What changed in this filing

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Item 1A. Risk Factors

2021-03-04 compared with 2020-03-11 · 182 added, 171 removed, 963 unchanged (27% of the section changed)

of Risk Factors

is a summary of the principal factors that make an investment in our common stock speculative or risky.

This summary does not

address all of the risks that we face.

Additional discussion of the risks summarized in this risk factor summary, and other risks

that we face, can be found below under the heading “Risk Factors”

and should be carefully considered, together with

other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common

have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable

will require additional capital to fund our operations and if we fail to obtain necessary financing we will not be able to complete

the development and commercialization of our product candidates.

are significantly dependent on the success of our DN-TNF product platform and Natural Killer Cell Priming Platform (INKmune) and

our product candidates based on these platforms.

need to attract and retain highly skilled personnel;

we may be unable to effectively manage growth with our limited resources.

depend upon our senior management and key consultants and their loss or unavailability could put us at a competitive disadvantage.

biotechnology and immunotherapy industries are characterized by rapid technological developments and a high degree of competition.

We may be unable to compete with more substantial enterprises.

can provide no assurance that our clinical product candidates will obtain regulatory approval or that the results of clinical

studies will be favorable.

discovery and development is a complex, time-consuming and expensive process with a high rate of failure.

may face legal claims;

legal disputes are expensive and we may not be able to afford the costs.

can provide no assurance of the successful and timely development of new products.

must comply with significant government regulations.

rely upon patents to protect our technology.

We may be unable to protect our intellectual property rights.

price of our common stock may be volatile.

market prices for our common stock may be adversely impacted by future events.

limited public trading market may cause volatility in the price of our common stock.

Rights Agreement contains anti-takeover provisions that could discourage, delay or prevent a change in control, which may cause

our stock price to decline.

should carefully consider the risks described below as well as other information provided to you in this document, including information

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RELATED TO OUR BUSINESS

have no approved products on the market and have generated no product revenues to date.

date, we have no approved products on the market and have generated no product revenues.

Until, and unless, we receive approval

from the FDA and other regulatory authorities for our product candidates, we cannot sell our products and will not have product

Therefore, for the foreseeable future, we will have to fund all of our operations and capital expenditures from the

net proceeds of the offering, cash on hand, licensing fees and grants and additional financings, to the extent such financings

can be obtained.

will need additional capital.

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a dilutive effect on our stockholders.

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

of December 31, 2019, the Company had an accumulated deficit of $21,276,181.

Losses have principally occurred as a result of non-cash

stock-based compensation expense and the substantial resources required for research

and development of the Company’s product candidates which included the general and administrative expenses associated with

its organization and product development as well as the lack of sources of revenues until such time as the Company’s products

are commercialized.

These factors raise substantial doubt about the Company’s ability to continue as a going concern for

the 12 months from the issuance date of these financial statements.

These financial statements do not include any adjustments

to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of

liabilities that may result from the outcome of these uncertainties.

Management intends to pursue additional funding and implement

its strategic plan to allow the opportunity for the Company to continue as a going concern, however, there cannot be any assurance

that we will be successful in doing so.

The opinion of our independent registered public accounts on our audited financial statements

for the year ended December 31, 2019, contains an explanatory paragraph regarding substantial doubt about our ability to continue

as a going concern.

is no assurance that we will be successful in raising the additional funds needed to fund our business plan.

If we are not able

to raise sufficient capital in the near future, our continued operations will be in jeopardy and we may be forced to cease operations

and sell or otherwise transfer all or substantially all of our remaining assets.

face intense competition in the markets targeted by our lead product candidates.

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are a party to a number of licenses that give us rights to third-party intellectual property that is necessary or useful to our

To this end, we are dependent on our licenses with Xencor, Inc., Immune Ventures, LLC and the University of Pittsburgh.

Our success will depend in part on the ability of our licensors to obtain, maintain and enforce our licensed intellectual property.

Our licensors may not successfully prosecute any applications for or maintain intellectual property to which we have licenses,

may determine not to pursue litigation against other companies that are infringing such intellectual property, or may pursue such

litigation less aggressively than we would.

