What changed in this filing

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Item 1A. Risk Factors

2022-03-22 compared with 2021-02-25 · 109 added, 97 removed, 560 unchanged (27% of the section changed)

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To both fund our clinical trials and support our future operations, we would likely seek to raise capital through a variety of different public and/or private financings vehicles.

This could include, but not be limited to, equity sales pursuant to our purchase agreement with Lincoln Park Capital Fund, L.L.C., potential issuances of other debt or equity securities in public or private financings and/or sale or licensing of assets.

If we raise capital through the sale of equity, or securities convertible into

equity, it will result in dilution to our then-existing stockholders.

This could include, but not be limited to, utilization of our at-the-market (“ATM”) offering agreement with H.C.

Wainwright & Co., LLC (“HCW”), equity sales pursuant to our purchase agreement with Lincoln Park Capital Fund, LLC potential issuances of other debt or equity securities in public or private financings and/or

sale or licensing of assets.

If we raise capital through the sale of equity, or securities convertible into equity, it will result in dilution to our then-existing stockholders.

Servicing the interest and principal repayment obligations under debt we incur, or whether any such debt is called, would divert funds that might otherwise be available to support research and development, clinical or commercialization activities.

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Our ability to generate revenue from product sales and achieve profitability depends significantly on our success in many factors, including:

• completing research regarding, and nonclinical and clinical development of, our product candidates;

• completing research regarding, and nonclinical and clinical development of, our current and future product candidates;

• obtaining regulatory approvals and marketing authorizations for product candidates for which we complete clinical trials;

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RISKS RELATED TO OUR CELL THERAPY PRODUCT DEVELOPMENT EFFORTS

Our future success may be dependent on the timely and successful continued development and commercialization of HONEDRA ® , our experimental product candidate for CLI and Buerger's Disease that is in clinical development in Japan, CLBS16 for CMD, CLBS201 for CKD and OLOGO TM for NORDA, and if we encounter delays or further difficulties in the development of these product candidates, our business prospects would be significantly harmed.

Our future success may be dependent on the timely and successful continued development and commercialization of HONEDRA ® , our experimental product candidate for CLI and Buerger's Disease that has been in clinical development in Japan, XOWNA ® or CLBS16 for CMD, and CLBS201 for DKD, and if we encounter delays or further difficulties in the development of these product candidates, our business prospects would be significantly harmed.

We are dependent upon the successful development, approval and commercialization of our product candidates.

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In early 2018, we treated the first patient in a clinical trial in Japan for HONEDRA ® for use in CLI taking advantage of the paradigm of potential conditional approval for regenerative medicine products established by new regulations in Japan for products that show sufficient safety evidence and some evidence of efficacy.

We also recently reported complete data from the 6-month follow-up of patients in a clinical trial (ESCaPE-CMD) using CD34+ cells to treat CMD (CLBS16).

Additionally, we currently have an open IND for OLOGO TM , a program for which discussions continue with FDA to define phase 3 trial size and scope for registration in the U.S.

in patients with NORDA.

Because of difficulty enrolling the remaining patients in the trial and the costs of continued delays in such, we suspended enrollment of the trial at the end of 2021 and commenced talks with development partners as well as with PMDA to consider paths forward.

There can be no assurance that we will find a partner or that PMDA will consider the drug for approval without completing enrollment of the trial, such that HONEDRA ® may be delayed indefinitely or never commercialized.

In late 2020 we began enrolling patients in the FREEDOM trial using CD34+ cells to treat CMD (CLBS16).

That trial also has been delayed significantly by COVID-19-related challenges to enrollment.

Additionally, we currently have an open investigational new drug application (“IND”) for CLBS201 in a pilot study examining the effectiveness of CD34+ cells to treat diabetic kidney disease.

Clinical testing is expensive, difficult to design and implement, and can take many years to complete.

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• clinical trial results that are negative, inconclusive or even less than desired as to safety and/or efficacy, which could result in the need for additional clinical trials or the termination of the product's development;

• delays in our ability to manufacture the product in quantities or in a form that is suitable for any required clinical trials;

• delays in our ability to manufacture our product candidates in quantities or in a form that is suitable for any required

clinical trials;

• intellectual property constraints that prevent us from making, using, or commercializing any of our cell therapy product candidates;

• the supply or quality of our product candidates or other materials necessary to conduct clinical trials of these product candidates may be insufficient or inadequate;

• the supply or quality of our product candidates or other materials or equipment necessary to conduct clinical trials of these product candidates may be no longer available for purchase, insufficient or inadequate;

• inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials;

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• delays in obtaining required IRB approval at each clinical trial site;

• inability to file INDs with the FDA for our development candidates or comparable clinical trial applications with other regulatory authorities outside of the U.S.;

• inability to file INDs with the FDA for our development candidates or comparable clinical trial applications with other regulatory authorities outside of the United States;

• imposition of a temporary or permanent clinical hold by the FDA or similar restrictions by other regulatory agencies for a number of reasons, including after review of an IND or amendment, or equivalent application or amendment;

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The COVID-19 pandemic has affected our operations and may materially affect our business.

