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Item 1. Business

2024-03-28 compared with 2023-03-02 · 1388 added, 1516 removed, 342 unchanged (89% of the section changed)

Our objective is to develop

and commercialize our product candidates to treat diseases where the innate immune system is dysfunctional causing and contributing to

and commercialize our product candidates to treat diseases where the innate immune system is dysfunctional causing or contributing to

the patient’s disease.

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However, age plays a significant role in the development of immune dysfunction.

Innate immune dysfunction can be in cancer where Natural

Killer (“NK”) cells are inactive and contribute to a tumor’s evasion of the immune system and/or disease progression.

Further, chronic inflammation causes expression of MUC4 and immunosuppressive cells of the tumor microenvironment proliferate to protect

the tumor from attack by the patient’s immune system and can cause other diseases such as neurologic and metabolic diseases where

chronic inflammation results in innate immune system dysfunction.

Our initial focus will be the treatment of cancer, treatment of Alzheimer’s

Disease (“AD”), the treatment of Treatment Resistant Depression (“TRD”) and an out-licensing strategy for Duchenne’s

Muscular Dystrophy (“DMD”).

In cancer, we plan to pursue two parallel development programs:

(1) with INKmune we will initially

focus on treating women with resistant disease relapse refractory carcinoma solid tumor and patients with high-risk myelodysplastic syndrome

(high risk MDS);

(2) with INB03, we plan to treat patients with cancers that express MUC4, a mucinous polyglucan on the surface of some

epithelial cancer cells, that appears to predict resistant to immunotherapy including women with MUC4 expressing HER2+ breast cancer and

potentially other MUC4 resistant cancers.

Our third drug candidate XPro1595 (“XPro”), targets Alzheimer’s Disease and

XPro for AD has completed Phase I trials and Phase II trials are underway in Australia and Canada.

The Company is currently in discussions

with the US FDA to obtain approval to commence the Phase II AD trials in the U.S.

which the FDA placed on full clinical hold on May 20,

XPro for TRD is being prepared for Phase II trials and will start after the FDA has cleared XPro for use in the US.

In early 2023,

the Company also announced pre-clinical data in DMD including new intellectual property for the purpose of trying to seek partnership

for the development of this program.

DMD is a X-linked genetic disease that occurs most often in young boys.

People with DMD do not produce

dystrophin, a protein necessary for normal skeletal muscle function.

The patients develop weakness of skeletal muscles initially seen

as weakness in standing and walking.

Innate immune dysfunction can be seen in cancer where

Natural Killer (“NK”) cells are impaired and facilitate a tumor’s evasion of the immune system and subsequent disease

Further, immunologically-mediated chronic inflammation causes expression of MUC4, inducing immunosuppressive cells of the

tumor microenvironment to proliferate and protect the tumor from attack by the patient’s immune system.

Chronic inflammation is

implicated in neurologic and metabolic diseases where it impairs the innate immune system.

Our initial focus is on the treatment of cancer,

Alzheimer’s Disease (“AD”), Treatment Resistant Depression (“TRD”) and an out-licensing strategy.

we plan to pursue two parallel development programs:

(1) with INKmune we are treating men with castration-resistant, metastatic prostate

cancer (“mCPRC”);

(2) with INB03, we plan to develop pre-clinical data in cancers that express MUC4, a mucinous polyglucan

on the surface of some epithelial cancer cells with a goal to out-license the program.

MUC4 expression appears to predict resistance to

immunotherapy including women with MUC4 expressing HER2+ breast cancer and potentially other MUC4 resistant cancers.

Our third drug candidate,

XPro1595 (“XPro”), targets Alzheimer’s Disease and TRD.

XPro for AD has completed Phase I trials and a Phase II trial

is open in, UK, EU, Australia and Canada.

XPro for TRD is being prepared for Phase II trials and will start after the current AD global

Phase II trial has completed recruitment.

In early 2023, the Company also announced pre-clinical data in Duchene’s Muscular Dystrophy

(“DMD”) including new intellectual property for the purpose of trying to seek partnership for the development of this program.

DMD is an X-linked genetic disease that occurs most often in young boys.

People with DMD do not produce dystrophin, a protein necessary

for normal skeletal muscle function.

The patients develop weakness of skeletal muscles initially seen as weakness in standing and walking.

Over time, the disease progresses forcing the patient to be wheelchair bound by early teens.

patients die young due to respiratory and cardiac failure before they reach thirty years old.

Therapies for DMD delay progression, there

The overall principal components

of our business strategy to achieve these objectives are to:

pursue development strategies and regulatory approval pathways that allow the treatment of oncology patients with our lead product candidates, INKmune and INB03;

pursue development strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidates, XPro;

Pursue development strategies with a dominant-negative

tumor necrosis factor (“DN-TNF”) compound for the treatment of DMD;

adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas;

provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates;

Collaborate with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03 and XPro product candidates, our DMD DN-TNF candidate and other products that will benefit from development or marketing beyond our current resources.

The patients typically die young due to respiratory

and cardiac failure before they reach thirty years old.

Therapies for DMD delay progression, there is no cure.

overall principal components of our business strategy to achieve these objectives are to:

pursue development strategies and regulatory approval

pathways that allow us to expand the treatment of oncology patients with our lead product candidate INKmune;

pursue pre-clinical development strategies to facilitate out-licensing

pursue development strategies

and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidate,

development strategies with a dominant-negative tumor necrosis factor (“DN-TNF”) compound for the treatment of DMD;

a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand

our IP suite into related immunotherapeutic areas;

clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement

for our product candidates;

with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03

and XPro product candidates, our DMD DN-TNF candidate and other products that will benefit from development or marketing beyond our

current resources.

Pursue development and

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such designation, but plan to do so in the future.

We believe the INKmune MDS cancer program may qualify for orphan status.

that it would take a minimum of six months to receive Orphan Drug status once we apply for application and a minimum of 12 months

to receive a designation once we submit an application.

We might never have these discussions, submit applications under the Orphan Drug

Act or the FDA Accelerated Approval Program or have these applications approved if we do.

Adopt a two-pronged patent

We are pursuing a two-pronged product development strategy that will seek to solidify our existing IP to prevent competition

and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP (see “Intellectual Property”)

will allow us both freedom-to-operate and provide robust protection from outside competition.

We will continue to invest in expanding

our patent suite.

We will also seek to further to strengthen our IP position by looking to in-license IP related to our focus on the innate

immune system.

We believe the INKmune program to treat castration resistant prostate cancer may qualify

for orphan status.

We believe that it would take a minimum of six months to receive Orphan Drug status once we apply for application

and a minimum of 12 months to receive a designation once we submit an application.

We might never have these discussions, submit applications

under the Orphan Drug Act or the FDA Accelerated Approval Program or have these applications approved if we do.

a two-pronged patent strategy.

We are pursuing a two-pronged product development strategy that will seek to solidify our existing

IP to prevent competition and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP (see

“Intellectual Property”) will allow us both freedom-to-operate and provide robust protection from outside competition.

will continue to invest in expanding our patent suite.

We will also seek to further strengthen our IP position by looking to in-license

IP related to our focus on the innate immune system.

Provide clear value propositions

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At the patient level,

we believe INKmune and INB03 therapy, if approved, should improve survival and quality of life.

At the payor level, we believe INKmune,

if approved, should provide more predictable costs and outcomes.

Therapies for Alzheimer’s disease are needed for medical, social

and economic reasons.

we believe INKmune, if approved, should improve survival and quality of life.

At the payor level, we believe INKmune, if approved, should

provide more predictable costs and outcomes.

Therapies for Alzheimer’s disease are needed for medical, societal and economic reasons.

The cost of Alzheimer’s disease to the government is large and growing.

Recently approved therapies that target

amyloid have a modest impact on disease progression and are difficult to use due to side-effects in some patients.

The cost of AD

to families and care givers is real and burdensome.

We believe treatment of dementia patients with XPro, including Alzheimer’s disease,

may provide a strategy to alter the costly dynamic of this disease in society today.

Collaborate to maximize

the value of our technology .

Recently approved therapies that target amyloid have a modest

impact on disease progression and are difficult to use due to side-effects in some patients.

The cost of AD to families and care givers

is real and burdensome.

We believe treatment of dementia patients with XPro, including Alzheimer’s disease, may provide a strategy

to alter the costly dynamic of this disease in society today.

to maximize the value of our technology .

We believe there are two reasons for us to enter collaborations with other companies.

The first is the

further development of INKmune, INB03, XPro and DN-TNF by either providing additional innovations to the product, including combination

therapy strategies, and/or providing resources to improve the speed and breadth of the development process.

The second is to optimize

the commercialization of our products either globally or regionally.

first is the further development of INKmune, INB03, XPro and DN-TNF by either providing additional innovations to the product, including

combination therapy strategies, and/or providing resources to improve the speed and breadth of the development process.

The second is

to optimize the commercialization of our products either globally or regionally.

The ideal partner will benefit us in both ways.

We continue to look for ways to utilize our unique capabilities to

optimize clinical application of cell therapies.

We believe that we have identified a way to manufacture human mesenchymal stem cells

for the medical research and biotech community that offers large volumes of high-quality, low passage human umbilical cord mesenchymal

stem cells with minimal batch-to-batch variability.

We have established a reliable supply of human umbilical cords based on our agreement

with the Anthony Nolan Cord Blood Bank in the United Kingdom and may seek additional supplies in the future.

We have developed a validated

manufacturing process that reliably produces contract manufacturer of the clinical grade (“cGMP”) quality mesenchymal stem

cells that we call CORDstrom.

The manufacturing process can be performed at a contract manufacturing site under the direction of Mark

Lowdell, the Company’s CSO.

We will seek academic laboratories and biopharma companies who need a reliable source of high quality

pooled human umbilical cord mesenchymal stem cells for research of and development of clinical products.

Once identified, we plan to act

as a cGMP for the development of therapeutic products by utilizing contract manufacturers.

Because the production of the product is not

continuous, we do not expect to engage a contract manufacturer until we have a customer identified.

To date, we are supporting two academic

clinical trials with CORDstrom.

One program is a Phase 2 trial sponsored by the Great Ormond Street Children’s Hospital in the UK

treating children with Erythematous Bullousa (“EB”), a disfiguring skin disease in children that is similar to a second degree

burn and the second program is treatment of system lupus in adults.

Both these studies are ongoing.

INmune Bio is supplying the clinical

product for treatment of these patients.

The Company does not know the results of these trials until they are announced by the principal

investigators at the clinical sites.

We have identified contract manufacturers in the UK that have the capability to produce cGMP stem

We expect the commercial arrangement with academic laboratories or biopharma companies to be a combination of fee-for-service and

licensing that does not require additional investment by us.

We will be opportunistic in pursuing therapeutic opportunities for our own

portfolio with this platform in the future if resources become available.

The regulatory path for therapeutic applications of the mesenchymal

stem cell products is well established and similar to the regulatory approval process for other cell therapies.

We will only be responsible

for regulatory compliance related to manufacturing of the mesenchymal stem cells when the product is being developed by a third party.

When developing a therapeutic product for the Company’s commercial portfolio, the Company will be responsible for all aspects of

the regulatory process.

Overview of Immunotherapy for Cancer

The immune system has two

parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an infection, providing immediate,

non-specific responses to eliminate harmful cells in the body.

Components of the innate immune system include cytokines, chemokines, macrophages,

neutrophils and NK cells, among others.

The adaptive immune system

is often initially triggered by the innate immune system, mounts a delayed response against diseased cells and plays a role protecting

against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and is developed or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens and mark them for destruction by other immune cells,

B-cells which produce these antibodies upon exposure to antigens, and T-cells which attack and eliminate the diseased cells.

The biopharmaceutical industry

has made significant advances in harnessing specific components of innate and adaptive immune systems for therapeutic use.

Some of these

approaches are summarized below.

Necrosis Factor alpha (“TNF”) is the focus of XPro and INB03.

TNF biology has four elements that include two cytokines, soluble

TNF and trans-membrane TNF (“sTNF” and “tmTNF,” respectively), and two receptors, TNF Receptor 1 and 2 (“TNFR1”

and “TNFR2”).

The biology of TNF ligation of TNFR varies dramatically based on what elements of the TNF system that are used.

sTNF binding to TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory

T cells (“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term survival because it promotes

epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive promoting resistance

In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes nerve cell survival,

improves synaptic function and stimulates remyelination.

In brief, sTNF is the “bad” TNF and tmTNF is the “good”

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has negative consequences such as immunosuppression,

increased infection, synaptic dysfunction and demyelination.

One of the early applications

of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).

Interferons are molecules that

inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack them.

They have been used as standard

of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment for certain cancers, including chronic myeloid

leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

However, the use of interferons has generally decreased

over the years due to serious adverse events ( e.g.

, flu-like symptoms and dramatic weight loss) and introduction of new therapies

with higher efficacy, better safety profiles and more convenient administration although Alpha-interferon remains the treatment of choice

for some hematological conditions such as polycythemia.

continue to look for ways to utilize our unique capabilities to optimize clinical application of cell therapies.

We believe that we have

developed a way to manufacture human mesenchymal stromal cells for the medical research and biotech community that offers large volumes

of high-quality, low passage human umbilical cord mesenchymal stromal cells with minimal batch-to-batch variability.

We have established

a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in the United Kingdom and may

seek additional supplies from US sources in the future.

We have developed a validated manufacturing process that reliably produces clinical

grade (“cGMP”) quality mesenchymal stromal cells that we call CORDstrom.

The manufacturing process is currently performed

at a contract manufacturing site under the direction of Mark Lowdell, the Company’s CSO.

To date, we are supporting a multicenter

academic clinical trial in the UK with CORDstrom.

This is a Phase I/IIb trial sponsored by the Great Ormond Street Children’s Hospital

in London treating children with the most severe form of Erythematous Bullosa (“EB”), a disfiguring and sometimes fatal skin

disease that is similar to a second degree burn.

INmune Bio is supplying the clinical product for treatment of these patients.

does not know the results of this trial until they are announced by the principal investigators at the clinical sites.

We have identified

contract manufacturers in the UK that have the capability to produce cGMP stem cells.

We expect the commercial arrangement with academic

laboratories or biopharma companies to be a combination of fee-for-service and licensing that does not require additional investment

We will be opportunistic in pursuing therapeutic opportunities for our own portfolio with this platform in the future if resources

become available.

The regulatory path for therapeutic applications of the mesenchymal stem cell products is well established and similar

to the regulatory approval process for other cell therapies.

We will only be responsible for regulatory compliance related to manufacturing

of the mesenchymal stromal cells when the product is being developed by a third party.

When developing a therapeutic product for the

Company’s commercial portfolio, the Company will be responsible for all aspects of the regulatory process.

of Immunotherapy for Cancer

immune system has two parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an infection,

providing immediate, non-specific responses to eliminate harmful cells in the body.

Components of the innate immune system include cytokines,

chemokines, macrophages, neutrophils and NK cells, among others.

adaptive immune system is often initially triggered by the innate immune system, mounts a delayed response against diseased cells and

plays a role protecting against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and is developed

or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens and mark them

for destruction by other immune cells, B-cells which produce these antibodies upon exposure to antigens, and T-cells which attack and

eliminate the diseased cells.

biopharmaceutical industry has made significant advances in harnessing specific components of innate and adaptive immune systems for

therapeutic use.

Some of these approaches are summarized below.

Tumor Necrosis Factor alpha (“TNF”) is the focus of XPro and INB03.

TNF biology has four elements that include two

cytokines, soluble TNF and trans-membrane TNF (“sTNF” and “tmTNF,” respectively), and two receptors, TNF Receptor

1 and 2 (“TNFR1” and “TNFR2”).

The biology of TNF ligation of TNFR varies dramatically based on what elements

of the TNF system that are used.

sTNF binding to TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes

proliferation of regulatory T cells (“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term

survival because it promotes epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive

promoting resistance to therapy.

In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes

nerve cell survival, improves synaptic function and stimulates remyelination.

In brief, sTNF is the “bad” TNF and tmTNF is

the “good” TNF.

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has negative consequences

such as immunosuppression, increased infection, synaptic dysfunction and demyelination.

of the early applications of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).

are molecules that inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack them.

They have been

used as standard of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment for certain cancers, including

chronic myeloid leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

However, the use of interferons has generally

decreased over the years due to serious adverse events ( e.g.

, flu-like symptoms and dramatic weight loss) and introduction of

new therapies with higher efficacy, better safety profiles and more convenient administration although Alpha-interferon remains the treatment

of choice for some hematological conditions such as polycythemia.

IL-2 activates T-cells and NK cells to attack diseased cells.

IL-2 has been used

to treat select cancers, but due to its relatively poor safety profile, physicians often only resort to this therapy for the most advanced

Antibody therapy.

has been used to treat select cancers, but due to its relatively poor safety profile, physicians often only resort to this therapy for

the most advanced settings.

Antibodies exist in three formats:

monoclonals (“mAbs”), oligo/polyclonal and antibody-drug conjugates.

mAbs represent an

effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers have leveraged mAbs’

ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better treatments that prolong survival

and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in the immune system have overcome in vivo

immune suppression and the resulting immune responses have led to profound therapeutic benefit in some patients.

However, the degree of

efficacy of these therapies is heavily reliant on the immune system of patients, many of whom are severely immuno-compromised.

mAbs are manufactured through a complex process that requires purification of cell products created from a cell line.

Polyspecific antibodies,

for example bi-specific antibodies, are able to target more than one antigen.

These are often used to bring and effector T cell in contact

with a target cell.

Antibody drug conjugates are mAbs attached to a toxin, chemotherapy or radio therapy that delivers the cancer killing

payload directly to the cancer.

mAbs represent an effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers

have leveraged mAbs’ ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better treatments

that prolong survival and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in the immune system

have overcome in vivo immune suppression and the resulting immune responses have led to profound therapeutic benefit in some patients.

However, the degree of efficacy of these therapies is heavily reliant on the immune system of patients, many of whom are severely immuno-compromised.

In addition, mAbs are manufactured through a complex process that requires purification of cell products created from a cell line.

antibodies, for example bi-specific antibodies, are able to target more than one antigen.

These are often used to bring and effector

T cell in contact with a target cell.

Antibody drug conjugates are mAbs attached to a toxin, chemotherapy or radio therapy that delivers

the cancer killing payload directly to the cancer.

Dendritic Cell Therapies.

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Cancer vaccines are the most common application of dendritic cells.

The only FDA-approved dendritic cell therapy is PROVENGE,

FDA-approved dendritic cell therapies such as PROVENGE,

which entails collecting monocytes from the patient, maturing them into dendritic cells, “loading” ex vivo with the

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of dendritic cell therapies have been mixed.

CAR-T and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside the diseased cells.

CAR-T therapy entails

genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens on the surface of cancer cells.

modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular antigens that must be presented on the surface

of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated impressive anti-tumor activity in a narrow spectrum

of hematologic cancers and garnered significant attention by research institutions and biopharmaceutical companies.

We believe a key limitation

of adaptive autologous immunotherapy is the need to retrieve non-compromised immune cells from a cancer patient which requires a complex

and costly manufacturing process to develop the therapy.

The complexity of this personalized process is reflected in the price of the

two approved therapies.

CAR-T therapies - tisagenlecleucel and axicabtagene ciloleucel for advanced leukemia and lymphoma respectively.

and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside the diseased

CAR-T therapy entails genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens on the surface

of cancer cells.

TCR therapy modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular antigens that

must be presented on the surface of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated impressive anti-tumor

activity in a narrow spectrum of hematologic cancers and garnered significant attention by research institutions and biopharmaceutical

We believe a key limitation of adaptive autologous immunotherapy is the need to retrieve non-compromised immune cells from

a cancer patient which requires a complex and costly manufacturing process to develop the therapy.

The complexity of this personalized

process is reflected in the price of the two approved therapies.

CAR-T therapies - tisagenlecleucel and axicabtagene ciloleucel for advanced

leukemia and lymphoma respectively.

