Canton Strategic Holdings, Inc. 10-K

ITEM 1. BUSINESS Overview Hillstream BioPharma is a pre-clinical biotechnology company developing novel therapeutic candidates targeting ferroptosis, an emerging new anti-cancer mechanism resulting in iron mediated cell death (“IMCD”) for treatment resistant cancers. The most advanced product candidate which we own is HSB-1216, an IMCD inducer, targeting a variety of solid tumors. In a clinical pilot study conducted in Germany by the University of Heidelberg, the active drug in HSB-1216 was found to reduce tumor burden in treatment resistant cancers, including triple negative breast cancer (“TNBC”) and epithelial carcinomas. Our goal is to submit an investigational new drug application (“IND”) to the U.S. Food and Drug Administration (“FDA”) in 2023 and start a clinical study with HSB-1216 in 2023; however, no assurance can be provided that our IND will be accepted by the FDA in 2023, if at all. If our IND is accepted by the FDA, our HSB-1216 clinical study will focus on expanding upon the clinical pilot study conducted in Germany. If we are able to start our clinical study with HSB-1216 in 2023, we anticipate that initial clinical data from such trial will be released either the end of 2023 or early 2024. We use Quatramer™, our proprietary tumor targeting platform, to enhance the uptake of HSB-1216 in the tumor microenvironment (“TME”) with an extended duration of action and minimal off-target toxicity. In addition, TridentAI, our artificial intelligence precision medicine platform, is used to identify biomarkers in our clinical programs to target specific patient segments. The discovery of regulated cell death processes, such as apoptosis and autophagy, has enabled novel target discovery for drug development. Ferroptosis, a form of IMCD, is an emerging regulated cell death process which decreases intracellular iron or the Labile Iron Pool (“LIP”). Cancer cells increase the LIP leading to unregulated cell growth and metabolism. Decreasing the LIP, induces iron-led ROS production and lipid peroxidation, two key hallmarks of ferroptosis/IMCD. HSB-1216 binds iron in the cytoplasm of cancer cells and decreases the LIP, thereby inducing ferroptosis/IMCD, leading to regulated cell death. Areas of interest for the development of HSB-1216 are as a treatment of solid tumors, including TNBC, uveal melanoma, glioblastoma multiforme, head and neck squamous cell carcinoma and other treatment resistant cancers with high unmet need. Quatramer is a tumor targeting platform which allows us to leverage and exploit key tumor targets and novel emerging pathways such as IMCD to facilitate the delivery of potent drugs directly to the TME, while sparing healthy tissue. By efficiently extending the circulation half-life, as well as targeting delivery to the tumor site, Quatramer traps drugs into the TME. This emerging orthogonal anti-cancer approach utilizes a fundamental recognized mechanism of iron mediated tumor growth and metabolism. We are building a portfolio of long-acting, potent anti-cancer drug candidates using our Quatramer platform. TridentAI uses an artificial intelligence precision medicine platform to identify novel biomarkers. TridentAI integrates diverse public datasets, including The Cancer Genome Atlas (“TCGA”) to identify novel gene signatures to stratify patients prospectively in clinical trials. Quatramer tumor targeting also allows us to segment patients by exploiting TridentAI’s findings by (i) synthetic lethal sensitivities with novel combinations, (ii) pursue undruggable targets such as c-myc and (iii) target tumors with a high degree of cell plasticity indicative of recurrent/drug resistant phenotype. 6 Our Product Candidates and Research Programs We are leveraging our proprietary technologies and developing multiple product candidates with differentiated profiles designed to address rare and treatment resistant cancers, as shown below. Figure 1: Pipeline Chart We intend to submit an IND with the FDA for HSB-1216 in 2023, for HSB-888 in 2024, for HSB-510 in 2024 and for HSB-114 in 2025; however, no assurance can be provided that our INDs will be accepted by the FDA based on our anticipated timeline, if at all. Our Lead Candidates HSB-1216 HSB-1216, our most advanced product candidate which we intend to develop in the clinic in 2022 for multiple high unmet need solid tumors, is an IMCD inducer delivered using our proprietary carrier, Quatramer. We intend to submit an IND application to the FDA and obtain clinical data to support our strategy in 2023; however, no assurance can be provided that our IND will be accepted by the FDA in 2023, if at all. HSB-1216 exploits a key feature of certain tumors that rely on an excessive LIP within the cell to modify the dysregulated iron microenvironment of cancer. We have received orphan drug designation (“ODD”) in small cell lung cancer (“SCLC”) and uveal melanoma for HSB-1216’s active drug. In a clinical pilot study conducted in Germany by the University of Heidelberg, HSB-1216’s active drug was studied in 7 patients with positive results in heavily pre-treated and therapy resistant cancers. By design, HSB-1216 circulates systemically after an intravenous injection and concentrates in the TME of solid tumor masses. The localization of HSB-1216 has been demonstrated in multiple in vivo models with pharmacodynamic signals showing significant decreases in tumor size after multiple weekly injections. 7 Figure 2: HSB-1216 - IMCD Mechanism of Action: Shifting the Intracellular Redox Balance As a tumor concentrating therapeutic, HSB-1216 has the potential to be used in cancer patients who have failed standard-of-care therapies for treatment resistant tumors without any approved therapies. We intend to submit an IND to the FDA for approval in 2023 and, if such IND is timely submitted and approved, we anticipate initial data either the end of 2023 or early 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2023, if at all. HSB-888 Chemotherapy, an important part of antitumor treatment, exerts anticancer effects by killing cancer cells, and anthracycline-based regimens have been and continue to be the mainstay of treatment for a vast majority of tumors. The clinical applications of anthracycline regimens, above certain dose ranges have limited use due to adverse events, including cumulative lifetime doses resulting in cardiotoxicity. The nonspecific accumulation of anthracyclines, such as doxorubicin and similar agents in non-target tissues such as cardiac cells, continues to be a problem. Our second product candidate, HSB-888, is a dual-loaded IMCD inducer coupled with our ultra-low dose next generation anthracycline analogue for solid tumors. HSB-888 is in IND-enabling studies, and we intend to develop such product candidate in the clinic in 2024 for multiple sarcomas after we submit an IND to the FDA for HSB-888 in 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2024, if at all. The components of HSB-888 are two anticancer drugs with complementary mechanisms of actions. The FDA has granted one of the drug components of HSB-888 a Rare Pediatric Disease Designation and ODD for pediatric osteosarcoma. The other drug component in HSB-888 is our next generation anthracycline analogue approved and marketed in China and Japan which has potent antitumor activity and is indicated for multiple tumor types, with an improved therapeutic index compared to doxorubicin. We believe targeting the agent in our proprietary dual-loaded Quatramer with our novel IMCD inducer may confer key benefits for multiple reasons, including a synergistic ultra-low-dose approach as well as leveraging a key differentiating mechanism of iron-mediation to kill the tumor and reduce off target toxicities simultaneously. 8 Figure 3: HSB-888 – Structure & Mechanism HSB-888 has the potential to be used in solid tumors whereby a potent anthracycline may be effective but prohibitive in current available forms due to their off-target effects. We intend to include data from our own pre-clinical studies as well as the human data available from Japanese and Chinese studies in our IND which we intend to submit in 2024 and, if such IND is timely submitted and approved, we anticipate top-line clinical data in 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2024, if at all. Our Other Candidates HSB-510 We own HSB-510, which is a novel highly targeted bifunctional inhibitory compound in Quatramer with single digit nanomolar IC50 against PI3K-delta and HDAC6, which is also known to downregulate c-myc , a highly pursued and yet undruggable cancer drug target. The Quatramer platform achieves optimal tumor targeting and bioavailability of the highly potent targeted small molecule. Through an ongoing Cooperative Research and Development Agreement with the National Center for Advancing Translational Sciences (“NCATS”), part of the National Institutes of Health (“NIH”), we analyzed novel dual Class I phosphoinositide 3-kinases (“PI3K”)/histone deacetylases (“HDAC”) inhibitors and a lead compound which showed good antiproliferative activity against multiple oncology cell lines. This compound obtained ideal pharmacokinetic properties in our proprietary Quatramer, while maintaining specific HDAC6-PI3K-delta specificity. We intend to continue our collaborative effort with NCATS through our collaboration. In addition, we intend to submit an IND to the FDA for HSB-510 in 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2024, if at all. 9 Figure 4: HSB-510 - Structure HSB-114 We own HSB-114, which is a novel immunotherapeutic agent that uses our proprietary Quatramer platform to deliver the human tumor necrosis factor-alpha (“TNF-alpha” or “TNF-α”) gene into cancer cells. Finding ways to selectively increase intratumoral TNF-alpha levels in tumors while managing the toxicity associated with such approaches remains a major unmet need. We believe we have developed a novel approach to include a peptide-DNA complex, which preferentially releases genetic material and localizes into the nucleus of the delivered cancer cell and has been demonstrated to be highly effective in achieving a desired tumor response in our pre-clinical oncology models using TNF-alpha. We believe this intratumoral expression of secreted cytokines, such as TNF-alpha, represents a novel approach for inducing anti-tumor activity and potentially reprogramming the tumor immune microenvironment, and we intend to develop this technology further to strengthen our pipeline. We intend to submit an IND to the FDA for HSB-114 in 2025; however, no assurance can be provided that our IND will be accepted by the FDA in 2025, if at all. Figure 5: HSB-114 - Structure 10 Research Programs Our technology platform enables us to generate a pipeline of early-stage product candidates spanning multiple targets in oncology utilizing diverse payloads to treat rare and treatment resistant tumors. While the payloads in our most advanced product candidates, HSB-1216 and HSB-888, are novel, and have pilot and extensive human data in multiple solid tumors, any solid tumor or non-oncologic disease requiring delivery of a peptide, protein or biologic is conceivably a candidate for our technology. Our early-stage product candidates are focused on rare and treatment resistant diseases; however, we believe our technology could potentially deliver meaningful benefit across a wide range of oncologic and viral diseases. We have tested several peptides, nucleic acids, proteins, small molecules and antibody constructs against multiple targets. Our Platform Technologies Quatramer Technology A key aspect of oncology treatment is that effective anticancer agents do not penetrate the tumor bed in order to kill cancer cells due to the limitation of the microenvironment of the tumor. The TME is protected by stromal tissue comprised of multiple layers of collagen, proteoglycans, hyaluronans and laminin layers shielding the tumor from the deployment of traditional treatments, including chemotherapy (novel small molecule and immunotherapies). Parts of the tumor create an environment to survive despite reduced nutrient sources whereby hypoxic regions of the tumor continue to thrive by incorporating a shift in metabolism, including iron dysregulation. Any drug that reaches the tumor is effluxed out of the cell by transporter pumps upregulated by the cancer cells rendering any such drug that reaches the tumor ineffective. The TME continues to thrive by the inability of immune cells normally designed to infiltrate and kill the tumor made ineffective by a reduction in their ability to activate their killing effect of the cancer. Figure 6: Tumor Vasculature Our proprietary Quatramer technology overcomes the limitations that have hampered development of nanoscale and liposome derived products as cancer therapeutics. Limitations include, but are not limited to, drug efflux, toxicity, eluding phagocytosis, physiological barrier penetrance and immune responses. Our Quatramer technology incorporates a therapeutic payload and is designed to be tunable while having a prolonged circulation within the blood, allowing a targeting of diseased tissue or cells, while providing a controlled and timely release of the therapeutic payload. 