Without protection for the intellectual property we license, other companies might

be able to offer similar products for sale, which could adversely affect our competitive business position and harm our business

If we lose any of our right to use third-party intellectual property, it could adversely affect our ability to commercialize

our technologies, products or services, as well as harm our competitive business position and our business prospects.

To this end, we are dependent on our licenses with Xencor, Inc., Immune Ventures, LLC the University of Pittsburgh and

University College London.

Our success will depend in part on the ability of our licensors to obtain, maintain and enforce our

licensed intellectual property.

Our licensors may not successfully prosecute any applications for or maintain intellectual property

to which we have licenses, may determine not to pursue litigation against other companies that are infringing such intellectual

property, or may pursue such litigation less aggressively than we would.

Without protection for the intellectual property we license,

other companies might be able to offer similar products for sale, which could adversely affect our competitive business position

and harm our business prospects.

If we lose any of our right to use third-party intellectual property, it could adversely affect

our ability to commercialize our technologies, products or services, as well as harm our competitive business position and our

business prospects.

are dependent on our licensing agreement with Xencor and the termination of this agreement could a have an adverse effect on our

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our business could be negatively impacted.

officers and Directors own the company that we license our principal patent from.

October 29, 2015, we entered into an exclusive license agreement with Immune Ventures, LLC, the owner of all the rights related

to our principal patent.

The license agreement relates to our natural killer program, INKmue.

Immune Ventures is owned by our

President and a member of our Board of Directors, David Moss, our Chief Financial Officer and Treasurer and Mark Lowdell, our

Chief Scientific Officer.

Because our officers and directors also own Immune Ventures there may be an inherent conflict of interest

which could result in unanticipated actions that adversely affect us.

officers and Directors own the company that we license our INKmune patent from.

October 29, 2015, we entered into an exclusive license agreement with Immune Ventures, LLC (Immune Ventures).

The license agreement

relates to our natural killer program, INKmune.

Immune Ventures is owned by our President and a member of our Board of Directors,

David Moss, our Chief Financial Officer and Treasurer and Mark Lowdell, our Chief Scientific Officer.

Because our officers and

directors also own Immune Ventures there may be an inherent conflict of interest which could result in unanticipated actions that

adversely affect us.

have a limited operating history, and expect to incur significant additional operating losses.

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reasons that may not be related to our product candidate;

participating

patients may be subject to unacceptable health risks;

may not complete clinical trials due to safety issues, side effects, or other reasons;

in regulatory requirements and guidance may occur, which require us to amend clinical trial protocols to reflect these changes;

third-party contractors, including those manufacturing our product candidate or components or ingredients thereof or conducting

clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us

in a timely manner or at all;

participating patients

may be subject to unacceptable health risks;

patients may not

complete clinical trials due to safety issues, side effects, or other reasons;

changes in regulatory

requirements and guidance may occur, which require us to amend clinical trial protocols to reflect these changes;

our third-party

contractors, including those manufacturing our product candidate or components or ingredients thereof or conducting clinical

trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely

manner or at all;

or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective

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on our anticipated timeline, or at all, and our receipt of necessary regulatory approvals could be delayed or prevented.

may not be able to initiate or continue clinical trials for INKmune or any other product candidate if we are unable to locate

and enroll a sufficient number of eligible patients to participate in clinical trials.

Patient enrollment is a significant factor

in the timing of clinical trials, and is affected by many factors, including:

may not be able to initiate or continue clinical trials for INKmune our DN-TNF product platform or any other product candidate

if we are unable to locate and enroll a sufficient number of eligible patients to participate in clinical trials.

Patient enrollment

is a significant factor in the timing of clinical trials, and is affected by many factors, including:

size and nature of the patient population;

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have never commercialized a product.

Even if INKmune, INB03, XPro1595, LivNate, or any other product candidate we develop is approved

by the appropriate regulatory authorities for marketing and sale, it may nonetheless fail to gain sufficient market acceptance

by physicians, patients, third-party payors and others in the medical community.

For example, physicians are often reluctant to

switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the

Further, patients often acclimate to the therapy that they are currently taking and do not want to switch unless their

physicians recommend switching products or they are required to switch therapies due to lack of reimbursement for existing therapies.

