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Item 1A. Risk Factors

2021-12-15 compared with 2020-12-16 · 1023 added, 1310 removed, 40 unchanged (98% of the section changed)

report contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from

those discussed in this report.

Factors that could cause or contribute to these differences include, but are not limited to, those

discussed below and elsewhere in this report.

any of the following risks, or other risks not presently known to us or that we currently believe to not be significant, develop

into actual events, then our business, financial condition, results of operations or prospects could be materially adversely affected.

If that happens, the market price of our securities could decline, and stockholders may lose all or part of their investment.

Related to Our Business and our Industry

have a history of net losses and expect to incur losses for the foreseeable future.

We may never generate revenues or, if we are

able to generate revenues, achieve profitability.

were formed in 2007 and since our inception have incurred a net loss in each of our previous operating years.

Our ability to become

profitable depends upon our ability to obtain marketing approval for and generate revenues from sales of our product candidates.

We have been focused on product development, have not received approval for any of our product candidates, and have not generated

any revenues to date.

We have incurred losses in each period of our operations, and we expect to continue to incur losses for

the foreseeable future.

These losses are likely to continue to adversely affect our working capital, total assets and stockholders’

The process of developing our product candidates requires significant clinical development, laboratory testing and clinical

In addition, commercialization of our product candidates will require that we obtain necessary regulatory approvals and

establish sales, marketing and manufacturing capabilities, either through internal hiring or through contractual relationships

We expect to incur substantial losses for the foreseeable future as a result of anticipated increases in our research

and development costs, including costs associated with conducting preclinical testing and clinical trials, and regulatory compliance

We incurred net losses of $17,548,085 and $15,562,144 for the years ended September 30, 2020 and 2019, respectively.

At September 30, 2020, we had stockholders’

equity of $33,670,668 and an accumulated deficit of $70,593,867.

used in operating activities was $16,930,658 and $12,437,751 for the years ended September 30, 2020 and 2019, respectively.

ability to generate revenues and achieve profitability will depend on numerous factors, including success in:

This report contains forward-looking statements

that involve risks and uncertainties.

Our actual results could differ materially from those discussed in this report.

Factors that could

cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report.

If any of the following risks, or other

risks not presently known to us or that we currently believe to not be significant, develop into actual events, then our business, financial

condition, results of operations or prospects could be materially adversely affected.

If that happens, the market price of our securities

could decline, and stockholders may lose all or part of their investment.

Risks Related to Our Business and our Industry

We have a history of net losses and expect

to incur losses for the foreseeable future.

We may never generate revenues or, if we are able to generate revenues, achieve profitability.

We were formed in 2007 and since our inception

have incurred a net loss in each of our previous operating years.

Our ability to become profitable depends upon our ability to obtain

marketing approval for and generate revenues from sales of our product candidates.

We have been focused on product development, have not

received approval for any of our product candidates, and have not generated any revenues to date.

We have incurred losses in each period

of our operations, and we expect to continue to incur losses for the foreseeable future.

These losses are likely to continue to adversely

affect our working capital, total assets and stockholders’ equity.

The process of developing our product candidates requires significant

clinical development, laboratory testing and clinical trials.

In addition, commercialization of our product candidates will require that

we obtain necessary regulatory approvals and establish sales, marketing and manufacturing capabilities, either through internal hiring

or through contractual relationships with others.

We expect to incur substantial losses for the foreseeable future as a result of anticipated

increases in our research and development costs, including costs associated with conducting preclinical testing and clinical trials, and

regulatory compliance activities.

We incurred net losses of $23,054,434 and $17,548,085 for the years ended September 30, 2021 and 2020,

respectively.

At September 30, 2021, we had stockholders’ equity of $132,182,353 and an accumulated deficit of $96,047,821.

net cash used in operating activities was $24,250,414 and $16,930,658 for the years ended September 30, 2021 and 2020, respectively.

Our ability to generate revenues and achieve profitability

will depend on numerous factors, including success in:

developing and testing product candidates;

receiving regulatory approvals for our product

commercializing our product candidates;

manufacturing commercial quantities of our product

candidates at acceptable cost levels;

obtaining medical insurance coverage for any

approved product candidate;

establishing a favorable competitive position

receiving regulatory approvals for our product candidates;

commercializing our product candidates that receive regulatory approval;

manufacturing commercial quantities of our product candidates at acceptable cost levels;

obtaining medical insurance coverage for any approved product candidate;

establishing a favorable competitive position for any approved product candidates.

Many of these factors will depend on circumstances

beyond our control.

We cannot assure you that any of our product candidates will be approved by the FDA or any foreign regulatory body

or obtain medical insurance coverage, that we will successfully bring any approved product to market or, if so, that we will ever become

Ability to continue as a going concern.

At September 30, 2021, we estimated that we have

sufficient capital to continue our operations through March 2023.

You should not rely on our consolidated balance sheet as an indication

of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders,

in the event of liquidation.

The Company has generated no operating revenue

to date and has principally raised capital through the issuance of debt and equity instruments to finance its operations.

Company’s continued operations beyond March 2023, including its development plans for Mino-Lok, Mino-Wrap, Halo-Lido, Novecite and

I/ONTAK, will depend on its ability to obtain regulatory approval to market Mino-Lok and generate substantial revenue from the sale of

Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic

relationships, or out-licensing of its product candidates.

However, the Company can provide no assurances on the approval, commercialization

or future sales of Mino-Lok or that financing or strategic relationships will be available on acceptable terms, or at all.

If the Company

is unable to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of Mino-Lok, there would

be a material adverse effect on its business.

Further, the Company expects in the future to incur additional expenses as it continues

to develop its product candidates, including seeking regulatory approval, and protecting its intellectual property.

We need to secure additional financing in

the future to complete the development of our current product candidates and support our operations.

We anticipate that we will incur operating losses

for the foreseeable future as we continue developing our product candidates.

The amount and timing of our future funding requirements

will depend on many factors, including, but not limited to:

the rate of progress and cost of our trials and other product development programs for our current product candidates;

the costs and timing of obtaining licenses for additional product candidates or acquiring other complementary technologies;

the timing of any regulatory approvals of any of our product candidates;

the costs of establishing or contracting for sales, marketing and distribution capabilities for our product candidates;

the status, terms and timing of any collaborative, licensing, co-promotion or other arrangements.

We will need to access the capital markets in

the future for additional capital for research and development and for operations.

As of the date of this report, we do not anticipate

seeking additional capital until sometime in 2023.

Traditionally, pharmaceutical companies have funded their research and development

expenditures through raising capital in the equity markets.

Declines and uncertainties in these markets over the past several years have

severely restricted raising new capital and have affected companies’ abilities to continue to expand or fund existing research and

development efforts.

The COVID-19 pandemic could also adversely impact future fundraising activities.

If the COVID-19 pandemic and related

and/or other economic conditions continue or become worse, our future cost of equity or debt capital and access to the capital markets

could be adversely affected.

If we are not successful in securing additional financing, we may be required to significantly delay, reduce

the scope of or eliminate one or more of our research or development programs, downsize our general and administrative infrastructure,

or seek alternative measures to avoid insolvency, including arrangements with collaborative partners or others that may require us to

relinquish rights to certain of our technologies or product candidates.

We are primarily a late-stage development

company with an unproven business strategy and may never achieve commercialization of our therapeutic product candidates or profitability.

We have no approved products.

All of our current

product candidates are in the pre-clinical or clinical stage.

We rely on third parties to conduct the research and development activities

for our product candidates.

of these factors will depend on circumstances beyond our control.

We cannot assure you that any of our product candidates will

be approved by the FDA or any foreign regulatory body or obtain medical insurance coverage, that we will successfully bring any

approved product to market or, if so, that we will ever become profitable.

is substantial doubt about our ability to continue as a going concern.

September 30, 2020, we estimated that we have sufficient capital to continue our operations through March 2021.

You should not

rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of

creditors, and potentially be available for distribution to stockholders, in the event of liquidation.

audited consolidated financial statements included in this report have been prepared assuming that we will continue as a going

concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of

assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern.

We have concluded

that substantial doubt about our ability to continue as a going concern exists and our auditors have made reference to this in

their audit report on our audited consolidated financial statements for the year ended September 30, 2020.

need to secure additional financing in the near future to complete the development of our current product candidates and support

our operations.

anticipate that we will incur operating losses for the foreseeable future.

We have received gross proceeds of approximately $70.5

million from our public and private placement offerings through September 30, 2020.

Additionally, in connection with the acquisition

of LMB our Executive Chairman, Leonard Mazur, made an equity investment of $3.0 million in March 2016.

Mazur has also loaned

us $4,710,000 pursuant to convertible promissory notes.

On August 8, 2017, these notes and accrued interest of $76,240 were converted

into 1,547,067 shares of common stock at a price of $3.09 per share as part of an underwritten public offering which closed on

the same date.

amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

the rate of progress and cost of our trials

and other product development programs for our current product candidates;

the costs and timing of obtaining licenses for

additional product candidates or acquiring other complementary technologies;

the timing of any regulatory approvals of any

of our product candidates;

the costs of establishing or contracting for

sales, marketing and distribution capabilities for our product candidates;

the status, terms and timing of any collaborative,

licensing, co-promotion or other arrangements.

will need to access the capital markets in the future for additional capital for research and development and for operations.

Traditionally, pharmaceutical companies have funded their research and development expenditures through raising capital in the

equity markets.

Declines and uncertainties in these markets over the past several years have severely restricted raising new capital

and have affected companies’

abilities to continue to expand or fund existing research and development efforts.

in the financial markets due to the COVID-19 pandemic could also adversely impact future fundraising activities.

If the COVID-19

pandemic and related and/or other economic conditions continue or become worse, our future cost of equity or debt capital and

access to the capital markets could be adversely affected.

If we are not successful in securing additional financing, we may be

required to significantly delay, reduce the scope of or eliminate one or more of our research or development programs, downsize

our general and administrative infrastructure, or seek alternative measures to avoid insolvency, including arrangements with collaborative

partners or others that may require us to relinquish rights to certain of our technologies or product candidates.

are primarily a late-stage development company with an unproven business strategy and may never achieve commercialization of our

therapeutic product candidates or profitability.

have no approved products.

All of our current product candidates are in the pre-clinical or clinical stage.

We rely on third parties

to conduct the research and development activities for our product candidates.

Further, we have no sales or marketing capability

at this time.

Even if we decide to use collaborative partners to assist us in the commercialization of our product candidates,

our product commercialization capabilities are unproven.

Our success will depend upon our ability to develop such capabilities

on our own or to enter into collaboration agreements on favorable terms and to select an appropriate commercialization strategy

for each product candidate that we choose to pursue, whether on our own or in collaboration.

If we are not successful in implementing

our strategy to commercialize our product candidates, we may never achieve, maintain or increase profitability.

Our ability to

successfully commercialize any of our product candidates will depend, among other things, on our ability to:

successfully complete pre-clinical and clinical

trials for our product candidates;

receive marketing approvals from the FDA and

similar foreign regulatory authorities for our product candidates;

establish commercial manufacturing arrangements

with third-party manufacturers for our product candidates;

produce, through a validated process, sufficiently

large quantities of our drug compound(s) to permit successful commercialization of our product candidates;

build and maintain strong sales, distribution

and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations with

third parties for such commercialization;

secure acceptance of any approved products from

physicians, health care payers, patients and the medical community;

manage our spending as costs and expenses increase

due to clinical trials, regulatory applications and development and commercialization activities.

are no guarantees that we will be successful in completing these tasks.

If we are unable to successfully complete these tasks,

we may not be able to commercialize any of our product candidates in a timely manner, or at all, in which case we may be unable

to generate sufficient revenues to sustain and grow our business.

If we experience unanticipated delays or problems, our development

costs could substantially increase and our business, financial condition and results of operations will be adversely affected.

have a limited operating history upon which to evaluate our ability to successfully commercialize our product candidates.

are a clinical stage company and our success is dependent upon our ability to obtain regulatory approval for and commercialize

our product candidates and we, as a company, have not demonstrated an ability to perform the functions necessary for the approval

or successful commercialization of any product candidates.

While various members of our executive management and key employees

have significant prior experience in pharmaceutical development, as a company we have to date not successfully completed any late

stage clinical trials nor undertaken any commercialization activities.

Our operations have been limited primarily to business

planning, acquiring our proprietary technology, research and development, recruiting management and technical staff, and raising

These operations provide a limited basis for you to assess our ability to successfully commercialize our product candidates

and the advisability of investing in our securities.

COVID-19 pandemic may materially and adversely affect our clinical trial operations and our financial results.

COVID-19 pandemic has adversely impacted hospitals and medical facilities where we are currently conducting our Mino-Lok phase

The full extent to which COVID-19 may impact this trial is not known at this time, but it has slowed the estimated completion

date for the trial, which we now expect to be in the second half of 2021.

This same risk applies to planned clinical trials for

Further, we have no sales or marketing capability at this time.

Even if we decide to use collaborative partners

to assist us in the commercialization of our product candidates, our product commercialization capabilities are unproven.

will depend upon our ability to develop such capabilities on our own or to enter into collaboration agreements on favorable terms and

to select an appropriate commercialization strategy for each product candidate that we choose to pursue and that receive approval, whether

on our own or in collaboration.

If we are not successful in implementing our strategy to commercialize our product candidates, we may

never achieve, maintain or increase profitability.

Our ability to successfully commercialize any of our product candidates will depend,

among other things, on our ability to:

successfully complete pre-clinical and clinical trials for our product candidates;

receive marketing approvals from the FDA and similar foreign regulatory authorities for our product candidates;

establish commercial manufacturing arrangements with third-party manufacturers for our product candidates;

produce, through a validated process, sufficiently large quantities of our drug compound(s) to permit successful commercialization of our product candidates;

build and maintain strong sales, distribution and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations with third parties for such commercialization;

secure acceptance of any approved products from physicians, health care payers, patients and the medical community;

manage our spending as costs and expenses increase due to clinical trials, regulatory applications and development and commercialization activities.

There are no guarantees that we will be successful

in completing these tasks.

If we are unable to successfully complete these tasks, we may not be able to commercialize any of our product

candidates in a timely manner, or at all, in which case we may be unable to generate sufficient revenues to sustain and grow our business.

If we experience unanticipated delays or problems, our development costs could substantially increase and our business, financial condition

and results of operations will be adversely affected.

We have a limited operating history upon

which to evaluate our ability to successfully commercialize our product candidates.

We are a clinical stage company and our success

is dependent upon our ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not

demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any product candidates.

While various members of our executive management and key employees have significant prior experience in pharmaceutical development, as

a company we have to date not successfully completed any late-stage clinical trials nor undertaken any commercialization activities.

operations have been limited primarily to business planning, acquiring our proprietary technology, research and development, recruiting

management and technical staff, and raising capital.

These operations provide a limited basis for you to assess our ability to successfully

commercialize our product candidates and the advisability of investing in our securities.

The COVID-19 pandemic may materially and

adversely affect our clinical trial operations and our financial results.

The COVID-19 pandemic has adversely impacted hospitals

and medical facilities where we are currently conducting our Mino-Lok phase 3 trial.

The full extent to which COVID-19 may impact this

trial is not known at this time, but it has slowed the estimated completion date for the trial, which we now expect to be in 2022.

same risk applies to planned clinical trials for our other product candidates.

The exact duration of the delay and any other impact will

depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak,

the severity of COVID-19, or the effectiveness of actions to contain and treat for COVID-19.

The continued spread of COVID-19 also could

adversely impact our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may

have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok trial.

In addition, if the FDA elects to delay

face-to-face meetings for an extended period of time due to COVID-19, it could have a material adverse effect on our Mino-Lok trial and

our other product candidates.

