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Item 1. Business

2023-03-20 compared with 2022-04-15 · 1331 added, 905 removed, 191 unchanged (92% of the section changed)

On March 25, 2021, BIT Merger Sub, Inc., a wholly owned subsidiary of Brooklyn (then known as NTN Buzztime, Inc.) merged with and into Brooklyn LLC, with Brooklyn LLC surviving as a wholly

owned subsidiary of Brooklyn.

This transaction, which we refer to as the Merger, was completed in accordance with the terms of an agreement and plan of merger and reorganization dated August 12, 2020 among Brooklyn (then known as NTN Buzztime,

Inc.), BIT Merger Sub, Inc.

and Brooklyn LLC.

In accordance with such agreement and plan of merger, on March 25, 2021, Brooklyn amended its restated certificate of incorporation in order to effect:

prior to the Merger, a reverse stock split of its common stock, par value $0.005 per share, at a ratio of one-for-two;

following the Merger, a change in its corporate name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.”

On March 26, 2021, we sold the rights, title and interest in and to the assets relating to the business operated under the name “NTN Buzztime, Inc.” prior to the Merger to eGames.com Holdings

LLC, or eGames.com, in exchange for eGames.com’s payment of a purchase price of $2.0 million and assumption of specified liabilities relating to such pre-Merger business.

This transaction, which we refer to as the Disposition, was completed in

accordance with the terms of an asset purchase agreement dated September 18, 2020, as amended, between us and eGames.com.

The Merger has been accounted for as a reverse acquisition in accordance with United States generally accepted accounting principles, or GAAP.

Under this method of accounting, Brooklyn LLC was

deemed the “acquiring” company and Brooklyn (then known as NTN Buzztime, Inc.) was treated as the “acquired” company for financial reporting purposes.

Operations prior to the Merger are those of Brooklyn LLC, and the historical financial

statements of Brooklyn LLC became the historical financial statements of Brooklyn with respect to periods prior to the completion of the Merger.

Our principal executive offices are located at 10355 Science Center Drive, Suite 150, San Diego, CA 92121 and our phone number is (212) 582-1199.

We maintain a website at www.brooklynitx.com.

Information contained on, or accessible through, our website is not a part of and is not incorporated by

reference into this Annual Report on Form 10-K.

We are a clinical-stage biopharmaceutical company focused on exploring the role that cytokine-based therapy can have on the immune system in treating patients with cancer, both as a single

agent and in combination with other anti-cancer therapies.

We are seeking to develop IRX-2, a novel cytokine-based therapy, to treat patients with cancer.

We also are exploring opportunities to advance oncology, blood disorder, and monogenic

disease therapies using gene-editing and cell therapy technology through a license with Factor Bioscience Limited, or Factor, and through our acquisition of Novellus, Inc.

and Novellus, Ltd.

in July 2021, which we refer to as the Acquisition.

IRX-2 is a mixed, human-derived cytokine product with multiple active constituents including Interleukin-2, or IL2, and other key cytokines.

Together, these cytokines are believed to signal,

enhance and restore immune function suppressed by the tumor, thus enabling the immune system to attack cancer cells, unlike many existing cancer therapies, which rely on targeting the cancer directly.

IRX-2 is prepared from the supernatant of

pooled allogeneic peripheral blood mononuclear cells, known as PBMCs, that have been stimulated using a proprietary process employing a specific population of cells and a specific mitogen.

While IRX-2 is a cytokine mixture, one of its active components is IL2, a cytokine-signaling molecule with pleiotropic effects on the immune system.

IL2 is a protein that regulates the

activities of white blood cells (leukocytes, including lymphocytes) that are responsible for immunity.

IL2 is part of the body’s natural response to microbial infection, and in discriminating between foreign, or non-self and “self,” IL2 mediates

its effects by binding to IL2 receptors, which are expressed by lymphocytes.

The major sources of IL2 are activated CD4 + T lymphocytes and activated CD8 + T lymphocytes.

Unlike existing recombinant IL2 therapies, IRX-2 is derived from human blood cells.

We believe this may promote better tolerance, broader targeting and a natural molecular conformation leading

to greater activity, and may permit low physiologic dosing, rather than the high doses needed in other existing IL2 therapies.

Regarding IRX-2 development, our strategy is:

Advance our product candidate IRX-2 through clinical development.

IRX-2 is a human blood cell-derived cytokine therapy being studied for multiple types of cancer,

including squamous cell cancer of the head and neck.

Enrollment in the ongoing Phase 2b INSPIRE trial, or the INSPIRE trial, has been completed, with top-line data estimated to be available by the third quarter of 2022.

Advance additional studies.

Once INSPIRE trial data are released, we plan to use those results as a catalyst in addition to data from the other clinical trials in

the program, see “—Clinical Program” below, with multiple data read-outs anticipated in 2022 and later.

Pursue partnerships to advance the IRX-2 clinical program .

We are pursuing partnership opportunities with certain leading biopharmaceutical companies for the

development and commercialization of IRX-2.

Regulatory strategy.

We believe that our assets may present opportunities for potential breakthroughs in the treatment of cancer and other indications.

endeavor to seek breakthrough therapy designation with regulatory agencies for IRX-2 for one or more indications.

Intellectual Property .

We continue to pursue additional intellectual property based on data from our IRX-2 clinical studies.

Pre-Clinical Results

Our findings to date from our nonclinical studies of IRX-2 include murine acute toxicology as well as acute and chronic toxicology in non-human primates.

These studies detected circulating

associated cytokines yet were associated with benign toxicological findings.

Clinical Program

IRX2 currently remains under development and has not yet been approved for marketing authorization in any jurisdiction.

The ongoing company sponsored development program is investigating use of

IRX2 as an immunotherapeutic neoadjuvant (pre-surgical) and adjuvant (post-operative) treatment for advanced head and neck squamous cell carcinoma, or (“HNSCC”).

Studies in other indications and combinations are being pursued in the investigator

sponsored study program.

The HNSCC development program is being conducted under U.S.

Food and Drug Administration (“FDA”) Investigational New Drug (IND) 11137 filed on June 30, 2003 and is ongoing.

The HNSCC program

has received fast track designation, approved November 7, 2003, and orphan drug designation, conferred on July 7, 2005, from the FDA.

We have not submitted a request for orphan drug designation in the European Union, although we may seek such

designation in the future.

Clinical studies in humans with HNSCC involving IRX‑2 show immune marker activation in patients treated with IRX‑2.

In a prior Phase 2a clinical trial, a correlation was shown between marker

activation and disease-free survival in head and neck cancer.

Results from this study were used to support the initiation of the INSPIRE trial involving 105 patients with HNSCC.

Details of this trial can be found at clinicaltrials.gov (NCT02609386).

The trial study schema can be found below.

Historical Background of the Inspire Study

The IRX-2 regimen has been studied in patients HNSCC in two previous open-label, multi-center studies.

Also, a phase 1 trial evaluated the IRX-2 regimen as a therapy for advanced disease, which

reported that the IRX-2 regimen was well tolerated.

In 2011, results were reported for a Phase 2a trial of IRX-2.

This trial was an open-label study involving 27 patients, 26 of whom completed the study.

The primary endpoint of the study was to

further evaluate the safety and efficacy of the immunotherapy regimen including IRX-2 in the neoadjuvant setting in previously untreated patients with advanced (Stage II to IVa) HNSCC.

The primary study objective was to demonstrate the safety of

this immunotherapy regimen based on adverse events (“AEs”), changes in clinical laboratory measures (hematology, chemistry, and urinalysis), vital signs, and physical examinations.

Secondary objectives were clinical, pathologic, and radiographic

tumor response;

and patient disease-free survival (“DFS”) and overall survival (“OS”).

Most recombinant cytokines, such as IL-2, are tested in the same manner as traditional oncology drugs, where the maximum tolerated dose is sought.

Typical cytokine therapies in cancer treatment

use extremely high doses, in the millions of units per administration.

Thus, AEs such as fever, hypotension, malaise, anemia, leukopenia, and hepatic and renal dysfunction are commonly reported, and often lead to discontinuation of the treatment.

IV administration of cytokines is frequently associated with an acute phase reaction characterized by rigors, fever, an increase in neutrophils, a decrease in lymphocytes, and changes in hormone levels.

By contrast, the IRX-2 regimen, which

contains physiologic quantities of cytokines, showed greatly improved tolerability over typical recombinant cytokine therapies.

The results of the Phase 2a study were published in December 2011 in the journal Head and Neck.

The article reported that IRX-2 showed an immunologically mediated antitumor effect, suggested by

pronounced lymphocytic infiltration.

Lymphocytic infiltration was measured by a 100-mm Visual Analog Scale (“VAS”) score, in which 100 mm signified lymphocyte infiltration of the entire primary tumor section and 0 mm signified no lymphocyte

infiltration in the tumor specimen.

The mean VAS score for all 24 patients was 22.6 mm on the samples obtained at surgery.

Patients were grouped into a low VAS score (below the overall mean) and high VAS score (above the overall mean) cohorts.

There were 14 patients in the low VAS score cohort with scores between 2 and 21 (median of 9.5), and there were 10 patients in the high VAS score cohort with scores between 27 and 66 (median of 37.0).

Patients in the high-LI group included fewer

oral cavity patients (50% in high LI vs 60% in low LI) but were similar with respect to tumor sites.

Seventy percent of high-LI patients were stage IV, whereas only 60% of low LI were stage IV.

The LI score was used to determine whether the

degree of LI correlated with survival.

Patients with a high-LI score had an improved survival trend compared to those with low LI, and superior to the survival rate for the combined overall group.

Interestingly, LI in resected tumor specimens was considered high in 40% of the patients.

The 10 patients with a high-LI score showed an improved survival trend in comparison to the low-LI

group (n = 15) and to the entire study population (n = 26).

It is difficult to directly compare these subgroups, because there was some imbalance, with a slightly higher per-centage of oral cavity patients in the low-LI group.

However, in the

absence of a randomized control, it is impossible to directly attribute the LI to the immuno-therapy regimen.

In addition, tumor reductions were observed at the end of the 21-day regimen in 11 patients, and a 75% reduction of glycolytic activity

in the tumor and lymph nodes on posttreatment PET scans in one patient.

With regard to the primary endpoint, eight serious adverse events (SAEs) were reported during treatment and the 30-day postoperative period in 7 patients, including 3 patients with aspiration

pneumonia, 1 patient with asthma exacerbation secondary to upper respiratory infection, 1 patient with a postoperative wound infection, 1 patient with a neck abscess, and 1 patient with an episode of alcohol withdrawal.

Only 1 case of aspiration

pneumonia was deemed life threatening (grade 4).

None of the SAEs was considered related to treatment except for the postoperative wound infection, which was considered possibly related.

Other minor (grade 1 or 2) AEs included headache (30%),

injection-site pain (22%), nausea (22%), constipation (15%), dizziness (15%), fatigue (11%), and myalgia (7%).

After over more than 36 months of follow-up, 11 of the 27 patients enrolled in the Phase 2a study had experienced tumor relapse (n = 1) or death (n = 10).

The pattern of first HNSCC relapse

included 3 patients with primary site recurrence, 2 with recurrences in the neck, and 2 with distant metastases.

Of the 10 patients who died, 6 died of cancer (1 from a new primary) and 4 died of other causes.

The 1-year, 2-year, and 3-year DFS

probabilities after surgery were 72%, 64%, and 62%, respectively.

Of the 26 patients whose primary tumor was resected surgically, 2 patients died during the first year and 5 patients died during the second year after surgery.

The probability of

surviving after surgery was 92% the first year, 73% the second year, and 69% the third year, which was considered to be an encouraging survival rate compared to historical norms in patients with HNSCC.

A second finding of the study was that some tumors showed some decrease in overall size after the immunotherapy regimen.

Overall tumor shrinkage was modest, although in 4 patients, independent,

objective imaging documented a greater than 10% decrease in tumor size.

This was unexpected and encouraging after only 3 weeks of presurgical neoadjuvant immunotherapy.

No patient achieved a true partial response by modified Response Evaluation

Criteria in Solid Tumors (RECIST) criteria.

Increases in tumor measurements were also seen in some patients, but most patients showed negligible change in tumor dimensions.

We believe that these findings suggest the safety of the neoadjuvant

regimen, although final decisions on whether a drug product is safe and effective can only be made by the FDA.

The phase 2a trial did not include a randomized control cohort.

However, the manuscript published in Head & Neck in December 2011 stated the authors’ belief that the safety results and

feasibility of this immunotherapy regimen were intriguing enough to warrant further study and appropriate comparison in a randomized trial.

The INSPIRE study is an open label, randomized, multi-center, multi-national Phase 2b clinical trial intended for patients with Stage II, III or IVA untreated SCC of the oral cavity who are

candidates for resection with curative intent.

Subjects were randomized 2:1 to either Regimen 1 or Regimen 2 and treated for 21 days prior to surgery and then postoperatively with a booster regimen given every three months for one year (a total

of four times.)

IRX-2 Regimen with cyclophosphamide, indomethacin, zinc-containing multivitamins, omeprazole and IRX-2 as neoadjuvant and adjuvant therapy.

Regimen 1 with cyclophosphamide, indomethacin, zinc-containing multivitamins, omeprazole but without IRX-2 as neoadjuvant and adjuvant therapy.

Treatments were allocated to study subjects using minimization with a stochastic algorithm based on the range method.

Minimization will account for the major prognostic factors for SCC of the

oral cavity (T and N stage) and study center to avoid imbalances in treatment allocation within centers.

Postoperatively, subjects first received standard adjuvant radiation or chemoradiation therapy as determined by the investigators per NCCN guidelines, and then also received Booster Regimen 1

or 2 as determined in the prior randomization.

Subjects will be followed for the Primary, Secondary and Exploratory endpoints.

Protocol mandated follow-up will end four years after randomization of the last patient.

The Neoadjuvant IRX-2 Regimen is a 21-day pre-operative regimen of cyclophosphamide on Day 1, indomethacin, zinc-containing multivitamins and omeprazole on Days 1-21, and subcutaneous IRX-2

injections in bilateral mastoid insertion regions for 10 days between Days 4 and 21, as shown in the table below:

Route of Administration

Treatment Days

Cyclophosphamide

230 units daily (Bilateral injections of 115 units)

Subcutaneous at or near the mastoid insertion of both sternocleidomastoid muscles

Any 10 days between Days 4 and 21

Zinc-Containing Multivitamins

1 tablet containing 15-30 mg of zinc

The Booster IRX-2 Regimen is given at 3, 6, 9 and 12 months (-14 to +28 days) after surgical resection.

It is a 10- day post-operative regimen of cyclophosphamide on Day 1, indomethacin,

zinc-containing multivitamins and omeprazole on Days 1-10 and subcutaneous IRX-2 injections in bilateral deltoid regions for 5 days between Days 4 and 10 as shown in the table below:

Route of Administration

Treatment Days

Cyclophosphamide

Every 3 months.

230 units daily (Bilateral injections of 115 units)

Subcutaneous into bilateral deltoid regions

Any 5 days between Days 4 and 10

Every 3 months.

Zinc-Containing Multivitamins

1 tablet containing 15-30 mg of zinc

Every 3 months.

Regimen 2, the control arm of the study, is identical, except that subjects will not receive IRX-2.

The primary objective of the study is to determine if the event-free survival (EFS) of subjects treated with Regimen 1 is longer than for subjects treated with Regimen 2.

The secondary

objections of the study are (i) to determine if OS of subjects treated with Regimen 1 is longer than for subjects treated with Regimen 2, (ii) to compare the safety of each Regimen, and (iii) to compare the feasibility of each booster regimen.

Other Indications

Other than the phase 2b INSPIRE trial, all clinical studies using IRX-2 are investigator-sponsored studies for which we are providing IRX‑2 as the study drug and financial support to conduct

These studies include:

Monotherapy studies:

BR-101 - A study involving 16 patients with neoadjuvant breast cancer performed at the Providence Portland Medical Center.

Details of this trial can be found at clinicaltrials.gov

(NCT02950259).

CIN-201 - An open label single arm Phase 2 trial of the IRX‑2 regimen in women with cervical squamous intraepithelial neoplasia 3 or squamous vulvar intraepithelial neoplasia 3.

Details of this trial can be

found at clinicaltrials.gov (NCT03267680).

Combination studies:

BAS-104 - A basket study originally intended to enroll 100 patients with metastatic bladder, renal, non-small cell lung cancer, or NSCLC, melanoma, and head and neck cancer being held at the Moffitt

Cancer Center, using IRX‑2 in conjunction with Opdivo ® (Nivolumab), an immunotherapy cancer treatment marketed by Bristol-Myers Squibb Company.

trial was discontinued after 11 subjects were enrolled due to insurance reimbursement challenges.

Details of this trial can be found on clinicaltrials.gov (NCT03758781).

HCC-107 - A study involving 28 patients with metastatic hepatocellular carcinoma, or HCC, being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology at Baylor

Simmons Cancer Center using IRX‑2 in conjunction with Opdivo ® , a cancer treatment marketed by Bristol-Myers Squibb Company.

this trial can be found at clinicaltrials.gov (NCT03655002).

GI-106 - A study involving 20 patients with metastatic gastric and gastroesophageal junction cancers (GI) being held at City of Hope Medical Center, HonorHealth Research Institute, and Texas Oncology

at Baylor Charles A.

Simmons Cancer Center using IRX‑2 in conjunction with Keytruda ® (Pembrolizumab), an immunotherapy cancer treatment marketed by

Details of this trial can be found at clinicaltrials.gov (NCT03918499).

MHN-102 - A study involving 15 patients with metastatic head and neck cancer being held at the H.

Lee Moffitt Cancer Center and Research Institute and University of Michigan Health System using IRX‑2 in

conjunction with Imfinzi (Durvalumab), a cancer treatment marketed by AstraZeneca plc.

Details of this trial can be found at clinicaltrials.gov (NCT03381183).

BR-202 - A study involving 30 patients with neoadjuvant triple negative breast cancer, held at the Providence Portland Medical Center using IRX‑2 in conjunction with a programmed cell death protein 1, or

PD1, and chemotherapy treatments.

Details of this trial can be found at clinicaltrials.gov (NCT04373031).

Impact of COVID-19 Pandemic

The development of our product candidates has been, and could continue to be, disrupted and materially adversely affected by past and continuing impacts of the COVID-19 pandemic.

largely a result of measures imposed by the governments and hospitals in affected regions, businesses and schools were suspended due to quarantines intended to contain this outbreak.

The spread of COVID-19 from China to other countries resulted

in the Director General of the World Health Organization declaring COVID-19 a pandemic in March 2020.

While the constraints of the pandemic are being lifted, we are still assessing the longer-term impact of the COVID-19 pandemic on our

development plans, and on the ability to conduct our clinical trials.

COVID-19 could continue to disrupt production and cause delays in the supply and delivery of products used in our operations, may affect our operations, including the conduct

of clinical studies, or the ability of regulatory bodies to grant approvals or supervise our candidates and products, may further divert the attention and efforts of the medical community to coping with the COVID-19 and disrupt the marketplace in

which we operate and may have a material adverse effects on our operations.

COVID-19 may also affect our employees and employees and operations at suppliers that may result in delays or disruptions in supply.

In addition, a recession or market

correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

Additionally, if the COVID-19 pandemic has a significant impact on our business and financial results for an extended period

of time, our liquidity and cash resources could be negatively impacted.

The extent to which the COVID-19 pandemic and ongoing global efforts to contain its spread will impact our operations will depend on future developments, which are highly

uncertain, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.

Further, the specific clinical outcomes, or future pandemic related impacts of emerging COVID-19 variants

cannot be reliably predicted.

The patients in our clinical trials have conditions that make them especially vulnerable to COVID-19, and as a result we have seen slowdowns in enrollment in our clinical trials.

INSPIRE trial in patients with squamous cell carcinoma of the oral cavity is fully populated, our other clinical studies are likely to continue to encounter delays in enrollment as a result of the pandemic.

Engineered Cellular and Genetic Medicines

We are advancing our gene-editing and cell therapy technology in oncology, blood disorders and monogenic disorders through a license with Factor and through the Acquisition of Novellus, Inc.

and Novellus, Ltd.

in July 2021.

We expect that the first generation product candidates resulting from the Acquisition will be derived from unedited (that is, not gene modified), induced pluripotent stem cells (“iPSC”)-derived allogeneic

mesenchymal stem cells (“iMSC”).

We expect to begin preclinical development of iMSC for clinical indications for which inhibiting inflammation and/or supporting recovery of bone marrow stromal cells is required.

The prior work of Novellus and

NoveCite with iMSC shows evidence for preclinical efficacy in inflammatory conditions (for example, acute respiratory distress syndrome, or ARDS).

Interactions with the FDA provided guidance on Chemistry, Manufacturing and Controls (“CMC”), and

manufacturing plans, which will be undertaken in a similar manner for additional iMSC applications.

We expect that second generation iMSC products will involve gene editing, for which we anticipate using the stepwise addition of genes provided by

the in-licensed Factor Bioscience gene editing machinery, NoveSlice, to efficiently place genes and regulatory sequences into safe harbor locations.

Development of processes to advance CMC and manufacturing will follow the experience from first

generation iMSC products.

We expect clinical indications for gene-modified iMSC will include solid tumors and other conditions associated with episodic and/or chronic inflammation.

We are also exploring opportunities to advance in vivo gene

therapies for monogenic and other diseases by combining the NoveSlice gene editing technology in combination with ToRNAdo TM , the in-licensed lipid nanoparticle (or

“LNP”) technology.

