What changed in this filing

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Item 1A. Risk Factors

2023-03-27 compared with 2022-03-28 · 312 added, 256 removed, 1117 unchanged (34% of the section changed)

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for the foreseeable future.

are a clinical-stage biopharmaceutical company focused on developing a novel class of TSTx in oncology and inflammation.

Investment in

biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant

risk that a product candidate will fail to prove effective, gain regulatory approval or become commercially viable.

We do not have any

products approved by regulatory authorities and have not generated any revenues from collaboration or licensing agreements or product

sales to date, and have incurred significant research, development and other expenses related to our ongoing operations and expect to

continue to incur such expenses.

As a result, we have not been profitable and have incurred significant operating losses since our inception.

For the years ended December 31, 2021 and 2020, we reported net losses of $24,383,879 and $1,147,863, respectively.

As of December

31, 2021, we had an accumulated deficit of $29,755,534.

We are a clinical-stage biopharmaceutical company focused on developing

a novel class of TSTx in oncology and inflammation.

Investment in biopharmaceutical product development is highly speculative because

it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to prove effective, gain regulatory

approval or become commercially viable.

We do not have any products approved by regulatory authorities and have not generated any revenues

from collaboration or licensing agreements or product sales to date, and have incurred significant research, development and other expenses

related to our ongoing operations and expect to continue to incur such expenses.

As a result, we have not been profitable and have incurred

significant operating losses since our inception.

For the years ended December 31, 2022 and 2021, we reported net losses of $8,229,713

and $24,383,879, respectively.

As of December 31, 2022, we had an accumulated deficit of $37,985,247.

do not expect to generate revenues for many years, if at all.

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will need to raise significant additional capital to complete development and obtain regulatory approval for our product candidates.

Although we believe that our existing cash will be sufficient to meet our cash, operational and liquidity requirements for at

least 12 months from the filing date of this Annual Report on Form 10-K, our operating plan may change as a result of many factors currently

unknown to us, and we may need additional funds sooner than planned.

Although we believe that our existing cash balance of $13,436,714 as of December 31, 2022, and funds available to be raised pursuant to the Sales Agreement, will be sufficient to meet our cash, operational and liquidity requirements for at

least 12 months from March 27, 2023, our operating plan may change as a result of many factors currently unknown to us, and we may

need additional funds sooner than planned.

expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of our product

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ability to use net operating losses to offset future taxable income may be subject to limitations.

of December 31, 2021, we had federal net operating loss (“NOLs”) carryforwards of approximately $1,875,000.

NOLs generated in tax years ending on or prior to December 31, 2017 are only permitted to be carried forward for 20 years under applicable

As of December 31, 2022, we had federal net operating loss (“NOLs”)

carryforwards of approximately $5,800,000.

Our NOLs generated in tax years ending on or prior to December 31, 2017 are only permitted

to be carried forward for 20 years under applicable U.S.

tax laws, and will begin to expire, if not utilized, beginning in 2027.

These NOL carryforwards could expire unused and be unavailable

to offset future income tax liabilities.

Under the Tax Act, federal NOLs incurred in tax years ending after December 31, 2017 may be

carried forward indefinitely, but the deductibility of such federal NOLs is limited.

It is uncertain if and to what extent various states

will conform to the Tax Act, or whether any further regulatory changes may be adopted in the future that could minimize its applicability.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and certain corresponding provisions of state law, if

a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in the

ownership of its equity over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change

tax attributes to offset its post-change income may be limited.

NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities.

Under the Tax Act, federal NOLs incurred

in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.

It is uncertain if and to what extent various states will conform to the Tax Act, or whether any further regulatory changes may be adopted

in the future that could minimize its applicability.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended,

and certain corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined

as a greater than 50% change, by value, in the ownership of its equity over a three-year period, the corporation’s ability to use

its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.

Relating to the Development and Regulatory Approval of Our Product Candidates

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from the MMA may result in a similar reduction in payments from private payors.

Patient Protection and Affordable Care Act, as amended

by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Health Care Reform Law”) is

a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies

against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees

on the health industry and impose additional health policy reforms.

The Health Care Reform Law revised the definition of “average

manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states.