The cost of a single therapy is many hundreds of thousands of dollars.

As a consequence of this need to harvest active T-cells, current

Phase I clinical trials for autologous CAR-T cell therapy in large part enroll patients from highly selected, often relatively early-stage

disease in a narrow spectrum of cancers, including bulky hematological cancers.

In addition, Phase I clinical trials of CAR-T cell immunotherapy

have reported severe adverse toxicities of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and,

in some instances, intensive care unit admission following side effects associated with cytokine release syndrome.

As a result, though

our competitors continue to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated

with these approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid

As a consequence of this need

to harvest active T-cells, current Phase I clinical trials for autologous CAR-T cell therapy in large part enroll patients from highly

selected, often relatively early-stage disease in a narrow spectrum of cancers, including bulky hematological cancers.

In addition, Phase

I clinical trials of CAR-T cell immunotherapy have reported severe adverse toxicities of cytokine release syndrome and neurotoxicity,

requiring hospitalization, pre-conditioning and, in some instances, intensive care unit admission following side effects associated with

cytokine release syndrome.

As a result, though our competitors continue to develop their CAR-T and TCR product candidates with the goal

of addressing certain of the limitations associated with these approaches, we believe these serious challenges may limit their potential

and use in a variety of indications, including solid tumors.

Checkpoint Inhibitors.

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CPI have become the backbone

of cancer therapy and are expected to be the best -selling class of drugs by 2027.

cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of the immune system responsible

for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having the inherent ability to detect and

eliminate diseased cells without the need for antigen presentation, which is why they are called “natural killers.”

NK cells bind to stress ligands

expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release cytokines, including, interferons

and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses by the host.

NK cells also represent a critical

effector cell for ADCC, whereby target cells bound with human antibodies, whether made by the patient’s body or administered, are

selectively destroyed by the NK cells.

Our Innate Immune Dominant-Negative

TNF (“DN-TNF”) product candidate

of cancer therapy and are expected to be the best -selling class of drugs in the future.

NK cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of the immune

system responsible for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having the inherent

ability to detect and eliminate diseased cells without the need for antigen presentation, which is why they are called “natural

cells bind to stress ligands expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release cytokines,

including, interferons and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses by the host.

also represent a critical effector cell for ADCC, whereby target cells bound with human antibodies, whether made by the patient’s

body or administered, are selectively destroyed by the NK cells.

Innate Immune Dominant-Negative TNF (“DN-TNF”) product candidate

We renamed XPro, which we license

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INB03 neutralizes soluble TNF in the tumor microenvironment (“TME”).

Neutralizing sTNF in the TME has two main effects

– decreases expression of MUC4 by the tumor and converting the immunosuppressive cancer promoting TME that promotes tumor growth

to an immunologically active TME that promotes tumor cell death.

INB03 decreases proliferation of MDSC, promotes recruitment of cytotoxic

T cells to the TME and may convert immunosuppressive tumor macrophages into tumor phagocytic macrophages.

In murine models, these changes

make the tumor reverse resistance to treatment with immunotherapy alone or in combination with tyrosine kinase inhibitors (TKI) such a

lapatinib and tucatinib.

MUC4 expression is increased by sTNF produced by the tumor.

MUC4 causes resistance to trastuzumab therapy in

HER2+ breast and gastric cancer cells by preventing binding of trastuzumab to HER2 by steric hinderance.

By neutralizing sTNF with INB03,

decreases MUC4 expression to allow trastuzumab to bind HER2.

The importance of trastuzumab based immunotherapy in the treatment of HER2

expressing tumors has increased recently due to the success of trastuzumab-deruxtecan (Enhertu, TDxd).

TDxd improves survival in women

with metastatic HER2+ breast cancer in both high and low HER2 expressing tumors.

MUC4 expression inhibits the TDxd tumor killing in a

murine model of HER2+ trastuzumab resistant HER2+ breast cancer.

The mechanism by which combination of INB03 with TKI improves efficacy

over TKI alone remains under investigation.

By using INB03 as part of combination therapy for cancer, we believe the patient’s dysregulated

immune response, a hallmark of cancer progression and resistance to therapy, to be converted to a coordinated immune response that can

overcome resistance mechanisms to immunotherapy in MUC4 expressing cancers.

These immune responses have been studied in at least two animal

In a murine model of an inflammatory cancer, where 3-methylcholanthrese is given to mice in a subcutaneous injection that causes

the development of multiple cutaneous fibrosarcoma.

This model was developed by Y Akamatsu in 1967 while working at the National Cancer

Institute of the NIH.

In research published by Professor Nikola Vujanovic in Cancer Immunology Research in 2016, treatment

with INB03 resulted in smaller and fewer cancers with increased survival.

INB03 is an engineered PEGylated protein that neutralizes human

soluble TNF, a human inflammatory cytokine that is increased in patients with advanced cancer.

By specifically neutralizing the cytokine,

there is decreased phosphorylation of STAT3, an essential step required for the proliferation of the MDSC population, and secretion of

the immunosuppressive cytokines.

The combination of decreased MDSC proliferation and decreased immunosuppressive cytokines allows the

immune system to respond to the tumor.

This data was published in an article entitled Inhibition of Soluble Tumor Necrosis Factor Prevents

Chemically Induced Carcinogenesis in Mice in Cancer Immunology Research in Cancer Immunology Research, 2016.

INB03 functions as an innate immune system checkpoint inhibitor by eliminating the population of MDSC that provides an immunosuppressive

shield protecting the tumor, the patient’s immune system is able to function normally to the benefit of the patient – it can

attack the tumor.

Neutralizing sTNF in the TME has two

main effects – decreases expression of MUC4 by the tumor and converting the immunosuppressive cancer promoting TME that promotes

tumor growth to an immunologically active TME that promotes tumor cell death.

INB03 alters the immunologic environment of the TME to promote

tumor killing.

INB03 decreases proliferation of MDSC, promotes recruitment of cytotoxic T cells to the TME and may convert immunosuppressive

tumor macrophages into tumor phagocytic macrophages.

In murine models, these changes make the tumor reverse resistance to treatment with

immunotherapy alone or in combination with tyrosine kinase inhibitors (TKI) such a lapatinib and tucatinib.

MUC4 expression is increased

by sTNF produced by the tumor.

MUC4 causes resistance to trastuzumab therapy in HER2+ breast and gastric cancer cells by preventing binding

of trastuzumab to HER2 by steric hinderance.

By neutralizing sTNF with INB03, decreases MUC4 expression to allow trastuzumab to bind HER2.

The importance of trastuzumab based immunotherapy in the treatment of HER2 expressing tumors has increased recently due to the success

of trastuzumab-deruxtecan (Enhertu, TDxd).

TDxd improves survival in women with metastatic HER2+ breast cancer in both high and low HER2

expressing tumors.

MUC4 expression inhibits the TDxd tumor killing in a murine model of HER2+ trastuzumab resistant HER2+ breast cancer.

The mechanism by which combination of INB03 with TKI improves efficacy over TKI alone remains under investigation.

By using INB03 as part

of combination therapy for cancer, we believe the patient’s dysregulated immune response, a hallmark of cancer progression and resistance

to therapy, to be converted to a coordinated immune response that can overcome resistance mechanisms to immunotherapy in MUC4 expressing

These immune responses have been studied in at least two animal models.

In a murine model of an inflammatory cancer, where 3-methylcholanthrese

is given to mice in a subcutaneous injection that causes the development of multiple cutaneous fibrosarcoma.

This model was developed

by Y Akamatsu in 1967 while working at the National Cancer Institute of the NIH.

In research published by Professor Nikola Vujanovic in

Cancer Immunology Research in 2016, treatment with INB03 resulted in smaller and fewer cancers with increased survival.

INB03 is an engineered PEGylated protein that neutralizes human soluble TNF, a human inflammatory cytokine that is increased in patients

with advanced cancer.

By specifically neutralizing the cytokine, there is decreased phosphorylation of STAT3, an essential step required

for the proliferation of the MDSC population, and secretion of the immunosuppressive cytokines.

The combination of decreased MDSC proliferation

and decreased immunosuppressive cytokines allows the immune system to respond to the tumor.

This data was published in an article entitled

Inhibition of Soluble Tumor Necrosis Factor Prevents Chemically Induced Carcinogenesis in Mice in Cancer Immunology Research in Cancer

Immunology Research, 2016.

In summary, INB03 functions as an innate immune system checkpoint inhibitor by eliminating the population

of MDSC that provides an immunosuppressive shield protecting the tumor, the patient’s immune system is able to function normally

to the benefit of the patient – it can attack the tumor.

TNF plays an important role in breast cancer (Schillaci R, Front.

Oncol., 22 April 2020 | https://doi.org/10.3389/fonc.2020.00584 ).

In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells, a human cell line of HER2 positive breast cancer resistant

to trastuzumab placed into immunocompromised mice, INB03 downregulates MUC4 from the surface of the JMIT-1 HER2+ breast cancer cells to

allow the trastuzumab resistant cells to become trastuzumab sensitive (Figure A from Bruni, NYAS 2020) to decrease tumor growth (from

Schillaci SABCS 2018, Figure B).

JMIT-1 cells are also resistant to lapatinib, a TKI inhibitor used as a second line therapy in women

with trastuzumab resistant HER2+ breast cancer.

The addition of INB03 to lapatinib in the animal model reverses lapatinib resistance in

part by decreasing expression of MUC4 (from Bruni NYAS 2020, Figure C).

In addition to decreasing resistance to trastuzumab by decreasing

MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci SABCS 2018, Bruni NYAS 2020).

22 April 2020 https://doi.org/10.3389/fonc.2020.00584 ).

In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells,

a human cell line of HER2 positive breast cancer resistant to trastuzumab placed into immunocompromised mice, INB03 downregulates MUC4

from the surface of the JMIT-1 HER2+ breast cancer cells to allow the trastuzumab resistant cells to become trastuzumab sensitive (Figure

A from Bruni, NYAS 2020) to decrease tumor growth (from Schillaci SABCS 2018, Figure B).

JMIT-1 cells are also resistant to lapatinib,

a TKI inhibitor used as a second line therapy in women with trastuzumab resistant HER2+ breast cancer.

The addition of INB03 to lapatinib

in the animal model reverses lapatinib resistance in part by decreasing expression of MUC4 (from Bruni NYAS 2020, Figure C).

to decreasing resistance to trastuzumab by decreasing MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci

SABCS 2018, Bruni NYAS 2020).

Recently, Dr.

reported the MUC4 expressing triple negative breast (TNBC) cancer patients have a worse overall survival.

Schillaci reported the MUC4 expressing triple negative breast (TNBC) cancer patients have

a worse overall survival.

(Schillaci SABCS 2021).

recently, Schillaci has shown that MUC4 causes resistance to trastuzumab ADC (trastuzumab-XXX and TDxd).

Combination therapy with INB03

overcomes resistance in this breast cancer model.

These data may be relevant to all tumors that express HER2 or MUC4 including upper gastrointestinal

malignancies such as gastric and pancreatic cancer.

We believe MUC4 expression is a biomarker of resistance that may improve therapeutic

decision making by clinical teams

More recently, Schillaci has shown that MUC4 causes resistance to trastuzumab ADC (trastuzumab-durextecn;

Combination therapy with INB03 overcomes resistance in this breast cancer model.

These data may be relevant to all tumors that

express HER2 or MUC4 including upper gastrointestinal malignancies such as gastric and pancreatic cancer.

We believe MUC4 expression is

a biomarker of resistance that may improve therapeutic decision making by clinical teams.

Because INB03 targets the

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MUC4 will benefit from treatment with INB03.

Those studies may be performed in the future, but they are not a priority.

XPro neutralizes soluble TNF

in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the effects of soluble TNF neutralization

in the brain are different.

The cause of the destructive neuroinflammation in the brain are microglial and astroglial cells.

cell are two of four cells in the neural unit that also includes oligodendrocytes and nerve cells.

Activated microglial cells are considered

the resident macrophages of the brain.

The primary role of microglial cells is to protect the neural unit from infection.

immune dysfunction causes chronic inflammation, activated microglial cells produce soluble TNF that activates astrocytes.

Activated glial

cells cause nerve cell and oligodrocyte dysfunction that results in synaptic pruning, nerve cell death and demyelination of neurons.

pathologies contribute, in part, to neurodegenerative diseases such as AD, Parkinson’s disease, ALS, MS, Huntington’s disease,

glaucoma and TBI (traumatic brain injury) may contribute to neuropsychiatric diseases such as depression, bi-polar disease, sleep disorders,

autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes dendritic pruning, synaptic dysfunction and nerve cell

death that contributes to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness, sleep disorders,

hallucinations and anhedonia.

Elimination of microglial activation should reverse these symptoms.

Because soluble TNF is the apex cytokine

in the inflammatory cytokine cascade, neutralization of soluble TNF with XPro should prevent glial activation and normalizes function

of the neural unit.

Those studies may be performed in the future, but they are not a current priority.

to produce pre-clinical data for use of INB03 in cancer indications with a goal to find a development partner or out-license the program.

The Company does not have plans to perform clinical trials with INB03 at this time.

neutralizes soluble TNF in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the effects

of soluble TNF neutralization in the brain are different.

The cause of the destructive neuroinflammation in the brain are microglial

and astroglial cells.

Glial cell are two of four cells in the neural unit that also includes oligodendrocytes and nerve cells.

microglial cells are considered the resident macrophages of the brain.

The primary role of microglial cells is to protect the neural

unit from infection.

When innate immune dysfunction causes chronic inflammation, activated microglial cells produce soluble TNF that

activates astrocytes.

Activated glial cells cause nerve cell and oligodrocyte dysfunction that results in synaptic pruning, nerve cell

death and demyelination of neurons.

These pathologies contribute, in part, to neurodegenerative diseases such as AD, Parkinson’s

disease, ALS, MS, Huntington’s disease, glaucoma and TBI (traumatic brain injury) may contribute to neuropsychiatric diseases such

as depression, bi-polar disease, sleep disorders, autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes

dendritic pruning, synaptic dysfunction and nerve cell death that contributes to cognitive decline and the behavioral manifestations

of AD including depression, aggressiveness, sleep disorders, hallucinations and anhedonia.

Elimination of microglial activation should

reverse these symptoms.

Because soluble TNF is the apex cytokine in the inflammatory cytokine cascade, neutralization of soluble TNF

with XPro should prevent glial activation and normalizes function of the neural unit.

The Company has completed

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The trial was performed in Australia

and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s Association.

and was partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s Association.

The clinical trial was the first in

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multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood and cerebral spinal fluid,

behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging biomarkers using MRI.

The primary goal of this short, open label

study was to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose of XPro to use in the Phase

The Company has opened a Phase II trial in ADi in Australia (“AUS”) and Canada (“CAN”).

We anticipate

opening additional countries including the US in 2023.

The Phase II ADi program is not yet open in the US.

The FDA has placed a full

clinical hold on the program related to product characteristics in the product produced for the Phase II program at KBI Biosciences in

The XPro produced by KBI is being used in the Phase II trial in AUS and CAN, the Phase II extension trial in patients that have

completed the Phase II trial in AUS and the Expanded Access Scheme in patients who completed the Phase I trial in AUS.

The Company is

working closely with the FDA to reverse the clinical hold.

We cannot predict when this will occur.

Our plan is to continue to enroll

patients in the Phase II ADi trial in regulatory venues outside of the US while working to resolve the concerns of the FDA.

of the Phase II trial will be to demonstrate the prolonged control of neuroinflammation in patients with dementia will help control cognitive

The Company has review its two Phase II trials in dementia, one each in mild cognitive impairment due to neuroinflammation (“MCI”)

and mild ADi.

New data supports combining the two trials into a single trial.

Instead of having separate blinded randomized Phase II

clinical trials in mild ADi and MCI 2 , there will be one clinical trial in early ADi that will include patients with either

mild ADi or MCI.

Combination of the two trials into a single clinical trial may speed enrollment and decrease costs and will likely mirror

the planned Phase III registration trial without increasing the risk of the clinical program.

The Phase I trial enrolled

18 patients at doses of 0.3, 0.6 and 1.0mg/kg given once a week as subcutaneous injection for three months.

Patients in the 10mg/kg group

were offered extended use of the drug for up to 12 months.

behavioral biomarkers (neuropsychiatric symptoms of AD), EEG and neuroimaging biomarkers using MRI.

The primary goal of this short, open

label study was to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose of XPro to use in the

Phase II trial.

Company is enrolling a global blinded randomized Phase II trial in ADi patients with Early AD in Australia (“AUS”), Canada

(“CAN”), the United Kingdom (“UK”), Spain (“ES”), France (“FR”), Germany (“DE”),

Poland (“PO”), the Czech Republic (“CZ”), Slovakia (“SL”) and the United States (“US”).

Early AD is patients that have MCI (Mild Cognitive Impairment) or mild AD.

The XPro produced by KBI is being used in the Phase II trial.

After completion of the Phase II trial, patients will be offered to enroll in the Phase II open label extension trial (OLE).

Access Scheme in patients who completed the Phase I trial in AUS.

The goal of the Phase II trial will be to demonstrate the prolonged

control of neuroinflammation in patients with dementia will help control cognitive decline.

The Phase I trial enrolled 18 patients at doses

of 0.3, 0.6 and 1.0mg/kg given once a week as subcutaneous injection for three months.

Patients in the 10mg/kg group were offered extended

use of the drug for up to 12 months.

Three patients remained on XPro for 12 months.

Preliminary data was presented

in a webinar on 13 July 2020.

Neuroimaging data from six patients were presented in the figure below.

In summary, treatment with XPro

at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and target dose respectively) decreased white matter free water

(“WMFW”) as measured by MRI.

WMFW is a validated biomarker of neuroinflammation.

Although the number of patients is low, there was a dose

response with a greater decrease in WMFW in the target dose compared to the low dose group.

An analysis of inflammation in white matter

tracts demonstrated a significant decrease in WMFW (40%;

range 20-52%) in the arcute fasciculus, a white matter tract important in the

control of language and short-term memory (Figure D).

These data suggest XPro is decreasing neuroinflammation in patients with Alzheimer’s

disease who have biomarkers of peripheral inflammation.

Additional data was presented

on January 21, 2021.

The goal of the January 21 data release was to show a correlation between the white matter free water, a novel biomarker

of inflammation with cerebral spinal fluid (“CSF”) cytokines and chemokine levels, a traditional measure neuroinflammation.

CSF cytokine/chemokines were measured in 9 patients before and after 12 weeks of weekly therapy with XPro using a panel from OLINK Target

48 Cytokine ( https://www.olink.com/products/olink-target-48-cytokine/ ), that measures 45 (Figure AD1).

Preliminary data was presented in a webinar on 13

Additional data was presented on January 21, 2021CSF cytokine/chemokines were measured in 9 patients before and after 12 weeks

of weekly therapy with XPro using a panel from OLINK Target 48 Cytokine (https://www.olink.com/products/olink-target-48-cytokine/),

that measures 45 (Figure AD1).

In the 6 patients in the 1mg/kg

per week dose, only one cytokine and chemokine, interferon gamma (“INFg”) did not change in the CSF of patients, the remainder all decreased

on average of 15%.

Using data from all patients treated for 12 weeks (3 low dose, 6 target dose), a high correlation (R 2 =.7561)

between the white matter free water safe mask and the inflammation composite score is shown in figure AD2.

The data analyzed provides

evidence that XPro decreases neuroinflammation in patients with Alzheimer’s disease.

We believe these data support the use of XPro to treat other diseases

where neuroinflammation is a part of the pathophysiology of the disease.

per week dose, only one cytokine and chemokine, interferon gamma (“INFg”) did not change in the CSF of patients, the remainder

all decreased on average of 15%.

The data analyzed provides evidence that XPro decreases neuroinflammation in patients with Alzheimer’s

We believe these data support the use of XPro to treat other diseases where

neuroinflammation is a part of the pathophysiology of the disease.

