase costs of drug development and harm our operations or business.

Changes in funding for the FDA and other

government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent our product

candidates from being developed or commercialized in a timely manner, which could negatively impact our business.

We rely on the FDA to assist

with the development our product candidates.

The ability of the FDA to review and approve new drug products can be affected by a variety

of factors outside of our control, including government budget and funding levels, ability to hire and retain key personnel and accept

the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the agency have fluctuated in recent

years as a result.

In addition, government funding of other government agencies that fund research and development activities is subject

to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and

other agencies may also slow the time necessary for our product candidates to be reviewed and/or potentially approved by necessary government

agencies, which would adversely affect our business.

For example, over the last several years, including for 35 days beginning on December

22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical

FDA employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly impact the ability of the

FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If the timing

of FDA’s review and approval of new products is delayed, the estimated timing of our drug development program may be delayed which

would materially increase costs of drug development and harm our operations or business.

Risks Related to Our Intellectual Property

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In addition, if any licensor fails to enforce or defend

its intellectual property rights, this may adversely affect our ability to develop and commercialize AL001 or AL002 as well as our ability

its intellectual property rights, this may adversely affect our ability to develop and commercialize AL001 or ALZN002 as well as our ability

to prevent competitors from making, using, and selling competing products.

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We cannot assure you that

AL001, AL002 or any of our future product candidates will not infringe existing or future patents.

We may be unaware of patents that have

already issued that a third party might assert are infringed by AL001, AL002 or one of our future product candidates.

Because patent applications

can take many years to issue and may be confidential for 18 months or more after filing, there may be applications now pending

of which we are unaware of and which may later result in issued patents that we may infringe by commercializing AL001, AL002 or any of

our future product candidates.

In addition, third parties may obtain patents in the future and claim that use of our technologies infringes

upon these patents.

Moreover, we may face claims from non-practicing entities (commonly referred to as patent trolls), which have no relevant

product revenue and against whom our own patent portfolio may thus have no deterrent effect.

AL001, ALZN002 or any of our future product candidates will not infringe existing or future patents.

We may be unaware of patents that

have already issued that a third party might assert are infringed by AL001, ALZN002 or one of our future product candidates.

Because patent

applications can take many years to issue and may be confidential for 18 months or more after filing, there may be applications

now pending of which we are unaware of and which may later result in issued patents that we may infringe by commercializing AL001, ALZN002

or any of our future product candidates.

In addition, third parties may obtain patents in the future and claim that use of our technologies

infringes upon these patents.

Moreover, we may face claims from non-practicing entities (commonly referred to as patent trolls), which

have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect.

We may be subject to third-party

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If a patent infringement suit were brought against us or our collaborators, we or our collaborators could

be forced to stop or delay research, development, manufacturing or sales of AL001 or AL002.

be forced to stop or delay research, development, manufacturing or sales of AL001 or ALZN002.

As a result of patent infringement claims,

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If our efforts to protect the proprietary

nature of the intellectual property related to AL001, AL002 or any of our potential future product candidates are not adequate, we may

nature of the intellectual property related to AL001, ALZN002 or any of our potential future product candidates are not adequate, we may

not be able to compete effectively in our market.

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We cannot be certain that

the claims in any patent application that we may submit covering composition-of-matter of AL001, AL002 and any potential future product

the claims in any patent application that we may submit covering composition-of-matter of AL001, ALZN002 and any potential future product

candidates will be considered patentable by the USPTO and courts in the U.S., or by the patent offices and courts in foreign countries.

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If the breadth or strength of protection provided by the patent applications

we may own, license or pursue with respect to AL001, AL002 or any future product candidates is threatened, it could threaten our ability

to commercialize AL001, AL002 or any future product candidates.

we may own, license or pursue with respect to AL001, ALZN002 or any future product candidates is threatened, it could threaten our ability

to commercialize AL001, ALZN002 or any future product candidates.

Further, if we encounter delays in our development efforts, the period

of time during which we could market AL001, AL002 or any future product candidates under patent protection would be reduced.

of time during which we could market AL001, ALZN002 or any future product candidates under patent protection would be reduced.

applications in the U.S.

and most other countries are confidential for a period of time after filing, we cannot be certain that we were

the first to file any patent application related to AL001, AL002 or any future product candidates.

the first to file any patent application related to AL001, ALZN002 or any future product candidates.