Further, the law

imposed a significant annual fee on companies that manufacture or import branded prescription drug products.

Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively,

the “Health Care Reform Law”) is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth

of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance

industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

The Health Care Reform Law

revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid

drug rebates to states.

Further, the law imposed a significant annual fee on companies that manufacture or import branded prescription

drug products.

Health Care Reform Law remains subject to legislative efforts to repeal, modify or delay the implementation of the law.

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Omnibus Budget Reconciliation Act of 1993 (42 U.S.C.

§ 1395nn) (the “Stark Law”) prohibit referrals by ordering

§ 1395nn) prohibit referrals by ordering

by a physician of “designated health services” which include pharmaceuticals and drugs that are payable, in whole or

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These state laws may cover all (not just Medicare and Medicaid) patients.

healthcare reform proposals in the past few years have attempted to expand the Stark Law to cover all patients as well.

If we violate

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manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples;

Physician Payments Sunshine Act which requires manufacturers of drugs, devices, biologics, and medical supplies for which payment

is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually

to the CMS, information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists,

podiatrists, and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and

teaching hospitals, and ownership and investment interests held by physicians and their immediate family members and applicable group

purchasing organizations;

law equivalents of each of the above federal laws, such as, Stark Law, anti-kickback and false claims laws which may apply to items

or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security

of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted

by federal laws, thus complicating compliance efforts.

or services reimbursed by any third-party payer, including commercial insurers, state laws that require pharmaceutical companies

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

by the federal government, state laws that require drug manufacturers to report information related to payments and other transfers

of value to physicians and other healthcare providers, marketing expenditures, or drug pricing, state and local laws that require

the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information

in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus

complicating compliance efforts.

our operations are found to be in violation of any of the laws described above or any governmental regulations that apply to us, we may

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we have limited financial and managerial resources, we intend to prioritize our efforts on specific research and development programs,

including clinical development of IMX-110, IMX-111 and IMX-120 or other future product candidates.

As a result, we may forgo or delay

pursuit of other opportunities, including with potential future product candidates that later prove to have greater commercial potential.

including clinical development of NXC-201, IMX-110, IMX-111 and IMX-120 or other future product candidates.

As a result, we may forgo

or delay pursuit of other opportunities, including with potential future product candidates that later prove to have greater commercial

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

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generate product revenue may be adversely affected and our business may suffer.

understanding of the number of people who suffer from certain types of cancers and inflammatory diseases as well as ulcerative colitis

and Crohn’s disease that our product candidates may have the potential to treat is based on estimates.

These estimates may prove

to be incorrect, and new studies may demonstrate or suggest a lower estimated incidence or prevalence of such diseases.

The number of

patients in the United States or elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our

current or potential future product candidates or patients may become increasingly difficult to identify and access, all of which would

adversely affect our business prospects and financial condition.

understanding of the number of people who suffer from certain types of cancers, hematologic malignancies and inflammatory diseases as

well as ulcerative colitis and Crohn’s disease that our product candidates may have the potential to treat is based on estimates.

These estimates may prove to be incorrect, and new studies may demonstrate or suggest a lower estimated incidence or prevalence of such

The number of patients in the United States or elsewhere may turn out to be lower than expected, may not be otherwise amenable

to treatment with our current or potential future product candidates or patients may become increasingly difficult to identify and access,

all of which would adversely affect our business prospects and financial condition.

products will face significant competition, and if they are unable to compete successfully, our business will suffer.

compete in an industry that is characterized by:

(i) rapid technological change, (ii) evolving industry standards, (iii) emerging competition,

(iv) new product introductions and (v) an emphasis on proprietary and novel products and product candidates.

Our competitors, some of

which include larger pharmaceutical companies, biotechnology companies, and academic institutions, have and may develop products and

technologies that will compete with our products and technologies.

Specifically, we face competition from companies developing therapies

for both oncology and inflammation some of which include Kymera Therapeutics Inc., Morphic Holding Inc., and RAPT Therapeutics Inc.

addition, we face competition from companies developing therapies for IBD (including UC and CD) some of which include Arena Pharmaceuticals

Inc., Landos Biopharma Inc., and Seres Therapeutics Inc.