Pluripotent Stem Cell-Derived MSC

MSC, also known as mesenchymal stromal cells, were originally discovered and isolated from bone marrow in the 1970s and have been isolated from various tissue sources including muscle,

umbilical cord, liver, placenta, skin, amniotic fluid, synovial membrane, and tooth root.

MSC have been intensely investigated for clinical applications within the last decades with a very strong record of safety and tolerability.

majority of registered clinical trials applying MSC therapy for diverse human diseases have fallen short of expectations, despite the encouraging pre-clinical outcomes in varied animal disease models.

This can be attributable to inconsistent

properties of MSC across studies as a result of variations in tissue source, donor variability, as well as isolation and manufacturing methodologies.

The generation of MSC from an iPSC source eliminates many of the sources of variability attributable to tissue derived MSC.

Sources of reduced variability include the use a single tissue source

and single donor as well as the ability to make larger cell banks due to the more extensive proliferation capacity of iMSC.

Moreover, development of iMSC products can leverage decades of valuable manufacturing, preclinical and clinical experience

Brooklyn plans to create “off-the-shelf” iMSC products in clinical indications that harness their anti-inflammatory and tumor homing properties.

Further, gene editing of iPSC can produce a stable source for iMSC that are endowed with

additional therapeutically beneficial properties that are not present in tissue derived MSC or native iMSC.

Bone Marrow Transplant and Inflammatory Diseases

Brooklyn is exploring the use of iMSC to address primary graft failure or poor graft function after bone marrow or hematopoietic stem cell transplantation, or BM/HSCT in addition to potential

applications in the prevention and/or treatment of graft vs host disease.

Preclinical studies will be conducted to demonstrate the ability of iMSC to target the bone marrow and influence the microenvironment.

In addition, we have assembled an

advisory board of world class experts in BM/HSCT to guide the clinical trial design and selection of clinical populations that are most likely to show benefit of a secondary transplant after treatment with iMSC.

Tumor Localized Delivery of Immune Stimulating Cytokines

The ability of MSC to migrate and navigate to sites of inflammation, including tumors, makes MSC attractive for delivery of oncology therapeutics.

We intend to use gene editing of iPSC to

produce a cell line with expression of the immune stimulatory cytokines, which then can be used to generate iMSC that express both IL-7 and IL-15.

Following systemic delivery of the gene edited iMSC, we believe that migration and homing to tumor

sites will result in a localized and more sustained delivery of these potent cytokines in the tumor microenvironment without producing the side effects that occur with high dose systemic administration of these cytokines.

Precision In vivo Genetic Medicines

We believe that the ability to engineer target site-specific DNA endonucleases with high fidelity (gene editing) has opened a new therapeutic arena for addressing the underlying genetic basis

Gene editing systems that possess both high specificity (low off-target editing) and high efficiency for on-target editing enable the in vivo use of the gene editing machinery to specifically modify patient DNA in target tissues and

thus address the genetic underpinnings of numerous disease states.

Brooklyn’s in-licensed technologies are being leveraged to develop genetic medicines that can achieve precision in vivo gene editing to address disorders that occur primarily as a

result of mutations in a single gene.

The initial disease and gene targets being pursued include familial transthyretin amyloidosis ( TTR gene mutations) and Stargardt disease ( ABC4A gene mutation).

Autologous and Allogeneic Cell Therapy

Cellular reprogramming refers to the process of generating pluripotent stem cells from non-pluripotent somatic cells (e.g., dermal fibroblasts obtained through a skin biopsy) by the forced

expression of key genes and factors important for maintaining the defining properties of pluripotent cells.

We believe the in-licensed technology for mRNA-based cellular reprogramming is highly efficient and safer than methods that utilize viral

vectors or plasmid DNA for expression of reprogramming factors because it eliminates the chance of DNA integration and potential for creating mutations in genomic DNA.

Also, our proprietary reprogramming process utilizes daily repeated

transfection of mRNA for expression of reprogramming factors and can achieve a rapid generation of iPSC clones (in 2 weeks) from patient tissue biopsy.

This rapid and efficient process therefore reduces the potential negative impact of low

quantity biopsy material and enhances reproducibility of autologous iPSC generation.

Furthermore, by delivering mRNA for a gene editing nuclease, genomic modifications, including correction of mutations, can be simultaneously performed thus

streamlining overall manufacturing time to produce gene-corrected autologous cells.

We expect that this approach, leveraging the proprietary in licensed technologies, can be employed to produce cell therapies addressing genetic diseases (e.g.,

sickle cell disease) of infectious diseases (e.g.

In addition, we have the potential to generate off-the-shelf (allogeneic) iPSC derived cell therapies for truly personalized cell therapy application in patients with genetic diseases.

Recent Developments

Listing on The Nasdaq Global Market

We transferred the listing of our common stock to The Nasdaq Global Market effective October 25, 2021, after voluntarily withdrawing the listing from the NYSE American stock exchange.

common stock continues to trade under the stock symbol “BTX.”

PIPE Transaction

On March 6, 2022, we entered into a Securities Purchase Agreement with an investor (the “PIPE Investor”) providing for the private placement (the “PIPE Transaction”) to the PIPE Investor of

approximately 6,857,000 units (the “Units”), each of which consisted of (i) one share of our common stock (or, in lieu thereof, one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one share of common stock) and (ii) one warrant (the

“Common Warrants”) to purchase one share of common stock, for an aggregate purchase price of approximately $12.0 million.

The PIPE Transaction closed on March 9, 2022.

Each Pre-Funded Warrant has an exercise price of $0.005 per share of common stock, was immediately exercisable and may be exercised at any time and has no expiration date and is subject to

customary adjustments.

The Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 9.99% immediately after exercise thereof.

Each Common Warrant has an exercise price of $1.91 per share, becomes exercisable six months following the closing of the PIPE Transaction, expires five-and-one-half years from the date of

issuance, and is subject to customary adjustments.

The Common Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof,

subject to increase to 9.99% at the option of the holder.

In connection with the PIPE Transaction, we and the PIPE Investor also entered into a registration rights agreement, dated March 6, 2022, pursuant to which we agreed to prepare and file a

registration statement with the Securities and Exchange Commission (the “SEC”) to register the resale of the shares of common stock included in the Units and the shares of common stock issuable upon exercise of the Pre-Funded Warrants and the

Common Warrants.

We agreed to use our best efforts to have such registration statement declared effective as promptly as possible after the filing thereof, subject to certain specified penalties if timely effectiveness is not achieved.

Purchase Agreements

On April 26, 2021, we and Lincoln Park Capital Fund, LLC, or Lincoln Park, executed a purchase agreement, or the First Purchase Agreement.

Pursuant to the First Purchase Agreement, we had the

right, but not the obligation, to sell to Lincoln Park, and Lincoln Park would be obligated to purchase, up to $20.0 million of shares of our common stock.

Sales of common stock by us were subject to certain limitations, and could occur from time

to time, at our sole discretion.

In consideration for Lincoln Park’s entry into the First Purchase Agreement, we issued Lincoln Park approximately 56,000 shares of common stock.

As of December 31, 2021, we had issued and sold to Lincoln Park

approximately 1,128,000 shares of common stock under the First Purchase Agreement for gross proceeds of $20.0 million, and no further shares may be sold to Lincoln Park under the First Purchase Agreement.

On May 26, 2021, we and Lincoln Park executed a second purchase agreement, or the Second Purchase Agreement, and together with the First Purchase Agreement, the Purchase

Pursuant to the Second Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park would be

obligated to purchase, up to $40.0 million of shares of our common stock.

Sales of common stock by us are subject to certain limitations, and may occur from time to time, at our sole discretion.

In consideration of Lincoln Park’s entry into the

Second Purchase Agreement, we issued to Lincoln Park 50,000 shares of common stock.

Under the Second Purchase Agreement, we may direct Lincoln Park to purchase up to 60,000 shares of common stock on any business day, which we refer to as a Regular Purchase, which amount may be

increased up to 120,000 shares based on the closing price of the common stock, provided that Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $2.0 million.

The purchase price per share for each such Regular Purchase

is based off of the common stock’s market immediately preceding the time of sale.

The Second Purchase Agreement also prohibits us from directing Lincoln Park to purchase any shares of common stock if those shares, when aggregated with all other shares of common stock then

beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of common stock.

right to terminate the Second Purchase Agreement at any time, at no cost or penalty.

Actual sales of shares of common stock to Lincoln Park under the Second Purchase Agreements depend on a variety of factors to be determined by us from time to time, including, among others,

market conditions, the trading price of the common stock and determinations by us as to the appropriate sources of funding for us and our operations.

As of December 31, 2021, we had issued and sold approximately 2,424,000 shares of common stock under the Second Purchase Agreement for total gross proceeds of $34.1 million.

Pursuant to the

securities purchase agreement in respect of the PIPE Transaction, we are prohibited from issuing additional shares under the Second Purchase Agreement for a period of one -year immediately following the closing of the PIPE Transaction.

We are a preclinical-stage biopharmaceutical company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines.

in-licensed a portfolio of over 100 patents covering key mRNA cell engineering technologies, including technologies for mRNA cell reprogramming, mRNA gene editing, the NoveSlice TM and UltraSlice TM gene-editing proteins, and the ToRNAdo TM mRNA

delivery system, which we collectively refer to as our “mRNA technology platform.” We plan to develop and advance a pipeline of therapeutic products, both internally and through strategic partnerships, with the near-term focus on deploying our mRNA

technology platform through strategic partnerships.

We license our mRNA technology platform from Factor Bioscience Limited (“Factor Limited”) under an exclusive license agreement.

Merger with NTN Buzztime, Inc.

On August 12, 2020, Eterna (then known as NTN Buzztime, Inc.), Eterna LLC (then known as Brooklyn Immunotherapeutics LLC) and BIT Merger Sub, Inc., a wholly owned subsidiary of

Eterna (“Merger Sub”), entered into an agreement and plan of merger and reorganization (the “Merger Agreement”), pursuant to which, among other matters, Merger Sub merged with and into Eterna LLC, with Eterna LLC surviving the merger as a wholly

owned subsidiary of Eterna (the “Merger”).

The Merger closed on March 25, 2021.

The Merger was accounted for as a reverse acquisition, in which Eterna LLC was deemed the acquiring company for accounting purposes.

In March 2021, we sold the NTN

Buzztime legacy assets to a third party (the “Disposition”).

Acquisition of Novellus

On July 16, 2021, Brooklyn and its newly formed, wholly owned subsidiary Brooklyn Acquisition Sub, Inc.

entered into an agreement and plan of acquisition, or the Acquisition Agreement, with (a)

Novellus LLC, (b) Novellus, Inc., the sole equity holder of Novellus, Ltd.

and, prior to the closing under the Acquisition Agreement, a wholly owned subsidiary of Novellus, LLC, and (c) a seller representative.

Novellus, Ltd.

is a pre-clinical

stage biotechnology company organized under the laws of Ireland that is developing engineered cellular medicines using its licensed, patented non-immunogenic mRNA, high-specificity gene editing, mutation-free and footprint-free cell reprogramming

and serum-insensitive mRNA lipid delivery technologies.

The Acquisition closed contemporaneously with the execution and delivery of the Acquisition Agreement.

We delivered consideration for the Acquisition totaling approximately $124.0 million, which consisted of (a) $22.8 million in cash and (b) approximately 7,022,000 shares of common stock, which

under the terms of the Acquisition Agreement were valued at a total of $102.0 million, based on a price of $14.5253 per share.

We expect the Acquisition will advance our evolution into a platform company with a pipeline of next generation engineered cellular, gene editing and cytokine programs.

The completion of the

Acquisition relieves Brooklyn LLC from potential obligations to pay Novellus, Ltd.

certain upfront fees, clinical development milestone fees and post-registration royalties under the License Agreement.

The agreement with Factor under the License

Agreement, which grants Brooklyn LLC exclusive rights to develop certain next-generation mRNA gene editing and cell therapy products, remains unchanged.

On July 16, 2021, we completed the acquisition (the “Novellus Acquisition”) of Novellus, Inc.

(“Novellus”) and its subsidiary, Novellus Therapeutics Limited (“Novellus Limited”).

the time of the acquisition, Novellus was focused on the development of next-generation engineered mesenchymal stem cell therapies using mRNA-based cell reprogramming and gene editing technologies licensed from Factor Bioscience.

As part of the

Novellus Acquisition, we also acquired 25.0% of the total outstanding equity interests of NoveCite, Inc.

(“NoveCite”), a corporation focused on developing an allogeneic mesenchymal stem cell product for patients with acute respiratory distress

syndrome (“ARDS”), including from COVID-19.

Principal Executive Offices

Our principal executive offices are located at 1035 Cambridge Street, Suite 18A, Cambridge, Massachusetts 02141, and our phone number is (212) 582-1199.

We maintain a website at

www.eternatx.com.

Information contained on, or accessible through, our website is not a part of and is not incorporated by reference into this Annual Report on Form 10-K.

Recent Developments

Cell Line Customization and License Agreement

On February 21, 2023, we entered into a cell line customization and license agreement (the “Lineage Agreement”) with Lineage Cell

Therapeutics, Inc.

(“Lineage”), pursuant to which, Lineage may request prior to August 22, 2023 that we develop for, and deliver to, Lineage certain induced pluripotent stem cell lines, which Lineage would use to evaluate the possible development

of cell transplant therapies for treatment of diseases of the central nervous system in humans, (a) excluding ophthalmologic indications, (b) diseases and conditions of the peripheral nervous system, (c) psychiatric, respiratory, musculoskeletal,

and hematological diseases, disorders, and conditions, and (d) cancer.

The Lineage Agreement also provides Lineage with the option to obtain an exclusive sublicense to certain related technology for preclinical, clinical and commercial purposes,

which would permit Lineage to sublicense such intellectual property, subject to payment of certain sublicense royalty fees.

Lineage has six months from our delivery to Lineage of such induced pluripotent stem cell lines to exercise such option,

and upon any such exercise, Lineage would agree to use its commercially reasonable efforts to exploit and make commercially available one or more licensed products derived from such induced pluripotent stem cell lines in accordance with the Lineage

Upon entry into the Lineage Agreement, Lineage paid us a $250,000 non-refundable up-front payment.

We are also entitled to certain cell line customization fees with respect to cell lines that Lineage may request that we develop for

Lineage, as well as royalty payments with respect to any such licensed products, certain sublicense fees and certain milestone payments under the Lineage Agreement.

Name and Ticker Symbol Changes and Nasdaq Listing Change

On October 17, 2022, we changed our name from Brooklyn ImmunoTherapeutics, Inc.

to Eterna Therapeutics Inc., and the trading symbol of our common stock on The Nasdaq Global Market

changed from “BTX” to “ERNA.” On January 11, 2023, we transferred the listing of our common stock from The Nasdaq Global Market to the Nasdaq Capital Market, on which our common stock continues to trade under the trading symbol “ERNA”.

Reverse Stock Split

Effective at 11:59 p.m.

Eastern time on October 16, 2022, we effected a reverse stock split of our common stock at a ratio of 1-for-20 (the “Reverse Stock Split”).

effectiveness of the Reverse Stock Split, every twenty shares of the issued and outstanding common stock were automatically combined and reclassified into one issued and outstanding share of common stock.

The Reverse Stock Split did not affect any

stockholder’s ownership percentage of the common stock, alter the par value of the common stock or modify any voting rights or other terms of the common stock.

The number of authorized shares of common stock under our Charter remains unchanged.

fractional shares were issued in connection with the Reverse Stock Split.

In lieu of any fractional shares to which a stockholder would otherwise be entitled, we paid an amount of cash equal to the product of (i) the fractional share to which the

holder would otherwise be entitled and (ii) the then fair value of a share as determined in good faith by our Board of Directors.

We paid an aggregate of $719 for a total of 175 fractional shares.

All share and per share data in this Annual Report on Form 10-K have been adjusted for all periods presented to reflect the Reverse Stock Split.

mRNA, Gene-Editing, and Cellular Medicines

We are a preclinical-stage biopharmaceutical company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines.

delivery system, which we collectively refer to as our “mRNA technology platform.” We plan to develop and advance a pipeline of therapeutic products both internally and through strategic partnerships, with the near-term focus on deploying our mRNA

technology platform through strategic partnerships.

We license our mRNA technology platform from Factor Limited under an exclusive license agreement.

Through strategic partnerships, we expect that our mRNA technology platform will be used for preclinical and eventual clinical development of product candidates for a variety of

clinical indications.

We expect that the initial product candidates developed by our strategic partners utilizing our mRNA technology platform will include hypoimmune induced pluripotent stem cell (“iPSC”)-derived product candidates for the

treatment of neurological indications and iPSC-derived immune-modulating cells (“iIMCs”) for indications such as acute myeloid leukemia (“AML”) and solid tumors.

We refer to aspects of our mRNA technology platform as “mRNA delivery,” “mRNA gene editing” and “mRNA cell reprogramming.”

mRNA Delivery

Nucleic acids, such as mRNA, can be used to induce cells to express desired proteins, including proteins that are capable of re-writing genetic and epigenetic cellular programs.

However, the plasma membrane surrounding cells normally protects cells from exogenous nucleic acids, preventing efficient uptake and protein translation.

Delivery systems can be used to enhance the uptake of nucleic acids by cells.

delivery systems, such as lipid nanoparticle (“LNP”)-based delivery, often suffer from endosomal entrapment and toxicity, which can limit their therapeutic use.

Our mRNA delivery technology is designed to use a novel chemical substance that is

designed to deliver nucleic acids, including mRNA, to cells both ex vivo and in vivo .

Our nucleic-acid delivery technology is also designed for ex vivo delivery of mRNA encoding gene-editing proteins and reprogramming factors, including to primary cells, insertion of exogenous sequences into genomic safe-harbor loci, and in vivo delivery of mRNA to the brain, eye, skin, and lung, which may be useful for the development of mRNA-based therapeutic.

mRNA Gene Editing

Our mRNA gene-editing technology is designed to delete, insert, and repair DNA sequences in living cells, which may be useful for correcting disease-causing mutations, making cells

resistant to infection and degenerative disease, modulating the expression of immunoregulatory proteins to enable the generation of durable allogeneic cell therapies, and engineering immune cells to more effectively fight cancer.

Conventional gene-editing technologies typically employ plasmids or viruses to express gene-editing proteins, which can result in low-efficiency editing and unwanted mutagenesis

when an exogenous nucleic acid fragment is inserted at random locations in the genome.

Our mRNA gene-editing technology instead is designed to employ mRNA to express gene-editing proteins, which can potentially enable gene editing without unwanted

insertional mutagenesis, because, unlike conventional gene-editing technologies that employ viruses or DNA-based vectors, mRNA does not typically cause unwanted insertional mutagenesis.

We believe the efficiency of our mRNA gene-editing technology

has the potential to support development of product candidates that could create new therapeutic approaches.

For example, we anticipate that our mRNA gene-editing technology can be used to generate allogeneic chimeric antigen receptor T-cell

(“CAR-T”) therapies for the treatment of cancer.

In such allogeneic CAR-T therapies, mRNA encoding gene-editing proteins would be used to inactivate the endogenous T-cell receptor to prevent therapeutic T-cells from causing graft-versus-host

disease (“GvHD”).

GvHD occurs when transplanted cells view the patient’s (i.e.

the host’s) cells as a threat and attack the host’s cells.

We expect that this same mechanism of action can generate allogeneic stem cell-derived therapies in which mRNA

encoding gene-editing proteins could be used to inactivate one or more components of the human leukocyte antigen (“HLA”) complex to render the cells immuno-nonreactive or “stealth,” which may be useful for the development of allogeneic cell-based

mRNA Cell Reprogramming

Our mRNA cell-reprogramming technology is capable of generating clonal lines of pluripotent stem cells that can be expanded and differentiated into many desired cell types that may

be useful for the development of regenerative cell therapies.

Conventional cell-reprogramming technologies (e.g., using Sendai virus or episomal vectors) can result in low efficiency reprogramming, can select for cells with abnormal growth

characteristics, and can leave traces of the vector in reprogrammed cells.

Our mRNA cell-reprogramming technology instead is designed to employ mRNA to express reprogramming factors, which can enable cell

reprogramming without leaving traces of the vector in reprogrammed cells, because, unlike conventional cell-reprogramming technologies that employ viruses or DNA-based vectors, mRNA does not typically leave traces of the vector in reprogrammed

IRX-2, our former clinical product candidate, is a mixed, human-derived cytokine product with multiple active constituents, including Interleukin-2, or IL2, and other key cytokines.

Together, these cytokines are believed to signal, enhance and restore immune function suppressed by the tumor, thus enabling the immune system to attack cancer cells, unlike many existing cancer therapies, which rely on targeting the cancer

IRX-2 is prepared from the supernatant of pooled allogeneic peripheral blood mononuclear cells, known as PBMCs, that have been stimulated using a proprietary process employing a specific population of cells and a specific mitogen.

We currently do not have plans to further develop the IRX-2 product candidate.

Results of the 150-patient Phase 2b INSPIRE trial (the “INSPIRE trial”), released in June 2022, showed

outcomes favored IRX-2 in certain predefined subgroups but the INSPIRE trial did not meet the primary endpoint of event-free survival at two years of follow up.

There were no new safety signals observed with IRX-2.

The INSPIRE trial was the only Company-sponsored study of IRX-2.

IRX-2 has been studied externally in other clinical settings outside of head and neck cancer in the form of

investigator sponsored trials, all of which have either ended or are not currently active.

We had previously provided IRX-2 as a study drug and financial support to conduct those investigator sponsored trials, but are no longer providing either.

