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Item 1A. Risk Factors

2021-04-02 compared with 2020-04-14 · 820 added, 1024 removed, 8 unchanged (100% of the section changed)

An investment in our common

stock involves a high degree of risk.

You should carefully consider the risks described below together with all of the other information

included in this annual report before making an investment decision with regard to our securities.

The statements contained in

this annual report include forward-looking statements that are subject to risks and uncertainties that could cause actual results

to differ materially from those set forth in or implied by forward-looking statements.

The risks set forth below are not the only

risks facing us.

Additional risks and uncertainties may exist that could also adversely affect our business, prospects or operations.

If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed.

case, the trading price of our common stock could decline, and you may lose all or a significant part of your investment.

Risks Concerning our Business

Because of a lack of funds, we have

suspended our product development operations.

Our business is the development of transdermal

systems for the delivery of pharmaceuticals.

The development of pharmaceutical products is highly cash intensive, and many early

stage drug development companies are unable to raise sufficient cash to complete the development and testing of their products

and obtain regulatory approval, with the result that they either obtain funding on very unfavorable terms, cease to conduct business

or sell or license their intellectual property on unfavorable terms.

At January 31, 2020, we had a working capital deficiency of

approximately $1.9 million, and cash of approximately $10,000.

Because of our lack of cash and the absence of any significant financing,

we have suspended our development activities relating to our transdermal pharmaceutical products.

Because of the anticipated lack

of revenues until we have an approved product that we can market and the time required to obtain FDA approval, which can take many

years, we must rely on our ability to raise money in the private or public equity market or enter into a joint venture relationship

with a company that has the funds, the willingness and the ability to fund or obtain funds for the project that is the subject

of the joint venture.

In March 2020, we withdrew a registration statement relating to a proposed public offering.

If we are able

to raise funds or enter into a joint venture, it is likely that the term will not be favourable to us.

We cannot assure you that

we will be able to raise funds in a public or private financing or a joint venture, and, if we are unable to do so, we may cease

Because we are an early-stage company

with minimal revenue and a history of losses and we expect to continue to incur substantial losses for the foreseeable future,

we cannot assure you that we can or will be able to operate profitably.

We did not generate any revenue prior to

the quarter ended October 31, 2018, we have incurred losses since our organization, 4P Therapeutics generated only modest revenue

from contract research and development services which are not related to our pharmaceutical transdermal patch business.

we anticipate that, for the near term, we will continue to perform research and development services for third parties, we do not

expect to generate significant revenue from performing contract research and development services for our clients and we have generated

losses from operations from this business.

During the year ended January 31, 2020, we experienced a significant decline in revenue

from 4P Therapeutics’

investment in our common stock involves a high degree of risk.

You should carefully consider the risks described below together

with all of the other information included in this annual report before making an investment decision with regard to our securities.

The statements contained in this annual report include forward-looking statements that are subject to risks and uncertainties

that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.

set forth below are not the only risks facing us.

Additional risks and uncertainties may exist that could also adversely affect

our business, prospects or operations.

If any of the following risks actually occurs, our business, financial condition or results

of operations could be harmed.

In that case, the trading price of our common stock could decline, and you may lose all or a significant

part of your investment.

Concerning our Business

of a lack of funds, we have suspended our pharmaceutical product development operations.

business is the development of transdermal systems for the delivery of pharmaceuticals.

The development of pharmaceutical products

is highly cash intensive, and many early-stage drug development companies are unable to raise sufficient cash to complete the

development and testing of their products and obtain regulatory approval, with the result that they either obtain funding on very

unfavorable terms, cease to conduct business or sell or license their intellectual property on unfavorable terms.

Because of our

lack of cash and the absence of any significant financing, we have suspended our development activities relating to our transdermal

pharmaceutical products.

Because of the anticipated lack of revenues until we have an approved product that we can market and

the time required to obtain FDA approval, which can take many years, we must rely on our ability to raise money in the private

or public equity market or enter into a joint venture relationship with a company that has the funds, the willingness and the

ability to fund or obtain funds for the project that is the subject of the joint venture.

In March 2020, we withdrew a registration

statement relating to a proposed public offering.

If we are able to raise funds or enter into a joint venture, it is likely that

the term will not be favorable to us.

We cannot assure you that we will be able to raise funds in a public or private financing

or a joint venture, and, if we are unable to do so, we may cease operations.

we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses

for the foreseeable future, we cannot assure you that we can or will be able to operate profitably.

did not generate any revenue prior to the quarter ended October 31, 2018 and since then, we have incurred losses as, 4P Therapeutics

generated only modest revenue from contract research and development services which are not related to our pharmaceutical transdermal

patch business.

Although we anticipate that, for the near term, we will continue to perform research and development services

for third parties, we do not expect to generate significant revenue from performing contract research and development services

for our clients and we have generated losses from operations from this business.

During the year ended January 31, 2021, we experienced

a significant decline in revenue from 4P Therapeutics’

largest customer.

We generated a negative gross margin and negative cash flow from operations for the

years ended January 31, 2020 and 2019.

We are subject to the risks common to start-up, pre-revenue enterprises, including, among

other factors, undercapitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack

Drug development companies typically incur substantial losses during the product development and FDA testing phase

of the business and do not generate revenues until after the drug has received FDA approval, which cannot be assured, and until

the company has started to sell the product.

We can give no assurance that we can or will ever be successful in achieving profitability

and the likelihood of our success must be considered in light of our early stage of operations.

We cannot assure you that we will

be able to operate profitably or generate positive cash flow.

If we cannot achieve profitability, we may be forced to cease operations

and you may suffer a total loss of your investment.

Our auditors’

report includes

a going concern paragraph.

Our financial statements include a going-concern

qualification from our auditors, which expresses doubt about our ability to continue as a going concern.

We have operated at a

loss since inception.

Our ability to operate profitable is dependent upon, among other things, obtaining substantial financing,

developing our products, completing FDA clinical testing, obtaining FDA approval and implementing a marketing program for our products.

These factors, among others, raise substantial doubt about our ability to continue as a going concern.

The accompanying financial

statements do not include any adjustments that take into consideration the uncertainty of our ability to continue operations.

Our business will be likely be adversely

affected by the COVID-19 pandemic.

The COVID-19 pandemic and the response to the pandemic will

affect our business in a number of ways, including, but are not limited to, the following:

● Our ability to raise financing for our operations and to enter into

a joint venture agreement may be affected by both the willingness and ability of potential financing sources and potential joint

venture partners to invest in an undercapitalized business, particularly at a time when the potential financing source or joint

venture partner may need to devote its resources to existing portfolio companies or joint ventures which may be in need of financing.

● The decision by investors who would invest in early stage pharmaceutical

companies to limit their financing efforts to companies that are dealing with products or services related to COVID-19 diagnosis

or treatment.

● The effect of recent stock market decline on the willingness of investors

to make an investment in our securities.

● The financial health of our potential contract service customers.

● Our ability to perform contract services.

● Our ability to obtain any goods or services which we may need to perform

We generated negative cash flow from operations

for the years ended January 31, 2021 and 2020.

We are subject to the risks common to start-up, pre-revenue enterprises, including,

among other factors, undercapitalization, cash shortages, limitations with respect to personnel, financial and other resources

and lack of revenues.

Drug development companies typically incur substantial losses during the product development and FDA testing

phase of the business and do not generate revenues until after the drug has received FDA approval, which cannot be assured, and

until the company has started to sell the product.

We can give no assurance that we can or will ever be successful in achieving

profitability and the likelihood of our success must be considered in light of our early stage of operations.

We cannot assure

you that we will be able to operate profitably or generate positive cash flow.

If we cannot achieve profitability, we may be forced

to cease operations and you may suffer a total loss of your investment.

business will be likely be adversely affected by the COVID-19 pandemic.

COVID-19 pandemic and the response to the pandemic will affect our business in a number of ways, including, but are not limited

to, the following:

Our ability to raise

financing for our operations and to enter into a joint venture agreement may be affected by both the willingness and ability

of potential financing sources and potential joint venture partners to invest in an undercapitalized business, particularly

at a time when the potential financing source or joint venture partner may need to devote its resources to existing portfolio

companies or joint ventures which may be in need of financing.

The decision by

investors who would invest in early stage pharmaceutical companies to limit their financing efforts to companies that are

dealing with products or services related to COVID-19 diagnosis or treatment.

The effect of recent

stock market decline on the willingness of investors to make an investment in our securities.

The financial health

of our potential contract service customers.

Our ability to perform

contract services.

● The ability of our foreign distributors to obtain regulatory approval,

which may be affected by the regulatory agencies giving a low priority to products such as our consumer patches.

● The financial health of Best Choice.

● If regulatory approval is obtained in South Korea, the extent to which

consumers in South Korea purchase our products.

● The extent to which the purchase of our consumer products is a low

priority item for a population whose disposable income may have decreased as a result of COVID-19 and the steps taken by the South

Korean government to curb the spread of infection.

Because we do not have a product

we can market in the United States, we cannot predict when or whether we will operate profitably.

We have not completed the development of

our lead product, which is our abuse deterrent fentanyl transdermal system, and we do not have any product that we can market in

the United States.

Because of the numerous risks and uncertainties associated with product development, we cannot assure you that

we will be able to develop and market any products or achieve or attain profitability.

If we are able to obtain financing for our

operations, we expect that we will incur substantial expenses as we continue with our product development and clinical trials.

Further, if we are required by applicable regulatory authorities, including the FDA as well as the comparable regulatory agencies

in other countries in which we may seek to market product, to perform studies in addition to those we currently anticipate, our

expenses will increase beyond expectations and the timing of any potential product approval may be delayed.

As a result, we expect

to continue to incur substantial losses and negative cash flow for the foreseeable future.

A number of factors, including, but not

limited to the following, may affect our ability to develop our business and operate profitably:

● our ability to obtain necessary funding to develop

our proposed products;

● the success of clinical trials for our products;

● our ability to obtain FDA approval for us to market

any proposed product in our pipeline in the United States;

● any delays in regulatory review and approval of product

in development;

● if we obtain FDA approval to market our product, our

ability to establish manufacturing and distribution operations or entering into manufacturing and distribution agreements with

qualified third parties;

● market acceptance of our products;

● our ability to establish an effective sales and marketing

infrastructure;

● our ability to protect our intellectual property;

● competition from existing products or new products

that may emerge;

● the ability to commercialize our products;

● potential product liability claims and adverse events;

● our ability to adequately support future growth;

● our ability to attract and retain key personnel to

manage our business effectively.

Our failure to develop our abuse

deterrent fentanyl transdermal system will impair our ability to continue in business.

Our lead product is our abuse deterrent

fentanyl transdermal system, and we are devoting our resources primarily to developing this product, and, if we complete the development

of this product, we will conduct the clinical trials necessary to enable us to obtain FDA approval and to market the product.

we are not able to obtain necessary financing to develop, obtain FDA marketing approval and market this product successfully, we

may not have the resources to develop additional products, and we may not be able to continue in business.

Before we can market in the United

States any product which is classified by the FDA as a drug, we must obtain FDA marketing approval.

Our proposed transdermal products are drug-device

combinations that are considered by the FDA to be drugs, which require approval by the FDA.

In order to obtain FDA approval, it

is necessary to conduct a series of preclinical and clinical tests to confirm that the product is safe and effective.

the medication that is being delivered through our transdermal patch may have already received FDA approval, because we are delivering

the medication through the skin, we will need to complete, to the FDA’s satisfaction, all of the required clinical testing

steps to demonstrate safety and efficacy.

At any point, the FDA could ask us to perform additional tests or to refine and redo

a test that we had previously completed.

The process of obtaining FDA approval could take many years, with no assurance that the

FDA will approve the product.

The FDA also will need to approve the manufacturing process and the manufacturing facility.

We may need to rely on a third party

contract research organization to conduct our preclinical and clinical trials.

Although we believe that we, through 4P

Therapeutics, have the capabilities to conduct preclinical studies and early stage clinical studies in house, we may need to rely

on third party contract research organizations to conduct our pivotal preclinical and clinical trials.

Our failure or the failure

of the contract research organization to conduct the trials in compliance with FDA regulations could possibly derail our obtaining

FDA approval, and could require us to redo any preclinical or clinical trials which we or the organization administered.