Even if INKmune, our DN-TNF product platform (INB03, XPro1595, Quellor, LIVNate), or any

other product candidate we develop is approved by the appropriate regulatory authorities for marketing and sale, it may nonetheless

fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.

example, physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective

or convenient treatments enter the market.

Further, patients often acclimate to the therapy that they are currently taking and

do not want to switch unless their physicians recommend switching products or they are required to switch therapies due to lack

of reimbursement for existing therapies.

to educate the medical community and third-party payors on the benefits of our product candidate may require significant resources

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be smaller than our estimates of the potential market opportunities.

if we obtain regulatory approvals for INKmune and/or INB03, XPro1595, LivNate, those approvals and ongoing regulation of our products

may limit how we manufacture and market our products, which could prevent us from realizing the full benefit of our efforts.

we obtain regulatory approvals, INKmune and/or INB03 therapy, and the manufacturing facilities used for its production will be

subject to continual review, including periodic inspections, by the FDA and other United States and foreign regulatory authorities.

In addition, regulatory authorities may impose significant restrictions on the indicated uses or marketing of INKmune or other

products that we may develop.

These and other factors may significantly restrict our ability to successfully commercialize INKmune.

if we obtain regulatory approvals for INKmune and/or any product from our DN-TNF platform (INB03, XPro1595, Quellor, LIVNate)

those approvals and ongoing regulation of our products may limit how we manufacture and market our products, which could prevent

us from realizing the full benefit of our efforts.

we obtain regulatory approvals, INKmune and/or the DN-TNF product platform, and the manufacturing facilities used for its production

will be subject to continual review, including periodic inspections, by the FDA and other United States and foreign regulatory

In addition, regulatory authorities may impose significant restrictions on the indicated uses or marketing of INKmune

or other products that we may develop.

These and other factors may significantly restrict our ability to successfully commercialize

and many of our vendors and suppliers will be required to comply with current Good Manufacturing Practices, or GMP, which include

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The discovery of previously unknown problems with INKmune,

INB03 or manufacturing facilities used to manufacture INKmune or INB03 may result in restrictions or sanctions on our products

or manufacturing facilities, including withdrawal of our products from the market.

Regulatory agencies may also require us to

reformulate our products, conduct additional clinical trials, make changes in the labeling of our product or obtain re-approvals.

This may cause our reputation in the market place to suffer or subject us to lawsuits, including class action suits.

the DN-TNF product platform or manufacturing facilities used to manufacture INKmune or the DN-TNF product platform may result

in restrictions or sanctions on our products or manufacturing facilities, including withdrawal of our products from the market.

Regulatory agencies may also require us to reformulate our products, conduct additional clinical trials, make changes in the labeling

of our product or obtain re-approvals.

This may cause our reputation in the market place to suffer or subject us to lawsuits,

including class action suits.

our product candidates receive marketing approval and we, or others, later discover that the drug is less effective than previously

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from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to

INKmune and any other of our product candidates that we may seek to develop or commercialize in the future.

Specifically, due

to the large unmet medical need, global demographics and relatively attractive reimbursement dynamics, the oncology market is

fiercely competitive and there are a number of large pharmaceutical and biotechnology companies that currently market and sell

products or are pursuing the development of product candidates for the treatment of cancer.

Our competitors may succeed in developing,

acquiring or licensing technologies and drug products that are more effective, have fewer or more tolerable side effects or are

less costly than any product candidates that we are currently developing or that we may develop, which could render our product

candidates obsolete and noncompetitive.

INKmune, our DN-TNF product platform, and any other of our product candidates that we may seek to develop or commercialize in

Specifically, due to the large unmet medical need, global demographics and relatively attractive reimbursement dynamics,

the oncology market is fiercely competitive and there are a number of large pharmaceutical and biotechnology companies that currently

market and sell products or are pursuing the development of product candidates for the treatment of cancer.

Our competitors may

succeed in developing, acquiring or licensing technologies and drug products that are more effective, have fewer or more tolerable

side effects or are less costly than any product candidates that we are currently developing or that we may develop, which could

render our product candidates obsolete and noncompetitive.

rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able

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Regardless of the merits or eventual outcome, liability claims may result in:

demand for our product candidate or products that we may develop;

decreased demand

for our product candidate or products that we may develop;

to our reputation and significant negative media attention;

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a district court action.