Moreover, companies with approved therapies and that are developing therapies

for soft tissue sarcoma include, but are not limited to, BioAtla Inc., Epizyme Inc., Nanobiotix SA, C4 Therapeutics, Inc., Adaptimmune

Therapeutics plc, Eisai, Novartis, and Janssen/Johnson & Johnson, and a company developing multi-kinase inhibitors is Mirati Therapeutics,

(i) rapid technological

change, (ii) evolving industry standards, (iii) emerging competition, (iv) new product introductions and (v) an emphasis on proprietary

and novel products and product candidates.

Our competitors, some of which include larger pharmaceutical companies, biotechnology companies,

and academic institutions, have and may develop products and technologies that will compete with our products and technologies.

Specifically,

we face competition from companies developing therapies for both oncology and inflammation some of which include Kymera Therapeutics Inc.,

Morphic Holding Inc., and RAPT Therapeutics Inc.

In addition, we face competition from companies developing therapies for IBD (including

UC and CD) some of which include Arena Pharmaceuticals Inc., Landos Biopharma Inc., and Seres Therapeutics Inc.

Moreover, companies with

approved therapies and that are developing therapies for soft tissue sarcoma include, but are not limited to, BioAtla Inc., Epizyme Inc.,

Nanobiotix SA, C4 Therapeutics, Inc., Adaptimmune Therapeutics plc, Eisai, Novartis, and Janssen/Johnson & Johnson, and a company

developing multi-kinase inhibitors is Mirati Therapeutics, Inc.

We also face competition from companies developing CAR-Ts targeting multiple

myeloma, some of which include Janssen/Johnson & Johnson, Bristol Myers Squibb, and Arcellx, Inc.

and companies developing therapies

for AL amyloidosis some of which include Prothena Corp, Caelum Biosciences (Now Alexion/AstraZeneca), and Janssen/Johnson & Johnson.

We also compete with these organizations to recruit management, scientists and clinical development personnel, which could negatively

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studies and clinical trials and the use and sufficiency of our existing cash.

outbreak of COVID-19 evolved into a global pandemic.

The extent to which COVID-19 impacts our business and operating results will depend

on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning

COVID-19, including various variants, and the actions to contain the virus or treat its impact, among others.

Many countries around the

world have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus.

spread of an infectious disease, including COVID-19, may also result in the inability of our suppliers to deliver supplies to us on a

timely basis.

We currently utilize third parties to, among other things, manufacture components of our product candidates and, in the

future, intend to utilize third parties to conduct our pre-clinical studies and clinical trials.

If either we or any third-party parties

in the supply chain for materials used in the production of our product candidates are adversely impacted by restrictions resulting from

the COVID-19 pandemic, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our pre-clinical

studies and clinical trials.

COVID-19 pandemic could also potentially affect the business of the FDA or other health authorities, which could result in delays in

meetings related to current and planned clinical trials and ultimately of reviews and approvals of our product candidates.

and deaths related to COVID-19 are disrupting certain healthcare and healthcare regulatory systems worldwide.

The effects of COVID-19

may also slow potential enrollment of current and planned clinical trials, reduce the number of eligible patients for our current and

planned clinical trials, create difficulties in recruiting clinical site investigators and staff, divert healthcare resources away from

the conduct of clinical trials, delay receiving approval from local authorities to initiate our current and planned clinical trials,

delay necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations

in employee resources or forced furlough of government employees, interrupt key clinical trial activities (like site monitoring) due

to travel limitations imposed by authorities, and create difficulties in data collection and analysis, among other things.

It is unknown

how long these disruptions could continue, were they to occur.

Any elongation or de-prioritization of our pre-clinical or clinical studies

or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates.

Any delays to our current and planned timelines could also impact the use and sufficiency of our existing cash reserves, and we may be

required to raise additional capital earlier than we had previously planned.

We may be unable to raise additional capital if and when

needed, which may result in further delays or suspension of our development plans.

If we are able to raise additional capital, challenging

and uncertain economic conditions can make capital raising costly and dilutive.

spread of COVID-19, which has caused a broad impact globally, including restrictions on travel and quarantine policies put into place

by businesses and governments, may have a material economic effect on our business.