Even where laws provide protection,

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Changes in patent law could diminish the

value of patents in general, thereby impairing our ability to protect AL001 and AL002.

value of patents in general, thereby impairing our ability to protect AL001 and ALZN002.

As is the case with other

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Filing, prosecuting and defending

patents on AL001, AL002 and any future product candidates throughout the world is prohibitively expensive.

patents on AL001, ALZN002 and any future product candidates throughout the world is prohibitively expensive.

Competitors may use our technologies

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Risks Relating to Legal Matters

We received a subpoena from the SEC in

the investigation known as “In the Matter of DPW Holdings, Inc.,” the consequences of which are unknown.

We received a subpoena from the SEC in the

investigation known as “In the Matter of DPW Holdings, Inc.,” the consequences of which are unknown.

In November 2019, we

received a subpoena from the SEC that stated that the staff of the SEC is conducting an investigation known as “In the Matter of

DPW Holdings, Inc.,” and that the subpoena was issued as part of an investigation as to whether BitNile Holdings, Inc., formerly

known as DPW Holdings, Inc.

(“BitNile”), and certain of its officers, directors, employees, partners, subsidiaries and/or

affiliates, and/or other persons or entities, directly or indirectly, violated certain provisions of the Securities Act and the Exchange

Act, in connection with the offer and sale of its securities.

Although the order states that the SEC may have information relating to

such alleged violations, the subpoena expressly provides that the inquiry is not to be construed as an indication by the SEC or its staff

that any violations of the federal securities laws have occurred.

We have produced documents in response to the subpoena.

in the future require us to produce additional documents, information or seek testimony from other members of our management team.

DPW Holdings, Inc.,” and that the subpoena was issued as part of an investigation as to whether Ault Alliance, Inc., formerly known

as DPW Holdings, Inc., Ault Global Holdings, Inc.

and BitNile Holdings, Inc.

(“AULT”), and certain of its officers, directors,

employees, partners, subsidiaries and/or affiliates, and/or other persons or entities, directly or indirectly, violated certain provisions

of the Securities Act and the Exchange Act, in connection with the offer and sale of its securities.

Although the order states that the

SEC may have information relating to such alleged violations, the subpoena expressly provides that the inquiry is not to be construed

as an indication by the SEC or its staff that any violations of the federal securities laws have occurred.

We have produced documents

in response to the subpoena.

The SEC may in the future require us to produce additional documents, information or seek testimony from

other members of our management team.

We are unaware of the scope

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Two members of our current Board of Directors, Messrs.

and Nisser, are directors of BitNile.

There can be no assurance that any final resolution of this and any similar matters will not have

a material adverse effect on our business, financial condition or results of operations.

and Nisser, are directors of AULT.

There can be no assurance that any final resolution of this and any similar matters will not have a

material adverse effect on our business, financial condition or results of operations.

If product liability lawsuits are brought

against us, we will incur substantial liabilities and may be required to limit the commercialization of AL001 or AL002.

against us, we will incur substantial liabilities and may be required to limit the commercialization of AL001 or ALZN002.

We and our partners face potential

product liability exposure related to the testing of AL001 or AL002 in clinical trials.

product liability exposure related to the testing of AL001 or ALZN002 in clinical trials.

We will face exposure to claims by an even greater

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and elsewhere, including those relating to

misuse of AL001 or AL002.

Now, and in the future, an individual may bring a liability claim against us alleging that AL001 or AL002 caused

While we intend to take what we believe to be appropriate precautions, we may be unable to avoid significant liability if any

product liability lawsuit is brought against us.

If we cannot successfully defend ourselves against product liability claims, we will

incur substantial liabilities.

Even if we successfully defend any such action, the costs associated with such defense could prove exorbitant.

misuse of AL001 or ALZN002.

Now, and in the future, an individual may bring a liability claim against us alleging that AL001 or ALZN002

caused an injury.

While we intend to take what we believe to be appropriate precautions, we may be unable to avoid significant liability

if any product liability lawsuit is brought against us.

If we cannot successfully defend ourselves against product liability claims, we

will incur substantial liabilities.

Even if we successfully defend any such action, the costs associated with such defense could prove

Regardless of merit or eventual outcome, liability claims may result in:

• decreased demand for AL001 or AL002 (if such product candidate had been approved and gone to market);

• decreased demand for AL001 or ALZN002 (if such product candidate had been approved and gone to market);

• injury to our reputation;

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Members of the Board of Directors and executive

officers of our company and BitNile, contain some of the same individuals, which may present potential conflicts of interest.

Our company is controlled by Milton C.