Business or economic disruptions

or global health concerns could seriously harm our development efforts and increase our costs and expenses.

Broad-based business or economic disruptions could adversely

affect our ongoing or planned research and development activities.

For example, in December 2019 an outbreak of a novel strain

of coronavirus originated in Wuhan, China, and has since spread to a number of other countries, including the United States.

date, this outbreak has already resulted in extended shutdowns of certain businesses in the Wuhan region and has had ripple effects

to businesses around the world.

Global health concerns, such as coronavirus, could also result in social, economic, and labor instability

in the countries in which we or the third parties with whom we engage operate.

We cannot presently predict the scope and severity

of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the suppliers,

clinical trial sites, regulators and other third parties with whom we conduct business, were to experience shutdowns or other business

disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively

It is also possible that global health concerns such as this one could disproportionately impact the clinical sites in

which we conduct any of our clinical trials, which could have a material adverse effect on our business and our results of operation

and financial condition.

The Company has not yet experienced any known business disruptions as a result of the coronavirus.

United Kingdom’s vote in favor of withdrawing from the European Union could lead to increased market volatility which could

make it more difficult for us to do business in the U.K.

or have other adverse effects on our business.

United Kingdom approved the Withdrawal Agreement and left the European Union on January 31, 2020.

As a result, we may face new

regulatory costs and challenges that could have a material adverse effect on our operations.

In addition, currency exchange rates

in the pound sterling and the euro with respect to each other and the U.S.

dollar have already been adversely affected by Brexit.

Should this foreign exchange volatility continue it could cause volatility in our financial results.

Further this could change

or eliminate the R&D rebate program that the company uses to help fund R&D and clinical trials.

or economic disruptions or global health concerns could seriously harm our development efforts and increase our costs and expenses.

business or economic disruptions could adversely affect our ongoing or planned research and development activities.

in December 2019 an outbreak of a novel strain of coronavirus originated in Wuhan, China, and has since spread to a number of

other countries, including the United States.

To date, this outbreak has already resulted in extended shutdowns of certain businesses

in the Wuhan region and has had ripple effects to businesses around the world.

Global health concerns, such as coronavirus, could

also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.

We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the

third parties with whom we engage, including the suppliers, clinical trial sites, regulators and other third parties with whom

we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner

and on the timelines presently planned could be materially and negatively impacted.

It is also possible that global health concerns

such as this one could disproportionately impact the clinical sites in which we conduct any of our clinical trials, which could

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

The Company has not

yet experienced any known business disruptions as a result of the coronavirus.

may face business disruption and related risk s resulting from President Biden’s invocation of the Defense

Production Act, which could have a material adverse effect on our business.

response to the COVID-19 pandemic, President Biden invoked the Defense Production Act (the “Defense Production

Pursuant to the Defense Production Act, the federal government may, among other things, require domestic industries

to provide essential goods and services needed for the national defense.

While we have not experienced any impact on our business

as a result of such actions, we continue to assess the potential impact that the invocation of the Defense Production Act may

have on our ability to effectively conduct our business operations as planned, either as a result of becoming directly subject

to the requirements of the Defense Production Act, our suppliers becoming so subject and diverting deliveries of raw materials

elsewhere, or otherwise.

There can be no assurance that we will not be impacted by any action taken by the federal government

under the Defense Production Act, and any resulting disruption on our ability to conduct business could have a material adverse

effect on our financial condition and results or operations.

cybersecurity incident and other technology disruptions could negatively affect our business and our relationships with customers.

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Related to our Common Stock

Company’s common stock is controlled by insiders.

Company’s officers and directors beneficially own 71.68% of our outstanding common stock.

Accordingly, shareholders may

have no effective voice in the management of the Company.

do not intend to pay dividends for the foreseeable future.

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and could significantly affect the value of any investment in our Company.

articles of incorporation allow for our board to create new series of preferred stock without further approval by our stockholders,

which could adversely affect the rights of the holders of our common stock.

Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock.

Directors will have the authority to issue up to 10,000,000 shares of our preferred stock without further stockholder approval.

As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders the

preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the

holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our

common stock.