We may encounter delays in completing

clinical trials, which would increase our costs and delay market entry.

We may experience delays in completing

the clinical trials necessary for FDA approval.

These delays may result from a number of factors which could prevent us from starting

the trial on time or completing the study in a timely manner, which may include factors out of our control.

Since we may need to

rely on third parties for supplying us with the drug and transdermal patches used in the trials, there may be various reasons for

us to experience a delay in obtaining the clinical materials required to start each clinical trial, which may include factors out

Our ability to obtain

any goods or services which we may need to perform contract services.

The ability of our

foreign distributors to obtain regulatory approval, which may be affected by the regulatory agencies giving a low priority

to products such as our consumer patches.

The financial health

of Best Choice.

If regulatory approval

is obtained in South Korea, the extent to which consumers in South Korea purchase our products.

The extent to which

the purchase of our consumer products is a low priority item for a population whose disposable income may have decreased as

a result of COVID-19 and the steps taken by the South Korean government to curb the spread of infection.

we do not have a product we can market in the United States, we cannot predict when or whether we will operate profitably.

have not completed the development of our lead product, which is our abuse deterrent fentanyl transdermal system, and we do not

have any product that we can market in the United States.

Because of the numerous risks and uncertainties associated with product

development, we cannot assure you that we will be able to develop and market any products or achieve or attain profitability.

If we are able to obtain financing for our operations, we expect that we will incur substantial expenses as we continue with our

product development and clinical trials.

Further, if we are required by applicable regulatory authorities, including the FDA as

well as the comparable regulatory agencies in other countries in which we may seek to market product, to perform studies in addition

to those we currently anticipate, our expenses will increase beyond expectations and the timing of any potential product approval

may be delayed.

As a result, we expect to continue to incur substantial losses and negative cash flow for the foreseeable future.

number of factors, including, but not limited to the following, may affect our ability to develop our business and operate profitably:

our ability to obtain

necessary funding to develop our proposed products;

the success of clinical

trials for our products;

our ability to obtain

FDA approval for us to market any proposed product in our pipeline in the United States;

any delays in regulatory

review and approval of product in development;

if we obtain FDA

approval to market our product, our ability to establish manufacturing and distribution operations or entering into manufacturing

and distribution agreements with qualified third parties;

market acceptance

of our products;

our ability to establish

an effective sales and marketing infrastructure;

our ability to protect

our intellectual property;

competition from

existing products or new products that may emerge;

the ability to commercialize

our products;

potential product

liability claims and adverse events;

our ability to adequately

support future growth;

our ability to attract

and retain key personnel to manage our business effectively.

failure to develop our abuse deterrent fentanyl transdermal system will harm our business.

lead product is our abuse deterrent fentanyl transdermal system, and we are devoting our resources primarily to developing this

product, and, if we complete the development of this product, we will conduct the clinical trials necessary to enable us to obtain

FDA approval and to market the product.

If we are not able to obtain necessary financing to develop, obtain FDA marketing approval

and market this product successfully, we may not have the resources to develop additional products..

we can market in the United States any product which is classified by the FDA as a drug, we must obtain FDA marketing approval.

proposed transdermal products are drug-device combinations that are considered by the FDA to be drugs, which require approval

In order to obtain FDA approval, it is necessary to conduct a series of preclinical and clinical tests to confirm

that the product is safe and effective.

Even though the medication that is being delivered through our transdermal patch may have

already received FDA approval, because we are delivering the medication through the skin, we will need to complete, to the FDA’s

satisfaction, all of the required clinical testing steps to demonstrate safety and efficacy.

At any point, the FDA could ask us

to perform additional tests or to refine and redo a test that we had previously completed.

The process of obtaining FDA approval

could take many years, with no assurance that the FDA will approve the product.

The FDA also will need to approve the manufacturing

process and the manufacturing facility.

may need to rely on a third party contract research organization to conduct our preclinical and clinical trials.

we believe that we, through 4P Therapeutics, have the capabilities to conduct preclinical studies and early stage clinical studies

in house, we may need to rely on third party contract research organizations to conduct our pivotal preclinical and clinical trials.

Our failure or the failure of the contract research organization to conduct the trials in compliance with FDA regulations could

possibly derail our obtaining FDA approval, and could require us to redo any preclinical or clinical trials which we or the organization

administered.

may encounter delays in completing clinical trials, which would increase our costs and delay market entry.

may experience delays in completing the clinical trials necessary for FDA approval.

These delays may result from a number of factors

which could prevent us from starting the trial on time or completing the study in a timely manner, which may include factors out

of our control.

Clinical trials can be delayed or terminated for a number of reasons, including delay or failure to:

● obtain necessary financing;

● obtain regulatory approval to commence a trial;

● reach agreement on acceptable terms with prospective

contract research organizations, investigators and clinical trial sites, the terms of which may be subject to extensive negotiation

and vary significantly among different research organizations and trial sites;

● obtain institutional review board approval at each

● enlist suitable patients to participate in a trial;

● have patients complete a trial or return for post-treatment

● ensure clinical sites observe trial protocol or continue

to participate in a trial;

● address any patient safety concerns that arise during

the course of a trial;

● address any conflicts with new or existing laws or

● add a sufficient number of clinical trial sites;

● manufacture sufficient quantities of the product candidate

for use in clinical trials.

Patient enrolment is also a significant

factor in the timely completion of clinical trials and is affected by many factors, including the size and nature of the patient

population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial,

competing clinical trials and clinicians’

Since we may need to rely on third parties for supplying us with the drug and transdermal patches used in the

trials, there may be various reasons for us to experience a delay in obtaining the clinical materials required to start each clinical

trial, which may include factors out of our control.

Clinical trials can be delayed or terminated for a number of reasons, including

delay or failure to:

obtain necessary

obtain regulatory

approval to commence a trial;

reach agreement

on acceptable terms with prospective contract research organizations, investigators and clinical trial sites, the terms of

which may be subject to extensive negotiation and vary significantly among different research organizations and trial sites;

obtain institutional

review board approval at each site;

enlist suitable

patients to participate in a trial;

have patients complete

a trial or return for post-treatment follow-up;

ensure clinical

sites observe trial protocol or continue to participate in a trial;

address any patient

safety concerns that arise during the course of a trial;

address any conflicts

with new or existing laws or regulations;

add a sufficient

number of clinical trial sites;

manufacture sufficient

quantities of the product candidate for use in clinical trials.

enrolment is also a significant factor in the timely completion of clinical trials and is affected by many factors, including

the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial,

the design of the clinical trial, competing clinical trials and clinicians’

and patients’

perceptions as to the potential advantages of the drug being

studied in relation to available alternatives, including any new drugs or treatments that may be approved for the indications we

are investigating.

We may also encounter delays if a clinical

trial is suspended or terminated by us, by the independent review boards of the institutions in which such trials are being conducted,

by the trial’s data safety monitoring board, or by the FDA.

Such authorities may suspend or terminate one or more of our

clinical trials due to a number of factors, including our failure to conduct the clinical trial in accordance with relevant regulatory

requirements or clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition

of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes

in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

If we experience delays in carrying out

or completing preclinical or clinical trials for any product candidates, the commercial prospects of our product candidates may

be harmed, and our ability to generate revenues from any of these product candidates will be delayed.

In addition, any delays in

completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize

our ability to commence product sales and generate revenues.

Any of these occurrences may significantly harm our business and financial

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials

may also ultimately lead to the denial of regulatory approval of our product candidates.

Our ability to finance our operations

and generate revenues depends on the clinical and commercial success of our abuse deterrent fentanyl transdermal system and our

other product candidates and failure to achieve such success will negatively impact our business.

Our prospects, including our ability to

finance our operations and generate revenues, depend on the successful development, regulatory approval and commercialization of

our abuse deterrent fentanyl transdermal system, which itself requires substantial financing, as well as our other product candidates.

The clinical and commercial success of our product candidates depends on a number of factors, many of which are beyond our control,

● the FDA’s acceptance of our parameters for regulatory

approval relating to our product candidates, including our proposed indications, primary endpoint assessments, primary endpoint

measurements and regulatory pathways;

● the FDA’s acceptance of the number, design,

size, conduct and implementation of our clinical trials, our trial protocols and the interpretation of data from preclinical studies

or clinical trials;

● the FDA’s acceptance of the sufficiency of the

data we collect from our preclinical studies and pivotal clinical trials to support the submission of a New Drug Application,

known as an NDA, without requiring additional preclinical or clinical trials;

● the FDA’s acceptance of our abuse deterrent labelling relating

to our products, including our abuse deterrent fentanyl transdermal system;

● when we submit our NDA upon completion of our clinical

trials, the FDA’s willingness to schedule an advisory committee meeting, if applicable, in a timely manner to evaluate and

decide on the approval of our NDA;

● the recommendation of the FDA’s advisory committee,

if applicable, to approve our application without limiting the approved labelling, specifications, distribution or use of the products,

or imposing other restrictions;

● our ability to satisfy any issued raised by the FDA

in response to our test data;

● the FDA’s satisfaction with the safety and efficacy

of our product candidates;

● the prevalence and severity of adverse events associated

with our product candidates;

● the timely and satisfactory performance by third party

contractors of their obligations in relation to our clinical trials;

● if we receive FDA approval, our success in educating

physicians and patients about the benefits, administration and use our product candidates;

● our ability to raise additional capital on acceptable

terms in order to achieve conduct the necessary clinical trials;

● the availability, perceived advantages and relative

cost of alternative and competing treatments;

● the effectiveness of our marketing, sales and distribution

strategy and operations;

● our ability to develop, validate and maintain a commercially

viable manufacturing process that is compliant with current good manufacturing practices;

● our ability to obtain, protect and enforce our intellectual

property rights;

● our ability to bring an action timely for patent infringement

arising out of the filing of ANDAs by generic companies seeking approval to market generic versions of our products, if applicable,

before the expiry of our patents;

● our ability to avoid third party claims of patent

infringement or intellectual property violations.

If we fail to achieve these objectives

or to overcome the challenges presented above, many of which are beyond our control, in a timely manner, we could experience significant

delays or an inability to successfully commercialize our product candidates.

Accordingly, even if we obtain FDA approval to market

our products, we may not be able to generate sufficient revenues through the sale of our products to enable us to continue our

Since we do not have commercial manufacturing

capability, if we are unable to establish manufacturing facilities, we may have to enter into a manufacturing agreement with a

manufacturer that has been approved by the FDA.

Any commercial manufacturer of our products

and the manufacturing facilities where we make our commercial products will be subject to FDA approval.

Part of the process of

seeking FDA approval to market our products is the FDA’s approval of the manufacturing process and facility.

plan to establish our own manufacturing facilities, the establishment of a manufacturing facility is very costly, and, unless we

obtain funding for that purpose, it would be necessary for us to engage a third party who has experience is manufacturing transdermal

patches for FDA approved products.

By relying on a third party manufacturer, we will be dependent upon the manufacturer, whose

interests may be different from ours.

Any third party contract manufacturer will be responsible for quality control and for meeting

our requirements.

If the manufacturer does not meet our quality standards and delivers products that do not meet our specifications,

we may both incur liability for breach of our warranty to our customer, as well as liability for any damage, including death, that

may result from the use, abuse or accidental misuse of the product.

Regardless of whether we are able to make a claim against the

manufacturer, our reputation may be impaired and we may lose business as a result.

Further, the contract manufacturer may have

other customers and may allocate its resources based on the contract manufacturer’s interest rather than our interest.

we may not be able to assure ourselves that we will get favorable pricing.

We have previously had problems with our manufacturer

of our consumer over-the-counter transdermal patches, and we cannot assure you that we will not have the same, similar or other

problems with the manufacturer of our FDA approved products.

If we or any third-party manufacturer

fails to comply with FDA current good manufacturing practices, we may not be able to sell our products until and unless the manufacture

becomes compliant.

All FDA approved drugs, including our proposed

transdermal products, must be manufactured in accordance with good manufacturing practices.

All manufacturing facilities are inspected

by the FDA as a matter of routine inspection or for a specific cause.