License and Royalty Agreements

Cell and Gene Therapy

On April 26, 2021, Brooklyn LLC entered into an exclusive license agreement, or the License Agreement, with Novellus, Ltd.

and Factor, or the Licensors, to license the Licensors’ intellectual

property and mRNA cell reprogramming and gene editing technology for use in the development of certain cell-based therapies to be evaluated and developed for treating human diseases, including certain types of cancer, sickle cell disease, and

beta thalassemia.

Through the License Agreement, Brooklyn LLC acquired an exclusive worldwide license to develop and commercialize certain cell-based therapies to treat cancer and rare blood disorders, including sickle cell disease, based on

patented technology and know-how of Novellus, Ltd.

The License Agreement provides that Brooklyn LLC pay the Licensors a total of $4.0 million in connection with the execution of the License Agreement, all of which has been paid.

was obligated to pay to the Licensors additional fees of $5.0 million in October 2021 and $7.0 million in October 2022.

The completion of our July 16, 2021 acquisition of Novellus, Inc., the sole equity holder of Novellus, Ltd., relieves us from potential obligations to pay Novellus, Ltd.

certain upfront fees,

clinical development milestone fees and post-registration royalties under the License Agreement.

The agreements with Factor under the License Agreement remain unchanged.

Brooklyn LLC is obligated to pay Factor $2.5 million in October 2021, which

has been paid, and $3.5 million in October 2022.

Under the terms of the License Agreement, Brooklyn LLC is required to use commercially reasonably efforts to achieve certain delineated milestones, including specified clinical development and

regulatory milestones and specified commercialization milestones.

In general, upon its achievement of these milestones, Brooklyn LLC will be obligated, in the case of development and regulatory milestones, to make milestone payments to Licensor

in specified amounts and, in the case of commercialization milestones, to specified royalties with respect to product sales, sublicense fees or sales of pediatric review vouchers.

In the event Brooklyn LLC fails to timely achieve certain

delineated milestones, the Licensors may have the right to terminate the rights of Brooklyn LLC under provisions of the License Agreement relating to those milestones.

The Licensors are responsible for preparing, filing, prosecuting and maintaining all patent applications and patents under the License Agreement.

If, however, the Licensors determine not to

maintain a particular licensed patent or not to prepare, file and prosecute a licensed patent, Brooklyn LLC will have the right, but not the obligation, to assume those responsibilities in the territory at its expense.

Novellus, Ltd.

is a pre-clinical development, manufacturing, and technology licensing entity focused on engineered cellular medicines.

Novellus, Ltd.

has developed mRNA-based cell reprogramming

and gene editing technologies to create engineered cellular medicines.

The synthetic mRNA is non-immunogenic—it is capable of successfully evading the cellular innate immune system and then is capable of expressing high levels of proteins for

cell reprogramming and gene editing.

The mRNA may be formulated for injection into target tissues for cellular uptake and therapeutic treatment.

The synthetic mRNA technology may be used to edit gene mutations or expressed gene-editing proteins to treat genetic and rare diseases.

It may also be used to reprogram human non-pluripotent

cells into induced pluripotent stem cells )(iPSC).

The iPSC may then be differentiated into populations of varying therapeutic cell types.

The reprogramming technology offers a rapid and patient specific therapy using the engineered stem cells

created from iPSC that may avoid the cost, complexity and safety issues associated with viral vector gene editing approaches.

Novellus, Ltd.

also has licenses from Factor to use over 70 granted patents throughout the world covering synthetic mRNA, RNA-based gene editing, and RNA-based cell reprogramming, in addition

to specific patents covering methods for treating specific diseases.

There are also more than 60 pending patent applications throughout the world focused on these and other aspects of the technology.

The patent coverage includes granted patents

and pending patent applications in the United States, Europe, and Japan, along with other major life sciences markets.

Novellus, Ltd.

is required to use commercially reasonably efforts to achieve certain delineated milestones, including specified clinical development and regulatory milestones and specified

commercialization milestones.

In general, upon its achievement of these milestones, Novellus, Ltd.

will be obligated, in the case of development and regulatory milestones, to make milestone payments of up to $51 million in aggregate to Factor

and, in the case of commercialization milestones, specified royalties with respect to product sales, sublicense fees or sales of pediatric review vouchers.

In the event Novellus, Ltd.

fails to timely achieve certain delineated milestones,

Factor may have the right to terminate Novellus, Ltd.’s rights under provisions of the License Agreement relating to those milestones.

There can be no assurance that Brooklyn LLC can successfully develop and commercialize the technology licensed under the License Agreement.

Unless otherwise stated below, each royalty to be paid under these license and royalty agreements is payable until the last patent for IRX-2 expires and runs in perpetuity

unless earlier terminated pursuant to the terms described below.

Cell and Gene Therapy License Agreements

Exclusive Factor License Agreement

In November 2020, Novellus Limited and Factor Limited entered into a license agreement (the “Novellus-Factor License Agreement”), pursuant to which Factor Limited granted to

Novellus Limited an exclusive license to certain patents owned by Factor Limited for the development of certain stem cell-based cellular therapies for treating diseases and conditions in humans and animals.

In April 2021, Eterna LLC, Novellus Limited and Factor Limited entered into an exclusive license agreement (the “Original Factor License Agreement”), pursuant to which Eterna LLC

acquired an exclusive worldwide license to intellectual property and mRNA cell reprogramming and gene editing technology for use in the development of certain mRNA, gene-editing, and cellular therapies to be evaluated and developed for treating

human diseases, including certain types of cancer, sickle cell disease, and beta thalassemia.

As a result of the Novellus Acquisition, the rights and obligations of Novellus Limited under the Novellus-Factor License Agreement pertaining to any and all licensed products

from Factor Limited inured to Eterna, and the Original Factor License Agreement remained unchanged.

In November 2022, following the expiration of one of the delineated milestone deadlines for certain regulatory filings required under the Novellus-Factor License Agreement, which

permitted Factor Limited to terminate the license granted to Novellus Limited thereunder, we entered into the first amendment to the Original Factor License Agreement (the “Amended Factor License Agreement”), pursuant to which, among other

things, Factor Limited granted to Eterna LLC an exclusive, sublicensable license under certain patents owned by Factor Limited (the “Factor Patents”) for the purpose of identifying and pursuing certain opportunities to grant to third parties

sublicenses to the Factor Patents.

The Amended Factor License Agreement also (i) terminated the Novellus-Factor License Agreement, (ii) confirmed Factor Limited’s grant to Eterna LLC of the rights and licenses Novellus Limited previously granted

to Eterna LLC under the Novellus-Factor License Agreement on the same terms and conditions as granted by Novellus Limited to Eterna LLC under such agreement, (iii) confirmed that the sublicense granted by Novellus Limited in accordance with the

Novellus-Factor License Agreement to NoveCite (as discussed below), survived termination of the Novellus-Factor License Agreement and (iv) removed Novellus Limited from the Amended Factor License Agreement and the NoveCite Agreement and replaced

Novellus Limited with Factor Limited as the direct licensor to Eterna LLC and NoveCite under such agreements, respectively.

On February 20, 2023, we and Factor Limited entered into an exclusive license agreement (the “Exclusive Factor License Agreement”), which terminated and replaced in its entirety

the Amended Factor License Agreement.

Subject to certain exclusive licenses or other rights granted by Factor Limited to certain third parties as of the effective date of the Exclusive Factor License Agreement, Factor granted us the exclusive,

sublicensable license under the Factor Patents.

The term of the Exclusive Factor License Agreement expires on November 22, 2027, but will be automatically extended for an additional two and a half years (such period, the

“Renewal Term”) if we receive at least $100 million in fees from sublicenses to the Factor Patents (“Sublicense Fees”) granted by us pursuant to the Exclusive Factor License Agreement.

Pursuant to the Exclusive Factor License Agreement, we will

pay to Factor 20% of any Sublicense Fee received by us before the initial expiration date of such license and 30% of any Sublicense Fees received by us during the Renewal Term.

We may terminate the Exclusive Factor License Agreement upon 120

days’ written notice to Factor, and both parties otherwise have additional customary termination rights, including in connection with certain uncured material breaches of the Exclusive Factor License Agreement and specified bankruptcy events.

Under the Exclusive Factor License Agreement, we are obligated to pay the expenses incurred by Factor Limited in preparing, filing, prosecuting and maintaining the Factor Patents and agreed to bear all costs and expenses associated with enforcing

and defending the Factor Patents in any action or proceeding arising from pursuit of sublicensing opportunities under the license granted under the Exclusive Factor License Agreement.

There can be no assurance that we can successfully develop and commercialize the technology licensed under the Exclusive Factor License Agreement.

See Item 1A “Risk Factors—Risks

Related to our Business and Industry — We depend substantially, and expect in the future to continue to depend, on in-licensed intellectual property.

Such licenses impose obligations on our business, and if

we fail to comply with those obligations, we could lose license rights, which would substantially harm our business” contained in this Annual Report on Form 10-K.

In October 2020, Novellus Limited (as sublicensor) and NoveCite (as sublicensee) entered into an exclusive license agreement (the “NoveCite Agreement”) to license a novel cellular

therapy for acute respiratory indications, which Novellus Limited was licensing from Factor Limited under the Novellus-Factor License Agreement.

As discussed above, as a result of the Amended Factor License Agreement and the termination of the

Novellus-Factor License Agreement, the NoveCite Agreement was amended to remove Novellus Limited as sublicensor and create a direct license between Factor Limited and NoveCite effective November 1, 2022.

IRX-2 License Agreements

Unless otherwise stated below, each royalty to be paid under these license and royalty agreements is payable until the last patent for IRX-2 expires and

runs in perpetuity unless earlier terminated pursuant to the terms described below.

There are no milestone payments due under any of these agreements.

While the licenses described below remain in force, we currently do not have plans to further

develop the IRX-2 product candidate.

License Agreement with the University of South Florida Research Association

On June 28, 2000, IRX Therapeutics, a predecessor of Brooklyn LLC, entered into a series of License Agreements (collectively, the “USF License Agreement”) with the University of South Florida

Research Association, Inc.

On June 28, 2000, IRX Therapeutics, a predecessor of Eterna LLC, entered into a series of License Agreements (collectively, as amended, the “USF License Agreement”) with the

University of South Florida Research Association, Inc.

(“Research Association”).

Pursuant to the USF License Agreement, as amended, the Research Association licensed to IRX Therapeutics the exclusive worldwide rights to certain patents on IRX-2 in exchange for royalties

equal to 7% of the gross product sales of IRX-2 (as defined in the USF License Agreement).

The USF License Agreement was assigned to Brooklyn LLC in connection with the sale of the assets of IRX Therapeutics to Brooklyn in November 2018.

Research Association has the right to terminate the USF License Agreement (i) upon Brooklyn LLC’s entering into bankruptcy or insolvency on a voluntary or involuntary basis, (ii) upon the failure to pay royalties due and payable upon thirty days’

notice, or (iii) upon a material breach or default of the Agreement by Brooklyn LLC, unless such breach or default is cured within a thirty-day notice period.

Brooklyn may terminate the USF License Agreement for any reason upon six months’ notice

to the Research Association.

Pursuant to the USF License Agreement, the Research Association licensed to IRX Therapeutics the exclusive worldwide rights to certain patents on IRX-2 in exchange

for royalties equal to 7% of the gross product sales of IRX-2.

The USF License Agreement was assigned to Eterna LLC in connection with the sale of the assets of IRX Therapeutics to Eterna LLC in November 2018.

Royalty Agreement with certain former IRX Therapeutics investors

On May 1, 2012, IRX Therapeutics entered into a royalty agreement (the “IRX Investor Royalty Agreement”) with certain investors who participated in a financing transaction.

The IRX Investor

Royalty Agreement was assigned to Brooklyn LLC in November 2018 when Brooklyn LLC acquired the assets of IRX Therapeutics.

Pursuant to the IRX Investor Royalty Agreement, if and when Brooklyn LLC becomes obligated to pay royalties to the Research

Association under the USF License Agreement, it will pay an additional royalty of 1% of gross sales to an entity organized by the investors who participated in such financing transaction.

There are no termination provisions in the IRX Investor

Royalty Agreement.

IRX Investor Royalty Agreement was assigned to Eterna LLC in November 2018 when Eterna LLC acquired the assets of IRX Therapeutics.

Pursuant to the IRX Investor Royalty Agreement, if and when Eterna LLC becomes obligated to pay royalties to the

Research Association under the USF License Agreement, it will pay an additional royalty of 1% of gross sales to an entity organized by the investors who participated in such financing transaction.

Collaborator License Agreement

Effective June 28, 2018, IRX Therapeutics terminated its Research, Development and Option Facilitation Agreement (the “Termination Agreement”) and its Options Agreement with a collaborative

partner (the “Collaborator”), pursuant to a Termination Agreement.

In connection with the Termination Agreement, all of the rights granted to the Collaborator under the RDO and Option Agreements were terminated, and IRX Therapeutics had no

obligation to refund any payments received from the Collaborator.

The Termination Agreement was assigned to Brooklyn LLC in connection with the sale of the assets of IRX Therapeutics to Brooklyn in November 2018.

As consideration for entering into the Termination Agreement, the Collaborator will receive a royalty equal to 6% of revenues from the sale of IRX-2, for the period of time beginning with the

first sale of IRX-2 through the later of (i) the twelfth anniversary of the first sale of IRX-2, or (ii) the expiration of the last IRX patent or other exclusivity of IRX-2, all as more particularly set forth in the Termination Agreement.

party under the Termination Agreement may terminate the agreement (i) upon a material breach of the Termination Agreement by the other party that is not cured within sixty days (or thirty days if such breach is due to Brooklyn LLC’s non-payment

of royalties), or (ii) upon the other party entering into bankruptcy on a voluntary or involuntary basis where such petition is not dismissed, discharged, bonded or stayed within ninety days.

Effective June 28, 2018, IRX Therapeutics terminated its Research, Development and Option Facilitation Agreement and certain related agreements with a collaborative partner

(the “Collaborator”), pursuant to a termination agreement (the “Termination Agreement”).

The Termination Agreement was assigned to Eterna LLC in connection with the sale of the assets of IRX Therapeutics to Eterna LLC in November 2018.

consideration for entering into the Termination Agreement, the Collaborator is entitled to receive a royalty equal to 6% of revenues from the sale of IRX-2, for the period of time beginning with the first sale of IRX-2 through the later of (i)

the twelfth anniversary of the first sale of IRX-2, or (ii) the expiration of the last IRX patent or other exclusivity of IRX-2.

Investor Royalty Agreement

On November 6, 2018, Brooklyn LLC entered into a royalty agreement (the “Brooklyn Investor Royalty Agreement”) with Brooklyn Immunotherapeutics Investors LP (“Investors LP”) and Brooklyn

Immunotherapeutics Investors GP (“Investors GP”), which entities provided the financing required by Brooklyn LLC in connection with Brooklyn LLC’s acquisition of the assets of IRX Therapeutics.

Under the Brooklyn Investor Royalty Agreement,

Brooklyn LLC is required to pay compensatory royalties equal to 4% of gross sales of IRX-2 on an annual basis, 3% of which is to be paid to Investors LP and 1% of which is to be paid to Investors GP (all as more particularly set forth in the

Royalty Agreement).

On November 6, 2018, Eterna LLC entered into a royalty agreement, as amended (the “Royalty Agreement”) with Brooklyn Immunotherapeutics Investors LP (“Investors LP”) and

Brooklyn Immunotherapeutics Investors GP (“Investors GP”), and certain beneficial holders of Investors LP and Investors GP, which entities provided the financing required by Eterna LLC in connection with Eterna LLC’s acquisition of the assets of

IRX Therapeutics.

Under the Royalty Agreement, Eterna LLC is required to pay royalties to Investors LP, Investors GP and such beneficial holders based on gross sales of IRX-2.

This royalty continues in perpetuity.

In anticipation of the Merger, on March 22, 2021, Brooklyn LLC entered into an Amended and Restated Royalty Agreement and Distribution Agreement, or the Amended Royalty Agreement, with

Investors GP, Investors LP, and certain beneficial holders of GP and LP.

Pursuant to the Amended Royalty Agreement, among other things, we are required to pay compensatory royalties equal to 4% of net revenues of IRX-2, on an annual basis, of

which 3% is to be paid to certain beneficial holders of LP and 1% is to be paid to certain beneficial holders of GP.

The royalty continues in perpetuity.

The Royalty Agreement specifies royalty payments to certain beneficial holders, including:

Charles Cherington, one of our directors and stockholders has a right to receive 4.20% of the Specified Royalty;

entities affiliated with George P.

Denny III (Denny Family Partners II, LLC, the George P.

Denny Trust, and the R.

Breck Denny Trust), a former director and current stockholder have a right to receive a

total of 4.39% of the Specified Royalty;

an entity affiliated with Nicholas J.

Singer (PCI BI LLC), a former director and current stockholder, has a right to receive a total of 2.10% of the Specified Royalty

entities affiliated with Yiannis Monovoukas (The Yiannis Monovoukas Family 2013 Revocable Trust FBO Alexi Monovoukas, The Yiannis Monovoukas Family 2013 Revocable Trust FBO Aresti Monovoukas, and The

Yiannis Monovoukas Family 2013 Revocable Trust FBO Christian Monovoukas), a former director and stockholder have a right to receive a total of 1.40% of the Specified Royalty;

an entity affiliated with John D.

Halpern (The John D.

Halpern Revocable Trust), one of our stockholders, has a right to receive 3.50% of the Specified Royalty.

The Royalty Agreement specifies

royalty payments to certain beneficial holders, including Charles Cherington and Nicholas J.

Singer, who are both current directors and stockholders of Eterna;

however, we have not paid and, because we are no longer pursuing the development of

IRX-2, we do not expect to pay, any such royalties.

Patent Portfolio

As of April 12, 2022, we owned or controlled approximately 9 patent families filed in the United States and other major markets worldwide,

including 99 granted, 10 pending and 11 published patent applications, directed to novel compounds, formulations, methods of treatments and platform technologies.

Cell and Gene Therapy

Our strategy is to develop and advance a pipeline of therapeutic products both internally and through strategic partnerships,

leveraging our in-licensed mRNA technology platform, with the near-term focus on deploying our mRNA technology platform through strategic partnerships.

As of March 20, 2023, we had in-licensed approximately 12 patent families filed in the

United States and other major markets worldwide, including 125 granted patents, 9 allowed patent applications, 64 published patent applications, 25 pending, unpublished non-provisional patent applications, and 2 published, pre-nationalization

PCT applications.

Patent protection for the mRNA technology platform includes:

Family Number and Title

United States or Foreign

Earliest Effective Date

of Patent Application

“Methods and Products for Transfecting Cells”

9,422,577, 9,605,277, 9,605,278, 10,472,611, 10,662,410, 10,829,738, 10,982,229, and 11,466,293), EP (CH, DE, FR, GB, IE), EP (BE, CH, DE, DK, FR, GB, IE,

NL), AU (6X), CA (Allowed), CN (4X), HK (5X), JP (2X), KR (2X), MX, MX (Allowed), RU (2X)

US (3X), EP, BR (2X), CA, CN, HK (2X), KR, RU

US (4X), AU, CA, MX (3X)

“Methods and Products for Transfection”

8,497,124, 9,127,248, 9,399,761, 9,562,218, 9,695,401, 9,879,228, 9,969,983, 10,131,882, 10,301,599, 10,443,045, 11,492,600)

“Methods and Products for Expressing Proteins in Cells”

9,376,669, 9,447,395, 9,464,285, 9,487,768, 9,657,282, 9,758,797, 10,415,060, 10,590,437, 10,724,053, 10,752,917, 10,752,918, 10,752,919, 10,767,195,

11,332,758, 11,332,759, 11,339,409, and

11,339,410), EP (CH, DE, FR, GB, IE), AU (2X), BR (3X Allowed), CA (Allowed), HK, JP (3X), KR (2X), MX, RU

US (2X), EP, BR, CA, CN, HK, JP, KR, MX

“Methods and Products for Nucleic Acid Production and Delivery”

9,770,489 and 10,124,042), EP (CH, DE, ES, FR, IE), EP (BE, CH, DE, DK, ES, FI, FR, GB, IE, NL, NO, SE), AU, CA (Allowed), HK, JP (Allowed), KR, MX

US (2X), AU, BR (2X), CA, CN, JP, KR, MX

“Nucleic Acid Products and Methods of Administration Thereof”

11,241,505), AU, JP

US, EP, CA, CN, HK (2X), JP, NZ

“Nucleic Acid Products and Methods of Administration Thereof”

10,137,206, 10,350,304, 10,363,321, 10,369,233, 10,576,167, 10,888,627, and 10,894,092), CN (Allowed)

US (3X), EP, AU, CA, CN, HK, JP, IL, IN, NZ

CN, JP (2X), NZ

“Nucleic Acid-Based Therapeutics”

US, EP, AU, CA, HK

“Cationic Lipids and Transfection Methods”

10,501,404, 10,556,855, 10,611,722, 10,752,576, and 11,242,311)

US (2X), AU, CA, CN, EP, HK, JP, KR, MX

“Engineered Gene-Editing Proteins”

“Mesenchymal Stem Cell Therapies”

“Engineered Immune Cell Therapies”

“Circular RNA”

US – United States of America

EP – European Patent Convention

PCT – Patent Cooperation Treaty

AU – Australia

CH – Switzerland

CN – Peoples’ Republic of China

GB – Great Britain

HK – Hong Kong

KR – Republic of Korea (South Korea)

NL – Netherlands

NZ – New Zealand

Patent Families

Descriptions of our patent families are as follows:

“Methods and Products for Transfecting Cells” - The present invention relates in part to nucleic acids encoding proteins, nucleic acids containing non-canonical nucleotides, therapeutics comprising

nucleic acids, methods, kits, and devices for inducing cells to express proteins, methods, kits, and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms, and therapeutics produced using these methods, kits,

Methods for inducing cells to express proteins and for reprogramming and gene-editing cells using RNA are disclosed.

