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Item 1A. Risk Factors

2023-06-29 compared with 2022-06-29 · 375 added, 567 removed, 1044 unchanged (47% of the section changed)

investment in the Company’s securities involves a high degree of risk.

You should carefully consider the risks described

below as well as other information provided to you in this report, including information in the section of this document entitled “Forward

You should carefully consider the risks described below

as well as other information provided to you in this report, including information in the section of this document entitled “Forward

Looking Statements.” The risks and uncertainties described below are not the only ones facing us.

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pharmaceutical industry is highly competitive.

supply chain disruption.

disasters and associated supply chain effects.

Interruptions

in operations at our sole facility could have a material adverse effect on our business.

are dependent on a small number of customers, suppliers and other third parties for core

business aspects.

may sell, withdraw or discontinue manufacture of certain products.

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in product development may result in failure to achieve adequate return on investment.

business is dependent on market perceptions, social and political pressures, including

public concern over the abuse of opioids.

business is dependent on market perceptions, social and political pressures, including public concern over the abuse of opioids.

economic conditions may adversely affect our business.

depend on qualified scientific and technical personnel and our ability to attract and retained

● Unsuccessful

depend on qualified scientific and technical personnel and our ability to attract and retained such.

collaboration or licensing arrangements could limit revenues and product development.

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have a relatively limited operating history and our operating results could fluctuate significantly.

inflation impacts

ability to fund operations is uncertain and we may require additional financing to meet objectives.

have substantial indebtedness which may adversely affect our financial condition.

is a risk of impairment of intangible assets on our balance sheet.

is a risk of impairment of significant intangible assets on our balance sheet.

requires estimates, judgements and assumptions which inherently contain uncertainties.

and Regulatory Risks

pharmaceutical industry is heavily regulated which creates uncertainty and substantial compliance

pharmaceutical industry is heavily regulated which creates uncertainty and substantial compliance costs.

business may be adversely affected by legislation or healthcare regulatory reform and initiatives.

of generics may be limited through legislative, regulatory or efforts of pharmaceutical companies.

tariffs and evolving trade policy between the US and other countries may adversely affect our business.

DEA could limit the availability of active ingredients used in many of our products.

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received a CRL from the FDA indicating that the SequestOx™ NDA is not ready for approval.

factors may cause us to be unable to manufacture products or face interruptions in our manufacturing

between branded pharmaceutical companies and generic pharmaceutical companies are facing

increased government scrutiny in the United States and Internationally.

factors may cause us to be unable to manufacture products or face interruptions in our manufacturing process.

between branded pharmaceutical companies and generic pharmaceutical companies are facing increased government scrutiny in the United

States and Internationally.

and Liability Related Risks

may not be able to obtain or maintain adequate insurance coverages.

● Litigation,

product liability claims, product recalls, government investigations and other significant

legal proceedings are common in the pharmaceutical industry.

are subject to various fraud and abuse laws which could expose us to criminal sanctions,

civil penalties, contractual damages, reputational harm, and diminished profits and future

products contain controlled substances which may subject us to increased litigation

risk and regulation.

REMS programs could increase the cost, burden, and liability associated with the commercialization

of certain products.

product liability claims, product recalls, government investigations and other significant legal proceedings are common in the pharmaceutical

are subject to various fraud and abuse laws which could expose us to criminal sanctions, civil penalties, contractual damages, reputational

harm, and diminished profits and future earnings.

products contain controlled substances which may subject us to increased litigation risk and regulation.

REMS programs could increase the cost, burden, and liability associated with the commercialization of certain products.

distribution and third party sale of counterfeit versions of our products could have a detrimental effect on our reputation and business.

and Organizational Risks

of our Articles of Incorporation could deter a change of management and discourage offers

to acquire us.

of our Articles of Incorporation could deter a change of management and discourage offers to acquire us.

Property Related Risks

ability to protect intellectual property rights and successfully defend third party allegations

of intellectual property infringement is vital to our business and uncertain.

ability to protect intellectual property rights and successfully defend third party allegations of intellectual property infringement

is vital to our business and uncertain.

Related to our Common Shares

from issuance of shares to Lincoln Park, Directors, Employees, Consultants or upon exercise

of warrants and options or the perception that dilution may occur could cause the price per

share of common stock to fall.

common stock is a penny stock, quoted on the OTC bulletin board, with rules in place that

could limit trading and liquidity of our shares, increased transaction costs that could adversely

affect our price per share.

● Shareholder

from issuance of shares to Lincoln Park, Directors, Employees, Consultants or upon exercise of warrants and options or the perception

that dilution may occur could cause the price per share of common stock to fall.

common stock is a penny stock, quoted on the OTC bulletin board, with rules in place that could limit trading and liquidity of our

shares, increased transaction costs that could adversely affect our price per share.

activism could negatively affect us.

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development, safety, efficacy, commercialization, marketing, promotion, product quality, cost-effectiveness, reputation, service, patient

convenience, access to scientific and technical information, and ability to manage operations in an economic environment that is severely

impacted by the ongoing COVID-19 pandemic.

In addition, the pharmaceutical industry is undergoing rapid and significant

technological change, and we expect competition to intensify as technical advances in each field are made and become more widely known.

An increasing number of pharmaceutical companies have been or are becoming interested in the development and commercialization of products

incorporating advanced or novel drug delivery systems.

We expect that competition in the field of drug delivery will increase in the

future as other specialized research and development companies begin to concentrate on this aspect of the business.

Some of the major

pharmaceutical companies have invested and are continuing to invest significant resources in the development of their own drug delivery

systems and technologies and some have invested funds in specialized drug delivery companies.

Many of our competitors have longer operating

histories and, they, and future competitors, may have greater financial, research and development, marketing, and other resources than

Furthermore, recent trends in this industry include market consolidation, which may further concentrate financial, technical,

market and other strengths and resources with the result being a further increase competitive pressures existent in this industry.

companies may develop new formulations and products, or may improve existing ones, more efficiently than we can.

Our success, if any,

will depend in part on our ability to keep pace with the changing technology in the fields in which we operate.

convenience, access to scientific and technical information, and ability to manage operations in an economic environment that has been severely

impacted by the COVID-19 pandemic.

In addition, the pharmaceutical industry is undergoing rapid and significant technological

change, and we expect competition to intensify as technical advances in each field are made and become more widely known.

An increasing

number of pharmaceutical companies have been or are becoming interested in the development and commercialization of products incorporating

advanced or novel drug delivery systems.

We expect that competition in the field of drug delivery will increase in the future as other

specialized research and development companies begin to concentrate on this aspect of the business.

Some of the major pharmaceutical

companies have invested and are continuing to invest significant resources in the development of their own drug delivery systems and

technologies and some have invested funds in specialized drug delivery companies.

Many of our competitors have longer operating histories

and, they, and future competitors, may have greater financial, research and development, marketing, and other resources than we do.

recent trends in this industry include market consolidation, which may further concentrate financial, technical, market and other strengths

and resources with the result being a further increase competitive pressures existent in this industry.

Such companies may develop new

formulations and products, or may improve existing ones, more efficiently than we can.

Our success, if any, will depend in part on our

ability to keep pace with the changing technology in the fields in which we operate.

we expand our presence in the generic pharmaceuticals market our product candidates may face intense competition from brand-name companies

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suits for patent infringement that automatically delay approval from the FDA;

citizens’ petitions with the FDA contesting approval of the generic versions of products

due to alleged health and safety issues;

controlled-release or other “next-generation” products, which often reduce demand

for the generic version of the existing product for which we may be seeking approval;

citizens’ petitions with the FDA contesting approval of the generic versions of products due to alleged health and safety issues;

controlled-release or other “next-generation” products, which often reduce demand for the generic version of the existing

product for which we may be seeking approval;

product claims and product labeling;

and marketing as over-the-counter products those branded products which are about to face

generic competition;

arrangements with managed care companies and insurers to reduce the economic incentives to

purchase generic pharmaceuticals.

and marketing as over-the-counter products those branded products which are about to face generic competition;

arrangements with managed care companies and insurers to reduce the economic incentives to purchase generic pharmaceuticals.

strategies may increase the costs and risks associated with our efforts to introduce our generic products under development and may delay

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cash flow, ability to operate and stock price.

pandemic and natural disasters, including the ongoing COVID-19 pandemic.

health problems, including the ongoing COVID-19 pandemic, natural disasters or other unexpected events could materially and adversely

affect our business.