While the potential economic impact brought by and

the duration of the pandemic may be difficult to assess or predict, it has already caused, and is likely to result in further, significant

disruption of global financial markets.

In addition, a recession, depression or other sustained adverse market event resulting from the

global effort to control COVID-19 infections could materially and adversely affect our business and the value of our common stock.

COVID-19 pandemic and mitigation measures also have had, and may continue to have, an adverse impact on global economic conditions

which could have an adverse effect on our business and financial condition, including impairing our ability to raise capital when

The extent to which the COVID-19 pandemic impacts our business and operations will depend on future developments that are

highly uncertain and cannot be predicted, including new information that may emerge concerning variants and the severity of such

variants and the actions to contain its impact.

Such events may result in a period of business disruption, and in reduced

operations, any of which could materially affect our business, financial condition and results of operations.

We do not yet know the

full extent of potential delays or impacts on our business, our pre-clinical studies and clinical trials, healthcare systems or the

outbreak of COVID-19 evolved into a global pandemic and spread to many regions of the world.

The extent to which COVID-19 impacts our

business and operating results may continue to depend on future developments that are uncertain and cannot be accurately predicted, including

new information that may emerge concerning COVID-19, including various variants, and the actions to contain the virus or treat its impact,

among others.

spread of an infectious disease, such as COVID-19, may also result in the inability of our suppliers to deliver supplies to us on a timely

We currently utilize third parties to, among other things, manufacture components of our product candidates and, in the future,

intend to utilize third parties to conduct our pre-clinical studies and clinical trials.

If either we or any third-party parties in the

supply chain for materials used in the production of our product candidates are adversely impacted by restrictions resulting from a health

epidemic such as COVID-19, which, among other things, resulted in quarantines and restrictions on travel, our supply chain may be disrupted,

limiting our ability to manufacture our product candidates for our pre-clinical studies and clinical trials.

and deaths related to a health epidemic may also disrupt the United States’ healthcare and healthcare regulatory systems as well

as other healthcare systems which could divert healthcare resources away from, or materially delay review and/or approval of our product

candidates by the FDA and other regulatory agencies.

Furthermore, a health epidemic may also slow potential enrollment of current and

planned clinical trials, reduce the number of eligible patients for our current and planned clinical trials, create difficulties in recruiting

clinical site investigators and staff, divert healthcare resources away from the conduct of clinical trials, delay receiving approval

from local authorities to initiate our current and planned clinical trials, delay necessary interactions with local regulators, ethics

committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees,

interrupt key clinical trial activities (like site monitoring) and create difficulties in data collection and analysis, among other things.

spread of COVID-19, which caused a broad impact globally may have a material economic effect on our business.

While the potential economic

impact brought by the pandemic may be difficult to assess or predict, it has already caused, and is likely to result in further, significant

disruption of global financial markets which may reduce our ability to access capital either at all or on favorable terms.

a recession, depression or other sustained adverse market event resulting from COVID-19 could materially and adversely affect our business

and the value of our common stock.

ultimate impact of the current pandemic, or any other health epidemic, is highly uncertain and subject to change.

We do not yet know

the full extent of potential delays or impacts on our business, our pre-clinical studies and clinical trials, healthcare systems or the

global economy as a whole.

However, these effects could have a material impact on our operations, and we will continue to monitor

the situation closely.

However, these effects could have a material impact on our operations.

international operations we undertake may subject us to risks inherent with operations outside of the United States.

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maintain an effective management team and work force could adversely affect our ability to operate, grow and manage our business.

employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities,

employees, consultants, commercial partners and vendors may engage in misconduct or other improper activities,

including non-compliance with regulatory standards and requirements.

are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial

are exposed to the risk of employee fraud or other illegal activity by our employees, consultants, commercial

partners and vendors.

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or reputational harm.

Because Immix Biopharma

and certain of its affiliates control a significant number of securities of Nexcella, it may have effective control over actions requiring

Nexcella stockholder approval.

