What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-04-28 compared with 2024-05-01 · 581 added, 662 removed, 145 unchanged (90% 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 prospectus before making an investment decision with regard to our securities.

The statements contained in this prospectus

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.

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 prospectus before making an investment decision with regard to our securities.

The statements contained in this prospectus 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.

Additional risks and

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

If any of the following risks actually

3 unchanged sentences

Risks Concerning our Business

Because we do not

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

Our lead product, which

is our abuse deterrent fentanyl transdermal system, is currently in development and is not yet approved by the FDA in the United States

or by any other regulatory agency in any other country.

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 programs 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:

There is economic

uncertainty concerning economic policies being pursued by the new administration in the United States that may affect the costs and timing

of the process of bringing our products to market through approvals with the FDA.

Our operating results

are affected by the current political and economic uncertainties related to the economy of the United States, the domestic pharmaceutical

industry and world economies.

Future conditions may also adversely affect our pricing strategy, promotional activities and our profitability

Additionally, many of the effects and consequences of U.S.

and global financial and economic conditions could potentially

have a material adverse effect on our liquidity and capital resources, including the ability to raise additional capital, if needed, or

could otherwise negatively affect our business and financial results.

Market instability could make it more difficult for us and our suppliers

to accurately forecast future product demand trends.

Additionally, inflationary factors such as increases in the costs to purchase products,

acquire product rights and overhead costs may adversely affect our operating results.

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.

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;

2 unchanged sentences

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;

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;

6 unchanged sentences

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 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, and we may not be able to continue in

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.

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

changing the dosage form or route of administration, we will need to complete, to the FDA’s satisfaction, all of the studies required

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

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

We may need to rely on a contract research

organization to conduct our preclinical and clinical trials.

Although we believe

that we, through 4P Therapeutics, have the capabilities to conduct certain 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 contract

research 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.

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:

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 to enable us to obtain FDA

approval so as to be able to market the product.

If we are not able to obtain necessary financing to develop our product, 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.

Even though the medication that

is being delivered through our transdermal patch may have already received FDA approval, because we are changing the dosage form or route

of administration, we will need to complete, to the FDA’s satisfaction, all of the studies required 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.

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.

Risk of delays at FDA due to restructuring

Changes at the Food and Drug Administration

(FDA) and other federal agencies under the incoming Trump administration include implementing a hiring freeze and employee layoffs

by executive orders and other measures implemented by the Department of Government Efficiency, may lead to new policies, changes in

the regulations, and disruption of normal operations of the FDA and other agencies, any of which may adversely impact our clinical

development plans and business operations.

Disruptions at the FDA may lead to slower response times and longer review periods,

potentially affecting our ability to progress with development of our product candidates or obtain timely regulatory approval for

our product candidates.

Changes in regulations may result in unexpected delays, increased costs, or other negative impacts on our

business that are difficult to predict.

Risk of increased tariffs on foreign goods.

The United States government has imposed tariffs

on foreign goods being imported into the United States.

Although our Company does not plan to sell any pharmaceutical products in

the United States that are manufactured overseas, some of the raw materials used in our products under development are obtained from foreign

manufacturers.

An increase in the costs of any of the raw materials used in our products under development could be detrimental

to our commercial forecasts and projected profit margins which are based in part on our ability to price our products competitively with

existing products marketed in the United States.

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 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;

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;

6 unchanged sentences

manufacture sufficient quantities of the product candidate for use in clinical trials.

Patient enrollment 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 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 the product development and approval process and jeopardize our ability to commence product

sales and generate revenues.

Patient enrollment 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 or our CDMO, 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

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 the product 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.

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 related 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, 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;

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 related

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, 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;

2 unchanged sentences

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;

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;

1 unchanged sentence

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 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 inspection.

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

we may 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 contract manufacturer who has experience is manufacturing FDA-approved

transdermal products.

By relying on a contract manufacturer, we will be dependent upon the manufacturer, whose interests may be different

Any contract manufacturer will be responsible for product quality and for meeting regulatory 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 adverse events, 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 contract manufacturer, our reputation

may be harmed 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.

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 business.

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 inspection.

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 may 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 contract manufacturer who has experience is manufacturing FDA-approved transdermal products.