Methods for producing cells from patient samples, cells produced using these methods, and therapeutics

comprising cells produced using these methods are also disclosed.

“Methods and Products for Transfection” - The present invention relates in part to methods for producing tissue-specific cells from patient samples, and to tissue-specific cells produced using these

Methods for reprogramming cells using RNA are disclosed.

Therapeutics comprising cells produced using these methods are also disclosed.

“Methods and Products for Expressing Proteins in Cells” - The present invention relates in part to nucleic acids encoding proteins, therapeutics comprising nucleic acids encoding proteins, methods

for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms, and therapeutics produced using these methods, kits, and devices.

and products for altering the DNA sequence of a cell are described, as are methods and products for inducing cells to express proteins using synthetic RNA molecules.

Therapeutics comprising nucleic acids encoding gene-editing proteins are

also described.

“Methods and Products for Nucleic Acid Production and Delivery” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics

comprising nucleic acids, methods for delivering nucleic acids to cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and

reprogramming cells, and cells, organisms, therapeutics, and cosmetics produced using these methods, kits, and devices.

Methods and products for altering the DNA sequence of a cell are described, as are methods and products for inducing

cells to express proteins using synthetic RNA molecules, including cells present in vivo.

Therapeutics comprising nucleic acids encoding gene-editing proteins are also described.

“Nucleic Acid Products and Methods of Administration Thereof” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics

reprogramming cells, and cells, organisms, therapeutics, and cosmetics produced using these methods, kits, and devices.

“Nucleic Acid Products and Methods of Administration Thereof” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics

reprogramming cells, and cells, organisms, therapeutics, and cosmetics produced using these methods, kits, and devices.

“Nucleic Acid-Based Therapeutics” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics comprising nucleic acids, methods for

delivering nucleic acids to cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms,

therapeutics, and cosmetics produced using these methods, kits, and devices.

“Cationic Lipids and Transfection Methods” - The present invention relates in part to novel cationic lipids and their use, e.g., in delivering nucleic acids to cells.

“Engineered Gene-Editing Proteins” - The present invention relates in part to nucleic acids encoding gene editing proteins, including novel engineered variants.

“Mesenchymal Stem Cell Therapies” - Cell-based therapies based on mesenchymal stem cells (MSCs) are described.

“Engineered Immune Cell Therapies” - The present disclosure relates in part to engineered immune cells that are, inter alia, silenced from a host immune response.

“Circular RNA” - Nucleic acid structures that promote formation of circular RNAs (circRNAs), which may comprise hybridization of substantially complimentary regions within the nucleic acid and

contact with an RNA ligase.

The nucleic acid structures may be used in gene editing and/or therapeutic applications.

In some embodiments, the nucleic acid comprises the structure:

5’-X-Y-A-IRES-B-CDS-C-Y’-Z-3’, wherein X, Y, Y’ and Z each

independently comprise one or more nucleotides;

Y and Y’ are substantially complementary;

X and Z are not substantially complementary;

IRES comprises an internal ribosome entry site;

CDS comprises a coding sequence;

and A, B, and C are each

independently a spacer comprising one or more nucleotides or null.

As of March 20, 2023, we owned or controlled approximately 10 patent families filed in the United States and other major markets worldwide related to IRX-2, including 94 granted,

12 pending and 6 published patent applications, directed to novel compounds, formulations, methods of treatments and platform technologies.

Patent protection for IRX-2 includes:

1 unchanged sentence

United States or Foreign

Earliest Effective Date

Anticipated Expiration Date

of Patent Application

6 unchanged sentences

Method of Increasing Immunological Effect

7,993,660 and 8,591,956), EP (BE, CH, DE, DK, ES, FI, FR, GB, IT, LI, NL), AU, CA, JP

7,993,660 and 8,591,956), EP (BE, CH, DE, DK, ES, FI, FR, GB, IT, LI, NL), AU, CA, JP, HK

12/11/2028 (No.

4 unchanged sentences

9,539,230), 09/04/2030 (No.

9,492,517), 11/15/2011 (No.

Vaccine Immunotherapy

9,492,517, 9,492,519), JP, CA, AU

02/25/2024 (No.

1 unchanged sentence

Immunotherapy for Reversing Immune Suppression

7,731,945), AU

Vaccine Immunotherapy for Immune Suppressed Patients

US (Patent Nos.

6,977,072, 7,153,499, 8,784,796, 9,789,172 and 9,789,173), CA, JP

10/26/2001 (No.

6,977,072), 5/5/2003 (No.

6,977,072, 9,789,172 and 9,789,173)

04/14/2023 (No.

4 unchanged sentences

Composition for the Treatment of Advanced Prostate Cancer

Uses of PD-1/PD-L1 Inhibitors and/or CTLA-4 Inhibitors with a Biologic Containing Multiple Cytokine Components

Uses of PD-1/PD-L1 Inhibitors and/or CTLA-4 Inhibitors with a Biologic Containing Multiple Cytokine Components to Treat Cancer

AU, CA, EP, IL, JP, KR, NZ, PH, SG, US (16/326,611)

BR, CN, EA, IN, MX, ZA

US:8/18/2037*

Subject to potential PTA

US – United States of America

12 unchanged sentences

ZA – South Africa

Patent Families

IRX-2 Patent Families

Descriptions of our patent families with issued patents in the United States or European Union are as follows:

14 unchanged sentences

patient infected with HPV and inducing an immune response to HPV.

A method of overcoming HPV-induced immune suppression of Langerhans cells (“LC”), by administering a therapeutically effective amount of a primary cell-derived biologic to

a patient infected with HPV and activating LC.

A method of increasing LC migration towards lymph nodes, by administering a therapeutically effective amount of a primary cell-derived biologic to a patient infected with HPV, activating LC,

and inducing LC migration towards lymph nodes.

A method of generating immunity against HPV, by administering an effective amount of a primary cell derived biologic to a patient infected with HPV, generating immunity against HPV, and

preventing new lesions from developing.

A method of overcoming HPV-induced immune suppression of Langerhans cells (“LC”), by administering a therapeutically effective amount of a primary cell-derived biologic to a

patient infected with HPV and activating LC.

A method of increasing LC migration towards lymph nodes, by administering a therapeutically effective amount of a primary cell-derived biologic to a patient infected with HPV, activating LC, and

inducing LC migration towards lymph nodes.

A method of generating immunity against HPV, by administering an effective amount of a primary cell derived biologic to a patient infected with HPV, generating immunity against HPV, and preventing

new lesions from developing.

Method of Increasing Immunological Effect - A method of increasing immunological effect in a patient by administering an effective amount of a primary cell derived biologic to the patient, inducing immune

2 unchanged sentences

Vaccine Immunotherapy/Composition for the Treatment of Advanced Prostate Cancer – A method providing compositions and methods of immunotherapy to treat cancer or other antigen-producing diseases or lesions.

According to one embodiment of the invention, a composition is provided for eliciting an immune response to at least one antigen in a patient having an antigen-producing disease or lesion, the composition comprising an effective amount of

a cytokine mixture, preferably comprising IL-1, IL-2, IL-6, IL-8, IFN-gamma.

cytokine mixture, preferably comprising IL-1, IL-2, IL-6, IL-8, IFN-gamma.

(gamma) and TNF- alpha (alpha).

4 unchanged sentences

Immunotherapy for Reversing Immune Suppression - A method for overcoming immune suppression including the steps of inducing production of naïve T-cells and restoring T cell immunity.

of vaccine immunotherapy includes the steps of inducing production of naïve T cells and exposing the naïve T cells to endogenous or exogenous antigens at an appropriate site.

Additionally, a method for unblocking immunization at a regional lymph

node includes the steps of promoting differentiation and maturation of immature dendritic cells, thus, for example, exposing tumor peptides to T cells to gain immunization of the T cells.

Further, a method of treating cancer and other persistent

lesions includes the steps of administering an effective amount of a natural cytokine mixtures an adjuvant to endogenous or exogenous administered antigen to the cancer or other persistent lesions;

preferably the natural cytokine mixture is

administered with thymosin.

A method of vaccine

immunotherapy includes the steps of inducing production of naïve T cells and exposing the naïve T cells to endogenous or exogenous antigens at an appropriate site.

Additionally, a method for unblocking immunization at a regional lymph node

includes the steps of promoting differentiation and maturation of immature dendritic cells, thus, for example, exposing tumor peptides to T cells to gain immunization of the T cells.

Further, a method of treating cancer and other

persistent lesions includes the steps of administering an effective amount of a natural cytokine mixtures an adjuvant to endogenous or exogenous administered antigen to the cancer or other persistent lesions;

preferably the natural cytokine

mixture is administered with thymosin.

Vaccine Immunotherapy for Immune Suppressed Patients - A method for overcoming mild to moderate immune suppression includes the steps of inducing production of naive T-cells and restoring T-cell immunity.

1 unchanged sentence

Additionally, a method for unblocking immunization at a

regional lymph node includes the steps of promoting differentiation and maturation of immature dendritic cells at a regional lymph node and allowing presentation of processed peptides by resulting mature dendritic cells, thus, for

example, exposing tumor peptides to T-cells to gain immunization of the T-cells.

Further, a method of treating cancer and other persistent lesions includes the steps of administering an effective amount of a natural cytokine mixture as an

adjuvant to endogenous or exogenous administered antigen to the cancer or other persistent lesions.

exposing tumor peptides to T-cells to gain immunization of the T-cells.

Further, a method of treating cancer and other persistent lesions includes the steps of administering an effective amount of a natural cytokine mixture as an adjuvant

to endogenous or exogenous administered antigen to the cancer or other persistent lesions.

Immunotherapy for Immune Suppressed Patients – A method providing compositions of a natural cytokine mixture (“NCM”) for treating a cellular immunodeficiency characterized by T lymphocytopenia, one or more

1 unchanged sentence

The invention includes methods of

treating these cellular immunodeficiences using the NCM of the invention.

treating these cellular immunodeficiencies using the NCM of the invention.

The compositions and methods are useful in the treatment of diseases associated with cellular immunodeficiencies such as cancer.

1 unchanged sentence

methods for reversing tumor-induced immune suppression comprising a chemical inhibitor and a non-steroidal anti-inflammatory drug (“NSAID”).

The invention also provides a diagnostic skin test comprising NCM for predicting treatment

outcome in cancer patients.

The invention also provides a diagnostic skin test comprising NCM for predicting treatment outcome

in cancer patients.

Patent Term and Term Extensions

Individual patents have terms for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in

which they are obtained.

Generally, utility patents issued for applications filed in the United States and the European Union are granted a term of 20 years from the earliest effective filing date of a non-provisional patent application.

addition, in certain instances, a patent term can be extended to recapture a portion of the U.S.

Patent and Trademark Office, or the USPTO, delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA

regulatory review period.

However, as to the FDA component, the restoration period cannot be longer than five years and the restoration period cannot extend the patent term beyond 14 years from FDA approval.

The duration of foreign patents varies

in accordance with provisions of applicable local law, but typically are also 20 years from the earliest effective filing date.

All taxes or annuities for a patent, as required by the USPTO and various foreign jurisdictions, must be timely paid

in order for the patent to remain in force during this period of time.

The actual protection afforded by a patent may vary on a product-by-product basis, from country to country, and can depend upon many factors, including the type of patent, the scope of its

coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Individual patents have terms for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in

the countries in which they are obtained.

Generally, utility patents issued for applications filed in the United States and the European Union are granted a term of 20 years from the earliest effective filing date of a non-provisional patent

In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S.

Patent and Trademark Office, or the USPTO, delay in issuing the patent as well as a portion of the term effectively lost as a result

of the United States Food and Drug Administration (“FDA”) regulatory review period.

However, as to the FDA component, the restoration period cannot be longer than five years and the restoration period cannot extend the patent term beyond 14 years

from FDA approval.

The duration of foreign patents varies in accordance with provisions of applicable local law, but typically are also 20 years from the earliest effective filing date.

All taxes or annuities for a patent, as required by the

USPTO and various foreign jurisdictions, must be timely paid in order for the patent to remain in force during this period of time.

The actual protection afforded by a patent may vary on a product-by-product basis, from country to country, and can depend upon many factors, including the type of patent,

the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Our patents and patent applications may be subject to procedural or legal challenges by others.

We may be unable to obtain, maintain and protect the intellectual property rights necessary to

conduct our business, and we may be subject to claims that we infringe or otherwise violate the intellectual property rights of others, which could materially harm our business.

For more information, see the section titled “Risk Factors-Risks

Related to Our Intellectual Property.”

As of March 17, 2022, three of our in-licensed patents were subject to

re-examination by the USPTO:

US 90/019,127, re-examination of US10,662,410, US 90/019,128, re-examination of US10,829,738, and US 90/019,129, re-examination of US10,982,229.

We may be unable to obtain, maintain and protect the intellectual

property rights necessary to conduct our business, and we may be subject to claims that we infringe or otherwise violate the intellectual property rights of others, which could materially harm our business.

For more information, see Item 1A “Risk

Factors-Risks Related to Our Intellectual Property” contained in this Annual Report on Form 10-K.

Supply and Manufacturing

Brooklyn has considerable experience in manufacturing the investigational active pharmaceutical ingredient (“API”) currently in the clinic.

In recent years, we maintained internal API

manufacturing capabilities.

We are currently investigating the option of outsourcing API manufacturing to an experienced contract manufacturing organization (“CMO”), as we had historically done, to mitigate the overhead costs of internal

manufacturing and leverage process development expertise to streamline and eliminate some of the more manual processes, thereby reducing risk of product microbial contamination.

The CMO selected will have the capability to produce high quality

product to meet both the investigational and anticipated commercial demands.

There will be technology transfer and process validation costs, which will be carefully considered in any decision.

We have established long-standing contract

manufacturing relationships for fill/finish and packaging of the clinical supplies of IRX-2.

As with any supply program, obtaining raw materials of the correct quality, and the performance of our contract manufacturing sites cannot be

Due to the current demand for CMO services and supply chain issues in the COVID-19 pandemic environment we cannot ensure that we will be successful in obtaining such raw materials on terms acceptable to us, if at all.

We expect to similarly rely on contract manufacturing relationships for any products that we may in-license or acquire in the future.

However, there can be no assurance that we will be able to

successfully contract with such manufacturers on terms acceptable to us, or at all.

Contract manufacturers are subject to ongoing periodic and unannounced inspections by the FDA, the Drug Enforcement Administration (“DEA”) and corresponding state agencies to ensure strict

compliance with current good manufacturing practices (“cGMPs”) and other state and federal regulations.

Our contractors, if any, in Europe face similar challenges from the numerous European Union and member state regulatory agencies and

authorized bodies.

We do not have control over third-party manufacturers’ compliance with these regulations and standards, other than through contractual obligations.

If our contractors are deemed out of compliance with cGMPs, product recalls

could result, inventory could be destroyed, production could be stopped, and supplies could be delayed or otherwise disrupted, which could have a materially adverse effect on our business.

If we need to change manufacturers after commercialization, the FDA and corresponding foreign regulatory agencies must approve these new manufacturers in advance, which will involve testing and

additional inspections and associated regulatory submissions to ensure compliance with FDA regulations and standards, which collectively may result in significant lead times, delay and cost.

Furthermore, switching manufacturers may be difficult

because the number of potential manufacturers is limited.

It may be difficult or impossible for us to find a replacement manufacturer quickly or on terms acceptable to us, or at all.

We currently do not have any agreements for the supply or manufacturing of cell lines.

However, together with our license partner, Factor Limited, we believe that we have

considerable experience in developing engineered cell lines.

Pursuant to a Master Services Agreement, dated as of September 9, 2022 (the “MSA”), by and between us and Factor Bioscience Inc.

(“Factor Bioscience”), the parent company of Factor

Limited, Factor Bioscience has agreed to provide us with certain mRNA cell engineering research support services, including (i) access to Factor Bioscience’s research laboratory facilities located in Cambridge, Massachusetts, (ii) access to

Factor Bioscience’s scientific equipment, (iii) training of our research staff in certain mRNA, iPSC, and gene editing technologies, (iv) copies of protocols, formulations, and sequences that may be useful for the development of mRNA cell

engineering products and (v) in vitro transcription templates, mRNA constructs, and iPS cells that may be useful for the development of mRNA cell engineering products.

To the extent that we need to obtain a supply of cell lines or manufacture

them, we expect to contract with a contract manufacturing organization or to enter into a new work order under the MSA.

Regulatory Matters

Government regulation and product approval

Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing,

manufacture, labeling, record-keeping, promotion, storage, advertising, distribution, marketing and export and import of products such as those we are developing.

Drugs and biologics must be approved by the FDA through the New Drug Application,

(NDA) process or the Biologic License Application (BLA) process before they may be legally marketed in the United States.

Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research,

development, testing, manufacture, labeling, record-keeping, promotion, storage, advertising, distribution, marketing and export and import of products such as those we are developing.

Drugs and biologics must be approved by the FDA through the

New Drug Application, (“NDA”) process or the Biologic License Application (“BLA”) process before they may be legally marketed in the United States.

Henceforth, we will use the term “marketing application,” or MA, to apply to both.

There are two centers within the FDA that are responsible for the review and approval of drug marketing applications and general regulatory oversight:

the Center for Drug Evaluation and

Research, or CDER, and the Center for Biologics Evaluation and Research, or CBER.

While all conventional drug products are regulated by CDER, biologic products can be regulated by either CDER or CBER, depending on the product’s classification.

There are two centers within the FDA that are responsible for the review and approval of drug and biologic marketing applications and general regulatory oversight:

for Drug Evaluation and Research, or CDER, and the Center for Biologics Evaluation and Research (“CBER”).

While all conventional drug products are regulated by CDER, biologic products can be regulated by either CDER or CBER, depending on the

product’s classification.

The majority of BLA submissions are assigned to CBER;

however, BLAs for certain biologic product categories are reviewed by CDER.

These product categories include monoclonal antibodies for in

vivo use, most proteins for therapeutic use, and categories such as cytokines, enzymes, and other novel proteins.

Based on this, it is likely that a BLA submission for IRX-2 would fall under the jurisdiction of CDER.

Regardless of the category,

NDAs for all drug products fall under the jurisdiction of CDER.

In the United States, drugs are subject to rigorous regulation by the FDA under the federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations, and biologics under the FDCA,

the Public Health Services Act (PHSA), and their implementing regulations.

These product categories include monoclonal

antibodies for in vivo use, most proteins for therapeutic use, and categories such as cytokines, enzymes, and other novel proteins.

Regardless of the category, NDAs for all drug products fall under the jurisdiction of CDER.

In the United States, drugs are subject to rigorous regulation by the FDA under the federal Food, Drug, and Cosmetic Act(“FDCA”) and implementing regulations, and biologics

under the FDCA, the Public Health Services Act (“PHSA”), and their implementing regulations.

Additionally, drugs and biologics are subject to other federal and state statutes.

The process of obtaining regulatory approvals and the subsequent compliance with

appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources.

Failure to comply with the applicable United States requirements at any time during the product

development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions.

The process of obtaining regulatory approvals and the subsequent

compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources.

Failure to comply with the applicable United States requirements at any time during the

product development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions.

These sanctions could include the FDA’s refusal to approve pending applications, license suspension or revocation,

2 unchanged sentences

enforcement action could have a material adverse effect on us.

The process required by the FDA before a drug or biologics may be marketed in the United States generally involves the following:

The process required by the FDA before a drug or biologic may be marketed in the United States generally involves the following:

completion of pre-clinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice, or GLP, regulations;

submission of an investigational new drug application, or IND, which must become effective before human clinical trials may begin and which must include approval by an institutional review board, or IRB, at

each clinical site before the trials are initiated;

performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good

clinical practice, or GCP, an international standard meant to protect the rights and health of human clinical trial subjects and to define the roles of clinical trial sponsors, administrators, and monitors;

submission of an investigational new drug application, or IND, which must become effective before human clinical trials may begin and which must include approval by an institutional

review board, or IRB, at each clinical site before the trials are initiated;

performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal

regulations and good clinical practice, or GCP, an international standard meant to protect the rights and health of human clinical trial subjects and to define the roles of clinical trial sponsors, administrators, and monitors;

submission to, and acceptance by, the FDA of a MA;

satisfactory completion of an FDA inspection of our manufacturing facility or other facilities at which the drug or biologic is produced to assess compliance with current good manufacturing practice, or

cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

satisfactory completion of an FDA inspection of our manufacturing facility or other facilities at which the drug or biologic is produced to assess compliance with current good

manufacturing practice, or cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the MA:

3 unchanged sentences

Once a pharmaceutical candidate is identified for development it enters the pre-clinical testing stage.

Pre-clinical tests include laboratory evaluations of product chemistry, toxicity and

formulation, as well as animal studies.

Prior to beginning human clinical trials, a sponsor must submit an Investigational New Drug Application (“IND”) to the FDA, which includes the results of the pre-clinical tests, together with manufacturing

information and analytical data.

Pre-clinical tests include laboratory evaluations of product

chemistry, toxicity and formulation, as well as animal studies.

Prior to beginning human clinical trials, a sponsor must submit an IND to the FDA, which includes the results of the pre-clinical tests, together with manufacturing information and

analytical data.

Some pre-clinical or non-clinical testing may continue even after the IND is submitted.

In addition to including the results of the pre-clinical studies, the IND will also include a protocol detailing, among other

things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, if the trial lends itself to an efficacy evaluation.