Ault III, our Founder, Chairman Emeritus and consultant, directly and indirectly through his controlling equity interest in Ault &

Company, Inc.

officers of our company and AULT, contain some of the same individuals, which may present potential conflicts of interest.

Our company is controlled

(Todd) Ault III, our Founder, Chairman Emeritus and consultant, directly and indirectly through his controlling equity interest

in Ault & Company, Inc.

the parent of Ault Life Sciences, Inc.

and Ault Life Sciences Fund, LLC.

Ault is also the Executive Chairman and

single largest stockholder (through his control of Ault Alpha, LP) of BitNile, a publicly-traded diversified holding company focused primarily

on the digital mining, investment, defense/aerospace, industrial and telecommunications industries.

The Board of Directors and executive

officers of our company and the board of directors and executive officers of BitNile contain some of the same individuals, all of whom

devote a portion of their business and professional time and efforts to the respective businesses of our company as well as BitNile.

Horne, the Chairman of the Board of our company, is the Chief Executive Officer and a director of BitNile, Henry C.W.

Nisser, our Executive

Vice President, General Counsel and a director of our company, is the President, General Counsel and a director of BitNile, and Kenneth

Cragun, our Senior Vice President of Finance is the Chief Financial Officer of BitNile.

Additionally, Mr.

Ault is the Chairman

of Avalanche International, Corp.

(“Avalanche”), a company currently engaged in developing advanced materials and processing

technology for textile applications.

Horne is a director of Avalanche and its Chief Financial Officer and Mr.

its Executive Vice President and General Counsel.

While we believe that our business and technologies

are distinguishable from those of BitNile and that we do not compete in the markets in which BitNile compete, Mr.

Ault and the other

named individuals may have potential conflicts of interest with respect to, among other things, potential corporate opportunities, business

combinations, joint ventures and/or other business opportunities that may become available to them, our company or BitNile.

(“ALSI”) and Ault Life Sciences Fund, LLC (“ALSF”).

Ault is also the Executive Chairman and single largest stockholder (through his control of Ault Alpha, LP) of AULT, a publicly-traded

diversified holding company focused primarily on digital mining of Bitcoin and its metaverse platform, oil exploration, crane services,

defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, hotel operations and textiles.

The Board of Directors

and executive officers of our company and the board of directors and executive officers of AULT contain some of the same individuals,

all of whom devote a portion of their business and professional time and efforts to the respective businesses of our company as well as

Horne, the Chairman of the Board of our company, is the Chief Executive Officer and a director of AULT, Henry Nisser,

our Executive Vice President, General Counsel and a director of our company, is the President, General Counsel and a director of AULT

and Kenneth S.

Cragun, our Senior Vice President of Finance is the Chief Financial Officer of AULT.

While we believe that our

business and technologies are distinguishable from those of AULT and that we do not compete in the markets in which AULT compete, Mr.

and the other named individuals may have potential conflicts of interest with respect to, among other things, potential corporate opportunities,

business combinations, joint ventures and/or other business opportunities that may become available to them, our company or AULT.

Ault and the other named individuals have agreed to devote a portion of their business and professional time and efforts

to our company, potential conflicts of interest also include the amount of time and effort devoted by each of them to the affairs of BitNile.

to our company, potential conflicts of interest also include the amount of time and effort devoted by each of them to the affairs of AULT.

We may be materially adversely affected if Mr.

Ault and/or the other named individuals choose to place the interests of BitNile before

Ault and/or the other named individuals choose to place the interests of AULT before

those of our company.

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In addition, our Board of Directors has

adopted a policy whereby any future transactions between us and any of our subsidiaries, affiliates, officers, directors, principal stockholders

or any affiliates of the foregoing will be on terms no less favorable to our company than could reasonably be obtained in “arm’s

adopted a policy whereby any future transactions between us and any of our affiliates, officers, directors, principal stockholders or

any affiliates of the foregoing will be on terms no less favorable to our company than could reasonably be obtained in “arm’s

length” transactions with independent third parties, and any such transactions will also be approved by a majority of our disinterested

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The named individuals, other than Mr.

Ault, owe fiduciary duties of care and loyalty to our company under Delaware

However, the failure of our management to resolve any conflicts of interest in favor of our company could materially adversely affect

our business, financial condition and results of operations.

Ault, owe fiduciary duties of good faith, care and loyalty to our company

under Delaware law.

However, the failure of our management to resolve any conflicts of interest in favor of our company could materially

adversely affect our business, financial condition and results of operations.