If a manufacturer fails to comply with all applicable regulations,

the FDA can prohibit us from distributing products manufactured in those facilities, whether they are a contract manufacturer or

own facility.

A failure to be in compliance with good manufacturing practices could result in the FDA closing the facilities or

limiting our use of the facilities.

If the FDA implements Risk Evaluation

and Mitigation Strategies policies for any of our proposed products, we will need to comply with such policies before we can obtain

FDA approval or the product.

The Food and Drug Administration Amendments

Act of 2007 gave FDA the authority to require a Risk Evaluation and Mitigation Strategy from manufacturers to ensure that the benefits

of a drug or biological product outweigh its risks.

The FDA has issued a Risk Evaluation Mitigation Strategy for a fentanyl iontophoretic

transdermal system.

Before we can receive FDA approval for any product for which the FDA has issued a Risk Evaluation Mitigation

Strategy, we must satisfy the FDA that we have complied with the Risk Evaluation Mitigation Strategy.

If one of our products becomes

subject to a Risk Evaluation and Mitigation Strategy policy after receiving FDA approval, it will need to comply with such policy.

Our products will continue to be subject to FDA review

after FDA approval is given.

Discovery of previously unknown problems

with our products or unanticipated problems with the manufacturing processes and facilities, even after FDA and other regulatory

approvals of the product for commercial sale, may result in the imposition of significant restrictions, including withdrawal of

the product from the market.

The FDA and other regulatory agencies continue

to review products even after the products receive agency approval.

If and when the FDA approves one of our products, its manufacture

and marketing will be subject to ongoing regulation, which could include compliance with current good manufacturing practices,

adverse event reporting requirements and general prohibitions against promoting products for unapproved or “off-label”

We are also subject to inspection and market surveillance by the FDA for compliance with these and other requirements.

enforcement action resulting from the failure, even by inadvertence, to comply with these requirements could affect the manufacture

and marketing of our products.

In addition, the FDA or other regulatory agencies could withdraw a previously approved product from

the market upon receipt of newly discovered information.

The FDA or another regulatory agency could also require us to conduct

additional, and potentially expensive, studies in areas outside our approved indicated uses.

We must continually monitor the safety

of our products once approved and marketed for potential adverse events which could jeopardize our ability to continue marketing

the products.

As with all medical products, the use of our

products could sometimes produce undesirable side effects or adverse reactions or events (referred to cumulatively as adverse events).

Our consumer products initially caused skin irritation because of certain of the ingredients in the patch, which we corrected by

reformulating the patches.

For the most part, we expect these adverse events to be known and occur at some predicted frequency

based on our experience in the clinical development program.

When adverse events are reported to us, we are required to investigate

each event and the circumstances surrounding it to determine whether it was caused by our product and whether a previously unrecognized

safety issue exists.

We will also be required to periodically report summaries of these events to the applicable regulatory authorities.

If the adverse effects are significant, we may be required to recall our product.

We cannot assure you that our medical products

will not cause skin irritation or other adverse events.

Our ability to market our products may be impaired by unanticipated adverse

events and any recall of our product.

Because we are an early-stage company, our reputation, and our ability to market products,

could be affected more severely than a major pharmaceutical company.

In addition, the use of our products could

be associated with serious and unexpected adverse events, or with less serious reactions at a greater than expected frequency.

Such issues may arise when our products are used in critically ill or otherwise compromised patient populations.

When unexpected

events are reported to us, we are required to make a thorough investigation to determine causality and the implications for product

These events must also be specifically reported to the applicable regulatory authorities.

If our evaluation concludes,

or regulatory authorities perceive, that there is an unreasonable risk associated with the product, we would be obligated to withdraw

the impacted lot(s) of that product or recall the product and discontinue marketing until all problems are satisfactorily resolved.

Furthermore, an unexpected adverse event of a new product could be recognized only after extensive use of the product, which could

expose us to product liability risks, enforcement action by regulatory authorities and damage to our reputation and public image.

A serious adverse finding concerning the

risk of any of our products by any regulatory authority could adversely affect our reputation, business and financial results.

If we obtain FDA approval to market

our products, we expect to spend considerable time and money complying with federal and state laws and regulations governing their

sale, and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties.

Health care providers, physicians and others

will play a primary role in the recommendation and prescription of our proposed products.

Further, if we use third-party sales

and marketing providers, they may expose us to broadly applicable fraud and abuse and other health care laws and regulations that

may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products.

Applicable federal and state health care laws and regulations are expected to include, but not be limited to, the following:

● The federal anti-kickback statute is a criminal statute that makes

it a felony for individuals or entities knowingly and wilfully to offer or pay, or to solicit or receive, direct or indirect remuneration,

in order to induce the purchase, order, lease, or recommending of items or services, or the referral of patients for services,

that are reimbursed under a federal health care program, including Medicare and Medicaid;

● The federal False Claims Act imposes liability on

any person who knowingly submits, or causes another person or entity to submit, a false claim for payment of government funds.

Penalties include three times the government’s damages plus civil penalties of $5,500 to $11,000 per false claim.

the False Claims Act permits a person with knowledge of fraud, referred to as a qui tam plaintiff, to file a lawsuit on behalf

of the government against the person or business that committed the fraud, and, if the action is successful, the qui tam plaintiff

is rewarded with a percentage of the recovery;

● Health Insurance Portability and Accountability Act,

known as HIPAA, imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security

and transmission of individually identifiable health information;

● The Social Security Act contains numerous provisions

allowing the imposition of a civil money penalty, a monetary assessment, exclusion from the Medicare and Medicaid programs, or

some combination of these penalties;

● Many states have analogous state laws and regulations,

such as state anti-kickback and false claims laws.

In some cases, these state laws impose more strict requirements than the federal

Some state laws also require pharmaceutical companies to comply with certain price reporting and other compliance requirements.

Our failure to comply with any of these

federal and state health care laws and regulations, or health care laws in foreign jurisdictions, could have a material adverse

effect on our business, financial condition, result of operations and cash flows.

Best Choice may not obtain approval

to market our consumer products in South Korea.

Although Best Choice has made modest purchases

of our consumer products in South Korea in connection with its preliminary marketing activities, Best Choice requires regulatory

approval by the MFDS before it can market our consumer products in South Korea.

Although Best Choice has advised us it is working

with the MFDS to determine a classification for our products, which is necessary before it can obtain authorization to market the

products in South Korea, we cannot assure you that it will obtain the necessary authorization.

The sale of products that require

authorization without the required authorization is a criminal offense.

We cannot assure you that Best Choice will be able to obtain

the necessary approval, and if it unable to obtain the necessary approval, it will not be able sell our consumer products in South

We may not be able to continue our

relationship with Best Choice, which is the only distributor for our consumer products.

Our agreement with Best Choice has an initial

term which, as a result of an extension dated May 26, 2019, will expire on April 30, 2020.

The agreement provides for an automatic

renewal for three years and for five-year periods thereafter if certain minimum purchases are made.

Best Choice did not meet the

initial conditions for the continuation of the agreement and we extended the period during which Best Choice must meet the initial

purchase requirement from April 30, 2019 to April 30, 2020.

As of the date of this annual report, Best Choice has not met the initial

purchase requirements.

We cannot assure you that Best Choice will meet the minimum purchase requirements for the extended initial

term and that the agreement will not terminate if Best Choice fail to make such purchases.

However, we cannot assure you that,

if the agreement with Best Choice terminates, we will be able to enter into an agreement with another distributor who would be

willing and able to obtain necessary regulatory approval and sell our product in the international market.

Our failure to have

any international distributor will materially impair our ability to generate revenue from our consumer products in the South Korean

or any other international market.

Before we can market our product

outside of the United States, we will need to obtain regulatory approval in each country in which we propose to sell our products.

In order to market and sell our products in

jurisdictions other than the United States, we must obtain separate marketing approvals and comply with numerous and varying regulatory

perceptions as to the potential

advantages of the drug being studied in relation to available alternatives, including any new drugs or treatments that may be

approved for the indications we are investigating.

may also encounter delays if a clinical trial is suspended or terminated by us, by the independent review boards of the institutions

in which such trials are being conducted, by the trial’s data safety monitoring board, or by the FDA.

Such authorities may

suspend or terminate one or more of our clinical trials due to a number of factors, including our failure to conduct the clinical

trial in accordance with relevant regulatory requirements or clinical protocols, inspection of the clinical trial operations or

trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure

to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate

funding to continue the clinical trial.

we experience delays in carrying out or completing preclinical or clinical trials for any product candidates, the commercial prospects

of our product candidates may be harmed, and our ability to generate revenues from any of these product candidates will be delayed.

In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development

and approval process and jeopardize our ability to commence product sales and generate revenues.

Any of these occurrences may

significantly harm our business and financial condition.

In addition, many of the factors that cause, or lead to, a delay in the

commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

ability to generate revenues from our planned pharmaceutical products depends on the clinical and commercial success of our abuse

deterrent fentanyl transdermal system and our other product candidates and failure to achieve such success will negatively impact

our business.

clinical and commercial success of our pharmaceutical product candidates depends on a number of factors, many of which are beyond

our control, including:

the FDA’s

acceptance of our parameters for regulatory approval relating to our product candidates, including our proposed indications,

primary endpoint assessments, primary endpoint measurements and regulatory pathways;

the FDA’s

acceptance of the number, design, size, conduct and implementation of our clinical trials, our trial protocols and the interpretation

of data from preclinical studies or clinical trials;

the FDA’s

acceptance of the sufficiency of the data we collect from our preclinical studies and pivotal clinical trials to support the

submission of a New Drug Application, known as an NDA, without requiring additional preclinical or clinical trials;

the FDA’s

acceptance of our abuse deterrent labelling relating to our products, including our abuse deterrent fentanyl transdermal system;

when we submit our

NDA upon completion of our clinical trials, the FDA’s willingness to schedule an advisory committee meeting, if applicable,

in a timely manner to evaluate and decide on the approval of our NDA;

the recommendation

of the FDA’s advisory committee, if applicable, to approve our application without limiting the approved labelling,

specifications, distribution or use of the products, or imposing other restrictions;

our ability to satisfy

any issued raised by the FDA in response to our test data;

the FDA’s

satisfaction with the safety and efficacy of our product candidates;

the prevalence and

severity of adverse events associated with our product candidates;

the timely and satisfactory

performance by third party contractors of their obligations in relation to our clinical trials;

if we receive FDA

approval, our success in educating physicians and patients about the benefits, administration and use our product candidates;

our ability to raise

additional capital on acceptable terms in order to achieve conduct the necessary clinical trials;

the availability,

perceived advantages and relative cost of alternative and competing treatments;

the effectiveness

of our marketing, sales and distribution strategy and operations;

our ability to develop,

validate and maintain a commercially viable manufacturing process that is compliant with current good manufacturing practices;

our ability to obtain,

protect and enforce our intellectual property rights;

our ability to bring

an action timely for patent infringement arising out of the filing of ANDAs by generic companies seeking approval to market

generic versions of our products, if applicable, before the expiry of our patents;

our ability to avoid

third party claims of patent infringement or intellectual property violations.

we do not have commercial drug manufacturing capability, if we are unable to establish manufacturing facilities, we may have to

enter into a manufacturing agreement with a manufacturer that has been approved by the FDA.

commercial manufacturer of our products and the manufacturing facilities where we make our commercial products will be subject

to FDA approval.

Part of the process of seeking FDA approval to market our products is the FDA’s approval of the manufacturing

process and facility.

Although we recently added certain manufacturing capabilities through our acquisition of Pocono, the establishment

of a manufacturing facility at the level required for prescription medication’s is very costly, and, unless we obtain funding

for that purpose, it would be necessary for us to engage a third party who has experience is manufacturing transdermal patches

for FDA approved products.

By relying on a third-party manufacturer, we will be dependent upon the manufacturer, whose interests

may be different from ours.

Any third-party contract manufacturer will be responsible for quality control and for meeting our

requirements.

The regulatory approval process outside the United States generally includes all of the risks associated with obtaining

FDA and can involve additional testing.

In addition, in many countries worldwide, it

is required that the product be approved for reimbursement before the product can be approved for sale in that country.

not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.