The IND automatically becomes effective 30 days

after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the trial.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can

The FDA may, at any time, impose a clinical hold on ongoing clinical trials.

In addition to including the results of the pre-clinical studies, the IND will also include a protocol detailing, among other things, the

objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, if the trial lends itself to an efficacy evaluation.

The IND automatically becomes effective 30 days after receipt by

the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the trial.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

may, at any time, impose a clinical hold on ongoing clinical trials.

If the FDA imposes a clinical hold, clinical trials cannot commence or recommence without FDA authorization and then only under terms authorized by the FDA.

Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of one or more qualified investigators in accordance with

federal regulations and GCP.

Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of one or more qualified investigators in

accordance with federal regulations and GCP.

Clinical trials must be conducted under protocols detailing the objectives of the trial and the safety and effectiveness criteria to be evaluated.

Each protocol must be submitted to the FDA as

part of the IND.

Further, an Institutional Review Board, or IRB, affiliated with each institution participating in the clinical trial must review and approve each protocol before any clinical trial commences at that institution.

subjects must provide informed consent, and informed consent information must be submitted to the IRB for approval prior to initiation of the trial.

Progress reports detailing the results of the clinical trials must be submitted at least annually

to the FDA and more frequently if adverse events or other certain types of other changes occur.

Each protocol must be

submitted to the FDA as part of the IND.

Further, an IRB affiliated with each institution participating in the clinical trial must review and approve each protocol before any clinical trial commences at that institution.

All research subjects

must provide informed consent, and informed consent information must be submitted to the IRB for approval prior to initiation of the trial and prior to providing it to potential subjects.

Progress reports detailing the results of the clinical

trials must be submitted at least annually to the FDA and more frequently if adverse events or other certain types of other changes occur.

Human clinical trials are typically conducted in three phases.

A fourth, or post-approval, phase may include additional clinical studies.

These phases generally include the following, and may

be sequential, or may overlap or be combined:

These phases generally include the

following, and may be sequential, or may overlap or be combined:

Phase 1 clinical trials involve the initial introduction of the drug or biologic into human subjects.

These studies are designed to determine the safety of usually single doses of the compound and determine

any dose limiting intolerance, as well as evidence of the metabolism and pharmacokinetics of the drug in humans.

For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to

healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated.

Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the safety and efficacy of the drug or biologic for specific, targeted indications, to determine dosage tolerance

and optimal dosage, and to identify possible adverse effects and safety risks.

In Phase 3, if a compound is found to be potentially effective and to have an acceptable safety profile in Phase 2 (or occasionally Phase 1) studies, the Phase 3 studies will be conducted to further confirm

clinical efficacy, optimal dosage and safety within an expanded population which may involve geographically diverse clinical trial sites.

Generally, but not always, two adequate and well-controlled Phase 3 clinical trials are required by

the FDA for approval of a marketing application.

These studies are designed to determine the safety of usually single doses of the

compound and determine any dose limiting intolerance, as well as evidence of the metabolism and pharmacokinetics of the drug in humans.

For some products for severe or life-threatening diseases, especially if the product may be too toxic

to administer to healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated.

Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the safety and efficacy of the drug or biologic for specific, targeted

indications, to determine dosage tolerance and optimal dosage, and to identify possible adverse effects and safety risks

In Phase 3, if a compound is found to be potentially effective and to have an acceptable safety profile in Phase 2 (or occasionally Phase 1) studies, the Phase 3 studies will be

conducted to further confirm clinical efficacy, optimal dosage and safety within an expanded population which may involve geographically diverse clinical trial sites.

Generally, but not always, two adequate and well-controlled Phase 3

clinical trials are required by the FDA for approval of a marketing application.

Phase 4 clinical trials are studies required of or agreed to by a sponsor that are conducted after the FDA has approved a product for marketing.

These studies are used to gain additional experience from the

treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations.

If the FDA approves a product while a company has ongoing clinical

trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement.

Failure to promptly conduct Phase 4 clinical trials where

necessary could result in withdrawal of approval for products approved under accelerated approval regulations.

While Phase 1, Phase 2, and Phase 3 studies are generally required for approval of a marketing application, certain drugs and biologics may not require one or more steps in the process

depending on other testing and the situation involved.

These studies are used to gain

additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations.

If the FDA approves a product while a

company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement.

Failure to promptly conduct Phase 4

clinical trials where necessary could result in withdrawal of approval for products approved under accelerated approval regulations.

While Phase 1, Phase 2, and Phase 3 studies are generally required for approval of a marketing application, certain drugs and biologics may not require one or more steps in

the process depending on other testing and the situation involved.

Additionally, the FDA, an IRB, or the sponsor may stop testing at any time if results show patients being exposed to unnecessary health risks or overly dangerous side effects.

initiation of a clinical trial or at any time during the conduct of studies with human subjects, the FDA may place a study on clinical hold where patients may not be enrolled until questions around potential safety issues with investigational

products are addressed.

In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on

its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the mechanism of action and physical characteristics of

the drug and finalize a process for manufacturing the product in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product and, among other requirements, the manufacturer

must develop methods for testing the identity, strength, quality, potency, and purity of the final product.

Additionally, appropriate packaging must be selected and validated, and stability studies must be conducted to demonstrate that the

product does not undergo unacceptable deterioration over its shelf life.

Prior to the initiation of a clinical trial or at any time during the conduct of studies with human subjects, the FDA may place a study on clinical hold where patients may not be enrolled and ongoing trial activities are suspended until questions

around potential safety issues with investigational products are addressed.

In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such

as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the mechanism of action and physical

characteristics of the drug and finalize a process for manufacturing the product in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product and, among other

requirements, the manufacturer must develop methods for testing the identity, strength, quality, potency, and purity of the final product.

Additionally, appropriate packaging must be selected and validated, and stability studies must be conducted

to demonstrate that the product does not undergo unacceptable deterioration over its shelf life.

United States drug review and approval process

Following completion of clinical studies, the results are evaluated and, depending on the outcome, submitted to the FDA in the form of an NDA or BLA in order to obtain FDA approval of the

product and authorization to commence commercial marketing.

In responding to an NDA, the FDA may require additional testing or information, may require that the product labeling be modified, may impose a post-approval study and other commitments

or reporting requirements or other restrictions on product distribution, or may deny the application.

The timing of final FDA review and action varies greatly but can take years in some cases and may involve the input of an FDA advisory

committee of outside experts.

Product sales in the United States may commence only when an NDA or BLA is approved.

Following completion of clinical studies, the results are evaluated and, depending on the outcome, submitted to the FDA in the form of an NDA or BLA in order to obtain FDA

approval of the product and authorization to commence commercial marketing.

In responding to an NDA or BLA, the FDA may require additional testing or information, may require that the product labeling be modified, may impose a post-approval study

and other commitments or reporting requirements or other restrictions on product distribution, or may deny the application.

The timing of final FDA review and action varies greatly but can take years in some cases and may involve the input of an

FDA advisory committee of outside experts.

Product sales in the United States may commence only upon FDA approval of an NDA or BLA.

FDA approval of a marketing application is required before marketing of the product may begin in the United States.

The MA must include the results of product development, pre-clinical studies

and clinical studies, together with other detailed information, including information on the chemistry, manufacture and controls utilized in manufacture of the product.

In addition, a MA must also demonstrate purity, specifically in terms of

showing that the final product does not contain extraneous material.

The FDA has 60 days from its receipt of the MA to review the application to ensure that it is sufficiently complete for substantive review before accepting it for filing.

FDA may request additional information rather than accept an MA for filing.

The MA must include the results of product development,

pre-clinical studies and clinical studies, together with other detailed information, including information on the chemistry, manufacture and controls utilized in manufacture of the product.

In addition, a MA must also demonstrate purity,

specifically in terms of showing that the final product does not contain extraneous material.

The FDA has 60 days from its receipt of the MA to review the application to ensure that it is sufficiently complete for substantive review before

accepting it for filing.

The FDA may request additional information rather than accept an MA for filing.

In this event, the MA must be resubmitted with the additional information.

The resubmitted application also is subject to review before the FDA accepts it for filing.

The resubmitted application also is subject to review before the

FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

The submission of an MA is also subject to the payment of a substantial application fee (for FDA fiscal year 2022 this fee may exceed 3 million dollars,

although a waiver of such fee may be obtained under certain limited circumstances, including when the drug that is subject of the application has received Orphan Drug Designation for the indication sought).

Further, the sponsor of an approved MA

is subject to an annual program fee, which for FDA fiscal year 2022 is $369,413 per prescription drug product.

The submission of an MA is also subject to the payment of a substantial application fee (for FDA fiscal year 2023 this fee may

exceed 3 million dollars, although a waiver of such fee may be obtained under certain limited circumstances, including when the drug that is subject of the application has received Orphan Drug Designation for the indication sought).

sponsor of an approved MA is subject to an annual program fee, which for FDA fiscal year 2023 is $393,933 per prescription drug product.

User fees typically increase annually.

The approval process is lengthy and complex, and the FDA may refuse to approve an MA if the

applicable regulatory criteria are not satisfied or may require additional clinical or other data and information.

Even if such data and information is submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for

The FDA may also refer applications for novel drug products or drug products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review,

evaluation and a recommendation as to whether the application should be approved.

The approval process is lengthy and complex, and the FDA may refuse to

approve an MA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information.

Even if such data and information is submitted, the FDA may ultimately decide that the NDA or BLA does not

satisfy the criteria for approval.

experts, for review, evaluation and a recommendation as to whether the application should be approved.

The FDA is not bound by the recommendation of an advisory committee.

The FDA reviews an application to determine, among other things, whether a product is safe and

effective for its intended use.

Before approving an MA, the FDA will inspect the facility or facilities where the product is manufactured to determine whether its manufacturing is cGMP–compliant to assure and preserve the product’s identity,

potency, quality, purity and stability.

The FDA reviews an application to determine, among other things, whether a

product is safe and effective for its intended use.

Before approving an MA, the FDA will inspect the facility or facilities where the product is manufactured to determine whether its manufacturing is cGMP–compliant to assure and preserve the

product’s identity, potency, quality, purity and stability.

If the FDA’s evaluation of the marketing submission or manufacturing facilities is not favorable, the FDA will issue a complete response letter.

The complete response letter outlines the

deficiencies in the submission and often requires additional testing or information in order for the FDA to reconsider the application.

Even after submitting this additional information, the FDA ultimately may decide that the application does not

satisfy the regulatory criteria for approval.

The complete response letter

outlines the deficiencies in the submission and often requires additional testing or information in order for the FDA to reconsider the application.

Even after submitting this additional information, the FDA ultimately may decide that the

application does not satisfy the regulatory criteria for approval.

With limited exceptions, the FDA may withhold approval of a MA regardless of prior advice it may have provided or commitments it may have made to the sponsor.

Once an MA is approved, changes to the conditions of approval, including additional indications, are made by the submission of a supplement to the MA The supplemental NDA, or sNDA, or the

supplemental BLA, or sBLA must contain all of the information necessary to support the change.

Once an MA is approved, changes to the conditions of approval, including additional indications, are made by the submission of a supplement to the MA The supplemental NDA, or

sNDA, or the supplemental BLA, or sBLA must contain all of the information necessary to support the change.

In the case of a new indication, that information usually consists of at least one clinical trial, and often more.

Like an MA, FDA determines whether

the supplemental application is sufficiently complete to permit review before it is filed.

Like an MA, FDA

determines whether the supplemental application is sufficiently complete to permit review before it is filed.

FDA then reviews the supplemental application.

The FDA can either approve or issue a complete response letter outlining the deficiencies.

The FDA can either approve or issue a complete response letter outlining the

deficiencies.

Manufacturing readiness

As part of the approval process, the FDA must inspect and approve each manufacturing facility.

Among the conditions of approval is the requirement that a manufacturer’s quality control and

manufacturing procedures conform to cGMP.

Among the conditions of approval is the requirement that a manufacturer’s

quality control and manufacturing procedures conform to cGMP.

Manufacturers must expend significant time, money and effort to ensure continued compliance, and the FDA conducts periodic inspections to verify compliance.

If we, or our contract manufacturers, fail to

comply or cannot remedy regulator identified deficiencies, then we may be prohibited from marketing product.

If the FDA grants approval, the approval will be limited to those conditions and patient populations for which the product is safe and effective, as demonstrated through clinical studies.

If we, or our contract

manufacturers, fail to comply or cannot remedy regulator identified deficiencies, then we may be prohibited from marketing product.

If the FDA grants approval, the approval will be limited to those conditions and patient populations for which the product is safe and effective, as demonstrated through

clinical studies.

Further, a product may be marketed only in those dosage forms and for those indications approved in the MA.

Certain changes to an approved MA, including, with certain exceptions, any significant changes to labeling, require approval of a

supplemental application before the drug may be marketed as changed.

Any products that we manufacture or distribute pursuant to FDA approvals are subject to continuing monitoring and regulation by the FDA, including compliance with cGMP and the

reporting of adverse experiences with the drugs.

The nature of marketing claims that the FDA will permit us to make in the labeling and advertising of our products will generally be limited to those specified in FDA approved labeling, and the

advertising of our products will be subject to comprehensive monitoring and regulation by the FDA.

Products whose review was accelerated may carry additional restrictions on marketing activities, including the requirement that all promotional

materials are pre-submitted to the FDA.

Certain changes to an approved MA, including, with certain exceptions, any significant changes to labeling, require

approval of a supplemental application before the drug may be marketed as changed.

Any products that we manufacture or distribute pursuant to FDA approvals are subject to continuing monitoring and regulation by the FDA, including compliance with

cGMP and the reporting of adverse experiences with the drugs.

The nature of marketing claims that the FDA will permit us to make in the labeling and advertising of our products will generally be limited to those specified in FDA approved

labeling, and the advertising of our products will be subject to comprehensive monitoring and regulation by the FDA.

Products whose review was accelerated may carry additional restrictions on marketing activities, including the requirement that

all promotional materials are pre-submitted to the FDA.

Claims exceeding those contained in approved labeling will constitute a violation of the FDCA.

Violations of the FDCA or regulatory requirements at any time during the product development process, approval

process, or marketing and sale following approval may result in agency enforcement actions, including corrective advertising, cessation of violative promotion, withdrawal of approval, recall, seizure of products, warning letters, injunctions,

fines and/or civil or criminal penalties.

Violations of the FDCA or regulatory requirements at any time during the product development

process, approval process, or marketing and sale following approval may result in agency enforcement actions, including corrective advertising, cessation of violative promotion, withdrawal of approval, recall, seizure of products, warning

letters, injunctions, fines and/or civil or criminal penalties.

Any agency enforcement action could have a material adverse effect on our business.

Failure to comply with applicable federal, state and foreign laws and regulations would likely have a material adverse effect on our business.

In addition, federal, state and foreign laws and

regulations regarding the manufacture and sale of new drugs are subject to future changes.

In addition, federal, state and

foreign laws and regulations regarding the manufacture and sale of new drugs are subject to future changes.

Post-approval requirements and consideration

Once a MA is approved, a product will be subject to certain post-approval requirements.

For instance, the FDA closely regulates the post-approval marketing and promotion of drugs and biologics,

including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet.

As a condition of MA approval, the FDA may

also require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug or biologic outweigh the potential risks.

REMS can include medication guides, communication plans for the healthcare professionals, and

other Elements to Assure Safe Use, or ETASU.

ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient

Once an MA is approved, a product will be subject to certain post-approval requirements.

For instance, the FDA and Federal Trade Commission closely regulate the post-approval

marketing and promotion of drugs and biologics, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the

As a condition of MA approval, the FDA may also require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug or biologic outweigh the potential risks.

REMS can include medication guides,

communication plans for the healthcare professionals, and other Elements to Assure Safe Use, or ETASU.

ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain

circumstances, special monitoring, and the use of patient registries.

The requirement for a REMS can materially affect the potential market and profitability of the drug or biologic.

Drugs and biologics may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Changes to some of the conditions established in an

approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new MA supplement before the change can be implemented.

An MA supplement for a new indication

typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing MA supplements as it does in reviewing MAs.

Adverse event reporting and submission of periodic reports is required following FDA approval of an MA.

The FDA also may require post-marketing testing, known as Phase 4 testing, and

surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.

In addition, quality control as well as drug manufacture, packaging, and labeling procedures

must continue to conform to cGMPs after approval.

Drug and biologic manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced

inspections by the FDA during which the agency inspects manufacturing facilities to assess compliance with cGMPs.

Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain

compliance with cGMPs.

Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized

problems are subsequently discovered.

Changes to some of the conditions

established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new MA supplement before the change can be implemented.

An MA supplement for a

new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing MA supplements as it does in reviewing MAs.

Adverse event reporting and submission of periodic reports are required following FDA approval of an MA.

The FDA also may require post-marketing testing, known as Phase 4

testing, and surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.

In addition, quality control as well as drug manufacture, packaging, and

labeling procedures must continue to conform to cGMPs after approval.

Drug and biologic manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to

periodic unannounced inspections by the FDA during which the agency inspects manufacturing facilities to assess compliance with cGMPs.

Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and

quality control to maintain compliance with cGMPs.

Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or

if previously unrecognized problems are subsequently discovered.

Foreign regulatory requirements

In addition to regulation by the FDA and certain state regulatory agencies, we are also subject to a variety of foreign regulations governing clinical trials and the marketing of other

In addition to regulation by the FDA and certain state regulatory agencies, we are also subject to a variety of foreign regulations governing clinical trials and the

marketing of other products.

Outside of the United States, our ability to market a product depends upon receiving a marketing authorization from the appropriate regulatory agencies.

The requirements governing the conduct of clinical trials, marketing authorization,

pricing and reimbursement vary widely from country to country.

In any country, however, we will only be permitted to commercialize our products if the appropriate regulatory agency is satisfied that we have presented adequate evidence of safety,

quality and efficacy.

Whether or not FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries must be obtained prior to the commencement of marketing of the product in those countries.

The requirements governing the conduct of clinical trials,

marketing authorization, pricing and reimbursement vary widely from country to country.

In any country, however, we will only be permitted to commercialize our products if the appropriate regulatory agency is satisfied that we have presented

adequate evidence of safety, quality and efficacy.

Whether or not FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries must be obtained prior to the commencement of marketing of the

product in those countries.

The regulatory approval and oversight process in other countries includes all of the risks associated with regulation by the FDA and certain state regulatory agencies as described above.

Under the European Union regulatory system, applications for drug approval may be submitted either in a centralized or decentralized manner.

Under the centralized procedure, a single

application to the European Medicines Agency may lead to an approval granted by the European Commission which permits marketing of the product throughout the European Union.

The decentralized procedure provides for mutual recognition of

nationally approved decisions and is used for products that do not comply with requirements for the centralized procedure.

Under the decentralized procedure, the holders of national marketing authorization in one of the countries within the

European Union may submit further applications to other countries within the European Union, who will be requested to recognize the original authorization based on an assessment report provided by the country in which marketing authorization is

Under the European Union regulatory system, applications for drug approval may be submitted either in a

centralized or decentralized manner.

Under the centralized procedure, a single application to the European Medicines Agency (“EMA”) may lead to an approval granted by the European Commission which permits marketing of the product throughout the

European Union.

The decentralized procedure provides for mutual recognition of nationally approved decisions and is used for products that do not comply with requirements for the centralized procedure.

Under the decentralized procedure, the

holders of national marketing authorization in one of the countries within the European Union may submit further applications to other countries within the European Union, who will be requested to recognize the original authorization based on

an assessment report provided by the country in which marketing authorization is held.

Pharmaceutical pricing and reimbursement

In both United States and foreign markets, our ability to commercialize our products successfully, and to attract commercialization partners for our products, depends in significant part on the

availability of adequate financial coverage and reimbursement from third-party payors, including, in the United States, governmental payors such as Medicare and Medicaid, managed care organizations, private commercial health insurers and pharmacy

benefit managers, or PBMs.

In both United States and foreign markets, our ability to commercialize our products successfully, and to attract commercialization partners for our products, depends in

significant part on the availability of adequate financial coverage and reimbursement from third-party payors, including, in the United States, governmental payors such as Medicare and Medicaid, managed care organizations, private commercial

health insurers and pharmacy benefit managers, or PBMs.

Third party payors are increasingly challenging the prices charged for medicines and examining their cost effectiveness, in addition to their safety and efficacy.

We may need to conduct expensive pharmacoeconomic or

other studies in order to further demonstrate the value of our products.

Even with the availability of such studies, our products may be considered less safe, less effective or less cost-effective than alternative products, and third-party payors

may not provide coverage and reimbursement for our product candidates, in whole or in part.

We may need to conduct

expensive pharmacoeconomic or other studies in order to further demonstrate the value of our products.

Even with the availability of such studies, any future products of ours may be considered less safe, less effective or less cost-effective than

alternative products, and third-party payors may not provide coverage and reimbursement for any future product candidates, in whole or in part.

Political, economic and regulatory influences are subjecting the health care industry in the United States to fundamental changes.

There have been, and we expect there will continue to be,

legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our business, including the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”).

We anticipate that in the United States, Congress, state legislatures, and private sector entities will continue to consider and may adopt healthcare policies intended to curb rising healthcare

There have been, and we expect there will

continue to be, legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our business, including the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”).

We anticipate that in the United States, Congress, state legislatures, and private sector entities will continue to consider and may adopt healthcare policies intended to

curb rising healthcare costs.

These cost containment measures could include:

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expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person

We are unable to predict what additional legislation, regulations or policies, if any, relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future

or what effect such legislation, regulations or policies would have on our business.