11 Characteristics of our Quatramer technology include: ● Prolonged circulation : the stealth nature of Quatramer allows for a prolonged circulation time resulting in accumulation at the site of disease prior to being cleared. ● Targeted : the size, shape and surface of Quatramer allows it to escape via gaps in the blood vessels in the TME allowing for release of the payload directly into cancerous cells. ● Blocks drug efflux : Quatramer composition offers reversal of p-glycoprotein mediated drug resistance in cells via generation of poloxamers (breakdown products comprised of small co-polymers). ● Tunability : Quatramer physicochemical characterization allows for optimizing size, shape and surface chemistry based on payload characteristics to render enhanced permeation and retention into the TME. ● Ease of manufacturing : large scale production efficiency and analysis for uniform chemistry, manufacturing and control capability at lower costs. ● Established regulatory path : chemical compositions listed in the FDA Inactive Ingredients Database with known profile. ● Payload versatility and flexibility : combined with the tunability of Quatramer, the technology allows for a variety of delivery payloads including peptides, small molecules, nucleic acids and antibodies with the added flexibility of dual-loaded payload therapeutics. ● Biodegradable : Quatramers ultimately breakdown into known metabolites such as lactic acid and ethanol. Trident Artificial Intelligence TridentAI uses an artificial intelligence precision medicine platform to identify novel biomarkers. TridentAI integrates diverse public datasets, including TCGA to identify novel gene signatures to stratify patients prospectively in clinical trials. Quatramer tumor targeting also allows us to segment patients by exploiting TridentAI’s findings by (i) synthetic lethal sensitivities with novel combinations, (ii) pursue undruggable targets such as c-myc and (iii) target tumors with a high degree of cell plasticity indicative of recurrent/drug resistant phenotype. Our TridentAI platform: ● Has the ability to create a Ferroptomics Atlas which integrates diverse multi-omics datasets including not only genomics, epigenetics and transcriptomics but also emerging proteomics data which enable identification of dynamical re-wiring of intra-tumoral signaling circuitry designed to target IMCD; ● Has the ability to identify biomarkers that potentially differentiate between progression of cancer plasticity and correlate it to degree of sensitivity to a synthetically lethal target that is induced with standard-of-care treatment and development of resistance; and ● Is designed to classify and select patients that are most likely to respond to treatment. 12 Figure 7: TridentAI is designed to establish clinical development Our Key Programs: HSB-1216 and HSB-888 We have leveraged our proprietary technologies and are developing multiple product candidates with differentiated profiles designed to address rare and treatment resistant cancers. Our HSB-1216 product candidate is an IMCD inducer delivered by our proprietary Quatramer platform. We intend to submit an IND to the FDA for approval in 2023 and, if such IND is timely submitted and approved, we anticipate initial data either at the end of 2023 or early 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2023, if at all. Our HSB-888 product candidate is a dual-loaded IMCD inducer that is coupled with our ultra-low dose next generation anthracycline analogue for solid tumors. We intend to include data from our own pre-clinical studies as well as the human data available from Japanese and Chinese studies to submit an IND to the FDA in 2024 and, if such IND is timely submitted and approved, we anticipate top-line clinical data in 2024; however, no assurance can be provided that our IND will be accepted by the FDA in 2024, if at all. HSB-1216: Our Novel Iron-Medicated Cell Death Inducer Iron, an important factor of many organisms, satisfies an assortment of vital living processes including DNA replication, protein synthesis and cellular respiration, essential for normal growth and propagation. However, iron also produces reactive oxygen species (“ROS”) via a chemical process in which there is a catalytic decomposition of hydrogen peroxide by ferrous ions, known as the Fenton reaction. This process may cause damage to the membrane lipid and DNA caused by ROS, known as lysosomal membrane permeabilization (“LMP”) rupturing and killing the cell by spilling its contents into the surrounding microenvironment and causing degradation in the surrounding extracellular milieu. Emerging evidence suggests iron may have a twofold role on cells, both stimulating cell growth and causing cell death, particularly a new form named ferroptosis, first described by the accumulation of iron-dependent lipid peroxides. 13 Figure 8: Role of Iron Research that has been published by us with respect to the active drug of HSB-1216 targeting chemotherapy resistant tumors suggests that it sequesters iron in the lysosomes of resistant tumor cells causing LMP of hard-to-treat cancer cells known as persister cells causing them to rupture and stop replicating. We believe an area of high interest for the development of HSB-1216 could be SCLC or TNBC or other rare cancers with high unmet need. 14 Figure 9: HSB-1216 Mechanism of Action One of the standard limitations to achieving successful cancer therapies is the manifestation of multidrug resistance (“MDR”) which is a cross-resistance to many commonly used drugs after repeat dosing. Extensive evidence to this point has shown that the mechanisms related to tumor MDR are complex and there is an urgent need to decipher the nuances of this phenomenon and discover new agents capable of evading resistance which can be applied to a clinical strategy in cancer. MDR can be developed by various ATP-binding cassette (“ABC”) transporters, including the well characterized ABCB1, also known as p-glycoprotein, which has been shown to be an important protein of the cell membrane and can transport a variety of molecules across extra- and intra-cellular membranes. The protein is an adenosine triphosphate (“ ATP”) dependent drug efflux pump that transports foreign substances out of the cell including drugs and xenobiotics with broad substrate specificity. HSB-1216’s active drug has been shown to block this ABC transporter in numerous studies as evidenced by drug efflux assays in MDR cell lines overexpressing these proteins by inducing a conformational change on the transporter protein itself rendering it ineffective. Furthermore, the byproduct of the Quatramer bio-degradable process results in formation of poloxamers which blocks the p-glycoprotein transporter system. This evidence may also allow other traditional chemotherapies, such as paclitaxel which is highly effected by these transporters, to stay in the cell and elicit anti-tumor effects in combination with HSB-1216. 15 HSB-1216 in Oncology Indications Our drug candidate, HSB-1216, has novel characteristics which may benefit patients with hard-to-treat recurrent tumors, such as TNBC in a number of ways. HSB-1216’s active drug, traditionally used as an anti-coccidial drug in livestock and poultry, has been shown to possess anti-cancer effects in a chemical screen on the basis that it has more than 100-fold potency compared to paclitaxel, a commonly used FDA-approved anti-cancer drug. The active compound is a monocarboxylic polyether compound first isolated from Streptomyces albus strain (Strain No. 80614) shown to eliminate self-renewing cancer cells which may remain dormant or undetectable in the presence of traditional chemotherapeutics, such as paclitaxel or other agents commonly used as first-line agents in a variety of tumors. Salinomycin alone could not be advanced further after its discovery as an anti-cancer agent for a variety reasons, including a short half-life along with a relatively narrow therapeutic index and potential toxicities. Subsequently, other groups have shown cytotoxicity of the compound on human neuronal cells showing it had an increase on cytosolic Na + concentrations consequently resulting in elevated cytosolic Ca 2+ . In addition, overdose or accidental ingestion of similar compounds has shown undesirable effects in cats, dogs, pigs, horses, as well as humans . These results and other data from third parties suggest it may be prudent to develop tissue-specific strategies to deliver the drug and prevent neuro-specific adverse events and capitalize on the specific mechanisms of HSB-1216’s active drug. Recent data from third parties suggest that the specific mechanisms of HSB-1216’s active drug are three-fold which include a novel selective iron-induced cell death known as ferroptosis, an ability to reverse a phenomenon known as epithelial-mesenchymal transition (“EMT”), as well as an ability to evade the ABC transporters, of which the latter two are linked to multidrug resistance to commonly used cancer chemotherapies. Clinical Data with HSB-1216’s Active Drug For several reasons, HSB-1216’s active drug was not established as a human drug due to several reports published by third parties in the past decades which reveal considerable toxicity in mammals such as horses, pigs, cats and alpacas after accidental oral ingestion or inhalation. It has been relegated to use in livestock as a coccidiostat and growth promoter. The European Food Safety Authority has declared an acceptable daily intake of 5 µg/kg . Based on these findings, the compound was therapeutically used in a “first-in-man” clinical pilot study conducted in Germany by the University of Heidelberg with a cohort of 7 patients with metastatic breast, ovarian and head and neck cancers in which tumor and metastatic regression were observed clinically in 4 patients with metastatic breast cancer, 1 patient with metastatic ovarian cancer, and 2 patients with squamous cell carcinoma (1 of the head and neck and the other of the vulva). Administration of 200– 250 μ g·kg −1 of active drug intravenously every second day for three weeks in these patients resulted in partial regression of tumor metastasis. Intravenous active drug therapy resulted in tachycardia and mild tremor for 30–60 minutes after administration but lacked side effects observed with conventional chemotherapeutic drugs, such as myelodepression, neutropenia, alopecia, nausea and vomiting, or gastrointestinal, thromboembolic, and neurological side effects. Only 2 of the 7 cases are described in the publication relating to this trial, both of which are detailed below showing that these promising results inducing cancer regression of heavily pretreated and therapy-resistant tumor types may define HSB-1216’s active drug to have novel effects as a clinically significant anticancer agent. Thirty months prior to treatment with the HSB-1216’s active drug, a 40-year-old female patient was diagnosed with unilateral ductal breast carcinoma (post-mastectomy and axillary lymph node dissection) and subsequently experienced a recurrence of the subcutaneous multifocal thoracic tumor that was ER, PR, and HER2 negative (i.e., “triple negative”) with vertebral bone metastasis. After all therapeutic options were exhausted, experimental treatment with HSB-1216’s active drug was recommended. The patient received 12 systemic administrations of intravenous (“IV”) treatment at a dose of 200 µg·kg -1 given every other day. After 12 cycles, there was a marked regression of the subcutaneous thoracic metastases (Figure 10). A biopsy of the metastatic tissue, as investigated by molecular histopathology, demonstrated that approximately 85% of the cells had undergone apoptosis. Additionally, serum levels of the tumor marker Ca 15-3 decreased from 14.3 U/mL before therapy to 7.2 U/mL after therapy. Similarly, serum levels of Carcinoembryonic antigen, another tumor marker, declined from 50.8 ng/mL to 15.5 ng/mL posttreatment. These results demonstrate that the drug was not only able to kill hard-to-treat cancers, but also more differentiated tumor cells and more importantly, highly indolent tumor cells displaying efficient mechanisms of resistance to cytotoxic drugs, radiation, and induction of apoptosis. 16 Figure 10: Clinical Pilot Study In a second case study, 18 months prior to treatment with HSB-1216’s active drug, an 82-year-old female patient was diagnosed with advanced and metastatic (pelvic lymphatic metastasis) squamous cell carcinoma of the vulva (after radical vulvectomy and bilateral lymph node dissection). Given a poor therapeutic response to existing treatments at the time and exhaustion of therapeutic options, experimental treatment of HSB-1216’s active drug in combination with erlotinib was recommended for this patient. The patient received 14 IV administrations of the drug at a dose of 200 µg·kg -1 given every other day plus erlotinib 150 mg daily for 30 days. Significant tumor regression was observed 30 days after combination therapy, based on clinical inspection of the tumor, as well as decreased serum level of squamous cell carcinoma (“SCC”) antigen from 11.3 ng/mL before combination therapy to 0.13 ng/mL after therapy. Three months post-treatment, SCC levels increased to 3.2 ng/mL, and clinical inspection demonstrated significant tumor progression. After experiencing numerous marked adverse effects with erlotinib (including fatigue, anorexia, nausea, and inappetence), the patient refused further treatment with erlotinib and was retreated with HSB-1216’s active drug as monotherapy. The patient received 12 IV administrations at a dose of 200 µg·kg -1 given every other day, which resulted in no progression and stable disease for 2 weeks, 4 weeks, and 4 months post-treatment, based on clinical inspection of the local tumor and no marked changes in SCC. Figure 11: 2012 – Human Serum Levels of the Tumor Marker Squamous Cell Carcinoma in vitro These results demonstrate that the drug is able to induce partial clinical regression of heavily pretreated and therapy-resistant cancers, particularly in combination with novel tumor-targeted drugs. 