The exact duration of the delay and any other impact will depend on future developments, which are

highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the severity of COVID-19, or the

effectiveness of actions to contain and treat for COVID-19.

The continued spread of COVID-19 also could adversely impact our ability

to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure

to COVID-19, which could further negatively impact the Mino-Lok trial.

In addition, if the FDA elects to delay face-to-face meetings

for an extended period of time due to COVID-19, it could have a material adverse effect on our Mino-Lok trial and our other product

Any or all of these events could increase our operating expenses and the length of time to complete the trial and

have a material adverse effect on our financial results.

may choose not to continue developing any of our product candidates at any time during development, which would reduce or eliminate

our potential return on investment for those product candidates.

any time, we may decide to discontinue the development of any of our product candidates for a variety of reasons, including inadequate

financial resources, the appearance of new technologies that render our product candidates obsolete, competition from a competing

product or changes in or failure to comply with applicable regulatory requirements.

If we terminate a program in which we have

invested significant resources, we will not receive any return on our investment and we will have missed the opportunity to allocate

those resources to potentially more productive uses.

an example, on July 1, 2016, we announced that we were discontinuing the development of Suprenza, which was our first commercial

product candidate, for strategic reasons and not due to safety or regulatory concerns, in order to focus our management and cash

resources on the Phase 3 development of Mino-Lok and the Phase 2b development of Halo-Lido.

The resources expended on Suprenza

therefore did not provide us any benefit.

face significant risks in our product candidate development efforts.

business depends on the successful development and commercialization of our product candidates.

We are not permitted to market

any of our product candidates in the United States until we receive approval from the FDA, or in any foreign jurisdiction until

we receive the requisite approvals from such jurisdiction.

The process of developing new drugs and/or therapeutic products is

inherently complex, unpredictable, time-consuming, expensive and uncertain.

We must make long-term investments and commit significant

resources before knowing whether our development programs will result in products that will receive regulatory approval and achieve

market acceptance.

Product candidates that appear to be promising at some or all stages of development may not reach the market

for a number of reasons that may not be predictable based on results and data of the clinical program.

Product candidates may

be found ineffective or may cause harmful side effects during clinical trials, may take longer to progress through clinical trials

than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due to statistical anomalies even though

clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may prove impracticable to manufacture

in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market acceptance.

cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates that are under development

and we cannot, therefore, predict the timing of any future revenues from these product candidates, if any.

The FDA has substantial

discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate for many

Any or all of these events could increase our operating expenses and the length of time to complete the

trial and have a material adverse effect on our financial results.

We may choose not to continue developing

any of our product candidates at any time during development, which would reduce or eliminate our potential return on investment for those

product candidates.

At any time, we may decide to discontinue the

development of any of our product candidates for a variety of reasons, including inadequate financial resources, the appearance of new

technologies that render our product candidates obsolete, competition from a competing product or changes in or failure to comply with

applicable regulatory requirements.

If we terminate a program in which we have invested significant resources, we will not receive any

return on our investment and we will have missed the opportunity to allocate those resources to potentially more productive uses.

As an example, on July 1, 2016, we announced that

we were discontinuing the development of Suprenza, which was our first commercial product candidate, for strategic reasons and not due

to safety or regulatory concerns, in order to focus our management and cash resources on the Phase 3 development of Mino-Lok and the Phase

2b development of Halo-Lido.

The resources expended on Suprenza therefore did not provide us any benefit.

We face significant risks in our product

candidate development efforts.

Our business depends on the successful development

and commercialization of our product candidates.

We are not permitted to market any of our product candidates in the United States until

we receive approval from the FDA, or in any foreign jurisdiction until we receive the requisite approvals from such jurisdiction.

process of developing new drugs and/or therapeutic products is inherently complex, unpredictable, time-consuming, expensive and uncertain.

We must make long-term investments and commit significant resources before knowing whether our development programs will result in products

that will receive regulatory approval and achieve market acceptance.

Product candidates that appear to be promising at some or all stages

of development may not receive approval or reach the market for a number of reasons that may not be predictable based on results and data

of the clinical program.

Product candidates may be found ineffective or may cause harmful side effects during clinical trials, may take

longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due

to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may

prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market

We cannot predict whether or when we will obtain

regulatory approval to commercialize our product candidates that are under development and we cannot, therefore, predict the timing of

any future revenues from these product candidates, if any.

The FDA has substantial discretion in the drug approval process, including

the ability to delay, limit or deny approval of a product candidate for many reasons.

For example, the FDA:

could determine that we cannot rely on Section

505(b)(2) for Mino-Lok or Halo-Lido or any future product candidates;

could determine that the information provided

by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any

of our product candidates for any indication;

may not find the data from clinical trials sufficient

to support the submission of an NDA or to obtain marketing approval in the United States, including any findings that the

clinical and other benefits of our product candidates outweigh their safety risks;

may disagree with our trial design or our interpretation

of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed

and commented on the design for our trials;

may determine that we have identified the wrong

reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked

by patent or non-patent exclusivity of the reference listed drug or drugs;

may identify deficiencies in the manufacturing

processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our product

may approve our product candidates for fewer

or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical

may change its approval policies or adopt new

regulations that could adversely impact our product candidate development programs;

may not approve the labeling claims that we

believe are necessary or desirable for the successful commercialization of our product candidates, or may require labeling

claims that impair the potential market acceptance of our product candidates.

same risks are generally applicable to the regulatory process in foreign countries.

Any failure to obtain regulatory approval

of our product candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval

for all of the indications and labeling claims we deem desirable could reduce our potential revenues.

our business strategy generally is to focus on the development of late stage product candidates to lessen the development risk,

there is still significant risk to successfully developing a product candidate.

goal in pursuing late stage therapeutic product candidates with what we believe is a promising pre-clinical and early clinical

stage track record is to avoid the risk of failure at the pre-clinical and early clinical stages.

However, there is still significant

risk to obtaining regulatory approval and successfully commercializing any late stage product candidate that we pursue.

the risks inherent in drug development of initial stage product candidates also apply to late stage candidates.

We cannot assure

you that our business strategy will be successful.

results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current

product candidates may not have favorable results in later studies or trials.

studies and Phase 1 and Phase 2 clinical trials are not primarily designed to test the efficacy of a product candidate in the

general population, but rather to test initial safety, to study pharmacokinetics and pharmacodynamics, to study limited efficacy

in a small number of study patients in a selected disease population, and to identify and attempt to understand the product candidate’s

side effects at various doses and dosing schedules.

Success in pre-clinical studies or completed clinical trials does not ensure

that later studies or trials, including continuing pre-clinical studies and large-scale clinical trials, will be successful nor

does it predict future results.

Favorable results in early studies or trials may not be repeated in later studies or trials, and

product candidates in later stage trials may fail to show acceptable safety and efficacy despite having progressed through earlier

could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA;

could determine that the information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for any indication;

may not find the data from clinical trials sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks;

may disagree with our trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our trials;

may determine that we have identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our product candidates;

may approve our product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials;

may change its approval policies or adopt new regulations that could adversely impact our product candidate development programs;

may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our product candidates, or may require labeling claims that impair the potential market acceptance of our product candidates.

These same risks are generally applicable to the

regulatory process in foreign countries.

Any failure to obtain regulatory approval of our product candidates would significantly limit

our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem desirable

could reduce our potential revenues.

While our business strategy generally is

to focus on the development of late-stage product candidates to lessen the development risk, there is still significant risk to successfully

developing a product candidate.

Our goal in generally pursuing late-stage therapeutic

product candidates with what we believe is a promising pre-clinical and early clinical stage track record is to avoid the risk of failure

at the pre-clinical and early clinical stages.

However, there is still significant risk to obtaining regulatory approval and successfully

commercializing any late-stage product candidate that we pursue.

All of the risks inherent in drug development of initial stage product

candidates also apply to late-stage candidates.

We cannot assure you that our business strategy will be successful.

The results of pre-clinical studies and

completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable

results in later studies or trials.

Pre-clinical studies and Phase 1 and Phase 2 clinical

trials are not primarily designed to test the efficacy of a product candidate in the general population, but rather to test initial safety,

to study pharmacokinetics and pharmacodynamics, to study limited efficacy in a small number of study patients in a selected disease population,

and to identify and attempt to understand the product candidate’s side effects at various doses and dosing schedules.

pre-clinical studies or completed clinical trials does not ensure that later studies or trials, including continuing pre-clinical studies

and large-scale clinical trials, will be successful nor does it predict future results.

Favorable results in early studies or trials may

not be repeated in later studies or trials, and product candidates in later stage trials may fail to show acceptable safety and efficacy

despite having progressed through earlier trials.

In addition, the placebo rate in larger studies may be higher than expected.

may be required to demonstrate through large, long-term outcome trials that our product candidates are safe and effective for

use in a broad population prior to obtaining regulatory approval.

We may be required to demonstrate through large,

long-term outcome trials that our product candidates are safe and effective for use in a broad population prior to obtaining regulatory

This would increase the duration and cost of any such trial.

is typically a high rate of attrition from the failure of product candidates proceeding through clinical trials.

certain subjects in our clinical trials may respond positively to placebo treatment - these subjects are commonly known as “placebo

responders”

- making it more difficult to demonstrate efficacy of the trial drug compared to placebo.

This effect is likely

to be observed in the treatment of hemorrhoids, which could negatively impact the development program for Halo-Lido.

any of our product candidates fail to demonstrate sufficient safety and efficacy in any clinical trial, we will experience potentially

significant delays and cost increases in, or may decide to abandon development of, that product candidate.

If we abandon or are

delayed, or experience increased costs, in our development efforts related to any of our product candidates, we may not have sufficient

resources to continue or complete development of that product candidate or any other product candidates.

We may not be able to

generate any revenues, continue our operations and clinical studies, or become profitable.

Our reputation in the industry and

in the investment community would likely be significantly damaged.

Further, it might not be possible for us to raise funds in

the public or private markets, and our stock price would likely decrease significantly.

we are unable to file for approval of Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act,

or if we are required to generate additional data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido

under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines.

current plans for filing NDAs for our product candidates include efforts to minimize the data we will be required to generate

in order to obtain marketing approval for certain of our product candidates and therefore possibly reduce the time and cost of

development of a product candidate and obtain a shortened review period for the application.

The timeline for filing and review

of our planned NDA for each of Mino-Lok and Halo-Lido is based upon our plan to submit each such NDA under Section 505(b)(2) of

the Federal Food, Drug and Cosmetic Act, wherein we will rely in part on data generated by third parties and that is in the public

domain or elsewhere.

Depending on the data that may be required by the FDA for approval, some of the data may be related to products

already approved by the FDA.

If the data relied upon is related to products already approved by the FDA and covered by third-party

patents, we would be required to certify that we do not infringe the listed patents or that such patents are invalid or unenforceable.

As a result of the certification, the third party would have 45 days from notification of our certification to initiate an action

In the event that an action is brought in response to such a certification, the approval of our NDA could be subject

to a stay of up to 30 months or more while we defend against such a suit.

Approval of any product candidate under Section 505(b)(2)

may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents

There is typically a high rate of attrition from

the failure of product candidates proceeding through clinical trials.

In addition, certain subjects in our clinical trials may respond

positively to placebo treatment - these subjects are commonly known as “placebo responders” - making it more difficult to

demonstrate efficacy of the trial drug compared to placebo.

This effect is likely to be observed in the treatment of hemorrhoids, which

could negatively impact the development program for Halo-Lido.

If any of our product candidates fail to demonstrate

sufficient safety and efficacy in any clinical trial, we will experience potentially significant delays and cost increases in, or may

decide to abandon development of, that product candidate.

If we abandon or are delayed, or experience increased costs, in our development

efforts related to any of our product candidates, we may not have sufficient resources to continue or complete development of that product

candidate or any other product candidates.

We may not be able to continue our operations and clinical studies, or generate any revenue

or become profitable.

Our reputation in the industry and in the investment community would likely be significantly damaged.

might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly.

If we are unable to file for approval of

Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to generate additional

data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under Section 505(b)(2), we may be unable to

meet our anticipated development and commercialization timelines.

Our current plans for filing NDAs or BLAs for

our product candidates include efforts to minimize the data we will be required to generate in order to obtain marketing approval for

certain of our product candidates and therefore possibly reduce the time and cost of development of a product candidate and obtain a shortened

review period for the application.

The timeline for filing and review of our planned NDA for each of Mino-Lok and Halo-Lido is based upon

our plan to submit each such NDA under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, wherein we will rely in part on data

generated by third parties and that is in the public domain or elsewhere.

Depending on the data that may be required by the FDA for approval,

some of the data may be related to products already approved by the FDA.

If the data relied upon is related to products already approved

by the FDA and covered by third-party patents, we would be required to certify that we do not infringe the listed patents or that such

patents are invalid or unenforceable.

As a result of the certification, the third party would have 45 days from notification of our certification

to initiate an action against us.

In the event that an action is brought in response to such a certification, the approval of our NDA

could be subject to a stay of up to 30 months or more while we defend against such a suit.

Approval of any product candidate under Section

505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents

applicable to our product candidates.

Alternatively, we may elect to generate sufficient additional clinical data so that we no

longer rely on data which triggers a potential stay of the approval of any product candidate.

Even if no exclusivity periods apply

to an application under Section 505(b)(2), the FDA has broad discretion to require us to generate additional data on the safety

and efficacy of our product candidates to supplement third-party data on which we may be permitted to rely.

In either event, we

could be required, before obtaining marketing approval for such product candidate, to conduct substantial new research and development

activities beyond those in which we currently plan to engage in order to obtain approval of that product candidate.

Such additional

new research and development activities would be costly and time consuming.

may not be able to obtain shortened review of our applications where available, and in any event the FDA may not agree that any

of our product candidates qualify for marketing approval.

If we are required to generate additional data to support approval,

we may be unable to meet our anticipated development and commercialization timelines, may be unable to generate the additional

data at a reasonable cost, or at all, and may be unable to obtain marketing approval of that product candidate.

In addition, notwithstanding

the approval of many products by the FDA pursuant to Section 505(b)(2), over the last few years, some pharmaceutical companies

and others have objected to the FDA’s interpretation of Section 505(b)(2).

If the FDA changes its interpretation of Section

505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could delay or even prevent the FDA

from approving any Section 505(b)(2) application that we submit.

of our product candidates, Mino-Lok and Halo-Lido, are combination products consisting of components that have each been separately

approved by the FDA for other indications and which are commercially available and marketed by other companies.

Our approval under

Section 505(b)(2), if received, would not preclude physicians, pharmacists and patients from obtaining individual drug products

and titrating the dosage of these drug products as close to our approved dose as possible.

Mino-Lok solution contains minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which have

been separately approved by the FDA for other indications, or are used as excipients in other parenteral products.

approval as a branded pharmaceutical product, we would need to obtain hospital formulary acceptance to generate sales of Mino-Lok.

Additionally, we may encounter reluctance by the infectious disease physician community to vary from the existing standard of

care to remove and replace an infected catheter.

Currently, hospitals are reimbursed for the treatment of CRBSIs by the Center

for Medicare and Medicare Services (“CMS”) through a Diagnosis Related Group (“DRG”) classification or

Alternatively, we may elect to generate sufficient additional clinical data so that we no longer

rely on data which triggers a potential stay of the approval of any product candidate.

Even if no exclusivity periods apply to an application

under Section 505(b)(2), the FDA has broad discretion to require us to generate additional data on the safety and efficacy of our product

candidates to supplement third-party data on which we may be permitted to rely.