Any cost containment measures, including those listed above, or other healthcare system reforms that are adopted may have a material adverse effect on our

business prospects.

Further, the pricing of pharmaceutical products generally, and particularly the pricing of orphan drugs, has recently received scrutiny from the press and from members of Congress in both

The Inflation Reduction Act of 2022 (the “IRA”) contained several provisions designed to curb the prices of drugs and biologics to Medicare beneficiaries.

For instance, the IRA

will require the federal government to directly negotiate the prices of certain drugs and biologics beginning in 2026.

Additionally, beginning in 2023, the IRA requires manufacturers of drugs and biologics to offer rebates if the price of the

drug or biologic raises faster than inflation.

These and other provisions in the IRA could have a material adverse effect on our business prospects.

We are unable to predict what additional legislation, regulations or policies, if any, relating to the healthcare industry or third-party coverage and reimbursement may be enacted

in the future or what effect such legislation, regulations or policies would have on our business.

Any cost containment measures, including those listed above, or other healthcare system reforms that are adopted may have a material adverse effect

on our business prospects.

Further, the pricing of pharmaceutical products generally, and particularly the pricing of orphan drugs, has recently received scrutiny from the press and from members of

Congress in both parties.

Some members of the medical community have also made statements in the press on the pricing of orphan drugs.

The impact of this scrutiny on the pricing of orphan drugs and other pharmaceutical products generally cannot be determined with

any certainty at this time.

The Biologics Price Competition and Innovation Act of 2009, which was included in the Affordable Care Act, authorized the FDA to approve similar versions of innovative biologics, commonly known

as biosimilars.

Under the Affordable Care Act, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biologic product or “reference product.”

Manufacturers may not submit an application for a biosimilar to the FDA until four years following approval of the reference product, and the FDA may not approve a biosimilar product until 12 years from the date on which the reference product was

Even if IRX-2 or any other biologic product we may acquire or in-license, if approved, are deemed to be reference products eligible for exclusivity, another company could market a competing version of that product if the FDA approves a

full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.

The impact of this scrutiny on the pricing of orphan drugs and other pharmaceutical products generally cannot

be determined with any certainty at this time.

The Biologics Price Competition and Innovation Act of 2009, which was included in the Affordable Care Act, authorized the FDA to approve similar versions of innovative

biologics, commonly known as biosimilars.

“reference product.” Manufacturers may not submit an application for a biosimilar to the FDA until four years following approval of the reference product, and the FDA may not approve a biosimilar product until 12 years from the date on which the

reference product was approved.

if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.

Orphan drug exclusivity

Some jurisdictions, including the United States and Europe, may designate drugs or biologic products for relatively small patient populations as orphan drugs.

Under the Orphan Drug Act of 1983

(ODA), the FDA may grant orphan drug designation to drugs or biologic products intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States

and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug.

In the United

States, orphan drug designation must be requested before submitting an application for marketing approval.

Orphan Drug Act of 1983 (“ODA”), the FDA may grant orphan drug designation to drugs or biologic products intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000

individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States

for that drug.

In the United States, orphan drug designation must be requested before submitting an application for marketing approval.

An orphan drug designation does not shorten the duration of the regulatory review and approval process.

The grant of an orphan drug

designation request does not alter the standard regulatory requirements and process for obtaining marketing approval.

Safety and efficacy of a product candidate must be established through adequate and well-controlled studies.

If a product which

has been granted orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to an orphan drug exclusivity period, which means the FDA may not approve any

other application to market the same drug for the same disease or condition for a period of seven years, except in limited circumstances, such as where an alternative product demonstrates clinical superiority to the product with orphan

grant of an orphan drug designation request does not alter the standard regulatory requirements and process for obtaining marketing approval.

Safety and efficacy of a product candidate must be established through adequate and well-controlled

If a product which has been granted orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to an orphan drug exclusivity period, which means the

FDA may not approve any other application to market the same drug for the same disease or condition for a period of seven years, except in limited circumstances, such as where an alternative product demonstrates clinical superiority to the

product with orphan exclusivity.

In addition, holders of exclusivity for orphan drugs are expected to assure the availability of sufficient quantities of their orphan drugs to meet the needs of patients.

Failure to do so could result in the withdrawal of marketing

exclusivity for the drug.

Failure to do so could result in the

withdrawal of marketing exclusivity for the drug.

The orphan drug exclusivity contained in the ODA has been the subject of recent scrutiny from the press, from some members of Congress and from some in the medical community.

There can be no

assurance that the exclusivity granted in ODA to orphan drugs approved by the FDA will not be modified in the future, and as to how any such change might affect our products.

The European Orphan Drug Regulation is considered for drugs intended to diagnose, prevent or treat a life-threatening or very serious condition afflicting five or fewer per 10,000 people in the

EU, including compounds that for serious and chronic conditions would likely not be marketed without incentives due to low market return on the sponsor’s development investment.

The medicinal product considered should be of significant benefit to

those affected by the condition.

Benefits of being granted Orphan Medicinal Product Designation are significant, including ten years of marketing exclusivity and a potential two-year extension.

The EU Community and Member States may not accept or

grant for ten years a new marketing authorization or application for another drug for the same therapeutic indication as the orphan drug, although the ten-year period can be reduced to six years if, after the end of the fifth year, available

evidence establishes that the product is sufficiently profitable not to justify maintenance of the marketing exclusivity.

A supplementary protection certificate may extend the protection six months beyond patent expiration if that is later than

the orphan drug exclusivity period.

To apply for the supplementary protection, a pediatric investigation plan, or PIP, must be included in the market application.

In Europe all drugs now seeking marketing authorization need to have a PIP agreed

with the European Medicines Agency (EMA) before it can be approved, even if it is a drug being developed specifically for a pediatric indication.

If a product is developed solely for use in the pediatric population, then a Pediatric Use Marketing

Authorization, or PUMA, may provide eight years of data exclusivity and ten years of marketing exclusivity.

There can be no assurance that the exclusivity granted in ODA to orphan drugs approved by the FDA will not be modified in the future, and as to how any such change might affect our products.

The European Orphan Drug Regulation is considered for drugs intended to diagnose, prevent or treat a

life-threatening or very serious condition afflicting five or fewer per 10,000 people in the EU, including compounds that for serious and chronic conditions would likely not be marketed without incentives due to low market return on the

sponsor’s development investment.

The medicinal product considered should be of significant benefit to those affected by the condition.

Benefits of being granted Orphan Medicinal Product Designation are significant, including ten years of

marketing exclusivity with a potential two-year extension.

The EU Community and Member States may not accept or grant for ten years a new marketing authorization or application for another drug for the same therapeutic indication as the orphan

drug, although the ten-year period can be reduced to six years if, after the end of the fifth year, available evidence establishes that the product is sufficiently profitable not to justify maintenance of the marketing exclusivity.

supplementary protection certificate may extend the protection six months beyond patent expiration if that is later than the orphan drug exclusivity period.

To apply for the supplementary protection, a pediatric investigation plan, or PIP, must

be included in the market application.

In Europe all drugs now seeking marketing authorization need to have a PIP agreed with the EMA before it can be approved, even if it is a drug being developed specifically for a pediatric indication.

product is developed solely for use in the pediatric population, then a Pediatric Use Marketing Authorization, or PUMA, may provide eight years of data exclusivity and ten years of marketing exclusivity.

Fast track designation and accelerated approval

The FDA is required to facilitate the development, and expedite the review, of drugs or biologics that are intended for the treatment of a serious or life-threatening disease or condition for

which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition.

Under the fast-track program, the sponsor of a new product candidate may request that FDA designate the product candidate

for a specific indication as a fast-track drug concurrent with, or after, the filing of the IND for the product candidate.

FDA must determine if the product qualifies for fast-track designation within 60 days of receipt of the sponsor’s request.

Under the fast track program and FDA’s accelerated approval regulations, FDA may approve a product for a serious or life-threatening illness that provides meaningful therapeutic benefit to

patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to

predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient feels, functions,

The FDA is required to facilitate the development, and expedite the review, of drugs or biologics that are intended for the treatment of a serious or life-threatening disease

or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition.

Under the fast-track program, the sponsor of a new product candidate may request that FDA designate the

product candidate for a specific indication as a fast-track drug concurrent with, or after, the filing of the IND for the product candidate.

FDA must determine if the product qualifies for fast-track designation within 60 days of receipt of the

sponsor’s request.

Under the fast track program and FDA’s accelerated approval regulations, FDA may approve a product for a serious or life-threatening illness that provides meaningful

therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that

is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient

feels, functions, or survives.

Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.

A product approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or

post-approval clinical trials to confirm the effect on the clinical endpoint.

Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, will allow FDA to withdraw the product from the market

on an expedited basis.

A product approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion

of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.

Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, will allow FDA to withdraw the product

from the market on an expedited basis.

All promotional materials for products approved under accelerated regulations are subject to prior review by FDA.

In addition to other benefits such as the ability to use surrogate endpoints and engage in more frequent interactions with FDA, FDA may initiate review of sections of a fast-track drug’s MA

before the application is complete.

In addition to other benefits such as the ability to use surrogate endpoints and engage in more frequent interactions with FDA, FDA may initiate review of sections of a

fast-track drug’s MA before the application is complete.

This rolling review is available if the applicant provides, and FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees.

However, FDA’s time period

goal for reviewing an application does not begin until the last section of the MA is submitted.

Additionally, the fast-track designation may be withdrawn by the FDA if they believe that the designation is no longer supported by data emerging in

the clinical trial process.

However, FDA’s time period goal for reviewing an application does not begin until the last section of the MA is submitted.

Additionally, the fast-track designation may be withdrawn by the FDA if they believe that the designation is no longer

supported by data emerging in the clinical trial process.

Priority review

Under FDA policies, a product candidate is eligible for priority review, or review within a six to eight-month time frame from the time a complete MA is submitted, if the product candidate is

intended for the treatment, diagnosis, or prevention of a serious or life-threatening condition, demonstrates the potential to address an unmet medical need, or provides a significant improvement compared to marketed drugs.

Under FDA policies, a product candidate is eligible for priority review, or review within a six to eight-month time frame from the time a complete MA is submitted, if the

product candidate is intended for the treatment, diagnosis, or prevention of a serious or life-threatening condition, demonstrates the potential to address an unmet medical need, or provides a significant improvement compared to marketed drugs.

Disclosure of clinical trial information

Sponsors of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information.

Information related to the product, patient

population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.

Sponsors are also obligated to disclose the results of their clinical trials after

Sponsors of clinical trials of FDA-regulated products, including drugs and biologics, are required to register and disclose certain clinical trial information.

related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.

Sponsors are also obligated to disclose the results of

their clinical trials after completion.

Disclosure of results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the clinical trial.

Competitors may use this publicly available information to gain knowledge regarding

the progress of development programs.

Competitors may use this publicly available information

to gain knowledge regarding the progress of development programs.

Finally, there can be no assurance that fast track designation will result in a faster review process.

Anti-Kickback, False Claims Laws, Stark Law & the Prescription Drug Marketing Act

In addition to FDA restrictions on marketing of pharmaceutical products, other state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in

recent years.

In addition to FDA restrictions on marketing of pharmaceutical products, other state and federal laws have been applied to restrict certain marketing practices in the

pharmaceutical industry in recent years.

These laws include anti-kickback prohibition, statutes and false claims statutes.

The federal healthcare program Anti-Kickback Statute, or Anti-Kickback Statute, prohibits, among other things, knowingly and willfully offering,

paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally

financed healthcare programs.

The federal healthcare program Anti-Kickback Statute, or Anti-Kickback Statute, prohibits, among other things, knowingly

and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or

other federally financed healthcare programs.

This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and patients, prescribers, purchasers and formulary managers on the other.

Violations of the

Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties, and exclusion from participation in federal healthcare programs.

Violations of

the Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties, and exclusion from participation in federal healthcare programs.

Although there are a number of statutory exceptions and regulatory safe harbors

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subject to scrutiny if they do not qualify for an exemption or safe harbor.

Federal false claims laws prohibit, among other things, any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly

making, or causing to be made, a false statement to have a false claim paid.

Recently, several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing

services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.

addition, certain marketing practices, including off-label promotion, may also violate false claims laws.

The majority of states also have statutes or regulations similar to the Anti-Kickback Statute and false claims laws, which apply to items

and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.

Federal law includes a provision commonly known as the “Stark Law.” This law prohibits a physician (defined to include a doctor of medicine or osteopathy, a doctor of dental surgery or dental

medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor) from referring Medicare and Medicaid patients to certain types of entities with which the physician or any of the physician’s immediate family members have a

financial relationship, unless an exception to the law’s prohibition is met.

Subject to adherence to their respective criteria requirements, the self-referral prohibition contains a number of exceptions, including exceptions covering employment

or independent contractor arrangements, space and equipment leases, and recruitment agreements.

Sanctions within the Stark Law include significant civil penalties including over $25,000 for each violation, over $169,000 for schemes to circumvent

the Stark Law restrictions, and up to $10,000 for each day an entity fails to report required information and exclusion from the federal healthcare programs.

Violations of the Stark Law may also result in payment denials, false claim recoveries,

civil monetary penalties, and/or federal program exclusion.

Federal false claims laws prohibit, among other things, any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government,

or knowingly making, or causing to be made, a false statement to have a false claim paid.

Recently, several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to

pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the

In addition, certain marketing practices, including off-label promotion, may also violate false claims laws.

The majority of states also have statutes or regulations similar to the Anti-Kickback Statute and false claims laws, which apply

to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.

Federal law includes a provision commonly known as the “Stark Law.” This law prohibits a physician (defined to include a doctor of medicine or osteopathy, a doctor of dental

surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor) from referring Medicare and Medicaid patients to certain types of entities with which the physician or any of the physician’s immediate family

members have a financial relationship, unless an exception to the law’s prohibition is met.

Subject to adherence to their respective criteria requirements, the self-referral prohibition contains a number of exceptions, including exceptions

covering employment or independent contractor arrangements, space and equipment leases, and recruitment agreements.

Sanctions within the Stark Law include significant civil penalties including over $25,000 for each violation, over $169,000 for

schemes to circumvent the Stark Law restrictions, and up to $10,000 for each day an entity fails to report required information and exclusion from the federal healthcare programs.

Violations of the Stark Law may also result in payment denials,

false claim recoveries, civil monetary penalties, and/or federal program exclusion.

Further, several states have enacted statutes similar in scope and purpose to the Stark Law.

These state laws may mirror the federal Stark Law or may be different in scope.

available guidance and enforcement activity associated with such state laws varies considerably.

The Physician Payments Sunshine Act, created under the ACA, and its implementing regulations require manufacturers of approved prescription drugs, devices, biologics, and medical supplies, for

which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually collect and report information on payments or transfers of value to physicians and teaching hospitals, as well

as investment interests held by physicians and their immediate family members.

These state laws may mirror the federal Stark Law or may be

different in scope.

The available guidance and enforcement activity associated with such state laws varies considerably.

The Physician Payments Sunshine Act, created under the ACA, and its implementing regulations require manufacturers of approved prescription drugs, devices, biologics, and

medical supplies, for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually collect and report information on payments or transfers of value to physicians and

teaching hospitals, as well as investment interests held by physicians and their immediate family members.

The information reported each year is made publicly available on a searchable website.

Failure to submit required information may result in civil monetary penalties.

In addition, several states now require prescription drug companies to report expenses relating to the marketing and promotion of drug products and to report gifts and payments to individual

physicians in these states.

Failure to submit required information may result in

civil monetary penalties.

In addition, several states now require prescription drug companies to report expenses relating to the marketing and promotion of drug products and to report gifts and

payments to individual physicians in these states.

Other states prohibit various other marketing-related activities.

Still other states require the posting of information relating to clinical studies and their outcomes.

In addition, California, Connecticut, Nevada, and

Massachusetts require pharmaceutical companies to implement compliance programs and/or marketing codes.

In addition, California,

Connecticut, Nevada, and Massachusetts require pharmaceutical companies to implement compliance programs and/or marketing codes.

Several additional states are considering similar proposals.

Compliance with these laws is difficult and time consuming, and companies that do

not comply with these state laws face civil penalties.

Compliance with these laws is difficult and time

consuming, and companies that do not comply with these state laws face civil penalties.

Prescription drug advertising is subject to federal, state and foreign regulations.

In the United States, the FDA regulates prescription drug promotion, including direct-to-consumer

In the United States, the FDA, along with the Federal Trade Commission, regulates

prescription drug promotion, including direct-to-consumer advertising.

Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use.

Any distribution of prescription drug products and pharmaceutical samples must comply with the United States Prescription Drug

Marketing Act, or PDMA, a part of the FDCA.

In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act, or DSCSA, has imposed new “track and trace” requirements on the distribution of

prescription drug products by manufacturers, distributors, and other entities in the drug supply chain.

The DSCSA requires product identifiers (i.e., serialization) on prescription drug products in order to eventually establish an electronic

interoperable prescription product system to identify and trace certain prescription drugs distributed in the United States and preempts existing state drug pedigree laws and regulations on this topic.

The DSCSA also establishes new requirements

for the licensing of wholesale distributors and third-party logistic providers.

The FDA is the process of finalizing regulations addressing wholesale distributors and third-party logistics providers.

We serialize our product at both the package

and homogeneous case level, pass serialization and required transaction information to our customers, and believe that we comply with all such requirements.

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, sets standards governing the

conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information that is stored or transmitted electronically.

These include standards for common healthcare transactions, such as:

information, plan eligibility, payment information and the use of electronic signatures;

Any distribution of prescription drug products and pharmaceutical

samples must comply with the United States Prescription Drug Marketing Act, or PDMA, a part of the FDCA.

In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act, or DSCSA, has

imposed new “track and trace” requirements on the distribution of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain.

The DSCSA requires product identifiers (i.e., serialization) on prescription

drug products in order to eventually establish an electronic interoperable prescription product system to identify and trace certain prescription drugs distributed in the United States and preempts existing state drug pedigree laws and

regulations on this topic.

The DSCSA also establishes new requirements for the licensing of wholesale distributors and third-party logistic providers.

The FDA is the process of finalizing regulations addressing wholesale distributors and

third-party logistics providers.

We serialize our product at both the package and homogeneous case level, pass serialization and required transaction information to our customers, and believe that we comply with all such requirements.

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, sets

standards governing the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information that is stored or transmitted electronically.

These include standards for common healthcare

transactions, such as:

claims information, plan eligibility, payment information and the use of electronic signatures;

unique identifiers for providers, employers, health plans and individuals;

and security, privacy, breach notification and enforcement.

HIPAA transaction

regulations establish form, format and data content requirements for most electronic healthcare transactions, such as healthcare claims that are submitted electronically.

The HIPAA privacy regulations establish comprehensive requirements relating

to the use and disclosure of protected health information.

The HIPAA security regulations establish minimum standards for the protection of protected health information that is stored or transmitted electronically.

The HIPAA breach notification

regulations establish the applicable requirements for notifying individuals, the HHS, and the media in the event of a data breach affecting protected health information.

Violations of the privacy, security and breach notification regulations are

punishable by civil and criminal penalties.

In addition to the federal HIPAA regulations, most states also have laws that regulate the collection, storage, use, retention, security, disclosure, transfer and other processing of health

information and other confidential, sensitive and personal data.

Certain of these laws grant individuals rights with respect to their information, and we may be required to expend significant resources to comply with these laws.

various states, such as California and Massachusetts, have implemented privacy laws and regulations, such as the California Confidentiality of Medical Information Act, that impose restrictive requirements regulating the use and disclosure of

personally identifiable information, including protected health information.

These laws in many cases are more restrictive than, and may not be preempted by, the HIPAA rules and may be subject to varying interpretations by courts and government

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical

companies, universities and other research institutions.

and security, privacy, breach notification and

HIPAA transaction regulations establish form, format and data content requirements for most electronic healthcare transactions, such as healthcare claims that are submitted electronically.

The HIPAA privacy regulations establish

comprehensive requirements relating to the use and disclosure of protected health information.

The HIPAA security regulations establish minimum standards for the protection of protected health information that is stored or transmitted

electronically.

The HIPAA breach notification regulations establish the applicable requirements for notifying individuals, the HHS, and the media in the event of a data breach affecting protected health information.

Violations of the privacy,

security and breach notification regulations are punishable by civil and criminal penalties.

In addition to the federal HIPAA regulations, most states also have laws that regulate the collection, storage, use, retention, security, disclosure, transfer and other

processing of health information and other confidential, sensitive and personal data.

Certain of these laws grant individuals rights with respect to their information, and we may be required to expend significant resources to comply with these

For example, various states, such as California and Massachusetts, have implemented privacy laws and regulations, such as the California Confidentiality of Medical Information Act, that impose restrictive requirements regulating the use and

disclosure of personally identifiable information, including protected health information.

These laws in many cases are more restrictive than, and may not be preempted by, the HIPAA rules and may be subject to varying interpretations by courts

and government agencies.

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty

pharmaceutical companies, universities and other research institutions.

Many of our competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources than we do.

Large pharmaceutical companies, in

particular, have extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical products.

Some of these companies also have significantly greater research and marketing capabilities

than we do and may also have products that have been approved or are in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions.

Established pharmaceutical companies may

also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we develop obsolete.

Mergers and acquisitions in the pharmaceutical and biotechnology

industries may result in even more resources being concentrated among a smaller number of our competitors.

As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval or discovering,

developing and commercializing products in our field before we do.

There are a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical and biotechnology companies.

These treatments consist both of small

molecule drug products, such as traditional chemotherapy, as well as novel immunotherapies.

Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have

fewer or less severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less expensive than any products that we may develop.