In response to the pandemic, we have limited operations, including implemented work from home and social distancing policies.

For instance, our clinical trials may suffer from lower than anticipated patient recruitment or enrollment and we may be forced to temporarily delay certain ongoing clinical trials.

In addition, we risk a delay, default and/or nonperformance under our existing agreements arising from force majeure.

The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the effectiveness and availability of the COVID-19 vaccines, among others.

In response to the pandemic, we have limited in-office operations, including implementing work from home and social distancing policies.

We risk a delay, default and/or nonperformance under our existing agreements arising from force majeure.

In addition, COVID-19 has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, social distancing and business shutdowns.

We have taken temporary precautionary measures intended to help minimize the risk of the virus to our employees, including temporarily allowing all employees to work remotely.

We have already suspended non-essential travel worldwide for our employees and are discouraging employee attendance at other gatherings.

These measures could negatively affect our business.

For instance,

temporarily requiring all employees to work remotely may induce absenteeism, disrupt our operations or increase the risk of a cybersecurity incident.

For instance, temporarily requiring all employees to work remotely may induce absenteeism, disrupt our operations, or increase the risk of a cybersecurity incident.

COVID-19 has also caused volatility in the global financial markets and threatened a slowdown in the global economy, which may negatively affect our ability to raise additional capital on attractive terms or at all.

The extent to which COVID-19 will continue to impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the severity of COVID-19 or the effectiveness of actions to contain and treat COVID-19, particularly in the geographies where we or our third party suppliers, contract manufacturers, or contract research organizations operate.

Our clinical trials have suffered and may continue to suffer from delays and lower than anticipated patient recruitment or enrollment.

Our clinical study of HONEDRA® in Japan has experienced significant delays in enrollment due to the States of Emergency in effect in Japan for most of 2020 and re-implemented from January 7, 2021 through March 21, 2021 covering Tokyo and other regions in response to an increased number of COVID-19 infections.

Due to reported increases in COVID-19 cases and a low rate of vaccination in Japan, States of Emergency were renewed on April 25, 2021 through May 11, 2021 and then re-implemented in Tokyo from July 12, 2021 through September 30, 2021.

With our expectation that COVID-19 in Japan would continue to impact negatively enrollment of patients in the HONEDRA® clinical trial, we elected to suspend trial enrollment, seek a development partner and consult with the Japanese regulatory authorities regarding the submission of patient data already accrued.

Our phase 2b trial of XOWNA® in the United States has also experienced delays in enrolling patients as a result of COVID-19.

The extent to which COVID-19 will continue to impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the severity of COVID-19 or new variants or the effectiveness of actions to contain and treat COVID-19 and its variants, particularly in the geographies where we or our third party suppliers, contract manufacturers, or contract research organizations operate.

We cannot presently predict the scope and severity of any potential business shutdowns or disruptions.

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Moreover, our ability to conduct trials outside of the United States may be constrained by our inability to transport trial materials to foreign destinations within the expiry period of such materials unless and until we commence operation outside of the United States or find another source of supply.

We may face challenges in enrolling patients to participate in our clinical trials due to the novelty of our cell-based therapies, the size of the patient populations, the eligibility criteria for enrollment in the trial and COVID-19 impact.

We may face continuing challenges in enrolling patients to participate in our clinical trials due to the novelty of our cell-based therapies, the size of the patient populations, the eligibility criteria for enrollment in the trial and COVID-19 impact.

Moreover, changes to enrollment criteria may be prohibited by regulating agencies, may have no impact on enrollment rates and may change or harm the outcome of the study.

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We may have other delays in completing our clinical trials and we may not complete them at all.

We have not completed the clinical trials necessary to obtain FDA approval to market HONEDRA ® , OLOGO TM , CLBS201 or CLBS16 or any of our other product candidates in development.

We have not completed the clinical trials necessary to obtain FDA approval to market HONEDRA ® , XOWNA ® or CLBS201 or any of our other product candidates in development.

Our operational team lacks significant experience in completing Phase 3 pivotal clinical trials and bringing a drug or biological product through commercialization.