Certain provisions of our certificate of

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Risks Relating to Ownership of Our Common Stock

If we do not continue

to satisfy the Nasdaq Capital Market continued listing requirements, our common stock could be delisted from the Nasdaq Capital Market.

If we do not regain compliance

with or continue to satisfy the Nasdaq Capital Market continued listing requirements, our common stock could be delisted from the Nasdaq

Capital Market.

listing of our common stock on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions

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We are currently not in compliance with Nasdaq listing requirements, specifically the minimum bid price requirement,

and must regain compliance on or prior to December 19, 2022.

If we are unable to regain such compliance, we will cease to be eligible

to trade on Nasdaq.

we were to fail to meet a Nasdaq Capital Market listing requirement, we may be subject to delisting by the Nasdaq Capital Market.

event our common stock is no longer listed for trading on the Nasdaq Capital Market, our trading volume and share price may decrease and

we may experience further difficulties in raising capital which could materially affect our operations and financial results.

delisting from the Nasdaq Capital Market could also have other negative effects, including potential loss of confidence by partners, lenders,

suppliers and employees and could also trigger various defaults under our lending agreements and other outstanding agreements.

delisting could make it harder for us to raise capital and sell securities.

You may experience future dilution as a result of future equity

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities

convertible into or exchangeable for our common stock.

and must regain compliance on or prior to July 31, 2023.

If we are unable to regain such compliance, we will cease to be eligible to trade

on Nasdaq and will likely be delisted by Nasdaq.

If we were to fail to meet

a Nasdaq Capital Market listing requirement, we may be subject to delisting by the Nasdaq Capital Market.

In the event our common stock

is no longer listed for trading on the Nasdaq Capital Market, our trading volume and share price may decrease and we may experience further

difficulties in raising capital which could materially affect our operations and financial results.

Further, delisting from the Nasdaq

Capital Market could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees

and could also trigger various defaults under our lending agreements and other outstanding agreements.

Finally, delisting could make it

harder for us to raise capital and sell securities.

You may experience future dilution as a result of future equity offerings.

to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or

exchangeable for our common stock.

We do not know whether an active market

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factors that may have little to do with our operations or business prospects.

During the past 52-week period (through April 30, 2022),

our stock closed at prices between $0.88 per share and $13.50 per share, as reported on Nasdaq.com.

During the year ended April 30, 2023, our stock closed at

prices between $0.425 per share and $1.19 per share, as reported on Nasdaq.com.

Stock markets, in general,

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• any failure of our testing and clinical trials;

• the impact of the ongoing COVID-19 pandemic on our business;

• product liability claims, other litigation or public concern about the safety of our product candidates

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and divert management’s attention and resources from our business.

If there are substantial sales of shares

of our common stock, the price of our common stock could decline.

The price of our

common stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive officers

and significant stockholders, or if there is a large number of shares of our common stock available for sale and the market perceives

that sales will occur.

As of July 19, 2022, we had 95,481,790 shares of our common stock outstanding.

Shares held by directors, executive

officers and other affiliates will be subject to volume limitations under Rule 144 under the Securities Act and various vesting agreements.

We have registered shares of common stock that we have issued and may issue under our employee equity incentive plans, which shares may

be sold freely in the public market upon issuance.

Sales of our common stock by current stockholders may make it more difficult for us

to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more

difficult for other stockholders to sell shares of our common stock.

market price of the shares of our common stock could decline as a result of the sale of a substantial number of our shares of common stock

in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

unable to predict the effect that sales may have on the prevailing market price of our common stock.

The concentration

of our stock ownership will limit your ability to influence corporate matters, including the ability to influence the outcome of director

elections and other matters requiring stockholder approval.

executive officers, directors and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially own a significant

percentage of our common stock.

As a result, these stockholders, acting together, will have significant influence over all matters that

require approval by our stockholders, including the election of directors and approval of significant corporate transactions.

actions might be taken even if other stockholders oppose them.

This concentration of ownership might also have the effect of delaying

or preventing a change of control of our company that other stockholders may view as beneficial.

If there are substantial sales of shares of our common stock,

the price of our common stock could decline.

The price of our common stock could decline if there are substantial

sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, or if there is a large

number of shares of our common stock available for sale and the market perceives that sales will occur.

As of July 24, 2023, we had 96,940,124

shares of our common stock outstanding.

Shares held by directors, executive officers and other affiliates will be subject to volume limitations

under Rule 144 under the Securities Act and various vesting agreements.