As of March 20, 2023, Immix Biopharma and certain of its affiliates (Ilya Rachman, our Chief

Executive Officer and Chairman and Gabriel Morris, our Chief Financial Officer and director) collectively own 5,044,988 shares of Nexcella’s

common stock, or 98.50% of Nexcella’s outstanding common stock, 1,000,000 shares of Nexcella’s Class A common stock, or 100%

of Nexcella’s outstanding Class A common stock and 250,000 shares of Nexcella’s Class A preferred stock, or 100% of Nexcella’s

outstanding Class A preferred stock.

Therefore, Immix Biopharma would have the ability to control the outcome of matters submitted to

Nexcella’s stockholders for approval.

Relating to our Intellectual Property

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to our business.

may be required to enter into intellectual property license agreements that are important to our business.

These license agreements may

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

For example, we may enter into exclusive license agreements

with various universities and research institutions, we may be required to use commercially reasonable efforts to engage in various development

and commercialization activities with respect to licensed products, and may need to satisfy specified milestone and royalty payment obligations.

If we fail to comply with any obligations under any potential agreements with any of these licensors, we may be subject to termination

of the license agreement in whole or in part;

increased financial obligations to our licensors or loss of exclusivity in a particular

field or territory, in which case our ability to develop or commercialize products covered by the license agreement will be impaired.

have and may, in the future, be required to enter into intellectual property license agreements that are important to our business.

license agreements may impose various diligence, milestone payment, royalty and other obligations on us.

For example, we may enter into

exclusive license agreements with various universities and research institutions, we may be required to use commercially reasonable efforts

to engage in various development and commercialization activities with respect to licensed products, and may need to satisfy specified

milestone and royalty payment obligations.

If we fail to comply with any obligations under any potential agreements with any of these

licensors, we may be subject to termination of the license agreement in whole or in part;

increased financial obligations to our licensors

or loss of exclusivity in a particular field or territory, in which case our ability to develop or commercialize products covered by

the license agreement will be impaired.

addition, disputes may arise regarding intellectual property subject to a license agreement, including:

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protection could adversely affect our business.

may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed alleged trade secrets.

is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology

or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees, consultants

and independent contractors 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 our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed trade secrets or other

proprietary information of their former employers.

Litigation may be necessary to defend against these claims.

If we fail in defending

any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could

adversely impact our business.

Even if we are successful in defending against these claims, litigation could result in substantial costs

and be a distraction to management.

may be subject to claims that our employees or consultants have wrongfully used or disclosed alleged

trade secrets.

As is common in the biotechnology

and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies,

including our competitors or potential competitors.

Although we try to ensure that our employees or consultants 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 our employees or consultants have inadvertently

or otherwise used or disclosed trade secrets or other proprietary information of their former employers.

Litigation may be necessary to

defend against these claims.

If we fail in defending any such claims, in addition to paying monetary damages, we could lose valuable intellectual

property rights or personnel, which could adversely impact our business.

Even if we are successful in defending against these claims,

litigation could result in substantial costs and be a distraction to management.

intellectual property may not be sufficient to protect our product candidates from competition, which may negatively affect our business.

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business and results of operations could suffer.

August 2016, we formed a wholly-owned Australian subsidiary, Immix Biopharma Australia Pty Ltd to conduct various pre-clinical and clinical

activities for our product and development candidates in Australia.

Due to the geographical distance and lack of employees currently

in Australia, as well as our lack of experience operating in Australia, we may not be able to efficiently or successfully monitor, develop

and commercialize our lead products in Australia, including conducting clinical trials.

Furthermore, we have no assurance that the results

of any clinical trials that we conduct for our product candidates in Australia will be accepted by the FDA or foreign regulatory authorities

for development and commercialization approvals.

In August 2016, we formed a wholly-owned

Australian subsidiary, Immix Biopharma Australia Pty Ltd to conduct various pre-clinical and clinical activities for our product and development

candidates in Australia.

We may not be able to efficiently or successfully monitor, develop and commercialize our lead products in Australia,

including conducting clinical trials.

Furthermore, we have no assurance that the results of any clinical trials that we conduct for our

product candidates in Australia will be accepted by the FDA or foreign regulatory authorities for development and commercialization approvals.

addition, current Australian tax regulations provide for a refundable research and development tax credit equal to 43.5% of qualified

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be adversely affected.