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• suspension or termination by regulators of clinical research for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with applicable cGMP/cGTP requirements for the clinical supplies of the cell therapy candidate;

• delays or failure to obtain clinical supply for our products necessary to conduct clinical trials from contract manufacturers, including commercial grade clinical supply for our trials;

• delays or failure to obtain clinical supply for our product candidates necessary to conduct clinical trials from contract manufacturers, including commercial grade clinical supply for our trials;

• our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

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We may be unable to manage multiple late stage clinical trials for a variety of product candidates simultaneously.

As our current clinical trials progress, we may need to manage multiple late stage clinical trials simultaneously in order to continue developing all of our current products.

As our current clinical trials progress, we may need to manage multiple late stage clinical trials simultaneously in order to continue developing all of our current product candidates.

Our management team does not have significant experience in completing late stage clinical trials and the management of late stage clinical trials is more complex and time consuming than early stage trials.

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Our product development costs will also increase if manufacturing processes and controls require unexpected investments, which could harm our business and results of operations.

Any disruption to our access to the reagents we are using in the clinical development of our cell therapy product candidates could adversely affect our ability to perform clinical trials and seek future regulatory submissions.

Any disruption to our access to the reagents, devices, material or equipment we are using in the clinical development of our cell therapy product candidates could adversely affect our ability to perform clinical trials and seek future regulatory submissions.

Reagents, devices, materials and systems that we are using in our clinical trials, that we intend to use in our planned clinical trials and that we may need or use in commercial production, are provided by unaffiliated third parties.

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The initiation of pivotal Phase 3 clinical trials for cell therapy product candidates requires the validation and establishment of manufacturing controls that may delay product development timelines.

To conduct pivotal Phase 3 clinical trials, we are required to have certain validated and established manufacturing controls with respect to the safety, purity and potency of our product when administered to patients.

If we determine that the results of any Phase 2 clinical trial we may conduct supports Phase 3 development, we expect to initiate and complete one or more pivotal Phase 3 clinical trials for such programs and would need to address any outstanding chemistry, manufacturing and control CMC issues raised by the FDA prior to initiating such trials.

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Product candidates that appear promising in research and development and early clinical trials may be delayed or fail to reach later stages of development.

Decisions regarding the further development of product candidates must be made with limited and incomplete data, which makes it difficult to ensure or even accurately predict whether the allocation of limited resources and the expenditure of additional capital on specific product candidates will result in desired outcomes.

additional capital on specific product candidates will result in desired outcomes.

Preclinical and clinical data can be interpreted in different ways, and negative or inconclusive results or adverse events during a clinical trial could delay, limit or prevent the development of a product candidate.

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The results of clinical trials in one set of patients or line of treatment may not be predictive of those obtained in another.

If serious or unacceptable side effects are identified during the development of any of our product candidate, we may need to abandon or limit our development of that product candidate.

If serious or unacceptable side effects are identified during the development of any of our product candidates, we may need to abandon or limit our development of that product candidate.

All of our product candidates are in clinical development and their risk of failure is high.

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A Fast Track designation by the FDA and other similar regulatory designations may not lead to a faster development, regulatory review or approval process.

We were granted SAKIGAKE designation in Japan and Advanced Therapeutic Medicinal Product ("ATMP") designation in Europe for HONEDRA ® for the treatment of CLI and Buerger's Disease, and RMAT designation for OLOGO TM for the treatment of no-option refractory disabling angina.

However, SAKIGAKE, ATMP and RMAT designations do not ensure that we will experience a faster development, regulatory review or approval process compared to conventional FDA or Japan PMDA procedures.

We were granted SAKIGAKE designation in Japan and Advanced Therapeutic Medicinal Product (“ATMP”) designation in Europe for HONEDRA ® for the treatment of CLI and Buerger's Disease.

However, SAKIGAKE and ATMP designations do not ensure that we will experience a faster development, regulatory review or approval process compared to conventional FDA or Japan PMDA procedures.

Additionally, a regulatory authority may withdraw a designation if it believes that the designation is no longer supported by data from the clinical development program.

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Some future trials may have different patient populations than current studies and will test our product candidates in different indications, among other differences.

In addition, our proposed manufacturing processes for our product candidates include what we believe will be process improvements that are not part of the production processes that were previously used in the earlier conducted clinical trials being conducted by the research institutions.

In addition, our proposed manufacturing processes

for our product candidates include what we believe will be process improvements that are not part of the production processes that were previously used in the earlier conducted clinical trials being conducted by the research institutions.

Accordingly, our results with our product candidates may not be consistent with the results of the clinical trials.

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We presently rely on contract manufacturing organizations to produce our product candidates at development and commercial scale quantities and have not yet qualified an alternate manufacturing supply, which could negatively impact our ability to meet any future demand for the products.