In either event, we could be required, before obtaining

marketing approval for such product candidate, to conduct substantial new research and development activities beyond those in which we

currently plan to engage in order to obtain approval of that product candidate.

Such additional new research and development activities

would be costly and time consuming.

We may not be able to obtain shortened review

of our applications where available, and in any event the FDA may not agree that any of our product candidates qualify for marketing approval.

If we are required to generate additional data to support approval, we may be unable to meet our anticipated development and commercialization

timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval

of that product candidate.

In addition, notwithstanding the approval of many products by the FDA pursuant to Section 505(b)(2), over the

last few years, some pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

FDA changes its interpretation of Section 505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could

delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.

Two of our product candidates, Mino-Lok

and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for other indications

and which are commercially available and marketed by other companies.

Our approval under Section 505(b)(2), if received, would not preclude

physicians, pharmacists and patients from obtaining individual drug products and titrating the dosage of these drug products as close

to our approved dose as possible.

Our Mino-Lok solution contains minocycline, disodium

ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which have been separately approved by the FDA for other indications,

or are used as excipients in other parenteral products.

Assuming FDA approval as a branded pharmaceutical product, we would need to obtain

hospital formulary acceptance to generate sales of Mino-Lok.

Additionally, we may encounter reluctance by the infectious disease physician

community to vary from the existing standard of care to remove and replace an infected catheter.

Currently, hospitals are reimbursed for

the treatment of CRBSIs by the Center for Medicare and Medicare Services (“CMS”) through a Diagnosis Related Group (“DRG”)

classification or code.

Commercial insurance plans reimburse for CRBSIs in a similar manner.

With Mino-Lok being priced as a branded FDA-approved

pharmaceutical product, this could result in the participating hospital retaining a lower share of CMS or commercial reimbursement

which may impact the acceptance and use of Mino-Lok by these institutions.

Halo-Lido product candidate for the treatment of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate,

a corticosteroid, and lidocaine, that have each been separately approved by the FDA for other indications and which are commercially

available and marketed by other companies.

Halobetasol propionate cream is available in a 0.05% strength, and lidocaine creams

are also available in strengths up to 5%.

From our market analysis and discussions with a limited number of physicians, we know

that patients sometimes obtain two separate cream products and co-administer them as prescribed, giving them a combination treatment

which could be very similar to what we intend to study and seek approval for.

As a branded, FDA-approved product with safety and

efficacy data, we intend to price our product substantially higher than the generically available individual creams.

have to convince third-party payers and pharmacy benefit managers of the advantages of our product and justify our premium pricing.

We may encounter resistance from these entities and will then be dependent on patients’

willingness to pay the premium and

not seek alternatives.

In addition, pharmacists often suggest lower cost prescription treatment alternatives to both physicians

and patients.

If approved, our Section 505(b)(2) approval and the market exclusivity we may receive will not guarantee that such

alternatives will not exist, that substitution will not occur, or that there will be immediate or any acceptance to our pricing

pharmaceutical product, this could result in the participating hospital retaining a lower share of CMS or commercial reimbursement which

may impact the acceptance and use of Mino-Lok by these institutions.

Our Halo-Lido product candidate for the treatment

of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate, a corticosteroid, and lidocaine, that have each

been separately approved by the FDA for other indications and which are commercially available and marketed by other companies.

propionate cream is available in a 0.05% strength, and lidocaine creams are also available in strengths up to 5%.

From our market analysis

and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer

them as prescribed, giving them a combination treatment which could be very similar to what we intend to study and seek approval for.

As a branded, FDA-approved product with safety and efficacy data, we intend to price our product substantially higher than the generically

available individual creams.

We will then have to convince third-party payers and pharmacy benefit managers of the advantages of our product

and justify our premium pricing.

We may encounter resistance from these entities and will then be dependent on patients’ willingness

to pay the premium and not seek alternatives.

In addition, pharmacists often suggest lower cost prescription treatment alternatives to

both physicians and patients.

If approved, our Section 505(b)(2) approval and the market exclusivity we may receive will not guarantee

that such alternatives will not exist, that substitution will not occur, or that there will be immediate or any acceptance to our pricing

by payer formularies .

fast track designation or grant of priority review status by the FDA may not actually lead to a faster development or regulatory

review or approval process, nor will it assure FDA approval of our product candidates.

Additionally, our product candidates may

treat indications that do not qualify for priority review vouchers.

have received fast track designation for Mino-Lok to treat and salvage infected central venous catheters in patients with CRBSIs.

We may seek fast track designation for some of our other product candidates or priority review of applications for approval of

our product candidates for certain indications.

If a drug is intended for the treatment of a serious or life-threatening condition

and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for the

FDA fast track designation.

If a product candidate offers major advances in treatment, the FDA may designate it eligible for priority

The FDA has broad discretion whether or not to grant these designations, so even if we believe a particular product candidate

is eligible for these designations, we cannot assure you that the FDA would decide to grant them.

Even with the fast track designation

for Mino-Lok and if we do receive fast track designation or priority review for any other product candidate, we may not experience

a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw fast track designation

from Mino-Lok or any other product candidate to be so designated if it believes that the designation is no longer supported by

data from our clinical development program.

do not own NoveCite, Inc.

outright and will share any benefits from the development of its NoveCite product candidate with the

other stockholder.

of November 30, 2020, we owned 75% of the outstanding common stock of NoveCite.

As a result, we will only be entitled to a portion

of any benefits that flow from the development by NoveCite of its NoveCite product candidate or any other product candidates that

it might develop.

In the event that NoveCite issues additional equity securities in the future this would likely reduce our percentage

ownership, unless we were to increase our investment, which would further reduce the portion of any benefit that might be derived

from the NoveCite drug candidate’s successful development.

FDA programs related to the development and approval of treatments for COVID-19 and its symptoms may not be available to us or

actually lead to a faster development or regulatory review or approval process for NoveCite, our proposed treatment for ARDS,

nor will it assure FDA approval of such a treatment.

intend to develop NoveCite under the FDA’s recently created Coronavirus Treatment Acceleration Program, or CTAP.

program was designed to accelerate the development of COVID-19 treatments via faster communications and regulatory review protocols.

In late April 2020, we made a pre-IND submission to the FDA for this treatment and requested the FDA’s feedback to support

the most expeditious pathway for clinical development of the therapy.

The CTAP program has only recently begun and the FDA has

broad discretion in administering the CTAP program and therefore we cannot assure you what the FDA might decide.

Even though we

believe that the response from the FDA was favorable, we did not specifically request guidance on the CTAP program;

we may encounter

problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a faster development process,

review or approval compared to conventional FDA procedures.

our NoveCite product candidate is based on novel technologies, it is difficult to predict the regulatory approval process and

the time, the cost and our ability to successfully initiate, conduct and complete clinical development, and obtain the necessary

regulatory and reimbursement approvals, required for commercialization of our NoveCite product candidate.

NoveCite’s

cell programming technology and platform for generating cell therapy products using allogenic mesenchymal stem cells derived from

iPSCs represent novel therapeutic approaches, and to our knowledge there are currently no iPSC-derived cell products approved

anywhere in the world for commercial sale.

As such, it is difficult to accurately predict the type and scope of challenges that

NoveCite may incur during development of its NoveCite product candidate, and it faces uncertainties associated with the preclinical

and clinical development, manufacture and regulatory requirements for the initiation and conduct of clinical trials, regulatory

approval, and reimbursement required for successful commercialization of its NoveCite product candidate.

In addition, because

NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage, NoveCite is currently assessing safety in humans

and have not yet been able to assess the long-term effects of treatment.

Animal models and assays may not accurately predict the

safety and efficacy of our product candidate in our target patient populations, and appropriate models and assays may not exist

for demonstrating the safety and purity of the NoveCite product candidate, as required by the FDA and other regulatory authorities

for ongoing clinical development and regulatory approval.

pre-clinical and clinical development, manufacture, and regulatory requirements for approval of the NoveCite product candidate

may be more expensive and take longer than for other more well-known or extensively studied pharmaceutical or biopharmaceutical

product candidates due to a lack of prior experiences on the side of both developers and regulatory agencies.

Additionally, due

to the uncertainties associated with the pre-clinical and clinical development, manufacture, and regulatory requirements for approval

of the NoveCite product candidate, NoveCite may be required to modify or change its pre-clinical and clinical development plans

or its manufacturing activities and plans, or be required to meet stricter regulatory requirements for approval.

Any such modifications

or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory approval or commercialize

its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition and results

of operations.

immunotherapies, and stem cell therapies and iPSC-derived cell therapies in particular, represent relatively new therapeutic areas,

and the FDA has cautioned consumers about potential safety risks associated with cell therapies.

To date, there are relatively

few approved cell therapies.

As a result, the regulatory approval process for a product candidate such as NoveCite is uncertain

and may be more expensive and take longer than the approval process for product candidates based on other, better known or more

extensively studied technologies and therapeutic approaches.

For example, there are currently no FDA approved products with a

label designation that supports the use of a product to treat and reduce the severity of ARDS in patients with COVID-19, which

makes it difficult to determine the clinical endpoints and data required to support an application or regulatory approval, and

the time and cost required to obtain regulatory approval in the United States for our product candidate.

requirements in the United States governing cell therapy products have changed frequently and the FDA or other regulatory bodies

may change the requirements, or identify different regulatory pathways, for approval of the NoveCite product candidate.

within the FDA, the Center for Biologics Evaluation and Research, or CBER, restructured and created a new Office of Tissues and

Advanced Therapies to better align its oversight activities with FDA Centers for Drugs and Medical Devices.

It is possible that

over time new or different divisions may be established or be granted the responsibility for regulating cell and/or gene therapy

products, including iPSC-derived cell products, such as the NoveCite product candidate.

As a result, NoveCite may be required

to change its regulatory strategy or to modify its applications for regulatory approval, which could delay and impair its ability

to complete the pre-clinical and clinical development and manufacture of, and obtain regulatory approval for, its NoveCite product

Changes in regulatory authorities and advisory groups, or any new requirements or guidelines they promulgate, may lengthen

the regulatory review process, require NoveCite to perform additional studies, increase its development and manufacturing costs,

lead to changes in regulatory pathways, positions and interpretations, delay or prevent approval and commercialization of the

NoveCite product candidate or lead to significant post-approval limitations or restrictions.

Any fast track designation or grant of priority

review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor will it assure FDA

approval of our product candidates.

Additionally, our product candidates may treat indications that do not qualify for priority review

We have received fast track designation for Mino-Lok

to treat and salvage infected central venous catheters in patients with CRBSIs.

We may seek fast track designation for some of our other

product candidates or priority review of applications for approval of our product candidates for certain indications.

If a drug is intended

for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for

this condition, the drug sponsor may apply for the FDA fast track designation.

If a product candidate offers major advances in treatment,

the FDA may designate it eligible for priority review.

The FDA has broad discretion whether or not to grant these designations, so even

if we believe a particular product candidate is eligible for these designations, we cannot assure you that the FDA would decide to grant

Even with the fast track designation for Mino-Lok and if we do receive fast track designation or priority review for any other product

candidate, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

withdraw fast track designation from Mino-Lok or any other product candidate to be so designated if it believes that the designation is

no longer supported by data from our clinical development program.

We do not own NoveCite, Inc.

will share any benefits from the development of its NoveCite product candidate with the other stockholder.

As of November 30, 2021, we owned 75% of the outstanding

common stock of NoveCite.

As a result, we will only be entitled to a portion of any benefits that flow from the development by NoveCite

of its NoveCite product candidate or any other product candidates that it might develop.

In the event that NoveCite issues additional

equity securities in the future this would likely reduce our percentage ownership, unless we were to increase our investment, which would

further reduce the portion of any benefit that might be derived from the NoveCite drug candidate’s successful development.

Any FDA programs related to the development

and approval of treatments for COVID-19 and its symptoms may not be available to us or actually lead to a faster development or regulatory

review or approval process for NoveCite, our proposed treatment for ARDS, nor will it assure FDA approval of such a treatment.

We intend to develop NoveCite under the FDA’s

Coronavirus Treatment Acceleration Program, or CTAP.

The CTAP program was designed to accelerate the development of COVID-19 treatments

via faster communications and regulatory review protocols.

In late April 2020, we made a pre-IND submission to the FDA for this treatment

and requested the FDA’s feedback to support the most expeditious pathway for clinical development of the therapy.

The CTAP program

has only recently begun and the FDA has broad discretion in administering the CTAP program and therefore we cannot assure you what the

FDA might decide.

Even though we believe that the response from the FDA was favorable, we did not specifically request guidance on the

CTAP program we may encounter problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a

faster development process, review or approval compared to conventional FDA procedures.

Because our NoveCite product candidate is

based on novel technologies, it is difficult to predict the regulatory approval process and the time, the cost and our ability to successfully

initiate, conduct and complete clinical development, and obtain the necessary regulatory and reimbursement approvals, required for commercialization

of our NoveCite product candidate.

NoveCite’s cell programming technology and

platform for generating cell therapy products using allogenic mesenchymal stem cells derived from iPSCs represent novel therapeutic approaches,

and to our knowledge there are currently no iPSC-derived cell products approved anywhere in the world for commercial sale.

is difficult to accurately predict the type and scope of challenges that NoveCite may incur during development of its NoveCite product

candidate, and it faces uncertainties associated with the preclinical and clinical development, manufacture and regulatory requirements

for the initiation and conduct of clinical trials, regulatory approval, and reimbursement required for successful commercialization of

its NoveCite product candidate.

In addition, because NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage,

NoveCite is currently assessing safety in humans and have not yet been able to assess the long-term effects of treatment.

Animal models

and assays may not accurately predict the safety and efficacy of our product candidate in our target patient populations, and appropriate

models and assays may not exist for demonstrating the safety and purity of the NoveCite product candidate, as required by the FDA and

other regulatory authorities for ongoing clinical development and regulatory approval.

The pre-clinical and clinical development, manufacture,

and regulatory requirements for approval of the NoveCite product candidate may be more expensive and take longer than for other more well-known

or extensively studied pharmaceutical or biopharmaceutical product candidates due to a lack of prior experiences on the side of both developers

and regulatory agencies.

Additionally, due to the uncertainties associated with the pre-clinical and clinical development, manufacture,

and regulatory requirements for approval of the NoveCite product candidate, NoveCite may be required to modify or change its pre-clinical

and clinical development plans or its manufacturing activities and plans, or be required to meet stricter regulatory requirements for

Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory

approval or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition

and results of operations.

Cellular immunotherapies, and stem cell therapies

and iPSC-derived cell therapies in particular, represent relatively new therapeutic areas, and the FDA has cautioned consumers about potential

safety risks associated with cell therapies.

To date, there are relatively few approved cell therapies.

As a result, the regulatory approval

process for a product candidate such as NoveCite is uncertain and may be more expensive and take longer than the approval process for

product candidates based on other, better known or more extensively studied technologies and therapeutic approaches.

For example, there

are currently no FDA approved products with a label designation that supports the use of a product to treat and reduce the severity of

ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application

or regulatory approval, and the time and cost required to obtain regulatory approval in the United States for our product candidate.

Regulatory requirements in the United States governing

cell therapy products have changed frequently and the FDA or other regulatory bodies may change the requirements, or identify different

regulatory pathways, for approval of the NoveCite product candidate.

For example, within the FDA, the Center for Biologics Evaluation

and Research, or CBER, restructured and created a new Office of Tissues and Advanced Therapies to better align its oversight activities

with FDA Centers for Drugs and Medical Devices.