Breakthrough Therapy Designation, Fast

Track Designation or RPDD by the FDA, and equivalents granted by other regulatory authorities, even if granted for any of our

product candidates developed for therapeutic indications, may not lead to a faster development, regulatory review or approval

process, and it does not increase the likelihood that any of our product candidates will receive marketing approval in any

jurisdiction.

We may seek a Breakthrough Therapy Designation for some of our product

A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies,

to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate

substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects

observed early in clinical development.

For therapies that have been designated as breakthrough therapies, interaction and communication

between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the

number of patients placed in ineffective control regimens.

Therapies designated as breakthrough therapies by the FDA may also be eligible

for priority review and accelerated approval.

Designation as a breakthrough therapy is within the discretion of the FDA.

even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and

instead determine not to make such designation.

In any event, the receipt of a Breakthrough Therapy Designation for a product candidate

may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA

procedures and does not assure ultimate approval by the FDA.

In addition, even if one or more of our product candidates qualify as breakthrough

therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification or decide that the time

period for FDA review or approval will not be shortened.

We may seek Fast Track Designation for some of our product candidates

for therapeutic indications.

If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates

the potential to address unmet medical needs for this condition, the therapy sponsor may apply for Fast Track Designation.

Filling an unmet medical need is defined as providing a therapy where none

exists or providing a therapy which may be potentially better than available therapy.

broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation,

we cannot assure you that the FDA would decide to grant it.

Even if we do receive Fast Track Designation, we may not experience a faster

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

The FDA may withdraw Fast Track Designation if it believes

that the designation is no longer supported by data from our clinical development program.

Fast Track Designation alone does not guarantee

qualification for the FDA’s priority review procedures.

We may seek a RPDD for some of

our product candidates.

However, even if we believe a particular product candidate is eligible for this designation, we cannot guarantee

that FDA would agree.

The FDA may award priority review vouchers to sponsors of products that meet the definition of a “rare

pediatric disease.” A “rare pediatric disease” is a (a) serious or life-threatening disease in which the

serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called

neonates, infants, children, and adolescents;

and (b) rare disease or conditions within the meaning of the Orphan Drug Act.

However, this designation is at the discretion of the FDA and, even if we do receive a Rare Pediatric Disease Designation, we may

not experience a faster development process, review or approval compared to conventional FDA procedures and are still not guaranteed final

approval of our product candidate by the FDA.

Additionally, the benefits of a RPDD may not be available for future product candidates.

After September 30, 2024, the FDA may only award a voucher for an approved rare pediatric disease product application if the sponsor has

a RPDD for the drug that was granted by September 30, 2024.

After September 30, 2026, the FDA may not award any additional rare pediatric

disease priority review vouchers.

Related to Owning our Common Stock

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number of broker-dealers willing to execute trades in shares of our common stock.

amounts of our outstanding shares may be sold into the market when lock-up or market standoff periods end.

If there are substantial sales

of shares of our common stock, the price of our common stock could decline.

of our outstanding shares of common stock held by our directors, executive officers and our stockholders are subject to contractual lock-up

restrictions on resale.

Specifically, in connection with our initial public offering, our executive officers and directors agreed to

a 12 month lock-up restriction from the date of our prospectus in connection with our initial public offering and other stockholders

agreed to a 6 month lock-up restriction from the date of our prospectus in connection with our initial public offering.

If these stockholders

sell, or indicate an intent to sell, substantial amounts of our common stock in the public market after the expiration of the applicable

lock-up period, the trading price of our common stock could decline significantly.

certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions

requiring stockholder approval.

of March 23, 2022, our directors, executive officers and principal stockholders, and their respective affiliates,

beneficially own approximately 63.94% of our outstanding shares of common stock.

As a result, these stockholders, acting together,

would have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors

and any merger, consolidation or sale of all or substantially all of our assets.

In addition, these stockholders, acting together, would

have the ability to control the management and affairs of our Company.

Accordingly, this concentration of ownership might harm the market

price of our common stock by:

of March 17, 2023, our directors, executive officers and principal stockholders, and their respective affiliates, beneficially own approximately

64.73% of our outstanding shares of common stock.