In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater

voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power

of our common stock or result in dilution to our existing stockholders.

are subject to the reporting requirements of federal securities laws, which can be expensive and may divert resources from other

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order to develop and implement appropriate internal controls and reporting procedures.

have elected to take advantage of specified reduced disclosure requirements applicable to an “emerging growth company”

under the JOBS Act, the information that we provide to stockholders may be different than they might receive from other public

a company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”

under the JOBS Act.

As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements

that are otherwise applicable generally to public companies.

These provisions include:

two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly

reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

disclosure about our executive compensation arrangements;

non- binding advisory votes on executive compensation or golden parachute arrangements;

from the auditor attestation requirement in the assessment of our internal control over financial reporting and delaying the

adoption of new or revised accounting standards that have different effective dates for public and private companies until

those standards apply to private companies.

have elected to take advantage of the above-referenced exemptions and we may take advantage of these exemptions for up to five

years or such earlier time that we are no longer an emerging growth company.

We would cease to be an emerging growth company if

we have more than $1 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates,

or we issue more than $1 billion of non-convertible debt over a three-year period.

We may choose to take advantage of some but

not all of these reduced burdens.

We have not taken advantage of any of these reduced reporting burdens in this Annual Report,

although we may choose to do so in future filings.

If we do, the information that we provide stockholders may be different than

you might get from other public companies that comply with public company effective dates.

are an “emerging growth company”

within the meaning of the Securities Act of 1933, as amended, or the Securities Act,

and if we decide to take advantage of certain exemptions from various reporting requirements applicable to emerging growth companies,

our common stock could be less attractive to investors.

will remain an emerging growth company until the earliest of (1) the last day of the fiscal year during which we have total annual

gross revenues of $1.07 billion or more, (2) December 31, 2024 (the last day of the fiscal year following the fifth anniversary

of the completion of our initial public offering), (3) the date on which we have, during the previous three-year period, issued

more than $1.0 billion in non-convertible debt, and (4) the date on which we are deemed to be a “large accelerated filer”

under the Securities Exchange Act of 1934, as amended, or the Exchange Act (i.e., the first day of the fiscal year after we have

(a) more than $700.0 million in outstanding common equity held by our non-affiliates, measured each year on the last day

of our second fiscal quarter, and (b) been public for at least 12 months).

after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,”

would allow us to take advantage of many of the same exemptions from disclosure requirements including exemption from compliance

with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding

executive compensation in our periodic reports and proxy statements.

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.

stock price may be volatile.

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many of which are beyond our control, including the following:

in our industry;

pricing pressures;

ability to obtain working capital financing;

or departures of key personnel;

“public float”

in the hands of a small number of persons whose sales or lack of sales could result in positive

or negative pricing pressure on the market price for our common stock;

of our common stock;

ability to execute our business plan;

results that fall below expectations;

of any strategic relationship;

developments;

and other external factors;

changes in our industry;

competitive pricing

our ability to obtain

working capital financing;

additions or departures

of key personnel;

limited “public

in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing

pressure on the market price for our common stock;

sales of our common

our ability to execute

our business plan;

operating results

that fall below expectations;

loss of any strategic

relationship;

regulatory developments;

economic and other

external factors;

period-to-period

fluctuations in our financial results;

to develop or acquire new or needed technology or products.

inability to develop

or acquire new or needed technology or products.

addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated

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then current stockholders.

Anti-takeover

provisions in our stockholder rights plan could make a third-party acquisition of us difficult.

have a stockholder rights plan that may have the effect of discouraging unsolicited takeover proposals.

Specifically, the rights

issued under the stockholder rights plan could cause significant dilution to a person or group that attempts to acquire us on

terms not approved in advance by our board of directors.

The rights plan is not intended to prevent a takeover, and we believe

it will enable all our stockholders to realize the full potential value of their investment in the Company and protect the Company

and its stockholders from efforts to obtain control of the Company that are inconsistent with the best interests of the Company

and its stockholders.

The rights under the plan will expire on December 30, 2021, subject to a possible earlier expiration to

the extent provided in the stockholder rights plan, unless extended.

UNRESOLVED STAFF COMMENTS

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

What changed 10-K

Item 1A. Risk Factors