In response to these

public health directives and orders, we have implemented alternative working practices and work-from-home capabilities for appropriate

employees, installed improved air flow and filtration at the Northvale Facility, as well as social distancing, modified schedules, shift

rotation, daily temperature checks, multiple hand sanitation stations and other similar policies at our manufacturing facilities.

have also suspended international and domestic travel on behalf of the Company.

effects of COVID-19, including the resultant supply chain issues and inflation, have had an impact on our business and may in

the future materially disrupt our business, including our manufacturing and supply chain operations by significantly reducing our output,

negatively impact our productivity and delay our product development programs.

The global pandemic may have significant impacts on third-party

arrangements, including those with our manufacturing, supply chain and distribution partners, information technology and other vendors

and other service providers and business partners.

For example, there may be significant disruptions in the ability of any or all of

these third-party providers to meet their obligations to us on a timely basis, or at all, which may be caused by their own financial

or operational difficulties, including any closures of their facilities pursuant to a governmental order or otherwise.

While we attempt, when possible, to mitigate our raw material

supply risks through stock management and alternative sourcing strategies, some raw materials are only available from one source.

of these disruptions could harm our ability to meet consumer demand, including any increase in demand for any of our products used during

we are unable to predict the impact that COVID-19 may have going forward on the business, results of operations or financial position

of any of our major customers, which could impact each customer to varying degrees and at different times and could ultimately impact

our own financial performance.

Certain or many of our competitors may also be better equipped to weather the impact of COVID-19 domestically

and may be better equipped to address changes in customer demand.

Additionally, our product development programs may be adversely affected

by the global pandemic and the prioritization of production during this pandemic.

The public health directives in response to COVID-19

requiring social distancing and restricting non-essential business operations have in certain cases caused and may continue to cause

delays, increased costs and additional challenges in our product development programs, including obtaining adequate patient enrolment

and successfully bringing product candidates to market.

In addition, we may face additional challenges receiving regulatory approvals

as previously scheduled dates or anticipated deadlines for action by the FDA on our applications and products in development, could be subject to delays beyond our control as regulators such as the FDA focus on COVID-19.

the extent our operating cash flows, together with our cash, cash equivalents, restricted cash and restricted cash equivalents, become

insufficient to cover our liquidity and capital requirements, including funds for any future acquisitions and other corporate transactions,

we may be required to seek third-party financing, and/or engage in one or more capital markets transactions.

The COVID-19 pandemic has

resulted in significant disruptions to and volatility in the local, national and global financial markets and, there can be no assurance

that we would be able to obtain any required financing on a timely basis or at all.

Further, lenders and other financial institutions

could require us to agree to more restrictive covenants, grant liens on our assets as collateral (resulting in an increase in our total

outstanding secured indebtedness) and/or accept other terms that are not commercially beneficial to us in order to obtain financing,

as a result of the actual or perceived impact that financial institutions believe the pandemic will have on our business.

could further restrict our operations and exacerbate any impact on our results of operations and liquidity that may result from COVID-19.

the occurrence of one or more unexpected events, including fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms

of severe hazards in the United States or in other countries in which we or our suppliers operate or are located could adversely affect

our operations and financial performance.

We have lost power or had to shut down operations as a result of extreme weather, natural disasters,

most notably Superstorm Sandy.

These types of unexpected events could result in physical damage to and complete or partial closure of

one or more of distribution centers or manufacturing facilities, or the temporary or long-term disruption in the supply of products,

and/or disruption of our ability to deliver products to customers.

Further, the long-term effects of climate change on general economic

conditions and the pharmaceutical manufacturing and distribution industry in particular are unclear, and changes in the supply, demand

or available sources of energy and the regulatory and other costs associated with energy production and delivery may affect the availability

or cost of goods and services, including natural resources, necessary to run our businesses.

Existing insurance arrangements may not

provide protection for the costs that may arise from such events, particularly if such events are catastrophic in nature or occur in

Any long-term disruption in our ability to service our customers from one or more distribution centers or outsourcing facilities

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

disasters could cause closures of our facilities and disrupt our operations.

the occurrence of one or more unexpected events, including fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other

forms of severe hazards in the United States or in other countries in which we or our suppliers operate or are located could

adversely affect our operations and financial performance.

We have lost power or had to shut down operations as a result of extreme

weather and natural disasters, most notably Superstorm Sandy.

These types of unexpected events could result in physical damage to

and complete or partial closure of one or more of distribution centers or manufacturing facilities, or the temporary or long-term

disruption in the supply of products, and/or disruption of our ability to deliver products to customers.

Further, the long-term

effects of climate change on general economic conditions and the pharmaceutical manufacturing and distribution industry in

particular are unclear, and changes in the supply, demand or available sources of energy and the regulatory and other costs

associated with energy production and delivery may affect the availability or cost of goods and services, including natural

resources, necessary to run our businesses.

Existing insurance arrangements may not provide protection for the costs that may arise

from such events, particularly if such events are catastrophic in nature or occur in combination.

Any long-term disruption in our

ability to service our customers from one or more distribution centers or outsourcing facilities could have a material adverse

effect on our operations, our business, results of operations and stock price.

Interruptions

in operations at our sole facility could have a material adverse effect on our business.

our manufacturing facility or the facilities of any of our suppliers fail to comply with regulatory requirements or encounter other manufacturing

difficulties, it could adversely affect our ability to manufacture and supply products.

All facilities and manufacturing processes used

for the manufacture of pharmaceutical products are subject to inspection by regulatory agencies at any time and must be operated in conformity

with current good manufacturing practice (“cGMP”) and, in the case of controlled substances, DEA regulations.

with the FDA’s cGMP and DEA requirements applies to both drug products seeking regulatory approval and to approved drug products.

In complying with cGMP requirements, pharmaceutical manufacturing facilities must continually expend significant time, money and effort

in production, recordkeeping, quality assurance and quality control so that their products meet applicable specifications and other requirements

for product safety, efficacy and quality.

Failure to comply with applicable legal requirements subjects us, our manufacturing facilities

and the facilities of our third-party suppliers to possible legal or regulatory action, including, without limitation, shutdown, which

may adversely affect our ability to supply the product.

Additionally, our manufacturing facilities, and those of our third party suppliers

may face other significant disruptions due to labor strikes, failure to reach acceptable agreement with labor unions, infringement of

intellectual property rights, vandalism, natural disaster, storm or other environmental damage, civil or political unrest, export or

import restrictions or other events.

our manufacturing facility or the facilities of any of our suppliers fail to comply with regulatory requirements or encounter other

manufacturing difficulties, it could adversely affect our ability to manufacture and supply products.

All facilities and

manufacturing processes used for the manufacture of pharmaceutical products are subject to inspection by regulatory agencies at any

time and must be operated in conformity with current good manufacturing practice (“cGMP”) and, in the case of controlled

substances, DEA regulations.

Compliance with the FDA’s cGMP and DEA requirements applies to both drug products seeking

regulatory approval and to approved drug products.

In complying with cGMP requirements, pharmaceutical manufacturing facilities must

continually expend significant time, money and effort in production, recordkeeping, quality assurance and quality control so that

their products meet applicable specifications and other requirements for product safety, efficacy and quality.

Failure to comply

with applicable legal requirements subjects us, our manufacturing facilities and the facilities of our third-party suppliers to

possible legal or regulatory action, including, without limitation, shutdown, which may adversely affect our ability to supply the

Additionally, our manufacturing facilities, and those of our third party suppliers may face other significant disruptions

due to labor strikes, failure to reach acceptable agreement with labor unions, infringement of intellectual property rights,

vandalism, natural disaster, pandemics, storm or other environmental damage, civil or political unrest, export or import

restrictions or other events.

Were we not able to manufacture products at our manufacturing facilities or were our third party

suppliers unable to manufacture products at their facilities because of regulatory, business or any other reasons, the manufacture and

marketing of these products would be interrupted.

This could have a material adverse impact on our business, results of operation, financial

condition, cash flows, competitive position and ability to operate.

suppliers unable to manufacture products at their facilities because of regulatory, business or any other reasons, the manufacture

and marketing of these products would be interrupted.