We currently rely on contract manufacturers to provide the cell processing services necessary for clinical production for our various CD34+ cell therapy product candidates.

The Foundation for Biomedical Research and Innovation, a Japanese corporation with its principal place of business in Kobe, Japan ("FBRI") provide all cell processing services for the HONEDRA ® CLI trial in Japan.

Minaris Regenerative Medicine and FBRI also provide services and produce materials for clinical trials on behalf of unaffiliated third parties.

To date, neither has produced any products at commercial scale quantities.

We expect that Minaris Regenerative Medicine and FBRI would need to expand significantly their manufacturing capabilities to meet potential commercial demand for HONEDRA ® , OLOGO TM , CLBS201 and CLBS16 and any other of our product candidates, if approved, as well as any of our other product candidates that might attain regulatory approval.

We currently rely on one contract manufacturer, Cognate Bioservices, a Charles River Company (“Cognate”), to provide the cell processing services necessary for clinical production for our various CD34+ cell therapy product candidates.

To date, Cognate has not produced any products at commercial scale quantities and we expect that Cognate would need to significantly expand its manufacturing capabilities to meet potential commercial demand for XOWNA ® and CLBS201 and any other of our product candidates, if approved, as well as any of our other product candidates that might attain regulatory approval.

Such expansion would require additional regulatory approvals.

Even if they increase their manufacturing capabilities, it is possible that they may still lack sufficient capacity to meet demand.

At present we have no contract manufacturer for the production of HONEDRA ® in Japan.

Ultimately, if we are unable to supply our products to meet commercial demand, whether because of processing constraints or other disruptions, delays or difficulties that we experience, sales of the products and their long-term commercial prospects could be significantly damaged.

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Ultimately, if we are unable to supply our cell therapy product candidates to meet commercial demand, were commercial approval to be obtained, whether because of processing constraints or other disruptions, delays or difficulties that we experience, our production costs could increase dramatically, and sales of the product and its long-term commercial prospects could be significantly damaged.

The commercial potential and profitability of our products are unknown and subject to significant risk and uncertainty.

Also, as a result of the current geopolitical tensions and the conflict between Russia and Ukraine following the recent and ongoing Russian invasion of Ukraine, the governments of the United States, the European Union, Japan and other jurisdictions have recently announced the imposition of sanctions on certain industry sectors and parties in Russia, as well as enhanced export controls on certain products and industries.

These and any additional sanctions and export controls, as well as any counter responses by the governments of Russia or other jurisdictions, could adversely affect, directly or indirectly, the global supply chain, with negative implications on the availability and prices of raw materials, energy prices, and our customers, as well as the global financial markets and financial services industry.

The commercial potential and profitability of our product candidates are unknown and subject to significant risk and uncertainty.

Even if we successfully develop and obtain regulatory approval for our cell therapy product candidates, the market may not understand or accept the products, which could adversely affect both the timing and level of future sales.

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Furthermore, this review process could be costly and time-consuming and could delay or prevent the commercialization of product candidates.

We may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe are essential to product commercialization or will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop.

Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute the shares of our existing stockholders, or disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.

We may enter into collaborations, strategic alliances, additional licensing arrangements, acquisitions, business combinations or other strategic transactions in the future, any of which could require us to issue securities that could significantly dilute the shares of our existing stockholders, and we may not realize the benefits of such alliances or licensing arrangements, acquisitions, business combinations or strategic transactions.

We may enter into collaborations, strategic alliances, additional licensing arrangements, acquisitions, business combinations or other strategic transactions with third parties that we believe are essential to product commercialization or will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop.

Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that could significantly dilute the shares of our existing stockholders, or disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partners and/or acquisition candidates and the negotiation process can be time-consuming and complex.

Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy.

Furthermore, there can be no assurance that our exploration of potential acquisitions, business combinations or strategic alternatives will result in us entering or completing any transaction or that such transaction, if completed, will add to shareholder value.

Further, collaborations involving our product candidates, such as our collaborations with third-party research institutions, are subject to numerous risks, which may include the following:

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We have limited experience in the areas of cell therapy product development and marketing, and in the related regulatory issues and processes.

Although we have recruited a team that has experience with designing and conducting clinical trials, as a company we have limited experience in conducting clinical trials and no experience in conducting clinical trials through to

regulatory approval of any product candidate.

In part because of this lack of experience, we cannot be certain that ongoing or planned clinical trials will begin or be completed on time, if at all.

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In general, cell-based or tissue-based products may be susceptible to various risks, including undesirable and unintended side effects, unintended immune system responses, inadequate therapeutic efficacy, or other characteristics that may prevent or limit their approval or commercial use.