The company studied the consequences of decreasing neuroinflammation

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Additional data may result from these ongoing analytics.

The results of the Phase I

study demonstrated that XPro safely decreases neuroinflammation in patients with ADi who have biomarkers of peripheral inflammation or

are ApoE4 positive when given for at least 3 months at the 1mg/kg once a week dose.

Decreasing neuroinflammation with XPro appears to

decrease neurodegeneration and improve synaptic function and promote remyelination.

The effect of XPro on the biology and immunology of

the brain in patients with AD suggest XPro therapy in patients with peripheral biomarkers of inflammation or ApoE4 allele(s) may impact

cognitive decline.

Although there were anecdotes of improved cognitive function in patients receiving the target dose of XPro, this cannot

be verified because the trial was not a blinded, randomized trial.

The impact on cognition of controlling neuroinflammation with XPro

will be studied in the Phase II program which is a blinded randomized, placebo controlled clinical trial.

The Company has consolidated

the two Phase II trials into a single trial of early ADi.

Early ADi patients have either mild AD or MCI with neuroinflammation.

AD or MIC patients must with at least one of elevated CRP, hemoglobinA1c, ESR in blood or have an ApoE4 allele are eligible for the trial.

The blinded randomized trial in patients with early ADi will enroll 201 patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week.

The trial is currently enrolling study subjects.

results of the Phase I study demonstrated that XPro safely decreases neuroinflammation in patients with ADi who have biomarkers of peripheral

inflammation or are ApoE4 positive when given for at least 3 months at the 1mg/kg once a week dose.

Decreasing neuroinflammation with

XPro appears to decrease neurodegeneration and improve synaptic function and promote remyelination.

The effect of XPro on the biology

and immunology of the brain in patients with AD suggest XPro therapy in patients with peripheral biomarkers of inflammation or ApoE4

allele(s) may impact cognitive decline.

Although there were anecdotes of improved cognitive function in patients receiving the target

dose of XPro, this cannot be verified because the trial was not a blinded, randomized trial.

The impact on cognition of controlling neuroinflammation

with XPro will be studied in the Phase II program which is a blinded randomized, placebo controlled clinical trial.

The ongoing blinded randomized

global Phase II trial in patients with early ADi will enroll 201 patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week.

is currently enrolling study subjects.

Patients will be treated for 6 months.

The primary end-point is Early/Mild Alzheimer’s

Cognitive Composite (EMACC), a sensitive cognitive end-point validated for use in patients with early AD.

Secondary cognitive (ADAS-Cog13,

CDR-SB and NPI) and functional (GAS, ADCS-ADL) end-points will be measured.

Biomarkers of inflammation using white and gray matter analytics

measured by MRI DTI similar to those used in the Phase I trial will also be used.

The primary end-point is Early/Mild Alzheimer’s Cognitive

Composite (EMACC), a sensitive cognitive end-point validated for use in patients with early AD.

Secondary cognitive (ADAS-Cog13, CDR-SB

and NPI) and functional (GAS, ADCS-ADL) end-points will be measured.

Exploratory structural and function biomarkers of brain function

and structural integrity using EEG and MRI DTI will be used in some or all patients.

All patients will be eligible to continue XPro for

at 12 additional months.

12 additional months in the Open Label Extension trial.

Clinical and MRI metrics will be followed during the extension trial.

Effective therapy for TRD

is a large unmet need.

therapy for TRD is a large unmet need.

Twenty percent of patients with a Major Depressive Disorder have TRD.

Once third of TRD patients have peripheral

biomarkers to inflammation (elevated CRP).

Once third of TRD patients

have peripheral biomarkers to inflammation (elevated CRP).

This is a large patient population.

The role of TNF and anti-TNF therapeutics was explored

in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University whereby it was demonstrated that patients which have

elevated TNF levels responded to treatment with infliximab (Miller, 2011).

The Company received a $2.9M USD award from the National Institute

of Mental Health (“NIMH”) to treat TRD with XPro.

The blinded, randomized Phase II trial will use a biomarkers of peripheral

inflammation to select patients with TRD for enrollment.

Patients will be treated for 6 weeks.

Primary end-points include both clinical

and neuroimaging measures.

The final trial design is ongoing and discussions with the FDA are not complete.

The Company anticipates receiving

authorization to initiate the clinical trial in 2023 at which point the Company may begin to request funds from the NIMH pursuant to the

The role of TNF and anti-TNF therapeutics

was explored in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University whereby it was demonstrated that patients

which have elevated TNF levels responded to treatment with infliximab (Miller, 2011).

Company received a $2.9M USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro.

randomized Phase II trial will use biomarkers of peripheral inflammation to select patients with TRD for enrollment.

Patients will be

treated for 6 weeks.

Primary end-points include both clinical and neuroimaging measures.

The final trial design is ongoing and discussions

with the FDA are not complete.

The Company anticipates receiving authorization to initiate the clinical trial in 2H24.

At which point

the Company may begin to request funds from the NIMH pursuant to the award.

INB03 and XPro are delivered

as a subcutaneous injection, similar to an insulin treatment, given one to three times per week.

Because this is a simple subcutaneous

injection similar to an insulin injection (the therapy patients give themselves for treatment of Type 1 diabetes mellitus), we expect

patients to administer the therapy by themselves or caregivers and not require expensive or logistically challenging clinic visits to

receive the therapy.

Release of INB03 and XPro drug supply

GMP DN-TNF product (INB03 and XPro) used in the

oncology Phase I, AD Phase I and COVID-19 Phase II trial were manufactured by Lonza at a site in New Hampshire.

The supply of Lonza DN-TNF

product is limited but allowed completion of the Phase I study in Alzheimer’s disease and support of patients in the extension

study for 12 months.

as a subcutaneous injection, similar to an insulin treatment or anti-obesity GLP-1 drugs, is given once a week.

More frequent treatment

cannot be ruled out for future indications.

Because this is a simple subcutaneous injection similar to an insulin injection (the therapy

patients give themselves for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy by themselves or caregivers

and not require expensive or logistically challenging clinic visits to receive the therapy.

of INB03 and XPro drug supply

GMP DN-TNF product (INB03

and XPro) used in the oncology Phase I, AD Phase I and COVID-19 Phase II trial were manufactured by Lonza at a site in New Hampshire.

The supply of Lonza DN-TNF product is limited but allowed completion of the Phase I study in Alzheimer’s disease and support of

patients in the extension study for 12 months.

New batches of XPro have been produced to support future clinical trials.

The Company engaged KBI Biopharma to manufacture

6 lots of XPro/INB03 at the Boulder, Colorado facility using the original master cell bank and updated manufacturing process.

have been converted into drug product using the US fill/finish facility of Vetter Pharma.

Two of the lots are frozen as drug substance

at -80C with a plan to convert to drug product the second half of 2023.

The final two lots are frozen as a cell paste with a plan to

process to drug substance in during 2023 or 2024 as needed to support the clinical trials.

We plan to use a two-step approach to improve

the yield of the drug substance from the fermentation process.

We hope to improve the yield of the drug product using the existing E.coli-based

Once the new process is validated and functional, we will perform a manufacturing campaign drug for future clinical trials.

the future, the Company may consider a strain change to improve yield of the fermentation step further.

The decision for strain improvements

and strain change will be made in the future as clinical development programs proceed.

Interaction with Regulatory Authorities Regarding

INB03 and XPro Development

We have completed a Phase I trial with INB03 in oncology and a Phase

I trial with XPro in patients with Alzheimer’s disease.

The Company engaged

KBI Biopharma to manufacture 6 lots of XPro/INB03 at the Boulder, Colorado facility using the original master cell bank and updated manufacturing

One lot has been converted into drug product using the US fill/finish facility of Vetter Pharma.

Half of the first lot is frozen

as drug substance at -80C with a plan to convert to drug product as clinical supplies are needed to support the AD and TRD Phase II trials

The unfrozen drug product is being used in the ongoing AD02 AD trial.

The remainder of the original fermentation runs is

frozen as a cell paste with a plan to process to drug substance.

The company expects to convert the drug substance to drug product 1H25.

Downstream processing to drug product and fill/finish to drug product of the cell paste will occur in 2025 as needed to support the clinical

We plan to use a two-step approach to improve the yield of the drug substance from the fermentation process.

The company has two

Phase III readiness programs in progress in preparation for the Phase III pivotal trial in patients with AD.

The Company is working on

the yield of the drug product using the existing E.coli-based system.

A second program is focused on down-stream process improvements

in the drug manufacturing program.

Once the new strain and process is validated and functional, we will perform a manufacturing campaign

drug for future clinical trials.

In the future, the Company may consider a strain change to improve yield of the fermentation step further.

The decision for strain improvements and strain change will be made in the future as clinical development programs proceed.

with Regulatory Authorities Regarding INB03 and XPro Development

We have completed a Phase

I trial with INB03 in oncology.

At this time we do not plan additional clinical trials with INB03 in oncology.

A Phase I trial with XPro

in patients with Alzheimer’s disease is underway.

The Phase II program with Alzheimer’s disease started during 2022.

The Phase I trial with XPro in patients with Alzheimer’s disease was performed in Australia under the regulatory authority of the

TGA using the Clinical Trials Exemption (“CTX”) scheme.

I trial with XPro in patients with Alzheimer’s disease was performed in Australia under the regulatory authority of the TGA using

the Clinical Trials Exemption (“CTX”) scheme.

Our first interaction with the regulatory body occurred in March 2018.

The Company received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018.

second interaction with the regulatory body occurred in March 2019.

The Company received approval to initiate the Phase I trial with

XPro in patients with Alzheimer’s disease in May 2019 and received authorization to start the Phase II trial in patients with mild

AD on January 5, 2022.

Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory

failure in patients hospitalized with COVID-19 infection.

The newly manufactured XPro is being used to support the Phase II AD trial in

AUS and CAN, the extension trial in AUS, and the Expand Access Scheme in AUS.

The FDA has not allowed the use of this drug in the US yet.

The FDA has asked for additional analytical testing to demonstrate comparability between the XPro used in the Phase I oncology, AD and

Phase II COVID-19 clinical trials with the drug planned to be used in the Phase II AD clinical trials.

This comparability testing is underway.

We cannot predict when the FDA will release the US Phase II from clinical hold.

The CAN and AUS regulatory authorities are aware of the

FDA clinical hold – they have not asked for similar information and allow the clinical program to proceed.

received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018.

The second interaction

with the regulatory body occurred in March 2019.

The Company received approval to initiate the Phase I trial with XPro in patients

with Alzheimer’s disease in May 2019 and received authorization to start the Phase II trial in patients with mild AD on January

Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory failure

in patients hospitalized with COVID-19 infection.

The newly manufactured XPro is being used to support the Phase II AD trial and the Expanded

Access Scheme.

INB03 Product Development Path:

Proposed Phase

II Studies in patients with cancer

Continued pre-clinical

studies to find a partner or out-license the progam

Phase I open label study in

patients with advanced solid tumors has been completed.

All future studies cancer will use INB03 as part of combination therapy.

All future cancer studies will use INB03 as part of combination therapy.

The evolution

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Immune checkpoint inhibitors (“CPI”) were introduced 5 years ago.

The success of CPI change

the focus of cancer therapy from cytotoxic based cancer regimens to immunotherapy-based cancer regimens.

The approval of Trastuzumab (“TDxd”)

in 2022 had a similar effect on HER2 expressing cancers.

For example, use of trastuzumab based therapy in HER2+ breast cancer required

3+ expression of HER2.

of CPI change the focus of cancer therapy from cytotoxic based cancer regimens to immunotherapy-based cancer regimens.

The approval of

Trastuzumab (“TDxd”) in 2022 had a similar effect on HER2 expressing cancers.

For example, use of trastuzumab based therapy

in HER2+ breast cancer required 3+ expression of HER2.

With TDxd, low HER2 expression (1+ or 2+ but not null) benefit for TDxd.

This has dramatically expanded the number

of women eligible for trastuzumab based immunotherapy from 20% to half of women with breast cancer.

This dramatic change in breast cancer

standard-of-care impacted our development plans for INB03 in breast cancer.

The Phase II trial is planned to be in women who have failed

TDxd therapy.

dramatically expanded the number of women eligible for trastuzumab based immunotherapy from 20% to half of women with breast cancer.

dramatic change in breast cancer standard-of-care impacted our development plans for INB03 in breast cancer.

The Phase II trial is planned

to be in women who have failed TDxd therapy.

About half of women who receive TDxd are resistant to therapy.

We believe, but need to confirm, that many of those women

express MUC4.

We believe, but need to confirm,

that many of those women express MUC4.

We believe an exploratory, single arm open label Phase II in woman who progress after TDxd is warranted.

We believe the

combination of TDxD, INB03 and TKI will be effective.

We continue to conduct pre-clinical studies of INB03 in MUC4 expressing tumors.

A decision on the clinical trial will not be made until the pre-clinical work has been completed and the data has been presented to an

Advisory Board of clinical experts.

INB03 Registration Studies and/or Partnering

We believe the combination of TDxD, INB03 and TKI will be effective.

We continue to conduct pre-clinical studies of INB03 in MUC4 expressing

The Company does not plan to perform further clinical studies with INB03 in oncology at this time.

We continue to support pre-clinical

studies as we search for a partner or an out-licensing opportunity.

INB03 Pre-clinical Studies and/or Partnering

We plan to pursue an efficient

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active partnering position as it relates to INB03 development in cancer, although limited partnering discussion are underway at this time

We do not expect partnering discussions to begin until Phase II data demonstrating efficacy of INB03 as part of combination

therapy for cancer are available.

Our INB03 platform can be

used in cancer patients in many ways.

The Phase I trial suggests the drug should not be used alone to treat cancer but used in combination

with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy, radiation and surgery.

We believe that

INB03 can also be used to treat many types of hematologic and epithelial cancers.

INB03 and XPro Regulatory Strategy

INB03 platform can be used in cancer patients in many ways.

The Phase I trial suggests the drug should not be used alone to treat cancer

but used in combination with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy, radiation and

We believe that INB03 can also be used to treat many types of hematologic and epithelial cancers.

XPro Regulatory Strategy

Drugs from the DN-TNF platform

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and/or the UK.

Because there are no therapies similar to INB03 or XPro approved in any market, we plan to take advantage of the regulatory

opportunities afforded to therapies that treat markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and

expedited programs for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority

review (see “Government Regulation).

We cannot predict which, if any, of these programs we will benefit from without further discussions

with the FDA, EMA and other competent regulatory authorities.

Immunotherapy for Treatment of Alzheimer’s Disease

XPro is being developed for

the treatment of Alzheimer’s disease.

Microglial activation and neuroinflammation are important causes of the synaptic dysfunction

and nerve cell death that causes cognitive decline in patient with dementia and Alzheimer’s disease.

The relationship between β

amyloid plaques and tau neurofibrillary tangles, the traditional targets in AD drug development and neuroinflammation is complex.

targeting plaques and tangles will have limited benefit.

Targeting neuroinflammation, the common pathway leading to synaptic dysfunction

and nerve cell death, may be an effective treatment strategy.

Substantial pre-clinical data supports the use of XPro in murine models

Substantial indirect data supports use of XPro in humans including a decreased risk of AD in patients treated with non-selective

TNF inhibitors for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

Because of different mechanism

of action of XPro compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating complications

such as multiple sclerosis (MS).

The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting the use of XPro

to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see above).

Because there are no therapies similar to XPro approved in any market, we plan to take advantage of the regulatory opportunities

afforded to therapies that treat markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and expedited programs

for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review (see “Government

We cannot predict which, if any, of these programs we will benefit from without further discussions with the FDA, EMA and

other competent regulatory authorities.

A partner or licensee of INB03 may take a similar path to registration as XPro.

The Company cannot

predict details of any INB03 registration strategy.

Immunotherapy

for Treatment of Alzheimer’s Disease

is being developed for the treatment of Alzheimer’s disease.

Microglial activation and neuroinflammation are important causes of

the synaptic dysfunction and nerve cell death that causes cognitive decline in patient with dementia and Alzheimer’s disease.

relationship between β amyloid plaques and tau neurofibrillary tangles, the traditional targets in AD drug development and neuroinflammation

We believe targeting plaques and tangles will have limited benefit.

Targeting neuroinflammation, the common pathway leading

to synaptic dysfunction and nerve cell death, may be an effective treatment strategy.

Substantial pre-clinical data supports the use

of XPro in murine models of AD.

Substantial indirect data supports use of XPro in humans including a decreased risk of AD in patients

treated with non-selective TNF inhibitors for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

Because of different mechanism of action of XPro compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression

and demyelinating complications such as multiple sclerosis (MS).

The Company reported preliminary data on July 13, 2020 and January 21,

2021 supporting the use of XPro to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral

inflammation (see above).

We completed enrollment of

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Patients had multiple inflammatory biomarkers test before therapy, at 6 weeks and at

Biomarkers were reported in blood and cerebral spinal fluid, MRI measures of white matter tract neuroinflammation, axonal quality

and axon myelin, and MRI measures of gray matter quality after XPro therapy.

Cognitive end-points were not the focus of the Phase 1 clinical

trial because of the wide range of disease severity enrolled and lack of a placebo group.

Patients enrolled in the Phase I trial had MMSE

ranging from 24 to 12.

This wide range of disease severity at the time of enrollment and the lack of a blinded concurrent control group

did not allow for determination of cognitive benefit beyond several anecdotal reports.

The first patient was enrolled in the low dose

0.3mg/kg/week cohort in the last week of November 2019.

The Safety Review Committee met by teleconference on January 7, 2020, to review

the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment.

The first patients were

enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020, and January 21, 2021, we

closed after completion of a 0.6mg/kg treatment group.

Biomarkers were reported in blood and cerebral spinal fluid.

Experient biomarkers including MRI measures of white matter tract

neuroinflammation, axonal quality and axon myelin, and MRI measures of gray matter quality were included.

Cognitive end-points were not

the focus of the Phase 1 clinical trial because of the wide range of disease severity enrolled and lack of a placebo group.

Patients enrolled

in the Phase I trial had MMSE ranging from 24 to 12.

This wide range of disease severity at the time of enrollment and the lack of a blinded

concurrent control group did not allow for determination of cognitive benefit beyond several anecdotal reports.

The first patient was

enrolled in the low dose 0.3mg/kg/week cohort in the last week of November 2019.

The Safety Review Committee met by teleconference on

January 7, 2020, to review the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment.

The first patients were enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020,

and January 21, 2021, we closed after completion of a 0.6mg/kg treatment group.

We canceled plans to treat patients with 3.0mg/kg.

The data from the Phase I trial

allowed the Company to choose a design the Phase II trials described above.

XPro Registration Studies and/or Partnering

We plan to aggressively pursue an efficient registration

strategy using XPro to improve the lives of patients with ADi.

We define ADi as Alzheimer’s disease with biomarkers of inflammation.

data from the Phase I trial informed the design of the Phase II trials described above.

Registration Studies and/or Partnering

We plan to aggressively pursue

an efficient registration strategy using XPro to improve the lives of patients with ADi.

We define ADi as Alzheimer’s disease with

biomarkers of inflammation.

We believe ADi is not the only indication for XPro in neurodegenerative and neuropsychiatric diseases.

We plan to pursue other indications

in neurodegenerative diseases as resources become available.

We have received NIMH funding to support a Phase II TRD program that hopes

to start patient enrollment in 2023.

We have an active partnering position as it relates to XPro development in neurodegenerative and

neuropshyciatric diseases, although limited partnering discussion are underway at this time.

There are two partnering opportunities with

this novel immunotherapy for the treatment of neurologic and psychiatric diseases.

The first is a traditional partnership focused on the

developing the drug for all neurodegenerative and neuropsychiatric applications.

The second is a more focused partnership developing XPro

as part of a combination therapy for a company’s existing therapy.

After completion of proof-of-concept Phase II studies, we will

decide what the most efficient registration strategy is available to the company with XPro.