Our competitors also may obtain FDA, European Medicines Agency

(“EMA”) or other marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

Even if the product

candidates we develop achieve marketing approval, they may be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness.

Large pharmaceutical

companies, in particular, have extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical products.

Some of these companies also have significantly greater research and marketing

capabilities than we do and may also have products or strategic partnerships with entities with products that have been approved or are in late stages of development, and collaborative arrangements in our target markets with leading companies and

research institutions.

Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our mRNA technology platform or any therapeutic

products that we develop obsolete.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

As a result of all of these factors,

our competitors may succeed in obtaining patent protection and/or marketing approval or discovering, developing and commercializing products in our field before we do.

There are a large number of companies developing or marketing treatments for cancer, including many major

pharmaceutical and biotechnology companies.

These treatments include both small molecule drug products, such as traditional chemotherapy, as well as novel immunotherapies.

Our commercial opportunities could be reduced or eliminated if our

competitors develop intellectual property and commercialize products that are safer, more effective, have fewer or less severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less

expensive than any products developed using our intellectual property or that we may develop.

Our competitors also may obtain FDA, EMA or other marketing approval for their products more rapidly than we may obtain approval for ours, which could

result in our competitors establishing a strong market position before we are able to enter the market.

Human Capital Resources

We perform in a highly competitive industry and recognize that our continued success relies upon our ability to attract, develop and retain

a diverse team of talented individuals.

We place high value on the satisfaction and well-being of our employees and operate with fair labor standards and industry-competitive compensation and benefits.

As of April 12, 2022, we have ten full-time employees, which includes five research and development positions and five administrative

We perform in a highly competitive industry and recognize that our success relies upon our ability to attract, develop and retain a diverse team of talented individuals.

place high value on the satisfaction and well-being of our employees and operate with fair labor standards and industry-competitive compensation and benefits.

As of March 20, 2023, we had nine full-time employees, which includes four research and

development positions and five administrative positions.

None of our employees are covered by collective bargaining agreements.

Compensation, Benefits and Development

Our approach to employee compensation and benefits is designed to deliver cash, equity and benefit programs that are competitive with those offered by leading companies in the biotechnology and

pharmaceutical industries to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adherence to our values and alignment with the interests of our stockholders.

Our base pay program aims to compensate staff members relative to the value of the contributions of their role, which takes into account the skills, knowledge and abilities required to perform

each position, as well as the experience brought to the job.

We may also provide our employees with opportunities to earn cash and equity incentive compensation to reward the achievement of company-wide goals that are established annually and

designed to drive aspects of our strategic priorities that support and advance our strategy across our company.

Our employees are also eligible for the grant of equity awards under our long-term incentive program that are designed to align

interests of our employees with that of our stockholders.

All employees also participate in a regular performance measurement process through which staff receive performance and development feedback, which is taken into account in determining

annual compensation.

Our approach to employee compensation and benefits is designed to deliver cash, equity and benefit programs that are competitive with those offered by leading companies in

the biotechnology and pharmaceutical industries to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adherence to our values and alignment with the interests of our stockholders.

Our base pay program aims to compensate staff members relative to the value of the contributions of their role, which takes into account the skills, knowledge and abilities

required to perform each position, as well as the experience brought to the job.

We may also provide our employees with opportunities to earn cash and equity incentive compensation to reward the achievement of company-wide goals that are

established annually and designed to drive aspects of our strategic priorities that support and advance our strategy across our company.

Our employees are also eligible for the grant of equity awards under our long-term incentive program that are

designed to align interests of our employees with that of our stockholders.

All employees also participate in a regular performance measurement process through which staff receive performance and development feedback, which is taken into account

in determining annual compensation.

Our benefit programs are generally broad-based, promote health and overall well-being and emphasize saving for retirement.

All employees are eligible to participate in the same health and

retirement savings plans.

All employees are eligible to participate in the

same health and retirement savings plans.

Code of Business Conduct and Ethics

We are committed to conducting business in accordance with the highest ethical standards.

Our Code of Conduct and Ethics emphasizes the importance of integrity, honesty, forthrightness, respect

and fairness.

Our Code of Conduct and Ethics emphasizes the importance of integrity, honesty,

forthrightness, respect and fairness.

Our Code of Conduct and Ethics applies to all our employees, including those who are integrated into the Company through acquisitions.

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We actively promote the safety, health and well-being of our employees.

We have continued to focus on employee safety throughout the COVID-19 pandemic by implementing extensive safety measures,

including without limitation, on-site COVID-19 testing protocols and flexible remote working options for most of our employees.

For example, we focused on employee safety throughout the COVID-19 pandemic by implementing extensive

safety measures, which have included, on-site COVID-19 testing protocols and flexible remote working options for most of our employees.

Our business, financial condition and operating results can be affected by many factors, whether currently known or unknown, many of which are not exclusively within our control,

including but not limited to those described below, any one or more of which could, directly or indirectly, cause our financial condition and operating results to differ materially from historical or anticipated future financial condition and

operating results.

Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.

We urge investors to carefully consider the risk factors described below in

evaluating our stock and the information in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Risks Related to our Business and Industry

We depend substantially, and expect in the future to continue to depend, on in-licensed intellectual property.

Such licenses impose obligations on our business,

and if we fail to comply with those obligations, we could lose license rights, which would substantially harm our business.

We are dependent on patents, know-how and proprietary technology licensed from Factor Limited under the Exclusive Factor License Agreement.

We may in the future become party to

additional license agreements pursuant to which we in-license key intellectual property for the development of therapeutics products both through strategic partnerships and internally.

We are party to the Exclusive Factor License Agreement with

Factor Limited, pursuant to which we acquired our mRNA technology platform.

The Exclusive Factor License Agreement imposes various sublicense fees and other obligations on us.

For example, we are obligated to pay the expenses incurred by Factor

Limited in preparing, filing, prosecuting and maintaining the Factor Patents and agreed to bear all costs and expenses associated with enforcing and defending the Factor Patents in any action or proceeding arising from pursuit of sublicensing

opportunities under the license granted under the Exclusive Factor License Agreement.

Factor Limited has customary termination rights under the Exclusive Factor License Agreement, including in connection with certain uncured material breaches of

the Exclusive Factor License Agreement and specified bankruptcy events.

Any termination of our existing or future licenses could result in the loss of significant rights and would harm our business significantly.

Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including:

the scope of rights granted under the license agreement and other interpretation-related issues;

whether and the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement;

our right to sublicense patents and other intellectual property to third parties under the license agreement;

the ownership of inventions and know-how resulting from any joint creation or use of intellectual property by our licensors and us or our partners.

If disputes over intellectual property that we have licensed, or license in the future, prevent or impair our ability to maintain our current licensing arrangements on acceptable

terms, we may be unable to successfully enter into strategic partnerships or develop therapeutic products.

In addition, the resolution of any such disputes could narrow what we believe to be the scope of our rights to the relevant intellectual

property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and

Additionally, we may have limited control over the maintenance, prosecution or enforcement of rights we in-license, and we may also have limited control over activities previously

or separately conducted by our licensors.

For example, we cannot be certain that activities conducted by Factor Limited or any other present or future licensors have been or will be conducted in compliance with applicable laws and regulations or

will result in valid and enforceable patents and other intellectual property rights.

We may also have limited control over other intellectual property that is not licensed to us but that may be related to our in-licensed intellectual property.

may have limited control over the manner in which our licensors initiate an infringement proceeding against a third-party infringer or the intellectual property or defend certain of the intellectual property that is licensed to us.

It is possible

that the licensors’ infringement proceedings or defense activities may be less vigorous than had we conducted them ourselves.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we own, as we are for intellectual property that we license.

or our licensors fail to adequately protect the intellectual property underlying our mRNA technology platform and any other in-licensed intellectual property, our ability to enter into strategic partnerships or develop and commercialize

therapeutic products could materially suffer.

We may not realize the benefits of strategic partnerships that we may form in the future or of potential future product acquisitions of licenses.

We intend to form strategic partnerships leveraging our mRNA technology platform, and we may desire to create joint ventures of collaborations, enter into licensing

agreements with third parties or acquire products or businesses, in each case that we believe will complement or augment this business strategy.

T hese relationships or transactions, or those like them, may

require us to incur nonrecurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, reduce the potential profitability of any products that are the subject of the

relationship or disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partnerships and transactions and the negotiation process is time-consuming and complex and there can be no

assurance that we can enter into any of these transactions even if we desire to do so.

Moreover, we may not be able to realize the anticipated benefit of these transactions if our strategic partners’ development of therapeutic products using our in-licensed

intellectual property does not meet our expectations.

We cannot be certain that, following license, we will achieve the financial or strategic results that would justify the transaction.

We are substantially dependent on intellectual property we in-licensed from Factor Limited, and if we lose the license to such intellectual property or the

Exclusive Factor License Agreement is terminated for any reason, our ability to enter into strategic partnerships or develop therapeutics products would be harmed, and our business, financial condition and results of operations would be materially

and adversely affected.

Our business is dependent upon the mRNA technology platform licensed from Factor Limited.

Pursuant to the Exclusive Factor License Agreement, Factor Limited has customary

termination rights, including in connection with certain uncured material breaches of the Exclusive Factor License Agreement, failure to make payments and specified bankruptcy events.

Our ability to enter into strategic partnerships or develop

therapeutics products using the Factor Patents depends entirely on the effectiveness and continuation of the Exclusive Factor License Agreement.

If we lose the right to license any of the mRNA technology platform, our ability to enter into

strategic partnerships or develop therapeutic products in the foreseeable future would be harmed.

Further, if the Exclusive Factor License Agreement is terminated, there is no guarantee that we will be able to enter into a new license agreement

that aligns with our business strategy on the same or similar terms, if at all, and our competitors could in-license the technology, which would result in a significant market disadvantage to us.

We or our licensors may be subject to claims challenging the inventorship or ownership of the patents and other intellectual property that we own or license now

or in the future.

We or our licensors may be subject to claims that former employees, collaborators or other third parties have an ownership interest in the patents and intellectual property that we

in-license or that we may own or in-license in the future.

While it is our policy to require our employees or contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to

us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own or such assignment may not be self-executing, for example, as part of employment or consulting

agreements, or may be breached.

Our licensors may face similar obstacles.

Litigation may be necessary to defend against any claims challenging inventorship or ownership, including in derivation proceedings in the USPTO.

If we or our licensors fail

in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, results of

operations and financial condition.

The failure of our licensees to fulfill their financial obligations with respect to royalty payments under their license agreements or to otherwise perform under

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

Our revenues may be dependent on royalty payments made to us pursuant to strategic partnership arrangements or license agreements we may enter into with respect to the mRNA

technology platform.

We anticipate that such arrangements will often require that licensees advance payment to us for royalties or other milestone payments.

The failure of our licensees to satisfy their financial obligations under these

arrangements, or their inability to operate successfully or at all, could result in a breach of an agreement, early termination of an agreement or non-renewal of an agreement, each of which could eliminate some or all of that revenue stream.

decrease or elimination of revenue could have a material adverse effect on our financial condition, results of operations and cash flows.

During the term of a license agreement, our revenues will substantially depend on our licensees’ ability to

develop a successful product candidate with the mRNA technology platform and their failure to do so could harm our future growth and prospects.

If our strategic partnerships do not meet expectations and licensees are not successful, our business,

financial condition and results of operation could be materially adversely affected.

If conflicts arise between us and our future strategic partners or collaborators, these parties may act in a manner adverse to us and could limit our ability to

implement our strategies.

If conflicts arise between our future strategic partners or corporate or academic collaborators and us, the other party may act in a manner adverse to us and could limit our ability

to implement our strategies.

Future strategic partners or collaborators may develop, either alone or with others, products in related fields that are competitive with the products or potential products that are the subject of our collaborations

with such partners or collaborators.

Competing products, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result in the withdrawal of partner support for any future

product candidates based on our mRNA technology platform or other intellectual property.

Our current or future strategic partners or collaborators may preclude us from entering into arrangements with their competitors, terminate their agreements

with us prematurely, or fail to devote sufficient resources to the development and commercialization of products.

Any of these developments could harm any future product development efforts, which could materially and adversely affect our business

and operating results.

We have identified material weaknesses in our internal control over financial reporting.

If we are unable to develop and maintain an effective system of internal

control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, and materially and adversely affect our business and operating results.

In prior periods, we identified two material weaknesses as discussed below.

We identified a material weakness that pertained to us having insufficient accounting staff available to enable and

ensure adequate segregation of duties and our lacking appropriate and complete documentation of policies and procedures critical to the accomplishment of financial reporting objectives.

In connection with this prior material weakness we

implemented remediation measures including the following:

Increased the number of accounting personnel and reallocated and/or reassigned roles and responsibilities of users to accommodate increased personnel;

Completed a comprehensive risk assessment to identify, design, and implement our internal controls;

Implemented improvement and refinement of our internal controls related to our review of users with access to its key financial systems, specifically to validate

and evidence that all users were subject to review and access was appropriate;

Refined our review of user access controls which restrict system users from having access to create and post journal entries;

Completed the documentation, review, and enhancement of business policies, procedures, and related internal controls to standardize business processes.

As a result of the above remediation measures, this prior material weakness was remediated as of December 31, 2022.

We were unable to timely file our Q1

2022 10Q with the SEC due to identifying errors in our financial statements reported in the Annual Report on Form 10-K for the years ended December 31, 2021 and 2020 during our preparation of the financial statements for the quarter ended March

Management concluded that the errors were the result of accounting personnel’s lack of technical proficiency in complex matters.

This material weakness remained unremediated as of December 31, 2022.

We filed an amendment to our Annual Report on Form 10-K/A for the years ended December 31, 2021 and 2020 on June 30, 2022 to correct the errors in our financial statements for

the years ended December 31, 2021 and 2020 and for the quarters ended June 30, 2020, September 30, 2020, March 31, 2021, June 30, 2021 and September 30, 2021.

As disclosed in Part II, Item 9A to this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded

that, as of December 31, 2022, our disclosure controls and procedures were not effective and did not provide reasonable assurance of achieving the desired control objectives.

For a discussion of management’s consideration of its material weaknesses and plans for remediation, see Part II, Item 9A:

Controls and Procedures included in this Annual Report on Form 10-K.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material

misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

plans to implement measures designed to ensure that the deficiencies contributing to the ineffectiveness of our internal control over financial reporting are promptly remediated, such that the internal controls are designed, implemented and

operating effectively.

The remediation actions planned include:

enhancing the business process controls related to reviews over technical, complex, and non-recurring transactions;

and providing additional training to accounting personnel and

consulting with an accounting advisor for technical, complex and non-recurring matters, with whom we have engaged and begun consulting.

We will continue to evaluate steps to remediate the material weaknesses in addition to those currently planned

by management.

These remediation measures may be costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we identify any additional material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our

accounts or disclosures and could result in a material misstatement of our annual or interim financial statements.

In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports,

investors may lose confidence in our financial reporting and our stock price may decline as a result.

We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential

future material weaknesses.

We may face litigation and other risks as a result of the material weaknesses in our internal control over financial reporting.

We identified two material weaknesses in our internal controls over financial reporting, one of which was remediated as of December 31, 2022.

result of the material weaknesses, restating our previously issued financial statements, and other matters that may in the future be raised by the SEC, we may face the potential for litigation or other disputes which may include, among others,

claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in our internal control over financial reporting and the preparation of our financial statements.

As of the date of this

Annual Report on Form 10-K, we have no knowledge of any such litigation or dispute.

However, we can provide no assurance that such litigation or dispute will not arise in the future.

Any such litigation or dispute, whether successful or not,

could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.

Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.

Our computer systems, as well as those of various third parties on which it relies, may sustain damage from computer viruses, unauthorized access, data breaches, phishing attacks, cybercriminals,

natural disasters (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures.

We rely on our third-party providers to implement effective security measures and identify and correct for any such failures,

deficiencies or breaches.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity

and sophistication of attempted attacks and intrusions from around the world have increased.

If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development and other

To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the

further development of any product candidate could be delayed.

We face business

disruption and related risks resulting from a resurgence of the novel coronavirus (COVID-19) pandemic or a similar pandemic health event in the future .

In December 2019, Chinese officials

reported a novel coronavirus (“COVID-19”) outbreak.

COVID-19 has since spread throughout the world, leading the World Health Organization to declare on March 11, 2020, that COVID-19 reached the magnitude of a global pandemic.

The rapid spread

of COVID-19 throughout the U.S.

led federal, state and local governments to take significant steps in an attempt to reduce exposure to COVID-19 and variants of the virus and control their negative effects on public health and the U.S.

economy, which steps changed over time and varied by locality.

The COVID-19 pandemic has subsided with the normalization of living with COVID-19 following the increase in accessibility to COVID-19 vaccines and antiviral treatments.

development of our product candidates was disrupted by the COVID-19 pandemic, and a resurgence of COVID-19 could disrupt production and cause delays in the supply and delivery of products used in our operations, may affect our operations,

including the conduct of clinical studies or other collaborative activities by our strategic partners, may further divert the attention and efforts of the medical community to coping with the COVID-19 and disrupt the marketplace in which we

operate and may have a material adverse effects on our operations.

COVID-19 may also affect our employees and employees and operations at suppliers that may result in delays or disruptions in supply.

In addition, a recession or market

correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

A future pandemic unrelated to

COVID-19 may lead to similar disruptions to our operations and materially affect our business and the value of our common stock.

Risks Related to New, Cutting Edge Technologies

Because gene-editing and cell therapy product candidates that may be developed using our mRNA technology platform are based on novel technologies, we cannot

assure that such products will be successful.

Cellular immunotherapies, stem cell therapies, gene-edited, and iPSC-derived product candidates represent relatively new therapeutic areas, and the FDA has cautioned

consumers about potential safety risks associated with them.

To date, there are relatively few approved cell therapies.

As a result, the regulatory approval process for a gene-editing or cellular therapy product candidates are uncertain and may

be more expensive and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies and therapeutic approaches.

For example, there are no new FDA approved products with a label

designation that supports the use of a product to treat and reduce the severity of ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application or regulatory approval,

and the time and cost required to obtain regulatory approval in the United States for the product candidates we or our strategic partners may develop.

Cell reprogramming technology and related cell therapy products using iPSC lines represent novel therapeutic approaches, and to our knowledge no iPSC-derived cell

products are currently approved for commercial sale anywhere in the world.

As such, it is difficult to accurately predict the type and scope of challenges that we will incur effecting our plan to develop and advance a pipeline of

therapeutic products both internally and through strategic partnerships .

We and our strategic partners thus face uncertainties associated with the preclinical and clinical development, manufacture, and regulatory

compliance for the initiation and conduct of clinical trials, regulatory approval, and reimbursement required for successful commercialization of product candidates.

Regulatory processes in the United States governing cell therapy products have changed frequently and the FDA or other regulatory bodies may change the requirements, or identify

different regulatory pathways, for approval of these product candidates.

For example, within the FDA, the Center for Biologics Evaluation and Research, CBER, restructured and created a new Office of Tissues and Advanced Therapies, OTAT, to better

align its oversight activities with FDA Centers for Drugs and Medical Devices.

It is possible that over time new or different divisions may be established or be granted the authority for regulating cell and/or gene therapy products, including

iPSC-derived cell products.

As a result, we or our strategic partners may be required to change regulatory strategies or to modify applications for regulatory approval, which could delay and impair our ability to complete the pre-clinical and

clinical development and manufacture of, and obtain regulatory approval for, our product candidates.

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

process, require us to perform additional studies, increase development and manufacturing costs, lead to changes in regulatory pathways, positions and interpretations, delay or prevent approval and commercialization of product candidates

developed through our strategic partners or lead to significant post-approval limitations or restrictions that may reduce the anticipated benefits of our strategic partnerships.

Likewise, gene editing technology is relatively new, and no products based on such technology have been approved in the U.S.

to date, and only a limited number of

clinical trials of product candidates based on gene-editing technologies have been commenced.

As such, it is difficult to accurately predict the developmental challenges we may incur pursuing our business strategy.

There may be long-term effects

from treatment with any such product candidates that we or our strategic partners may develop that we cannot predict at this time.

Any such product candidates may interact with genetic material (RNA/DNA) and because animal genetic materials

differ from human genetic material, past testing of any such product candidates in animal models may not be predictive of results in human clinical trials for safety or efficacy.

As a result of these factors, it is more difficult to predict the

time and cost of such product candidate development, and we cannot predict whether the application of gene editing technology, or other similar or competitive gene editing technologies, will result in the identification, development and

regulatory approval of any products.

The clinical trial requirements of the FDA, the EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product

candidate vary substantially according to the type, complexity, novelty and intended use and market of the product candidate.

No products based on gene-editing technologies have been approved by regulators to date.

As a result, the regulatory

approval process for product candidates using such technology is uncertain and may be more expensive and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies.

difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for product candidates using this technology in either the United States or the E.U.

or how long it will take to commercialize any product

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product candidate to market could decrease our ability to generate sufficient product revenue, and our business,

financial condition, results of operations and prospects may be harmed.

Regulatory requirements in the United States and in other jurisdictions governing gene therapy products have changed frequently and may continue to change in the future.

2020, the FDA issued several new guidance documents on gene therapy products.

The FDA established the Office of Tissues and Advanced Therapies within its Center for Biologics Evaluation and Research to consolidate the review of gene therapy and

related products, and established the Cellular, Tissue and Gene Therapies Advisory Committee to advise this review.

Adverse developments in clinical trials of gene therapy products conducted by others may cause the FDA or other oversight bodies to

change the requirements for approval of any of our or our strategic partners’ product candidates.