By relying on a contract manufacturer, we will be dependent upon the manufacturer, whose interests may be different from ours.

manufacturer will be responsible for product quality and for meeting regulatory 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 adverse events, 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 contract manufacturer, our reputation may be harmed and we may lose business

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.

If we or any third-party

1 unchanged sentence

manufacturer 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.

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 (REMS) from manufacturers to ensure

that the benefits of a drug or biological product outweigh its risks.

If one of our proposed product candidates does receive regulatory

approval, the approval may be limited to specific conditions and dosages or the indications for use may otherwise be limited, which could

restrict the commercial value of the product.

The FDA may require a REMS, which can include a medication guide, patient package insert,

a communication plan, elements to assure safe use and implementation system, and include a timetable for assessment of the REMS.

the FDA may require that certain contraindications, warnings or precautions be included in the product labeling and may require testing

and surveillance programs to monitor the safety of approved products that have been commercialized.

In addition, the FDA may require post-approval

testing which involves clinical trials designed to further assess a drug product’s safety and effectiveness after the NDA.

Depending on the extent

of the REMS requirements, any U.S.

launch may be delayed, the costs to commercialize may increase substantially and the potential commercial

market could be restricted.

Furthermore, risks that are not adequately addressed through the proposed REMS program may also prevent or

delay its approval for commercialization.

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” uses.

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.

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.

Failure to be in compliance with good manufacturing practices could result in the FDA closing the facilities or limiting our use of the

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 (REMS) from manufacturers to ensure that the benefits

of a drug or biological product outweigh its risks.

If one of our proposed product candidates does receive regulatory approval, the approval

may be limited to specific conditions and dosages or the indications for use may otherwise be limited, which could restrict the commercial

value of the product.

The FDA may require a REMS, which can include a medication guide, patient package insert, a communication plan,

elements to assure safe use and implementation system, and include a timetable for assessment of the REMS.

Further, the FDA may require

that certain contraindications, warnings or precautions be included in the product labeling and may require testing and surveillance programs

to monitor the safety of approved products that have been commercialized.

In addition, the FDA may require post-approval testing which

involves clinical trials designed to further assess a drug product’s safety and effectiveness after the NDA.

Depending on the extent of the REMS requirements,

launch may be delayed, the costs to commercialize may increase substantially and the potential commercial market could be restricted.

Furthermore, risks that are not adequately addressed through the proposed REMS program may also prevent or delay its approval for commercialization.

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 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” uses.

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

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

2 unchanged sentences

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

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.

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 transdermal products will not cause skin irritation or other adverse

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

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

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 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.

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

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).

most part, we expect these adverse events to be known and occur at some predicted frequency based on our experience in the clinical development

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 transdermal products will not cause skin irritation or other adverse events.

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.

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 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 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.

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.

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.

Before we can market

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

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 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

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 for marketing in the United States 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.

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.

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.

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

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.

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 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.

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, changes in the regulatory or public

policy environment, 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 thereby allowing us to market the product in the United States, it will be necessary for us to generate

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.

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.

Before we can market our products outside

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

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.

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.

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 for marketing in the United States 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

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

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

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.

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.

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, changes in the regulatory or public policy environment,

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 thereby allowing 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, patients and payors 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 we will be dependent upon the ability of these third parties to market our products effectively.

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 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 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

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.

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 products.

Our products use technology

which we developed for the transdermal delivery of drugs.

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.

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 products.

Our products use technology which we developed

for the transdermal delivery of drugs.

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

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.

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 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.

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

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

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.

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 intellectual property used in our lead product, the abuse deterrent fentanyl transdermal system.

The AVERSA abuse

deterrent technology utilized in our AVERSA product pipeline is covered by an international intellectual property portfolio with

patents issued in 45 countries including the United States, Europe, Japan, Korea, Russia, Mexico, Canada and Australia.

prosecution is still pending in China and Hong Kong.

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 2003.

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

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 intellectual

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

The AVERSA abuse deterrent

technology utilized in our AVERSA product pipeline is covered by an international intellectual property portfolio with patents issued

in 45 countries including the United States, Europe, Japan, Korea, Russia, Mexico, Canada and Australia.