This could have a material adverse impact on our business, results of

operation, financial condition, cash flows, competitive position and ability to operate.

all of our manufacturing operations are conducted at the Northvale Facility and any delays or unanticipated expenses in connection with

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Any of these events could have a material adverse effect on our business, results of operations, financial condition, and

are dependent on a small number of customers, suppliers and other third parties for core business aspects.

are dependent on a small number of suppliers for our raw materials and any delay or unavailability of raw materials can materially adversely

affect our ability to produce products.

The FDA requires identification of raw material suppliers in applications for approval of drug

If raw materials were unavailable from a specified supplier, FDA approval of a new supplier could delay the manufacture of

the drug involved.

addition, some materials used in our products are currently available from only one supplier or a limited number of suppliers and there

is a risk of a sole approved supplier significantly raising prices.

Please note that such an occurrence has taken place recently, wherein

significant price increases from a sole supplier greatly reduced profit margins, sales, and delayed product launches.

These occurrences

were ultimately resolved by the successful FDA approval of an alternate supplier, with such approval process being lengthy and costly.

a significant portion of our raw materials may be available only from foreign sources.

Foreign sources can be subject to the special

risks of doing business abroad, including, without limitation:

possibility for disruption due to transportation or communication problems;

relative instability of some foreign governments and economies;

price volatility based on labor unrest, materials or equipment shortages, export duties,

restrictions on the transfer of funds, or fluctuations in currency exchange rates;

● Uncertainty

regarding recourse to a dependable legal system for the enforcement of contracts and other

addition, patent laws in certain foreign jurisdictions (primarily, but not necessarily, in Europe) may make it increasingly difficult

to obtain raw materials for research and development prior to expiration of applicable United States or foreign patents.

inability to obtain raw materials on a timely basis, or any significant price increases that cannot be passed on to customers, can materially

adversely affect our ability to produce products.

This can materially adversely affect our business and operations.

also depend on a limited number of customers and any reduction, delay or cancellation of an order from these customers or the loss of

any of these customers could cause our revenue to decline.

Each year we have had one or a few customers that have accounted for a large

percentage of our limited revenues therefore the termination of a contract with a customer may result in the loss of substantially all

of our revenues.

We are constantly working to develop new relationships with existing or new customers, but despite these efforts we

may not, at the time that any of our current contracts expire, have other contracts in place generating similar or material revenue.

We have agreements with Lannett Company, Prasco, LLC, Epic Pharma, LLC, and TAGI Pharma, LLC for the sales and distribution of

products that we manufacture.

We receive revenues to manufacture these products and also receive a profit split or royalties based on

in-market sales of the products.

a significant portion of our revenues is derived from a relatively few customers, any financial difficulties experienced by any one of

these customers, or any delay in receiving payments from any one of these customers, could have a material adverse effect on our business,

results of operations, financial condition, and cash flows.

rely on third parties to supply raw material used in our products.

In addition, we rely on third party suppliers, distributors and other

third party service providers to provide services for certain core aspects of our business, including, without limitation, manufacturing,

warehousing, freight and distribution, medical affairs services, regulatory compliance activities, sales and marketing, clinical studies,

lab services and other technical and financial services.

Many such third-party suppliers and contractors are subject to requirements

proscribed by FDA, DEA or both.

Our business and financial viability are dependent on the continued supply of goods, materials and services,

by these third parties, their regulatory compliance and on the strength, validity and terms of our various contracts and arrangements

with these third parties.

Any interruption or failure by our third party suppliers, distributors and other third party service providers

to meet their obligations pursuant to the various agreements with us on schedule or in accordance terms and/or expectations, or any termination

by these third parties of their arrangements with us, which in each case, could be the result of one or more factors outside of our control,

could delay or prevent the development, approval, commercialization or manufacture of our products, result in non-compliance with applicable

laws and/or regulations, cause us to incur failure to supply penalties, disrupt our operations, increase the cost of our operations or

cause harm to our reputation in the industry, any or all of which could have a material adverse effect on our business, financial condition,

results of operations, cash flows and stock price.

We may also be unsuccessful in resolving any underlying issues with such suppliers,

distributors or other third-party service providers or in replacing them within a reasonable time frame on commercially reasonable terms.

conducting clinical trials, we rely on third parties

to conduct the trials and testing for our product candidates, and if they do not properly and successfully perform their legal

and regulatory obligations, as well as their contractual obligations to us, we may not be able to obtain regulatory approvals for our

product candidates.

We do not control these third parties and, as a result, delays may occur as a result of the priorities and operations

of these third parties differing from those which we may feel would be most optimal to the completion of such activities in the most

efficient manner possible.

we rely on third parties when conducting clinical trials and related activities, we are responsible for confirming

that each of our clinical trials is conducted in accordance with our general investigational plan and protocol.

Moreover, the FDA and

other relevant regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices

and good laboratory practices, for conducting, recording, and reporting the results of clinical trials to ensure that the data and 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.

The FDA enforces good clinical practices and good laboratory practices through periodic inspections

of trial sponsors, principal investigators, and trial sites.

If we, our contract research organizations, or our study sites fail to comply

with applicable good clinical practices and good laboratory practices, the clinical data generated in our clinical trials may be deemed

unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications.

We cannot assure

you that, upon inspection, the FDA will determine that any of our clinical trials comply with good clinical practices and good laboratory

In addition, our clinical trials must be conducted with product manufactured under the FDA’s current Good Manufacturing

Practices, or cGMP, regulations.

Our failure or the failure of our contract manufacturers if any are involved in the process, to comply

with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.

third parties do not successfully carry out their duties under their agreements with us, if the quality or accuracy of the data they

obtain is compromised due to failure to adhere to our clinical protocols or regulatory requirements, or if they otherwise fail to comply

with clinical trial protocols or meet expected deadlines, our clinical trials may not meet regulatory requirements.

If our clinical trials

do not meet regulatory requirements or if these third parties need to be replaced, our clinical trials may be extended, delayed, suspended,

or terminated.

If any of these events occur, we may not be able to obtain regulatory approval of our product candidates, which could

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

may sell, withdraw or discontinue manufacture of certain products.

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excessive when compared to their actual current value and their perceived value and place in our strategic plans.

For example, and without

limitation, during the twelve months ended March 31, 2020, we received new product approvals that would have resulted in us owning a

number of ANDAs that would have required us to self-identify as a large size ANDA holder, on the measurement date, as per the FDA’s

Generic Drug User Fee Amendment (“GDUFA”) program fee structure, as opposed to the medium size ANDA classification in effect

prior to these new ANDA approvals.

Based on the GDUFA program fees in effect for the period October 1, 2020 through September 30, 2021,

the annual fee for large sized ANDA holders was approximately $0.9 million greater than the fee for medium sized ANDA holders.

conducting a study of ANDAs held, with the GDUFA program fee levels being one of several relevant factors considered, we identified and

sold ANDAs relating to Methadone Tablets, Second Phendimetrazine Product, Hydromorphone Tablets, Oxycodone and Acetaminophen Tablets

and Hydrocodone and Acetaminophen Tablets.

our expectations are to engage only in the sale or withdrawal of ANDAs if they advance or otherwise support our overall strategy, any

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Completion of necessary clinical trials may take several years or

Delays associated with products for which we are directly conducting preclinical or clinical trials may cause us to incur additional

Delays associated with product candidates for which we are directly conducting preclinical or clinical trials may cause us to incur additional

operating expenses.

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Ineffectiveness

of our product candidate or perceptions by physicians that the product candidate is not safe

or effective for a particular indication;

of our product candidate or perceptions by physicians that the product candidate is not safe or effective for a particular indication;

to manufacture sufficient quantities of the product candidate for use in clinical trials;

or failure in obtaining approval of our clinical trial protocols from the FDA or institutional

review boards;

or failure in obtaining approval of our clinical trial protocols from the FDA or institutional review boards;

than expected rate of patient recruitment and enrollment;

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process of developing and obtaining regulatory approvals for new products is time-consuming, costly and inherently unpredictable.

are direct, indirect, known and unknown risks inherent in the development of pharmaceuticals, including, without limitation, products

are direct, indirect, known and unknown risks inherent in the development of pharmaceuticals, including, without limitation, product candidates

which initially show promise in preliminary pharmacological or marketing studies, but fail to yield the positive results consistent with

initial indications.