It is possible that over time new or different divisions may be established or be granted

the responsibility for regulating cell and/or gene therapy products, including iPSC-derived cell products, such as the NoveCite product

As a result, NoveCite may be required to change its regulatory strategy or to modify its applications for regulatory approval,

which could delay and impair its ability to complete the pre-clinical and clinical development and manufacture of, and obtain regulatory

approval for, its NoveCite product candidate.

Changes in regulatory authorities and advisory groups, or any new requirements or guidelines

they promulgate, may lengthen the regulatory review process, require NoveCite to perform additional studies, increase its development

and manufacturing costs, lead to changes in regulatory pathways, positions and interpretations, delay or prevent approval and commercialization

of the NoveCite product candidate or lead to significant post-approval limitations or restrictions.

As NoveCite advances its NoveCite

product candidate, NoveCite will be required to consult with the FDA and other regulatory authorities, and its NoveCite product

candidate will likely be reviewed by an FDA advisory committee.

NoveCite also must comply with applicable requirements, and if

it fails to do so, it may be required to delay or discontinue development of its NoveCite product candidate.

Delays or unexpected

costs in obtaining, or the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market

could impair NoveCite’s and our ability to generate sufficient product revenues to maintain our respective businesses.

has assumed that the biological capabilities of iPSCs and adult-donor derived cells are likely to be comparable.

If it is discovered

that this assumption is incorrect, the NoveCite product candidate research and development activities could be harmed.

anticipates that its research and development for its NoveCite product candidate will involve iPSCs, rather than adult-donor derived

With respect to iPSCs, NoveCite believes that scientists are still somewhat uncertain about the clinical utility, life

span, and safety of such cells, and whether such cells differ in any clinically significant ways from adult-donor derived cells.

If NoveCite discovers that iPSCs will not be useful for whatever reason for its NoveCite product candidate program, this would

negatively affect NoveCite’s ability to develop a marketable product and it and we may never become profitable, which would

have an adverse effect on our respective businesses, prospects, financial condition and results of operations.

if we receive regulatory approval to commercialize a product candidate, our ability to generate revenues from any resulting product

will be subject to a variety of risks, many of which are out of our control.

if one of our product candidates obtains regulatory approval, that product may not gain market acceptance among physicians, patients,

healthcare payers or the medical community.

The indication may be limited to a subset of the population or we may implement a

distribution system and patient access program that is limited.

Coverage and reimbursement of our product candidates by third-party

payers, including government payers, generally is also necessary for commercial success.

We believe that the degree of market

acceptance and our ability to generate revenues from any approved product candidate or acquired approved product will depend on

a number of factors, including:

product candidate, NoveCite will be required to consult with the FDA and other regulatory authorities, and its NoveCite product candidate

will likely be reviewed by an FDA advisory committee.

NoveCite also must comply with applicable requirements, and if it fails to do so,

it may be required to delay or discontinue development of its NoveCite product candidate.

Delays or unexpected costs in obtaining, or

the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market could impair NoveCite’s

and our ability to generate sufficient product revenues to maintain our respective businesses.

NoveCite has assumed that the biological

capabilities of iPSCs and adult-donor derived cells are likely to be comparable.

If it is discovered that this assumption is incorrect,

the NoveCite product candidate research and development activities could be harmed.

NoveCite anticipates that its research and development

for its NoveCite product candidate will involve iPSCs, rather than adult-donor derived cells.

With respect to iPSCs, NoveCite believes

that scientists are still somewhat uncertain about the clinical utility, life span, and safety of such cells, and whether such cells differ

in any clinically significant ways from adult-donor derived cells.

If NoveCite discovers that iPSCs will not be useful for whatever reason

for its NoveCite product candidate program, this would negatively affect NoveCite’s ability to develop a marketable product and

it and we may never become profitable, which would have an adverse effect on our respective businesses, prospects, financial condition

and results of operations.

Even if we receive regulatory approval to

commercialize a product candidate, our ability to generate revenues from any resulting product will be subject to a variety of risks,

many of which are out of our control.

Even if one of our product candidates obtains

regulatory approval, that product may not gain market acceptance among physicians, patients, healthcare payers or the medical community.

The indication may be limited to a subset of the population or we may implement a distribution system and patient access program that

Coverage and reimbursement of our product candidates by third-party payers, including government payers, generally is also

necessary for commercial success.

We believe that the degree of market acceptance and our ability to generate revenues from any approved

product candidate or acquired approved product will depend on a number of factors, including:

prevalence and severity of any side effects;

results of any post-approval studies of the

potential or perceived advantages or disadvantages

over alternative treatments;

availability of coverage and reimbursement from

government and other third-party payers;

the willingness of patients to pay out of pocket

in the absence of government or third-party coverage;

the relative convenience and ease of administration

and dosing schedule;

product labeling or product insert requirements

of the FDA or other regulatory authorities;

strength of sales, marketing and distribution

price of any future products, if approved, both

in absolute terms and relative to alternative treatments;

the effectiveness of our or any future collaborators’

sales and marketing strategies;

the effect of current and future healthcare

laws on any approved products;

patient access programs that require patients

to provide certain information prior to receiving new and refill prescriptions;

requirements for prescribing physicians to complete

certain educational programs for prescribing drugs.

approved, any product candidate may fail to achieve market acceptance or generate significant revenue to achieve or sustain profitability.

In addition, our efforts to educate the medical community and third-party payers on the benefits of any product candidate may

require significant resources and may never be successful.

if approved for marketing by applicable regulatory bodies, we will not be able to create a market for any of our product candidates

if we fail to establish marketing, sales and distribution capabilities, either on our own or through arrangements with third parties.

strategy with our product candidates is to outsource to third parties all or most aspects of the product development process,

and possibly marketing, sales and distribution activities.

results of any post-approval studies of the product;

potential or perceived advantages or disadvantages over alternative treatments;

availability of coverage and reimbursement from government and other third-party payers;

the willingness of patients to pay out of pocket in the absence of government or third-party coverage;

the relative convenience and ease of administration and dosing schedule;

product labeling or product insert requirements of the FDA or other regulatory authorities;

strength of sales, marketing and distribution support;

price of any future products, if approved, both in absolute terms and relative to alternative treatments;

the effectiveness of our or any future collaborators’ sales and marketing strategies;

the effect of current and future healthcare laws on any approved products;

patient access programs that require patients to provide certain information prior to receiving new and refill prescriptions;

requirements for prescribing physicians to complete certain educational programs for prescribing drugs.

If approved, any product candidate may fail to

achieve market acceptance or generate significant revenue to achieve or sustain profitability.

In addition, our efforts to educate the

medical community and third-party payers on the benefits of any product candidate may require significant resources and may never be successful.

Even if approved for marketing by applicable

regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales and

distribution capabilities, either on our own or through arrangements with third parties.

Our strategy with our product candidates is to

outsource to third parties all or most aspects of the product development process, and possibly marketing, sales and distribution activities.

Currently, we do not have any sales, marketing or distribution capabilities.

In order to generate sales of any product candidate that receives regulatory approval, we must either acquire or develop an internal

marketing and sales force with technical expertise and with supporting distribution capabilities or make arrangements with third

parties to perform these services for us.

The acquisition or development of a sales and distribution infrastructure would require

substantial resources, which may divert the attention of our management and key personnel and defer our product development efforts.

To the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts

In order to generate sales of any product candidate that

receives regulatory approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with

supporting distribution capabilities or make arrangements with third parties to perform these services for us.

The acquisition or development

of a sales and distribution infrastructure would require substantial resources, which may divert the attention of our management and key

personnel and defer our product development efforts.

To the extent that we enter into marketing and sales arrangements with other companies,

our revenues will depend on the efforts of others.

These efforts may not be successful.

If we fail to develop sales, marketing and distribution channels, or enter into

arrangements for such with third parties, we will experience delays in product launch and sales and incur increased costs.

markets in which we operate are highly competitive and we may be unable to compete successfully against new entrants or established

in the pharmaceutical and medical products industries is intense and is characterized by costly and extensive research efforts

and rapid technological progress.

We are aware of several pharmaceutical companies also actively engaged in the development of

therapies or products for at least some of the same conditions we are targeting.

Many of these companies have substantially greater

research and development capabilities as well as substantially greater marketing, financial and human resources than we do.

addition, many of these companies have significantly greater experience than us in undertaking pre-clinical testing, clinical

trials and other regulatory approval procedures.

Our competitors may develop technologies and products that are more effective

than those we are researching and developing.

Such developments could render our product candidates, if approved, less competitive

or possibly obsolete.

We are also competing with respect to marketing capabilities and manufacturing efficiency, areas in which

we have no current capabilities and in which we have no experience as a company, although our executive officers do have commercialization

However, that experience might not translate into the successful development and launch of any of our product candidates.

If we fail to develop sales, marketing and distribution

channels, or enter into arrangements for such with third parties, we will experience delays in product launch and sales and incur increased

The markets in which we operate are highly

competitive and we may be unable to compete successfully against new entrants or established companies.

Competition in the pharmaceutical and medical

products industries is intense and is characterized by costly and extensive research efforts and rapid technological progress.

aware of several pharmaceutical companies also actively engaged in the development of therapies or products for at least some of the same

conditions we are targeting.

Many of these companies have substantially greater research and development capabilities as well as substantially

greater marketing, financial and human resources than we do.

In addition, many of these companies have significantly greater experience

than us in undertaking pre-clinical testing, clinical trials and other regulatory approval procedures.

Our competitors may develop technologies

and products that are more effective than those we are researching and developing.

Such developments could render our product candidates,

if approved, less competitive or possibly obsolete.

We are also competing with respect to marketing capabilities and manufacturing efficiency,

areas in which we have no current capabilities and in which we have no experience as a company, although our executive officers do have

commercialization experience.

However, that experience might not translate into the successful development and launch of any of our product

Mergers, acquisitions, joint ventures and similar events may also significantly increase the competition we face.

new developments, including the development of other drug technologies and methods of preventing the incidence of disease, occur

in the pharmaceutical and medical technology industries at a rapid pace.

These developments may render our product candidates

obsolete or noncompetitive.

Compared to us, many of our potential competitors have substantially greater:

research and development

resources, including personnel and technology;

regulatory resources,

experience and expertise;

product candidate

development and clinical trial resources and experience;

product sourcing,

sales and marketing resources and experience;

experience and expertise

in exploitation of intellectual property rights;

access to strategic

partners and capital resources.

a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we can or may obtain

patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates.

Our competitors may also develop products that are more effective, more useful and less costly than ours and may also be more

successful in manufacturing and marketing their products.

In addition, our competitors may be more effective than us in commercializing

their products and as a result, our business and prospects might be materially harmed.

and patients might not accept and use any of our product candidates for which regulatory approval is obtained.

if the FDA approves one of our product candidates, physicians and patients might not accept and use it.

Acceptance and use of

our approved product candidates will depend upon a number of factors, including:

perceptions by members of the health care community,

including physicians, about the safety and effectiveness of any of our product candidates;

perceptions by members of the health care community,

including physicians, about the use of our product candidates versus the then respective standards of care for the disease

or problem that we seek to address with our product candidates;

cost-effectiveness of our product candidates

relative to competing products or therapies;

availability of reimbursement for our product

candidates from government or other healthcare payers;

effective marketing and distribution efforts

by us and/or our licensees and distributors, if any.

any of our current product candidates are approved, we expect their sales to generate substantially all of our revenues for the

foreseeable future, and as a result, the failure of any of these product candidates to find market acceptance would harm our business

and would require us to seek additional financing.

ability to generate product revenues will be diminished if any of our product candidates that may be approved sell for inadequate

prices or patients are unable to obtain adequate levels of reimbursement.

ability to commercialize our product candidates, alone or with collaborators, will depend in part on the extent to which reimbursement

will be available from:

government and health

administration authorities;

private health maintenance

organizations and health insurers;

other healthcare

uncertainty exists as to the reimbursement status of newly approved healthcare products.

Healthcare payers, including Medicare,

are challenging the prices charged for medical products and services.

Government and other healthcare payers increasingly attempt

to contain healthcare costs by limiting both coverage and the level of reimbursement for drugs.

Even if our product candidates

are approved by the FDA, insurance coverage might not be available, and reimbursement levels might be inadequate, to cover our

If government and other healthcare payers do not provide adequate coverage and reimbursement levels for our products,

once approved, market acceptance of such products could be reduced.

Proposals to modify the current health care system in the

to improve access to health care and control its costs are continually being considered by the federal and state governments.

In March 2010, the U.S.

Congress passed landmark healthcare legislation.

Portions of this legislation have been repealed in recent

years and members of the U.S.

Congress and some state legislatures continue to seek to overturn at least some remaining portions

of the legislation and we expect they will continue to review and assess this legislation and possibly alternative health care

reform proposals.

We cannot predict what impact on federal reimbursement policies this legislation will have in general or on

our business specifically.

We cannot predict whether new proposals will be made or adopted, when they may be adopted or what impact

they may have on us if they are adopted.

administration authorities in countries other than the U.S.

may not provide reimbursement for our products at rates sufficient

for us to achieve profitability, or at all.

Like the U.S., these countries have considered health care reform proposals and could

materially alter their government-sponsored health care programs by reducing reimbursement rates.

Any reduction in reimbursement

rates under Medicare or foreign health care programs could negatively affect the pricing of our product candidates.

not able to charge a sufficient amount for our product candidates, then our margins and our profitability will be adversely affected.

are and will be dependent on third-party contract research organizations to conduct all of our clinical trials.

are and will be dependent on third-party research organizations to conduct all of our clinical trials with respect to our product

candidates, including any candidates that we may develop in the future.

If we are unable to obtain any necessary testing services

on acceptable terms, we may not complete our product development efforts in a timely or cost-effective manner or at all.

rely on third parties for human trials, we may lose some control over these activities and become too dependent upon these parties.

These third parties may not complete testing activities on schedule or when we so request.

We may not be able to secure and maintain

suitable research organizations to conduct our human trials.

We are responsible for confirming that each of our clinical trials

is conducted in accordance with the trial’s general plan and protocol.

Moreover, the FDA and foreign regulatory agencies

require us to comply with regulations and standards, commonly referred to as good clinical practices, for conducting, recording

and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the trial

participants are adequately protected.

Our reliance on third parties does not relieve us of these responsibilities and requirements.

If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines,

if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure

to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or

clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any

of our product candidates.

rely exclusively on third parties to formulate and manufacture our product candidates.

do not have and do not intend to establish our own manufacturing facilities.

Consequently, we lack the physical plant to formulate

and manufacture our product candidates, which are currently being manufactured entirely by commercial third-party manufacturers.

If any product candidate we might develop or acquire in the future receives FDA approval, we will rely on one or more third-party

contractors to manufacture our products.

If, for any reason, we become unable to rely on our current source or any future source

or sources to manufacture our product candidates, either for pre-clinical or clinical trials or for commercial quantities, then

we would need to identify and contract with additional or replacement third-party manufacturers to manufacture compounds for preclinical,

clinical and commercial purposes.

We might not be successful in identifying additional or replacement third-party manufacturers,

or in negotiating acceptable terms with any that we do identify.

If we are unable to secure and maintain third-party manufacturing

capacity, the development and sales of our product candidates and our financial performance might be materially affected.

addition, before any of our collaborators can begin to commercially manufacture our product candidates, each must obtain regulatory

approval of the manufacturing facility and process.

Manufacturing of drugs for clinical and commercial purposes must comply with

the FDA’s cGMP and applicable non-U.S.

new developments, including the development of other drug technologies and methods of preventing the incidence of disease, occur in the

pharmaceutical and medical technology industries at a rapid pace.

These developments may render our product candidates obsolete or noncompetitive.

Compared to us, many of our potential competitors have substantially greater as well as access to strategic partners and capital resources.