We have registered shares of common stock that we have issued

and may issue under our employee equity incentive plans, which shares may be sold freely in the public market upon issuance.

our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at

a time and price that we deem reasonable or appropriate, and make it more difficult for other stockholders to sell shares of our common

The market price of the shares

of our common stock could decline as a result of the sale of a substantial number of our shares of common stock in the public market or

the perception in the market that the holders of a large number of shares intend to sell their shares.

We are unable to predict the effect

that sales may have on the prevailing market price of our common stock.

The concentration of our stock ownership

will limit your ability to influence corporate matters, including the ability to influence the outcome of director elections and other

matters requiring stockholder approval.

Our executive officers, directors

and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially own a significant percentage of our common

As a result, these stockholders, acting together, will have significant influence over all matters that require approval by our

stockholders, including the election of directors and approval of significant corporate transactions.

Corporate actions might be taken

even if other stockholders oppose them.

This concentration of ownership might also have the effect of delaying or preventing a change

of control of our company that other stockholders may view as beneficial.

Our bylaws provide that the Court of Chancery

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

Because we do not intend to pay dividends

on our common stock, you must rely on stock appreciation for any return on your investment.

We presently intend to retain

any future earnings and do not expect to pay any dividends in the foreseeable future.

As a result, you must rely on stock appreciation

and a liquid trading market for any return on your investment.

If an active and liquid trading market does not develop, you may be unable

to sell your shares of common stock at or above the initial public offering price or at the time you would like to sell.

We have identified a material weakness in

our internal control over financial reporting.

If our remediation of this material weakness is not effective, or if we experience additional

material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be

able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in

us and, as a result, the value of our common stock.

We have limited accounting personnel to

adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial

In connection with the audit of our financial statements for the year ended April 30, 2022, we identified material

weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies,

in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial

statements will not be prevented or detected on a timely basis.

The material weaknesses related to a lack of sufficient number of qualified

personnel within our accounting function to adequately segregate duties, to perform sufficient reviews and approval of manual journal

entries posted to the general ledger and to consistently execute review procedures over general ledger account reconciliations, financial

statement preparation and accounting for non-routine transactions and, we have not designed and implemented effective Information Technology

General Controls (“ITGC”) related to access controls to payment and financial accounting systems.

We are implementing measures

designed to improve our internal control over financial reporting to remediate this material weakness, including the following:

• We are formalizing our internal control documentation and strengthening supervisory reviews by our management;

• We are in the process of adding additional accounting personnel and segregating duties amongst accounting

• We are in the process of strengthening ITGC access controls related to our payment and financial accounting

We cannot assure you that

the measures we have taken to date, and are continuing to implement, will be sufficient to remediate the material weakness we have identified

or avoid potential future material weaknesses.

If the steps we take do not correct the material weakness in a timely manner, we will be

unable to conclude that we maintain effective internal control over financial reporting.

Accordingly, there could continue to be a reasonable

possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.

As a public company, we are

required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls.

perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the

effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

The Sarbanes-Oxley

Act also requires that our management report on internal control over financial reporting be attested to by our independent registered

public accounting firm, to the extent we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business

Startups Act of 2012 (JOBS Act).

We do not expect our independent registered public accounting firm to attest to our management report

on internal control over financial reporting for so long as we are an emerging growth company.

We are in the process of enhancing our internal

control over financial reporting required to comply with this obligation, which process will be time consuming, costly and complicated.

If we identify any additional material weaknesses in our internal control over financial reporting, if we are unable to comply with the

requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial reporting is

effective, or when required in the future, if our independent registered public accounting firm is unable to express an opinion as to

the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of

our financial reports and the market price of our common stock could be adversely affected, and we could become subject to investigations

by the Nasdaq Stock Market, the SEC, or other regulatory authorities, which could require additional financial and management resources.

General Risk Factors

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has resulted in significantly higher operating expenses.

Expansion of our operations, to include the development of AL001 and AL002, may

also cause a significant demand on our management, finances and other resources.

Expansion of our operations, to include the development of AL001 and ALZN002,

may also cause a significant demand on our management, finances and other resources.