Products we may develop may not receive the marketing authorizations necessary for us to market them

and, if approved, we may be unable to successfully commercialize them on a timely basis or at all, or if commercialized, revenues and

profits achieved from the sale of such products might not reach levels that provide sufficient return on those costs incurred during

the commercialization process.

Product candidates we may develop may not receive the marketing authorizations necessary for us to market them and, if approved,

we may be unable to successfully commercialize them on a timely basis or at all, or if commercialized, revenues and profits achieved

from the sale of such products might not reach levels that provide sufficient return on those costs incurred during the commercialization

successful commercialization of a product is subject to a number of factors, including:

timely filing of any NDA, ANDA or other regulatory submission applicable to our product candidates;

adverse development or perceived adverse development with respect to the applicable regulatory

agency’s review of such regulatory submission and approval for the indication sought;

adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of such regulatory

submission and approval for the indication sought;

effectiveness, ease of use and safety of our products as compared to existing products;

demand and the willingness of physicians and customers to adopt our products over products

with which they may have more loyalty or familiarity and overcoming any biases towards our

cost of our product compared to alternative products and the pricing and commercialization

strategies of our competitors;

demand and the willingness of physicians and customers to adopt our products over products with which they may have more loyalty

or familiarity and overcoming any biases towards our products;

cost of our product compared to alternative products and the pricing and commercialization strategies of our competitors;

success of our launch and marketing efforts;

publicity about us, our products, our competitors and their products or the industry as a

whole or favorable publicity about competitors;

publicity about us, our products, our competitors and their products or the industry as a whole or favorable publicity about competitors;

advent of new and innovative alternative products;

unforeseen issues or adverse developments in connection with a product and any resulting

litigation or regulatory scrutiny and harm to our reputation or the reputation or acceptance

of the product in the market.

unforeseen issues or adverse developments in connection with a product and any resulting litigation or regulatory scrutiny and harm

to our reputation or the reputation or acceptance of the product in the market.

addition, there are many risks associated with developing, commercializing and marketing new products that are beyond our control.

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Typically, expenses related

to research, development, and regulatory approval of compounds for SequestOx™, which is a branded pharmaceutical product, the

development of which is currently paused, are significantly greater than those expenses associated with generic products.

research and development efforts are required, resulting in increased research expenses.

Because of the inherent risk associated with

research and development efforts in the healthcare industry, particularly with respect to new drugs, our research and development expenditures

may not result in the successful regulatory approval and introduction of new pharmaceutical products and failure in the development of

any new product can occur at any point in the process, including late in the process after substantial investment.

Also, after we submit

a regulatory application, the relevant governmental health authority may require that we conduct additional studies, including, for example,

studies to assess the product’s interaction with alcohol.

As a result, we may be unable to reasonably predict the total research

and development costs to develop a particular product and there is a significant risk that the funds we invest in research and development

will not generate financial returns.

In addition, our operating results and financial condition may fluctuate as the amount we spend

to research and develop, commercialize, acquire or license new products, technologies and businesses changes.

Much of the preceding occurred

with the development of SequestOx™, which has not received marketing approval from the FDA, for which continued development has

been paused and with material adverse effects on our business, results of operations, financial condition, cash flows and ability to

operate resulting in the past, as well as the risk remaining for the future.

to research, development, and regulatory approval of compounds for SequestOx™, which is a branded pharmaceutical product, the development

of which is currently paused, are significantly greater than those expenses associated with generic products.

Expanded research and development

efforts are required, resulting in increased research expenses.

Because of the inherent risk associated with research and development

efforts in the healthcare industry, particularly with respect to new drugs, our research and development expenditures may not result

in the successful regulatory approval and introduction of new pharmaceutical products and failure in the development of any new product

can occur at any point in the process, including late in the process after substantial investment.

Also, after we submit a regulatory

application, the relevant governmental health authority may require that we conduct additional studies, including, for example, studies

to assess the product’s interaction with alcohol.

As a result, we may be unable to reasonably predict the total research and development

costs to develop a particular product and there is a significant risk that the funds we invest in research and development will not generate

financial returns.

In addition, our operating results and financial condition may fluctuate as the amount we spend to research and develop,

commercialize, acquire or license new products, technologies and businesses changes.

Much of the preceding occurred with the development

of SequestOx™, which has not received marketing approval from the FDA, for which continued development has been paused and with

material adverse effects on our business, results of operations, financial condition, cash flows and ability to operate resulting in

the past, as well as the risk remaining for the future.

of these risks, our research and development efforts may not result in any commercially viable products.

Any delay in, or termination

of, preclinical or clinical trials will delay the filing of our drug applications with the FDA and, ultimately, our ability to commercialize product candidates and generate product revenues.

of, preclinical or clinical trials will delay the filing of our drug applications with the FDA and, ultimately, our ability to commercialize

product candidates and generate product revenues.

If a significant portion of these development efforts are not successfully completed,

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We must also successfully address any challenges brought by the owner of the listed patent.

requires that we expend considerable capital to pursue activities that do not yield an immediate or near-term return.

Also, because of

the significant time necessary to develop a product, the actual market for a product at the time it is available for sale may be significantly

less than the originally projected market for the product.

If this were to occur, our potential return on our investment in developing

the product, if approved for marketing by the FDA, would be adversely affected and we may never receive a return on our investment in

It is also possible for the manufacturer of the brand-name product for which we are developing a generic drug to obtain

approvals from the FDA to switch the brand-name drug from the prescription market to the OTC market.

If this were to occur, we would

be prohibited from marketing our product other than as an OTC drug, in which case revenues could be substantially less than we anticipated.

This process requires

that we expend considerable capital to pursue activities that do not yield an immediate or near-term return.

Also, because of the significant

time necessary to develop a product, the actual market for a product at the time it is available for sale may be significantly less than

the originally projected market for the product.

If this were to occur, our potential return on our investment in developing the product,

if approved for marketing by the FDA, would be adversely affected and we may never receive a return on our investment in the product.

It is also possible for the manufacturer of the brand-name product for which we are developing a generic drug to obtain approvals from

the FDA to switch the brand-name drug from the prescription market to the OTC market.

If this were to occur, we would be prohibited from

marketing our product other than as an OTC drug, in which case revenues could be substantially less than we anticipated.

business is dependent on market perceptions, social and political pressures, including public concern over the abuse of opioids.

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The degree of market acceptance of any of our approved

products among physicians, patients, health care payors and the medical community will depend on a number of factors,

including, without limitation:

products among physicians, patients, health care payors and the medical community will depend on a number of factors, including, without

evidence of safety and efficacy;

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prevalence and severity of any adverse side effects;

● Availability

of alternative treatments;

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to obtain sufficient third-party coverage or reimbursement.

we are unable to achieve market acceptance for our products, then such products will not be commercially successful, and

our business will be adversely affected.

we are unable to achieve market acceptance for our products, then such products will not be commercially successful, and our business

will be adversely affected.

of these factors are not within our control, and our products may not achieve expected levels of market acceptance.

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management programs such as the need for a patient registry.

We may also experience downward pressure on the price of our products due

to social or political pressure to lower the cost of drugs, which would reduce our revenue and future profitability

concern over the abuse of opioid medications, including

increased legal and regulatory action, could also negatively affect our business.

While Elite has de-emphasized its programs with respect

to opioids and will continue to focus on products other than opioids, certain governmental and regulatory agencies, as well as state

and local jurisdictions, are focused on the abuse of opioid medications in the United States.

State and local governmental agencies may

investigate us as a manufacturer and/or distributor of medicines containing opioids or in conjunction with their investigation of other

pharmaceutical wholesale distributors, and others in the supply chain that have a direct or indirect connection to our operations in

relation to the distribution of opioid medications.

In addition, multiple lawsuits have been filed against other pharmaceutical manufacturers

and distributors alleging, among other claims, that they failed to provide effective controls and procedures to guard against the diversion

of controlled substances, acted negligently by distributing controlled substances to pharmacies that serve individuals who abuse controlled

substances, and failed to report suspicious orders of controlled substances in accordance with regulations.

Additional governmental entities

have indicated an intent to sue these other manufacturers and distributors.

While no such actions have been taken against us, the immediate

effect on the Company has been an inability to commercialize and market three opioid products approved during fiscal years prior to the

twelve months ended March 31, 2021.

We continue to hold one approved ANDA for an opioid product that, while approved by the FDA,

has not been launched commercially.