17 HSB-1216 Pre-Clinical Data HSB-1216’s active drug has been shown to target elusive cancer cells in different types of human cancers, including gastric cancer, lung adenocarcinoma, osteosarcoma, colorectal cancer, squamous cell carcinoma, and prostate, suggesting that the drug may be effective against side populations of many types of human cancers. The drug is able to enhance the cytotoxic effects of conventional chemotherapeutics and novel tumor-targeted drugs in regular cancer cells, potentially playing a central role for HSB-1216-based combination therapies in the future treatment of cancer. Figure 12: HSB-1216 Inhibits Tumor Growth in SCLC Mouse Model According to the National Cancer Institute’s Surveillance, Epidemiology and End Results, there are anticipated to be more than 230,000 new cases of lung cancer in the United States in 2021, and according to the American Cancer Society, SCLC comprises approximately 10-15% of all lung cancers. Although SCLC is responsive to chemotherapy, recurrence occurs rapidly, with less than 7% of patients surviving over five years. SCLC has shown to be responsive to immunotherapy with approximately one-third of patients responding to PD-1/PD-L1 therapy and achieving a median overall survival of approximately eight months. The need to rapidly advance therapeutics is an urgent, unmet medical need in these recurrent cases. In one pre-clinical mouse model of SCLC conducted by a third party in Asia, both HSB-1216’s active drug as well as HSB-1216 showed no antitumor activity in vivo , believed to be due to lab dilution errors of the test articles. The same articles showed marked antitumor activity in a tumor sphere model owing to the potent effects of both compounds. Our previous studies with HSB-1216 has shown a profound inhibition of tumor growth as a once-weekly injectable product in a nude mouse xenograft models utilizing an N-H69 SCLC cell line, with three 5 mg/kg doses administered over three weeks when compared to placebo. 18 Figure 13: HSB-1216 is 2x-4x more potent against chemo-resistant SCLC cell in vitro HSB-1216 is two to four times more potent in chemoresistant SCLC. Using chemoresistant cell lines for SCLC (NCI-H69AR), our approach demonstrates an increased potency of our compound using our Quatramer formulation when compared to standard-of-care therapies for these resistant tumor types. HSB-1216 Clinical Plan in Solid Tumors We intend to submit an IND for our HSB-1216 product candidate for solid tumors to the FDA in 2023, and, if approved, we plan to conduct a Phase 1 clinical trial to obtain human pharmacokinetic data and dose optimization data on our formulation thereafter; however, no assurance can be provided that our IND will be accepted by the FDA in 2023, if at all. Based on the data obtained from pre-clinical studies, we believe a Phase 1 basket trial can be conducted in the US with HSB-1216 where there are limited therapies. Even with the advent of immune checkpoint inhibitors (“ICIs”), there remains a large patient population which either does not benefit from allowing HSB-1216 to potentially prolong survival in ICI failures as well as recurrent disease patients. HSB-888: Our Dual-Loaded IMCD inducer and Ultra-Low Dose Next Generation Anthracycline Our HSB-888 product candidate has a component selected in pre-clinical screens for its similar cytotoxic activity to doxorubicin accompanied by its reduced cardiac toxicity. The component drug has been in use in Japan for more than two decades, and our clinical studies support its claim of similar efficacy to doxorubicin but with reduced toxicity. We intend to obtain approval of this product in the United States as a drug that can be used in the treatment protocol of recurrent osteosarcoma. HSB-888 combination could be a more tolerable therapy which may improve response rates, overall survival, and quality of life. We intend to submit an IND to the FDA in 2024 and, if approved, we plan to initiate a clinical trial in recurrent pediatric osteosarcoma. The active drugs of HSB-888 have been used clinically to treat tumors such as osteosarcoma, breast cancer, lymphoma and acute myeloid leukemia (“AML”) in countries outside the US such as Germany, Japan, China and India. One component compound has shown lower cardiotoxicity and greater antitumor effect than other anthracycline agents, commonly used in these tumors, due to the fact that it is taken up by tumor cells to a higher degree than other drugs in its class. This rapid uptake into tumor cells causes targeted incorporation into the cell’s DNA and causes cell cycle arrest. 19 Furthermore, in multidrug-resistant cells, we believe HSB-888 can disrupt cell cycle kinetics. Currently, the most important impediment to improving outcomes of patients with osteosarcoma is the clinical resistance to the primary chemotherapy, MAP, which is widely used. One of HSB-888’s active drugs has been shown to be taken up by tumor cells approximately 170 times faster than doxorubicin and distributes its DNA into tumor nucleus and intercalates. In MDR osteosarcoma cell lines (MG63/DOX), the drug was shown to have a marked cell inhibitory effect in both resistant and sensitive cells. In a retrospective Chinese study of relapsed and refractory osteosarcoma conducted by a third party, 3 of 23 evaluable patients who received only one of the active drugs of HSB-888 with cisplatin, had partial responses, with 1 patient after 7 cycles achieving disease free progression for more than 29 months. In another Chinese study, the 5-year disease-free survival (“DFS”) rate of the patients treated with the drug was 70.2%, significantly higher than that of the DOX-based regimen-treated group (53.1%). The drug decreased the lung metastatic rate significantly compared with the DOX-based regimen (19.1% vs. 36.7%, p =0.045), as well as the relapse rate (31.9% vs. 49.0%, p =0.067). The compound also showed lower rates of alopecia (63.8% vs. 85.7%, P =0.012), nausea and vomiting (51.1% vs. 79.6%, p =0.003), and mucositis (48.9% vs. 75.6%, p =0.003). It also resulted in lower cardiac toxicity and demonstrated that it is better than the DOX-based regimen in terms of the 5-year DFS rate, pulmonary metastasis rate, relapse rate and side effects . These data suggest that an updated regimen utilizing HSB-888 delivering two active drugs in refractory cases in a setting that would use high-dose methotrexate along with a platinum-drug may be warranted, and we intend to study these patients in a clinical trial, due to the high unmet need in this population. HSB-888 Low Dose Strategy Chemotherapies like anthracyclines, including doxorubicin and others in its class, have been used for decades as mainstay therapy in combination with other drugs for multiple tumor types, including osteosarcoma as first-line therapy. The most important issue is that although the regimen may benefit patients in this setting, there is a dose-limiting cumulative effect on the patient with these cytotoxic approaches whereby, after a maximum accumulation of dose over multiple cycles, the class of drug can longer be used in the recurrent setting for patients. The components of our HSB-888 product candidate are two anticancer drugs with distinct and complementary mechanisms of actions (ferroptosis and DNA intercalation) which together constitute an active combination for treating osteosarcoma. We investigated whether the efficacy of this combination could be improved by controlling drug ratios following in vitro and vivo administration. The combinations were evaluated systematically for drug ratio-dependent synergy in vitro using multiple tumor cell lines. In vitro screening informatics on drug ratio-dependent cytotoxicity identified a consistently antagonistic region between active drugs at various molar ratios, which also showed multiple synergistic ratios, dependent on the chemical characteristics of either DNA intercalating active drugs combined with a ferroptosis inducer. Co-formulations of these two agents were developed that maintained a fixed drug ratio for stability and release profiling over broad timelines. Drug ratio-dependent antitumor activity was demonstrated in vitro and in vivo for these ratios and improved antitumor activity was observed for the Quatramer 1:3 molar ratio of DNA intercalator:ferroptosis inducer (designated HSB-888) compared to drug cocktails in models tested. HS-888, is a fixed-ratio formulation of DNA intercalator and ferroptosis inducer, and a near-clinical candidate for development. Furthermore, our proprietary molar ratio as seen by its in vitro and in vivo efficacy profile enables a low dose to be administered that is presumably 5-fold to 10-fold less than the traditional DNA intercalator therapy that is currently utilized in multiple high unmet need tumor types. This low dose strategy may allow clinicians to treat a variety of tumor types requiring cytotoxic chemotherapy without the burden of dose-limiting toxicities for traditional chemotherapy. HSB-888 Synergy and Combination Index Extensive research suggests cancer drug combination may act in synergy, additively or antagonistic based on drug ratios of the separate compounds combined. While this relationship can be evaluated readily in vitro where drug ratios can be controlled, the translation of such information in vivo is complex due to the fact that individual drugs administered separately may be distributed, metabolized and eliminated differently. This prevents control of the drug ratio following administration and may result in exposure of cancer cells to antagonistic drug ratios with a corresponding loss of therapeutic activity. 20 Our approach with a combination of two drugs in HSB-888 as a dual drug-loaded formulation with our Quatramer strategy circumvents multiple hurdles when compared with administering compounds separately. A distinguishing feature of our technology is our proprietary Quatramer delivery platform which maintains drug combinations at the desired ratio after in-vivo administration. Drug combinations used to treat cancer are often encompassed with drugs which are highly varied in chemical and physical composition as well as properties. Subsequently, formulating such drug combinations with unrelated features into a single pharmaceutical approach that discharges both agents at the same or pre-determined different rates in the body as well as in the tumor tissue of choice presents a significant technical challenge. We have developed the Quatramer platform to provide versatility in controlling drug loading to specified drug loading and release rates with the precise retention properties for therapeutic agents from drug classes important for unmet need pharmaceutical development to benefit cancer patients. We have specifically identified cell-based screens and identified synergistic drug combinations of HSB-1216 and HSB-888 which have markedly different chemical attributes. With respect to our combination approach, we have controlled the ratio of the compounds in the delivery when prepared, maintained the ratio of the compounds within the carrier system while circulating in the blood and have ensured the release at the proper synergistic ratios when delivered to the tumor. This approach allows for the combination product HSB-888 to have different physicochemical properties of the original drugs and allows for the co-formulation and coordinated release of both drugs with widely different properties from the same particle. Figure 14: HSB-888 is 5 times more potent in synergy with HSB - 1216 in vitro HSB-888 Combination Drug Clinical Development Plan We intend to submit an IND to the FDA for HSB-888 in 2024 and, if approved, thereafter progress our program into a Phase 1 study to identify the dose of our formulation that would optimize the pharmacokinetic profile of the drug in line with the known cellular and human kinetic profiles in Japanese and Chinese studies; however, no assurance can be provided that our IND will be accepted by the FDA in 2024, if at all. We intend to work with the FDA to further progress a Phase 2 trial in a refractory sarcoma setting in patients who would benefit due to the cumulative doses of anthracycline regimens these patients have already received. We intend to develop our combination strategy that incorporates our Quatramer platform using HSB-888, a dual drug-loaded formulation that may be synergistic in mechanism to explore improved outcomes in these patients. 