DN-TNF for the treatment of Duchene Muscular

The Company also is exploring partnership opportunities

outside of neurodegenerative disease with DN-TNF such as DMD.

DMD is a X-linked muscular dystrophy that occurs in 1 in 3500 male births

The disease is caused by defects in dystrophin, a protein needed for efficient function of skeletal muscle.

Boys with DMD develop

skeletal muscle weakness that manifests early on with difficult standing and walking.

The boys become wheelchair bound by late adolescence

and die of respiratory and cardiac failure in their twenties.

plan to pursue other indications in neurodegenerative diseases as resources become available.

We have received NIMH funding to support

a Phase II TRD program that hopes to start patient enrollment in 2024.

We have an active partnering position as it relates to XPro development

in neurodegenerative and neuropsychiatric diseases, although limited partnering discussion are underway at this time.

There are two partnering

opportunities with this novel immunotherapy for the treatment of neurologic and psychiatric diseases.

The first is a traditional partnership

focused on the developing the drug for all neurodegenerative and neuropsychiatric applications.

The second is a more focused partnership

developing XPro as part of a combination therapy for a company’s existing therapy.

After completion of proof-of-concept Phase II

studies, we will decide what the most efficient registration strategy is available to the company with XPro.

for the treatment of Duchene Muscular Dystrophy

Company also is exploring partnership opportunities outside of neurodegenerative disease with DN-TNF such as DMD.

DMD is a X-linked muscular

dystrophy that occurs in 1 in 3500 male births in the US.

The disease is caused by defects in dystrophin, a protein needed for efficient

function of skeletal muscle.

Boys with DMD develop skeletal muscle weakness that manifests early on with difficult standing and walking.

The boys become wheelchair bound by late adolescence and die of respiratory and cardiac failure in their twenties.

There is no cure.

Symptomatic therapies include corticosteroids and novel

strategies to replace dystrophin including ASO and gene therapies.

Better therapies are needed.

The pathology of DMD is inflammation, skeletal

muscle cell destruction, replacement of muscle fibers with fat and fibrosis.

The most widely used therapy, corticosteroids are focused

on decreasing skeletal muscle inflammation.

Although anti-inflammatory, corticosteroids cause metabolic and immunologic problems including

insulin resistance, obesity, hirsutism, short stature, depression and behavioral problems.

Long term use of corticosteroids exacerbates

skeletal muscle weakness.

In collaboration with Professor

Armando Vallarta of University of California Irvine, the Company has completed and has ongoing studies with DN-TNF in murine models of

The animal models show that DN-TNF therapy decreases inflammation and muscle degradation, promotes muscle regeneration and decreases

Symptomatic therapies include corticosteroids and novel strategies to replace dystrophin including ASO and gene therapies.

Better therapies

pathology of DMD is inflammation, skeletal muscle cell destruction, replacement of muscle fibers with fat and fibrosis.

The most widely

used therapy, corticosteroids are focused on decreasing skeletal muscle inflammation.

Although anti-inflammatory, corticosteroids cause

metabolic and immunologic problems including insulin resistance, obesity, hirsutism, short stature, depression and behavioral problems.

Long term use of corticosteroids exacerbates skeletal muscle weakness.

collaboration with Professor Armando Vallarta of University of California Irvine, the Company has completed and has ongoing studies with

DN-TNF in murine models of DMD.

The animal models show that DN-TNF therapy decreases inflammation and muscle degradation, promotes muscle

regeneration and decreases fibrosis.

This is a unique set of attributes compared to other therapies on the market or in development.

Because muscle cells produce

TNF, we believe the benefits of DN-TNF therapy extends beyond the obvious immunologic attributes of modifying T cell and macrophage infiltrates.

Because muscle cells produce TNF, we believe the benefits of DN-TNF therapy extends beyond the obvious immunologic attributes of modifying

T cell and macrophage infiltrates.

Pre-clinical animal studies continue to better define the exact mechanism for these effects.

The Company has filed global

IP on the use of DN-TNF to treat muscular dystrophy.

The Company has placed the IP and knowhow into a wholly owned subsidiary called DN02,

The purpose of this structure is to facilitate partnering and/or co-development of DN-TNF for DMD in a way that does not complicate

or compromise the development of XPro for CNS diseases.

The Company is actively seeking a partner to develop DN-TNF for DMD.

predict if or when or under what terms a partnership will be formed.

Company has filed global IP on the use of DN-TNF to treat muscular dystrophy.

The Company has placed the IP and knowhow into a wholly

owned subsidiary called DN02, Inc.

The purpose of this structure is to facilitate partnering and/or co-development of DN-TNF for DMD

in a way that does not complicate or compromise the development of XPro for CNS diseases.

The Company is actively seeking a partner to

develop DN-TNF for DMD.

We cannot predict if or when or under what terms a partnership will be formed.

Our NK cell Directed Product Candidate

INKmune is our lead product

candidate that converts the patient’s resting NK cells into cancer memory like NK cells, an essential step to allow them to participate

in the immune control of the patient’s cancer.

We have shown this works ex vivo in human tissue cell cultures, and we believe that

this will work in vivo which is the purpose of our planned clinical trials.

Cancers grow and relapse because

they evade the immune system.

In many cancers, NK cells are the most important cell for the elimination of residual disease that causes

cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface that signal the NK cells to activate

and kill the cancer cell.

NK cells develop a memory like NK cell phenotype to enhance killing of cancer cells.

This phenotype requires

multiple simultaneous signals to be delivered to the NK cells.

A cocktail of three cytokines, IL12, IL15 and IL18 can be used to convert

a resting NK cell to cytokine induced memory like NK cells (“CIML”) [Fehneger 2016 ] or by INKmune priming with INB16 (TpNK – tumor

primed NK cells).

Although the intracellular biology of these two strategies has yet to be worked out, they do not appear to be identical.

In summary, INKmune converts resting NK cells into tumor killing memory like NK cells that function well in the hostile environment of

is our lead product candidate that converts the patient’s resting NK cells into cancer memory like NK cells, an essential step

to allow them to participate in the immune control of the patient’s cancer.

We have shown this works ex vivo in human tissue cell

cultures, and we believe that this will work in vivo which is the purpose of our planned clinical trials.

Cancers grow and relapse because they evade the immune system.

cancers, NK cells are the most important cell for the elimination of residual disease that causes cancer relapse.

NK cells target cells

based on a series of complex antigens on the cancer cell surface that signal the NK cells to activate and kill the cancer cell.

develop a memory like NK cell phenotype to enhance killing of cancer cells.

This phenotype requires multiple simultaneous signals to be

delivered to the NK cells.

A cocktail of three cytokines, IL12, IL15 and IL18 can be used to convert a resting NK cell to cytokine induced

memory like NK cells (“CIML”) [Fehneger 2016] or by INKmune priming with INB16 (TpNK – tumor primed NK cells).

the intracellular biology of these two strategies has yet to be worked out, they do not appear to be identical.

In summary, INKmune converts

resting NK cells into tumor killing memory like NK cells that function well in the hostile environment of the TME.

(Figure 1 below).

The ability of NK cells to

kill tumor cells depends on the strength and duration of the cell-cell interaction.

This is call avidity.

The higher the avidity the

greater the tumor cell killing.

Cytokine stimulation may increase avidity of NK binding to some cancer cells whereas, in all experiments

to date, INKmune priming enhances NK binding to all cancer cells tested.

The relative increase in avidity to specific cancer cells is

cytokine specific;

as shown below, IL15 increases NK avidity for the ovarian cancer line SKOV-3 whereas IL2 has a limited effect.

primed NK cells lyse SKOV-3 cells whereas IL2 primed NK do not.

INKmune primed NK (TpNK) showed the highest avidity for the tumor cells

and the highest level of cytotoxicity.

It is likely that the use of multiple cytokines will achieve the same level of avidity and cytotoxicity

as INKmune but studies with multiple cytokines have not yet been performed (Figure below).

We have demonstrated

TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source of the NK cells (normal volunteers

or patients with cancer) and in many types of tumors – both cell lines and primary tumors from patients.

The principle of TpNK

killing has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

were not supported by us and used a first-generation personalized cell therapy product and treatment strategy that is different from

the INKmune product and treatment strategy.

The ability of NK cells to kill tumor cells depends on the strength

and duration of the cell-cell interaction.

This is called avidity.

The higher the avidity the greater the tumor cell killing.

stimulation may increase avidity of NK binding to some cancer cells whereas, in all experiments to date, INKmune priming enhances NK binding

to all cancer cells tested.

The relative increase in avidity to specific cancer cells is cytokine specific;

as shown below, IL15 increases

NK avidity for the ovarian cancer line SKOV-3 whereas IL2 has a limited effect.

IL15 primed NK cells lyse SKOV-3 cells whereas IL2 primed

INKmune primed NK (TpNK) showed the highest avidity for the tumor cells and the highest level of cytotoxicity.

that the use of multiple cytokines will achieve the same level of avidity and cytotoxicity as INKmune but studies with multiple cytokines

have not yet been performed (Figure below).

have demonstrated TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source of the

NK cells (normal volunteers or patients with cancer) and in many types of tumors – both cell lines and primary tumors from patients.

The principle of TpNK killing has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

These trials were not supported by us and used a first-generation personalized cell therapy product and treatment strategy that is different

from the INKmune product and treatment strategy.

In these trials, haplo-identical NK cells obtained from a first degree relative by leukapheresis

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that our strategy for treating residual disease is sensible but unproven.

Because INKmune primes NK

cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers including hematologic

malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).

We expect the list of

INKmune sensitive tumors to continue to expand.

INKmune primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers

including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).

We expect the list of INKmune sensitive tumors to continue to expand.

The primary role for INKmune

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the difficulty and cost of achieving these labels extensions will decline with each successive approval, if and when achieved.

if INKmune is proven to be effective therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal

if INKmune is proven to be effective therapy in patients with castration resistant prostate cancer, we will need to perform separate pivotal

trials for approval in lung, prostate or renal cancer.

Three step process to preparation for INKmune

human clinical trials:

INKmune GMP scale-up for Phase I/II clinical

step process to preparation for INKmune human clinical trials:

GMP scale-up for Phase I/II clinical material

The working cell banks and

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direction of Professor Mark Lowdell.

The Company can produce enough INKmune to complete both Phase I clinical trials in women with ovarian

cancer and in patients with high-risk MDS.

The Company can produce enough INKmune to complete its Phase I clinical trial in men with metastatic

castrate resistant prostate cancer (mCRPC)..

We have validated storage of INKmune for up over 3 years in vapor phase nitrogen and have

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We may need additional INKmune for future clinical trials.

Interaction with Regulatory Authorities Regarding

INKmune Development

with Regulatory Authorities Regarding INKmune Development

The INKmune Phase I studies

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the UK version of the FDA as part of a Scientific Advice Meetings in preparation for submitting the CTA for our first planned program.

The purpose of the meeting was to explain to the MHRA our manufacturing process and clinical plan for the development of INKmune in a

Phase I relapse/refractory ovarian cancer.

We are working to seek regulatory approval to start a solid tumor program in the US.

has had initial discussion with the FDA.

Those discussions are ongoing.

We plan to file an IND for a solid tumor indication in 2023.

have not announced the solid tumor target.

INKmune Product Development Path Proposed Phase

I Study in patients with high-risk MDS

During 2021, we initiated

an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).

Patients are being enrolled

who have a low burden of disease after completion of conventional therapy.

The first patients were enrolled in the first quarter of 2021.

In the Phase I trial, patients with detectable residual disease in bone marrow and/or peripheral blood (<15% blasts by conventional

tests) will be treated with intravenous infusions of INKmune and monitored for changes in peripheral blood NK activation, NK function

and changes in residual blast counts in blood and bone marrow.

We and others have previously shown that MDS patients with inadequate NK

function have statistically significantly poorer prognosis than matched patients with normal levels of NK function (Tsirogianni et al

2019) and we have shown in laboratory experiments that the functional activity of NK cells from MDS patients can be enhanced by exposure

Moreover, INKmune-primed NK cells are not inhibited by the hypoxic conditions of the diseased bone marrow microenvironment.

The first patient was treated

in the second quarter of 2021.

Product Development Path Proposed Phase I Study in patients with high-risk MDS

2021, we initiated an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).

are being enrolled who have a low burden of disease after completion of conventional therapy.

The first patients were enrolled in the

first quarter of 2021.

In the Phase I trial, patients with detectable residual disease in bone marrow and/or peripheral blood (<15%

blasts by conventional tests) will be treated with intravenous infusions of INKmune and monitored for changes in peripheral blood NK

activation, NK function and changes in residual blast counts in blood and bone marrow.

We and others have previously shown that MDS patients

with inadequate NK function have statistically significantly poorer prognosis than matched patients with normal levels of NK function

(Tsirogianni et al 2019) and we have shown in laboratory experiments that the functional activity of NK cells from MDS patients can be

enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are not inhibited by the hypoxic conditions of the diseased bone marrow

microenvironment.

first patient was treated in the second quarter of 2021.

The patient is now more than 12 months out from therapy with INKmune.

The patient, part of the first cohort,

received 1x10^8 INKmune cells on day 1,8 and 15 as an in-patient.

The patient did not require any type of conditioning therapy or cytokine

part of the first cohort, received 1x10^8 INKmune cells on day 1,8 and 15 as an in-patient.

The patient did not require any type of conditioning

therapy or cytokine support.

The patient tolerated the three infusions without any problems.

The patient underwent intensive monitoring over 120 days.

are 4 observations from this first patient.

The patient underwent intensive monitoring

over 120 days.

There are 4 observations from this first patient.

The patient has dramatically increased the number of activated, “memory-like”

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Two were young patients with AML who had failed previous hematopoietic stem cell transplants (“HSCT”).

compassionate-treatment patient showed such improved neutrophil and platelet counts that she was discharged from hospital for the first

time in six months.

The second patient treated compassionately had failed two high risk HSCT and entered the course of INKmune therapy

with high percentage of blasts in his bone marrow.

His blood NK cells responded in differentiation into mlNK as hoped but it is too early

to determine if INKmune has provide any clinical benefit.

INKmune Registration Studies and/or Partnering

The Company plans to file

an Investigational New Drug (“IND”) application in 2023 for a Phase I/II trial of INKmune in a solid tumor indication.

Other solid cancers

are of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK cells and an important unmet clinical

need in emerging markets such as mainland China.

The first compassionate-treatment patient showed such improved neutrophil and platelet counts that she was discharged from hospital for

the first time in six months.

The second patient treated compassionately had failed two high risk HSCT and entered the course of INKmune

therapy with high percentage of blasts in his bone marrow.

His blood NK cells responded in differentiation into mlNK as hoped but it is

too early to determine if INKmune has provide any clinical benefit.

Due to market opportunities, the Company has closed the high-risk

MDS trial to focus on solid tumors.

The Company plans to put all of its INKmune development efforts into the on-going US Phase I/II trial

in men with mCRPC.

Registration Studies and/or Partnering

During March 2023 the Company opened an Investigational New Drug (“IND”)

application for a Phase I/II trial of INKmune in metastatic castrate resistant prostate cancer (mCPRC).

The clinical trial is an open

label Phase I/II trial in men with metastatic castrate resistant prostate cancer.

The trial has a modified Baysian design that allows

for a 3 patient Phase I for each dose level followed by a 6 patient Phase II trial.

All patients will receive 3 infusions of INKmune on

days 1, 8 and 15.

The three doses of INKmune at low, medium and high dose of INKmune is 1x10^8, 3x10^8 or 5 x10^8 cells per infusion respectively.

INKmune infusions are given as an out-patient with the use of pre-medication or additional cytokines.

Patients are carefully monitored

for 6 months after the first dose of INKmune.

There are four goals of the trial – determine safety in the target population;

efficacy, anti-tumor effects and select a dose for the pivotal trial.

Immunologic efficacy is determined by an increase in the numbers

of memory like NK cells in the circulation of the patient and how long that increase lasts.

In general, we are expecting the number of

mlNK to double and to persist in the circulation of the patient for more than 120 days.

Anti-tumor effects will be monitored by serial

testing of blood prostatic surface antigen level (blood PSA), prostate-specific membrane antigen

nuclear medicine scan ( PMSA scan with piflufolastat F18;

Pylarify®) and circulating tumor DNA.

The Company enrolled the first

patient in the open label low dose Phase I cohorts of December 27, 2023.

A second patient was enrolled in February 2024.

The final patient

in the low dose cohort was enrolled in March 2024.

The trial will enroll patients during all of 2024.

The last patient in the Phase II

cohorts is expected to be enrolled in 1H25 with data lock 2H25.

As an open label trial, there may be opportunities to see patient data

Other solid cancers are of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK cells

and an important unmet clinical need in emerging markets such as mainland China.

Renal cell carcinoma is also a known target for INKmune.

We may seek partner or sell

Although our development strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets

on the Pacific Rim, South Asia and South America, but will wait for partners to help with the development in those regions, however, at

this time, we are not negotiating with any potential partners.

Importantly, we have published

data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes priming of NK cells differentiated

from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

Numerous companies are developing

therapeutic strategies using cord blood derived NK cell products and one or more may wish to partner with us to potentiate their product

by co-incubation or co-administration with INKmune.

We are also aware of companies developing cytokine primed NK cells (CIML) for the

treatment of cancer.

We may seek to partner or sell INKmune.

Although our development strategy is focused on North America and Europe, we believe INKmune will

also be attractive for markets on the Pacific Rim, South Asia and South America, but will wait for partners to help with the development

in those regions, however, at this time, we are not negotiating with any potential partners.

we have published data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes priming

of NK cells differentiated from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

companies are developing therapeutic strategies using cord blood derived NK cell products and one or more may wish to partner with us

to potentiate their product by co-incubation or co-administration with INKmune.

We are also aware of companies developing cytokine primed

NK cells (CIML) for the treatment of cancer.

We believe tumor primed NK cells are superior to ex vivo or in vivo cytokine strategies.

Challenges in the Market for Our Product Candidates

The market for new oncology therapies is competitive, complicated,

and rapidly evolving.

We will be competing with companies that are older, larger, better financed and have greater experience.

two types of drug companies – development companies and commercial companies.

Development companies take the risk of developing

new products to proof-of-concept.

Once proof-of-concept has been achieved, if the drug provides clinical benefit, the product is usually

acquired by a commercial company, which completes the drug’s clinical development and markets the product.

We are a development

company which will seek to develop products such as INKmune from the bench to the bedside to demonstrate proof-of-concept.

us is to successfully develop such products to the point where they are attractive targets for potential partners/acquirers.

According to a recent Markets and Markets report, the immunotherapy

market is growing rapidly at an annual rate of over 13%.

Recently, the market is biased towards T cell-based immunotherapies including

bi-specific antibody therapies, checkpoint inhibitors and CAR-T cell-based therapies.

There are substantial numbers of clinical trials

that are focused on the adaptive immune system versus clinical trials that are focused on the innate immune system for the treatment of

Our challenge will be to educate partners on the value of NK cell-based therapeutic strategies.

The need to educate people of

the importance of INB03 is equally challenging.

At the academic and investor level, there is little recognition of the role MUC4 plays

in causing resistance to immunotherapy.

The concept of adding a drug to modify the immunosuppressive environment of the TME to allow immunotherapy

to be effective is also new.

We will be responsible for educating them on the importance of MUC4 expression, TAM, MDSC and why INB03 may

be an important addition to the oncologist’s armamentarium.

We believe educating investors and partners about new therapeutic opportunities

is an easier task than trying to differentiate our company from the many other cancer immunotherapy companies.

We plan to use a combination

of publication, presentation and investor relations to discuss INKmune and INB03 and to educate the clinical, biopharma and investor community

on the value of these novel therapeutic approaches.

DN-TNF Competition

To our knowledge, there are

no other companies developing a therapy to treat patients with MUC4+HER2+ tumors.

This set of biomarkers predicts a tumor that will be

resistant to therapy.

We believe MUC4 expression means that patient will be resistant to first line trastuzumab based immunotherapy and

will be resistant to CPI.

in the Market for Our Product Candidates

market for new oncology therapies is competitive, complicated, and rapidly evolving.