Regulatory approval of novel product candidates such as HONEDRA ® , OLOGO TM , CLBS201 and CLBS16, which are each manufactured using novel and proprietary manufacturing processes, can be more complex and expensive and take longer than other, more well-known or extensively studied pharmaceutical or biopharmaceutical products, due to the FDA’s lack of experience with them.

Regulatory approval of novel product candidates such as HONEDRA ® , XOWNA ® and CLBS201, which are each manufactured having novel and proprietary formulations, can be more complex and expensive and take longer than other, more well-known or extensively studied pharmaceutical or biopharmaceutical products, due to the FDA’s lack of experience with them.

To our knowledge, the FDA has only approved five autologous cell therapy products to date.

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The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing reference product.

Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original reference product is approved for marketing in the U.S.

a stand-alone BLA.

Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original reference product is approved for marketing in the United States a stand-alone BLA.

The law is complex and is still being interpreted and implemented by the FDA.

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There can be no assurance that we will be successful in attracting or retaining personnel required by us to continue to grow our operations.

The loss of a key employee, the failure of a key employee to perform in his or her current position or our inability to attract and/or retain skilled employees, as needed, could result in our inability to continue to grow our business or to implement our business strategy, or may have a material adverse effect on our business, financial condition and operating results.

The loss of a key employee, the failure of a key employee to perform in his or her current position or our inability to attract and/or retain skilled employees, as needed,

could result in our inability to continue to grow our business or to implement our business strategy, or may have a material adverse effect on our business, financial condition and operating results.

Our internal computer systems, or those used by our clinical investigators, clinical research organizations or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of development programs for our product candidates.

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The techniques that could be used by criminal elements or foreign governments to attack these computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world.

Furthermore, there is an increased risk of cybersecurity attacks by state actors due to the current conflict between Russia and Ukraine.

Recently, Russian ransomware gangs have threatened to increase hacking activity against critical infrastructure of any nation or organization that retaliates against Russia for its invasion of Ukraine.

Any such increase in such attacks on our third-party provider or other systems could adversely affect our network systems or other operations.

While we have not experienced any such system failure, theft of information, accident or security breach to date, if such an event were to occur and cause interruptions in its operations, it could result in a material disruption of our clinical development activities.

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The increasing use of social media platforms presents new risks and challenges.

Social media is increasingly being used to communicate information about our products and the diseases that our therapies are designed to treat.

Social media is increasingly being used to communicate information about our product candidates and the diseases that our therapies are designed to treat.

Social media practices in our industry continue to evolve and regulations related to such use are not always clear.

This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business.

For example, patients and others may use social media channels to comment on the effectiveness of a product or to report an alleged adverse event.

When such disclosures occur, we may fail to monitor and comply with applicable adverse event reporting obligations or we may not be able to defend against political and market pressures generated by social media due to restrictions on what we may say about our products.

For example, patients and others may use social media channels to comment on the effectiveness of a product candidate or to report an alleged adverse event.

There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate comments about us on any social networking website.

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In addition, manufacturers of therapeutic products may be required to modify their manufacturing processes from time to time in response to regulatory requests.

The manufacture of live cellular-based products is complex and imposes significant regulatory burdens that may change over time.

The manufacture of live cellular-based products is complex and imposes significant regulatory burdens

that may change over time.

We may encounter difficulties in the production of our product candidates due to our limited manufacturing experience.

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The development and commercialization of our product candidates are subject to extensive regulation by the FDA and other regulatory agencies in the United States and abroad, and the failure to receive regulatory approvals for our cell therapy product candidates would likely have a material and adverse effect on our business and prospects.

Government authorities in the United States, at the federal, state and local level, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, including any manufacturing changes, packaging, storage, recordkeeping, labeling, advertising and promotion, distribution, marketing, import and export of pharmaceutical and biological products, such as HONEDRA ® , OLOGO TM , CLBS201 and CLBS16.

The process of obtaining required regulatory approvals and the subsequent compliance with appropriate statutes and regulations requires the expenditure of substantial time and money, and there is no guarantee that we will successfully complete the steps needed to obtain regulatory approval of HONEDRA ® , OLOGO TM , CLBS201 or CLBS16 or any future product candidates.

The process of obtaining required regulatory approvals and the subsequent compliance with appropriate statutes and regulations requires the expenditure of substantial time and money, and there is no guarantee that we will successfully complete the steps needed to obtain regulatory approval of HONEDRA ® , XOWNA ® and CLBS201 or any future product candidates.

There also are extensive and ongoing post-marketing compliance obligations to which we would be subject following FDA approval of any of our product candidates.

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To date, we have not received regulatory approval to market any of our product candidates in any jurisdiction.