As a result, these stockholders, acting together, would have the ability to control

the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation

or sale of all or substantially all of our assets.

In addition, these stockholders, acting together, would have the ability to control

the management and affairs of our Company.

Accordingly, this concentration of ownership might harm the market price of our common stock

deferring or preventing a change in corporate control;

4 unchanged sentences

declaring or paying any cash dividends for the foreseeable future.

Any return to stockholders will therefore be limited to the increase,

if any, of our share price.

Furthermore, any future debt agreements may also preclude us from paying

or place restrictions on our ability to pay dividends.

Any future determination as to the declaration and payment of dividends will be

at the discretion of our board of directors and will depend on factors the board of directors deems relevant, including among others,

our results of operations, financial condition and cash requirements, business prospects, and the terms of any of our financing arrangements.

Therefore, any return to stockholders may be limited to the increase, if any, of our share price.

There is no guarantee

that our stock will appreciate in value.

third amended and restated certificate of incorporation (“Amended and Restated Certificate of Incorporation”) and our amended

61 unchanged sentences

costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial

to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our

common stock.

If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

internal control over financial reporting is necessary for us to provide reliable financial reports in a timely manner.

Our management

concluded there was a material weakness in our internal control over financial reporting as of December 31, 2022 as, due to our small

size, and our limited number of personnel, we did not have in place an effective internal control environment with formal processes and

procedures, including journal entry processing and review, to allow for a detailed review of accounting transactions that would identify

errors in a timely manner.

A material weakness is a significant deficiency, or a combination of significant deficiencies, in internal

control over financial reporting such that it is reasonably possible that a material misstatement of the annual or interim financial

statements will not be prevented or detected on a timely basis.

We have implemented additional

review procedures including addition of accounting consultants to remediate such weakness.

While we believe that our remediation efforts

will resolve the identified material weakness, there is no assurance that such efforts will be sufficient or that additional actions will

not be necessary, which may undermine our ability to provide accurate, timely and reliable reports on our financial and operating results.

Furthermore, if we remediate our current material weakness but identify new material weaknesses in our internal control over financial

reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price

of our common stock may be negatively affected.

As a result of such failures, we could also become subject to investigations by Nasdaq,

the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation,

financial condition or divert financial and management resources from our business.

and economic conditions may negatively impact our business, financial condition and share price.

4 unchanged sentences

economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years.

Our general business strategy may be adversely affected by any such economic downturns (including the current downturn related to the

current COVID-19 pandemic), volatile business environments and continued unstable or unpredictable economic and market conditions.

these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete,

more costly, and more dilutive.

Failure to secure any necessary financing in a timely manner and on favorable terms could have a material

adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or

commercialization plans.

Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued

unstable or unpredictable economic and market conditions.

If these conditions continue to deteriorate or do not improve, it may make

any necessary debt or equity financing more difficult to complete, more costly, and more dilutive.

Failure to secure any necessary financing

in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share

price and could require us to delay or abandon development or commercialization plans.

securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our

13 unchanged sentences

cause our share price to fall.

In addition, the perception that sales of our common stock could occur, could cause our stock price to fall.

expect that significant additional capital will be needed to continue our planned operations, including increased marketing, hiring new

8 unchanged sentences

stockholders.

We are an “emerging growth company”

and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our

common stock less attractive to investors.

We are an “emerging

growth company,” as defined in the JOBS Act and we intend to take advantage of certain exemptions from various reporting requirements

that are applicable to other public companies that are not “emerging growth companies” including not being required to comply

with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive

compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote

on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, pursuant to

Section 107 of the JOBS Act, as an “emerging growth company” we intend to take advantage of the extended transition period

provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards.

In other words, an “emerging

growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

Furthermore, sales of a substantial number of our shares of common stock in the public markets or the perception

that such sales could occur, could depress the market price of our common stock and impair our ability to raise capital through the sale

of additional equity securities.

The number of shares of our common stock available

for future issuance or sale could adversely affect the per share trading price of our common stock.

We cannot predict whether future

issuances or sales of our common stock or the availability of shares for resale in the open market will decrease the per share trading

price of our common stock.