As a result of these factors, our competitors

may obtain regulatory approval of their products more rapidly than we can or may obtain patent protection or other intellectual property

rights that limit our ability to develop or commercialize our product candidates.

Our competitors may also develop products that are more

effective, more useful and less costly than ours and may also be more successful in manufacturing and marketing their products.

our competitors may be more effective than us in commercializing their products and as a result, our business and prospects might be materially

Physicians and patients might not accept

and use any of our product candidates for which regulatory approval is obtained.

Even if the FDA approves one of our product candidates,

physicians and patients might not accept and use it.

Acceptance and use of our approved product candidates will depend upon a number of

factors, including:

perceptions by members of the health care community, including physicians, about the safety and effectiveness of any of our product candidates;

perceptions by members of the health care community, including physicians, about the use of our product candidates versus the then respective standards of care for the disease or problem that we seek to address with our product candidates;

cost-effectiveness of our product candidates relative to competing products or therapies;

availability of reimbursement for our product candidates from government or other healthcare payers;

effective marketing and distribution efforts by us and/or our licensees and distributors, if any.

If any of our current product candidates are approved,

we expect their sales to generate substantially all of our revenues for the foreseeable future, and as a result, the failure of any of

these product candidates to find market acceptance would harm our business and would require us to seek additional financing.

Our ability to generate product revenues

will be diminished if any of our product candidates that may be approved sell for inadequate prices or patients are unable to obtain adequate

levels of reimbursement.

Our ability to commercialize our product candidates,

alone or with collaborators, will depend in part on the extent to which reimbursement will be available from:

government and health administration authorities;

private health maintenance organizations and health insurers;

other healthcare payers.

Significant uncertainty exists as to the reimbursement

status of newly approved healthcare products.

Healthcare payers, including Medicare, are challenging the prices charged for medical products

and services.

Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the

level of reimbursement for drugs.

Even if our product candidates are approved by the FDA, insurance coverage might not be available, and

reimbursement levels might be inadequate, to cover our products.

If government and other healthcare payers do not provide adequate coverage

and reimbursement levels for our products, once approved, market acceptance of such products could be reduced.

We cannot predict whether

federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation would be

on the healthcare industry in general or on our business specifically.

Health administration authorities in countries

other than the U.S.

may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all.

the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care

programs by reducing reimbursement rates.

Any reduction in reimbursement rates under Medicare or foreign health care programs could negatively

affect the pricing of our product candidates.

If we are not able to charge a sufficient amount for our product candidates, then our margins

and our profitability will be adversely affected.

We are and will be dependent on third-party

contract research organizations to conduct all of our clinical trials.

We are and will be dependent on third-party research

organizations to conduct all of our clinical trials with respect to our product candidates, including any candidates that we may develop

in the future.

If we are unable to obtain any necessary testing services on acceptable terms, we may not complete our product development

efforts in a timely or cost-effective manner or at all.

If we rely on third parties for human trials, we may lose some control over these

activities and become too dependent upon these parties.

These third parties may not complete testing activities on schedule or when we

We may not be able to secure and maintain suitable research organizations to conduct our human trials.

We are responsible

for confirming that each of our clinical trials is conducted in accordance with the trial’s general plan and protocol.

the FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices,

for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate

and that the trial participants are adequately protected.

Our reliance on third parties does not relieve us of these responsibilities

and requirements.

If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected

deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure

to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical

trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any of our product

We rely exclusively on third parties to

formulate and manufacture our product candidates.

We do not have and do not intend to establish

our own manufacturing facilities.

Consequently, we lack the physical plant to formulate and manufacture our product candidates, which

are currently being manufactured entirely by commercial third-party manufacturers.

If any product candidate we might develop or acquire

in the future receives FDA approval, we will rely on one or more third-party contractors to manufacture our products.

If, for any reason,

we become unable to rely on our current source or any future source or sources to manufacture our product candidates, either for pre-clinical

or clinical trials or for commercial quantities, then we would need to identify and contract with additional or replacement third-party

manufacturers to manufacture compounds for preclinical, clinical and commercial purposes.

We might not be successful in identifying additional

or replacement third-party manufacturers, or in negotiating acceptable terms with any that we do identify.

If we are unable to secure

and maintain third-party manufacturing capacity, the development and sales of our product candidates and our financial performance might

be materially and adversely affected.

In addition, before any of our collaborators can

begin to commercially manufacture our product candidates, each must obtain regulatory approval of the manufacturing facility and process.

Manufacturing of drugs for clinical and commercial purposes must comply with the FDA’s good manufacturing practice, or cGMP, and

applicable non-U.S.

regulatory requirements.

The cGMP requirements govern quality control and documentation

policies and procedures.

Complying with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and

effort in production, recordkeeping, and quality control to assure that the product meets applicable specifications and other

requirements.

Our contracted manufacturing facilities must also pass a pre-approval inspection prior to FDA approval.

to pass a pre-approval inspection might significantly delay FDA approval of our product candidates.

If any of our collaborators

fails to comply with these requirements, we would be subject to possible regulatory action which could limit the jurisdictions

in which we are permitted to sell our product candidates.

As a result, our business, financial condition, and results of operations

might be materially harmed.

reliance on a limited number of third-party manufacturers exposes us to the following risks:

We might be unable to identify manufacturers

for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must

approve any replacement contractor.

The cGMP requirements govern quality control and documentation policies and procedures.

with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and effort in production, recordkeeping, and quality

control to assure that the product meets applicable specifications and other requirements.

Our contracted manufacturing facilities must

also pass a pre-approval inspection prior to FDA approval.

Failure to pass a pre-approval inspection might significantly delay FDA approval

of our product candidates.

If any of our collaborators fails to comply with these requirements, we would be subject to possible regulatory

action which could limit the jurisdictions in which we are permitted to sell our product candidates.

As a result, our business, financial

condition, and results of operations might be materially harmed.

Our reliance on a limited number of third-party

manufacturers exposes us to the following risks:

We might be unable to identify manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor.

This approval would generally require compliance inspections.

In addition, a new manufacturer

would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after

receipt of FDA approval, if any;

Our third-party manufacturers might be unable

to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical and commercial

needs, if any;

Our contract manufacturers might not perform

as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or

to successfully produce, store and distribute our product candidates for commercialization;

Currently, our contract manufacturer for our

clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions and adds the

risk of political and environmental uncertainties that might effect those countries;

Drug manufacturers are subject to ongoing periodic

unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government

regulations and corresponding foreign standards.

We do not have complete control over third-party manufacturers’

with these regulations and standards;

If any third-party manufacturer makes improvements

in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual property

rights to the innovation with our licensors;

Operations of our third-party manufacturers

or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the manufacturer

or supplier or a natural disaster or a pandemic such as COVID-19;

We might compete with other companies for access

to these manufacturers’

facilities and might be subject to manufacturing delays if the manufacturers give other clients

higher priority than us.

of these risks could delay our clinical trials or the approval, if any, of our product candidates by the FDA or any foreign regulatory

agency or the commercialization of our product candidates and could result in higher costs or deprive us of potential product

As a result, our business, financial condition, and results of operations might be materially harmed.

we materially breach or default under any of our license agreements, the licensor party to such agreement will have the right

to terminate the license agreement, which termination may materially harm our business.

commercial success will depend in part on the maintenance of our license agreements.

Currently, we are a party to two in-license

agreements with MDACC, one for Mino-Lok (sub-licensed from the entity holding the license from MDACC) and one for Mino-Wrap.

recently entered into an in-license agreement with Novellus through our subsidiary NoveCite.

Additionally, we expect to enter

into additional license agreements in the future.

In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after receipt of FDA approval, if any;

Our third-party manufacturers might be unable to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical and commercial needs, if any;

Our contract manufacturers might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our product candidates for commercialization;

Currently, our contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions and adds the risk of political and environmental uncertainties that might affect those countries;

Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’ compliance with these regulations and standards;

If any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual property rights to the innovation with our licensors;

Operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the manufacturer or supplier or a natural disaster or a pandemic such as COVID-19;

We might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than us.

Each of these risks could delay our clinical trials

or the approval, if any, of our product candidates by the FDA or any foreign regulatory agency or the commercialization of our product

candidates and could result in higher costs or deprive us of potential product revenues.

As a result, our business, financial condition,

and results of operations might be materially harmed.

If we materially breach or default under

any of our license agreements, the licensor party to such agreement will have the right to terminate the license agreement, which termination

may materially harm our business.

Our commercial success will depend in part on

the maintenance of our current and any future license agreements.

Our license agreements impose, and we expect that future license agreements

will impose, various diligence, milestone payment, royalty and other obligations on us.

For example, under our current license

agreements, we are required to use commercially reasonable diligence to develop and commercialize a product and to satisfy specified

payment obligations.

If we fail to comply with our obligations under our current license agreements or any future license agreements

with any party, or we are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we

would not be able to market products covered by the license.

Each of our license agreements provides the licensor with a right

to terminate the license agreement for our material breach or default under the agreement, including the failure to make any required

milestone or other payments.

Should the licensor under any of our license agreements exercise such a termination right, we would

lose our right to the intellectual property under the respective license agreement, which loss may materially harm our business.

termination, or breach by, or conflict with our strategic partners or licensees could harm our business .

we or any of our current or future collaborators or licensees fail to renew or terminate any of our collaborations or licensing

arrangements or if either party fails to satisfy its obligations under any of our collaboration or license agreements or complete

them in a timely manner, we could have difficulty completing the development of any of our product candidates and potentially

lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well

as volatility in any future revenue.

In addition, our agreements with our collaborators and licensees may have provisions that

give rise to disputes regarding the rights and obligations of the parties.

These and other possible disagreements could lead to

termination of the agreement or delays in collaborative research, development, supply or commercialization of our product candidates,

or could require or result in litigation or arbitration.

Any such conflicts with our collaborators could reduce our ability to

obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators, adversely

affecting our business and revenues.

Finally, any of our collaborations or license agreements may prove to be unsuccessful.

plan to grow and develop our business through acquisitions of or investment in new or complementary businesses, products or technologies,

and the failure to manage these acquisitions or investments, or the failure to integrate them with our existing business, could

have a material adverse effect on us.

business strategy is based on the acquisition of additional product candidates.

This is evidenced by our in-licensing of NoveCite

in October 2020.

We might consider opportunities to acquire or invest in other technologies, products and businesses that might

enhance our capabilities or complement our current product candidates.

Potential and completed acquisitions and strategic investments

involve numerous risks, including potential problems or issues associated with the following:

assimilating the

acquired technologies, products or business operations, as we are currently engaged in for NoveCite;

maintaining uniform

standards, procedures, controls and policies;

unanticipated costs

associated with the acquisition or investment;

diversion of our

management’s attention from our preexisting business;

maintaining or obtaining

the necessary regulatory approvals or complying with regulatory standards;

adverse effects

on existing business operations.

have no current commitments with respect to any acquisition or investment in other technologies or businesses.

We do not know

if we will identify other suitable acquisitions, whether we will be able to successfully complete any acquisitions, or whether

we will be able to successfully integrate any acquired product, technology or business into our business operations or retain

key personnel, suppliers or collaborators.

ability to successfully develop our business through acquisitions including the recent in-licensing of NoveCite, will depend on

our ability to identify, negotiate, complete and integrate suitable target businesses or technologies and obtain any necessary

These efforts could be expensive and time consuming and might disrupt our ongoing operations.

If we are unable to efficiently

integrate any acquired business, technology or product into our business operations, our business and financial condition might

be adversely affected.

rely on the significant experience and specialized expertise of our executive management and other key personnel and the loss

of any of our executive management or key personnel or our inability to successfully hire their successors could harm our business.

performance is substantially dependent on the continued services and on the performance of our executive management and other

key personnel, who have extensive experience and specialized expertise in our business.

Our President and Chief Executive Officer,

Myron Holubiak, our Executive Chairman, Leonard Mazur, and our Chief Medical Officer and Executive Vice President, Myron Czuczman,

in particular have significant experience in the running of pharmaceutical companies and/or drug development itself.

Matt Angel, a director of NoveCite, is serving as a technical consultant to that company and was instrumental in the discovery

and development to date of NoveCite.

This depth of experience is of significant benefit to us, especially given the small size

of our management team and our company, including our subsidiaries.

The loss of the services of any of Mr.

For example, under our current license agreements,

we are required to use commercially reasonable diligence to develop and commercialize a product and to satisfy specified payment obligations.

If we fail to comply with our obligations under our current license agreements or any future license agreements with any party, or we

are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we would not be able to market products

covered by the license.

Each of our license agreements provides the licensor with a right to terminate the license agreement for our material

breach or default under the agreement, including the failure to make any required milestone or other payments.

Should the licensor under

any of our license agreements exercise such a termination right, we would lose our right to the intellectual property under the respective

license agreement, which loss may materially harm our business.

Any termination, or breach by, or conflict

with our strategic partners could harm our business .

If we or any of our current or future collaborators

fail to renew or terminate any of our collaboration agreements or if either party fails to satisfy its obligations under any of our collaboration

or license agreements or complete them in a timely manner, we could have difficulty completing the development of any of our product candidates

and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition

as well as volatility in any future revenue.

In addition, our agreements with our collaborators may have provisions that give rise to

disputes regarding the rights and obligations of the parties.

These and other possible disagreements could lead to termination of the

agreement or delays in collaborative research, development, supply or commercialization of our product candidates, or could require or

result in litigation or arbitration.

Any such conflicts with our collaborators could reduce our ability to obtain future collaboration

agreements and could have a negative impact on our relationship with existing collaborators, adversely affecting our business and revenues.

Finally, any of our collaborations may prove to be unsuccessful.

We plan to grow and develop our business

through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions

or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.

Our business strategy is based on the acquisition

of additional product candidates.

This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021.

might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or

complement our current product candidates.

Potential and completed acquisitions and strategic investments involve numerous risks, including

potential problems or issues associated with the following:

assimilating the acquired technologies, products or business operations, as we are currently engaged in for I/ONTAK;

maintaining uniform standards, procedures, controls and policies;

unanticipated costs associated with the acquisition or investment;

diversion of our management’s attention from our preexisting business;

maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards;

adverse effects on existing business operations.

We have no current commitments with respect to

any acquisition or investment in other technologies or businesses.

We do not know if we will identify other suitable acquisitions, whether

we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired product,

technology or business into our business operations or retain key personnel, suppliers or collaborators.

Our ability to successfully develop our business

through acquisitions including the recent in-licensing of I/ONTAK, will depend on our ability to identify, negotiate, complete and integrate

suitable target businesses or technologies and obtain any necessary financing.

These efforts could be expensive and time consuming and

might disrupt our ongoing operations.

If we are unable to efficiently integrate any acquired business, technology or product into our

business operations, our business and financial condition might be adversely affected.

We rely on the significant experience and

specialized expertise of our executive management and other key personnel and the loss of any of our executive management or key personnel

or our inability to successfully hire their successors could harm our business.

Our performance is substantially dependent on

the continued services and on the performance of our executive management and other key personnel, who have extensive experience and specialized

expertise in our business.

Our President and Chief Executive Officer, Myron Holubiak, our Executive Chairman, Leonard Mazur, and our Chief

Medical Officer and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical

companies and/or drug development itself.

In addition, Matt Angel, a director of NoveCite, is serving as a technical consultant to that

company and was instrumental in the discovery and development to date of NoveCite.

This depth of experience is of significant benefit

to us, especially given the small size of our management team and our company, including our subsidiaries.

The loss of the services of

Holubiak, Mr.

Czuczman or Dr.