If we seek approval of any of our cell therapy product candidates, we will be required to submit to FDA and Japanese and potentially other regulatory authorities extensive preclinical and clinical data supporting the safety and efficacy of such products, as well as information about the manufacturing process and to undergo inspection of manufacturing facilities, among other things.

If we seek approval of any of our cell therapy product candidates, we will be required to submit to FDA, Japan's PMDA, and potentially other regulatory authorities, extensive preclinical and clinical data supporting the safety and efficacy of such product candidates, as well as information about the manufacturing process and to undergo inspection of manufacturing facilities, among other things.

The process of obtaining FDA and other regulatory approvals is expensive, typically takes many years and is subject to numerous risks and uncertainties, particularly with complex and/or novel product candidates such as our cell-based product candidates.

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• data obtained from animal testing and other nonclinical testing and clinical trials can be interpreted in different ways, and regulatory authorities may not agree with our respective interpretations or may require us to conduct additional testing;

• negative or inconclusive results or the occurrence of serious or unexpected adverse events during a clinical trial could cause us to delay or terminate development efforts for a product candidate;

• negative or inconclusive results or the occurrence of serious or unexpected adverse events during a clinical trial could cause us to delay and/or terminate development efforts for a product candidate;

• the FDA and other regulatory authorities may require expansion of the size and scope of the clinical trials.

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As such, there can be no assurance that we will be able, or will have the resources, to maintain compliance with all applicable biopharmaceutical and health care laws and regulations.

Failure to comply with such biopharmaceutical and

health care laws and regulations could result in significant enforcement actions, civil or criminal penalties, which along with the costs associated with such compliance or with enforcement of such biopharmaceutical and health care laws and regulations, may have a material adverse effect on our operations or may require restructuring of our operations or impair our ability to operate profitably.

Failure to comply with such biopharmaceutical and health care laws and regulations could result in significant enforcement actions, civil or criminal penalties, which along with the costs associated with such compliance or with enforcement of such biopharmaceutical and health care laws and regulations, may have a material adverse effect on our operations or may require restructuring of our operations or impair our ability to operate profitably.

Facilities engaged in the recovery, processing, storage, labeling, packaging or distribution of any human cells, tissues or cellular- and tissue-based products, or the screening or testing of a donor, are required to register with the applicable regulatory agencies.

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If the FDA finds that patients enrolled in the trial are or would be exposed to an unreasonable and significant risk of illness or injury due to, among other things, occurrence of one or more serious adverse events in an ongoing clinical trial, the FDA can place one or more of our clinical trials on partial or full clinical hold.

If safety concerns develop, we may, or the FDA, a foreign regulatory authority, or an IRB may require us to, stop the affected trials before completion.

If safety concerns develop, we may, or the FDA, a foreign regulatory authority, or an IRB may require us to pause or stop the affected trials before completion.

The completion of our clinical trials also may be delayed or terminated for a number of other reasons, including if:

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The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business.

In the U.S., we may be subject to state security breach notification laws, state health information privacy laws and federal and state consumer protections laws which impose requirements for the collection, use, disclosure and transmission of personal information.

In the United States, we may be subject to state security breach notification laws, state health information privacy laws and federal and state consumer protections laws which impose requirements for the collection, use, disclosure and transmission of personal information.

Each of these laws are subject to varying interpretations by courts and government agencies, creating complex compliance issues for us.

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EU member states and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations.

In May 2016, the European Union formally adopted the General Data Protection Regulation

(GDPR), which applies to all EU member states from May 25, 2018 and replaced the EU Data Protection Directive The regulation introduces stringent new data protection requirements in the European Union and substantial fines for breaches of the data protection rules.

In May 2016, the European Union formally adopted the General Data Protection Regulation (“GDPR”), which applies to all EU member states from May 25, 2018 and replaced the EU Data Protection Directive The regulation introduces stringent new data protection requirements in the European Union and substantial fines for breaches of the data protection rules.

It has increased our responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with the new EU data protection rules.

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In addition, amendments to the Federal False Claims Act, including under health care reform, have made it easier for private parties to bring “ qui tam ” (whistleblower) lawsuits against companies under which the whistleblower may be entitled to receive a percentage of any money paid to the government.

The Federal False Claims Act provides, in part,

that an action can be brought against any person or entity that has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim approved.

The Federal False Claims Act provides, in part, that an action can be brought against any person or entity that has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim approved.

The government has taken the position that claims presented in violation of the federal anti-kickback law, Stark Law or other health care-related laws, including laws enforced by the FDA, may be considered a violation of the Federal False Claims Act.