21 Recurrent Sarcoma Market Potential Sarcomas in a broad sense are tumors which are mesenchymal in nature capable of forming in connective tissue, blood, lymphatic and vessels, believed to also effect bone and soft tissue. They are rare and account for 1% of cancers, yet encompass about 13% of cases under the age of 20. Most common in bone are osteosarcoma and Ewing’s sarcoma, while those arising from soft tissue are commonly rhabdomyosarcomas. Other sarcomas, such as desmoplastic small round cell and synovial sarcoma are more common into adolescence and young adulthood. All of these tumors are treated with combination strategies including surgery, radiotherapy and traditional chemotherapy of various kinds with 5-year survival rates of 60-70% depending on histology and metastatic disease at diagnosis. Metastatic disease has a poor prognosis at about 20-30% 5-year survival, while recurrent disease is even worse at less than 20%. Recurrent osteosarcoma, either initially non-respondent to treatment or returning after an initial response, occurs in about 30-50% of patients with local disease and upwards of 80% in metastatic disease. The most frequent site of metastasis as well as recurrence is the lungs, and often times these patients undergo surgical resection of the tumor prior to continuing on therapy. Research has suggested that patients can benefit from multiple surgeries, but this does not obviate the need for systemic treatments to mitigate or eradicate the disease in recurrent cases, a significant high unmet need. Other than palliative approaches using bone-seeking radiopharmaceuticals, limited agents have been approved for this high unmet need tumor, predominantly in children and young adults. Vascular endothelial growth factor inhibitors as well as mechanistic target of rapamycin inhibitors and immunotherapy have been studied but none have been conclusive in elucidating a regimen that could be FDA-approved for this disease. Ewing’s sarcoma, the second most common bone sarcoma when it recurs, has a dismal prognosis with a 5-year overall survival less than 10%. Frontline therapy consists of vincristine, doxorubicin, cyclophosphamide, ifosfamide and etoposide in alternating cycles of interval compressed treatment. While chemotherapy regimens are used in frontline treatment, there remains no standard backbone therapy for recurrent or refractory cases. Rhabdomyosarcoma, the most common soft tissue tumor in young adults, has been historically treated with vincristine, actinomycin D, and cyclophosphamide as standard-of-care for the last 50 years. Desmoplastic round cell tumors as well synovial sarcomas are much more aggressive sarcomas and have had no new interventions in recurrent and refractory disease. All of these sarcomas, effecting younger patients, share the commonality of very poor prognoses when the cancer recurs or becomes refractory to standard-of-care treatment protocols, creating a vital urgency for novel treatments in these tumor types. HSB-510: Our Novel Bifunction HDAC6-PI3K-Delta Inhibitor Downregulates ¬c-myc Our HSB-510 product candidate is a novel highly targeted bifunctional inhibitory compound in Quatramer with single digit nanomolar IC50 against PI3K-delta and HDAC6, which is also known to downregulate c-myc , a highly pursued and yet undruggable cancer drug target. The Quatramer platform achieves optimal tumor targeting and bioavailability of the highly potent targeted small molecule. In October 2020, we renewed our Cooperative Research and Development Agreement with NCATS. The agreement enables NCATS to use our Quatramer drug delivery platform in formulations of HDAC-PI3K-delta dual inhibitors for the treatment of rare cancers, including AML and acute lymphoid leukemia (“ALL”). A series of compounds were rationally designed and synthesized as novel dual PI3K/HDAC inhibitors by incorporating a histone deacetylase pharmacophore into a PI3K inhibitor (Idelalisib) via an optimized linker. Several of these dual inhibitors were highly potent (IC50 < 10 nM) and selective against PI3Kγ, -delta and HDAC6 enzymes and exhibited good antiproliferative activity against multiple cancer cell lines. The lead compound induced necrosis in several mutant and FLT3-resistant AML cell lines and primary blasts from AML patients, while showing no cytotoxicity against several select normal cells. Target engagement of PI3K-delta and HDAC6 by the lead were demonstrated in specific cells using the cellular thermal shift assay. The compound also showed ideal pharmacokinetic properties in mice via intraperitoneal administration which provides a means to examine the biological effects of inhibiting these two enzymes with a single molecule, either in vitro or in vivo . Studies conducted by NCATS have shown that by disrupting multiple compensatory cytoprotective pathways, HDAC6-PI3K-delta dual inhibitors have therapeutic value. Our primary objective in conjunction with NCATS was encapsulation of NCATS’ developed HDAC6-PI3K-delta dual inhibitors into our proprietary, tumor infiltrating Quatramer platform to enhance delivery to malignant cells. We intend to continue our collaborative effort with NCATS through our Cooperative Research and Development Agreement, and we intend to expand such agreement and execute a license to this novel HDAC-PI3K-delta dual inhibitor to move the compound through further pre-clinical testing and into IND-enabling work. HSB-510 HDAC6 & PI3K-delta Inhibitor HDACs are an important class of epigenetic enzymes that regulate gene expression by removing acetyl groups from ε-amino lysine residues on histones. HDACs play an important role in regulating expression of various proteins, including tumor suppressors and transcription factors. Dysregulation of HDACs is involved in cancer initiation and proliferation. HDAC inhibition has emerged as a therapeutic approach for cancer and several inhibitors, including Vorinostat (“SAHA”), Romidepsin, Belinostat, Panobinostat, and Chidamide, have been approved in recent years Pan-HDAC inhibitors, such as Panobinostat and SAHA, modulate the acetylation status of a wide range of protein targets leading to a therapeutic response; however, these molecules also have undesirable side-effects, including hematological, gastrointestinal, and cardiac toxicity with less than disable efficacy. 22 Class I PI3Ks are lipid kinase enzymes that transduce signals from cell surface receptors (RTK, GPCR, etc.) to downstream effectors (AKT, mTOR, etc.), leading to a variety of cellular processes, including cell proliferation, survival, differentiation, metabolism, and angiogenesis. Specifically, class I PI3Ks phosphorylate phosphatidylinositol (4,5)-bisphosphate (PI(4,5)P2 or PIP2) in vivo to form the secondary messenger phosphatidylinositol (3,4,5)-trisphosphate (PI(3,4,5)P3 or PIP3). The PI3Kα and PI3Kβ isoforms are ubiquitously expressed, whereas PI3Kγ and PI3K-delta expression is limited to leukocytes. Aberrant regulation of class I PI3Ks has been implicated in several cancer types, and their inhibition continues to be an active cancer therapeutic area with at least four approved PI3K inhibitor drugs (Idelalisib, Copanlisib, Duvelisib, and Alpelisib) and several others in ongoing clinical trials. Despite tremendous progress in the discovery of PI3K inhibitors (“PI3Ki”) over the past decade, clinical trials conducted by third parties with PI3Ki as a monotherapy have shown poor efficacy prompting their evaluation in combination therapies and/or developing PI3K-based multitarget drugs. Although both PI3K and HDAC inhibitor drugs are limited by insufficient efficacy and resistance mutations, there is strong evidence that simultaneous inhibition of both PI3K and HDAC can synergistically inhibit tumor growth and address these limitations by improving efficacy, limiting resistance, and providing a better therapeutic window than single inhibitors. Figure 15: HSB-510 - Mechanism HSB-114 (TNF-alpha DNA) for Metastatic Soft Tissue Sarcoma TNF-α, identified in 1975, cloned in 1984 and named for its ability to induce necrosis of induced-sarcomas in mice, is a chemokine with potent tumoricidal properties. However, severe systemic toxicity (capillary leakage, disseminated coagulopathy, acidosis and shock) limited its use as an anticancer agent, until procedures were developed to use the cytokine in the clinic where high concentrations were infused into isolated limbs of sarcoma and melanoma subjects. It has since been shown that direct intratumoral injection can augment ICIs by slowing progression of tumors in various models, with unreliable efficacy due to the fact that levels of TNF produced must be sufficient to attract specific T cells to the tumor via signaling, notwithstanding TNF’s direct antitumor necrotic effects. Despite the potential to activate tumor cell death, physiological intratumoral levels of sufficient TNF concentrations are unlikely to induce cancer regression in patients utilizing the current strategies available to deliver this potent cytokine. Finding ways to selectively increase intratumoral TNF levels in tumors while managing the toxicity associated with such approaches remains a major unmet need. 23 Our HSB-114 product candidate is a novel immunotherapeutic agent which uses our proprietary Quatramer technology to deliver the human TNF-α gene to cancer cells. Previous immunotherapeutic strategies, including the payload of HSB-114, pHSB-114, used adenovector technology requiring replication deficient gene deletions and complex manufacturing controls in order to deliver the gene to the desired cells, although posed a theoretical risk of systemic toxicity and adjacent tissue damage due to overflow of TNF-α in blood from the tumor, had some dose-limited toxicities. In early phase trials of pHSB-114 in combination with radiotherapy conducted by GenVec Inc. (“GenVec”), significant clinical activity was observed in patients with metastatic melanoma, soft tissue sarcoma and locally advanced esophageal cancer. Anti-tumor activity was also observed in patients with pancreatic, rectal, and head and neck cancers. However, a Phase 3 trial conducted by GenVec in patients with locally advanced pancreatic cancer failed to demonstrate a survival benefit prompting discontinuation of the development of this agent. We believe our novel non-viral immunotherapeutic TNF-α gene therapy, HSB-114, builds on the pHSB-114 clinical development program with improved scalability and tunability providing efficacy with an overall enhanced safety profile to potentially minimize dose-limited toxicities. We have developed HSB-114 via a modified Quatramer delivery system which includes a peptide-DNA complex designed for maintaining the balance of DNA condensation and intracellular release and nuclear localization. For delivery in vivo , the system circumvents the challenge of DNA-nanoparticle serum interactions that have limited this field from progressing without use of a viral vector delivery scheme. Our results demonstrate that this approach is highly effective in conferring TNF-induced anti-tumor activity in the absence of toxicity ( Figure 5 ). Our findings further indicate that this system maybe broadly applicable for expression of intratumoral cytokines that promote immune recognition and destruction. Figure 16: 2017 – Antitumor Activity of HSB-114 in Mouse Model Clinical Data with pHSB-114 Two Phase 1 studies conducted by a third party evaluated TNF-α gene transfer therapy using a radiation-inducible polymer combined with ionizing radiation therapy in patients with soft tissue sarcoma and solid tumors. This combination therapy optimizes the therapeutic index of TNF-α by facilitating a synergistic supra-additive interaction between the two therapeutic modalities by selective destruction of the tumor vasculature leading to tumor necrosis. Further, this strategy allows for direct cellular toxicity by locally targeted induction of high concentrations of TNF-α within the tumor with minimal systemic toxicity. The studies, summarized below, provide preliminary evidence that pHSB-114 + radiotherapy is feasible, well tolerated, and provides a potential alternative to isolated limb perfusion. Phase I Study in Soft Tissue Sarcoma of the Extremities A Phase 1 dose-escalation study evaluated pHSB-114 and concomitant ionizing radiation therapy for up to 5 weeks in 14 adult patients with soft tissue sarcoma of an extremity. pHSB-114 was administered by intratumoral injection, twice weekly during the first week and once weekly during weeks 2-5 of radiation therapy. Three escalating dose levels of pHSB-114 were administered, with 3-6 patients treated per dose level, starting with a dose of 4 × 10 9 particle units (“pu”) and escalating in 1-log increments to a dose of 4 × 10 11 pu or until the maximal tolerated dose (“MTD”) was reached. There was no intrapatient dose escalation. Concomitant single-daily fractionated radiation was administered 5 days per week (total dose, 36-50.4 Gy). Surgery was performed in 11 patients whose tumor was resectable 3–9 weeks after radiotherapy ended. 