Angel, as well as any other member of our executive management or any key employees, including those at NoveCite,

could harm our ability to attract capital and develop and commercialize our product candidates.

Neither we nor NoveCite has key

man life insurance policies.

we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed.

utilize the services of a clinical management team on a part-time basis to assist us in managing our ongoing Phase 2 and Phase

3 trials and intend to do so for future preclinical and clinical trials.

While we believe this will provide us with sufficient

staffing for our current and future development efforts, we will need to hire or contract with additional qualified personnel

with expertise in preclinical testing, clinical research and testing, government regulation, formulation and manufacturing and

sales and marketing in connection with the continued development, regulatory approval and commercialization of our product candidates.

We compete for qualified individuals with numerous pharmaceutical and biopharmaceutical companies, universities and other research

institutions.

for these individuals is intense, and we cannot be certain that our search for such personnel will be successful.

Attracting and

retaining qualified personnel will be critical to our success.

In addition, we may be unable to attract and retain those qualified

officers, directors and members of board committees required to provide for effective management.

If we are unable to attract

and retain qualified employees, officers and directors, the management and operation of our business could be adversely affected.

expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties

in managing growth.

will need to manage our anticipated growth and increased operational activity, including as a result of the in-licensing of NoveCite

in October 2020.

Our personnel, systems and facilities currently in place may not be adequate to support this future growth.

need to effectively execute our growth strategy will require that we:

manage our research and development activities

and our regulatory trials effectively;

attract and motivate sufficient numbers of talented

employees or consultants;

manage our internal development efforts effectively

while complying with our contractual obligations to licensors, licensees, contractors, collaborators and other third parties;

develop internal sales and marketing capabilities

or establish collaborations with third parties with such capabilities;

Angel, as well as any other member of our executive management or any key employees,

including those at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.

nor NoveCite has key man life insurance policies.

If we are unable to retain or hire additional

qualified personnel, our ability to grow our business might be harmed.

We utilize the services of a clinical management

team on a part-time basis to assist us in managing our ongoing Phase 2 and Phase 3 trials and intend to do so for future preclinical and

clinical trials.

While we believe this will provide us with sufficient staffing for our current and future development efforts, we will

need to hire or contract with additional qualified personnel with expertise in preclinical testing, clinical research and testing, government

regulation, formulation and manufacturing and sales and marketing in connection with the continued development, regulatory approval and

commercialization of our product candidates.

We compete for qualified individuals with numerous pharmaceutical and biopharmaceutical companies,

universities and other research institutions.

Competition for these individuals is intense,

and we cannot be certain that our search for such personnel will be successful.

Attracting and retaining qualified personnel will be critical

to our success.

In addition, we may be unable to attract and retain those qualified officers, directors and members of board committees

required to provide for effective management.

If we are unable to attract and retain qualified employees, officers and directors, the

management and operation of our business could be adversely affected.

We expect to need to increase the size of

our organization to further develop our product candidates, and we may experience difficulties in managing growth.

We will need to manage our anticipated growth

and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021.

Our personnel, systems and

facilities currently in place may not be adequate to support this future growth.

Our need to effectively execute our growth strategy will

require that we:

manage our research and development activities and our regulatory trials effectively;

attract and motivate sufficient numbers of talented employees or consultants;

manage our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors, collaborators and other third parties;

develop internal sales and marketing capabilities or establish collaborations with third parties with such capabilities;

commercialize our product candidates;

improve our operational, financial and management

controls, reporting systems and procedures.

planned future growth could place a strain on our administrative and operational infrastructure and may require our management

to divert a disproportionate amount of its attention away from our day-to-day activities.

We may not be able to effectively manage

the expansion of our operations or recruit and train additional qualified personnel, which may result in weaknesses in our infrastructure,

and give rise to operational mistakes, loss of business opportunities, loss of employees and consultants and reduced productivity

among remaining employees and consultants.

We may not be able to make improvements to our management information and control systems

in an efficient or timely manner and may discover deficiencies in existing systems and controls.

If our management is unable to

effectively manage our expected growth, our expenses may increase more than expected, our ability to generate or increase our

revenues could be reduced and we may not be able to implement our business strategy.

Our future financial performance and our

ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

of interest may arise from our relationship with NoveCite.

of November 30, 2020, we beneficially owned 75% of the voting power of NoveCite’s outstanding common stock;

Novellus owns

the other 25%.

Our Board Chairman Leonard Mazur, who is also our largest stockholder, is a director and significant shareholder

As a result of our partial ownership and Mr.

Mazur’s relationship to Novellus, our relationship with NoveCite

could give rise to certain conflicts of interest that could have an impact on our and NoveCite’s respective research and

development programs, business opportunities, and operations generally.

though we utilize different technologies than NoveCite, we could find ourselves in competition

with it for research scientists, financing and other resources, licensing, manufacturing,

and distribution arrangements.

will engage for its own business in research and product development programs, investments,

and business ventures, and we will not be entitled to participate or to receive an interest

in those programs, investments, or business ventures other than to the extent as a stockholder

NoveCite will not be obligated to present any particular research and development,

investment, or business opportunity to us, even if the opportunity would be within the

scope of our research and development plans or programs, business objectives, or investment

These opportunities may include, for example, opportunities to acquire businesses

or assets, including but not limited to patents and other intellectual property that

could be used by us or by NoveCite.

conflict of interest will be resolved by our respective boards of directors in keeping

with their fiduciary duties and such policies as they may implement from time to time.

is overlap among our board of directors and senior management and that of NoveCite.

of our directors, Myron Holubiak and Leonard Mazur, also serve as directors of NoveCite.

In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves

as Chief Financial Officer of both Citius and NoveCite.

These overlapping positions could

interfere with the duties owed by such individuals to Citius.

dual roles of our officers and directors who also serve in similar roles with NoveCite could create a conflict of interest and

will require careful monitoring.

share some directors and officers with NoveCite.

This could create conflicts of interest between the two companies in the future.

In the future, situations may arise under the operation of both companies that may create a conflict of interest.

to be diligent to ensure that any such situation is resolved by independent parties.

In particular, NoveCite is free to pursue

opportunities which could potentially be of interest to us, and they are not required to notify us prior to pursuing such opportunities.

Any such conflict of interest or pursuit by NoveCite of a corporate opportunity independent of us could expose us to claims by

our investors and creditors and could harm our results of operations.

Related to Our Regulatory and Legal Environment

are subject to extensive and costly government regulation.

product candidates are and any approved products will be subject to extensive and rigorous domestic government regulation including

regulation by the FDA, the Centers for Medicare and Medicaid Services, other divisions of the U.S.

Department of Health and Human

Services, the U.S.

Department of Justice, state and local governments, and their respective foreign equivalents.

The FDA regulates

the research, development, preclinical and clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling,

storage, approval, advertising, promotion, sale, distribution, import, and export of pharmaceutical products.

If our product candidates

are to be marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not they have

obtained FDA approval.

Such foreign regulation might be equally or more demanding than corresponding U.S.

regulation substantially increases the cost and risk of researching, developing, manufacturing, and selling our product candidates.

The regulatory review and approval process, which includes preclinical testing and clinical trials of each product candidate,

is lengthy, expensive, and uncertain.

We or our collaborators must obtain and maintain regulatory authorization to conduct clinical

trials and approval for each product candidate we intend to market, and the manufacturing facilities used for the product candidates

must be inspected and meet legal requirements.

Securing regulatory approval requires submitting extensive preclinical and clinical

data and other supporting information for each proposed product candidate in order to establish the product’s safety and

efficacy for each intended use.

The development and approval process might take many years, requires substantial resources, and

might never lead to the approval of a product candidate.

Further, the FDA or any foreign regulatory authority could change its

established regulations that govern the drug development and approval process, which could negatively impact the ongoing or future

regulatory review of our product candidates, including the anticipated timeline and cost of development and approval.

we are able to obtain regulatory approval for a particular product candidate, the approval might limit the indicated medical uses

for the product, limit our ability to promote, sell, and distribute the product, require that we conduct costly post-marketing

surveillance, and/or require that we conduct ongoing post-marketing studies.

Material changes to an approved product, such as,

for example, manufacturing changes or revised labeling, might require further regulatory review and approval.

Once obtained, any

approvals might be withdrawn, including, for example, if there is a later discovery of previously unknown problems with the product,

such as a previously unknown safety issue.

we, our collaborators or our contract manufacturers fail to comply with applicable regulatory requirements at any stage during

the regulatory process, such noncompliance could result in, among other things:

suspension or cessation of clinical trials;

in the approval of applications or supplements to approved applications;

refusal of a regulatory authority, including the FDA,

to review pending market approval applications or supplements to approved applications;

warning letters;

import and export

restrictions;

product recalls or seizures;

total or partial suspension of production;

civil penalties;

of previously approved marketing applications or licenses;

recommendations by the FDA or other regulatory authorities against

governmental contracts;

and/or criminal prosecutions.

might not obtain the necessary U.S.

improve our operational, financial and management controls, reporting systems and procedures.

This planned future growth could place a strain

on our administrative and operational infrastructure and may require our management to divert a disproportionate amount of its attention

away from our day-to-day activities.

We may not be able to effectively manage the expansion of our operations or recruit and train additional

qualified personnel, which may result in weaknesses in our infrastructure, and give rise to operational mistakes, loss of business opportunities,

loss of employees and consultants and reduced productivity among remaining employees and consultants.

We may not be able to make improvements

to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and

If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our ability

to generate or increase our revenues could be reduced and we may not be able to implement our business strategy.

Our future financial

performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

Conflicts of interest may arise from our

relationship with NoveCite.

As of November 30, 2021, we beneficially owned

75% of the voting power of NoveCite’s outstanding common stock;

Novellus owns the other 25%.

As a result of our partial ownership,

our relationship with NoveCite could give rise to certain conflicts of interest that could have an impact on our and NoveCite’s

respective research and development programs, business opportunities, and operations generally.

Even though we utilize different technologies than NoveCite, we could find ourselves in competition with it for research scientists, financing and other resources, licensing, manufacturing, and distribution arrangements.

NoveCite will engage for its own business in research and product development programs, investments, and business ventures, and we will not be entitled to participate or to receive an interest in those programs, investments, or business ventures other than to the extent as a stockholder in NoveCite.

NoveCite will not be obligated to present any particular research and development, investment, or business opportunity to us, even if the opportunity would be within the scope of our research and development plans or programs, business objectives, or investment policies.

These opportunities may include, for example, opportunities to acquire businesses or assets, including but not limited to patents and other intellectual property that could be used by us or by NoveCite.

Each conflict of interest will be resolved by our respective boards of directors in keeping with their fiduciary duties and such policies as they may implement from time to time.

There is overlap among our board of directors, senior management and research staffs and that of NoveCite.

Two of our directors, Myron Holubiak and Leonard Mazur, also serve as directors of NoveCite.

In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves as Chief Financial Officer of both Citius and NoveCite.

These overlapping positions could interfere with the duties owed by such individuals to Citius.

Risks Related to Our Regulatory and Legal Environment

We might not obtain the necessary

or foreign regulatory approvals to commercialize any product candidates.

cannot assure you that we will receive the approvals necessary to commercialize for sale any product candidates we are currently

developing or that we may acquire or seek to develop in the future.

We will need FDA approval to commercialize our product candidates

In order to obtain FDA approval of any product candidate, we must submit to the FDA an NDA demonstrating that the

product candidate is safe for humans and effective for its intended use.

This demonstration requires significant research, pre-clinical

studies, and clinical trials.

Satisfaction of the FDA’s regulatory requirements typically takes many years, depends upon

the type, complexity and novelty of the product candidate and requires substantial resources for research, development and testing.

We cannot predict whether our research and clinical approaches will result in products that the FDA considers safe for humans

and effective for their indicated uses.

The FDA has substantial discretion in the product approval process and might require us

to conduct additional pre-clinical and clinical testing, perform post-marketing studies or otherwise limit or impose conditions

on any additional approvals we obtain.

The approval process might also be delayed by changes in government regulation, future

legislation or administrative action or changes in FDA policy that occur prior to or during our product candidate’s regulatory

We cannot assure you that we will receive the

approvals necessary to commercialize for sale any product candidates we are currently developing or that we may acquire or seek to develop

in the future.

We will need FDA approval to commercialize our product candidates in the U.S.

In order to obtain FDA approval of any product

candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate is safe for humans and effective for its

intended use.

This demonstration requires significant research, pre-clinical studies, and clinical trials.

Satisfaction of the FDA’s

regulatory requirements typically takes many years, depends upon the type, complexity and novelty of the product candidate and requires

substantial resources for research, development and testing.

We cannot predict whether our research and clinical approaches will result

in products that the FDA considers safe for humans and effective for their indicated uses.

The FDA has substantial discretion in the product

approval process and might require us to conduct additional pre-clinical and clinical testing, perform post-marketing studies or otherwise

limit or impose conditions on any additional approvals we obtain.

The approval process might also be delayed by changes in government

regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our product candidate’s

regulatory review.

Delays in obtaining regulatory approvals might:

delay commercialization

of, and our ability to derive product revenues from, our product candidates;

impose costly procedures

diminish any competitive

advantages that we might otherwise enjoy.

if we comply with all FDA requests, the FDA might ultimately reject one or more of our NDAs.

We cannot be sure that we will ever

obtain regulatory clearance for any of our product candidates.

Failure to obtain FDA approval of one or more of our product candidates

could severely undermine our business by leaving us without saleable products, and therefore without any potential sources of

revenues, until another product candidate could be developed or obtained and successfully developed, approved and commercialized.

Foreign jurisdictions impose similar regulatory approval processes and we will face the same risks if we seek foreign approval

for any of our product candidates.

There is no guarantee that we will ever be able to successfully develop or acquire any product

any regulatory approval of any product candidate, we will be subject to ongoing regulatory obligations and restrictions, which

may result in significant expense and limit our ability to commercialize our other product candidates.

one of our product candidates is approved by the FDA or by a foreign regulatory authority, we will be required to comply with

extensive regulations for product manufacturing, labeling, packaging, adverse event reporting, storage, distribution, advertising,

promotion and record keeping.

Regulatory approvals may also be subject to significant limitations on the indicated uses or marketing

of the products or to whom and how we may distribute an approved product.

regulatory approval is obtained, the FDA

may still impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for

potentially costly post-approval studies.

For example, the label ultimately approved for any of our product candidates, if any,

may include restrictions on use.

If so, we may be subject to ongoing regulatory obligations and restrictions, which may result

in significant expense and limit our ability to commercialize that product candidate.

The FDA could also require a registry to

track the patients utilizing the product or implement a Risk Evaluation and Mitigation Strategy, or REMS, that could restrict

access to the product, which would reduce our revenues and/or increase our costs.

Potentially costly post-marketing clinical studies

may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest

delay commercialization of, and our ability to derive product revenues from, our product candidates;

impose costly procedures on us;

diminish any competitive advantages that we might otherwise enjoy.

Even if we comply with all FDA requests, the FDA

might ultimately reject one or more of our NDAs or BLAs.

Even if we are able to obtain regulatory approval for a particular product candidate,

the approval might limit the indicated medical uses for the product, limit our ability to promote, sell, and distribute the product, require

that we conduct costly post-marketing surveillance, and/or require that we conduct ongoing post-marketing studies.

We cannot be sure that

we will ever obtain regulatory clearance for any of our product candidates.

Failure to obtain FDA approval of one or more of our product

candidates could severely undermine our business by leaving us without saleable products, and therefore without any potential sources

of revenues, until another product candidate could be developed or obtained and successfully developed, approved and commercialized.

jurisdictions impose similar regulatory approval processes and we will face the same risks if we seek foreign approval for any of our

product candidates.