Even if we were to receive

approval in the United States, approval by the FDA does not ensure approval by regulatory authorities in other countries.

approval by one regulatory authority outside the United States would not ensure approval by regulatory authorities in other countries.

We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any

If we are unable to obtain approval of our product candidates by regulatory authorities in foreign jurisdictions, the commercial

prospects of those product candidates may be significantly diminished and our business prospects could be impaired.

Outside the United States, particularly in

member states of the European Union, the pricing of prescription drugs is subject to governmental control.

In these countries,

pricing negotiations or the successful completion of health technology assessment procedures with governmental authorities can

take considerable time after receipt of marketing approval for a product.

In addition, there can be considerable pressure by governments

and other stakeholders on prices and reimbursement levels, including as part of cost containment measures.

Certain countries allow

companies to fix their own prices for medicines but monitor the pricing.

In addition to regulations in the United

States, if we market outside of the United States, we will be subject to a variety of regulations governing, among other things,

clinical trials and any commercial sales and distribution of our products.

Whether or not we obtain FDA approval for a product,

we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials

or marketing of the product in those countries.

If we do not have sufficient product

liability insurance, we may be subject to claims that are in excess of our net worth.

Before we market any pharmaceutical product,

we will need to purchase significant product liability insurance.

However, in the event of major claims from the use of our products,

it is possible that our product liability insurance will not be sufficient to cover claims against us.

We cannot assure you that

we will not face liability arising out of the use of our products which is significantly in excess of the limits of our product

liability insurance.

In such event, if we do not have the funds or access to the funds necessary to satisfy such liability, we

may be unable to continue in business.

Because some of the patches we are

developing, such as our abuse deterrent fentanyl patch, have potential severe side effects, we may face liability in the event

patients suffer serious, possibly life-threatening, side effects from our products.

Fentanyl patches have known side effects and

may cause serious or life-threatening breathing problems due to opioid-induced respiratory depression.

In addition, taking certain

medications with fentanyl may increase the risk of serious or life-threatening breathing problems, sedation or coma.

the seriousness of the side effects, fentanyl patches should only be used in accordance labelling approved by the FDA or by the

applicable regulatory authorities outside of the United States.

Fentanyl patches are only indicated for the treatment of people

who are tolerant to opioid medications because they have taken this type of medication for at least one week and should not be

used to treat mild or moderate pain, short-term pain, pain after an operation or medical or dental procedure, or pain that can

be controlled by medication that is taken on an as-needed basis.

Although we will include all warnings on the packaging that are

required by the FDA or foreign regulatory authorities, claims may be made against us in the event that death or serious side effects

result from the use of our abuse deterrent fentanyl transdermal system, even if prescribed for a patient for whom fentanyl patches

should not be prescribed.

We cannot assure you that we will not face significant liability as a result of such side effects and

we may not have sufficient product liability insurance to cover any damages that may be assessed against us.

Because of our lack of funds, we

may have to enter into a joint venture or strategic relationship or licensing agreement with a third party to develop and seek

to obtain FDA approval of our potential products.

Our present efforts are directed to developing

and seeking FDA approval for our pipeline of transdermal pharmaceutical products including our lead product, the abuse deterrent

fentanyl transdermal system.

The development of pharmaceutical products including a new delivery system for an already approved

drug, is very expensive with no assurance of obtaining FDA approval.

Because of the costs involved, we may need to enter into a

joint venture or strategic alliance or licensing or similar agreement with a third party to bring our products to market, in which

event we would have to give up a significant percentage of the equity in or rights to the product and require the other party to

provide the necessary financing and personnel and to take a significant role in making the decisions relating to the development,

testing, marketing and manufacturing of the product.

The third party may have interests which are different from, and possibly

in conflict with, our own.

If we are unable to attract competent parties to distribute and market any product which we may develop,

or if such parties’

efforts are inadequate, we will not be able to implement our business strategy and may have to cease

We cannot assure you that we will be successful in entering into joint ventures or other strategic relationships or

that any relationship into which we may enter will develop a marketable product or that we will generate any revenue or net income

from such a venture.

We may decide not to continue developing

or commercializing any products at any time during development or after approval, which would reduce or eliminate our potential

return on investment for those product candidates.

We may decide to discontinue the development

of our abuse deterrent fentanyl transdermal system or any other product in our pipeline or not to continue to commercialize any

potential product for a variety of reasons, such as the appearance of new technologies that make our product less commercially

viable, an increase in competition, changes in or failure to comply with applicable regulatory requirements, the discovery of unforeseen

side effects during clinical development or after the approved product has been marketed or the occurrence of adverse events at

a rate or severity level that is greater than experienced in prior clinical trials.

If we discontinue a program in which we have

invested significant resources, we will not receive any return on our investment.

If any of our potential products

are approved for marketing but fail to achieve the broad degree of physician or market acceptance necessary for commercial success,

our operating results and financial condition will be adversely affected.

If any of the products in our pipeline

receives FDA approval for us to market the product in the United States, it will be necessary for us to generate acceptance of

our product for the indications covered by the FDA approval.

In order to generate acceptance in the marketplace, we will need to

demonstrate to physicians that our product provides a distinct advantage or better outcome at a price that reflects the value of

our product as compared with existing products.

We will need to develop and implement a marketing program directed at both physicians

and the general public.

Since we do not presently have the resources necessary to develop or implement an in-house marketing program

and we may not have the funds to do so if and when we obtain FDA approval to market our product, we will need to establish a distribution

network though license and distribution agreements with third parties who have the capability to market our product to physicians

and emergency service organizations, and we will be dependent upon the ability of these third parties to market our products effectively.

We cannot assure you that we will be able to negotiate license and distribution agreements with terms that are acceptable to us.

Since we do not have an established track record and our product pipeline is relatively small, we may be at a disadvantage in negotiating

the terms of license and distribution agreements.

Further, we may have little control over the development and implementation of

our licensee’s marketing program, and our licensees may have interests that are inconsistent with ours with respect to the

allocation of resources and implementation of the marketing program.

We cannot assure you that a marketing program for any of our

products can or will be implemented effectively or that we will be successful in developing physician and emergency service acceptance

of our products.

If we seek to market any products

in our pipeline in countries other than the United States, we will need to comply with the regulations of each country in which

we seek to market our products.

None of our pharmaceutical products are

currently approved for sale by any government authority in any jurisdiction.

If we fail to comply with regulatory requirements

in any market we decide to enter, or to obtain and maintain required approvals, or if regulatory approvals in the relevant markets

are delayed, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.

Marketing approval in one jurisdiction, including the United States, does not ensure marketing approval in another, but a failure

or delay in obtaining marketing approval in one jurisdiction may have a negative effect on the regulatory process in others.

to obtain a marketing approval in countries in which we seek to market our products or any delay or setback in obtaining such approval

would impair our ability to develop foreign markets for any of our products.

The drug delivery industry is subject

to rapid technological change and, our failure to keep up with technological developments may impair our ability to market our

Our products use technology which we developed

for the transdermal delivery of drugs.

The field of drug delivery is subject to rapid technological changes.

Our future success

will depend upon our ability to keep abreast of the latest developments in the industry and to keep pace with advances in technology

and changing customer requirements.

If we cannot keep pace with such changes and advances, our proposed products could be rendered

obsolete, which would result in our having to cease its operations.

If we obtain FDA approval, we will

face significant competition from better known and better capitalized companies.

If we obtain FDA approval for any of our

products, we expect to face significant competition from existing companies, which are better known and already have developed

relationships with physicians within the healthcare system.

Any product we may develop will compete with existing medications performing

the same medicinal functions, which may include transdermal patches.

We cannot assure you that we will be able to compete successfully.

In addition, even if we are able to commercialize our product candidates, we may not be able to price them competitively with current

standard of care products or their price may drop considerably due to factors outside our control.

If this happens or the price

of materials and manufacture increases dramatically, our ability to continue to operate our business would be materially harmed

and we may be unable to commercialize any products successfully.

In addition, other pharmaceutical companies may be engaged in

developing, patenting, manufacturing and marketing products that compete with those that we are developing.

These potential competitors

may include large and experienced companies that enjoy significant competitive advantages over us, such as greater financial, research

and development, manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise

in obtaining marketing approvals from the FDA and foreign regulatory authorities.

Healthcare reforms by governmental

authorities, court decisions affecting health care policies and related reductions in pharmaceutical pricing, reimbursement and

coverage by third-party payors may adversely affect our business.

We expect the healthcare industry to face

increased limitations on reimbursement, rebates and other payments as a result of healthcare reform, which could adversely affect

third-party coverage of our proposed products and how much or under what circumstances healthcare providers will prescribe or administer

our products, if approved.

In both the U.S.

and other countries, sales

of our products, if approved for marketing, will depend in part upon the availability of reimbursement from third-party payors,

which include governmental authorities, managed care organizations and other private health insurers.

Third-party payors are increasingly

challenging the price and examining the cost effectiveness of medical products and services.

Increasing expenditures for healthcare

have been the subject of considerable public attention in the United States.

Both private and government entities are seeking ways

to reduce or contain healthcare costs.

Numerous proposals that would effect changes in the United States healthcare system have

been introduced or proposed in Congress and in some state legislatures, including reducing reimbursement for prescription products

and reducing the levels at which consumers and healthcare providers are reimbursed for purchases of pharmaceutical products.

Cost reduction initiatives and changes

in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products,

which in turn would affect the price we can receive for those products.

Any reduction in reimbursement that results from federal

legislation or regulation may also result in a similar reduction in payments from private payors, since private payors often follow

Medicare coverage policy and payment limitations in setting their own reimbursement rates.

Significant developments that may adversely

affect pricing in the United States include the enactment of federal healthcare reform laws and regulations, including the Affordable

Care Act, or ACA, which is popularly known as Obamacare, and the Medicare Prescription Drug Improvement and Modernization Act of

A recent district court decision which struck down Obamacare, if upheld, could have a material adverse effect upon

reimbursement and payment for products such as our proposed products.

Changes to the healthcare system enacted as part of any healthcare

reform in the United States, as well as the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid,

and private sector beneficiaries, may result in increased pricing pressure by influencing, for instance, the reimbursement policies

of third-party payors.

Regulatory changes which have the effect of decreasing the use of opioids has resulted in a decrease in

the size of the market for opioid products, including fentanyl, could impact the market for our abuse deterrent fentanyl transdermal

system or any other opioid-based transdermal product we may develop.

In 2017, a new administration, which had

promised to repeal and replace the ACA, took office in the United States.

Although we cannot predict the form any such replacement

of the ACA may take or the full effect on our business of the enactment of additional legislation pursuant to healthcare and

other legislative reform, we believe that legislation or regulations that would reduce reimbursement for, or restrict coverage

of, our products could adversely affect how much or under what circumstances healthcare providers prescribe or administer our products.

This could materially and adversely affect our business by reducing our ability to generate revenues, raise capital, obtain licensees

and market our products.

In addition, we believe the increasing emphasis on managed care in the United States, has and will continue

to put pressure on the price and usage of pharmaceutical products, which may adversely impact product sales.

It will be difficult for us to profitably

sell any of our products if reimbursement for these products is limited by government authorities and third-party payor policies.

It is difficult and costly to protect

our proprietary rights, and we may not be able to ensure their protection.

Our commercial success will depend in part

on obtaining and maintaining patent protection and trade secret protection for our technology which is incorporated in our products

as well as successfully defending these patents against third-party challenges, should any be brought.

4P Therapeutics originally

filed an international patent application under the Patent Cooperation Treaty for worldwide prosecution of the abuse deterrent

transdermal technology patent used in our lead product, the abuse deterrent fentanyl transdermal system.

The patent is being prosecuted

in the United States and in other countries.

Although the European Patent Office and the Japan patent office have approved

our patent application, we have not yet received any response from the United States Patent and Trademark Office.

Our ability to

stop third parties from making, using, selling, offering to sell or importing products utilizing our proprietary or patented technology

is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

We cannot assure you that a patent will be granted in the United States or in any country in which the patent is being prosecuted.

The patent positions of pharmaceutical and biopharmaceutical companies can be highly uncertain and involve complex legal and factual

questions for which important legal principles remain unresolved.

No consistent policy regarding the breadth of claims allowed

in biopharmaceutical patents has emerged to date in the United States.