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The extent to which the reforms brought about under health care reform may be successful in reducing the number of such uninsured is unclear, and the reduced funding of governmental programs and increase in uninsured populations could have a negative impact on the demand for our services to the extent they relate to products and services which are reimbursed by government and private payors.

Unintended consequences of health care reform legislation in the U.S.

may adversely affect our business.

Unintended consequences of health care reform legislation in the United States may adversely affect our business.

The health care industry is undergoing fundamental changes resulting from political, economic and regulatory influences.

In the U.S., comprehensive programs are under consideration that seek to, among other things, increase access to health care for the uninsured and control the escalation of health care expenditures within the economy.

In the United States, comprehensive programs are under consideration that seek to, among other things, increase access to health care for the uninsured and control the escalation of health care expenditures within the economy.

In March 2010, the Patient Protection and Affordable Care Act (“PPACA”), as amended by the Health Care and Education Reconciliation Act, or the Affordable Care Act, was passed, which substantially changes the way health care is financed by both governmental and private insurers, and significantly impacts the U.S.

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On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Strong, partisan disagreement in Congress has prevented implementation of various PPACA provisions, and the Trump Administration has made repeal of the PPACA a priority.

Strong, partisan disagreement in Congress has prevented implementation of various PPACA provisions, and the Trump Administration had made the repeal of the PPACA a priority.

One of the first executive orders of the Trump administration granted federal agencies broad powers to unwind regulations under the PPACA.

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Reference pricing used by various EU member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices.

In some countries where we may seek to market our product candidates in the future, we may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidate to other available therapies in order to obtain or maintain reimbursement or pricing approval.

In some countries where we may seek to market

our product candidates in the future, we may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidate to other available therapies in order to obtain or maintain reimbursement or pricing approval.

Publication of discounts by third-party payors or authorities may lead to further pressure on prices or reimbursement levels within the country of publication and other countries.

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If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, upon completion of

this offering and in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Further, upon completion of this offering and in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Competitor companies or hospitals may be able to take advantage of EU rules permitting sales of unlicensed medicines for individual patients to sell competing products without a marketing authorization.

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• challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

• the continued threat of terrorism and the impact of military and other action, including military actions involving Russia and Ukraine;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad, including as a result of COVID-19 or the recent military actions involving Russia and Ukraine;

• business interruptions resulting from geo-political actions, including war and terrorism.

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Our commercial success will depend, in part, on obtaining and maintaining patent protection for new technologies, product candidates, products and processes and successfully defending such patents against third-party challenges.

To that end, we file

patent applications, and have been issued patents, that are intended to cover certain methods and uses of human cells as well as compositions and methods relating to hematopoietic stem cells.

To that end, we file patent applications, and have been issued patents, that are intended to cover certain methods and uses of human cells as well as compositions and methods relating to hematopoietic stem cells.

These patent applications may never result in the issuance of patents.

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As such, it is possible that any patents that may cover an approved product may have expired at the time of commercialization or only have a short remaining period of exclusivity, thereby reducing the commercial advantages of the patent.

In such case, we would then rely solely on other forms of exclusivity, such as regulatory exclusivity provided by the FDC Act, which may provide less protection to our competitive position.

In such case, we would then rely solely on other forms of exclusivity, such as regulatory exclusivity provided by the FD&C Act, which may provide less protection to our competitive position.

Litigation relating to intellectual property is expensive, time-consuming and uncertain, and we may be unsuccessful in our efforts to protect against infringement by third parties or defend ourselves against claims of infringement.

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Third parties may allege that the research, development and commercialization activities we conduct infringe patents or other proprietary rights owned by such parties.

While we do not believe any of our current activities infringe the rights of others, we have not conducted an exhaustive search or analysis of third-party patent rights to determine whether our pre-clinical or clinical research and development or activities may infringe or be alleged to infringe any third-party patent rights.

While we do not believe any of our current activities infringe the rights of

others, we have not conducted an exhaustive search or analysis of third-party patent rights to determine whether our pre-clinical or clinical research and development or activities may infringe or be alleged to infringe any third-party patent rights.

If we are found to have infringed the patents of a third party, we may be required to pay substantial damages;

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We expend significant energy, resources and know-how in an effort to protect these trade secrets and know-how, including through the use of confidentiality agreements.

Even so, improper use or disclosure of our

confidential information could occur, and in such case, adequate remedies may not exist.

Even so, improper use or disclosure of our confidential information could occur, and in such case, adequate remedies may not exist.

The disclosure of trade secrets and know-how could impair our competitive position.

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patent law may have a material adverse effect on our intellectual property rights.

The Leahy-Smith America Invents Act (AIA), which was signed into law on September 16, 2011, significantly changed United States patent law.