24 An objective tumor response was observed in 11 patients, or 85%; of these, 2 were complete responses and 9 were partial responses. Of the 11 patients who had surgery, all were resected with negative margins. Pathological complete response was observed in 2 of the 11 patients. Of the 8 patients who had partial response, 4 had ≥ 95% tumor necrosis, which prognostically carries an improved long-term survival. Of the 2 patients who did not have surgery and received pHSB-114 for palliation, 1 had stable disease and the other had partial response. Tumor response assessment was not consistent between results obtained via computed tomography (“CT”) and those obtained via histological assessment after resection, whereby CT scans showed less response than pathological assessment in 9 of the 11 patients who had surgery, suggesting that the magnitude of the true anti-tumor response rate of pHSB-114 with ionizing radiation may be underestimated by CT scans, particularly if performed shortly after the end of treatment. HSB-1218: Research in Treating COVID-19 Coronaviruses (“CoVs”) are important human and animal pathogens, and at the end of 2019, a novel coronavirus emerged as the cause of a cluster of pneumonia cases in Wuhan, China. Since then the virus identified as severe acute respiratory syndrome coronavirus 2 (“SARS-CoV-2”) has been identified to causes the designated as COVID-19. According to Johns Hopkins Coronavirus Resource Center, the global cases of COVID-19 have reached over 446 million confirmed cases and more than 6 million reported deaths as of March 7, 2022. While there are no specific clinical features which can reliably distinguish COVID-19 from other viral respiratory infections, development of dyspnea, anosmia and myalgias were strongly associated with a positive microbiologic test. There has been much research on finding effective vaccines and therapeutics against SARS-COV-2, including remdesivir, chloroquine or hydroxychloroquine, convalescent plasma and other antibody based therapies, as well as IL-6 inhibitors, direct and indirect acting antivirals, immunomodulatory agents as well as antibiotics including azithromycin, and anti-helminthics such as ivermectin are all in various stages of testing and clinical development. It has been reported that CoVs present and adhere to host cells via Angiotensin-Converting Enzyme-2 (“ACE-2”) receptor-mediated endocytosis, which is a pH-dependent process. In this process, Spike (S) protein plays a major role in receptor binding and membrane fusion of SARS-CoV-2 for access into host cells. It is a large transmembrane protein on the surface of the virus consisting of two subunits, including the S1 subunit necessary to fit with the ACE-2 receptor for viral entry. Subsequent to binding, SARS-CoV-2 enters the cytosol of the host cell, by pH-dependent proteolytic cleavage of spike protein by transmembrane protease serine 2, a plasma membrane-anchored protease that participates in proteolytic cascades of several human proteins, including those relevant to the normal function of the human prostate. This host protein primes the S1 subunit and promotes viral uptake and host cell entry. Then, the combination of viral and host cell membranes occurs in acidified endosomes, permitting viral genomes to affect host cells with the aid of the S2 subunit. Our HSB-1218 product candidates uses our Quatramer tunable technology to encapsulate a potent antiviral and deploy the agent either systemically or in an inhaled formulation to target SARS-CoV-2. Evidence suggests the payload of HSB-1218’s active drug inhibits replication of viral RNA in the cytoplasm by altering the pH. We believe this product candidate has the potential to prevent the entry of SARS-CoV-2 into the cytosol and prevent membrane fusion (a pH-dependent process). Further, it has been reported to interact with the S-protein, and impact ACE-2 attachment and impede the release of viral RNA into the cytoplasm identifying the active component as a potential antiviral agent against SARS-CoV-2. In 2021 we conducted studies in BSL3 laboratory to assess activity of HSB-1218 against SARS-CoV-2 virus grown in Vero E6 cells. The results demonstrated that treating tissue culture cells with HSB-1218 either before or after challenge with SARS-CoV-2 virus can protect cells from virus induced cytotoxicity and significantly reduce the accumulation of virus titers in culture supernatants. In pre-treatment experiments, treatment of cells with 5 micromolar HSB-1218 had the most significant impact on both inhibition of virus induced cytotoxicity and virus titers at 72 hours post-infection and treatment with as little as 1 micromolar HSB-1218 reduced virus titers below the limit of detection at 24 hours post-infection. Treatment of cells with 10 micromolar HSB-1218 following infection reduced virus titers in the culture supernatant below the level of detection and inhibited virus induced cytotoxicity. We are continuing further mechanistic studies in order to identify the antiviral effect of HSB-1218 against SARS-CoV-2. 25 Figure 17: HSB-1218 - Dose dependent effect of HSB-1218 in an in vitro COVID-19 Model We believe HSB-1218, which utilizes our Quatramer delivery technology, may offer an approach for effective use of this agent as an antiviral delivered to the site of infection in attacking SARS-CoV-2, and we intend to continue to develop this compound and seek government and other funding to further develop this program. Iron Mediated Cell Death Inducer Analogues Program In December 2019, we acquired intellectual property and data related to analogues of HSB-1216’s active drug with varying molecular constructs with increased efficacy against a subgroup of tumors consisting of breast, pancreatic and prostate cancers. Several lead analogues have demonstrated increased potency when compared to HSB-1216’s active drug, whereby the increased potency of these compounds is expected to have ferroptotic effects greater than HSB-1216’s active drug at micro-dosage levels, creating an increased therapeutic index as novel small molecules. We expect to develop these advanced compounds as follow-on therapeutics to HSB-1216 to treat a variety of high unmet needs, including orphan cancers, which are sensitive to the ferroptotic pathway. Quatramer Technology Overview Our proprietary Quatramer technology is based on know-how and permits manufacture of uniform size polymer aggregates that can be packaged and tuned specifically to interact with pharmaceutical drugs, biological molecules and/or combinations of molecules to bypass delivery problems. The system is biocompatible and can be tailored to form therapeutics which solubilize the drug in aqueous media such as human plasma and blood which dramatically increases the amount of drug available at the disease site while administering a lower dose. 26 Figure 18: Quatramer Platform - Disintegration Our studies have shown that targeted delivery of drugs to a site of action, including tumors, is directly related to the length of time of a circulating therapeutic in the bloodstream. This is an expected outcome as most drug delivery formulations delivering payloads to sites of action are cleared extremely rapidly by the reticuloendothelial system (“RES”) in the liver. The stealth nature of our technology allows for a prolonged circulation time whereby there is accumulation at the site of disease prior to being cleared. Figure 19: Scanning electron microscopy (SEM) of Quatramer 27 The size, shape and surface of our Quatramer allows it to escape via gaps in the blood vessels in the TME allowing for release of the payload directly into cancerous cells. Furthermore, the system functions as a “peeling onion” in coordinated and precise acidic versus basic conditions depending on the TME as well as inside cancerous cells. Certain portions of the technology release a payload due to its own physicochemical characteristics while the core of the Quatramer system would release a different payload depending on its own chemical and physical properties. This type of a profile for certain of our Quatramer therapeutics, particularly our combination products, are specifically designed to cleave or disperse in response to external stimuli causing internal changes for delivery and is a designed approach to our size tunable vehicles. This designed size tunable feature of certain of our Quatramer compositions offer further advantages, as certain cleaved materials create a reversal of drug resistance in cells. Drug resistance can be classified into two categories: de novo resistance or acquired resistance. Cancer patients that exhibit de novo resistance do not respond to chemotherapy from the start. However, in acquired resistance, the cancer cells initially respond to a drug but eventually acquire resistance to it and the cells might also show cross-resistance to other structurally and mechanistically unrelated drugs, a phenomenon commonly known as MDR whereby treatment regimens that combine multiple agents with different targets are no longer effective. Our Quatramer technology circumvents this phenomenon upon cleavage of the payload from the system, whereby the remnants of the system, such as certain hydrophobic chains flanked by hydrophilic chains which are not related to therapeutic efficacy, cause drug efflux pump blockage and allow the payload to continue to be effective in MDR cellular systems both in vitro and in vivo . Quatramer physicochemical characterization allows for optimizing size, shape and surface chemistry based on payload characteristics to render enhanced permeation and retention into the TME. Our scientific know-how and scientific expertise in developing Quatramer based therapeutics has led to understanding the optimal conditions for encapsulating therapeutics of different physicochemical characteristics into our proprietary delivery, and the combination of multiple materials used varies depending on the drug itself, causing a highly specific tunability platform that can be scaled. The proprietary know-how behind our Quatramer structures with multiple layering allows for therapeutics of different levels of hydrophilicity and hydrophobicity to interact within aqueous mediums of varied acid-base conditions, including human serum and blood. The importance of the Quatramer structure extends the certain aspects of the core and thereby has the capacity to increase drug uptake and sustain its release over long periods of time, including over many days and weeks in both in vitro and in vivo systems. Our Quatramer technology has been designed to be a scalable process with production efficiency whereby the analysis of the output of a designed chemistry, manufacturing and controls system creates a predictable and uniform product with controllable capability and cost efficiency. Chemical compositions listed in the FDA Inactive Ingredients Database with known profile. Combined with the tunability of Quatramer, the technology allows for a variety of delivery payloads including peptides, small molecules, nucleic acids and antibodies with the added flexibility of dual-loaded payload therapeutics. The payload diversity and flexibility of the system coupled with its numerous advantages allows for a targeted system with prolonged circulation time, which takes advantage of an efficient EPR effect with numerous mechanistic features deployed at various conditions with the TME as well as in intracellular environments, which makes the methodology of Quatramer therapeutics, a highly advantageous platform to deliver low doses of therapeutics directly to tumors. Trident Artificial Intelligence Platform Overview Tumor cells are constantly undergoing phenotypic switching that may or may not be dependent on the drug target and without additional secondary genetic mutations but are now understood to engage three different mechanisms: EMT, Dedifferentiation/Trans differentiation and Treatment-induced tolerance. These stepwise phenotypic transitions through a slow cycling state potentially induce a synthetic lethal sensitivity of key driver functional pathways making them amenable to novel therapeutic strategies. These phenotypic transitions present novel opportunities for targeting specific drug pathways and gene circuits which none of the conventional approaches are designed to do. We recognize these dynamical aspects which make cancer a constantly evolving progressive disease and are taking a biomarker-guided approach to drug development that will maximize treatment benefit for patients. We are developing TAI, a drug targeting technology platform, to enable the development of rational therapeutic strategies to target the plasticity of cancer cells associated with drug resistance. TAI aims to establish clinical development by applying state-of-the-art deep learning artificial intelligence technologies to patient-based multi-modal datasets. 28 Our TridentAI platform: ● Has the ability to create a Ferroptomics Atlas which integrates diverse multi-omics datasets including not only genomics, epigenetics and transcriptomics but also emerging proteomics data which enable identification of dynamical re-wiring of intra-tumoral signaling circuitry designed to target IMCD; ● Has the ability to identify biomarkers that potentially differentiate between progression of cancer plasticity and correlate it to degree of sensitivity to a synthetically lethal target that is induced with standard-of-care treatment and development of resistance; and ● Is designed to classify and select patients that are most likely to respond to treatment. TridentAI is based on a deep learning engine that identifies synthetic lethal sensitivities associated with degree of cell plasticity using biomarkers that can be translated for patient selection. TridentAI is designed to maximize enrichment for patients who are most likely to respond to treatment and thus de-risks clinical development. Cell plasticity is a leading contributor to drug resistance Tumor cells are constantly undergoing phenotypic switching that may or may not be dependent on the drug target and without additional secondary genetic mutations. Three critical mechanisms are understood to be involved which are engaged more or less simultaneously. These are EMT, dedifferentiation and transdifferentiation, and transient drug-induced tolerance. EMT is characterized by both morphological and molecular changes characterized by loss of apical-basal polarity and epithelial cell junctions leading to changes in cellular composition of basement membrane, altering intra- and inter- cellular signaling, and eventually resulting in metastasis. At the same time, distinct compartments of the epithelium maintained by different pools of resident stem cells begin to transdifferentiate or even reverse completely and dedifferentiate upon treatment. For instance, epidermal growth factor receptor (“EGFR”)-driven non-SCLC are observed to convert towards a SCLC phenotype upon EGFR inhibition and melanoma cells dedifferentiate progressively through transitory and neural crest-like states under v-raf murine sarcoma viral oncogene homolog B1 inhibitor treatment. 