There is no guarantee that we will ever be able to successfully develop or acquire any product candidate.

Following any regulatory approval of any

product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result in significant expense and

limit our ability to commercialize our other product candidates.

If one of our product candidates is approved by

the FDA or by a foreign regulatory authority, we will be required to comply with extensive regulations for product manufacturing, labeling,

packaging, adverse event reporting, storage, distribution, advertising, promotion and record keeping.

Regulatory approvals may also be

subject to significant limitations on the indicated uses or marketing of the products or to whom and how we may distribute an approved

regulatory approval is obtained, the FDA may still impose significant restrictions on a product’s indicated

uses or marketing or impose ongoing requirements for potentially costly post-approval studies.

For example, the label ultimately approved

for any of our product candidates, if any, may include restrictions on use.

If so, we may be subject to ongoing regulatory obligations

and restrictions, which may result in significant expense and limit our ability to commercialize that product candidate.

The FDA could

also require a registry to track the patients utilizing the product or implement a Risk Evaluation and Mitigation Strategy, or REMS, that

could restrict access to the product, which would reduce our revenues and/or increase our costs.

Potentially costly post-marketing clinical

studies may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest

to the regulatory authority.

Similar risks apply in foreign jurisdictions.

Manufacturers

of pharmaceutical products and their facilities are subject to continual review and periodic inspections by the FDA and other

regulatory authorities for compliance with cGMP regulations, which include requirements relating to quality control and quality

assurance as well as the corresponding maintenance of records and documentation.

Similar regulatory programs exist in foreign

jurisdictions.

Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture

our future approved products, if any, and these facilities are subject to ongoing regulatory inspections.

In addition, regulatory

agencies subject a pharmaceutical product, its manufacturer and the manufacturer’s facilities to continual review and inspections.

The subsequent discovery of previously unknown problems with a product, including adverse events of unanticipated severity or

frequency, or problems with the facility where the product is manufactured, may result in restrictions on the marketing of that

product, up to and including, withdrawal of the product from the market.

If the manufacturing facilities of our suppliers fail

to comply with applicable regulatory requirements, it could result in regulatory action and additional costs to us.

comply with applicable FDA and other regulatory requirements may, either before or after product approval, if any, subject our

company to administrative or judicially imposed sanctions, including:

issuance of Form 483 notices, warning letters

and adverse publicity by the FDA or other regulatory agencies;

imposition of fines and other civil penalties

due to product liability or other issues;

injunctions, suspensions or revocations of regulatory

suspension of any ongoing pre-clinical and clinical

total or partial suspension of manufacturing;

delays in commercialization;

refusal by the FDA to approve pending applications

or supplements to approved applications filed by us or our collaborators;

refusals to permit medical products to be imported

into or exported from the U.S.;

restrictions on operations, including costly

new manufacturing requirements;

product recalls or seizures;

criminal prosecutions.

addition, the law or regulatory policies governing pharmaceutical products may change.

New statutory requirements may be enacted

or additional regulations may be enacted that could prevent or delay regulatory approval of our product candidates.

Contract manufacturing

organizations, or CMOs, and their vendors or suppliers may also face changes in regulatory requirements from governmental agencies

Manufacturers of pharmaceutical products and their

facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP

regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of

records and documentation.

Similar regulatory programs exist in foreign jurisdictions.

Further, regulatory agencies must approve these

manufacturing facilities before they can be used to manufacture our future approved products, if any, and these facilities are subject

to ongoing regulatory inspections.

In addition, regulatory agencies subject a pharmaceutical product, its manufacturer and the manufacturer’s

facilities to continual review and inspections.

The subsequent discovery of previously unknown problems with a product, including adverse

events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, may result in restrictions

on the marketing of that product, up to and including, withdrawal of the product from the market.

If the manufacturing facilities of our

suppliers fail to comply with applicable regulatory requirements, it could result in regulatory action and additional costs to us.

to comply with applicable FDA and other regulatory requirements may, either before or after product approval, if any, subject our company

to administrative or judicially imposed sanctions.

In addition, the law or regulatory policies governing

pharmaceutical products may change.

New statutory requirements may be enacted or additional regulations may be enacted that could prevent

or delay regulatory approval of our product candidates.

Contract manufacturing organizations, or CMOs, and their vendors or suppliers

may also face changes in regulatory requirements from governmental agencies in the U.S.

and other countries.

We cannot predict the likelihood, nature, extent or effects of government regulation that may

arise from future legislation or administrative action, either in the U.S.

We cannot predict the likelihood,

nature, extent or effects of government regulation that may arise from future legislation or administrative action, either in the U.S.

or elsewhere.

If we are not able to maintain regulatory

compliance, we might not be permitted to market any future approved products and our business could suffer.

if we receive regulatory approval to commercialize our product candidates, post-approval marketing and promotion of products is

highly regulated by the FDA, and marketing campaigns which violate FDA standards may result in adverse consequences including

regulatory enforcement action by the FDA as well as follow-on actions filed by consumers and other end-payers, which could result

in substantial fines, sanctions and damage awards against us, any of which could harm our business.

Post-approval

marketing and promotion of products, standards and regulations for direct-to-consumer advertising, dissemination of off-label

product information, industry-sponsored scientific and educational activities and promotional activities are heavily scrutinized

and regulated by the FDA.

Products may only be marketed for approved indications and in accordance with provisions of the FDA

approved labels.

Failure to comply with such requirements may result in adverse publicity, warning letters issued by the FDA,

and civil or criminal penalties.

the event the FDA discovers post-approval violations, we could face penalties in the future including the FDA’s issuance

of a cease and desist order, impounding of our products, and civil or criminal penalties.

As a follow-on to such governmental

enforcement activities, consumers and other end-payers of the product may initiate action against us claiming, among other things,

fraudulent misrepresentation, unfair competition, violation of various state consumer protection statues and unjust enrichment.

If the plaintiffs in such follow-on actions are successful, we could be subject to various damages, including compensatory damages,

treble damages, punitive damages, restitution, disgorgement, prejudgment and post-judgment interest on any monetary award, and

the reimbursement of the plaintiff’s legal fees and costs, any of which could have an adverse effect on our revenue, business,

financial condition and prospects.

could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful.

use of any of our product candidates in pre-clinical and clinical trials, and the sale of any approved products, may expose us

to liability claims and financial losses resulting from the use or sale of our product candidates.

We have obtained limited product

liability insurance coverage for our pre-clinical and clinical trials of $5.0 million per occurrence and in the aggregate, subject

to a deductible of $25,000 per bodily injury and property damage occurrence, and a medical expense per person limit of $25,000.

There can be no assurance that our existing insurance coverage will extend to any other product candidates in the future.

product liability insurance coverage may not be sufficient to satisfy all liabilities resulting from product liability claims.

A successful claim may prevent us from obtaining adequate product liability insurance in the future on commercially desirable

terms, if at all.

Even if a claim is not successful, defending such a claim would be time consuming and expensive, may damage

that product’s and our reputations in the marketplace, and would likely divert management’s attention, any of which

If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products and

our business could suffer.

We could be forced to pay substantial damage

awards if product liability claims that may be brought against us are successful.

The use of any of our product candidates in pre-clinical

and clinical trials, and the sale of any approved products, may expose us to liability claims and financial losses resulting from the

use or sale of our product candidates.

We have obtained limited product liability insurance coverage for our pre-clinical and clinical

trials of $5.0 million per occurrence and in the aggregate, subject to a deductible of $25,000 per bodily injury and property damage occurrence,

and a medical expense per person limit of $25,000.

There can be no assurance that our existing insurance coverage will extend to any other

product candidates in the future.

Any product liability insurance coverage may not be sufficient to satisfy all liabilities resulting

from product liability claims.

A successful claim may prevent us from obtaining adequate product liability insurance in the future on

commercially desirable terms, if at all.

Even if a claim is not successful, defending such a claim would be time consuming and expensive,

may damage that product’s and our reputations in the marketplace, and would likely divert management’s attention, any of which

could have a material adverse effect on our Company.

Related to Our Intellectual Property

business depends on protecting our intellectual property.

the intellectual property rights we have already obtained, as well as the further rights we are also pursuing, our competitors

would have opportunity to take advantage of our research and development efforts to develop competing products.

Our success, competitive

position and future revenues, if any, depend in part on our ability and the abilities of our licensors to obtain and maintain

patent protection for our product candidates, methods, processes and other technologies, to preserve our trade secrets, to prevent

third parties from infringing on our proprietary rights and to operate without infringing the proprietary rights of third parties.

We anticipate filing additional patent applications both in the U.S.

Risks Related to Our Intellectual Property

Our business depends on protecting our intellectual

Without the intellectual property rights we have

already obtained, as well as the further rights we are also pursuing, our competitors would have opportunity to take advantage of our

research and development efforts to develop competing products.

Our success, competitive position and future revenues, if any, depend

in part on our ability and the abilities of our licensors to obtain and maintain patent protection for our product candidates, methods,

processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and

to operate without infringing the proprietary rights of third parties.

We anticipate filing additional patent applications both in the

and in other countries, as appropriate.

However, the patent

process is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting

our product candidates by obtaining and defending patents.

These risks and uncertainties include the following:

Our patent rights might be challenged, invalidated,

or circumvented, or otherwise might not provide any competitive advantage;

Our competitors, many of which have substantially

greater resources than we do and many of which might make significant investments in competing technologies, might seek, or

might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our

product candidates either in the U.S.

However, the patent process is subject to numerous risks and uncertainties, and there can

be no assurance that we will be successful in protecting our product candidates by obtaining and defending patents.

These risks and uncertainties

include the following:

Our patent rights might be challenged, invalidated, or circumvented, or otherwise might not provide any competitive advantage;

Our competitors, many of which have substantially greater resources than we do and many of which might make significant investments in competing technologies, might seek, or might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our product candidates either in the U.S.

or in international markets;

Countries other than the U.S.

might have less

restrictive patent laws than those upheld by U.S.

courts, allowing foreign competitors the ability to exploit these laws to

create, develop, and market competing products;

As a matter of public policy regarding worldwide

health concerns, there might be significant pressure on the U.S.

government and other international governmental bodies to

limit the scope of patent protection both inside and outside the U.S.

might have less restrictive patent laws than those upheld by U.S.

courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products;

As a matter of public policy regarding worldwide health concerns, there might be significant pressure on the U.S.

government and other international governmental bodies to limit the scope of patent protection both inside and outside the U.S.

for product candidates that prove successful.

addition, the U.S.

Patent and Trademark Office and patent offices in other jurisdictions have often required that patent applications

concerning pharmaceutical and/or biotechnology-related inventions be limited or narrowed substantially to cover only the specific

innovations exemplified in the patent application, thereby limiting the scope of protection against competitive challenges.

even if we or our licensors are able to obtain patents, the patents might be substantially narrower than anticipated.

the time period from filing a patent application to the issuance, if ever, of the patent is often more than three years and because

any regulatory approval and marketing for a pharmaceutical product often occurs several years after the related patent application

is filed, the resulting market exclusivity afforded by any patent on our drug candidates and technologies will likely be substantially

less than 20 years.

In addition, the U.S.

Patent and Trademark Office

and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related

inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby

limiting the scope of protection against competitive challenges.

Thus, even if we or our licensors are able to obtain patents, the patents

might be substantially narrower than anticipated.

Because the time period from filing a patent application

to the issuance, if ever, of the patent is often more than three years and because any regulatory approval and marketing for a pharmaceutical

product often occurs several years after the related patent application is filed, the resulting market exclusivity afforded by any patent

on our drug candidates and technologies will likely be substantially less than 20 years.

For example, the U.S.

patent on the original Mino-Lok composition expires in June 2024, and the U.S.

on the stabilized Mino-Lok composition expires in November 2036.

Since we anticipate significant additional time before FDA approval

could be obtained, the maximum market exclusivity afforded by the statutory term of the currently issued patents would be less

than 17 years.

In the United States, the European Union and some other jurisdictions, patent term extensions are available for

certain delays in either patent office proceedings or marketing and regulatory approval processes.

However, due to the specific

requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions even if we encounter

significant delays in patent office proceedings or marketing and regulatory approval.

and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial

risk that such protections will prove inadequate.

patent on the original

Mino-Lok composition expires in June 2024, and the U.S.

patent on the stabilized Mino-Lok composition expires in November 2036.

we anticipate significant additional time before FDA approval could be obtained, the maximum market exclusivity afforded by the statutory

term of the currently issued patents would be less than 17 years.

In the United States, the European Union and some other jurisdictions,

patent term extensions are available for certain delays in either patent office proceedings or marketing and regulatory approval processes.

However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions

even if we encounter significant delays in patent office proceedings or marketing and regulatory approval.

Additionally, patent law is subject to change

and varies among the U.S.

and foreign countries.

Depending on decisions by the United States Congress, the U.S.

federal courts, the USPTO

or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may

weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents we and our licensors or partners may

obtain in the future.

Patent and other intellectual property protection

is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.

Our business and prospects will be harmed if these protections prove insufficient.

rely on trade secret protections through confidentiality agreements with our employees and other parties, and the breach of these

agreements could adversely affect our business and prospects.

rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees,

collaborators, suppliers, and other parties.

There can be no assurance that these agreements will not be breached, that we would

have adequate remedies for any such breach or that our trade secrets will not otherwise become known to or independently developed

by our competitors.

We might be involved from time to time in litigation to determine the enforceability, scope and validity of

our proprietary rights.

Any such litigation could result in substantial cost and divert management’s attention from our

we infringe the rights of third parties we might have to forego developing and/or selling any approved products, pay damages,

or defend against litigation.

our product candidates, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur

substantial costs and we might have to:

obtain licenses, which might not be available

on commercially reasonable terms, if at all;

We rely on trade secret protections through

confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business

and prospects.

We rely on trade secrets, which we seek to protect,

in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties.

can be no assurance that these agreements will not be breached, that we would have adequate remedies for any such breach or that our trade

secrets will not otherwise become known to or independently developed by our competitors.

We might be involved from time to time in litigation

to determine the enforceability, scope and validity of our proprietary rights.

Any such litigation could result in substantial cost and

divert management’s attention from our operations.

If we infringe the rights of third parties

we might have to forego developing and/or selling any approved products, pay damages, or defend against litigation.

If our product candidates, methods, processes

and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we might have to:

obtain licenses, which might not be available on commercially reasonable terms, if at all;

abandon an infringing product candidate;

redesign our product candidates or processes

to avoid infringement;

stop using the subject matter claimed in the

patents held by others;

defend litigation or administrative proceedings

which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and management

of these events could substantially harm our earnings, financial condition and operations.

government could have “march-in rights”

to certain of our intellectual property.

at any time federal monies are used in support of the research and development activities at MDACC that resulted or in the future

result in certain of our issued pending U.S.

patent applications, the federal government retains what are referred to as “march-in

rights”

to patents that are granted on these applications.

Our license agreements for Mino-Lok and Mino-Wrap each provide

that in the event of such governmental funding, our rights are subject to the government’s prior rights, if any.

the license agreements provide that we will comply with the requirements of any agreement between MDACC and the governmental funding

redesign our product candidates or processes to avoid infringement;

stop using the subject matter claimed in the patents held by others;

defend litigation or administrative proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.

Any of these events could substantially harm our

earnings, financial condition and operations.

government could have “march-in

rights” to certain of our intellectual property.

If at any time federal monies are used in support

of the research and development activities at MDACC that resulted or in the future result in certain of our issued pending U.S.

applications, the federal government retains what are referred to as “march-in rights” to patents that are granted on these

applications.