We will be competing with companies that are older,

larger, better financed and have greater experience.

There are two types of drug companies – development companies and commercial

Development companies take the risk of developing new products to proof-of-concept.

Once proof-of-concept has been achieved,

if the drug provides clinical benefit, the product is usually acquired by a commercial company, which completes the drug’s clinical

development and markets the product.

We are a development company which will seek to develop products such as INKmune from the bench

to the bedside to demonstrate proof-of-concept.

The goal for us is to successfully develop such products to the point where they are

attractive targets for potential partners/acquirers.

to a recent Markets and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the market

is biased towards T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T cell-based therapies.

There are substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical trials that are focused

on the innate immune system for the treatment of cancer.

Our challenge will be to educate partners on the value of NK cell-based therapeutic

The need to educate people of the importance of INB03 is equally challenging.

At the academic and investor level, there is

little recognition of the role MUC4 plays in causing resistance to immunotherapy.

The concept of adding a drug to modify the immunosuppressive

environment of the TME to allow immunotherapy to be effective is also new.

We will be responsible for educating them on the importance

of MUC4 expression, TAM, MDSC and why INB03 may be an important addition to the oncologist’s armamentarium.

We believe educating

investors and partners about new therapeutic opportunities is an easier task than trying to differentiate our company from the many other

cancer immunotherapy companies.

We plan to use a combination of publication, presentation and investor relations to discuss INKmune and

INB03 and to educate the clinical, biopharma and investor community on the value of these novel therapeutic approaches.

our knowledge, there are no other companies developing a therapy to treat patients with MUC4+HER2+ tumors.

This set of biomarkers predicts

a tumor that will be resistant to therapy.

We believe MUC4 expression means that patient will be resistant to first line trastuzumab

based immunotherapy and will be resistant to CPI.

INB03 is a unique category of cancer therapies.

It is does not kill cancer cells.

INB03 modulates the immunology

of the TME to make existing therapies more effective.

The advantage of this strategy is that it can be used prospectively, and it does

not add toxicity to existing therapy.

INKmune Competition

Our industry is highly competitive

and subject to rapid and significant technological change.

Our potential competitors include large pharmaceutical and biotechnology companies,

specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.

that key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability,

reliability, price, and reimbursement level.

Many of our potential competitors, including many of the organizations named below, have

substantially greater financial, technical, and human resources than we do and significantly greater experience in the discovery and development

of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products.

our competitors may be more successful than us in obtaining FDA approval for and achieving widespread market acceptance of their drugs.

Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may

render our product candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of

our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced

technologies become available.

Further, the development of new treatment methods for the conditions we are targeting could render our

drugs non-competitive or obsolete.

INKmune is an immunotherapy

that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy strategies for the treatment

of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways to classify immunotherapy for cancer.

modulates the immunology of the TME to make existing therapies more effective.

The advantage of this strategy is that it can be used

prospectively, and it does not add toxicity to existing therapy.

industry is highly competitive and subject to rapid and significant technological change.

Our potential competitors include large pharmaceutical

and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research

institutions.

We believe that key competitive factors that will affect the development and commercial success of our product candidates

are efficacy, safety, tolerability, reliability, price, and reimbursement level.

Many of our potential competitors, including many of

the organizations named below, have substantially greater financial, technical, and human resources than we do and significantly greater

experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization

of those products.

Accordingly, our competitors may be more successful than us in obtaining FDA approval for and achieving widespread

market acceptance of their drugs.

Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any

drug we may commercialize and may render our product candidates obsolete or non-competitive before we can recover the expenses of developing

and commercializing any of our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter

the market and advanced technologies become available.

Further, the development of new treatment methods for the conditions we are targeting

could render our drugs non-competitive or obsolete.

is an immunotherapy that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy strategies

for the treatment of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways to classify immunotherapy

The list below classifies immunotherapy strategies beginning with those that are most closely related to INKmune:

Companies in the NK cell therapy business;

Companies in the personalized immune-oncology business;

Companies in the precision immuno-oncology business.

We are not aware of any approved

treatments that are classified as NK cell therapies.

We are aware of public companies in the NK cell therapy business such as Century

Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.

These companies are developing products that involve replacing

or supplementing NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo cell manipulations which,

with respect to Century Therapeutics and Fate Therapeutics, may include gene therapy.

The next larger group of companies are in the personalized

immuno-oncology business with products focused on T cell activation strategies.

The most popular are the CAR-T cell therapies which are

a patient specific ex-vivo gene therapy approach to a single disease (for example:

Companies in the NK cell

therapy business;

Companies in the personalized

immune-oncology business;

Companies in the precision

immuno-oncology business.

are not aware of any approved treatments that are classified as NK cell therapies.

We are aware of public companies in the NK cell therapy

business such as Century Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.

These companies are developing

products that involve replacing or supplementing NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo

cell manipulations which, with respect to Century Therapeutics and Fate Therapeutics, may include gene therapy.

The next larger group

of companies are in the personalized immuno-oncology business with products focused on T cell activation strategies.

The most popular

are the CAR-T cell therapies which are a patient specific ex-vivo gene therapy approach to a single disease (for example:

pediatric ALL).

CAR-T therapy has become wildly popular

of late and includes many private companies, newer public companies such as Bluebird, Juno Therapeutics and Mustang Bio as well as established

companies such as Novartis and Gilead.

For many of the companies, CAR-T cell therapies is their only business.

For the latter two, CAR-T

cell therapies is a newly in-licensed program with marketing authorization in the US.

Finally, the precision immune-oncology category

also includes companies with anti-cancer antibody products and the newer “check-point” inhibitors.

Antibody therapies are

all about “illuminating” the cancer to the innate immune system (NK cells).

Monoclonal antibodies were the original immunotherapy

that drove the growth of well-known biopharma companies including Genentech/Roche, Amgen, Merck and others.

Each of these products is

disease specific (ie:

CAR-T therapy has become wildly popular of late and includes many private companies, newer public companies such as Bluebird, Juno Therapeutics

and Mustang Bio as well as established companies such as Novartis and Gilead.

For many of the companies, CAR-T cell therapies is their

only business.

For the latter two, CAR-T cell therapies is a newly in-licensed program with marketing authorization in the US.

the precision immune-oncology category also includes companies with anti-cancer antibody products and the newer “check-point”

Antibody therapies are all about “illuminating” the cancer to the innate immune system (NK cells).

antibodies were the original immunotherapy that drove the growth of well-known biopharma companies including Genentech/Roche, Amgen,

Merck and others.

Each of these products is disease specific (ie:

treat only HER2+ breast cancer).

Modern therapeutic antibodies are much more complicated bi-specific and tri-specific

antibodies that attempt to connect the cancer with activated T-cells of the adaptive immune system.

Check-point inhibitors are currently

the most rapidly expanding product category in immuno-oncology.

These CTLA-4 (ipilimumab) and PD-1 inhibitors (pembrolizumab and nivolumab)

specifically block a mechanism that shields cancers from T-cell killing.

The two companies in this business are Merck (pembrolizumab)

and GSK (ipilimumab and nivolumab).

There are many others trying to join this promising therapeutic area including large companies such

as BMS and Roche.

There are several FDA approved

drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal antibody therapies (for example:

Modern therapeutic antibodies are

much more complicated bi-specific and tri-specific antibodies that attempt to connect the cancer with activated T-cells of the adaptive

immune system.

Check-point inhibitors are currently the most rapidly expanding product category in immuno-oncology.

These CTLA-4 (ipilimumab)

and PD-1 inhibitors (pembrolizumab and nivolumab) specifically block a mechanism that shields cancers from T-cell killing.

The two companies

in this business are Merck (pembrolizumab) and GSK (ipilimumab and nivolumab).

There are many others trying to join this promising therapeutic

area including large companies such as BMS and Roche.

are several FDA approved drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal

antibody therapies (for example:

Avastin® and Herceptin® marketed by Roche/Genentech);

and “check-point” inhibitors (Yervoy® and

Opdivo®, BMS, Keytruda®, Merck and others).

There is a large amount of development activity in the immune checkpoint inhibitor

field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck KGaA, Roche, GSK, Novartis and Amgen and many

start-ups, small companies and university spin-offs which have emerged in the past two years.

Examples (in alphabetical order) include

Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion, Cellerant Therapeutics, Checkpoint Therapeutics, Compugen,

CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext, IOmet Pharma, iTeos Therapeutics, Jounce Therapeutics, KAHR Medical,

Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican Therapeutics, Pieris Pharmaceuticals, Prima BioMed, Redx Pharma, Sorrento

Therapeutics, Tesaro, TG Therapeutics, Theravectys and ToleroTech active in the field.

The list of companies with poly-specific antibodies

that attempt to link the cancer with a cytotoxic T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus

and many others).

Finally, two CAR-T cell therapies were just approved for the treatment of ALL – Kymriah™ (Novartis) and

Yescarta™ (Gilead).

We expect additional drugs to gain marketing authorization in the immune-oncology space.

To our knowledge, there are

no innate immune check-point inhibitors in development that have the unique characteristics of INB03 that neutralize sTNF to:

the proliferation of MDSC;

ii) decreasing local and systemic immunosuppression caused by MDSC by stopping production of immunosuppressive

cytokines and;

iii) improving NK/DC cross-talk to recruit the adaptive immune system to fight the cancer.

Intellectual Property

and “check-point”

inhibitors (Yervoy® and Opdivo®, BMS, Keytruda®, Merck and others).

There is a large amount of development activity in the

immune checkpoint inhibitor field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck KGaA, Roche, GSK,

Novartis and Amgen and many start-ups, small companies and university spin-offs which have emerged in the past two years.

alphabetical order) include Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion, Cellerant Therapeutics, Checkpoint

Therapeutics, Compugen, CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext, IOmet Pharma, iTeos Therapeutics, Jounce

Therapeutics, KAHR Medical, Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican Therapeutics, Pieris Pharmaceuticals, Prima BioMed,

Redx Pharma, Sorrento Therapeutics, Tesaro, TG Therapeutics, Theravectys and ToleroTech active in the field.

The list of companies with

poly-specific antibodies that attempt to link the cancer with a cytotoxic T cell is long, includes both private and public companies

(Amgen, Xencor, F-Star, Merus and many others).

Finally, two CAR-T cell therapies were recently approved for the treatment of ALL –

Kymriah™ (Novartis) and Yescarta™ (Gilead).

We expect additional drugs to gain marketing authorization in the immune-oncology

To our knowledge, there are no innate immune check-point inhibitors

in development that have the unique characteristics of INB03 that neutralize sTNF to:

i) decreases the proliferation of MDSC;

ii) decreasing

local and systemic immunosuppression caused by MDSC by stopping production of immunosuppressive cytokines and iii) improving NK/DC cross-talk

to recruit the adaptive immune system to fight the cancer.

We seek to protect our therapeutic

6 unchanged sentences

and sometimes in Brazil, China and/or Korea.

We currently have in our portfolio eleven (11) issued patents and forty-seven (47) pending

We currently have in our portfolio fifteen (15) issued patents and twenty-three (23) pending

patent applications, including both company-owned and in-licensed properties.

2 unchanged sentences

of preparing this document:

DN-TNF Platform Technology (Oncology, Central

Nervous System Disorders, Acute and Chronic Peripheral Diseases)

The DN-TNF Platform Technology

covers a variety of dominant negative tumor necrosis factor (“DN-TNF”) variant proteins, including the pegylated DN-TNF protein

variants known as XPro and INB03.

These DN-TNF protein variants can be considered a platform technology for treating the underlying immune

dysfunction associated with many disease manifestations.

Unlike approved anti-TNF therapeutics, DNTNF selectively targets and neutralizes

soluble TNF, and is therefore not immunosuppressive.

Additionally, XPro has been shown to cross the blood brain barrier after peripheral

administration, making it attractive for use in treating CNS disorders.

The following table summarizes current IP covering our DN-TNF

Platform Technology:

Platform Technology (Oncology, Central Nervous System Disorders, Acute and Chronic Peripheral Diseases)

DN-TNF Platform Technology covers a variety of dominant negative tumor necrosis factor (“DN-TNF”) variant proteins, including

the pegylated DN-TNF protein variants known as XPro and INB03.

These DN-TNF protein variants can be considered a platform technology

for treating the underlying immune dysfunction associated with many disease manifestations.

Unlike approved anti-TNF therapeutics, DNTNF

selectively targets and neutralizes soluble TNF, and is therefore not immunosuppressive.

Additionally, XPro has been shown to cross the

blood brain barrier after peripheral administration, making it attractive for use in treating CNS disorders.

The following table summarizes

current IP covering our DN-TNF Platform Technology:

Subject Matter / Compound

2 unchanged sentences

Use of DNTNF for treating disease

INB-16 / INKmune (Oncology)

INKmune is a replication-incompetent

derivative of our proprietary INB-16 cell line.

One commercial application of INKmune includes use as a therapeutic composition designed

to enhance the ability of a patient’s own NK cells to seek, recognize and eliminate cancer.

Another commercial application of INKmune

includes use as a cytokine-like (“pseudokine”) agent for enhancing NK cell killing specificity, potency, and efficacy of NK

cell -based therapeutics.

/ INKmune (Oncology)

is a replication-incompetent derivative of our proprietary INB-16 cell line.

One commercial application of INKmune includes use as a

therapeutic composition designed to enhance the ability of a patient’s own NK cells to seek, recognize and eliminate cancer.

commercial application of INKmune includes use as a cytokine-like (“pseudokine”) agent for enhancing NK cell killing specificity,

potency, and efficacy of NK cell -based therapeutics.

INKmune, as a therapeutic, is intended for provision as an I.V.

-infused product containing replication-incompetent

bio substrate units, each of which is adapted to present an aggregate of protein ligands and/or receptors to a patient’s own NK

cells, in vivo .

Upon contacting the patient’s NK cells, INKmune converts resting NK cells into what we call “primed”

NK cells (“pNKs”).

Data suggests that pNKs demonstrate enhanced killing of tumor cells, thus INKmune may indirectly improve

a patient’s own immune response to cancer.

As a pseudokine agent, INKmune can be used to contact the NK cells of an NK cell therapeutic

product in vitro , e.g., during manufacturing, for enhancing characteristics of the NK cell therapeutic and rendering an improved

-infused product

containing replication-incompetent bio substrate units, each of which is adapted to present an aggregate of protein ligands and/or receptors

to a patient’s own NK cells, in vivo .

Upon contacting the patient’s NK cells, INKmune converts resting NK cells into

what we call “primed” NK cells (“pNKs”).

Data suggests that pNKs demonstrate enhanced killing of tumor cells,

thus INKmune may indirectly improve a patient’s own immune response to cancer.

As a pseudokine agent, INKmune can be used to contact

the NK cells of an NK cell therapeutic product in vitro , e.g., during manufacturing, for enhancing characteristics of the NK cell

therapeutic and rendering an improved product.

The following table summarizes current IP covering INB-16 / INKmune:

3 unchanged sentences

Use of INKmune for treating disease

Use of INKmune for enhancing NK cell therapeutics

General IP Disclosures

Our commercial success depends

in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current and future product candidates

and the methods used to manufacture them, as well as successfully defending our patents against third-party challenges.

Our ability to stop third

parties from making, using, selling, offering to sell or importing our products depends on the extent to which we have rights under valid

and enforceable patents or trade secrets that cover these activities, and whether we are able to enforce such rights.

We cannot assure

you that our pending patent applications will result in issued patents, or that any or all rights will be enforceable in every jurisdiction

whether or not patent rights are sought.

International PCT patent applications

cover all 152 nations which are signatories of the PCT.

However, our global IP strategy generally targets Australia, Canada, Europe, Japan,

and the United States, and sometimes Brazil, China and/or Korea, as targets for extending patent protection under the PCT.

Decisions regarding

which countries to extend patent coverage under the PCT is taken on a case-by-case basis, subject to normal business considerations such

as value and return on investment.

Given the markets for products we are developing, we consider the foregoing jurisdictions to amount

to “global” coverage as used herein as it relates to IP.

The above disclosures related

to patents and patent applications are subject to change based on strategic patent portfolio building decisions, which may include refiling

and reissue, certain abandonments, including those in favor of continuing patent applications, maturations from provisional to non-provisional

filings, and other regular patent prosecution activities.

The designations INMUNE BIO TM ,

INB16 TM , INKmune TM , PSEUDOKINE TM , and XPro TM are trademarks of INmune Bio, Inc.

these trademarks may be protected by applications pending at the USPTO and other trademark registration authorities globally.

of the trademark registration process, we may be required to submit a statement of use evidencing bona fide use of each mark in

By nature of being in the biopharmaceutical business, certain regulatory requirements must be met in connection with certain

products and/or services prior to receiving marketing authorization from a regulatory agency, and thus it may take some time before products

and/or services are offered for sale and a statement of use can be submitted for perfecting trademark registration.

For these reasons,

we may be required to obtain extensions of time, or to refile applications, seeking registration of trademarks.

We cannot guarantee that

a given trademark application will be allowed or issued in a respective office for each jurisdiction.

IP License Agreements

Immune Ventures, LLC License Agreement

On October 29, 2015, the Company

entered into an exclusive license agreement (the “INKmune License Agreement”) with Immune Ventures, LLC (“Immune Ventures”).

Pursuant to the INKmune License Agreement, we were granted an exclusive worldwide, sub-licensable, royalty-bearing license to commercialize

INKmune (the “INKmune License”).

In consideration for the INKmune License, we are obligated to pay Immune Ventures certain

milestone and royalty payments.

The term of the Immune Ventures

Agreement began on October 29, 2015, and, if not terminated sooner pursuant to the agreement, ends on a country-by-country basis on the

date of the expiration of the last to expire patent rights where patent rights exist.

Subject to granting, prosecution-related patent

term adjustments, and requirements for maintenance and renewals, the latest to expire patent is scheduled to expire on March 15, 2038

IP Disclosures

commercial success depends in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current

and future product candidates and the methods used to manufacture them, as well as successfully defending our patents against third-party

ability to stop third parties from making, using, selling, offering to sell or importing our products depends on the extent to which

we have rights under valid and enforceable patents or trade secrets that cover these activities, and whether we are able to enforce such

We cannot assure you that our pending patent applications will result in issued patents, or that any or all rights will be enforceable

in every jurisdiction whether or not patent rights are sought.

International

PCT patent applications cover all 152 nations which are signatories of the PCT.

However, our global IP strategy generally targets Australia,

Canada, Europe, Japan, and the United States, and sometimes Brazil, China and/or Korea, as targets for extending patent protection under

Decisions regarding which countries to extend patent coverage under the PCT is taken on a case-by-case basis, subject to normal

business considerations such as value and return on investment.

Given the markets for products we are developing, we consider the foregoing

jurisdictions to amount to “global” coverage as used herein as it relates to IP.

above disclosures related to patents and patent applications are subject to change based on strategic patent portfolio building decisions,

which may include refiling and reissue, certain abandonments, including those in favor of continuing patent applications, maturations

from provisional to non-provisional filings, and other regular patent prosecution activities.

designations INMUNE BIO TM , INB16 TM , INKmune TM , PSEUDOKINE TM , and XPro TM are trademarks

of INmune Bio, Inc.

Some or all these trademarks may be protected by applications pending at the USPTO and other trademark registration

authorities globally.

As part of the trademark registration process, we may be required to submit a statement of use evidencing bona

fide use of each mark in commerce.

By nature of being in the biopharmaceutical business, certain regulatory requirements must be

met in connection with certain products and/or services prior to receiving marketing authorization from a regulatory agency, and thus

it may take some time before products and/or services are offered for sale and a statement of use can be submitted for perfecting trademark

registration.

For these reasons, we may be required to obtain extensions of time, or to refile applications, seeking registration of

We cannot guarantee that a given trademark application will be allowed or issued in a respective office for each jurisdiction.