29 Figure 20: Cell plasticity is a leading contributor to drug resistance Lastly, tumor cells undergo a slow-proliferating drug-tolerant state, called drug-tolerant persisters, before further developing secondary mutational drug-resistance. This phenomenon has been observed in glioblastomas, melanomas and non-SCLC. Collectively, these stepwise transitions through a slow cycling state potentially induce a synthetic lethal sensitivity of key driver functional pathways making them amenable to novel therapeutic strategies. This presents a novel opportunity for drug targeting to identifying treatment-induced, state-specific, synthetically lethal drug-target pairs. Conventional approaches to drug targeting are limiting Conventional approaches to drug targeting are not equipped to handle the challenges of identifying synthetic lethal drug-target pairs. Signature-reversion principles or guilt-by-association strategies used to uncover drug-drug or drug-disease similarity have yielded few successes due to large transcriptional differences between in vitro long-lived cell lines and in vivo TME. Chemical similarity approaches have their pitfalls - errors in chemical structures as well as physiological effects that exist beyond the structural relationship limit the use for drug targeting. Structure-based molecular docking virtual screens, for predicting drug-target pairs, are limited by lack of widespread availability of 3D protein structures for drug targets and poor predictability of target binding affinity. Pathway or network-based approaches to integrate gene expression patterns, protein interactions and genome-wide association study data help identify enrichment of drug targets but do not yield biomarkers that can be translated for patient selection. None of these approaches are designed to search for context-specific synthetic lethal targets. 30 Figure 21: Conventional approaches to drug repurposing are limiting TridentAI is a Deep Learning Engine that identifies synthetic lethal sensitivities associated with degree of cell plasticity TridentAI takes a multi-pronged approach to address each of the leading causes of tumor plasticity as the disease progresses namely EMT, dedifferentiation/transdifferentiation, and transient drug-induced tolerance and sensitivity. The platform builds on a deep foundation of diverse multi-modal and multi-omic private and public datasets which include not only genomic and transcriptomic data from patient derived blood or biopsy samples and sublines, and pan-cancer epigenetic and transcriptional drug response data from TCGA, Cancer Cell Line Encyclopedia and Genomics of Drug Sensitivity in Cancer, but also human cancer proteome datasets from emerging global efforts that include Human Cancer Proteome Project, The Cancer Proteome Atlas and The National Cancer Institute’s Clinical Proteomic Tumor Analysis Consortium. Inclusion of proteomics data is very critical for identifying dynamical re-wiring of intra-tumoral signaling circuitry which is likely to be missed if one looks at the genomic and transcriptomic level alone. TridentAI is a deep learning engine that integrates in vitro and in vivo epigenetic, transcriptomic and proteomic data characterizing genomic alterations, methylation states, cellular differentiation, and drug tolerance to identify: ● Biomarker fingerprints that deconvolve a heterogenous tumor biopsy into a discrete phenotypic state along a gradient of progressive cellular plasticity; ● Network of dis-regulated functional pathways that underscore a patient’s pathology; and ● Indication-specific synthetic-lethal sensitivities to drugs. TridentAI utilizes state-of-the-art convolutional neural networks to classify and select patients based on their tumor-derived multi-comic profiles thus enabling a targeted synthetic-lethal approach to kill persistent tumor cell populations and treat patients in select indications. 31 Figure 22: TridentAI identifies synthetic legal sensitivities associated with degree of cell plasticity TridentAI maps the phenotypic tumor transition from a high-dimensional landscape onto a quantitative, measurable one-dimensional scale TridentAI traces the complex high-dimensional landscape of tumor progression to identify biomarkers that mark milestones in this continuum and enable quantification of degree of plasticity along the trajectory. TridentAI’s deep learning engine trains a model that can reduce this high-dimensional information into a one-dimensional quantitative and measurable scale which provides the degree of plasticity in a biopsy sample or cell line dataset. TridentAI’s unbiased search in the vast repository of multi-modal datasets enables identification of synthetic lethal sensitivities that correlate linearly but contrast with degree of plasticity. This biomarker-guided, state-specific approach enables to successfully deconvolve signals from a heterogenous tumor biopsy into a discrete phenotypic state along a gradient of progressive and divergent cellular plasticity and complementary synthetic lethal sensitivity. Figure 23: TridentAI maps the phenotypic transition of tumor onto a quantitative, measurable one-dimensional scale TridentAI is designed to establish clinical development and deliver on the promise of precision medicine 32 TridentAI is designed to deliver on our ultimate goal, which is to identify and treat the right patients that are most likely to benefit from treatment. Using TridentAI, biomarkers measured in patient blood/biopsy samples will assist in determining the degree of plasticity for a specific patient, which will then directly inform about a patient’s sensitivity to activation/inhibition of the synthetically lethal target and probability of successful treatment. More than just de-risking clinical development, TridentAI aspires to deliver on the promise of precision medicine by building a platform based on the robust foundation of patient-based biomarker research and deep learning artificial intelligence technologies. TridentAI has successfully identified biomarkers correlating dedifferentiation in melanoma with sensitivity to inhibitors of ferroptosis. Figure 24: TridentAI is designed to establish clinical development Our Strategy Our goal is to disrupt the biotechnology landscape by developing novel therapeutics by leveraging both our targeted-delivery Quatramer platform-based therapeutics and our TAI platform to address significant unmet medical needs, with a focus on treatments for cancer. We believe that our technology has the potential to generate differentiated products that have the potential to treat rare and treatment resistant tumors. Our business strategy includes: ● Developing drug candidate, HSB-1216, in solid tumors. Data from a clinical pilot study conducted in Germany by the University of Heidelberg led us to progress HSB-1216 into IND-enabling studies with the goal of submitting an IND to the FDA in 2023. These IND-enabling trials are pre-clinical in nature and include toxicology and pharmacokinetic profiling as well as bioanalytical assay development. We engaged in discussions with the FDA in 2020 and expect to use the 505(b)(1) FDA approval pathway and conduct a Phase 1 trial to obtain initial pharmacokinetic and dosing information in patients. We intend to evaluate the development of HSB-1216 in other high-unmet need oncology indications, including certain brain, breast and prostate cancers, and in combination with other cancer therapies. ● Developing our combination drug candidate, HSB-888, for pediatric sarcomas. HSB-888 is in IND-enabling trials with the goal of submitting an IND to the FDA in 2024. These trials are pre-clinical in nature and include toxicology and pharmacokinetic profiling as well as bioanalytical assay development. Based on this data we plan to initiate discussions with the FDA in 2024 and intend to use the 505(b)(1) FDA approval pathway and conduct a Phase 1 trial for obtaining initial pharmacokinetic data and determine the optimized dose in patients. We intend to demonstrate the safety and efficacy in a Phase 2 program in a basket trial enrolling patients with recurrent cancers due to multiple sarcomas, including Ewing’s sarcoma, rhabdomyosarcoma and eligible osteosarcoma patients. 33 ● Leveraging our Trident Artificial Intelligence Platform. TAI is a computational intelligence platform that identifies synthetic lethal sensitivities associated with degree of cell plasticity. We undertake a multi-pronged approach to address each of the leading causes of tumor plasticity as the disease progresses including epithelial to EMT, dedifferentiation/transdifferentiation, and transient drug-induced tolerance and sensitivity. The platform builds on a deep foundation of diverse multi-modal and multi-omic private and public datasets which include not only genomic and transcriptomic data from patient derived blood or biopsy samples and sublines, and pan-cancer epigenetic and transcriptional drug response data. ● Developing and commercializing Quatramer in collaboration with leading pharmaceutical companies. In addition to our internal development programs, we actively seek opportunities to collaborate with recognized biopharmaceutical companies to develop Quatramer incorporating therapeutic payloads from their proprietary product portfolios. We intend to establish collaborations with industry leaders and strategic pharmaceutical organizations. ● Leveraging our novel platform to develop a pipeline of high value Quatramer leads. The tunability of our technology allows us to efficiently expand our pipeline of Quatramer, both on our own and in collaboration with others, through various combinations of targeted DNA encoded for anti-tumor cytokines and therapeutic payloads, which enables us to move into other areas of oncology, including immuno-oncology whereby we could potentially increase the effectiveness of ICIs. ● Commercializing proprietary Quatramer based products, including HSB-1216, directly in the United States and with collaborators outside the United States. We own HSB-1216 and our other proprietary pipeline and expect to maintain similar rights with respect to other proprietary Quatramer we develop. We intend to build a focused oncology sales organization to market Quatramer in the United States following FDA approval. Outside the United States, we expect to rely on collaborators to commercialize proprietary approved Quatramer. ● Continuing to extend and protect our product technology and Quatramer through our intellectual property portfolio. We seek to protect our novel platform through U.S. and international patents as well as know-how and trade secrets relating to the design and manufacturing of our technology. We expect to continue to file patent applications as we apply our technology to new targets and therapeutic payloads. In addition, we believe the heightened regulatory requirements for generics of this technology may strengthen the protection afforded by our intellectual property portfolio. Our Team Our Chief Executive Officer and directors have extensive scientific, drug development, and commercialization experience across pertinent disciplines including oncology; small molecule, peptide and antibody drug manufacturing and quality; clinical drug development, and commercialization. Our Chief Executive Officer and directors have held various research, clinical development, artificial intelligence, strategy, corporate development and operational positions at large biopharmaceutical companies , public biotechnology companies, and universities having worked at companies such as DuPont Merck Pharmaceuticals, Amgen Inc., Exelixis, Inc., Salix Pharmaceuticals, Inc., Global Cancer Research Institute, Sanofi and UCLA School of Medicine. Our Chief Executive Officer and directors have been involved in the discovery, development, manufacturing and commercialization of multiple marketed products across various therapeutic areas, including, but not limited to, Cabometyx ® (cabozantinib), Remicade ® (infliximab) and Clolar ® (clofarabine). 34 Competition The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products and intellectual property. We face competition from m ajor multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, emerging and start-up companies, universities and other research institutions both in the United States and internationally. Any drug candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future. Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Earlier stage companies, such as smaller discovery phase biotechnology companies, may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Some of our competitors include BridgeBio Pharma, Inc. (Ferro Therapeutic, Inc.), Kojin Therapeutics, Inc., Bayer AG and The Broad Institute of MIT and Harvard, Moderna Inc. and Takeda Pharmaceutical Company. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours. In addition, our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of generic products. Generic products are currently on the market, including the therapeutics payload in HSB-1216 and HSB-888, for the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years. If our drug candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products. The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy and targeted drug therapy. There are a variety of available drug therapies marketed for solid tumors. In many cases, these drugs are administered in combination to enhance efficacy. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis, including drugs in the same therapeutic class as the payloads contained in HSB-1216 and/or HSB-888. Many of these approved drugs are well established therapies and are widely accepted by physicians, patients and third-party payers. In general, although there has been considerable progress over the past few decades in the treatment of solid tumors and the currently marketed therapies provide benefits to many patients, these therapies all are limited to some extent in their efficacy and frequency of adverse events, and none of them are successful in treating all patients. As a result, the level of morbidity and mortality from solid tumor cancers remains high. There are also a number of products in late-stage clinical development to treat solid tumors including, but not limited to, Merck & Co Inc. (Keytruda), Bristol-Myers Squibb Co. (Opdivo), AbbVie Inc. (Imbruvica), Roche Group (Tecentiq), Regeneron Pharmaceuticals, Inc. (Libtayo) and Eli Lilly & Co (sintilimab). These products in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for our product candidates for which we obtain marketing approval. Intellectual Property Our commercial success depends on our intellectual property, and we strive to protect it, by, among other things, obtaining, maintaining, defending, and enforcing our patents in the United States and internationally for our proprietary technology, improvements, platforms, products and components thereof, novel biological discoveries, new therapeutic approaches and potential indications, and other inventions that are important to our business. For our product candidates, generally we initially pursue patent protection covering compositions of matter, methods of production, and methods of use. Throughout the development of our product candidates and technologies, we will seek to identify additional means of obtaining patent protection. 35 As of March 21, 2022, our utility patent portfolio includes six patent families, as set forth below. These families include issued patents and pending applications related generally to our polymeric nanoparticle technologies, methods of making our polymeric nanoparticle technologies, and methods of using our polymeric nanoparticles therapeutically ( e.g ., for delivery of therapeutic compounds). We own all of the patents set forth below and currently do not out-license any of our patents to third parties. Patent Family #1 (HSB-1216; HSB-510; HSB-888; HSB-407; and HSB-114): Jurisdiction Title Status Expiration Date Europe Polymeric Nanoparticles and A Process of Preparation Thereof Granted Validated CH, DE, ES, FR, GB, IT, NL 2033 Europe Polymeric Nanoparticles and A Process of Preparation Thereof Pending — Japan Polymeric Nanoparticles and A Process of Preparation Thereof Granted 2033 Japan Polymeric Nanoparticles and A Process of Preparation Thereof Granted 2033 Japan Polymeric Nanoparticles and A Process of Preparation Thereof Pending — USA Polymeric Nanoparticles and a Process of Preparation Thereof Issued 2034 USA Polymeric Nanoparticles and a Process of Preparation Thereof Issued 2033 USA Polymeric Nanoparticles and a Process of Preparation Thereof Pending — Patent Family #2 (HSB-1216): Jurisdiction Title Status Expiration Date Australia Polymeric Nanoparticles Comprising Salinomycin Pending — Canada Polymeric Nanoparticles Comprising Salinomycin Pending — China Polymeric Nanoparticles Comprising Salinomycin Pending — Europe Polymeric Nanoparticles Comprising Salinomycin Pending — Japan Polymeric Nanoparticles Comprising Salinomycin Pending — South Korea Polymeric Nanoparticles Comprising Salinomycin Pending — USA Polymeric Nanoparticles Comprising Salinomycin Pending — 36 Patent Family #3 (HSB-384): Jurisdiction Title Status Expiration Date China Polymeric Nanoparticles Pending — Europe Polymeric Nanoparticles Pending — Hong Kong Polymeric Nanoparticles Pending — Japan Polymeric Nanoparticles Pending — USA Polymeric Nanoparticles Pending — Patent Family #4 (HSB-114): Jurisdiction Title Status Expiration Date China Polymeric Nanoparticles Pending — Europe Polymeric Nanoparticles Pending — Hong Kong Polymeric Nanoparticles Pending — Japan Polymeric Nanoparticles Pending — South Korea Polymeric Nanoparticles Pending — USA Polymeric Nanoparticles Pending — Patent Family #5 (HSB-407): Jurisdiction Title Status Expiration Date Australia Polymeric Nanoparticles Comprising Bortezomib Pending — Canada Polymeric Nanoparticles Comprising Bortezomib Pending — China Polymeric Nanoparticles Comprising Bortezomib Pending — Europe Polymeric Nanoparticles Comprising Bortezomib Pending — Hong Kong Polymeric Nanoparticles Comprising Bortezomib Pending — Japan Polymeric Nanoparticles Comprising Bortezomib Pending — South Korea Polymeric Nanoparticles Comprising Bortezomib Pending — USA Polymeric Nanoparticles Comprising Bortezomib Pending — Patent Family #6 (HSB-1216): Jurisdiction Title Status Expiration Date USA Salinomycin Derivatives and Therapeutic Uses Thereof Granted 2036 The term of individual patents depends on the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the U.S., the term of a patent may be lengthened by patent term adjustment (“PTA”), which compensates a patentee for administrative delays by the USPTO in examining and granting a patent or the term of a patent may be shortened if a patent is terminally disclaimed over an earlier filed patent. The term of a patent that covers a drug or biological product may also be eligible for patent term extension (“PTE”) after FDA approval for a portion of the term effectively lost as a result of the FDA regulatory review period, subject to certain limitations and provided statutory and regulatory requirements are met. PTE can be for no more than five years, typically only one patent per approved product can be extended, the extension cannot extend the total patent term beyond 14 years from approval, and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. In addition, the length of the adjustment or extension granted could be less than that requested, and we may not receive the full PTA or PTE available if we fail to exercise due diligence during the testing phase or regulatory review process, fails to apply within applicable deadlines, fails to apply prior to expiration of relevant patents, or otherwise fails to satisfy applicable requirements. 37 In addition to patents, we rely on trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. However, trade secrets and know-how can be difficult to protect. We take measures to protect and maintain the confidentiality of proprietary information in order to protect aspects of the business that are not amenable to, or that we do not consider appropriate for, patent protection. We require employees, consultants, outside scientific partners, sponsored researchers and other advisors to execute confidentiality agreements with us on or prior to the commencement of employment or consulting relationships with us. These agreements also require such individuals to assign to us any inventions conceived in the course of employment or consulting relationships with us. We have also filed a trademark applications with the USPTO for “HILLSTREAM BIOPHARMA” for pharmaceutical preparations for use in cancer treatment and therapies” and for “QUATRAMER” for nano particle technologies and nanoparticle technologies for cancer therapy and treatment, namely, drug delivery agents in the form of nanoparticles that provide controlled release of active ingredients for a wide variety of pharmaceuticals for the treatment of cancer. Manufacturing We do not own or operate any facilities in which we can formulate or manufacture our product candidates. We intend to rely on contract manufacturers to produce all materials required to conduct pre-clinical studies and clinical trials under current good manufacturing practice (“cGMP”), with oversight of these activities by our management team. We have identified alternate sources of supply and other contract manufacturers that can produce materials for our pre-clinical and clinical trial requirements on a timely basis. However, if an existing or future contract manufacture fails to deliver on schedule, or at all, it may delay or interrupt the development process for our product candidates which may have an adverse effect on our operating results and estimated timelines. Recent Developments On January 14, 2022, we closed the initial public offering of our common stock pursuant to which we issued and sold an aggregate of 3,750,000 shares of our common stock for a purchase price of $4.00 per share. We received net proceeds of approximately $13.0 million, after deducting underwriting discounts and commissions and offering expenses borne by us. In connection with the closing of our initial public offering, in January 2022, notes in the aggregate amount of $3,920,640, including interest accrued thereon, were converted into an aggregate of 1,225,384 shares of our common stock. As of March 21, 2022, we have no outstanding convertible notes. Government Regulations Governmental authorities in the U.S. and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of pharmaceutical products such as those being developed by us. In the U.S., the FDA regulates such products under the FDCA and its implementing regulations. Failure to comply with applicable FDA requirements, both before and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution. 38 U.S. Food and Drug Administration Regulation United States Drug Development In the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under the FDCA and its implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice regulations; ● submission to the FDA of an IND, which must become effective before human clinical trials may begin; ● performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and clinical study related regulations, referred to as Good Clinical Practice (“GCP”), to establish the safety and efficacy of the proposed drug for its proposed indication; ● submission to the FDA of a new drug application (“NDA”); ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with the FDA’s cGMP requirements; ● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and ● FDA review and approval of the NDA prior to any commercial marketing or sale. Once a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an institutional review board (“IRB”) must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. 39 Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: ● Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients. ● Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule. ● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling. Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register them and post the results of completed clinical trials on a government-sponsored database, www.clinicaltrials.gov , in the United States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions. Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated check points based on access to certain data from the study. The clinical trial sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate. Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. NDA and FDA Review Process The results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA, which request approval to market a new drug product. The submission of an NDA is subject to the payment of a substantial user fee, and the sponsor of an approved NDA is also subject to an annual program user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review. 40 The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt. The decision to accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and may go through multiple review cycles. After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of an NDA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all. Before approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter describes specific deficiencies in the NDA identified by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data. There is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant difficulties or costs during the review process. If a product receives marketing approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects of approved products. For example, the FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA may also place other conditions on approvals, including the requirement for a REMS to assure the safe use of the drug. If the FDA concludes a Risk Evaluation and Mitigation Strategy (“REMS”) is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing. 41 Orange Book Listing and Paragraph IV Certification For NDA submissions, including those under Section 505(b)(2), applicants are required to list with the FDA certain patents with claims that cover the applicant’s product. Upon approval, each of the patents listed in the application is published in Approved Drug Products with Therapeutic Equivalence Evaluations , commonly referred to as the Orange Book. Any applicant who subsequently files an abbreviated new drug application (“ANDA”) or 505(b)(2) NDA that references a drug listed in the Orange Book must certify to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. This last certification is known as a Paragraph IV Certification. If an applicant has provided a Paragraph IV Certification to the FDA, the applicant must also send notice of the Paragraph IV Certification to the holder of the NDA for the approved drug and the patent owner once the application has been accepted for filing by the FDA. The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV Certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV Certification prevents the FDA from approving the ANDA or 505(b)(2) application until the earlier of 30 months from the date of the lawsuit, the applicant’s successful defense of the suit, or expiration of the