Further, defense against any such opioid related lawsuits could be cost-prohibitive resulting in

an adverse material effect on our business, financial condition, results of operations, cash flows and stock price.

Similar allegations

made against us, even without litigation, could also negatively affect our business in various ways, including through increased costs

and harm to our reputation.

In addition, an adverse resolution of any lawsuit or investigation could also have a material adverse effect

on our business, results of operations, cash flows and stock price.

may also experience downward pressure on the price of our products due to social or political pressure to lower the cost of drugs, which

would reduce our revenue and future profitability.

concern over the abuse of opioid medications, including increased legal and regulatory action, could also negatively affect our business.

While Elite has de-emphasized its programs with respect to opioids and will continue to focus on products other than opioids, certain

governmental and regulatory agencies, as well as state and local jurisdictions, are focused on the abuse of opioid medications in the

United States.

State and local governmental agencies may investigate us as a manufacturer and/or distributor of medicines containing

opioids or in conjunction with their investigation of other pharmaceutical wholesale distributors, and others in the supply chain that

have a direct or indirect connection to our operations in relation to the distribution of opioid medications.

In addition, multiple lawsuits

have been filed against other pharmaceutical manufacturers and distributors alleging, among other claims, that they failed to provide

effective controls and procedures to guard against the diversion of controlled substances, acted negligently by distributing controlled

substances to pharmacies that serve individuals who abuse controlled substances, and failed to report suspicious orders of controlled

substances in accordance with regulations.

Additional governmental entities have indicated an intent to sue these other manufacturers

and distributors.

While no such actions have been taken against us, the immediate effect on the Company has been an inability to commercialize

and market three opioid products approved during fiscal years prior to the twelve months ended March 31, 2021 and a cessation of orders

for another two other opioid products that had been marketed by our marketing partners.

During the year ended March 31, 2020, we disposed

of four approved ANDA’s for opioid products.

As of March 31, 2023, we continue to hold one approved ANDA for an opioid product

that, while approved by the FDA, has not been launched commercially.

Further, defense against any such opioid related lawsuits could

be cost-prohibitive resulting in an adverse material effect on our business, financial condition, results of operations, cash flows and

Similar allegations made against us, even without litigation, could also negatively affect our business in various ways,

including through increased costs and harm to our reputation.

In addition, an adverse resolution of any lawsuit or investigation could

also have a material adverse effect on our business, results of operations, cash flows and stock price.

perceptions of our business are important to us, especially market perceptions of the safety and quality of our products.

of our products or similar products that other companies distribute are subject to market withdrawal, recall, or are proven to be, or

are claimed to be, harmful to consumers, then this could have a material adverse effect on our business, results of operations, financial

condition, and cash flows.

Furthermore, due to the importance of market perceptions, negative publicity associated with product quality,

illness or other adverse effects resulting from, or perceived to be resulting from, our products, or similar products made by other companies,

If any of our

products or similar products that other companies distribute are subject to market withdrawal, recall, or are proven to be, or are claimed

to be, harmful to consumers, then this could have a material adverse effect on our business, results of operations, financial condition,

and cash flows.

Furthermore, due to the importance of market perceptions, negative publicity associated with product quality, illness

or other adverse effects resulting from, or perceived to be resulting from, our products, or similar products made by other companies,

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

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economic conditions may adversely affect our business.

global economy has undergone a period of significant volatility, especially during the ongoing COVID-19 pandemic, which has

led to diminished credit availability, declines in consumer confidence, and increases in unemployment rates.

There remains caution

about the stability of the U.S.

global economy has undergone a period of significant volatility, especially during the ongoing COVID-19 pandemic, which has led to diminished

credit availability, declines in consumer confidence, and increases in unemployment rates.

There remains caution about the stability

economy, and we cannot assure that further deterioration in the financial markets will not occur.

These economic conditions have resulted in, and could lead to further, reduced consumer spending related to healthcare in general

and pharmaceutical products in particular.

These economic conditions

have resulted in, and could lead to further, reduced consumer spending related to healthcare in general and pharmaceutical products in

addition, we have exposure to many different industries and counterparties, including our partners under our alliance and collaboration

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officers and qualified scientific and technical personnel.

addition, marketing of our branded product, SequestOx™, if approved, will require much greater use of a direct sales force

compared to marketing of our generic products, should we reinstate development and successfully commercialize this product.

Our ability to realize significant revenues from marketing and sales activities depends on our ability or the ability of our partners

to attract and retain qualified sales personnel.

addition, marketing of our branded product, SequestOx™, if approved, will require much greater use of a direct sales force compared

to marketing of our generic products, should we reinstate development and successfully commercialize this product.

Our ability to realize

significant revenues from marketing and sales activities depends on our ability or the ability of our partners to attract and retain

qualified sales personnel.

Competition for qualified sales personnel is intense.

Any failure to attract or retain

qualified sales personnel could negatively impact our sales revenue and have a material adverse effect on our business, results of operations,

financial condition, cash flows and stock price.

Any failure to attract or retain qualified sales personnel

could negatively impact our sales revenue and have a material adverse effect on our business, results of operations, financial condition,

cash flows and stock price.

have entered into employment agreements with our executive officers and certain other key employees.

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However, there can be no assurance

that any of these agreements will result in FDA approvals, or that we will be able to market any such products, if approved, at

that any of these agreements will result in FDA approvals, or that we will be able to market any such products, if approved, at a profit.

Collaboration and licensing arrangements pose the following risks:

Collaborations

and licensing arrangements may be terminated, in which case we will experience increased

operating expenses and capital requirements if we elect to pursue further development of

the related product candidate;

and licensing arrangements may be terminated, in which case we will experience increased operating expenses and capital requirements

if we elect to pursue further development of the related product candidate;

Collaborators

and licensees may delay clinical trials and prolong clinical development, under-fund a clinical

trial program, stop a clinical trial, or abandon a product candidate;

revenue might not be generated because milestones may not be achieved, and product candidates

may not be developed;

and licensees may delay clinical trials and prolong clinical development, under-fund a clinical trial program, stop a clinical trial,

or abandon a product candidate;

revenue might not be generated because milestones may not be achieved, and product candidates may not be developed;

Collaborators

and licensees could independently develop, or develop with third parties, products that could

compete with our future products;

terms of our contracts with current or future collaborators and licensees may not be favorable

to us in the future;

collaborator or licensee with marketing and distribution rights to one or more of our products

may not commit enough resources to the marketing and distribution of our products, limiting

our potential revenues from the commercialization of a product;

may arise delaying or terminating the research, development, or commercialization of our

product candidates, or result in significant and costly litigation or arbitration;

or more third-party developers could obtain approval for a similar product prior to the collaborator

or licensee resulting in unforeseen price competition in connection with the development

and licensees could independently develop, or develop with third parties, products that could compete with our future products;

terms of our contracts with current or future collaborators and licensees may not be favorable to us in the future;

collaborator or licensee with marketing and distribution rights to one or more of our products may not commit enough resources to

the marketing and distribution of our products, limiting our potential revenues from the commercialization of a product;

may arise delaying or terminating the research, development, or commercialization of our product candidates, or result in significant

and costly litigation or arbitration;

or more third-party developers could obtain approval for a similar product prior to the collaborator or licensee resulting in unforeseen

price competition in connection with the development product.

or all of the above could result in a material adverse effect on our business, financial condition, results of operations, cash flow,

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Variations may result from one or more factors, including, without limitation:

of a global pandemic or similar situation, including, without limitation the COVID-19 pandemic

that emerged in 2020, with such effects to include actions taken by the Company, its suppliers,

partners, competitors, other entities involved in the industry, other entities, and any laws,

regulations, executive orders or other governmental/regulatory actions taken in relation

to such a pandemic or similar circumstance;

of a global pandemic or similar situation, including, without limitation the COVID-19 pandemic that emerged in 2020, with such effects

to include actions taken by the Company, its suppliers, partners, competitors, other entities involved in the industry, other entities,

and any laws, regulations, executive orders or other governmental/regulatory actions taken in relation to such a pandemic or similar

circumstance;

of approval of applications filed with the FDA;

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of clinical trial programs;

or unexpected health or safety concerns with our products, brand products which we have genericized,

products currently under development or any other product candidates;

● Introduction

or unexpected health or safety concerns with our products, brand products which we have genericized, products currently under development

or any other product candidates;

of new products by others that render our products obsolete or non-competitive;