Our license agreements for Mino-Lok and Mino-Wrap each provide that in the event of such governmental funding, our rights

are subject to the government’s prior rights, if any.

In addition, the license agreements provide that we will comply with the requirements

of any agreement between MDACC and the governmental funding entity.

If applicable, this could require us to grant the U.S.

government either a nonexclusive, partially exclusive or exclusive

license to the patented invention in any field of use, upon terms that are reasonable for a particular situation.

Circumstances

that could trigger march-in rights generally would be set out in the agreement between MDACC and the funding governmental entity

and could include, for example, failure to take, within a reasonable time, effective steps to achieve practical application of

the invention in a field of use, failure to satisfy the health and safety needs of the public and failure to meet requirements

of public use specified by federal regulations.

A funding governmental entity could elect to exercise these march-in rights on

their own initiative or at the request of a third party;

however, the exercise of such march-in rights has been historically rare

when the patent holder (or its licensee) is practicing the patent invention although there can be no assurance that such rights

would not be exercised.

This same risk would apply to any other license into which we enter if the licensor receives government

funding for the product candidate that is the subject of the license.

in patent law or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect

our product candidates.

United States has enacted and is expected to continue to implement wide-ranging patent reform legislation.

Further, United States

Supreme Court rulings have either narrowed the scope of patent protection available in certain circumstances or weakened the rights

of patent owners in certain situations.

In addition to increasing uncertainty with regard to our ability to obtain patents in

the future, this combination of events has created uncertainty with respect to the scope and value of patents, once obtained.

September 2011, the Leahy-Smith America Invents Act, also known as the America Invents Act, or AIA, was signed into law.

includes a number of significant changes to U.S.

patent law, including provisions that affect the way patent applications will

be prosecuted and may also affect patent litigation.

The USPTO is currently developing regulations and procedures to govern administration

of the AIA, and many of the substantive changes to patent law associated with the AIA.

It is not clear what other, if any, impact(s)

the AIA will have on the operation of our business.

Moreover, the AIA and its implementation could increase the uncertainties

and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of

which could have an adverse effect on our business.

One important change introduced by the AIA is that, as of March 16, 2013,

the United States transitioned to a “first-to-file”

system for deciding which party should be granted a patent when

two or more patent applications are filed by different parties claiming the same invention.

A third party who files a patent application

with the USPTO after such date but prior to our filing may therefore be awarded a patent covering an invention of ours even if

we were the first to invent.

All of our U.S.

patent applications were filed after March 16, 2013.

This “first-inventor-to-file”

system will require us both to remain cognizant, going forward, of the timing between invention and filing of a patent application.

some of the other changes introduced by the AIA are those that (i) limit where a patentee may file a patent infringement suit

and (ii) provide opportunities for third parties to challenge any issued patent in the USPTO.

Such changes apply to all of our

Because of a lower evidentiary standard in USPTO proceedings, as compared to the evidentiary standard applied in

federal courts, necessary to invalidate a patent claim, a third party could potentially present evidence in a USPTO proceeding

sufficient for the USPTO to find a claim invalid, notwithstanding that the same evidence would be insufficient to invalidate a

claim first presented in a district court action.

Accordingly, a third party may attempt opportunistically to use USPTO procedures

to invalidate our patent claims.

on decisions by the United States Congress, the U.S.

federal courts, the USPTO or similar authorities in foreign jurisdictions,

the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’

to obtain new patents or to enforce existing patents we and our licensors or partners may obtain in the future.

Related to Our Securities

we fail to meet the continued listing requirements of Nasdaq it could result in a delisting of our common stock and certain warrants.

common stock and certain outstanding warrants are currently listed for trading on The Nasdaq Capital Market, and the continued

listing of our common stock on The Nasdaq Capital Market is subject to our compliance with a number of listing standards.

listing standards include the requirement for avoiding sustained losses, maintaining a minimum level of stockholders’

and maintaining a minimum stock price.

The failure to meet any listing standard would subject us to potential loss of listing.

our common stock were no longer listed on The Nasdaq Capital Market, investors might only be able to trade on one of the over-the-counter

markets, including the OTC Bulletin Board ®

or in the Pink Sheets ®

(a quotation medium operated by Pink Sheets LLC).

This would impair the liquidity of our common stock not only in the number of shares that could be bought and sold at a given

price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction

in media coverage.

In addition, we could face significant material adverse consequences, including:

a limited availability

of market quotations for our securities;

a limited amount

of news and analyst coverage for us;

a decreased ability

to issue additional securities or obtain additional financing in the future.

have twice failed to meet the listing standards, most recently between April 2020 and July 2020.

In October 2019, we received

a notice from Nasdaq that we failed to comply with the $1.00 minimum bid price requirement.

We regained compliance on January

On April 1, 2020, we received written notice from The Nasdaq Stock Market indicating that, because the closing bid price

for the Company’s common stock has fallen below $1.00 per share for 30 consecutive business days, we no longer complied

with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Rule 5550(a)(2) of the Nasdaq

Listing Rules.

Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), we had been provided a compliance period of 180 calendar days,

which ran until September 28, 2020, to regain compliance with the minimum bid price requirement.

The date to regain compliance

was extended by Nasdaq in response to the COVID-19 pandemic and its impact on the capital markets and listed companies’

stock prices.

As a result of the extension, to regain compliance, the closing bid price of our common stock had to meet or exceed

$1.00 per share for a minimum of 10 consecutive business days prior to December 14, 2020.

On July 10, 2020, we regained compliance.

the event of a future delisting, we would take actions to restore our compliance with Nasdaq’s listing requirements, but

we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the

market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid

price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

our common stock were delisted and determined to be a “penny stock,”

a broker-dealer may find it more difficult to

trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock in the secondary market.

our common stock were removed from listing with The Nasdaq Capital Market, it may be subject to the so-called “penny stock”

The SEC has adopted regulations that define a “penny stock”

to be any equity security that has a market price

per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange,

which is the exception on which we currently rely.

For any transaction involving a “penny stock,”

unless exempt, the

rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions.

If our common stock were

delisted and determined to be a “penny stock,”

a broker-dealer may find it more difficult to trade our common stock

and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market.

we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or

detect fraud.

Consequently, stockholders could lose confidence in our financial reporting and this may decrease the trading price

of our common stock.

are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley

Act of 2002, or SOX, and Nasdaq rules and regulations.

SOX requires, among other things, that we maintain effective disclosure

controls and procedures and internal control over financial reporting.

We perform system and process evaluation and testing of

our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over

financial reporting in our Annual Report on Form 10-K filing for each year, as required by Section 404 of SOX.

We previously had

identified material weaknesses in our internal control over financial reporting related to ineffective separation of duties due

to our limited finance staff, our reliance on consultants to assist with the financial reporting function and a lack of documented

policies and procedures, which weaknesses were reported in fiscal 2016 and 2017 (and prior to that by our predecessor company).

We remediated these material weaknesses as of September 30, 2018 and management determined that our internal controls over financial

reporting were effective as of that date.

While we are committed to continuing to improve our internal control processes, and

although we will continue to diligently and vigorously review our internal controls over financial reporting, we cannot be certain

that, in the future, a material weakness or significant deficiency will not exist or otherwise be discovered.

If that were to

happen, it could harm our operating results and cause stockholders to lose confidence in our reported financial information.

such loss of confidence would have a negative effect on the trading price of our securities.

control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control

system’s objectives will be satisfied.

Internal control over financial reporting and disclosure controls and procedures

are designed to give a reasonable assurance that they are effective to achieve their objectives.

We cannot provide absolute assurance

that all of our possible future control issues will be detected.

These inherent limitations include the possibility that judgments

in our decision making can be faulty, and that isolated breakdowns can occur because of simple human error or mistake.

of our system of controls is based in part upon assumptions about the likelihood of future events, and there can be no assurance

that any design will succeed absolutely in achieving our stated goals under all potential future or unforeseeable conditions.

Because of the inherent limitations in a cost-effective control system, misstatements due to error could occur and not be detected.

This and any future failures could cause investors to lose confidence in our reported financial information, which could have

a negative impact on our financial condition and stock price.

price of our securities may become volatile, which could lead to losses by stockholders and costly securities litigation.

trading price of our securities is likely to be highly volatile and could fluctuate in response to factors such as:

the cost, timing, completion

and/or results of our clinical trials;

our common stock being delisted

from The Nasdaq Capital Market;

sales of our common stock or other

securities in the open market or in public offerings or in private placements;

regulatory actions regarding our

product candidates or any approved products;

additions or departures of key personnel;

announcements of developments by

us or our competitors;

announcements by us or our competitors

of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

actual or anticipated variations

in our operating results;

adoption of new accounting standards

affecting our industry;

other events or factors, many of

which are beyond our control.

stock market is subject to significant price and volume fluctuations.

In the past, following periods of volatility in the market

price of a company’s securities, securities class action litigation has often been initiated against such a company.

such litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s

attention and resources, which could harm our business and financial condition.

may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock or

securities convertible into common stock.

the foreseeable future, to finance our operations, including possible acquisitions or strategic transactions, we expect to issue

equity securities, resulting in the dilution of the ownership interests of our present stockholders.

We are currently authorized

to issue an aggregate of 200,000,000 shares of common stock and 10,000,000 shares of preferred stock.

As of September 30, 2020,

there were 55,576,996 shares of common stock outstanding, 26,831,989 shares underlying warrants with a weighted average exercise

price of $1.546 per share and 3,390,171 shares underlying options with a weighted average exercise price of $2.513 per share.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common

stock in connection with hiring or retaining employees, or for other business purposes.

either a nonexclusive, partially exclusive or exclusive license to the patented invention in any field of use, upon terms that are reasonable

for a particular situation.

Circumstances that could trigger march-in rights generally would be set out in the agreement between MDACC

and the funding governmental entity and could include, for example, failure to take, within a reasonable time, effective steps to achieve

practical application of the invention in a field of use, failure to satisfy the health and safety needs of the public and failure to

meet requirements of public use specified by federal regulations.

A funding governmental entity could elect to exercise these march-in

rights on their own initiative or at the request of a third party;

however, the exercise of such march-in rights has been historically

rare when the patent holder (or its licensee) is practicing the patent invention although there can be no assurance that such rights would

not be exercised.

This same risk would apply to any other license into which we enter if the licensor receives government funding for

the product candidate that is the subject of the license.

Risks Related to Our Securities

If we fail to meet the continued listing

requirements of Nasdaq it could result in a delisting of our common stock and certain warrants.

Our common stock and certain outstanding warrants

are currently listed for trading on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market

is subject to our compliance with a number of listing standards.

These listing standards include the requirement for avoiding sustained

losses, maintaining a minimum level of stockholders’ equity and maintaining a minimum stock price.

The failure to meet any listing

standard would subject us to potential loss of listing.

If our common stock were no longer listed on The

Nasdaq Capital Market, investors might only be able to trade on one of the over-the-counter markets, including the OTC Bulletin Board

® or in the Pink Sheets ® (a quotation medium operated by Pink Sheets LLC).

This would impair the liquidity of our common stock

not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity,

but also through delays in the timing of transactions and reduction in media coverage.

In addition, we could face significant material

adverse consequences, including:

a limited availability of market quotations for our securities;

a limited amount of news and analyst coverage for us;

a decreased ability to issue additional securities or obtain additional financing in the future.

We have twice failed to meet the listing standards

between October 2019 and January 2020 and between April 2020 and July 2020 because the closing bid price for our common stock has fallen

below $1.00 per share for 30 consecutive business days, as a result of which we did not comply with the $1.00 minimum bid price requirement

for continued listing on The Nasdaq Capital Market under Rule 5550(a)(2) of the Nasdaq Listing Rules.

Pursuant to Nasdaq Marketplace Rule

5810(c)(3)(A).

In each instance, we regained compliance within the time period allowed by Nasdaq.

In the event of a future delisting, we would take

actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken

by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent

our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing

requirements.

If our common stock were delisted and determined

to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more

difficult to acquire or dispose of our common stock in the secondary market.

If our common stock were removed from listing

with The Nasdaq Capital Market, it may be subject to the so-called “penny stock” rules.

The SEC has adopted regulations that

define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain

exceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely.

transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers,

subject to certain exceptions.

If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may

find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock

on the secondary market.

You may experience dilution of your ownership

interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.

For the foreseeable future, to finance our operations,

including possible acquisitions or strategic transactions, we expect to issue equity securities, resulting in the dilution of the ownership

interests of our present stockholders.

We are currently authorized to issue an aggregate of 400,000,000 shares of common stock and 10,000,000

shares of preferred stock.

As of September 30, 2021, there were 145,979,429 shares of common stock outstanding, 40,208,347 shares underlying

warrants with a weighted average exercise price of $1.695 per share and 5,755,171 shares underlying options with a weighted average exercise

price of $2.13 per share.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable

for common stock in connection with hiring or retaining employees, or for other business purposes.

The future issuance of any such additional

shares of common stock or common stock equivalents may create downward pressure on the trading price of our common stock or publicly

traded warrants.

common stock is controlled by insiders.

of November 30, 2020, our executive officers and directors beneficially owned approximately 34.0% of our outstanding shares of

common stock.

Such concentrated control of our company may adversely affect the price of our common stock.

If you acquire common

stock, you may have no effective voice in the management of our company.

Sales by our directors and executive officers or their

affiliates, along with any other market transactions, could adversely affect the market price of our common stock.

do not intend to pay dividends for the foreseeable future.

have paid no dividends on our common stock to date and we do not anticipate that any dividends will be paid to holders of our

common stock in the foreseeable future.

While our future dividend policy will be based on the operating results and capital needs

of our business, we currently anticipate that any future earnings will be retained to finance our future expansion and for the

implementation of our business plan.

The lack of a dividend can further affect the market value of our stock and could significantly

affect the value of any investment in our company.

Certificate of Incorporation allows for our Board of Directors to create new series of preferred stock without further approval

by our stockholders, which could adversely affect the rights of the holders of the common stock.

Board of Directors has the authority to issue up to 10,000,000 shares of preferred stock and to fix and determine the relative

rights and preferences of any such preferred stock without further stockholder approval.

As a result, our Board of Directors could

authorize the issuance of one or more series of preferred stock that would grant preferential rights to our assets upon liquidation,

the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption

of the preferred shares, together with a premium, prior to the redemption of the common stock.

In addition, our Board of Directors

could authorize the issuance of a series of preferred stock that has greater voting power than the common stock or that is convertible

into our common stock, which could decrease the relative voting power of the common stock or result in dilution to our existing

stockholders.

shares of common stock or common stock equivalents may create downward pressure on the trading price of our common stock or publicly traded

Our Certificate of Incorporation allows

for our Board of Directors to create new series of preferred stock without further approval by our stockholders, which could adversely

affect the rights of the holders of the common stock.

Our Board of Directors has the authority to issue

up to 10,000,000 shares of preferred stock and to fix and determine the relative rights and preferences of any such preferred stock without

further stockholder approval.

As a result, our Board of Directors could authorize the issuance of one or more series of preferred stock

that would grant preferential rights to our assets upon liquidation, the right to receive dividend payments before dividends are distributed

to the holders of common stock and the right to the redemption of the preferred shares, together with a premium, prior to the redemption

of the common stock.

In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater

voting power than the common stock or that is convertible into our common stock, which could decrease the relative voting power of the

common stock or result in dilution to our existing stockholders.

Unresolved Staff Comments

lease our offices at 11 Commerce Drive, Cranford, New Jersey 07016.

Not applicable.

We lease our offices at 11 Commerce Drive, Cranford,

New Jersey 07016.

The lease runs until October 31, 2025.

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

What changed 10-K

Item 1A. Risk Factors