Patent prosecution is still pending

in China and Hong Kong.

These patents provide patent coverage to 2035.

We continue to build on our

proprietary positions in the United States and internationally for our product candidates AVERSA Fentanyl, AVERSA buprenorphine and

AVERSA methylphenidate as well as other products and technology that we may have in development.

Our policy is to pursue, maintain

and defend patent rights developed internally or acquired externally and to protect the technology, inventions and improvements that

are commercially important to the development of our business.

We cannot be sure that patents will be granted with respect to any of

our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of

our existing patents or any patents granted to us in the future will be commercially useful in protecting our technology.

rely on trade secrets to protect our commercial products and product candidates.

Our commercial success also depends in part on our

non-infringement of the patents or proprietary rights of third parties.

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.

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

We continue to build on our proprietary positions in the United

States and internationally for our product candidates AVERSA Fentanyl, AVERSA buprenorphine and AVERSA methylphenidate as well as other

products and technology that we may have in development.

Our policy is to pursue, maintain and defend patent rights developed internally

or acquired externally and to protect the technology, inventions and improvements that are commercially important to the development of

our business.

We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to

any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents granted to us in

the future will be commercially useful in protecting our technology.

We also rely on trade secrets to protect our commercial products

and product candidates.

Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third

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.

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

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;

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

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.

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 business.

We have recently expanded

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 business.

We have expanded

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

In 2017, we issued 1,458,333 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.

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

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.

Acquisitions may lead to our acquiring assets the value of

which is not commensurate with the purchase price we paid.

For example, in 2017, we issued 1,458,333 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.

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.

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.

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.

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.

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

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.

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.

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.

Patents may not be granted for patent applications

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

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.

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 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

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.

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.

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 are dependent

on third party distributors for the international marketing of our consumer products and complying with applicable laws.

We do not currently sell

or market our consumer transdermal products domestically, or for our international sales, directly to international consumers, 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 are dependent on third party distributors

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

We do not currently sell or market our consumer

transdermal products domestically, or for our international sales, directly to international consumers, 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.

We are dependent

upon our chief executive officer, our president and our chief operating officer.

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.

We are dependent upon our chief executive

officer, our president and our chief operating officer.

We are dependent upon

2 unchanged sentences

of 4P Therapeutics.

Sheridan and Mr.

Melnik have employment agreements with us, the employment agreements does not guarantee

Although these officers have employment agreements with us, the employment agreements do not guarantee

that the officer will continue with us.

We do not have an employment agreement with Dr.

The loss of Mr.

1 unchanged sentence

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.

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

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.

If we are unable to attract and retain

qualified employees, our business may be materially and adversely affected.

If we are unable to attract and retain qualified

employees, our business may be materially and adversely affected.

Risks Concerning our Securities

Our lack of internal

controls over financial reporting may affect the market for and price of our common stock.

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

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.

The market price

for our common stock may be volatile and your investment in our common stock 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 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:

Our lack of internal controls over financial

reporting may affect the market for and price of our common stock.

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 controls.

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.

The market price for our common stock may

be volatile and your investment in our common stock 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 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 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 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;

3 unchanged sentences

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;

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.

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 capital.

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 capital.

We anticipate that we

7 unchanged sentences

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.

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 maybe 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 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.

Our failure to

10 unchanged sentences

requirements.

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 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 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.

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 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 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

The settlement may affect the market for and the market price of our common stock.

The market price

for our common stock may be volatile and your investment in our common stock 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 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:

concern about the effects of our settlement with the SEC;

the market’s reaction to our financial

condition and its perception of our ability to raise necessary funding or enter into a joint venture, as well as its perception of the possible terms of any financing or joint venture;

The market price for our common stock may

be volatile and your investment in our common stock 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 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 our financial condition and its perception of our ability to raise necessary funding or enter into a joint venture, 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;

3 unchanged sentences

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;

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 and stock ownership of certain other stockholders that have invested in the company, these stockholders

have the power to elect all directors and to approve any action requiring stockholder approval.

Because of our executive officers’

stock ownership and stock ownership of certain other stockholders that have invested in the company, these stockholders have the power

to elect all directors and to approve any action requiring stockholder approval.

Our officers and directors

33 unchanged sentences

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