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of product manufactured and sold due to each product having different gross margins;

cost and outcome of litigation, in the event that such occurs in relation to, without limitation,

intellectual property issues, regulatory or other matters;

ability to comply with complex and numerous governmental regulations and regulatory authorities

which oversee and regulate many aspects of our business and operations;

in coverage and reimbursement policies of health plans and other health insurers, including

changes to Medicare, Medicaid, and similar state programs, especially in relation to those

products that are currently manufactured, under development or identified for future development

by the Company;

cost and outcome of litigation, in the event that such occurs in relation to, without limitation, intellectual property issues, regulatory

or other matters;

ability to comply with complex and numerous governmental regulations and regulatory authorities which oversee and regulate many aspects

of our business and operations;

in coverage and reimbursement policies of health plans and other health insurers, including changes to Medicare, Medicaid, and similar

state programs, especially in relation to those products that are currently manufactured, under development or identified for future

development by the Company;

in the cost of raw materials contained within our products;

Manufacturing

and supply interruptions, including product rejections or recalls due to failure to comply

with manufacturing specifications;

and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications;

of revenue recognition relating to our licensing and other agreements;

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and respond to competitive developments.

operations during a global pandemic or similar situation, such as the COVID-19 global pandemic

first identified in 2020.

operations during a global pandemic or similar situation, such as the COVID-19 global pandemic first identified in 2020.

we do not effectively address the risks we face, our business model may become unworkable and we may not achieve or sustain profitability

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of the following:

dedication of a substantial portion of our cash flows from operations to the payment of legal

or related expenses, resulting in these same funds being unavailable for other purposes,

including, without limitation, debt service, operations, capital expenditures, product development

and future business opportunities;

limitation in our ability to adjust to changing market conditions, causing us to be more

vulnerable to periods of negative or impaired growth in the general economy or in our business,

resulting the company being put at a competitive disadvantage as a result of a decreased

or unavailable ability to engage in capital spending and take all other actions that would

otherwise be required to ensure growth and competitiveness;

dedication of a substantial portion of our cash flows from operations to the payment of legal or related expenses, resulting in these

same funds being unavailable for other purposes, including, without limitation, debt service, operations, capital expenditures, product

development and future business opportunities;

limitation in our ability to adjust to changing market conditions, causing us to be more vulnerable to periods of negative or impaired

growth in the general economy or in our business, resulting the company being put at a competitive disadvantage as a result of a

decreased or unavailable ability to engage in capital spending and take all other actions that would otherwise be required to ensure

growth and competitiveness;

limitation in our ability to attract and retain key personnel;

decrement in our debt service and compliance obligations related to certain of our outstanding

debt obligations, exposing us to events of default and reduced credit ratings, which in turn

lead to increased capital costs and potential unavailability of capital;

decrement in our debt service and compliance obligations related to certain of our outstanding debt obligations, exposing us to events

of default and reduced credit ratings, which in turn lead to increased capital costs and potential unavailability of capital;

overall inability to fund our operations and liquidity needs.

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Any refinancing of our substantial indebtedness could be at significantly higher interest

rates, which will depend on both the conditions of the market as well as the Company’s finances at such time and may also

require our compliance with covenants that could be more onerous than current, which in turn could result in the further restriction

of our business operations.

rates, which will depend on both the conditions of the market as well as the Company’s finances at such time, and may also require

our compliance with covenants that could be more onerous than current, which in turn could result in the further restriction of our business

Any refinancing may also increase the amount of our secured indebtedness.

In addition, the terms of existing

or future debt agreements may restrict us from adopting any of the alternatives.

Internal reorganizations, restructuring activities,

asset sales and cost saving initiatives may also be complex and could entail significant costs and charges or could otherwise negatively

impact shareholder value.

There can also be no assurance that we will be able to accomplish any of these alternatives on terms acceptable

to us, or at all, or that even if accomplished, that the intended results and benefits would be realized.

In addition, the terms of existing or future debt

agreements may restrict us from adopting any of the alternatives.

Internal reorganizations, restructuring activities, asset sales and

cost saving initiatives may also be complex and could entail significant costs and charges or could otherwise negatively impact shareholder

There can also be no assurance that we will be able to accomplish any of these alternatives on terms acceptable to us, or at all,

or that even if accomplished, that the intended results and benefits would be realized.

most likely will require additional financing to meet our business objectives.

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growth in our current generic product line, consisting of Phentermine Tablets, Phentermine Capsules, Phendimetrazine Tablets, Naltrexone

Tablets, Isradipine Capsules, Trimipramine Capsules, Oxy IR, Amphetamine IR Tablets, Amphetamine ER Capsules and Dantrolene Capsules,

combined with manufacturing, profit split and royalty revenues earned pursuant to the Lannett Alliance, the Epic Alliance, the

Prasco Alliance, the TAGI License Agreement, and successful commercialization of other products

in our product development pipeline, may lead to eventual profitability, there can be no assurances of Elite becoming profitable.

there can be no assurances of the continuation revenues being earned from the current generic product line, no assurances of Elite’s

successful commercialization of other products in our development pipeline, and no assurances of Elite’s ability to continue as

a going concern.

In addition, there can be no assurances of Elite being able to raise additional funds in a timely manner, on acceptable

terms, if needed to support commercial operations resulting in a material detrimental effect on Elite’s ability to become profitable

and accordingly being a material factor to the detriment of Elite’s ability to continue as a going concern as well as having a

material adverse effect on our business, results of operations, financial condition, and cash flow and ability to operate in the future.

Tablets, Isradipine Capsules, Trimipramine Capsules, Loxapine capsules, Amphetamine IR Tablets, Amphetamine ER Capsules and Dantrolene Capsules, and successful commercialization of other products in our product development pipeline,

may lead to eventual profitability, there can be no assurances of Elite becoming profitable.

Furthermore, there can be no assurances

of the continuation revenues being earned from the current generic product line, no assurances of Elite’s successful commercialization

of other products in our development pipeline, and no assurances of Elite’s ability to continue as a going concern.

there can be no assurances of Elite being able to raise additional funds in a timely manner, on acceptable terms, if needed to support

commercial operations resulting in a material detrimental effect on Elite’s ability to become profitable and accordingly being

a material factor to the detriment of Elite’s ability to continue as a going concern as well as having a material adverse effect

on our business, results of operations, financial condition, and cash flow and ability to operate in the future.

sustain operations and meet our business objectives we must be able to commercialize our products and other products or pipeline opportunities.

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Total liabilities as of March 31, 2023, were $11.9 million, with such amount including, without

limitation, $2.9 million in various loans, leases and bonds payable, $0.9 million in derivative

liabilities, and $6.1 million in current payables and accruals.

limitation, $3.9 million in various loans, leases, and bonds payable, $0.5 million in derivative liabilities, and $7.5 million in current

payables and accruals.

The consequences of this substantial indebtedness could include:

increase in our vulnerability to general economic and industry conditions, including recessions,

depressions, effects of global pandemics such as the COVID-19 pandemic, significant inflation

and other financial market volatility;

increase in our vulnerability to general economic and industry conditions, including recessions, depressions, effects of global pandemics

such as the COVID-19 pandemic, significant inflation and other financial market volatility;

to the risk of increased interest rates;

Company being required to dedicate a substantial portion of cash flow from operations for

debt service and the attendant result of a diminished ability to fund working capital, capital

expenditures and other expenses;

limitation in our flexibility in planning for, or reacting to, changes in our business and

the industry in which we operate;

Company being required to dedicate a substantial portion of cash flow from operations for debt service and the attendant result of

a diminished ability to fund working capital, capital expenditures and other expenses;

limitation in our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

being at a competitive disadvantage as compared to competitors with less indebtedness;

limitation in our ability to borrow additional funds that may be needed to operate and expand

our business.

limitation in our ability to borrow additional funds that may be needed to operate and expand our business.

addition, a notice of default was issued by the New Jersey Economic Development Authority in relation to prior obligations of our tax-exempt

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effect on our business, financial condition, results of operations, cash flows and stock price.

During the year ended March 31, 2023, we determined that circumstances indicated that the value of our intangible

assets may not be recoverable.

During the year ended March 31, 2023, we recorded impairment of approximately $0.3 million of our ANDA

and patent intangible assets.

requires estimates, judgements and assumptions which inherently contain uncertainties.