patent. Reimbursement Potential sales of any of our product candidates, if approved, will depend, at least in part, on the extent to which such products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services. A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our future revenues and results of operations. Decreases in third-party reimbursement or a decision by a third-party payor to not cover a product candidate, if approved, or any future approved products could reduce physician usage of our products, and have a material adverse effect on our sales, results of operations and financial condition. In the United States, the Medicare Part D program provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain products. We do not know whether our product candidates, if approved, will be eligible for coverage under Medicare Part D, but individual Medicare Part D plans offer coverage subject to various factors such as those described above. Furthermore, private payors often follow Medicare coverage policies and payment limitations in setting their own coverage policies. Healthcare Laws and Regulations Sales of our product candidates, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement by the federal government and the states and foreign governments in which we might conduct our business. The healthcare industry is highly regulated under both state and federal laws and regulations. Our operations and relationships with healthcare plans and providers are subject to extensive and increasing regulation by numerous federal, state, and local government agencies including the FDA, the Office of Inspector General (“OIG”), the DOJ, the CMS, the Office of Civil Rights, and various state authorities. The healthcare laws and regulations that may affect our ability to operate include the following: False Claims Acts We will be subject to numerous federal and state laws that prohibit the presentation of false information, or the failure to disclose information, in connection with the submission and payment of medical claims for reimbursement. 42 The federal civil and criminal false claims laws and civil monetary penalties laws, such as the federal False Claims Act, 31 U.S.C. §§ 3729—3733, impose civil liability on individuals or entities that submit false or fraudulent claims for payment to the federal government. The False Claims Act provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly or recklessly: presented, or caused to be presented, a false or fraudulent claim for payment or approval to the federal government; made, used or caused to be made or used a false statement or a false record to get a claim for payment approved, including a false or fraudulent claim; concealed, or knowingly and improperly avoided or decreased, an obligation to pay or transmit money or property to the federal government; or conspired to commit any of the foregoing. The federal government has used the False Claims Act to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs. The federal government, including as a result of the passage of the ACA, and a number of courts have taken the position that claims presented in violation of certain other statutes, including the federal Anti-Kickback Statute (“AKS”) or the federal physician referral law, 42 U.S.C. 1395nn (the “Stark Law”), can also be considered a violation of the False Claims Act. A number of states have enacted laws that are similar to the federal False Claims Act. Under Section 6031 of the Deficit Reduction Act of 2005, as amended, if a state enacts a false claims act that is at least as stringent as the federal statute and that also meets certain other requirements, the state will be eligible to receive a greater share of any monetary recovery obtained pursuant to certain actions brought under the state’s false claims act. As a result, many states have enacted laws that are similar to the federal False Claims Act and there has been a concomitant increase in state false claims enforcement efforts. Violations of federal and state fraud and abuse laws may be punishable by criminal and/or civil sanctions, including significant penalties, fines, disgorgement, additional reporting requirements and oversight under a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, and/or exclusion or suspension from federal healthcare programs, such as Medicare, and debarment from contracting with the U.S. government. Penalties for False Claims Act violations include fines ranging from $11,803 to $23,607 for each false claim, plus up to three times the amount of damages sustained by the government. In addition to the provisions of the False Claims Act, which provide for civil enforcement, the federal government also can use several criminal statutes to prosecute persons who are alleged to have submitted false or fraudulent claims to the government for payments. Additionally, private parties may initiate qui tam whistleblower lawsuits against any person or entity under the False Claims Act in the name of the federal government, as well as under the false claims laws of several states, and may share in the proceeds of a successful suit. Generally, federal and state governments have made investigating and prosecuting healthcare fraud and abuse a priority. The Federal “Stark” Law The Federal Stark Law (42 U.S.C. § 1395nn) prohibits referrals or ordering by a physician of “designated health services,” which include pharmaceuticals and drugs that are payable, in whole or in part, by Medicare or Medicaid, to an entity in which the physician or the physician’s immediate family member has an investment interest or other financial relationship, subject to several exceptions. Financial relationships that are implicated by the Stark Law can include arrangements ranging from marketing arrangements and consulting agreements to medical director agreements with physicians who order our products. The Stark Law also prohibits billing for services rendered pursuant to a prohibited referral. Several states have enacted laws similar to the Stark Law. These state laws may cover all (not just Medicare and Medicaid) patients. Many federal healthcare reform proposals in the past few years have attempted to expand the Stark Law to cover all patients as well. If we violate the Stark Law, our financial results and operations could be adversely affected. Penalties for violations include denial of payment for the services, significant civil monetary penalties, and exclusion from the Medicare and Medicaid programs. Federal and State Anti-Kickback Statutes The AKS, set forth in Section 1128B of the Social Security Act, prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person for items or services reimbursable under federal healthcare programs, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under federal healthcare programs or (iii) the purchase, lease or order or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under federal healthcare programs. 43 The core of a violation of the AKS is an “inducement” to refer patients for services or items that are reimbursed under a federal healthcare program, such as Medicare, Medicaid, or Tricare (which covers military personnel). The ACA amended the AKS to make it clear that a person need not have actual knowledge of the statute, or specific intent to violate the statute, as a predicate for a violation. Court cases have resulted in the interpretation that a violation may occur where even one purpose of the remuneration is to induce or reward referrals, and the OIG, which has the authority to impose administrative sanctions for violation of the statute, has adopted a similar standard. There are certain AKS “safe harbors” which, if the respective requirements are met, would afford protection from the AKS. Failure to meet all requirements of an AKS safe harbor does not necessarily mean the arrangement violates the AKS, but it may be subject to scrutiny by legal authorities, in light of the parties’ intent and arrangements. In other words, if an arrangement does not fit within a safe harbor, it does not necessarily mean that the arrangement is per se illegal—only that it is not shielded from regulatory scrutiny. The federal AKS provides criminal penalties for individuals or entities that knowingly and willfully solicit or receive any remuneration. A violation of the AKS is punishable by imprisonment of up to ten years, fines of up to $100,000 per offense, or both. Violation can also give rise to federal healthcare program exclusion, liability under the False Claims Act and civil penalties, which may include monetary penalties of up to $100,000 per offense, repayments of up to three times the total payments between the parties to the arrangement and suspension from future participation in Medicare and Medicaid. Additionally, some states have enacted statutes and regulations similar to the AKS, but which may be applicable regardless of the payor source for the patient. These state laws may contain exceptions and safe harbors that are different from and/or more limited than those of federal law and that may vary from state to state. Health Care Fraud Statute The Health Care Fraud Statute, 18 U.S.C. § 1347, prohibits any person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, which can be either a government or private payor plan. Violation of this statute, even in the absence of actual knowledge of or specific intent to violate the statute, may be charged as a felony offense and may result in fines, imprisonment or both. The Health Care False Statement Statute, 18 U.S.C. § 1035, prohibits, in any matter involving a federal healthcare program, anyone from knowingly and willfully falsifying, concealing or covering up, by any trick, scheme or device, a material fact, or making any materially false, fictitious, or fraudulent statement or representation, or making or using any materially false writing or document knowing that it contains a materially false or fraudulent statement. A violation of this statute may be charged as a felony offense and may result in fines, imprisonment, or both. Civil Monetary Penalties Statute The Civil Monetary Penalties Law (“CMPL”), 42 U.S.C. § 1320a-7a, authorizes the imposition of civil monetary penalties, assessments, and exclusions against an individual or entity based on a variety of prohibited conduct, including, but not limited to: (i) presenting, or causing to be presented, claims for payment to Medicare, Medicaid, or other third-party payors that the individual or entity knows or should know are for an item or service that was not provided as claimed or is false or fraudulent; (ii) offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider; (iii) arranging contracts with an entity or individual excluded from participation in a federal healthcare program; (iv) violating the federal AKS; (v) making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a federal healthcare program; (vi) making, using, or causing to be made any false statement, omission, or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider of services or a supplier under a federal healthcare program; and (vii) failing to report and return an overpayment owed to the federal government. We could be exposed to a wide range of allegations to which the federal CMPL would apply. We cannot foreclose the possibility that we will face allegations subject to the CMPL with the potential for a material adverse impact on our business, results of operations and financial condition. Substantial civil monetary penalties may be imposed under the federal Civil Monetary Penalty Statute and may vary, depending on the underlying violation. In addition, an assessment of not more than three times the total amount claimed for each item or service may also apply, and a violator may be subject to exclusion from federal and state healthcare programs. Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws. 44 Employees As of March 21, 2022, we employed 1 full-time employee and 1 part-time employee. We are not a party to any collective bargaining agreements, and we believe that we maintain good relations with our employee. Our Corporate History Hillstream BioPharma Inc. (“HBI”) was incorporated on March 28, 2017, as a Delaware C-corporation. On July 16, 2019, Hillstream BioPharma Holdings, Inc. (“Holdco”) was formed as a Delaware C-corporation. On July 24, 2019, Holdco entered into a Contribution and Exchange Agreement with Nanoproteagen LLC (“Nanoproteagen”) whereby the members of Nanoproteagen exchanged 100% of their membership interests in Nanoproteagen for shares of Holdco common stock. Also on July 24, 2019, the stockholders of HBI exchanged 100% of their shares of common stock for shares of common stock of Holdco. HBI and Nanoproteagen became wholly-owned subsidiaries of Holdco. On August 7, 2019, pursuant to a certificate of amendment, Holdco’s name was changed to Hillstream BioPharma, Inc. and HBI’s name was changed to HB Pharma Corp. On November 12, 2020, Hillstream BioPharma, Inc. entered into a Share Exchange Agreement with Farrington Therapeutics LLC (“Farrington”), whereby the members of Farrington exchanged their membership interest in Farrington for shares of common stock of Hillstream BioPharma, Inc., and Farrington became a wholly-owned subsidiary of Hillstream BioPharma, Inc. At December 31, 2021, Hillstream BioPharma, Inc. has two wholly-owned subsidiaries: HB Pharma Corp. and Farrington. Available Information Our website address is www.hillstreambio.com . The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov . The information contained in the SEC’s website is not intended to be a part of this filing.