What changed in this filing

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Item 1A. Risk Factors

2024-02-13 compared with 2023-11-08 · 94 added, 43 removed, 108 unchanged (56% of the section changed)

11 unchanged sentences

or commercialize our product candidates.

depend, and will continue to depend, on contract research organizations (“CROs”), clinical trial sites and clinical trial

principal investigators, contract laboratories, and other third parties to conduct our clinical trials.

We rely heavily on these third

parties over the course of our clinical trials, and we control only certain aspects of their activities.

Nevertheless, we are responsible

for ensuring that each of our studies is conducted in accordance with the protocol and applicable legal, regulatory, and scientific standards

and regulations, and our reliance on third parties does not relieve us of our regulatory responsibilities.

We and these third parties

are required to comply with current good clinical practices (“cGCPs”), which are regulations and guidelines enforced by the

FDA and comparable foreign regulatory authorities for the conduct of clinical trials on product candidates in clinical development.

authorities enforce cGCPs through periodic inspections and for-cause inspections of clinical trial principal investigators and trial

If we or any of these third parties fail to comply with applicable cGCPs or fail to enroll a sufficient number of patients, we

We depend, and will continue

to depend, on third parties, including, but not limited to, CROs, clinical trial sites and clinical trial principal investigators, contract

laboratories, IRBs, manufacturers, suppliers, and other third parties to conduct our clinical trials, including those for our drug candidates

NE3107 and BIV201.

We rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects

of their activities.

Nevertheless, we retain ultimate responsibility for ensuring that each of our studies is conducted in accordance

with the protocol and applicable legal, regulatory, and scientific standards and regulations, and our reliance on third parties does not

relieve us of our regulatory responsibilities.

We and these third parties are required to comply with cGCPs, which are regulations and

guidelines enforced by the FDA and comparable foreign regulatory authorities for the conduct of clinical trials on product candidates

in clinical development.

Regulatory authorities enforce cGCPs through periodic inspections and for-cause inspections of clinical trial

principal investigators and trial sites.

If, due to the failure of either the Company or a third party, a clinical trial fails to comply

with applicable cGCPs, FDA’s Investigational New Drug (“IND”) requirements, other applicable regulatory requirements,

or requirements set forth in the applicable IRB-approved protocol, including failure to enroll a sufficient number of patients, the Company

may be required to conduct additional clinical trials to support our marketing applications, which would delay the regulatory approval

Moreover, our business may be implicated if any of these third parties violates federal, state, or foreign fraud and abuse or

false claims laws and regulations or healthcare privacy and security laws, or provide us or government agencies with inaccurate, misleading,

or incomplete data.

For example, during routine monitoring of blinded data from our Phase 3 study (NCT04669028) of NE3107, we uncovered

what appears to be potential scientific misconduct and significant non-compliance with GCPs and regulation at six sites.

We have alerted

the FDA’s Office of Scientific Integrity (“OSI”) about these issues and believe OSI will perform a thorough, competent,

objective and fair research of any potential scientific misconduct and non-compliance of GCPs and regulation.

Sensitivity analysis excluding

data from these six problematic sites has been performed and accounted for in the statistical analysis plan for the study (NCT04669028).

Nonetheless, these findings of potential scientific misconduct and significant GCP violations may call into question the rigor, robustness

and validity of the entire data set for this study (NCT04669028) and may require additional clinical studies to confirm the final results

of the study.

Although we design the clinical trials for our

product candidates, our CROs are tasked with facilitating and monitoring our clinical trials.

As a result, many important aspects of our clinical

development programs, including site and investigator selection, and the conduct and timing and monitoring of the study, will be partly

or completely outside our direct control.

Our reliance on third parties to conduct clinical trials also results in less direct control

over the collection, management, and quality of data developed through clinical trials than would be the case if we were relying entirely

upon our own employees.

Communicating with third parties can also be challenging, potentially leading to mistakes as well as difficulties

in coordinating activities.

Moreover, our business may be implicated if any of these third parties violates applicable federal, state, or foreign laws and/or

regulations, including but not limited to FDA’s IND regulations, fraud and abuse or false claims laws, healthcare privacy and data

security laws, or provide us or government agencies with inaccurate, misleading, or incomplete data.

For example, during routine monitoring

of blinded data from our Phase 3 study (NCT04669028) of NE3107, we uncovered what appears to be potential scientific misconduct and significant

deviation from study protocol and GCP violations at fifteen sites, which resulted in the Company excluding all patients from these sites

and referring them to the FDA’s OSI for further action.

The unplanned exclusion of so many patients left our Phase 3 study underpowered

for the primary endpoints.

These findings of potential scientific misconduct, significant deviation from protocol and GCP violations may

call into question the rigor, robustness and validity of the entire data set for this study (NCT04669028).

Although we design the

clinical trials for our product candidates, our CROs are tasked with facilitating and monitoring our clinical trials.

As a result, many

important aspects of our clinical development programs, including site and investigator selection, and the conduct, timing, and monitoring

of the study, is often outside our direct control, either partially or in whole.