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substantial compliance costs on our business in relation to product development as well as commercial operations.

authorities such as the FDA impose substantial requirements on the development, manufacture, holding, labeling, marketing, advertising,

authorities such as the FDA impose substantial requirements on the development, manufacture, holding, labelling, marketing, advertising,

promotion, distribution and sale of therapeutic pharmaceutical products through lengthy and detailed laboratory and clinical testing

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The FDA may also require companies

to conduct post-approval studies and companies are subject to post-approval surveillance regarding their drug products and to

report adverse events.

The FDA also can require companies to formulate approved Risk Evaluation and Mitigation Strategies (REMS) to

help ensure that a drug’s benefits outweigh its risks.

to conduct post-approval studies and companies are subject to post-approval surveillance regarding their drug products and to report

adverse events.

The FDA also can require companies to formulate approved Risk Evaluation and Mitigation Strategies (REMS) to help ensure

that a drug’s benefits outweigh its risks.

may seek FDA approval for certain product candidates through the 505(b)(2) regulatory pathway.

Even if we receive approval for

an NDA under Section 505(b)(2), the FDA may not take timely enforcement action against companies marketing unapproved versions of the

therefore, we cannot be sure that that we will receive the benefit of any de facto exclusive marketing period or that we will fully

recoup the expenses incurred to obtain an approval.

Even if we receive approval for an NDA

under Section 505(b)(2), the FDA may not take timely enforcement action against companies marketing unapproved versions of the drug;

therefore, we cannot be sure that that we will receive the benefit of any de facto exclusive marketing period or that we will fully recoup

the expenses incurred to obtain an approval.

In addition, certain competitors and others have objected to the FDA’s interpretation

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of time, money, and effort to ensure full compliance.

Failure to comply with the FDA, DEA, EPA and other governmental regulations

can result in fines, disgorgement, unanticipated compliance expenditures, recall or seizure of products, exposure to product liability

claims, total or partial suspension of production or distribution, suspension of the FDA’s review of NDAs or ANDAs, enforcement

actions, injunctions and civil or criminal prosecution, any of which could have a material and adverse effect on our business, results

of operations and financial condition.

Failure to comply with the FDA, DEA, EPA and other governmental regulations can

result in fines, disgorgement, unanticipated compliance expenditures, recall or seizure of products, exposure to product liability claims,

total or partial suspension of production or distribution, suspension of the FDA’s review of NDAs or ANDAs, enforcement actions,

injunctions and civil or criminal prosecution, any of which could have a material and adverse effect on our business, results of operations

and financial condition.

business may be adversely affected by legislation or healthcare regulatory reform and initiatives.

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government regulations and tariffs.

could potentially disrupt our existing supply chains

and impose additional costs on our business, including costs with respect to raw materials upon which our business depends.

if tariffs, trade restrictions or trade barriers are placed on products such as ours by foreign governments, it could cause us to raise

prices for our products, which may result in the loss of customers.

If we are unable to pass along increased costs to our customers,

our margins could be adversely affected.

Additionally, it is possible that further tariffs may be imposed that could affect imports of

APIs and other materials used in our products, or our business may be adversely impacted by retaliatory trade measures taken by other

countries, including restricted access to APIs or other materials used in our products, causing us to raise prices or make changes to

our products.

Further, the continued threats of tariffs, trade restrictions and trade barriers could have a generally disruptive impact

on the global economy and, therefore, negatively impact our sales.

Given the volatility and uncertainty regarding the scope and

duration of these tariffs and other aspects of U.S.

international trade policy, the impact on our operations and results is uncertain

and could be significant.

Further governmental action related to tariffs, additional taxes, regulatory changes or other retaliatory trade

measures could occur in the future.

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

of operations and cash flows.

could potentially disrupt our existing supply chains and impose additional costs on our business, including costs with respect to raw

materials upon which our business depends.

Furthermore, if tariffs, trade restrictions or trade barriers are placed on products such

as ours by foreign governments, it could cause us to raise prices for our products, which may result in the loss of customers.

are unable to pass along increased costs to our customers, our margins could be adversely affected.

Additionally, it is possible that

further tariffs may be imposed that could affect imports of APIs and other materials used in our products, or our business may be adversely

impacted by retaliatory trade measures taken by other countries, including restricted access to APIs or other materials used in our products,

causing us to raise prices or make changes to our products.

Further, the continued threats of tariffs, trade restrictions and trade barriers

could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales.

Given the volatility and

uncertainty regarding the scope and duration of these tariffs and other aspects of U.S.

international trade policy, the impact on our

operations and results is uncertain and could be significant.

Further governmental action related to tariffs, additional taxes, regulatory

changes or other retaliatory trade measures could occur in the future.

Any of these factors could have a material adverse effect on our

business, financial condition, results of operations and cash flows.

DEA could limit the availability of active ingredients used in many of our products.

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sufficient to meet commercial demand or to complete any clinical trials we may conduct.

Moreover, the DEA may adjust these

quotas from time to time during the year, although the DEA has substantial discretion in whether or not to make such adjustments.

delay or refusal by the DEA in establishing our quotas, or modification of our quotas, for controlled substances could delay or result

in the stoppage of our clinical trials or product launches or could cause trade inventory disruptions for those products that already

been launched, which could have a material adverse effect on our business, financial position, cash flows and stock price.

Moreover, the DEA may adjust these quotas from

time to time during the year, although the DEA has substantial discretion in whether or not to make such adjustments.

Any delay or refusal

by the DEA in establishing our quotas, or modification of our quotas, for controlled substances could delay or result in the stoppage

of our clinical trials or product launches or could cause trade inventory disruptions for those products that already been launched,

which could have a material adverse effect on our business, financial position, cash flows and stock price.

received a CRL from the FDA indicating that the SequestOx™ NDA is not ready for approval .

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If we are unable to obtain

approval for SequestOx™ or if we incur significant costs or delays in obtaining such approval, our return on investment in

SequestOx™ will be materially adversely affected.

approval for SequestOx™ or if we incur significant costs or delays in obtaining such approval, our return on investment in SequestOx™

will be materially adversely affected.

July 2016, the FDA issued a Complete Response Letter, or CRL, regarding the NDA.

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will be unable to commercialize the product.

Furthermore, in the event that the Company does receive marketing approval

for SequestOx™, there can be no assurances of the Company realizing future revenues or profits related to this product, or that

any such future revenues and profits would be in amounts that provide adequate return on the significant investments made to secure this

marketing authorization.

The Company has currently paused further development of SequestOx™ due to the prohibitive cost of such

and attendant risks related thereto.

Furthermore, in the event that the Company does receive marketing approval for SequestOx™,

there can be no assurances of the Company realizing future revenues or profits related to this product, or that any such future revenues

and profits would be in amounts that provide adequate return on the significant investments made to secure this marketing authorization.

The Company has currently paused further development of SequestOx™ due to the prohibitive cost of such and attendant risks related

factors may cause us to be unable to manufacture products or face interruptions in our manufacturing process.

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in the event of the Company being party to a settlement agreement, either as the branded, innovator product owner, or as the generic

applicant, we may receive formal or informal requests from the FTC or DOJ for information about a settlement agreement and there

is a risk of the FTC or DOJ alleging a violation of antitrust laws and commencing an action against us.

such action could have an adverse effect on the

Company’s business operations and financial condition.

applicant, we may receive formal or informal requests from the FTC for information about a settlement agreement and there is a risk of

the FTC or DOJ alleging a violation of antitrust laws and commencing an action against us.

such action could have an adverse effect on the Company’s business, operations and financial condition.

and Liability Related Risks

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these claims have a basis in scientific fact.

See the risk factor “Public concern over abuse of opioids could negatively

affect our business” for more information.

See the risk factor “ Our business is dependent on market perceptions, social and

political pressures, including public concern over the abuse of opioids ” for more information.

are also inherently exposed to litigation concerning patents and proprietary rights which can be protracted and expensive.