License Agreements

Ventures, LLC License Agreement

October 29, 2015, the Company entered into an exclusive license agreement (the “INKmune License Agreement”) with Immune Ventures,

LLC (“Immune Ventures”).

Pursuant to the INKmune License Agreement, we were granted an exclusive worldwide, sub-licensable,

royalty-bearing license to commercialize INKmune (the “INKmune License”).

In consideration for the INKmune License, we are

obligated to pay Immune Ventures certain milestone and royalty payments.

term of the Immune Ventures Agreement began on October 29, 2015, and, if not terminated sooner pursuant to the agreement, ends on a country-by-country

basis on the date of the expiration of the last to expire patent rights where patent rights exist.

Subject to granting, prosecution-related

patent term adjustments, and requirements for maintenance and renewals, the latest to expire patent is scheduled to expire on March 15,

2038 (“Natural Expiration”).

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to achieve the following milestones:

Initiation of Phase II clinical

trials or equivalent by October 29, 2023;

Initiation of Phase III

clinical trials or equivalent by October 29, 2025;

Filing of NDA or equivalent by October 29, 2026 or equivalent.

If we don’t achieve

the above milestones, we are required to negotiate in good faith with Immune Ventures to determine how we can either remedy the failure

or achieve an alternate development.

If we fail to make any required efforts or if the efforts do not remedy the situation within 60 days

of written notice by Immune Ventures, then Immune Ventures may provide notice to terminate the license or convert it to a non-exclusive

University of Pittsburg License Agreement

On October 3, 2017, the

Company entered into an Assignment and Assumption Agreement with Immune Ventures related to intellectual property licensed from the University

of Pittsburgh.

Pursuant to the Assignment and Assumption Agreement (the “Assignment Agreement”), Immune Ventures assigned

all its rights, obligations and liabilities under an Exclusive License Agreement between the University of Pittsburgh – Of the Commonwealth

System of Higher Education (“Licensor”) and Immune Ventures to INmune Bio (“Licensee”), (the “PITT Agreement”).

As consideration under the

PITT Agreement, we are obligated to pay:

(i) annual maintenance fees, (ii) royalty payments based on the sale of products making use of

the licensed technology, and (iii) milestone payments.

In 2022, the Company paid

$5,000 according to the PITT Agreement as an annual maintenance fee.

The PITT Agreement expires

upon the earlier of:

(i) expiration of the last claim of the Patent Rights forming the subject matter of the PITT Agreement;

date that is 20 years from the effective date of the agreement (June 26, 2037).

The Company may terminate

the PITT Agreement upon 3 months prior written notice provided all payments under the license are current.

Licensor may terminate the

PITT Agreement upon written notice if:

(i) the Company defaults as to performance of material obligations which have not been cured within

60 days after receiving written notice;

or (ii) the Company ceases to carry out its business, becomes bankrupt or insolvent, applies for

or consents to the appointment of a trustee, receiver or liquidator of its assets or seeks relief under any law for the aid of debtors.

Xencor License Agreement

On October 3, 2017, the

Company entered into a license agreement with Xencor, Inc.

(“Xencor”), which has discovered and developed a proprietary biological

molecule that inhibits soluble tumor necrosis factor (the “Xencor Agreement”).

During June 2021, the Company entered into

the First Amendment to License Agreement with Xencor.

Pursuant to the Xencor Agreement, Xencor granted the Company an exclusive worldwide,

royalty-bearing license in licensed patent rights, licensed know-how and licensed materials (as defined in the Xencor Agreement) to make,

develop, use, sell and import any pharmaceutical product that comprises, contains, or incorporates Xencor’s proprietary protein

known as “XPro” that inhibits soluble tumor necrosis factor (or all modifications, formulations and variants of the licensed

protein that specifically bind soluble tumor necrosis factor) alone or in combination with one or more active ingredients, in any dosage

or formulation.

of Phase II clinical trials or equivalent by October 29, 2023;

of Phase III clinical trials or equivalent by October 29, 2025;

of NDA or equivalent by October 29, 2026 or equivalent.

we don’t achieve the above milestones, we are required to negotiate in good faith with Immune Ventures to determine how we can

either remedy the failure or achieve an alternate development.

If we fail to make any required efforts or if the efforts do not remedy

the situation within 60 days of written notice by Immune Ventures, then Immune Ventures may provide notice to terminate the license or

convert it to a non-exclusive license.

of Pittsburg License Agreement

October 3, 2017, the Company entered into an Assignment and Assumption Agreement with Immune Ventures related to intellectual property

licensed from the University of Pittsburgh.

Pursuant to the Assignment and Assumption Agreement (the “Assignment Agreement”),

Immune Ventures assigned all its rights, obligations and liabilities under an Exclusive License Agreement between the University of Pittsburgh

– Of the Commonwealth System of Higher Education (“Licensor”) and Immune Ventures to INmune Bio (“Licensee”),

(the “PITT Agreement”).

consideration under the PITT Agreement, we are obligated to pay:

(i) annual maintenance fees, (ii) royalty payments based on the sale

of products making use of the licensed technology, and (iii) milestone payments.

2022, the Company paid $5,000 according to the PITT Agreement as an annual maintenance fee.

PITT Agreement expires upon the earlier of:

(i) expiration of the last claim of the Patent Rights forming the subject matter of the PITT

or (ii) the date that is 20 years from the effective date of the agreement (June 26, 2037).

Company may terminate the PITT Agreement upon 3 months prior written notice provided all payments under the license are current.

may terminate the PITT Agreement upon written notice if:

(i) the Company defaults as to performance of material obligations which have

not been cured within 60 days after receiving written notice;

or (ii) the Company ceases to carry out its business, becomes bankrupt

or insolvent, applies for or consents to the appointment of a trustee, receiver or liquidator of its assets or seeks relief under any

law for the aid of debtors.

License Agreement

October 3, 2017, the Company entered into a license agreement with Xencor, Inc.

(“Xencor”), which has discovered and developed

a proprietary biological molecule that inhibits soluble tumor necrosis factor (the “Xencor Agreement”).

During June 2021,

the Company entered into the First Amendment to License Agreement with Xencor.

Pursuant to the Xencor Agreement, Xencor granted the Company

an exclusive worldwide, royalty-bearing license in licensed patent rights, licensed know-how and licensed materials (as defined in the

Xencor Agreement) to make, develop, use, sell and import any pharmaceutical product that comprises, contains, or incorporates Xencor’s

proprietary protein known as “XPro” that inhibits soluble tumor necrosis factor (or all modifications, formulations and variants

of the licensed protein that specifically bind soluble tumor necrosis factor) alone or in combination with one or more active ingredients,

in any dosage or formulation.

The Xencor Agreement expires upon the later of:

(a) the expiration of the last to expire valid claim covering any pharmaceutical

product that contains, comprises, or incorporates Xencor’s proprietary protein known as XPro alone or in combination with one or

more active ingredients, in any dosage or formulation.

(“Licensed Product”) in such country or (b) ten years following the

first sale to a third party of the licensed product in such country.

Net Sales with respect to any Licensed Product is the gross amounts

invoiced by us for sales of the Licensed Products less deductions actually incurred.

A valid claim is an issued, unexpired or pending

claim with the patent rights that Xencor controls as of October 3, 2017 which patent rights are necessary to make, develop, use, sell,

have sold, offer for sale and import a Licensed Product in the Field (the Field means all applications for the treatment of diseases in

humans) or the Product Patent Rights, which claim has not lapsed, been abandoned, been revoked or been held to be unpatentable, invalid

or unenforceable by a final judgment of a court or other governmental agency or competent jurisdiction from which no appeal can be or

is taken within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue, re-examination,

(a) the expiration of the last to expire valid claim covering

any pharmaceutical product that contains, comprises, or incorporates Xencor’s proprietary protein known as XPro alone or in combination

with one or more active ingredients, in any dosage or formulation.

(“Licensed Product”) in such country or (b) ten years

following the first sale to a third party of the licensed product in such country.

Net Sales with respect to any Licensed Product is

the gross amounts invoiced by us for sales of the Licensed Products less deductions actually incurred.

A valid claim is an issued, unexpired

or pending claim with the patent rights that Xencor controls as of October 3, 2017 which patent rights are necessary to make, develop,

use, sell, have sold, offer for sale and import a Licensed Product in the Field (the Field means all applications for the treatment of

diseases in humans) or the Product Patent Rights, which claim has not lapsed, been abandoned, been revoked or been held to be unpatentable,

invalid or unenforceable by a final judgment of a court or other governmental agency or competent jurisdiction from which no appeal can

be or is taken within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue, re-examination,

disclaimer or otherwise.

3 unchanged sentences

the other party after the breach of any material provision of the agreement by the other party if the breaching party has not cured the

breach within the 60-day period (10-day period for any payment default) following written notice of termination by the non-breaching party.

breach within the 60-day period (10-day period for any payment default) following written notice of termination by the non-breaching

We can terminate the Xencor Agreement upon 180 days prior written notice to Xencor.

Xencor may terminate the Xencor Agreement in its entirety

or with respect to any specific Licensed Product upon written notice in the event that we contest, oppose or challenge or assist any party

in contesting, opposing or challenging, Xencor’s ownership of, or the enforceability or validity of the Patent Rights that Xencor

controls as of October 3, 2017 which Patent Rights are necessary to make develop, use, sell, have sold, offered for sale and import a

Licensed Product in the Field.

Either party may terminate the Xencor Agreement upon written notice to the other party upon or after the

insolvency, bankruptcy, dissolution or winding up of such other party or the making or seeking to make or arrange an assignment for the

benefit of creditors of such other party or the initiation of proceedings in voluntary or involuntary bankruptcy which proceeding, or

action remains undismissed or unstayed for a period of more than 60 days.

In consideration of the

Xencor Agreement, we agreed to royalty payments and a percentage of any payments received in exchange for a sub-license.

INKmune Research and Development

We expect to use third parties

to conduct our preclinical and clinical trials under the direct supervision of management.

INKmune Manufacturing

We intend to contract with third parties for the manufacture of our

compounds for investigational purposes, for preclinical and clinical testing and for any FDA approved products for commercial sale.

and clinical material for the early clinical trials with INKmune has been manufactured under the direction of Mark Lowdell at a licensed

Good Manufacturing Practice (“GMP”) facility.

The master cell bank, working cell bank and individual product doses were completed

in July 2018.

This clinical material is planned for use in the Phase I/II clinical trials in ovarian cancer.

As we progress in our clinical

programs, additional working cell banks and therapeutic product will be produced from the existing master cell bank.

This process takes

approximately 6 months and is not anticipated to delay the initiation of the high-risk MDS Phase I/II trials.

We may transfer the manufacturing

to a different commercial contract manufacturing organization after completion of these Phase II studies.

Human Mesenchymal Stem

In November 2017 (amended in October 2022), we entered into a Material

Transfer and License Agreement with the Anthony Nolan Cord Blood Bank (“AN”), the oldest and largest non-directed cord blood

bank in the United Kingdom for the supply the starting material for the mesenchymal stem cells - umbilical cords not used after cord blood

Mark Lowdell’s research group developed and validated a methodology for producing large numbers of clinical-grade pooled

human umbilical cord derived mesenchymal stem cells (“HucMSC”).

We believe we are well positioned to become a preferred manufacturing

partner for companies who need MSC for clinical programs.

Manufacture of HucMSC is performed under the direction of Mark Lowdell in a

licensed GMP facility that is contracted to the Company as part of existing research and development agreements.

The starting material

for the HucMSC product is provided by the AN.

The HucMSC product produced in this facility are fully qualified to be used for either research

or clinical trials.

We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical grade

(“cGMP”) quality mesenchymal stem cells that we call CORDstrom.

To date, we are supporting two academic clinical trials with

One program is a in the UK treating children with erythematous bullousa, a disfiguring skin disease in children that is similar

to a second degree burn and treatment of system lupus in adults.

Both these studies are ongoing.

INmune Bio is supplying the clinical

product for treatment of these patients.

The Company does not know the results of these trials until they are announced by the principal

investigators at the clinical sites.

Currently, we plan to supply HucMSC to third parties for their research use and in clinical trials

as part of the development process for commercial pro/ducts.

We may decide to expand this agreement in the future if the commercial and/or

development opportunities warrant such expansion.

At the current time, we expect this program to be funded by revenues from commercial

Xencor may terminate the Xencor Agreement

in its entirety or with respect to any specific Licensed Product upon written notice in the event that we contest, oppose or challenge

or assist any party in contesting, opposing or challenging, Xencor’s ownership of, or the enforceability or validity of the Patent

Rights that Xencor controls as of October 3, 2017 which Patent Rights are necessary to make develop, use, sell, have sold, offered for

sale and import a Licensed Product in the Field.

Either party may terminate the Xencor Agreement upon written notice to the other party

upon or after the insolvency, bankruptcy, dissolution or winding up of such other party or the making or seeking to make or arrange an

assignment for the benefit of creditors of such other party or the initiation of proceedings in voluntary or involuntary bankruptcy which

proceeding, or action remains undismissed or unstayed for a period of more than 60 days.

consideration of the Xencor Agreement, we agreed to royalty payments and a percentage of any payments received in exchange for a sub-license.

Research and Development

expect to use third parties to conduct our preclinical and clinical trials under the direct supervision of management.

Manufacturing

intend to contract with third parties for the manufacture of our compounds for investigational purposes, for preclinical and clinical

testing and for any FDA approved products for commercial sale.

Pre-clinical and clinical material for the early clinical trials with

INKmune has been manufactured under the direction of Mark Lowdell at a licensed Good Manufacturing Practice (“GMP”) facility.

The master cell bank, working cell bank and individual product doses were completed in July 2018.

This clinical material is planned for

use in the Phase I/II clinical trials.

As we progress in our clinical programs, additional working cell banks and therapeutic product

will be produced from the existing master cell bank.

This process takes approximately 6 months and is not anticipated to delay the initiation

or enrollment of the Phase I/II trials.

We may transfer the manufacturing to a different commercial contract manufacturing organization

after completion of these Phase II studies.

Mesenchymal Stem Cells

November 2017 (amended in October 2022), we entered into a Material Transfer and License Agreement with the Anthony Nolan Cord Blood

Bank (“AN”), the oldest and largest non-directed cord blood bank in the United Kingdom for the supply the starting material

for the mesenchymal stem cells - umbilical cords not used after cord blood harvest.

Mark Lowdell’s research group developed and

validated a methodology for producing large numbers of clinical-grade pooled human umbilical cord derived mesenchymal stem cells (“HucMSC”).

We believe we are well positioned to become a preferred manufacturing partner for companies who need MSC for clinical programs.

of HucMSC is performed under the direction of Mark Lowdell in a licensed GMP facility that is contracted to the Company as part of existing

research and development agreements.

The starting material for the HucMSC product is provided by the AN.

The HucMSC product produced

in this facility are fully qualified to be used for either research or clinical trials.

We have developed a validated manufacturing process

that reliably produces contract manufacturer of the clinical grade (“cGMP”) quality mesenchymal stem cells that we call CORDstrom.

To date, we are supporting two academic clinical trials with CORDstrom.

One program is a in the UK treating children with erythematous

bullousa, a disfiguring skin disease in children that is similar to a second degree burn and treatment of system lupus in adults.

these studies are ongoing.

INmune Bio is supplying the clinical product for treatment of these patients.

The Company does not know the

results of these trials until they are announced by the principal investigators at the clinical sites.

Currently, we plan to supply HucMSC

to third parties for their research use and in clinical trials as part of the development process for commercial pro/ducts.

We may decide

to expand this agreement in the future if the commercial and/or development opportunities warrant such expansion.

At the current time,

we expect this program to be funded by revenues from commercial sales.

The agreement with AN terminates on November 29, 2027.

AN may terminate the license on written notice to us, if a donor withdraws

consent to the continued use of umbilical cord tissue samples that were obtained by AN.

Additionally, either party may terminate the agreement

on 30 days prior written notice to the other if that other party materially breach any term of the agreement and such breaches (to the

extent it is remediable) is not remedied within 30 days of the written request to the other party to do so.

Challenges in the Market for Immunotherapy

Government Regulation

The FDA and other federal,

state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling, manufacture,

marketing, and distribution of drug products.

These agencies regulate, among other things, research and development activities and the

testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, advertising and promotion of

our product candidates.

The regulatory approval process is generally lengthy and expensive, with no guarantee of a positive result.

failure to comply with applicable FDA or other requirements may result in civil or criminal penalties, recall or seizure of products,

injunctive relief including partial or total suspension of production, or withdrawal of a product from the market.

Various regulatory authorities

regulate, among other things, the research, manufacture, promotion, and distribution of drugs in the United States under the FDA and other

statutes and implementing regulations.

The process required by the FDA before prescription drug product candidates may be marketed in

the United States generally involves the following:

completion of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice regulations;

submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;

for some products, performance of adequate and well-controlled human clinical trials in accordance with the FDA’s regulations, including Good Clinical Practices, to establish the safety and efficacy of the product candidate for each proposed indication;

submission to the FDA of a new drug application or NDA;

satisfactory completion of an FDA preapproval inspection of the manufacturing facilities at which the product is produced to assess compliance with current Good Manufacturing Practice, or cGMP, regulations;

FDA review and approval of the NDA prior to any commercial marketing, sale or shipment of the drug.

The testing and approval process

requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will

be granted on a timely basis, if at all.

Preclinical tests include

laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and other animal

The results of preclinical tests, together with manufacturing information and analytical data, are submitted as part of an IND

terminate the license on written notice to us, if a donor withdraws consent to the continued use of umbilical cord tissue samples that

were obtained by AN.

Additionally, either party may terminate the agreement on 30 days prior written notice to the other if that other

party materially breach any term of the agreement and such breaches (to the extent it is remediable) is not remedied within 30 days of

the written request to the other party to do so.

in the Market for Immunotherapy Products

FDA and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval,

labeling, manufacture, marketing, and distribution of drug products.

These agencies regulate, among other things, research and development

activities and the testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, advertising

and promotion of our product candidates.

The regulatory approval process is generally lengthy and expensive, with no guarantee of a positive

Moreover, failure to comply with applicable FDA or other requirements may result in civil or criminal penalties, recall or seizure

of products, injunctive relief including partial or total suspension of production, or withdrawal of a product from the market.

regulatory authorities regulate, among other things, the research, manufacture, promotion, and distribution of drugs in the United States

under the FDA and other statutes and implementing regulations.

The process required by the FDA before prescription drug product candidates

may be marketed in the United States generally involves the following:

of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the FDA’s

Good Laboratory Practice regulations;

to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;

some products, performance of adequate and well-controlled human clinical trials in accordance with the FDA’s regulations,

including Good Clinical Practices, to establish the safety and efficacy of the product candidate for each proposed indication;

to the FDA of a new drug application or NDA;

completion of an FDA preapproval inspection of the manufacturing facilities at which the product is produced to assess compliance

with current Good Manufacturing Practice, or cGMP, regulations;

review and approval of the NDA prior to any commercial marketing, sale or shipment of the drug.

testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for

our product candidates will be granted on a timely basis, if at all.

tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals

and other animal studies.

The results of preclinical tests, together with manufacturing information and analytical data, are submitted

as part of an IND to the FDA.

Some preclinical testing may continue even after an IND is submitted.

The IND also includes one or more protocols for the

initial clinical trial or trials and an investigator’s brochure.

An IND automatically becomes effective 30 days after receipt by

the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed clinical trials as outlined

in the IND and places the clinical trial on a clinical hold.

In such cases, the IND sponsor and the FDA must resolve any outstanding concerns

or questions before any clinical trials can begin.

Clinical trial holds also may be imposed at any time before or during studies due to

safety concerns or non-compliance with regulatory requirements.

An independent institutional review board, or IRB, at each of the clinical

centers proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that center.

An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in

relation to anticipated benefits.

The IRB also approves the consent form signed by the trial participants and must monitor the study until

The FDA offers several regulatory

mechanisms that provide expedited or accelerated approval procedures for selected drugs in the indications on which we are focusing our

These include accelerated approval under Subpart H of the agency’s NDA approval regulations, fast track drug development

procedures and priority review.