Our reliance on third parties to conduct clinical trials

also results in less direct control over the collection, management, and quality of data developed through clinical trials than would

be the case if we were relying entirely upon our own employees.

Communicating with third parties can also be challenging, potentially

leading to mistakes as well as difficulties in coordinating activities.

Successful development

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Services Industry and Concentration of Risk

As of September 30, 2023, the Company had cash

As of December 31, 2023, the Company had cash

deposited in certain financial institutions in excess of federally insured levels.

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arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations.

We are currently subject to securities class action litigation

and may be subject to similar or other litigation in the future, all of which will require significant management time and attention,

result in significant legal expenses and may result in unfavorable outcomes, which may have a material adverse effect on our business,

operating results and financial condition, and negatively affect the price of our common stock.

We are, and may in the future become, subject to various legal proceedings

and claims that arise in or outside the ordinary course of business.

For example, on January 19, 2024, a securities class action complaint,

captioned Eric Olmstead v.

3:24-cv-00035, was filed in the U.S.

District Court for the District of Nevada against

the company and certain of its officers and/or directors, asserting violations of Sections 10(b) and 20(a) of the Securities and Exchange

Act of 1934, as amended (the "Exchange Act") stemming from the company’s disclosures and series of events from August

5, 2021 through November 29, 2023 regarding the company's Phase 3 study of NE3107 in Alzheimer’s Disease.

The complaint alleges

that the statements previously made during the time period mentioned were materially false and misleading statements and/or omitted material

adverse facts regarding the Phase 3 study of NE3107 and the company's business, operations, prospects.

See Part II, Item 1 of this Quarterly

Report on Form 10-Q, entitled “Legal Proceedings” for more information regarding this litigation.

It is possible that additional lawsuits will be filed, or allegations

received from stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants.

Such lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will

depend upon many unknown factors.

The outcome of such lawsuits is necessarily uncertain.

We could be forced to expend significant resources

in the defense of the pending lawsuit and any additional lawsuits, and we may not prevail.

In addition, we may incur substantial legal

fees and costs in connection with such lawsuits.

We currently are not able to estimate the possible cost to us from this matter, as the

pending lawsuit is currently at an early stage, and we cannot be certain how long it may take to resolve the pending lawsuit or the possible

amount of any damages that we may be required to pay.

Monitoring, initiating and defending against legal actions is time-consuming for

our management, is likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities.

We could be forced to expend significant resources in the settlement or defense of the pending lawsuit and any potential future lawsuits,

and we may not prevail in such lawsuits.

Although we have insurance coverage that we believe applies to these

actions, the coverage is subject to a $2 million deductible.

That means that we are responsible for the first $2 million of loss arising

from these actions, which includes both defense costs and damages, before any insurance coverage will apply.

Furthermore, our insurance

coverage may be insufficient, and our assets may be insufficient to cover any amounts that exceed our insurance coverage, and we may have

to pay damage awards or otherwise may enter into a settlement arrangement in connection with such claim.

A decision adverse to our interests

in the pending lawsuit, or in similar or related litigation, could result in the payment of substantial damages, or possibly fines, and

could have a material adverse effect on our business, our stock price, cash flow, results of operations and financial condition.

not established any reserve for any potential liability relating to the pending lawsuit or any potential future lawsuits.

Any such payments

or settlement arrangements in current or future litigation could have a material adverse effect on our business, operating results or

financial condition.

In addition, such lawsuits may make it more difficult to finance our operations and affect our ability to make payments

Risks Relating To Our Common Stock

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under the Controlled Equity Offering Sales Agreement (the “Sales Agreement”), dated as of August 31, 2022, with Cantor Fitzgerald

(the “Agent”), pursuant to which the Company may issue and sell from time to time shares of common stock

through the Agent.

We may sell shares or other securities in any other offering at a price per share that is less than the current market

price of our securities, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

(the “Agent”), pursuant to which the Company may issue and sell from time to time shares of common stock through

We may sell shares or other securities in any other offering at a price per share that is less than the current market price

of our securities, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

The sale of additional shares of common stock or other securities convertible into or exchangeable for our common stock would dilute all

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protection contained within those warrants.

In addition, as of September 30, 2023, there

In addition, as of December 31, 2023, there

were warrants outstanding to purchase an aggregate of 7,770,285 shares of common stock at exercise prices ranging from $1.82 to

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and directors of the Company may have significant control over our management.

As of September 30, 2023, our directors and executive

As of December 31, 2023, our directors and executive

officers and affiliates currently own aggregate 23,551,161 shares of our Common Stock, which currently constitutes 59.1% of our issued

9 unchanged sentences

common stock, which would reduce investors’ percent of ownership and may dilute our share value.

As of September 30, 2023, our Articles of Incorporation,

As of December 31, 2023, our Articles of Incorporation,

as amended, authorize the issuance of 800,000,000 shares of Common Stock, and we had 39,866,714 shares of Common Stock issued and

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

What changed 10-Q

Item 1A. Risk Factors