The biopharmaceutical patent situation outside the United

States varies from country to country and is even more uncertain.

Changes in either the patent laws or in interpretations of patent

laws in the United States and other countries may diminish the value of our intellectual property.

Accordingly, we cannot predict

the breadth of claims that may be allowed or enforced in any patents we may be granted.

Further, if any patents are granted and

are subsequently deemed invalid and unenforceable, it could impact our ability to license our technology and, as noted previously,

fend off competitive challenges.

Patent litigation is very expensive and we may not have sufficient funds to defend our proprietary

technology from infringement, either as a plaintiff in an action seeking to stop infringers from using our technology, or as a

defendant in an action against us alleging infringement by us.

The degree of future protection for our

proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or

permit us to gain or keep our competitive advantage.

● others may be able to make compositions or formulations

that are similar to our product s but that are not covered by the claims of our patents;

● other persons may have filed patents covering inventions,

technology or processes that we use, with the result that we may infringe upon the prior patents;

● others may independently develop similar or alternative

technologies or duplicate any of our technologies;

● our pending patent applications may not result in

the grant of patents;

● any patents which may be issued may not provide us

with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties;

● our inability to fund any litigation to defend our

proprietary rights, either in defense of an action against us or a plaintiff to seek to prevent infringement.

● our failure to develop additional proprietary technologies

that are patentable.

If we seek to expand our business

through acquisition, we may not be successful in identifying acquisition targets or integrating their businesses with our existing

We have recently expanded our business

by acquisition, and we may make acquisitions in the future.

In 2017, we issued 1,250,000 shares of common stock, valued at $2,500,000,

in connection with our proposed acquisition of Advanced Health Brands, Inc., but the stock of Advanced Health Brands was never

transferred to us and the value of the intellectual property we were to have acquired did not have the value we anticipated, with

the result that we incurred a $2,500,000 impairment loss in the year ended January 31, 2018.

In September 2018, we entered into

an agreement to acquire Carmel Biosciences Inc., and in November 2018, we terminated the agreement.

We previously entered into

another acquisition agreement which was rescinded shortly after the agreement was executed.

We cannot assure you that any acquisition

we complete will be successful or that any acquisition agreement we may enter into will result in an acquisition.

An acquisition

can be unsuccessful for a number of reasons, including the following:

● We may incur significant expenses and devote significant

management time to the acquisition and we may be unable to consummate the acquisition on acceptable terms.

● If we identify a potential acquisition, we may face

competition from other companies in the industry or from financial buyers in seeking to make the acquisition.

● The integration of any acquisition with our existing

business may be difficult and, if we are not able to integrate the business successfully, we may not only be unable to operate

the business profitably, but management may be unable to devote the necessary time to the development of our existing business;

● The key employees who operated the acquired business

successfully prior to the acquisition may not be happy working for us and may resign, thus leaving the business without the necessary

continuity of management.

● Even if the business is successful, our senior executive

officers may need to devote significant time to the acquired business, which may distract them from their other management activities.

● If the business does not operate as we expect, we

may incur an impairment charge based on the value of the assets acquired.

● The products or proposed products of the acquired

company may have regulatory problems with the FDA or any other regulatory agency, including the need for additional and unanticipated

testing or the need for a recall or a change in labeling.

● We may have difficulty maintaining the necessary quality

control over the acquired business and its products and services.

● To the extent that an acquired company operates at

a loss prior to our acquisition, we may not be able to develop profitable operations following the acquisition.

● Problems and claims relating to the acquired business

that were not disclosed at the time of the acquisition may result in increased costs and may impair our ability to operate the

acquired company.

● The acquired company may have liabilities or obligations

which were not disclosed to us, or the acquired assets, including any intellectual property, may not have the value we anticipated.

● The assets, including intellectual property, of the

acquired company may not have the value that we anticipated.

● The products may not perform as anticipated.

● We may not be able to fund the development of any

assets we may acquire.

● The products may be subject to recall or the FDA may

require additional trials for the product.

● Components or ingredients for the product may become

subject to tariffs which may increase manufacturing costs.

● We may require significant capital both to acquire

and to operate the business, and the capital requirements of the business may be greater than we anticipated.

Our failure to obtain

funds on reasonable terms may impair the value of the acquisition.

● The acquired company may not operate at the revenue

level or with the gross margin shown in the financial statements or projections.

● The acquired company may have granted rights to its

intellectual property which decrease the value of the intellectual property to us.

● Patents may not be granted for patent applications

which the acquired company filed or patents may be successfully challenged.

● There may be conflicts in management styles that prevent

us from integrating the acquired company with us.

● The former equity owners or officers may compete in

violation of their non-competition covenants or the non-competition covenants may be held to be unenforceable.

● The business of the acquired company may have problems

of which management was unaware and which do not become evident until after the acquisition and we may require significant funding

to remedy the problem.

● The indemnification obligations of the seller under

the purchase agreement, if any, may be inadequate to compensate us for any loss, damage or expense which we may sustain, including

undisclosed claims or liabilities.

● To the extent that the acquired company is dependent

upon its management to maintain relationships with existing customers, we may have difficulty in retaining the business of these

customers if there is a change in management.

● Government agencies may seek damages after we make

the acquisition for conduct which occurred prior to the acquisition and we may not have adequate recourse against the seller.

● The acquired company may have operated in violation

of laws which results significant expenditures for us to remedy as well as potential penalties for the violations.

● We may have difficult collecting the acquired company’s

accounts receivable and in selling the acquired company’s inventory.

● The sellers of the acquired company may be in breach

of their representations and warranties and we may not be able to recover damages.

If any of the foregoing or any other events

which we do not contemplate happen, we may incur significant expenses, which we may not be able to cover, and the development of

our business can be impaired.

We cannot assure you that any acquisition we will make will be successful.

We may not be able to recover the

1,200,000 shares of common stock we issued in connection with our proposed acquisition of Advanced Health Brands.

On May 22, 2017, we entered into an agreement

to acquire Advanced Health Brands, which held six provisional patents for transdermal products.

Pursuant to the agreement, we were

to issue 1,250,000 shares of common stock, valued at $2,500,000, in exchange for the stock of Advanced Health Brands and a related

In August 2017, when we issued the shares to the Advanced Health Brands stockholders, the Advanced Health Brands stock

had not been transferred to us.

Although we did not have title to the shares of Advanced Health Brands stock, we treated the transaction

as completed and we announced that we had acquired Advanced Health Brands, relying on the stockholders’

obligation to transfer

the shares to us.

We had appointed two of the Advanced Health Brands stockholders as directors and executive officers.

2018, we recognized an impairment loss of $2,500,000 based on both our failure to obtain title to the Advanced Health Brands stock

and our conclusion that the provisional patents that were held by Advanced Health Brands did not have any value to us.

2018 50,000 shares were returned by one of the defendants.

We have commenced legal actions against Advanced Health Brands and its

stockholders in Florida and New York.

In the Florida action, the court ruled against us.

On February 1, 2019, we appealed the court’s

Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been

issued to her, and the shares were cancelled as of January 31, 2019.

On March 20, 2020, the Florida district court of appeal reversed

the lower court ruling in the Florida state court action that dismissed our complaint with prejudice, and gave us leave to file

an amended complaint.

The New York action was recently commenced against the stockholders of Advanced Health Brands, and the defendants

have filed a motion to dismiss the action.

See “Bsiness —

Legal Proceedings.”

We cannot assure you that we will

prevail in either action, that we will be able recover either the 1,200,000 shares of common stock or any monetary damages from

the Advanced Health Brands stockholders or that we will not incur any liability as a result of either our issuance of the shares

or our failure to provide the necessary documentation to permit the Advanced Health Brands stockholders to sell their shares pursuant

to Rule 144 or from our treating and announcing the acquisition as completed or based on other claims.

We are dependent on third party distributors

for the marketing of our consumer products and complying with applicable laws.

We do not currently sell or market our

consumer transdermal products directly, and we rely on distributors to sell and market these products.

We cannot market our consumer

transdermal patch products in the United States without first obtaining FDA approval.

We do not plan to seek FDA approval or market

these products in the United States at this time.

We plan to sell our transdermal consumer products to distributors in those countries

in which the products can be sold in compliance with all applicable regulations without our spending significant monies for preclinical

and clinical studies to obtain regulatory approval.

At present we have one distribution agreement, which is our agreement with

Best Choice that covers certain countries in Asia.

At present, Best Choice is planning to market three of our product lines in

South Korea pending receipt of necessary regulatory approval, and we cannot assure you that we will generate any significant revenue

form Best Choice or that Best Choice will be able to sell our products in any country, including South Korea.

Best Choice is responsible

for compliance with all applicable government regulations relating to our products in the countries in which it sells our products.

The failure of Best Choice or any other international distributor to comply with applicable government regulations could impair

our ability to derive revenue from those countries and could result in actions against us as the supplier of the products regardless

of whether we were involved in the conduct which violated applicable laws.

We have had difficulty in having

our consumer transdermal products manufactured for us;

and we cannot assure you that we will not have problems with the manufacture

of any other products we may develop.

Our consumer transdermal products have

been manufactured by a domestic contract manufacturer since 2016.

However, our supplier ran into supply problems for certain foil

components due to the new tariffs on Chinese imports into the United States, design changes in the pouch, and quality problems

with material in the pouch, all of which resulted in manufacturing delays in meeting the first order for Best Choice, which was

for product to be used for preliminary marketing activities.

Our current arrangement is to have the manufacturer manufacture coated

film roll stock and ship sealed rolls to Best Choice in South Korea for slitting, die-cutting and packaging individual patches

in foil pouches.

We cannot assure you that we will not have difficulty manufacturing any transdermal products in the future.

failure to establish reliable manufacturing for our products may impair our ability to generate revenue from our products.

we will be responsible for the performance of the products we sell, regardless of whether or not we manufacture the products ourselves

or manufacture them with a contract manufacturer.

In addition, while we intend to require any manufacturer to maintain sufficient

product liability insurance to protect us against any liability we may incur as a result of defects in manufacturing, we cannot

assure you that any product liability insurance the manufacturer may obtain will be sufficient to protect us against liability.

We are dependent upon our chief executive

officer and our chief operating officer.

We are dependent upon Gareth Sheridan,

our chief executive officer, and Dr.

Alan Smith, our chief operating officer who is president of 4P Therapeutics.

Sheridan has an employment agreement with us, the employment agreement does not guarantee that he will continue with us.

not have an employment agreement with Dr.

If the manufacturer does not meet our quality standards and delivers products that do not meet our specifications,

we may both incur liability for breach of our warranty to our customer, as well as liability for any damage, including death,

that may result from the use, abuse or accidental misuse of the product.

Regardless of whether we are able to make a claim against

the manufacturer, our reputation may be impaired and we may lose business as a result.

Further, the contract manufacturer may

have other customers and may allocate its resources based on the contract manufacturer’s interest rather than our interest.

Furthermore, we may not be able to assure ourselves that we will get favorable pricing.

We have previously had problems with our

manufacturer of our consumer over-the-counter transdermal patches, and we cannot assure you that we will not have the same, similar

or other problems with the manufacturer of our FDA approved products.

we or any third-party manufacturer fails to comply with FDA current good manufacturing practices, we may not be able to sell our

products until and unless the manufacture becomes compliant.

FDA approved drugs, including our proposed transdermal products, must be manufactured in accordance with good manufacturing practices.

All manufacturing facilities are inspected by the FDA as a matter of routine inspection or for a specific cause.

If a manufacturer

fails to comply with all applicable regulations, the FDA can prohibit us from distributing products manufactured in those facilities,

whether they are a contract manufacturer or own facility.

A failure to be in compliance with good manufacturing practices could

result in the FDA closing the facilities or limiting our use of the facilities.

the FDA implements Risk Evaluation and Mitigation Strategies policies for any of our proposed products, we will need to comply

with such policies before we can obtain FDA approval or the product.

Food and Drug Administration Amendments Act of 2007 gave FDA the authority to require a Risk Evaluation and Mitigation Strategy

from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks.

The FDA has issued a Risk Evaluation

Mitigation Strategy for a fentanyl iontophoretic transdermal system.