We plan to seek orphan drug

designation for INKmune for the treatment of high-risk MDS if the results of the clinical trials support this activity.

The United States,

European Union and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,”

The IND also includes one or more

protocols for the initial clinical trial or trials and an investigator’s brochure.

An IND automatically becomes effective 30 days

after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed clinical

trials as outlined in the IND and places the clinical trial on a clinical hold.

In such cases, the IND sponsor and the FDA must resolve

any outstanding concerns or questions before any clinical trials can begin.

Clinical trial holds also may be imposed at any time before

or during studies due to safety concerns or non-compliance with regulatory requirements.

An independent institutional review board, or

IRB, at each of the clinical centers proposing to conduct the clinical trial must review and approve the plan for any clinical trial

before it commences at that center.

An IRB considers, among other things, whether the risks to individuals participating in the trials

are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the consent form signed by the trial participants

and must monitor the study until completed.

FDA offers several regulatory mechanisms that provide expedited or accelerated approval procedures for selected drugs in the indications

on which we are focusing our efforts.

These include accelerated approval under Subpart H of the agency’s NDA approval regulations,

fast track drug development procedures and priority review.

The United States, European

Union and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,”

which, in the United States, is generally a disease or condition that affects no more than 200,000 individuals.

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path with INB03 or XPro, although the precise indication cannot be determined until we are farther along in the development process.

Clinical Trials

Phase 1 clinical trials typically

involve the initial introduction of the product candidate into healthy human volunteers.

In Phase 1 clinical trials, the product candidate

is typically tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics.

Phase 2 clinical trials are

conducted in a limited patient population to gather evidence about the efficacy of the product candidate for specific, targeted indications;

1 clinical trials typically involve the initial introduction of the product candidate into healthy human volunteers.

In Phase 1 clinical

trials, the product candidate is typically tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics.

2 clinical trials are conducted in a limited patient population to gather evidence about the efficacy of the product candidate for specific,

targeted indications;

to determine dosage tolerance and optimal dosage;

and to identify possible adverse effects and safety risks.

Phase 3 clinical trials are

undertaken to evaluate clinical efficacy and to test for safety in an expanded patient population at geographically dispersed clinical

The size of Phase 3 clinical trials depends upon clinical and statistical considerations for the product candidate and disease,

but sometimes can include several thousand patients.

Phase 3 clinical trials are intended to establish the overall risk-benefit ratio

of the product candidate and provide an adequate basis for product labeling.

Clinical trials involve the

administration of the product candidate to human subjects under the supervision of qualified medical investigators according to approved

protocols that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to

be used to monitor participant safety.

3 clinical trials are undertaken to evaluate clinical efficacy and to test for safety in an expanded patient population at geographically

dispersed clinical trial sites.

The size of Phase 3 clinical trials depends upon clinical and statistical considerations for the product

candidate and disease, but sometimes can include several thousand patients.

Phase 3 clinical trials are intended to establish the overall

risk-benefit ratio of the product candidate and provide an adequate basis for product labeling.

trials involve the administration of the product candidate to human subjects under the supervision of qualified medical investigators

according to approved protocols that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria,

and the parameters to be used to monitor participant safety.

Regulatory procedures differ in each country we will be working in.

For example, in the US, each

protocol is submitted to the FDA as part of the IND for their review and consent before enrolling patients in the clinical trial.

US is not the only place to perform clinical trials.

Most countries have systems in place to allow academics and companies to sponsor

clinical trials of novel therapies in patients.

For financial and technical reasons, the Company will perform the Phase I clinical trials

of our programs in the United Kingdom and Australia.

The US will be included in the Phase II programs.

Other venues such as Europe, Canada,

Japan and other Pacific Rim countries may be included in the development program in the future.

The first clinical trial with INKmune

will be initiated in the United Kingdom.

In the United Kingdom, the regulatory submission is made to the MHRA for a clinical trials authorization

This is a multistep process.

The Company had a Scientific Advice meeting with the MHRA in September 2017 to discuss

the INKmune Phase I/II trial in women with relapse/refractory ovarian cancer including trial design, manufacturing processes and clinical

trial execution.

The MHRA gave recommendations on trial design, manufacturing controls and the regulatory procedures needed to initiate

example, in the US, each protocol is submitted to the FDA as part of the IND for their review and consent before enrolling patients in

the clinical trial.

We received CTA approval from the MHRA for an INKmune trial in ovarian cancer on December 18, 2018.

The approval allows

for the execution of the Phase I/II INKmune clinical trial in the United Kingdom.

We plan to have two cancer clinics referring the 6 patients

needed for the Phase I portion of the trial.

We expect the first Phase I sites to be in the United Kingdom.

If the first cohort of the

Phase I trial proceeds as planned, we expect to expand the clinical trial in the United Kingdom and may include clinical sites in the

Any Phase II program will start as a multi-national trial because at least 30 patients will be required to complete the Phase II program.

The additional clinical sites in the United Kingdom or US have not been identified at this time.

No additional regulatory procedures will

be needed to add sites in the United Kingdom.

To add sites in the US, we will need to file an IND with the FDA.

Once the FDA approves

the IND, clinical sites can be opened.

We have chosen relapsed/refractory ovarian cancer as the anticipated Phase 1 study for INKmune

for a number of reasons.

Relapsed refractory is a disease with poor treatment options.

Our pre-clinical data suggests INKmune may have

advantages over other immunotherapies in the treatment of ovarian cancer.

Ovarian cancer has a sensitive and validated biomarker to measure

disease burden – CA125.

This allows the Company to accurately select patients for the clinical trial and determine if INKmune therapy

is effective.

This provides regulatory advantages for registration of INKmune.

INB03 will follow a similar development strategy but used

Australia for the Phase I programs.

In Australia, clinical trials for INB03 are performed under the clinical trials notification (“CTN”)

scheme authorized by the Therapeutic Good Administration (“TGA”).

The TGA is the equivalent agency to the FDA in the US and

the MHRA in the United Kingdom.

We filed an Australian Clinical Trial Notification, or CTN, for INB03 and XPro during the second quarter

of 2018 and 2019 respectively.

Applications were accepted in May 2018 and 2019 to allow us to initiate the Phase I trials in cancer and

Alzheimer’s disease respectively.

We have completed the oncology Phase 1 open label dose escalation trial in patients with advanced

solid tumors and biomarkers of inflammation in their blood.

The INBO3 Phase I trial has been completed and provided evidence

of safety and a pharmacodynamic drug affect, decrease of inflammatory biomarkers, needed to move the program to a Phase II clinical trial

The Phase II clinical trial will combine INB03 with approved second line therapy in patients with HER2+ breast cancer with

or without brain metastasis that have progressed after treatment with TDxd.

This is a combination trial where the addition of INB03 to

approved second line therapy may provide a therapeutic alternative in a disease without any drugs approved.

The Company has not lost interest

in combining INB03 with immune checkpoint inhibitors (CPI), but competition for patients is fierce in this arena.

Our plan is to pursue

treatment of tumors that express MUC4 as our lead indication.

Tumors that express MUC4 are resistant to all forms of immunotherapy due

to a combination of increased MDSC in the tumor, decrease tumor macrophage (TAM) phagocytosis, decreased inflammation in the tumor (a

“cold” tumor) and direct effects of MUC4 and soluble TNF on HER2 function.

If combination therapy with INB03 decreases MUC4

expression and changes the TME to make the “cold” tumor “hot”, then addition of a CPI will be warranted.

time, the combination trial to treat MUC4+ TDxd resistant HER2+ expressing cancer is our most probable registration strategy for INB03.

This includes the combination of INB03 with trastuzumab antibody drug conjugate therapy TDxd in combination with a TKI and/or CPI.

therapies for TDxd resistant cancers are used on a trial by error approach.

Using MUC4 expression as a biomarker for to predict resistance

may bring a precision medicine approach to this difficult clinical scenario.

Addition of INB03 to the treatment regimen for treating MUC4+

cancers may convert “cold” tumors to “hot” tumors making the eligible for treatment with CPI.

The design and successful

completion of a Phase II trial is not guarantee of clinical relevance or commercial viability.

There are multiple therapies on the market

or in development for the treatment of resistant breast cancer.

The introduction of TDxd to the clinician’s armamentarium is new

and evolving.

The US is not the only place to perform clinical trials.

Most countries have systems in place to allow academics

and companies to sponsor clinical trials of novel therapies in patients.

For financial and technical reasons, the Company will perform

the Phase I clinical trials of our programs in the United Kingdom and Australia.

The US will be included in the Phase II and//or Phase

III programs.

Other venues such as Europe, Canada, Japan and other Pacific Rim countries may be included in the development program in

The INB03 Phase I trial has

been completed and provided evidence of safety and a pharmacodynamic drug affect, decrease of inflammatory biomarkers, needed to move

the program to a Phase II clinical trial in cancer.

The Phase II clinical trial will combine INB03 with approved second line therapy in

patients with HER2+ breast cancer with or without brain metastasis that have progressed after treatment with TDxd.

This is a combination

trial where the addition of INB03 to approved second line therapy may provide a therapeutic alternative in a disease without any drugs

The Company has not lost interest in combining INB03 with immune checkpoint inhibitors (CPI), but competition for patients is

fierce in this arena.

Our plan is to pursue treatment of tumors that express MUC4 as our lead indication.

Tumors that express MUC4 are

resistant to all forms of immunotherapy due to a combination of increased MDSC in the tumor, decrease tumor macrophage (TAM) phagocytosis,

decreased inflammation in the tumor (a “cold” tumor) and direct effects of MUC4 and soluble TNF on HER2 function.

If combination

therapy with INB03 decreases MUC4 expression and changes the TME to make the “cold” tumor “hot”, then addition

of a CPI will be warranted.

At this time, the combination trial to treat MUC4+ TDxd resistant HER2+ expressing cancer is our most probable

registration strategy for INB03.

This includes the combination of INB03 with trastuzumab antibody drug conjugate therapy TDxd in combination

with a TKI and/or CPI.

Current therapies for TDxd resistant cancers are used on a trial by error approach.

Using MUC4 expression as a

biomarker for to predict resistance may bring a precision medicine approach to this difficult clinical scenario.

Addition of INB03 to

the treatment regimen for treating MUC4+ cancers may convert “cold” tumors to “hot” tumors making the eligible

for treatment with CPI.

The design and successful completion of a Phase II trial is not guarantee of clinical relevance or commercial

There are multiple therapies on the market or in development for the treatment of resistant breast cancer.

The introduction

of TDxd to the clinician’s armamentarium is new and evolving.

The future standard-of-care is not known.

The registration and development strategy for INB03 is multinational.

II program may enroll patients in other countries, including the United States after submitting an Investigational New Drug application,

or IND, to the U.S.

The registration and development

strategy for INB03 is multinational.

The Phase II program may enroll patients in other countries, including the United States after submitting

an Investigational New Drug application, or IND, to the U.S.

Food and Drug Administration, or FDA.

If partnering is successful at any stage of INB03 development, we expect the

partner to influence the development and regulatory decisions needed with moving the drug to commercialization.

Finally, combination therapy

to treat patients resistant to trastuzumab or CPI are not the only oncology application for INB03.

INB03 can be combined with other immune-oncology

therapy to improve efficacy, safety or both.

INB03 can be used as part of combination therapy with immuno-oncology drugs, paired with

tradition therapies such as cytotoxic chemotherapy, kinase inhibitors, cell therapies or radiation therapy.

The company is pursuing pre-clinical

data in some of these areas.

When and if positive developments occur, we will communicate them to our shareholders.

There are other regulatory

venues that will be important for both our products – the largest and most important is Europe.

In Europe, the European Medicines

Agencies (“EMA”) is responsible for authorization of clinical trials in member states.

In EU, there may be a requirement to

get individual country authorization at the same time as EMA authorization.

The initial development of INB03 and XPro occurred in AUS

followed by trials in other regulatory jurisdictions including the US.

The development of INKmune will start in the United Kingdom followed

by trials in the US.

XPro is being developed for the treatment of Alzheimer’s disease under a Part-the-Cloud Award received Feb

The biomarker directed Phase I trial was performed in AUS using a regulatory strategy identical to that used for INB03 in cancer.

If partnering is successful at any

stage of INB03 development, we expect the partner to influence the development and regulatory decisions needed with moving the drug to

commercialization.

Finally, combination therapy to treat patients resistant to trastuzumab or CPI are not the only oncology application

INB03 can be combined with other immune-oncology therapy to improve efficacy, safety or both.

INB03 can be used as part of

combination therapy with immuno-oncology drugs, paired with tradition therapies such as cytotoxic chemotherapy, kinase inhibitors, cell

therapies or radiation therapy.

The company is pursuing pre-clinical data in some of these areas.

When and if positive developments occur,

we will communicate them to our shareholders.

There are other regulatory venues that will be important for both our products – the

largest and most important is Europe.

In Europe, the European Medicines Agencies (“EMA”) is responsible for authorization

of clinical trials in member states.

In EU, there may be a requirement to get individual country authorization at the same time as EMA

authorization.

The initial development of INB03 and XPro occurred in AUS followed by trials in other regulatory jurisdictions including

The development of INKmune will start in the United Kingdom followed by trials in the US.

XPro is being developed for the treatment

of Alzheimer’s disease under a Part-the-Cloud Award received Feb 2019.

The biomarker directed Phase I trial was performed in AUS

using a regulatory strategy identical to that used for INB03 in cancer.

Regulatory approval to initiate the trial was received on February

XPro treats microglial activation and innate immune dysregulation

may be the cause with Alzheimer’s disease in some patients.

To our knowledge, there are few companies using an anti-inflammatory

strategy for the treatment of Alzheimer’s disease.

Those companies include Denali Therapeutics (NASDAQ:

developing DNL747

that targets critical signaling proteins in the TNF pathway that regulate inflammation and cell death.

XPro treats microglial activation and innate immune dysregulation may be the cause with Alzheimer’s disease in some patients.

To our knowledge, there are few companies using an anti-inflammatory strategy for the treatment of Alzheimer’s disease.

Those companies

include Denali Therapeutics (NASDAQ:

developing DNL747 that targets critical signaling proteins in the TNF pathway that regulate

inflammation and cell death.

Alector (NASDAQ:

ALEC) in partnership

with Abbvie is developing AL002 that targets TREM2 on microglial cells.

Gliacure is targeting microglial cells in Alzheimer’s disease

with a small molecule candidate GC021109.

Lecanemab (Leqembi™;

Eisai) was approved for the treatment

of patients with Early AD in January 2023 This is this the second anti-amyloid drug for the treatment of ealy AD to be approved.

(Lilly), a third drug anti-amyloid therapy for early AD is expected to be approved in the second half of 2023.

These three drugs have

similar efficacy and safety profiles.

One of the common safety problems is the development of ARIA (Alzheimer’s Related Imaging

Abnormality) that causes a delay or discontinuation of therapy.

ARIA is neuroinflammation related side-effect more common in patients

expressing ApoE4.

The modest efficacy, sub-optimal safety and difficulty of use makes combination therapy for the treatment of early AD

an attractive development and therapeutic strategy.

The Company is following the developments in this area closely.

Clinical testing must satisfy

extensive FDA regulations.

Reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety

reports must be submitted for serious and unexpected adverse events.

Success in early-stage clinical trials does not assure success in

later stage clinical trials.

The FDA, an IRB or we may suspend a clinical trial at any time on various grounds, including a finding that

the research subjects or patients are being exposed to an unacceptable health risk.

New Drug Applications

Assuming successful completion

of the required clinical trials, the results of product development, preclinical studies and clinical trials are submitted to the FDA

as part of an NDA.

An NDA also must contain extensive manufacturing information, as well as proposed labeling for the finished product.

An NDA applicant must develop information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing

the product in accordance with cGMP.

The manufacturing process must be capable of consistently producing quality product within specifications

approved by the FDA.

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

appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo

unacceptable deterioration over its shelf life.

Prior to approval, the FDA will conduct an inspection of the manufacturing facilities

to assess compliance with cGMP.

The FDA reviews all NDAs submitted

before it accepts them for filing.

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

In this event, the

NDA must be resubmitted with the additional information and is subject to review before the FDA accepts it for filing.

After an application

is filed, the FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should

be approved and under what conditions.

The FDA is not bound by the recommendation of an advisory committee, but it considers them carefully

when making decisions.

The FDA may deny approval of an NDA if the applicable regulatory criteria are not satisfied.

Data obtained from

clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data.

The FDA may issue

a complete response letter, which may require additional clinical or other data or impose other conditions that must be met in order to

secure final approval of the NDA.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases

and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

the FDA may require us to conduct Phase 4 testing which involves clinical trials designed to further assess a drug’s safety and

effectiveness after NDA approval and may require surveillance programs to monitor the safety of approved products which have been commercialized.

Once issued, the FDA may withdraw product approval if ongoing regulatory requirements are not met or if safety or efficacy questions are

raised after the product reaches the market.

Post-Approval Requirements

Any products manufactured

or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things,

requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, distribution, and advertising and promotion

ALEC) in partnership with Abbvie is developing AL002 that targets TREM2 on microglial cells.

Gliacure is targeting microglial cells in Alzheimer’s disease with a small molecule candidate GC021109.

Eisai) was approved for the treatment of patients with Early AD in January 2023 This is this the second anti-amyloid

drug for the treatment of early AD to be approved.

Donanemab (Lilly), a third drug anti-amyloid therapy for early AD is expected to be

approved 2Q24.

These two drugs have similar efficacy and safety profiles.

One of the common safety problems is the development of ARIA

(Alzheimer’s Related Imaging Abnormality) that causes a delay or discontinuation of therapy.

ARIA is neuroinflammation related

side-effect more common in patients expressing ApoE4.

The modest efficacy, sub-optimal safety and difficulty of use makes combination

therapy for the treatment of early AD an attractive development and therapeutic strategy.

The Company is following the developments in

this area closely.

The Company believes the anti-amyloid therapies will slowly develop market share, but due to their safety and efficacy

profile, there will be demand for safer and more efficacious therapies that do not target amyloid.

testing must satisfy extensive FDA regulations.

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

to the FDA and safety reports must be submitted for serious and unexpected adverse events.

Success in early-stage clinical trials does

not assure success in later stage clinical trials.

The FDA, an IRB or we may suspend a clinical trial at any time on various grounds,

including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Drug Applications

successful completion of the required clinical trials, the results of product development, preclinical studies and clinical trials are

submitted to the FDA as part of an NDA.

An NDA also must contain extensive manufacturing information, as well as proposed labeling for

the finished product.

An NDA applicant must develop information about the chemistry and physical characteristics of the drug and finalize

a process for manufacturing the product in accordance with cGMP.

The manufacturing process must be capable of consistently producing

quality product within specifications approved by the FDA.

The manufacturer must develop methods for testing the quality, purity and

potency of the final product.

In addition, appropriate packaging must be selected and tested, and stability studies must be conducted

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

Prior to approval, the FDA will conduct

an inspection of the manufacturing facilities to assess compliance with cGMP.

FDA reviews all NDAs submitted before it accepts them for filing.

The FDA may request additional information rather than accept an NDA

In this event, the NDA must be resubmitted with the additional information and is subject to review before the FDA accepts

it for filing.

After an application is filed, the FDA may refer the NDA to an advisory committee for review, evaluation and recommendation

as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendation of an advisory

committee, but it considers them carefully when making decisions.

The FDA may deny approval of an NDA if the applicable regulatory criteria

are not satisfied.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret

the same data.

The FDA may issue a complete response letter, which may require additional clinical or other data or impose other conditions

that must be met in order to secure final approval of the NDA.

If a product receives regulatory approval, the approval may be significantly

limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value

of the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject

to prior FDA review and approval.

There also are continuing, annual user fee requirements for any marketed products and the establishments

at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

Pharmaceutical

manufacturers and 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 and certain state agencies for compliance with GMP, which impose certain procedural and

documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing process are strictly regulated, and,

depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation

and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain

compliance with cGMP and other aspects of regulatory compliance.