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are subject to various fraud and abuse laws which could expose us to criminal sanctions, civil penalties, contractual damages, reputational

harm and diminished profits.

harm and diminished profits and future earnings.

activities are subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute,

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These laws include:

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities

from knowingly and willfully soliciting, offering, receiving or paying any remuneration,

directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either

the referral of an individual for, or the purchase, lease, order, or arranging for or recommending

the purchase, lease or order of, any good or service, for which payment may be made, in whole

or in part, under federal healthcare programs such as Medicare and Medicaid.

entity does not need to have actual knowledge of the statute or specific intent to violate

it in order to have committed a violation;

civil False Claims Act (which can be enforced through “qui tam,” or whistleblower

actions, by private citizens on behalf of the federal government), prohibits any person from,

among other things, knowingly presenting, or causing to be presented false or fraudulent

claims for payment of government funds or knowingly making, using or causing to be made or

used, a false record or statement material to an obligation to pay money to the government

or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money

federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,

offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward

either the referral of an individual for, or the purchase, lease, order, or arranging for or recommending the purchase, lease or

order of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare

and Medicaid.

A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order

to have committed a violation;

civil False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on

behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented

false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record

or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing

an obligation to pay money to the U.S.

federal government;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes

criminal liability and amends provisions on the reporting, investigation, enforcement, and

penalizing of civil liability for, among other things, knowingly and willfully executing,

or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly

and willfully falsifying, concealing or covering up a material fact or making any materially

false statement, in connection with the delivery of, or payment for healthcare benefits,

items or services by a healthcare benefit program, which includes both government and privately

funded benefits programs;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability and amends provisions

on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully

executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing

or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare

benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs;

similar to the U.S.

federal Anti-Kickback Statute, a person or

entity does not need to have actual knowledge of the statute or specific intent to violate

it in order to have committed a violation;

laws and regulations, including state anti-kickback and false claims laws, that may apply

to our business practices, including but not limited to, research, distribution, sales and

marketing arrangements and claims involving healthcare items or services reimbursed by any

third-party payer, including private insurers;

state laws that require pharmaceutical companies

to comply with the pharmaceutical industry’s voluntary compliance guidelines and the

relevant compliance guidance promulgated by the U.S.

federal government, or otherwise restrict

payments that may be made to healthcare providers and other potential referral sources;

state laws and regulations that require drug manufacturers to file reports relating to pricing

and marketing information, which requires tracking gifts and other remuneration and items

of value provided to healthcare professionals and entities;

Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing

regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies

that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance

Program to report annually to CMS information related to certain payments made in the preceding

calendar year and other transfers of value to physicians and teaching hospitals, as well

as ownership and investment interests held by physicians and their immediate family members;

beginning in 2022, applicable manufacturers are required to report such information regarding

payments and transfers of value provided, as well as ownership and investment interests held,

during the previous year to physician assistants, nurse practitioners, clinical nurse specialists,

certified nurse anesthetists, and certified nurse-midwives;

Foreign Corrupt Practices Act, or the FCPA, which generally prohibits offering, promising,

giving, or authorizing others to give anything of value, either directly or indirectly, to

government official in order to influence official action, or otherwise obtain

or retain business.

The FCPA also requires public companies to make and keep books and records

that accurately and fairly reflect the transactions of the corporation and to devise and

maintain an adequate system of internal accounting controls.

Our industry is heavily regulated

and therefore involves significant interaction with public officials, including officials

Additionally, in many other countries, the health care providers

who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals

are government entities;

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific

intent to violate it in order to have committed a violation;

laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but

not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed

by any third-party payer, including private insurers;

state laws that require pharmaceutical companies to comply with the pharmaceutical

industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S.

federal government,

or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

and state laws and

regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking

gifts and other remuneration and items of value provided to healthcare professionals and entities;

Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers

of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health

Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other

transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their

immediate family members;

beginning in 2022, applicable manufacturers are required to report such information regarding payments

and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants,

nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives;

Foreign Corrupt Practices Act, or the FCPA, which generally prohibits offering, promising, giving, or authorizing others to give

anything of value, either directly or indirectly, to a non-U.S.

government official in order to influence official action, or otherwise

obtain or retain business.

The FCPA also requires public companies to make and keep books and records that accurately and fairly

reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls.

is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S.

Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government,

and the purchasers of pharmaceuticals are government entities;

therefore, our dealings with these prescribers and purchasers are

subject to regulation under the FCPA.

Recently, the SEC and Department of Justice have increased

their FCPA enforcement activities with respect to pharmaceutical companies.

Recently, the SEC and Department of Justice have increased their FCPA enforcement activities

with respect to pharmaceutical companies.

of any of these laws or any other governmental regulations that may apply to us, may subject us to significant civil, criminal and administrative

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of our current products and products under development contain controlled substances.

Misuse or abuse of such drugs can lead to

physical or other hard.

The FDA and/or the DEA may impose new regulations concerning the manufacture, storage, transportation, distribution,

and sale of prescription narcotics.

Such regulations may include new labelling requirements, the development and implementation of a

formal REMS, restrictions on prescription and sale of such products and mandatory reformulation in order to make abuse of such products

more difficult.

Misuse or abuse of such drugs can lead to physical

or other hard.

The FDA and/or the DEA may impose new regulations concerning the manufacture, storage, transportation, distribution, and

sale of prescription narcotics.

Such regulations may include new labelling requirements, the development and implementation of a formal

REMS, restrictions on prescription and sale of such products and mandatory reformulation in order to make abuse of such products more

In 2007, Congress passed legislation authorizing the FDA to require companies to undertake post-approval studies in order

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and may modify their regulations with respect to prescription narcotics in an attempt to curb abuse.

Mandatory REMS programs could

increase the cost, burden and liability associated with the commercialization of certain products.

REMS programs could increase the cost, burden and liability associated with the commercialization of certain products.

FDA has imposed a class-wide REMS on all IR, ER and long acting (“LA”) opioid drug products (known as the Opioid Analgesic

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and will increase transaction costs for sales and purchases of our Common Stock as compared to other securities.

addition, our Common stock is quoted on the Over-the-Counter Bulletin Board (the “OTCBB”) which is a regulated quotation

addition, our Common stock is quoted on the Venture Market (the “OTCQB”) which is a regulated quotation

service that displays real-time quotes, last sale prices and volume limitations in over-the-counter securities.

Because trades and quotations

on the OTCBB involve a manual process, the market information for such securities cannot be guaranteed.

on the OTCQB involve a manual process, the market information for such securities cannot be guaranteed.

In addition, quote information,

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be able to sell shares of our Common Stock at the optimum trading prices.

fewer shares of a security are being traded on the OTCBB, volatility of prices may increase, and price movement may outpace the ability

fewer shares of a security are being traded on the OTCQB, volatility of prices may increase, and price movement may outpace the ability

to deliver accurate quote information.

Lower trading volumes in a security may result in a lower likelihood of an individual’s

orders being executed, and current prices may differ significantly from the price one was quoted by the OTCBB at the time of the order

Orders for OTCBB securities may be cancelled or edited like orders for other securities.

orders being executed, and current prices may differ significantly from the price one was quoted by the OTCQB at the time of the order

Orders for OTCQB securities may be cancelled or edited like orders for other securities.

All requests to change or cancel an order

must be submitted to, received, and processed by the OTCBB.

Due to the manual order processing involved in handling OTCBB trades, order

must be submitted to, received, and processed by the OTCQB.

Due to the manual order processing involved in handling OTCQB trades, order

processing and reporting may be delayed, and an individual may not be able to cancel or edit his order.

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dealer’s spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller

of securities on the OTCBB if the Common Stock or other security must be sold immediately.

of securities on the OTCQB if the Common Stock or other security must be sold immediately.

Further, purchasers of securities may incur

an immediate “paper” loss due to the price spread.

Moreover, dealers trading on the OTCBB may not have a bid price for securities

bought and sold through the OTCBB.

Due to the foregoing, demand for securities that are traded through the OTCBB may be decreased or

Moreover, dealers trading on the OTCQB may not have a bid price for securities

bought and sold through the OTCQB.

Due to the foregoing, demand for securities that are traded through the OTCQB may be decreased or

activism could negatively affect us.

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For the twelve months ended March 31, 2023, the closing sale price

on the OTC Bulletin Board (“OTCBB”) of our Common Stock fluctuated from a high of $0.06 per share to a low of $0.03 per share.

on the Venture Market (“OTCQB”) of our Common Stock fluctuated from a high of $0.05 per share to a low of $0.03 per share.

The price per share of our Common Stock may not exceed or even remain at current levels in the future.

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

What changed 10-K

Item 1A. Risk Factors