Before we can receive FDA approval for any product for which

the FDA has issued a Risk Evaluation Mitigation Strategy, we must satisfy the FDA that we have complied with the Risk Evaluation

Mitigation Strategy.

If one of our products becomes subject to a Risk Evaluation and Mitigation Strategy policy after receiving

FDA approval, it will need to comply with such policy.

products will continue to be subject to FDA review after FDA approval is given.

of previously unknown problems with our products or unanticipated problems with the manufacturing processes and facilities, even

after FDA and other regulatory approvals of the product for commercial sale, may result in the imposition of significant restrictions,

including withdrawal of the product from the market.

FDA and other regulatory agencies continue to review products even after the products receive agency approval.

If and when the

FDA approves one of our products, its manufacture and marketing will be subject to ongoing regulation, which could include compliance

with current good manufacturing practices, adverse event reporting requirements and general prohibitions against promoting products

for unapproved or “off-label”

We are also subject to inspection and market surveillance by the FDA for compliance

with these and other requirements.

Any enforcement action resulting from the failure, even by inadvertence, to comply with these

requirements could affect the manufacture and marketing of our products.

In addition, the FDA or other regulatory agencies could

withdraw a previously approved product from the market upon receipt of newly discovered information.

The FDA or another regulatory

agency could also require us to conduct additional, and potentially expensive, studies in areas outside our approved indicated

must continually monitor the safety of our products once approved and marketed for potential adverse events which could jeopardize

our ability to continue marketing the products.

with all medical products, the use of our products could sometimes produce undesirable side effects or adverse reactions or events

(referred to cumulatively as adverse events).

Our consumer products initially caused skin irritation because of certain of the

ingredients in the patch, which we corrected by reformulating the patches.

For the most part, we expect these adverse events to

be known and occur at some predicted frequency based on our experience in the clinical development program.

When adverse events

are reported to us, we are required to investigate each event and the circumstances surrounding it to determine whether it was

caused by our product and whether a previously unrecognized safety issue exists.

We will also be required to periodically report

summaries of these events to the applicable regulatory authorities.

If the adverse effects are significant, we may be required

to recall our product.

We cannot assure you that our medical products will not cause skin irritation or other adverse events.

Our ability to market our products may be impaired by unanticipated adverse events and any recall of our product.

Because we are

an early-stage company, our reputation, and our ability to market products, could be affected more severely than a major pharmaceutical

addition, the use of our products could be associated with serious and unexpected adverse events, or with less serious reactions

at a greater than expected frequency.

Such issues may arise when our products are used in critically ill or otherwise compromised

patient populations.

When unexpected events are reported to us, we are required to make a thorough investigation to determine

causality and the implications for product safety.

These events must also be specifically reported to the applicable regulatory

If our evaluation concludes, or regulatory authorities perceive, that there is an unreasonable risk associated with

the product, we would be obligated to withdraw the impacted lot(s) of that product or recall the product and discontinue marketing

until all problems are satisfactorily resolved.

Furthermore, an unexpected adverse event of a new product could be recognized

only after extensive use of the product, which could expose us to product liability risks, enforcement action by regulatory authorities

and damage to our reputation and public image.

serious adverse finding concerning the risk of any of our products by any regulatory authority could adversely affect our reputation,

business and financial results.

we obtain FDA approval to market our products, we expect to spend considerable time and money complying with federal and state

laws and regulations governing their sale, and, if we are unable to fully comply with such laws and regulations, we could face

substantial penalties.

care providers, physicians and others will play a primary role in the recommendation and prescription of our proposed products.

Further, if we use third-party sales and marketing providers, they may expose us to broadly applicable fraud and abuse and other

health care laws and regulations that may constrain the business or financial arrangements and relationships through which we

market, sell and distribute our products.

Applicable federal and state health care laws and regulations are expected to include,

but not be limited to, the following:

The federal anti-kickback

statute is a criminal statute that makes it a felony for individuals or entities knowingly and willfully to offer or pay,

or to solicit or receive, direct or indirect remuneration, in order to induce the purchase, order, lease, or recommending

of items or services, or the referral of patients for services, that are reimbursed under a federal health care program, including

Medicare and Medicaid;

The federal False

Claims Act imposes liability on any person who knowingly submits, or causes another person or entity to submit, a false claim

for payment of government funds.

Penalties include three times the government’s damages plus civil penalties of $5,500

to $11,000 per false claim.

In addition, the False Claims Act permits a person with knowledge of fraud, referred to as a qui

tam plaintiff, to file a lawsuit on behalf of the government against the person or business that committed the fraud, and,

if the action is successful, the qui tam plaintiff is rewarded with a percentage of the recovery;

Health Insurance

Portability and Accountability Act, known as HIPAA, imposes obligations, including mandatory contractual terms, with respect

to safeguarding the privacy, security and transmission of individually identifiable health information;

The Social Security

Act contains numerous provisions allowing the imposition of a civil money penalty, a monetary assessment, exclusion from the

Medicare and Medicaid programs, or some combination of these penalties;

Many states have

analogous state laws and regulations, such as state anti-kickback and false claims laws.

In some cases, these state laws impose

more strict requirements than the federal laws.

Some state laws also require pharmaceutical companies to comply with certain

price reporting and other compliance requirements.

failure to comply with any of these federal and state health care laws and regulations, or health care laws in foreign jurisdictions,

could have a material adverse effect on our business, financial condition, result of operations and cash flows.

we can market our product outside of the United States, we will need to obtain regulatory approval in each country in which we

propose to sell our products.

order to market and sell our products in jurisdictions other than the United States, we must obtain separate marketing approvals

and comply with numerous and varying regulatory requirements.

The regulatory approval process outside the United States generally

includes all of the risks associated with obtaining FDA and can involve additional testing.

addition, in many countries worldwide, it is required that the product be approved for reimbursement before the product can be

approved for sale in that country.

We may not obtain approvals from regulatory authorities outside the United States on a timely

basis, if at all.

Even if we were to receive approval in the United States, approval by the FDA does not ensure approval by regulatory

authorities in other countries.

Similarly, approval by one regulatory authority outside the United States would not ensure approval

by regulatory authorities in other countries.

We may not be able to file for marketing approvals and may not receive necessary

approvals to commercialize our products in any market.

If we are unable to obtain approval of our product candidates by regulatory

authorities in foreign jurisdictions, the commercial prospects of those product candidates may be significantly diminished, and

our business prospects could be impaired.

the United States, particularly in member states of the European Union, the pricing of prescription drugs is subject to governmental

In these countries, pricing negotiations or the successful completion of health technology assessment procedures with

governmental authorities can take considerable time after receipt of marketing approval for a product.

In addition, there can

be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment

Certain countries allow companies to fix their own prices for medicines but monitor the pricing.

addition to regulations in the United States, if we market outside of the United States, we will be subject to a variety of regulations

governing, among other things, clinical trials and any commercial sales and distribution of our products.

Whether or not we obtain

FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the

commencement of clinical trials or marketing of the product in those countries.

we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.

we market any pharmaceutical product, we will need to purchase significant product liability insurance.

However, in the event

of major claims from the use of our products, it is possible that our product liability insurance will not be sufficient to cover

claims against us.

We cannot assure you that we will not face liability arising out of the use of our products which is significantly

in excess of the limits of our product liability insurance.

In such event, if we do not have the funds or access to the funds

necessary to satisfy such liability, we may be unable to continue in business.

some of the patches we are developing, such as our abuse deterrent fentanyl patch, have potential severe side effects, we may

face liability in the event patients suffer serious, possibly life-threatening, side effects from our products.

patches have known side effects and may cause serious or life-threatening breathing problems due to opioid-induced respiratory

In addition, taking certain medications with fentanyl may increase the risk of serious or life-threatening breathing

problems, sedation or coma.

Because of the seriousness of the side effects, fentanyl patches should only be used in accordance

labelling approved by the FDA or by the applicable regulatory authorities outside of the United States.

Fentanyl patches are only

indicated for the treatment of people who are tolerant to opioid medications because they have taken this type of medication for

at least one week and should not be used to treat mild or moderate pain, short-term pain, pain after an operation or medical or

dental procedure, or pain that can be controlled by medication that is taken on an as-needed basis.

Although we will include all

warnings on the packaging that are required by the FDA or foreign regulatory authorities, claims may be made against us in the

event that death or serious side effects result from the use of our abuse deterrent fentanyl transdermal system, even if prescribed

for a patient for whom fentanyl patches should not be prescribed.

We cannot assure you that we will not face significant liability

as a result of such side effects, and we may not have sufficient product liability insurance to cover any damages that may be

assessed against us.

of our lack of funds, we may have to enter into a joint venture or strategic relationship or licensing agreement with a third

party to develop and seek to obtain FDA approval of our potential products.

present efforts are directed to developing and seeking FDA approval for our pipeline of transdermal pharmaceutical products including

our lead product, the abuse deterrent fentanyl transdermal system.

The development of pharmaceutical products including a new

delivery system for an already approved drug, is very expensive with no assurance of obtaining FDA approval.

Because of the costs

involved, we may need to enter into a joint venture or strategic alliance or licensing or similar agreement with a third party

to bring our products to market, in which event we would have to give up a significant percentage of the equity in or rights to

the product and require the other party to provide the necessary financing and personnel and to take a significant role in making

the decisions relating to the development, testing, marketing and manufacturing of the product.

The third party may have interests

which are different from, and possibly in conflict with, our own.

If we are unable to attract competent parties to distribute

and market any product which we may develop, or if such parties’

efforts are inadequate, we will not be able to implement

our business strategy and may have to cease operations.

We cannot assure you that we will be successful in entering into joint

ventures or other strategic relationships or that any relationship into which we may enter will develop a marketable product or

that we will generate any revenue or net income from such a venture.

may decide not to continue developing or commercializing any products at any time during development or after approval, which

would reduce or eliminate our potential return on investment for those product candidates.

may decide to discontinue the development of our abuse deterrent fentanyl transdermal system or any other product in our pipeline

or not to continue to commercialize any potential product for a variety of reasons, such as the appearance of new technologies

that make our product less commercially viable, an increase in competition, changes in or failure to comply with applicable regulatory

requirements, the discovery of unforeseen side effects during clinical development or after the approved product has been marketed

or the occurrence of adverse events at a rate or severity level that is greater than experienced in prior clinical trials.

we discontinue a program in which we have invested significant resources, we will not receive any return on our investment.

any of our potential products are approved for marketing but fail to achieve the broad degree of physician or market acceptance

necessary for commercial success, our operating results and financial condition will be adversely affected.

any of the products in our pipeline receives FDA approval for us to market the product in the United States, it will be necessary

for us to generate acceptance of our product for the indications covered by the FDA approval.

In order to generate acceptance

in the marketplace, we will need to demonstrate to physicians that our product provides a distinct advantage or better outcome

at a price that reflects the value of our product as compared with existing products.

We will need to develop and implement a

marketing program directed at both physicians and the general public.

Since we do not presently have the resources necessary to

develop or implement an in-house marketing program and we may not have the funds to do so if and when we obtain FDA approval to

market our product, we will need to establish a distribution network though license and distribution agreements with third parties

who have the capability to market our product to physicians and emergency service organizations, and we will be dependent upon

the ability of these third parties to market our products effectively.

We cannot assure you that we will be able to negotiate

license and distribution agreements with terms that are acceptable to us.

Since we do not have an established track record and

our product pipeline is relatively small, we may be at a disadvantage in negotiating the terms of license and distribution agreements.

Further, we may have little control over the development and implementation of our licensee’s marketing program, and our

licensees may have interests that are inconsistent with ours with respect to the allocation of resources and implementation of

the marketing program.

We cannot assure you that a marketing program for any of our products can or will be implemented effectively

or that we will be successful in developing physician and emergency service acceptance of our products.

we seek to market any products in our pipeline in countries other than the United States, we will need to comply with the regulations

of each country in which we seek to market our products.

of our pharmaceutical products are currently approved for sale by any government authority in any jurisdiction.

If we fail to

comply with regulatory requirements in any market we decide to enter, or to obtain and maintain required approvals, or if regulatory

approvals in the relevant markets are delayed, our target market will be reduced and our ability to realize the full market potential

of our products will be harmed.