The issuance of a substantial number of shares of our common stock in the public market or the perception that

such issuances might occur could adversely affect the per share trading price of our common stock.

are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging

growth companies, which could make our common stock less attractive to investors.

are an “emerging growth company,” as defined in the JOBS Act and we intend to take advantage of certain exemptions from various

reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not

being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations

regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding

advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

pursuant to Section 107 of the JOBS Act, as an “emerging growth company” we intend to take advantage of the extended transition

period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards.

In other words,

an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors

find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price

may be more volatile.

We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total

annual gross revenues of $1.07 billion or more;

(ii) the last day of our fiscal year following the fifth anniversary of the date of the

completion of our initial public offering;

(iii) the date on which we have issued more than $1 billion in nonconvertible debt during

the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We may be at risk of securities class action

We may be at risk of securities

class action litigation.

In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility,

particularly when associated with binary events such as clinical trials and product approvals.

If we face such litigation, it could result

in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline

in the market price of our common stock.

Financial reporting obligations of being

a public company in the U.S.

are expensive and time-consuming, and our management will be required to devote substantial time to compliance

As a publicly traded company

we incur significant additional legal, accounting and other expenses.

The obligations of being a public company in the U.S.

require significant

expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting

obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the

Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of The Nasdaq Capital

These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal

control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult

to implement, monitor and maintain compliance with.

Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements,

rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging

growth company” or a “smaller reporting company.” Our management and other personnel will need to devote a substantial

amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out

of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

Failure to maintain effective internal controls

could cause our investors to lose confidence in us and adversely affect the market price of our common stock.

If our internal controls

are not effective, we may not be able to accurately report our financial results or prevent fraud.

Effective internal

control over financial reporting is necessary for us to provide reliable financial reports in a timely manner.

Our management concluded

there was a material weakness in our internal control over financial reporting as of December 31, 2021 as, due to our small size, and our limited number of personnel, we did not have in place an effective internal control

environment with formal processes and procedures, including journal entry processing and review, to allow for a detailed review of accounting

transactions that would identify errors in a timely manner.

A material weakness is a significant

deficiency, or a combination of significant deficiencies, in internal control over financial reporting such that it is reasonably possible

that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Although we have

implemented additional review procedures including addition of accounting consultants to remediate such weakness, the material

weakness cannot be considered remediated until the controls operate for a sufficient period of time and management concludes that

our internal controls are operating effectively.

While we believe that our remediation efforts will resolve the identified material

weakness, there is no assurance that such efforts will be sufficient or that additional actions will not be necessary, which may

undermine our ability to provide accurate, timely and reliable reports on our financial and operating results.

Furthermore, if we

remediate our current material weakness but identify new material weaknesses in our internal control over financial reporting in the

future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common

stock may be negatively affected.

As a result of such failures, we could also become subject to investigations by Nasdaq, the SEC,

or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation,

financial condition or divert financial and management resources from our business.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and

our stock price may be more volatile.

We may take advantage of these reporting exemptions until we are no longer an “emerging growth

company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in

which we have total annual gross revenues of $1.235 billion or more;

(ii) the last day of our fiscal year following the fifth anniversary

of the date of the completion of our initial public offering;

(iii) the date on which we have issued more than $1 billion in nonconvertible

debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the

may be at risk of securities class action litigation.

In the past, biotechnology and pharmaceutical companies have experienced significant

stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.

If we face such

litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our

business and results in a decline in the market price of our common stock.

reporting obligations of being a public company in the U.S.

are expensive and time-consuming, and our management will be required to

devote substantial time to compliance matters.

a publicly traded company we incur significant additional legal, accounting and other expenses.

The obligations of being a public company

require significant expenditures and place significant demands on our management and other personnel, including costs resulting

from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices,

including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements

of The Nasdaq Capital Market.

These rules require the establishment and maintenance of effective disclosure and financial controls and

procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that

are often difficult to implement, monitor and maintain compliance with.

Moreover, despite recent reforms made possible by the JOBS Act,

the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are

no longer an “emerging growth company” or a “smaller reporting company.” Our management and other personnel will

need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations,

otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

UNRESOLVED STAFF COMMENTS

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

What changed 10-K

Item 1A. Risk Factors