If our future suppliers are not able to comply with these requirements,

the FDA may, among other things, halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the

The FDA may withdraw approval

if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with

manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new

safety information;

In addition, the FDA may require us to conduct Phase 4 testing which involves clinical trials designed to further assess

a drug’s safety and effectiveness after NDA approval and may require surveillance programs to monitor the safety of approved products

which have been commercialized.

Once issued, the FDA may withdraw product approval if ongoing regulatory requirements are not met or

if safety or efficacy questions are raised after the product reaches the market.

Post-Approval

products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including,

among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, distribution, and

advertising and promotion of the product.

After approval, most changes to the approved product, such as adding new indications or other

labeling claims, are subject to prior FDA review and approval.

There also are continuing, annual user fee requirements for any marketed

products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications

with clinical data.

Pharmaceutical manufacturers and 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 and certain state agencies for compliance with

GMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing

process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any

third-party manufacturers that we may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in the

area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

If our future suppliers

are not able to comply with these requirements, the FDA may, among other things, halt our clinical trials, require us to recall a product

from distribution, or withdraw approval of the product.

FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product

reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity

or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved

labeling to add new safety information;

imposition of post-market studies or clinical studies to assess new safety risks;

or imposition of distribution restrictions

or other restrictions under a REMS program.

The FDA closely regulates

the marketing, labeling, advertising and promotion of pharmaceutical products.

A company can make only those claims relating to safety

and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.

other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

Failure to comply with these requirements

can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from

those tested by us and approved by the FDA.

or imposition

of distribution restrictions or other restrictions under a REMS program.

FDA closely regulates the marketing, labeling, advertising and promotion of pharmaceutical products.

A company can make only those claims

relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

Failure to comply

with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil

and criminal penalties.

Physicians may prescribe legally available products for uses that are not described in the product’s labeling

and that differ from those tested by us and approved by the FDA.

Such off-label uses are common across medical specialties.

Physicians may believe that such

off-label uses are the best treatment for many patients in varied circumstances.

The FDA does not regulate the behavior of physicians

in their choice of treatments.

The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of

their products.

Other Healthcare Laws and Compliance Requirements

Our sales, promotion, medical

education, clinical research and other activities following product approval will be subject to regulation by numerous regulatory and

law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade Commission, the Department

of Justice, the Centers for Medicare and Medicaid Services, or CMS, other divisions of the U.S.

Department of Health and Human Services

and state and local governments.

Our promotional and scientific/educational programs must comply with the federal Anti-Kickback Statute,

the civil False Claims Act, physician payment transparency laws, privacy laws, security laws, and additional federal and state laws similar

to the foregoing.

The federal Anti-Kickback

Statute prohibits, among other things, the knowing and willing, direct or indirect offer, receipt, solicitation or payment of remuneration

in exchange for or to induce the referral of patients, including the purchase, order or lease of any good, facility, item or service that

would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.

Remuneration has been broadly defined

to include anything of value, including cash, improper discounts, and free or reduced-price items and services.

The federal Anti-Kickback

Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, formulary

managers, and beneficiaries on the other.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some

common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

Practices that involve remuneration that may be

alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception

or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does

not make the conduct per se illegal under the federal Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated

on a case-by-case basis based on a cumulative review of all its facts and circumstances.

Several courts have interpreted the statute’s

intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare

covered business, the federal Anti-Kickback Statute has been violated.

The government has enforced the federal Anti-Kickback Statute to

reach large settlements with healthcare companies based on sham research or consulting and other financial arrangements with physicians.

Further, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback

Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

Many states have similar laws that apply to their

state health care programs as well as private payors.

Federal false claims and false

statement laws, including the federal civil False Claims Act, or FCA, imposes liability on persons or entities that, among other things,

knowingly present or cause to be presented claims that are false or fraudulent or not provided as claimed for payment or approval by a

federal health care program.

The FCA has been used to prosecute persons or entities that “cause” the submission of claims

for payment that are inaccurate or fraudulent, by, for example, providing inaccurate billing or coding information to customers, promoting

a product off-label, submitting claims for services not provided as claimed, or submitting claims for services that were provided but

not medically necessary.

Actions under the FCA may be brought by the Attorney General or as a qui tam action by a private individual in

the name of the government.

may believe that such off-label uses are the best treatment for many patients in varied circumstances.

The FDA does not regulate the

behavior of physicians in their choice of treatments.

The FDA does, however, restrict manufacturer’s communications on the subject

of off-label use of their products.

Healthcare Laws and Compliance Requirements

sales, promotion, medical education, clinical research and other activities following product approval will be subject to regulation

by numerous regulatory and law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade

Commission, the Department of Justice, the Centers for Medicare and Medicaid Services, or CMS, other divisions of the U.S.

of Health and Human Services and state and local governments.

Our promotional and scientific/educational programs must comply with the

federal Anti-Kickback Statute, the civil False Claims Act, physician payment transparency laws, privacy laws, security laws, and additional

federal and state laws similar to the foregoing.

federal Anti-Kickback Statute prohibits, among other things, the knowing and willing, direct or indirect offer, receipt, solicitation

or payment of remuneration in exchange for or to induce the referral of patients, including the purchase, order or lease of any good,

facility, item or service that would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.

has been broadly defined to include anything of value, including cash, improper discounts, and free or reduced-price items and services.

The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and

prescribers, purchasers, formulary managers, and beneficiaries on the other.

Although there are a number of statutory exceptions and

regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny

if they do not qualify for an exception or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory

exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute.

Instead, the legality

of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances.

courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration

is to induce referrals of federal healthcare covered business, the federal Anti-Kickback Statute has been violated.

The government has

enforced the federal Anti-Kickback Statute to reach large settlements with healthcare companies based on sham research or consulting

and other financial arrangements with physicians.

Further, a person or entity does not need to have actual knowledge of the statute or

specific intent to violate it to have committed a violation.

In addition, the government may assert that a claim including items or services

resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims

Many states have similar laws that apply to their state health care programs as well as private payors.

false claims and false statement laws, including the federal civil False Claims Act, or FCA, imposes liability on persons or entities

that, among other things, knowingly present or cause to be presented claims that are false or fraudulent or not provided as claimed for

payment or approval by a federal health care program.

The FCA has been used to prosecute persons or entities that “cause”

the submission of claims for payment that are inaccurate or fraudulent, by, for example, providing inaccurate billing or coding information

to customers, promoting a product off-label, submitting claims for services not provided as claimed, or submitting claims for services

that were provided but not medically necessary.

Actions under the FCA may be brought by the Attorney General or as a qui tam action by

a private individual in the name of the government.

Violations of the FCA can result in significant monetary penalties and treble damages.

The federal government

is using the FCA, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical and biotechnology

companies throughout the country, for example, in connection with the promotion of products for unapproved uses and other illegal sales

and marketing practices.

The government has obtained multi-million and multibillion dollar settlements under the FCA in addition to individual

criminal convictions under applicable criminal statutes.

In addition, certain companies that were found to be in violation of the FCA

have been forced to implement extensive corrective action plans, and have often become subject to consent decrees or corporate integrity

agreements, restricting the manner in which they conduct their business.

The federal Health Insurance

Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things,

knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party

knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent

statement in connection with the delivery of or payment for healthcare benefits, items or services;

and willfully obstructing a criminal

investigation of a healthcare offense.

Like the federal Anti-Kickback Statute, the Affordable Care Act amended the intent standard for

certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or

specific intent to violate it in order to have committed a violation.

Given the significant size

of actual and potential settlements, we expect that the government will continue to devote substantial resources to investigating healthcare

providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

Also, many states have similar fraud and abuse

statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under

Medicaid and other state programs.

Additionally, to the extent that our products, once commercialized, are sold in a foreign country,

we may be subject to similar foreign laws.

In addition, there has been

a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers.

The Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, among

other things, imposed new reporting requirements on certain manufacturers of drugs, devices, biologics and medical supplies for which

payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, for payments

or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians

and their immediate family members.

Covered manufacturers are required to collect and report detailed payment data and submit legal attestation

to the accuracy of such data to the government each year.

Failure to submit required information may result in civil monetary penalties

of up to an aggregate of $150,000 per year (or up to an aggregate of $1 million per year for “knowing failures”), for all

payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual

Additionally, entities that do not comply with mandatory reporting requirements may be subject to a corporate integrity agreement.

Certain states also mandate implementation of commercial compliance programs, impose restrictions on covered manufacturers’ marketing

practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and other healthcare professionals.

We may also be subject to

data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA, as amended

by the Health Information Technology and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified

requirements on certain health care providers, plans and clearinghouses (collectively, “covered entities”) and their “business

associates,” relating to the privacy, security and transmission of individually identifiable health information.

Among other things,

HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors

or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service

for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities,

business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions

in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

certain states have their own laws that govern the privacy and security of health information in certain circumstances, many of which

differ from each other and/or HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts.

Coverage and Reimbursement

Sales of pharmaceutical products

depend significantly on the extent to which coverage and adequate reimbursement are provided by third-party payors.

Third-party payors

include state and federal government health care programs, managed care providers, private health insurers and other organizations.

we currently believe that third-party payors will provide coverage and reimbursement for our product candidates, if approved, we cannot

be certain of this.

Third-party payors are increasingly challenging the price, examining the cost-effectiveness, and reducing reimbursement

for medical products and services.

In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare

government, state legislatures and foreign governments have continued implementing cost containment programs, including

price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.

Adoption of price controls

and cost containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further

limit our net revenue and results.

We may need to conduct expensive clinical studies to demonstrate the comparative cost-effectiveness

of our products.

The product candidates that we develop may not be considered cost-effective and thus may not be covered or sufficiently

It is time consuming and expensive for us to seek coverage and reimbursement from third-party payors, as each payor will make

its own determination as to whether to cover a product and at what level of reimbursement.

Thus, one payor’s decision to provide

coverage and adequate reimbursement for a product does not assure that another payor will provide coverage or that the reimbursement levels

will be adequate.

Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement

rate will be approved.

Reimbursement may not be available or sufficient to allow us to sell our products on a competitive and profitable

Healthcare Reform

The United States and some

foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system

in ways that could affect our ability to sell our products profitably.

Among policy makers and payors in the United States and elsewhere,

there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving

quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has

been significantly affected by major legislative initiatives.

By way of example, in March 2010, the Affordable Care Act (“ACA”)

was signed into 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 the healthcare and health insurance industries, impose new taxes and fees

on the health industry and impose additional health policy reforms.

Among the provisions of the ACA of importance to our potential drug

candidates are:

an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;

an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;

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;

a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;

extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

In addition, other legislative changes have been proposed and

adopted since the ACA was enacted.

These changes include, among others, the Budget Control Act of 2011, which mandates aggregate reductions

to Medicare payments to providers of up to 2% per fiscal year effective April 1, 2013, and, due to subsequent legislative amendments,

will remain in effect through 2024 unless additional Congressional action is taken.

In January 2013, President Obama signed into law the

American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals

and cancer treatment centers, increased the statute of limitations period for the government to recover overpayments to providers from

three to five years.

These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material

adverse effect on customers for our product candidates, if approved, and, accordingly, our financial operations.

its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA.

17, 2021 the U.S.

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically

ruling on the constitutionality of the ACA.

Thus, the ACA will remain in effect in its current form.

The federal government is using the FCA, and the accompanying threat of significant liability, in its investigation and prosecution of

pharmaceutical and biotechnology companies throughout the country, for example, in connection with the promotion of products for unapproved

uses and other illegal sales and marketing practices.

The government has obtained multi-million and multibillion dollar settlements under

the FCA in addition to individual criminal convictions under applicable criminal statutes.

In addition, certain companies that were found

to be in violation of the FCA have been forced to implement extensive corrective action plans, and have often become subject to consent

decrees or corporate integrity agreements, restricting the manner in which they conduct their business.

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit,

among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program,

including private third-party payors;

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

false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;

willfully obstructing a criminal investigation of a healthcare offense.

Like the federal Anti-Kickback Statute, the Affordable Care Act

amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual

knowledge of the statute or specific intent to violate it in order to have committed a violation.

the significant size of actual and potential settlements, we expect that the government will continue to devote substantial resources

to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

Also, many states

have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items

and services reimbursed under Medicaid and other state programs.

Additionally, to the extent that our products, once commercialized,

are sold in a foreign country, we may be subject to similar foreign laws.

In addition, there has been a recent trend of increased federal and

state regulation of payments made to physicians and other healthcare providers.

The Patient Protection and Affordable Care Act, as amended

by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, among other things, imposed new reporting

requirements on certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare,

Medicaid or the Children’s Health Insurance Program, with specific exceptions, for payments or other transfers of value made by

them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family

Covered manufacturers are required to collect and report detailed payment data and submit legal attestation to the accuracy of

such data to the government each year.

Failure to submit required information may result in civil monetary penalties of up to an aggregate

of $150,000 per year (or up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of

value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission.

Additionally,

entities that do not comply with mandatory reporting requirements may be subject to a corporate integrity agreement.

Certain states also

mandate implementation of commercial compliance programs, impose restrictions on covered manufacturers’ marketing practices and/or

require the tracking and reporting of gifts, compensation and other remuneration to physicians and other healthcare professionals.

may also be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and their respective implementing regulations,

imposes specified requirements on certain health care providers, plans and clearinghouses (collectively, “covered entities”)

and their “business associates,” relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as

independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection

with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed

against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil

actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing

federal civil actions.

In addition, certain states have their own laws that govern the privacy and security of health information in

certain circumstances, many of which differ from each other and/or HIPAA in significant ways and may not have the same effect, thus complicating

compliance efforts.

and Reimbursement

of pharmaceutical products depend significantly on the extent to which coverage and adequate reimbursement are provided by third-party

Third-party payors include state and federal government health care programs, managed care providers, private health insurers

and other organizations.

Although we currently believe that third-party payors will provide coverage and reimbursement for our product

candidates, if approved, we cannot be certain of this.

Third-party payors are increasingly challenging the price, examining the cost-effectiveness,

and reducing reimbursement for medical products and services.

In addition, significant uncertainty exists as to the reimbursement status

of newly approved healthcare products.

government, state legislatures and foreign governments have continued implementing cost

containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic

Adoption of price controls and cost containment measures, and adoption of more restrictive policies in jurisdictions with existing

controls and measures, could further limit our net revenue and results.

We may need to conduct expensive clinical studies to demonstrate

the comparative cost-effectiveness of our products.

The product candidates that we develop may not be considered cost-effective and thus

may not be covered or sufficiently reimbursed.

It is time consuming and expensive for us to seek coverage and reimbursement from third-party

payors, as each payor will make its own determination as to whether to cover a product and at what level of reimbursement.

payor’s decision to provide coverage and adequate reimbursement for a product does not assure that another payor will provide coverage

or that the reimbursement levels will be adequate.

Moreover, a payor’s decision to provide coverage for a drug product does not

imply that an adequate reimbursement rate will be approved.

Reimbursement may not be available or sufficient to allow us to sell our

products on a competitive and profitable basis.

United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change

the healthcare system in ways that could affect our ability to sell our products profitably.

Among policy makers and payors in the United

States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare

costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these

efforts and has been significantly affected by major legislative initiatives.

way of example, in March 2010, the Affordable Care Act (“ACA”) was signed into 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 the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy

Among the provisions of the ACA of importance to our potential drug candidates are:

annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biologic agents, apportioned

among these entities according to their market share in certain government healthcare programs;

increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the

average manufacturer price for branded and generic drugs, respectively;

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;

new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated

prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s

outpatient drugs to be covered under Medicare Part D;

of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed

care organizations;

of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals

and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level,

thereby potentially increasing a manufacturer’s Medicaid rebate liability;

of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness

research, along with funding for such research.

addition, other legislative changes have been proposed and adopted since the ACA was enacted.

These changes include, among others, the

Budget Control Act of 2011, which mandates aggregate reductions to Medicare payments to providers of up to 2% per fiscal year effective

April 1, 2013, and, due to subsequent legislative amendments, will remain in effect through 2024 unless additional Congressional action

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further

reduced Medicare payments to several providers, including hospitals and cancer treatment centers, increased the statute of limitations

period for the government to recover overpayments to providers from three to five years.

These new laws may result in additional reductions

in Medicare and other healthcare funding, which could have a material adverse effect on customers for our product candidates, if approved,

and, accordingly, our financial operations.

Since its enactment, there have been judicial, administrative, executive

and legislative challenges to certain aspects of the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial

challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Thus, the ACA will remain

in effect in its current form.

Further, prior to the U.S.

Court ruling, President Biden issued an executive order to, among other things, instruct certain governmental agencies to review and reconsider

their existing policies and rules that limit access to health care, including among others, reexamining Medicaid demonstration projects

and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance

coverage through Medicaid or the ACA.

Supreme Court ruling, President Biden issued an executive order to, among other

things, instruct certain governmental agencies to review and reconsider their existing policies and rules that limit access to health

care, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies

that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate

2 unchanged sentences

Payment methodologies may also be subject to changes in healthcare legislation and regulatory initiatives.

Centers for Medicare and Medicaid Services may develop new payment and delivery models, such as bundled payment models.

There also has

been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription

drugs and biologics.

example, Centers for Medicare and Medicaid Services may develop new payment and delivery models, such as bundled payment models.

also has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of

prescription drugs and biologics.

Such scrutiny has resulted in several recent U.S.

Congressional inquiries and proposed and enacted federal and state

legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare,

review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for

Congressional inquiries and proposed and enacted

federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription

drugs under Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement

methodologies for drugs.

By way of example, in August 2022, the Inflation Reduction Act of 2022, or the IRA, was signed into law.

Among other things, the

IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be

negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation

(first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

permits the Secretary of the Department of Health and Human Services to implement many of these provisions through guidance, as opposed

to regulation, for the initial years.

For that and other reasons, it is currently unclear how the IRA will be effectuated, or the impact

of the IRA on our business.

the state level, legislatures in the United States have also increasingly passed legislation and implemented regulations designed to control

pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access

and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries and

bulk purchasing.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine

what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

We expect that the ACA, as well as other healthcare reform measures

that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure

on the price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded programs

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

The implementation of cost containment measures or other healthcare

reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.

Human Capital Resources

As of December 31, 2022, we

had 10 full-time employees.

We consider the intellectual capital of our employees to be an important driver of our business and key to

our future prospects.

We monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation

and insurance benefits for all our employees, as well as participation in our equity programs.

None of our employees is subject to a collective

bargaining agreement or represented by a trade or labor union.

We consider our relations with our employees to be good.

Corporate Information

We were incorporated under the laws of the State

of Nevada on September 25, 2015.

Our principal executive office is located at 225 NE Mizner Blvd, Suite 640, Boca Raton FL 33432 and our

telephone number is (858) 964-3720.

other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with

prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases

that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning

The IRA permits the Secretary of the Department of Health and Human Services to implement many of these provisions through

guidance, as opposed to regulation, for the initial years.

For that and other reasons, it is currently unclear how the IRA will be effectuated,

or the impact of the IRA on our business.

the state level, legislatures in the United States have also increasingly passed legislation and implemented regulations designed to

control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product

access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries

and bulk purchasing.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures

to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage

criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved product.

Any reduction

in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain

profitability or commercialize our drugs.

Capital Resources

of December 31, 2023, we had 11 full-time employees and 6 part-time employees.

We consider the intellectual capital of our employees

to be an important driver of our business and key to our future prospects.

We monitor our compensation programs closely and provide what

we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our

equity programs.

None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union.

our relations with our employees to be good.

were incorporated under the laws of the State of Nevada on September 25, 2015.

Our principal executive office is located at 225 NE Mizner

Blvd, Suite 640, Boca Raton FL 33432 and our telephone number is (858) 964-3720.

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 1. Business