Marketing approval in one jurisdiction, including the United States, does not ensure marketing

approval in another, but a failure or delay in obtaining marketing approval in one jurisdiction may have a negative effect on

the regulatory process in others.

Failure to obtain a marketing approval in countries in which we seek to market our products

or any delay or setback in obtaining such approval would impair our ability to develop foreign markets for any of our products.

drug delivery industry is subject to rapid technological change and, our failure to keep up with technological developments may

impair our ability to market our products.

products use technology which we developed for the transdermal delivery of drugs.

The field of drug delivery is subject to rapid

technological changes.

Our future success will depend upon our ability to keep abreast of the latest developments in the industry

and to keep pace with advances in technology and changing customer requirements.

If we cannot keep pace with such changes and

advances, our proposed products could be rendered obsolete, which would result in our having to cease its operations.

we obtain FDA approval, we will face significant competition from better known and better capitalized companies.

we obtain FDA approval for any of our products, we expect to face significant competition from existing companies, which are better

known and already have developed relationships with physicians within the healthcare system.

Any product we may develop will compete

with existing medications performing the same medicinal functions, which may include transdermal patches.

We cannot assure you

that we will be able to compete successfully.

In addition, even if we are able to commercialize our product candidates, we may

not be able to price them competitively with current standard of care products or their price may drop considerably due to factors

outside our control.

If this happens or the price of materials and manufacture increases dramatically, our ability to continue

to operate our business would be materially harmed and we may be unable to commercialize any products successfully.

other pharmaceutical companies may be engaged in developing, patenting, manufacturing and marketing products that compete with

those that we are developing.

These potential competitors may include large and experienced companies that enjoy significant competitive

advantages over us, such as greater financial, research and development, manufacturing, personnel and marketing resources, greater

brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory authorities.

reforms by governmental authorities, court decisions affecting health care policies and related reductions in pharmaceutical pricing,

reimbursement and coverage by third-party payors may adversely affect our business.

expect the healthcare industry to face increased limitations on reimbursement, rebates and other payments as a result of healthcare

reform, which could adversely affect third-party coverage of our proposed products and how much or under what circumstances healthcare

providers will prescribe or administer our products, if approved.

both the U.S.

and other countries, sales of our products, if approved for marketing, will depend in part upon the availability

of reimbursement from third-party payors, which include governmental authorities, managed care organizations and other private

health insurers.

Third-party payors are increasingly challenging the price and examining the cost effectiveness of medical products

and services.

expenditures for healthcare have been the subject of considerable public attention in the United States.

Both private and government

entities are seeking ways to reduce or contain healthcare costs.

Numerous proposals that would effect changes in the United States

healthcare system have been introduced or proposed in Congress and in some state legislatures, including reducing reimbursement

for prescription products and reducing the levels at which consumers and healthcare providers are reimbursed for purchases of

pharmaceutical products.

reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and

reimbursement for any approved products, which in turn would affect the price we can receive for those products.

Any reduction

in reimbursement that results from federal legislation or regulation may also result in a similar reduction in payments from private

payors, since private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement

developments that may adversely affect pricing in the United States include the enactment of federal healthcare reform laws and

regulations, including the Affordable Care Act, or ACA, which is popularly known as Obamacare, and the Medicare Prescription Drug

Improvement and Modernization Act of 2003.

A recent district court decision which struck down Obamacare, if upheld, could have

a material adverse effect upon reimbursement and payment for products such as our proposed products.

Changes to the healthcare

system enacted as part of any healthcare reform in the United States, as well as the increased purchasing power of entities that

negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, may result in increased pricing pressure by influencing,

for instance, the reimbursement policies of third-party payors.

Regulatory changes which have the effect of decreasing the use

of opioids has resulted in a decrease in the size of the market for opioid products, including fentanyl, could impact the market

for our abuse deterrent fentanyl transdermal system or any other opioid-based transdermal product we may develop.

2017, a new administration, which had promised to repeal and replace the ACA, took office in the United States.

Although we cannot

predict the form any such replacement of the ACA may take or the full effect on our business of the enactment of additional

legislation pursuant to healthcare and other legislative reform, we believe that legislation or regulations that would reduce

reimbursement for, or restrict coverage of, our products could adversely affect how much or under what circumstances healthcare

providers prescribe or administer our products.

This could materially and adversely affect our business by reducing our ability

to generate revenues, raise capital, obtain licensees and market our products.

In addition, we believe the increasing emphasis

on managed care in the United States, has and will continue to put pressure on the price and usage of pharmaceutical products,

which may adversely impact product sales.

will be difficult for us to profitably sell any of our products if reimbursement for these products is limited by government authorities

and third-party payor policies.

is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.

commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection for our technology

which is incorporated in our products as well as successfully defending these patents against third-party challenges, should any

4P Therapeutics originally filed an international patent application under the Patent Cooperation Treaty for worldwide

prosecution of the abuse deterrent transdermal technology patent used in our lead product, the abuse deterrent fentanyl transdermal

The patent is being prosecuted in the United States and in other countries.

Although the European Patent Office and

the Japan patent office have approved our patent application, we have not yet received any response from the United States Patent

and Trademark Office.

Our ability to stop third parties from making, using, selling, offering to sell or importing products utilizing

our proprietary or patented technology is dependent upon the extent to which we have rights under valid and enforceable patents

or trade secrets that cover these activities.

We cannot assure you that a patent will be granted in the United States or in any

country in which the patent is being prosecuted.

The patent positions of pharmaceutical and biopharmaceutical companies can be

highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved.

No consistent

policy regarding the breadth of claims allowed in biopharmaceutical patents has emerged to date in the United States.

The biopharmaceutical

patent situation outside the United States varies from country to country and is even more uncertain.

Changes in either the patent

laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual

Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in any patents we may be granted.

Further, if any patents are granted and are subsequently deemed invalid and unenforceable, it could impact our ability to license

our technology and, as noted previously, fend off competitive challenges.

Patent litigation is very expensive, and we may not

have sufficient funds to defend our proprietary technology from infringement, either as a plaintiff in an action seeking to stop

infringers from using our technology, or as a defendant in an action against us alleging infringement by us.

degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may

not adequately protect our rights or permit us to gain or keep our competitive advantage.

others may be able

to make compositions or formulations that are similar to our product s but that are not covered by the claims of our patents;

other persons may

have filed patents covering inventions, technology or processes that we use, with the result that we may infringe upon the

prior patents;

others may independently

develop similar or alternative technologies or duplicate any of our technologies;

our pending patent

applications may not result in the grant of patents;

any patents which

may be issued may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal

challenges by third parties;

our inability to

fund any litigation to defend our proprietary rights, either in defense of an action against us or a plaintiff to seek to

prevent infringement.

our failure to develop

additional proprietary technologies that are patentable.

have no current plans regarding the marketing of our own consumer products.

do not currently sell or market our own branded consumer transdermal products directly, and have no such plans to do so.

market our consumer transdermal patch products in the United States without first obtaining FDA approval.

We do not plan to seek

FDA approval or market our own branded products in the United States at this time.

Following our acquisition of Pocono, our core

focus is on contract manufacturing and consulting for third party brands primarily in Asia.

are dependent upon our chief executive officer and our chief operating officer.

are dependent upon Gareth Sheridan, our chief executive officer, and Dr.

Alan Smith, our chief operating officer who is president

of 4P Therapeutics.

Sheridan has an employment agreement with us, the employment agreement does not guarantee that

he will continue with us.

We do not have an employment agreement with Dr.

The loss of Mr.

Sheridan or Dr.

Smith would materially impair our ability to conduct

our business.

If we are unable to attract, train

and retain technical and financial personnel, our business may be materially and adversely affected.

Our future success depends, to a significant

extent, on our ability to attract, train and retain key management, technical, regulatory and financial personnel.

Recruiting and

retaining capable personnel with experience in pharmaceutical product development is vital to our success.

There is substantial

competition for qualified personnel, and, competition is likely to increase.

We cannot assure you we will be able to attract or

retain the personnel we require.

Our financial condition is likely to impair our ability to attract qualified candidates.

are unable to attract and retain qualified employees, our business may be materially and adversely affected.

Risks Concerning our Securities

We and our senior executive officers

settled an SEC investigation, which may affect the market for and the market price of our common stock and warrants and our ability

to list on a stock exchange.

Following an investigation into the accuracy

of statements in our Form 10 registration statement filed June 2, 2016, as amended, and our Form 10-K annual report filed May 8,

2017 that did not accurately reflect the FDA’s jurisdiction over our consumer products and did not disclose that we could

not legally market these products in the United States, a Wells notice which we, our chief executive officer and our chief financial

officer received on August 10, 2017 and a Wells submission which we and the officers submitted in response to the Wells notice,

the SEC, on December 26, 2018, announced that it has accepted our settlement offer and instituted settled an administrative

cease-and-desist proceeding against us and our chief executive officer and chief financial officer.

The SEC’s administrative

order, dated December 26, 2018, finds that we and the officers consented –

without admitting or denying any findings by the

to cease-and-desist orders against them for violations by us of Sections 12(g) and 13(a) of the Securities Exchange

Act of 1934 and Rules 12b-20 and 13a-1 thereunder, which require issuers to file accurate registration statements and annual reports

with the Commission;

violations by the officers for causing our violations of the above issuer reporting provisions;

and violations

by the officers of Rule 13a-14 of the Exchange Act, which requires each principal executive and principal financial officer of

issuers to attest that annual reports filed with the SEC do not contain any untrue statements of material fact.

In addition to

consenting to the cease-and-desist orders, the officers have each agreed to pay a $25,000 civil penalty to resolve the investigation.

The administrative order does not impose a civil penalty or any other monetary relief against us.

The settlement may affect the

market for and the market price of our common stock and warrants.

Our lack of internal controls over

financial reporting may affect the market for and price of our common stock and warrants.

Pursuant to Section 404 of the Sarbanes-Oxley

Act, we are required to file a report by our management on our internal control over financial reporting.

Our disclosure controls

and our internal controls over financial reporting are not effective.

We do not have the financial resources or personnel to develop

or implement systems that would provide us with the necessary information on a timely basis so as to be able to implement financial

Our financial condition together with the fact that we recently acquired 4P Therapeutics, which was a privately owned

company prior to our acquisition and did not have any internal controls over financial reporting in effect, makes it difficult

for us to implement a system of internal controls over financial reporting, and we cannot assure you that we will be able to develop

and implement the necessary controls.

The absence of internal controls over financial reporting may inhibit investors from purchasing

our stock and may make it more difficult for us to raise capital or borrow money.

Implementing any appropriate changes to our internal

controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our

existing accounting systems, take a significant period of time to complete and divert management’s attention from other business

These changes may not, however, be effective in developing or maintaining internal control.

If we are unable to conclude that we have

effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of the

common stock and warrants could decline and we may be subject to litigation or regulatory enforcement actions.

In addition, if

we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, our common stock and warrants may not be able

to remain listed on the NASDAQ Capital Market.

The market price for our common stock

and warrants may be volatile and your investment in our common stock and warrants could suffer a decline in value.

The trading volume in our stock is low,

which may result in volatility in our stock price.

As a result, any reported prices may not reflect the price at which you would

be able to sell shares of common stock or warrants if you want to sell any shares or warrants you own or buy shares or warrants

if you wish to buy shares or warrants.

Further, stocks with a low trading volume may be more subject to manipulation than a stock

that has a significant public float and is actively traded.

The price of our stock and warrants may fluctuate significantly in

response to a number of factors, many of which are beyond our control.

These factors include, but are not limited to, the following,

in addition to the risks described above and general market and economic conditions:

● concern about the effects of the recent SEC settlement;

● the market’s reaction to our financial condition and its perception

of our ability to raise necessary funding or enter into a joint venture, given the economic environment resulting from the COVID-19

pandemic, as well as its perception of the possible terms of any financing or joint venture;

● the market’s perception as to our ability to

generate positive cash flow or earnings;

● changes in our or any securities analysts’

of our financial performance;

● the perception of our ability to raise the necessary

financing to complete the product development activities including preclinical and clinical testing required for FDA approval

and our ability to generate revenue and cash flow from our products;

● the anticipated or actual results of our operations;

● changes in market valuations of other companies in

our industry;

● litigation or changes in regulations and insurance

company reimbursement policies affecting prescription drugs;

● concern that our internal controls are ineffective;

● any discrepancy between anticipated or projected results

and actual results of our operations;

● actions by third parties to either sell or purchase

stock in quantities which would have a significant effect on our stock price;

● other factors not within our control.