Our ability to manage the anticipated future growth,

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Any failure to expand these areas and implement

and improve AL001 or AL002 or our procedures and controls in an efficient manner at a pace consistent with our business could have a material

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

There can be no assurance that our attempts to expand our

marketing, sales, manufacturing and customer support efforts will be successful or will result in additional sales or profitability in

any future period.

and improve AL001 or ALZN002 or our procedures and controls in an efficient manner at a pace consistent with our business could have a

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

There can be no assurance that our attempts to

expand our marketing, sales, manufacturing and customer support efforts will be successful or will result in additional sales or profitability

in any future period.

We may not be successful in our efforts

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losses caused by unforeseen events, cold chain interruption and testing difficulties.

AL001 and AL002, individually,

AL001 and ALZN002, individually,

will be manufactured and distributed, if ever, using technically complex processes requiring specialized facilities, highly specific raw

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results of operations and financial condition.

Because we do not intend to pay dividends

on our common stock, you must rely on stock appreciation for any return on your investment.

We presently intend to retain

any future earnings and do not expect to pay any dividends in the foreseeable future.

As a result, you must rely on stock appreciation

and a liquid trading market for any return on your investment.

If an active and liquid trading market does not develop, you may be unable

to sell your shares of common stock at or above the initial public offering price or at the time you would like to sell.

We have identified a material weakness in

our internal control over financial reporting.

If our remediation of this material weakness is not effective, or if we experience additional

material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be

able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in

us and, as a result, the value of our common stock.

We have limited accounting

personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over

financial reporting.

In connection with the audit of our financial statements for the year ended April 30, 2023, we identified

material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or combination

of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of our financial statements will not be prevented or detected on a timely basis.

The material weaknesses related to a lack of sufficient

number of qualified personnel within our accounting function to adequately segregate duties, to perform sufficient reviews and approval

of manual journal entries posted to the general ledger and to consistently execute review procedures over general ledger account reconciliations,

financial statement preparation and accounting for non-routine transactions and, we have not designed and implemented effective Information

Technology General Controls (“ITGC”) related to access controls to payment and financial accounting systems.

We are implementing measures

designed to improve our internal control over financial reporting to remediate this material weakness, including the following:

• We are formalizing our internal control documentation and strengthening supervisory reviews by our management;

• We are in the process of adding additional accounting personnel and segregating duties amongst accounting

• We are in the process of strengthening ITGC access controls related to our payment and financial accounting

We cannot assure you that

the measures we have taken to date, and are continuing to implement, will be sufficient to remediate the material weakness we have identified

or avoid potential future material weaknesses.

If the steps we take do not correct the material weakness in a timely manner, we will be

unable to conclude that we maintain effective internal control over financial reporting.

Accordingly, there could continue to be a reasonable

possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.

As a public company, we are

required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls.

perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the

effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

The Sarbanes-Oxley

Act also requires that our management report on internal control over financial reporting be attested to by our independent registered

public accounting firm, to the extent we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business

Startups Act of 2012 (JOBS Act).

We do not expect our independent registered public accounting firm to attest to our management report

on internal control over financial reporting for so long as we are an emerging growth company.

We are in the process of enhancing

our internal control over financial reporting required to comply with this obligation, which process will be time consuming, costly

and complicated.

If we identify any additional material weaknesses in our internal control over financial reporting, if we are unable

to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial

reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an opinion

as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness

of our financial reports and the market price of our common stock could be adversely affected, and we could become subject to investigations

by the Nasdaq Stock Market, the SEC, or other regulatory authorities, which could require additional financial and management resources.

We may have trouble hiring additional qualified

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in an increasingly demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley

Act, the regulations of The Nasdaq Capital Market, the rules and regulations of the SEC, expanded disclosure

requirements, accelerated reporting requirements and more complex accounting rules.

Company responsibilities required by the Sarbanes-Oxley

Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures.

Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.

We must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report

on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

Act, the regulations of The Nasdaq Capital Market, the rules and regulations of the SEC, expanded disclosure requirements, accelerated

reporting requirements and more complex accounting rules.

Company responsibilities required by the Sarbanes-Oxley Act include establishing

corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures.

Effective internal

controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.

We must perform

system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness

of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

We anticipate that the process

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the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We could be subject

to securities class action litigation.

the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.

This risk is especially relevant for us because biopharmaceutical companies have experienced significant stock price volatility in recent

If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources,

which could harm our business.

We could be subject to securities class

action litigation.

In the past, securities class

action litigation has often been brought against a company following a decline in the market price of its securities.

This risk is especially

relevant for us because biopharmaceutical companies have experienced significant stock price volatility in recent years.

If we face such

litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

UNRESOLVED STAFF COMMENTS

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