Similarly, the EMA governs the development of gene therapies in the EU and may issue new guidelines concerning the development and marketing

authorization for gene therapy products and require that we comply with these new guidelines.

These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, which

may reduce the anticipated benefits of our strategic partnerships or adversely affect the commercialization of any future therapeutic products that we may develop.

Risks Related to Ownership of our Common Stock

We have a limited operating history and have never generated any product revenue.

We were formed in September 2018, for the purpose of consummating a business combination with IRX Therapeutics, Inc., which business combination was consummated in November

Since inception, we have incurred significant net losses.

As of December 31, 2022, we had an accumulated deficit of approximately $165.3 million.

Since inception, we have financed our operations with capital contributions from the former

beneficial holders of Eterna LLC’s Class A membership interests, as well as through the sale of our securities under the Purchase Agreements with the Investment Group and in connection with certain private placement transactions.

We have never been profitable, have no products approved for commercial sale, and have not generated any product revenue.

While we plan to develop and advance a pipeline of therapeutic products both internally and through strategic partnerships, it is possible that none of such products will

obtain necessary regulatory approvals or be commercialized.

Our expenses could increase beyond expectations.

Even if our strategic partners successfully develop and advance therapeutic products using our mRNA technology platform or

our other intellectual property and such products are commercialized, we may incur significant costs associated with the related strategic partnership.

If we cannot successfully execute any one of the foregoing, our business may not succeed, and

your investment will be negatively impacted.

Furthermore, we sometimes estimate for planning purposes the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives

by our strategic partners or collaborators, as well as milestones under our strategic arrangements or sublicense agreements with third parties.

These milestones may include our expectations regarding the commencement or completion of scientific

studies, clinical trials, the submission of regulatory filings or commercialization objectives.

From time to time, we may publicly announce the expected timing of some of these milestones.

The achievement of these milestones by our strategic

partners or collaborators will generally be outside of our control.

All of these milestones are based on a variety of assumptions, which may cause the timing of achievement of the milestones to vary considerably from our estimates.

strategic partners or collaborators fail to achieve milestones in the timeframes we expect, we may not be entitled to receive certain contractual payments, which could have a material adverse effect on our business, financial position, results of

operations and future growth prospects.

If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive pharmaceuticals industry depends in large part upon the ability to attract highly qualified managerial, scientific and

medical personnel.

In order to induce valuable employees to remain with us, we intend to provide employees with stock options that vest over time.

The value to employees of stock options that vest over time will be significantly affected by

movements in the price of the common stock that it will not be able to control and may at any time be insufficient to counteract more lucrative offers from other companies.

Competition for skilled personnel in our industry is intense and competition for experienced scientists may limit our ability to hire and retain highly qualified personnel on

acceptable terms.

Despite our efforts to retain valuable employees, members of our management, scientific and medical teams may terminate their employment with us on short notice.

Our success also depends on our ability to continue to attract,

retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior scientific and medical personnel.

Other companies with which we compete for qualified personnel have greater financial and other resources, different risk profiles, and a longer history in the industry than

we do, and such companies also may provide more diverse opportunities and better chances for career advancement.

Some of these characteristics may be more appealing to high-quality candidates than what Eterna has to offer.

If we are unable to

continue to attract and retain high-quality personnel, the rate and success at which we can pursue our business strategy would be limited.

Risks Related to our Financial Position and Capital Requirements

We may acquire businesses, assets or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.

We may acquire additional businesses, assets or products, form strategic alliances or create joint ventures with third parties that we believe will complement or augment our

existing business.

If we acquire businesses with promising intellectual property, markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing

operations and company culture.

We may encounter numerous difficulties in developing, manufacturing and marketing any new acquisition.

Difficulties may prevent us from realizing its expected benefits or enhancing our business.

We cannot assure

you that, following any such acquisition, we will achieve the expected synergies to justify the transaction.

We will require substantial additional capital to fund our operations, and if we fail to obtain the necessary financing, we may not be able to pursue our

business strategy.

We will require additional capital to develop and advance our pipeline of therapeutic products both internally and through strategic partnerships .

Because the length of time and activities associated with successful development of such products by us or our strategic partners are highly uncertain, we are unable to estimate with certainty the actual funds we will

require for development and commercialization activities.

Our future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

the cost of filing, prosecuting, defending and enforcing its patent claims and other intellectual property rights;

the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our strategic partners or collaborators;

the effect of competing market developments.

Based on currently available information and our ongoing operations, we believe that our existing cash will not be sufficient for us to fund our operating expenses and

capital expenditure requirements through the twelve-month period subsequent to the issuance date of this report.

We intend to raise additional sources of capital, which could be in the form of debt, grants or equity.

We cannot be certain that

additional capital will be available on acceptable terms, or at all.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue our business

activities, or potentially discontinue operations altogether.

In addition, attempting to secure additional capital may divert the time and attention of our management from day-to-day activities and harm its ability to execute on our overall

We are unable to estimate the amounts of increased capital outlays, operating expenditures and capital requirements associated with our current commercialization strategy.

Raising additional funds by issuing equity securities may cause dilution to existing holders, raising additional funds through debt financings may involve

restrictive covenants, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.

We expect that significant additional capital will be needed in the future to continue our planned operations.

Until such time, if ever, that we can generate substantial

product revenue, directly or through our strategic partnerships, we expect to finance our cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements or other collaborations.

To the extent that we raise additional capital by issuing equity securities, existing stockholder ownership may experience substantial dilution, and the securities may include preferred shares with liquidation or other preferences that could harm

the rights of a common stockholder.

We plan to raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, and as a result we may

have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

Risks Related to Regulatory Requirements

We are subject to extensive and costly government regulation.

Product candidates employing medical technology are subject to extensive and rigorous domestic government regulation including regulation by the FDA, the Centers for Medicare

and Medicaid Services, or CMS, other divisions of the United States Department of Health and Human Services, the United States Department of Justice, state and local governments, and their respective foreign equivalents.

If products employing our

technologies are marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not they have obtained FDA approval for a given product and its uses.

Such foreign regulation may be equally or more demanding

than corresponding United States regulation.

Government regulation substantially increases the cost and risk of researching, developing, manufacturing, and selling medical products.

Even if we or our strategic partners

are able to obtain regulatory approval for a particular product, the approval may limit the indicated medical uses for the product, may otherwise limit our ability to promote, sell, and distribute the product, may require costly post-marketing

surveillance, and/or may require ongoing post-marketing studies.

Material changes to an approved product, such as, for example, manufacturing changes or revised labeling, may require further regulatory review and approval.

Once obtained, any

approvals may be withdrawn, including, for example, if there is a later discovery of previously unknown problems with the product, such as a previously unknown safety issue.

In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of a product candidate.

regulatory agencies may approve a product candidate for fewer or more limited indications than requested or may grant approval subject to the performance of post-marketing studies.

Regulators may approve a product candidate for a smaller patient

population, a different drug formulation or a different manufacturing process, than we or our strategic partners are seeking.

Healthcare legislative reform measures and constraints on national budget social security systems may have a material adverse effect on our business and results

of operations.

Payors, whether domestic or foreign, or governmental or private, are developing increasingly sophisticated or complex methods of controlling healthcare costs and those

methods are not always specifically adapted for new technologies such as those we are developing.

In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care

system that could impact our ability to sell our products profitably.

In particular, in the United States, the Affordable Care Act, among other things, subjects biologic products to potential competition by lower-cost biosimilars;

addresses a new

methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

increases the minimum Medicaid rebates owed by most manufacturers

under the Medicaid Drug Rebate Program;

extends the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations;

subjects manufacturers to new annual fees and taxes for certain

branded prescription drugs;

and provides incentives to programs that increase the federal government’s comparative effectiveness research.

In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted.

In August 2011, the Budget Control Act

of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.5 trillion for the years 2013 through 2021, was

unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April

2013, and due to subsequent legislative amendments, including the BBA, will remain in effect through 2027 unless additional Congressional action is taken.

The CARES Act, the Consolidated Appropriations Act of 2021, and the Act to Prevent

Across-the-Board Direct Spending Cuts suspended the 2% sequestration mandated by the Budget Control Act of 2011 and the American Relief Act of 2011 through December 31, 2021.

In December 2021, Congress extended the suspension of the automatic 2%

reduction through March 2022 and reduced the sequestration adjustment to 1% beginning on April 1, 2022 through June 30, 2022, with the full 2% reduction for sequestration resuming thereafter.

In January 2013, the American Taxpayer Relief Act of

2012, was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover

overpayments to providers from three to five years.

We cannot anticipate whether Congress will further extend the sequestration and when the sequestration reimbursement will return.

Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in

several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and

reform government program reimbursement methodologies for drug products.

For example, in November 2018, CMS issued a proposed rule for comment that would, among other things, provide Medicare prescription drug plans under Part D more transparency

in pricing and greater flexibility to negotiate discounts for, and in certain circumstances exclude, drugs in the six “protected” formulary classes and allow Medicare Advantage plans to use certain drug management tools such as step therapy for

physician-administered drugs.

The IRA, among other things, requires drug manufacturers to offer rebates if the prices rise faster than inflation.

Although a number of these, and other proposed measures will require authorization through

additional legislation to become effective, Congress and the Biden administration has each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of

healthcare and containing or lowering the cost of healthcare.

We cannot predict the initiatives that may be adopted in the future.

The continuing efforts of these governments and other payors to contain or reduce costs of healthcare and/or impose

price controls may adversely affect:

the demand for our or our strategic partners’ product candidates, if we or they obtain regulatory approval;

the ability to set a price that we believe is fair for such products;

our ability to generate revenue and achieve or maintain profitability;

the level of taxes that we are required to pay;

the availability of capital.

Any denial in coverage or reduction in reimbursement from Medicare or any other government programs may result in a similar denial or reduction in payments from private

payors, which may adversely affect our future profitability.

Risks Relating to Eterna’s Intellectual Property

If we are unable to obtain and maintain patent and other intellectual property protection, or if the scope of the patent and other intellectual property

protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to those derived from our intellectual property, and our ability to achieve profitability may be adversely affected.

Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of our technology and

manufacturing processes.

We rely on research, manufacturing and other know-how, patents, trade secrets, license agreements and contractual provisions to establish our intellectual property rights.

These legal means, however, afford only limited

protection and may not adequately protect our rights.

In certain situations, and as considered appropriate, we have sought, and we intend to continue to seek to protect our proprietary position by filing patent applications in

the United States and, in at least some cases, one or more countries outside the United States relating to future products and product candidates that we or our strategic partners or collaborators may develop that are important to our business.

However, we cannot predict whether the patent applications currently being pursued will issue as patents, or whether the claims of any resulting patents will provide us with a competitive advantage or whether we will be able to successfully

pursue patent applications in the future relating to such products and product candidates.

Moreover, the patent application and approval processes are expensive and time-consuming.

We may not be able to file and prosecute all necessary or

desirable patent applications at a reasonable cost or in a timely manner.

Furthermore, we, or any future partners, collaborators, or licensees, may fail to identify patentable aspects of inventions made in the course of development and

commercialization activities before it is too late to obtain patent protection on them.

Therefore, we may miss potential opportunities to seek additional patent protection.

It is possible that defects of form in the preparation or filing of

patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.

If we fail to establish, maintain or protect such patents and other

intellectual property rights, such rights may be reduced or eliminated.

If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable,

and such applications may never result in valid, enforceable patents.

Even if they are unchallenged, our patents and patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around

our patent claims by developing similar or alternative technologies or therapeutics in a non-infringing manner.

For example, a third party may develop a competitive therapy that provides benefits similar to one or more of the future products and

product candidates that we or our strategic partners or collaborators may develop but that falls outside the scope of our patent protection.

If the patent protection provided by the patents and patent applications we hold or pursue with respect

to such product candidates is not sufficiently broad to impede such competition, the successful commercialization of such product candidates could be negatively affected.

Other parties, many of whom have substantially greater resources and have made significant investments in competing technologies, have developed or may develop technologies

that may be related or competitive with our approach, and may have filed or may file patent applications and may have been issued or may be issued patents with claims that overlap or conflict with our patent applications, either by claiming the

same compositions, formulations or methods or by claiming subject matter that could dominate our patent position.

In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.

result, any patents we may obtain in the future may not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing products similar to future products and product candidates that we or our

strategic partners or collaborators may develop.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain.

No consistent policy regarding the breadth of claims allowed in biotechnology

and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions.

In addition, the determination of patent rights with respect to pharmaceutical compounds commonly involves complex legal and factual questions,

which has in recent years been the subject of much litigation.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Our competitors may also seek approval to market their own

products similar to or otherwise competitive with our products.

Alternatively, our competitors may seek to market generic versions of any approved products by submitting ANDAs or ABLAs to the FDA in which they claim that our patents are invalid,

unenforceable or not infringed.

In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement.

In any of these types of proceedings, a court or other agency with

jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner.

Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing

products or processes sufficient to achieve our business objectives.

In addition to patent protection, we expect to rely heavily on trade secrets, know-how and other unpatented technology, which are difficult to protect.

Although we seek such

protection in part by entering into confidentiality agreements with our vendors, employees, consultants and others who may have access to proprietary information, we cannot be certain that these agreements will not be breached, adequate remedies

for any breach would be available, or our trade secrets, know-how and other unpatented proprietary technology will not otherwise become known to or be independently developed by our competitors.

If we are unsuccessful in protecting our

intellectual property rights, sales of our products may suffer and our ability to generate revenue could be severely impacted.

Issued patents covering future products and product candidates that we or our strategic partners or collaborators may develop could be found invalid or unenforceable if challenged in court or in administrative proceedings.

We may not be able to protect our trade secrets in court.

If we initiate legal proceedings against a third-party to enforce a patent covering future products and product candidates that we or our strategic partners or collaborators

may develop, the defendant could counterclaim that the patent covering such products or product candidates is invalid or unenforceable.

In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are

Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, written description or non-enablement.

Grounds for an unenforceability assertion

could be an allegation that someone connected with prosecution of the patent withheld information material to patentability from the USPTO, or made a misleading statement, during prosecution.

Third parties also may raise similar claims before

administrative bodies in the United States or abroad, even outside the context of litigation.

Such mechanisms include re- examination, post grant review, inter partes review and equivalent proceedings in foreign jurisdictions.

determination in any of the foregoing proceedings could result in the revocation or cancellation of, or amendment to, our patents in such a way that they no longer cover future products and product candidates that we or our strategic partners or

collaborators may develop.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which the

patent examiner and we were unaware during prosecution.

If a defendant or third party were to prevail on a legal assertion of invalidity or unenforceability, we could lose at least part, and perhaps all, of the patent protection on one or more of

the future products and product candidates that we or our strategic partners or collaborators may develop.

Such a loss of patent protection could have a material adverse impact on our business.

In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

Competitors and other third parties could purchase future products

and product candidates that we or our strategic partners or collaborators may develop and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe, misappropriate or otherwise

violate our intellectual property rights, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights.

If any of our trade secrets were to be lawfully obtained or

independently developed by a competitor or other third party, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.

If our trade secrets are not adequately

protected or sufficient to provide an advantage over our competitors, our competitive position could be adversely affected, as could our business.

Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have

insufficient recourse against third parties for misappropriating our trade secrets.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by

governmental patent agencies, and our patent protection could be reduced or eliminated for non- compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications are required to be paid to the USPTO and various

governmental patent agencies outside of the United States in several stages over the lifetime of the patents and applications.

The USPTO and various non-U.S.

governmental patent agencies require compliance with a number of procedurals,

documentary, fee payment and other similar provisions during the patent application process and after a patent has issued.

There are situations in which non- compliance can result in abandonment or lapse of the patent or patent application,

resulting in partial or complete loss of patent rights in the relevant jurisdiction.

The terms of one or more licenses that we enter into the future may not provide us with the ability to maintain or prosecute patents in the portfolio and must

therefore rely on third parties to do so.

If we fail to obtain and maintain the patents and patent applications covering our products or procedures, we may not be able to stop a competitor from marketing products that are the same as our product

candidates, which could have a material adverse effect on our business.

If we do not obtain patent term extension and data exclusivity for future products and product candidates that we or our strategic partners or collaborators may

develop, our business may be materially harmed.

Patents have a limited lifespan.

In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest

non-provisional filing date.

Various extensions may be available, but the life of a patent, and the protection it affords, is limited.

Even if patents covering future products and product candidates that we or our strategic partners or

collaborators may develop are obtained, once the patent life has expired for a product candidate, we or our strategic partners or collaborators may be open to competition from competitive products.

Given the amount of time required for the

development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

As a result, our patent portfolio may not provide us with sufficient

rights to exclude others from commercializing products similar or identical to ours.

In the future, if we obtain an issued patent covering one of future products and product candidates that we or our strategic partners or collaborators may develop, depending

upon the timing, duration and specifics of any FDA marketing approval of such product candidates, such patent may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or

Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process.

A patent term extension cannot extend the remaining term of a

patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.

A patent may only be

extended once and only based on a single approved product.

However, we may not be granted an extension because of, for example, failure to obtain a granted patent before approval of a product candidate, failure to exercise due diligence during

the testing phase or regulatory review process, failure to apply within applicable deadlines, failure to apply prior to expiration of relevant patents or otherwise our failure to satisfy applicable requirements.

A patent licensed to us by a third

party may not be available for patent term extension.

Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.

If we are unable to obtain patent term extension or the term of any such

extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.

Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect

future products and product candidates that we or our strategic partners or collaborators may develop.

Changes in either the patent laws or the interpretation of the patent laws in the United States or other jurisdictions could increase the uncertainties and costs surrounding

the prosecution of patent applications and the enforcement or defense of issued patents.

On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law.

When implemented, the Leahy-Smith Act included

several significant changes to U.S.

patent law that impacted how patent rights could be prosecuted, enforced and defended.

In particular, the Leahy-Smith Act also included provisions that switched the United States from a “first-to-invent” system

to a “first-to-file” system, allowed third- party submission of prior art to the USPTO during patent prosecution and set forth additional procedures to attack the validity of a patent by the USPTO administered post grant proceedings.

first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the

invention earlier.

The USPTO developed new regulations and procedures governing the administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file

provisions, only became effective on March 16, 2013.

Some of the Company’s patents and patent applications have effective dates later than March 16, 2013 and thus will be subject to the provisions of the Leahy-Smith Act.

In addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly uncertain.

Recent rulings from the

Court of Appeals for the Federal Circuit and the U.S.

Supreme Court have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.

This combination of events

has created uncertainty with respect to the validity and enforceability of patents, once obtained.

Depending on future actions by the U.S.

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in

unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, maintaining, defending and enforcing patents on products and product candidates in all countries throughout the world would be prohibitively expensive,

and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States.

The requirements for patentability may differ in certain countries, particularly in developing countries;

thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that cover our products.

There can be no assurance that we will obtain or maintain patent rights in or outside the

United States under any future license agreements.

In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

Consequently, we may not be able to

prevent third parties from utilizing our inventions in all countries outside the United States, even in jurisdictions where we pursue patent protection, or from selling or importing products made using our inventions in and into the United States

or other jurisdictions.

Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we

have patent protection, but enforcement is not as strong as that in the United States.

These products may compete with future products and product candidates that we or our strategic partners or collaborators may develop and our patents or other

intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain

countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology and pharmaceutical products, which could make it

difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

For example, many foreign countries have compulsory licensing laws under which a patent owner must grant

licenses to third parties.

Proceedings to enforce our patent rights, even if obtained, in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at

risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits that we initiate and the damages or other

remedies awarded, if any, may not be commercially meaningful.

While we intend to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all

jurisdictions in which we may wish to market our products.

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we

regard as our own intellectual property.

Many of our current and former employees, including our senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies,

including some which may be competitors or potential competitors.

Some of these employees may be subject to proprietary rights, non-disclosure and non- competition agreements, or similar agreements, in connection with such previous employment.

Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade

secrets or other proprietary information, of any such third party.

Litigation may be necessary to defend against such claims.

If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual

property rights or personnel or sustain damages.

Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products.

Such a license

may not be available on commercially reasonable terms or at all.

Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements

assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own, which may result in claims by or against us related to the

ownership of such intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights.

Even if we are successful in prosecuting or defending

against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.

We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming and

unsuccessful.

Competitors may infringe our patents, trademarks, copyrights or other intellectual property.

To counter infringement or unauthorized use, we may be required to file

infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

In addition, our patents may become, involved in inventorship, priority, or validity disputes.

or defend against such claims can be expensive and time-consuming, and our adversaries may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

Any claims we assert against perceived

infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both.

In an infringement proceeding, a court may decide that a patent is invalid or unenforceable or may refuse to stop the other party from using the technology at issue on the

grounds that our patents do not cover the technology in question.

Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating intellectual property rights we own or control.

result in any litigation proceeding could put one or more of our owned or in-licensed patents at risk of being invalidated or interpreted narrowly.

Further, because of the substantial amount of discovery required in connection with intellectual

property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

Even if resolved in our favor, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may

not be an adequate remedy.

Litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities.

In addition, there could be

public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our

common stock.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors may be able to sustain the costs of such

litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios.

Uncertainties resulting from the initiation and continuation of patent litigation

or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest and our business may

be adversely affected.

Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.

We rely on both registration and

common law protection for our trademarks.

We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our

markets of interest.

During trademark registration proceedings, we may receive rejections.

Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

In addition, with the USPTO and

with comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.

Opposition or cancellation proceedings may be filed against our

trademarks, and our trademarks may not survive such proceedings.

If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.

Unresolved Staff Comments

We do not have any unresolved comments issued by the SEC Staff.

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What changed 10-K

Item 1. Business