Because of our executive officers’

stock ownership, they have the power to elect all directors and to approve any action requiring stockholder approval.

Our officers and directors as a group beneficially

own approximately 61% of our common stock.

As a result, they have the effective power to elect all of our directors and to approve

any action requiring stockholder approval.

Raising funds by issuing equity or

convertible debt securities could dilute the net tangible book value of the common stock and impose restrictions on our working

We anticipate that we will require funds

in addition to the net proceeds from this offering for our business.

If we were to raise capital by issuing equity securities,

either alone or in connection with a non-equity financing, the net tangible book value of the then outstanding common stock could

If the additional equity securities were issued at a per share price less than the market price, which is customary in

the private placement of equity securities, the holders of the outstanding shares would suffer dilution, which could be significant.

Further, if we are able to raise funds from the sale of debt securities, the lenders may impose restrictions on our operations

and may impair our working capital as we service any such debt obligations.

Stockholders may experience significant

dilution as a result of future equity offerings and other issuances of our common stock or other securities.

We will need to raise substantial funds

in order to develop our products.

In order to raise additional capital, we may in the future offer additional shares of our common

stock or other securities convertible into or exchangeable for our common stock at prices that may not which is less than the market

price and which may be based on a discount from market at the time of issuance.

Stockholders will incur dilution upon exercise

of any outstanding stock options, warrants or upon the issuance of shares of common stock under our present and future stock incentive

In addition, the sale of shares and any future sales of a substantial number of shares of our common stock in the public

market, or the perception that such sales may occur, could adversely affect the price of our common stock.

We cannot predict the

effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale

will have on the market price of our common stock.

We may issue preferred stock whose

terms could adversely affect the voting power or value of our common stock.

Our articles of incorporation authorize

us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations,

preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions,

as our board of directors may determine.

The terms of one or more classes or series of preferred stock could adversely impact the

voting power or value of our common stock.

For example, we might grant holders of preferred stock the right to elect a number of

our directors in all events or on the happening of specified events or the right to veto specified transactions.

Similarly, the

repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual

value of the common stock.

For as long as we are an emerging

growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards

and disclosure about our executive compensation, that apply to other public companies.

We are classified as an “emerging

growth company”

Smith would materially

impair our ability to conduct our business.

we are unable to attract, train and retain technical and financial personnel, our business may be materially and adversely affected.

future success depends, to a significant extent, on our ability to attract, train and retain key management, technical, regulatory

and financial personnel.

Recruiting and retaining capable personnel with experience in pharmaceutical product development is vital

to our success.

There is substantial competition for qualified personnel, and competition is likely to increase.

We cannot assure

you we will be able to attract or retain the personnel we require.

Our financial condition is likely to impair our ability to

attract qualified candidates.

If we are unable to attract and retain qualified employees, our business may be materially and adversely

Concerning our Securities

market price for our common stock may be volatile and your investment in our common stock could suffer a decline in value.

trading volume in our stock is low, which may result in volatility in our stock price.

As a result, any reported prices may not

reflect the price at which you would be able to sell shares of common stock if you want to sell any shares you own or buy if you

wish to buy shares.

Further, stocks with a low trading volume may be more subject to manipulation than a stock that has a significant

public float and is actively traded.

The price of our stock may fluctuate significantly in response to a number of factors, many

of which are beyond our control.

These factors include, but are not limited to, the following, in addition to the risks described

above and general market and economic conditions:

the market’s

reaction to the offering, our financial condition and the general perception of our ability to raise necessary funding or

enter into a joint venture or partnering arrangement, given the economic environment resulting from the COVID-19 pandemic,

as well as its perception of the possible terms of any financing or joint venture;

the market’s

perception as to our ability to generate positive cash flow or earnings;

changes in our or

any securities analysts’

estimate of our financial performance;

the perception of

our ability to raise the necessary financing to complete the product development activities including preclinical and clinical

testing required for FDA approval and our ability to generate revenue and cash flow from our products;

the anticipated

or actual results of our operations;

changes in market

valuations of other companies in our industry;

litigation or changes

in regulations and insurance company reimbursement policies affecting prescription drugs;

concern that our

internal controls are ineffective;

any discrepancy

between anticipated or projected results and actual results of our operations;

actions by third

parties to either sell or purchase stock in quantities which would have a significant effect on our stock price;

other factors not

within our control.

may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

articles of incorporation authorize us to issue, without the approval of our stockholders, one or more classes or series of preferred

stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting

dividends and distributions, as our board of directors may determine.

The terms of one or more classes or series of preferred

stock could adversely impact the voting power or value of our common stock.

For example, we might grant holders of preferred stock

the right to elect a number of our directors in all events or on the happening of specified events or the right to veto specified

transactions.

Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred

stock could affect the residual value of the common stock.

may not be able to recover the 1,200,000 shares of common stock we issued in connection with our proposed acquisition of Advanced

Health Brands.

May 22, 2017, we entered into an agreement to acquire Advanced Health Brands, which held six provisional patents for transdermal

Pursuant to the agreement, we were to issue 1,250,000 shares of common stock, valued at $2,500,000, in exchange for

the stock of Advanced Health Brands and a related corporation.

In August 2017, when we issued the shares to the Advanced Health

Brands stockholders, the Advanced Health Brands stock had not been transferred to us.

Although we did not have title to the shares

of Advanced Health Brands stock, we treated the transaction as completed and we announced that we had acquired Advanced Health

Brands, relying on the stockholders’

obligation to transfer the shares to us.

We had appointed two of the Advanced Health

Brands stockholders as directors and executive officers.

In January 2018, we recognized an impairment loss of $2,500,000 based

on both our failure to obtain title to the Advanced Health Brands stock and our conclusion that the provisional patents that were

held by Advanced Health Brands did not have any value to us.

In December 2018 50,000 shares were returned by one of the defendants.

We have commenced legal actions against Advanced Health Brands and its stockholders in Florida and New York.

In the Florida action,

the court ruled against us.

On February 1, 2019, we appealed the court’s order.

Pursuant to a settlement agreement with

one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as

of January 31, 2019.

On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state

court action that dismissed our complaint with prejudice, and gave us leave to file an amended complaint.

The New York action

was recently commenced against the stockholders of Advanced Health Brands, and the defendants filed a motion to dismiss the action.

We cannot assure you that we will prevail in either action, that we will be able recover either the 1,200,000 shares of common

stock or any monetary damages from the Advanced Health Brands stockholders or that we will not incur any liability as a result

of either our issuance of the shares or our failure to provide the necessary documentation to permit the Advanced Health Brands

stockholders to sell their shares pursuant to Rule 144 or from our treating and announcing the acquisition as completed or based

on other claims.

as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including

those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

are classified as an “emerging growth company”

under the JOBS Act.

For as long as we are an emerging growth company, which may be up to five full fiscal

years, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s

assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the

Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or

a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit

and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation, or (iv) hold

nonbinding advisory votes on executive compensation.

We will remain an emerging growth company for up to five years, although we

will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal year, have more than $700 million in market

value of our common stock held by non-affiliates, or issue more than $1.07 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about

our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies.

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

stock and our stock price may be more volatile.

We do not intend to pay any cash

dividends in the foreseeable future.

We have not paid any cash dividends on

our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future.

We do not own any real property.

We lease approximately 200

square feet of office space in Orlando, Florida pursuant to a one-year lease which expires in July 2020.

The current annual rental

We have the right to renew, at a rent to be determined.

With the office lease, we have access to board rooms, kitchen

facilities and administrative support services.

For as long as we are an emerging growth company,

which may be up to five full fiscal years, we will not be required to, among other things, (i) provide an auditor’s

attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting

pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring

mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide

additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding

executive compensation, or (iv) hold nonbinding advisory votes on executive compensation.

We will remain an emerging growth

company for up to five years, although we will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal

year, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.07 billion

of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging

growth companies, you will receive less information about our executive compensation and internal control over financial reporting

than issuers that are not emerging growth companies.

If some investors find our common stock to be less attractive as a result,

there may be a less active trading market for our common stock and our stock price may be more volatile.

and our senior executive officers settled an SEC investigation, which may affect the market for and the market price of our common

stock and our ability to list on a stock exchange.

an investigation into the accuracy of statements in our Form 10 registration statement filed June 2, 2016, as amended, and our

Form 10-K annual report filed May 8, 2017 that did not accurately reflect the FDA’s jurisdiction over our consumer products

and did not disclose that we could not legally market these products in the United States, a Wells notice which we, our chief

executive officer and our chief financial officer received on August 10, 2017 and a Wells submission which we and the officers

submitted in response to the Wells notice, the SEC, on December 26, 2018, announced that it has accepted our settlement offer

and instituted settled an administrative cease-and-desist proceeding against us and our chief executive officer and chief financial

The SEC’s administrative order, dated December 26, 2018, finds that we and the officers consented –

admitting or denying any findings by the SEC —

to cease-and-desist orders against them for violations by us of Sections

12(g) and 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20 and 13a-1 thereunder, which require issuers to file accurate

registration statements and annual reports with the Commission;

violations by the officers for causing our violations of the above

issuer reporting provisions;

and violations by the officers of Rule 13a-14 of the Exchange Act, which requires each principal

executive and principal financial officer of issuers to attest that annual reports filed with the SEC do not contain any untrue

statements of material fact.

In addition to consenting to the cease-and-desist orders, the officers have each agreed to pay a

$25,000 civil penalty to resolve the investigation.

The administrative order does not impose a civil penalty or any other monetary

relief against us.

The settlement may affect the market for and the market price of our common stock.

lack of internal controls over financial reporting may affect the market for and price of our common stock.

to Section 404 of the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial

Our disclosure controls and our internal controls over financial reporting are not effective.

We do not have the financial

resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis

so as to be able to implement financial controls.

Our financial condition together with the fact that we recently acquired 4P

Therapeutics, which was a privately owned company prior to our acquisition and did not have any internal controls over financial

reporting in effect, makes it difficult for us to implement a system of internal controls over financial reporting, and we cannot

assure you that we will be able to develop and implement the necessary controls.

The absence of internal controls over financial

reporting may inhibit investors from purchasing our stock and may make it more difficult for us to raise capital or borrow money.

Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees,

entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and

divert management’s attention from other business concerns.

These changes may not, however, be effective in developing or

maintaining internal control.

funds by issuing equity or convertible debt securities could dilute the net tangible book value of the common stock and impose

restrictions on our working capital.

anticipate that we will require funds in addition to the net proceeds from this offering for our business.

If we were to raise

additional capital by issuing equity securities, either alone or in connection with a non-equity financing, the net tangible book

value of the then outstanding common stock could decline.

If the additional equity securities were issued at a per share price

less than the market price, which is customary in the private placement of equity securities, the holders of the outstanding shares

would suffer dilution, which could be significant.

Further, if we are able to raise funds from the sale of debt securities, the

lenders may impose restrictions on our operations and may impair our working capital as we service any such debt obligations.

may experience significant dilution as a result of future equity offerings and other issuances of our common stock or other securities.

will need to raise substantial funds in order to develop our products.

In order to raise additional capital, we may in the future

offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices

that may not which is less than the market price and which may be based on a discount from market at the time of issuance.

will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under

our present and future stock incentive programs.

In addition, the sale of shares and any future sales of a substantial number

of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the price

of our common stock.

We cannot predict the effect, if any, that market sales of those shares of common stock or the availability

of those shares of common stock for sale will have on the market price of our common stock.

do not intend to pay any cash dividends in the foreseeable future.

have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable

do not own any real property.

We lease a shared office space in Orlando for $ 149 per month.

With the office lease, we have access

to board rooms, kitchen facilities and administrative support services.

We lease manufacturing space in Cherryville, North Carolina,

for $4,200 per month under a verbal agreement on a month-to-month basis.

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