It may take some time to establish what the law means, since it is just being interpreted by the lower courts, and any lower court decisions have not been reviewed by either the Federal Circuit Court of Appeals or the Supreme Court, a process that will take years.

The first major change is that AIA switches the U.S.

patent system from a “first to invent” system to a “first to file” system.

Now that the first to file system is in effect, there is a risk that another company may independently develop identical or similar patents at approximately the same time and be awarded the patents instead of us.

Further, in the second major change, AIA abolished interference proceedings, and establishes derivation proceedings to replace interference proceedings in all cases in which the time period for instituting an interference proceeding has not lapsed where an inventor named in an earlier application derived the claimed invention from a named inventor.

Now that the derivation proceedings are in effect, there is a risk that the inventorship of any pending patent application can be challenged for reasons of derivation.

The third major change is that AIA established post-grant opposition proceedings that will apply only to patent applications filed after “first to file” became effective.

Post-grant opposition will enable a person who is not the patent owner to initiate proceedings in the patent office within 9 months after the grant of a patent that can result in cancellation of a patent as invalid.

There is a risk, therefore, that any of our patents once granted after the effective date of these provisions of the AIA (March 16, 2013) may be subject to post-grant opposition, which will increase uncertainty on the validity of any newly granted patent or may ultimately result in cancellation of the patent.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain.

Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs, and may diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our owned and any licensed patents.

Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the Leahy-Smith Act), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain.

Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

Depending on future actions by the U.S.

Congress, the U.S.

courts, the U.S.

Patent and Trade Office (the “USPTO”) and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.

Our commercial success depends in part on our avoiding infringement of the patents, trademarks and proprietary rights of third parties.

There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, and reexamination proceedings before the U.S.

Patent and Trade Office (the "USPTO") and corresponding foreign patent offices and trademark violations.

Numerous U.S.

and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing products and services.

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The market price of our common stock has been, and in the future may continue to be, highly volatile.

For example, from January 1, 2020 through February 25, 2021 our common stock traded as low as $1.05 per share and as high as $4.89 per share.

For example, from January 1, 2021 through March 22, 2022 our common stock traded as low as $0.63 per share and as high as $4.89 per share.

The market price for our common stock is highly dependent on, among other things, stock market conditions in general, our clinical development efforts and the growth of our business in general, the amount of our available cash and investments and our level of cash utilization.

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or foreign government regulations impacting the life sciences industry or the movement of capital into or out of our industry, are likely to affect the price of our common stock.

Geopolitical events, including the continued threat of terrorism and the impact of military and other

action, including military actions involving Russia and Ukraine, could impact our stock price as well.

There can be no assurance that the market price of our common stock will not continue to fluctuate or decline significantly in the future.

In addition to potential dilution associated with future fundraising transactions, we currently have significant numbers of securities outstanding that are exercisable for our common stock, which could result in significant additional dilution and downward pressure on our stock price.

We may fail to comply with the continued listing requirements of the Nasdaq Capital Market, such that our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is listed for trading on the Nasdaq Capital Market.

We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days (the "Minimum Bid Price Requirement").

If a company trades for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq will send a deficiency notice to the company advising that it has been afforded a “compliance period” of 180 calendar days to regain compliance with the applicable requirements.We received such notice on February 18, 2022 and thus risk delisting unless we are able to regain compliance in a timely fashion.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a grace period of 180 calendar days, or until August 17, 2022, to regain compliance with the Minimum Bid Price Requirement.

Compliance can be achieved automatically and without further action if the closing bid price of our stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period, in which case Nasdaq will notify us of our compliance and the matter will be closed.

If, however, we do not achieve compliance with the Minimum Bid Price Requirement by August 17, 2022, we may be eligible for additional time to comply.

In order to be eligible for such additional time, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify Nasdaq in writing of our intention to cure the deficiency during the second compliance period.

There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement, that we will maintain compliant with other Nasdaq listing requirements or that we will be granted a second compliance period.

A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock.

In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.

In addition to potential dilution associated with potential future fundraising and strategic transactions, we currently have significant numbers of securities outstanding that are exercisable for our common stock, which could result in significant additional dilution and downward pressure on our stock price.

As of December 31, 2021, there were 59,789,712 shares of our common stock outstanding.

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Additionally, failure to maintain effective internal control over our financial reporting could result in government investigation or sanctions by regulatory authorities.

Our common stock is listed for trading on the Nasdaq Capital Market.

We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days.

If a company trades for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq will send a deficiency notice to the company, advising that it has been afforded a “compliance period” of 180 calendar days to regain compliance with the applicable requirements.

A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock.

UNRESOLVED STAFF COMMENTS.

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

What changed 10-K

Item 1A. Risk Factors