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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-01 · 301 added, 272 removed, 361 unchanged (61% of the section changed)

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We are dependent on the success of our INTASYL

technology platform, and our product candidates based on this platform, which is unproven and may never lead to approved and marketable

Our efforts have been focused on the development

of product candidates based on our INTASYL technology platform.

We have invested, and we expect to continue to invest, significant financial

resources and efforts developing our product candidates.

Our ability to eventually generate revenue is highly dependent on the successful

development, regulatory approval and commercialization of our INTASYL product candidates by us or by collaborative partners, which may

not occur for the foreseeable future, if ever, and is highly uncertain and depends on a number of factors, many of which are beyond our

Therefore, it is difficult to accurately predict challenges we may face with our product candidates as they move through the

discovery, preclinical and clinical development stages.

We will spend large amounts of money developing our INTASYL platform technology

and may never succeed in obtaining regulatory approval.

In addition, our research methodology may be unsuccessful in identifying product

candidates and results from preclinical studies and clinical trials may not predict the results that will be obtained in later phase trials

of our product candidates or our product candidates may interact with patients in unforeseen or harmful ways that may make it impractical

or impossible to manufacture, receive regulatory approval or commercialize.

If we are not successful in bringing an INTASYL product candidate

to market, it could negatively impact our business and financial condition and we may not be able to identify and successfully implement

an alternative product development strategy.

technology, and our product candidates based on this platform, which is unproven and may never lead to approved and marketable products.

Our efforts have been focused on the development of

product candidates based on our INTASYL technology.

We have invested, and we expect to continue to invest, significant financial resources

and efforts developing our product candidates.

Our ability to eventually generate revenue is highly dependent on the successful development,

regulatory approval and commercialization of our INTASYL product candidates by us or by collaborative partners, which may not occur for

the foreseeable future, if ever, and is highly uncertain and depends on a number of factors, many of which are beyond our control.

it is difficult to accurately predict challenges we may face with our product candidates as they move through the discovery, preclinical

and clinical development stages.

We will spend large amounts of money developing our INTASYL technology and may never succeed in obtaining

regulatory approval.

In addition, our research methodology may be unsuccessful in identifying product candidates and results from preclinical

studies and clinical trials may not predict the results that will be obtained in later phase trials of our product candidates or our product

candidates may interact with patients in unforeseen or harmful ways that may make it impractical or impossible to manufacture, receive

regulatory approval or commercialize.

If we are not successful in bringing an INTASYL product candidate to market, it will negatively

impact our business and financial condition and we may not be able to identify and successfully implement an alternative product development

Our product candidates

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condition, and results of operations.

Further, the FDA may not accept the results of

our preclinical studies or clinical trials and may require us to complete additional studies or impose stricter approval conditions than

we expect, which could impact the value of a particular program, the approvability or commercialization of the particular product candidate

Further, the FDA may not accept the results of our

preclinical studies or clinical trials and may require us to complete additional studies or impose stricter approval conditions than we

expect, which could impact the value of a particular program, the approvability or commercialization of the particular product candidate

or product and our Company in general.

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may not be able to commence, continue or complete such preclinical studies or clinical trials.

We are dependent on our collaboration partner

for the successful development of our adoptive cell therapy product candidate.

We are dependent on third parties that have direct

access to the patient or donor cells used in cell therapy and expect to depend on our third-party collaborator to support the clinical

development of our ACT product candidate.

We have entered into a clinical co-development collaboration agreement with AgonOx, Inc.

conduct a Phase 1 clinical trial of the evaluation of PH-762 treated “double positive” tumor infiltrating lymphocytes in patients

with advanced melanoma and other advanced solid tumors.

The success of our collaboration depends upon the efforts of our collaboration

partner, and their performance in achieving the development activities to the extent they are responsible under our collaboration agreement.

Our partner may not be successful in performing these activities, including completing the required preclinical studies and other information

to be included in an IND application (or foreign equivalent), obtaining approval to initiate clinical trials, conducting the necessary

clinical trials and arranging for the manufacturing or contract research organization (“ CRO ”) relationships and obtaining

marketing authorization.

Our partner works with other companies, potentially including some of our competitors, their corporate objectives

may not align with ours, and they may change their strategic focus or pursue alternative technologies.

If our collaboration is not successful

or our partner terminates our collaboration agreement, our business, financial condition, and results of operations could be materially

and adversely affected.

Further, we may not be successful in negotiating

agreements with this collaborator or with future collaborators for the development and commercialization of our ACT product candidates

through collaborations such as joint development or licensing agreements.

Our ability to successfully negotiate such agreements will depend

on, among other things, potential partners’ evaluation of the superiority of our technology over competing technologies, the quality

of preclinical data that we have generated, the perceived risks specific to developing our product candidates and our partners’

own strategic and corporate objectives.

If we fail to negotiate these agreements, we may not be able commence clinical trials with our

ACT product candidates or we may be required to obtain licenses from cell therapy companies and our business, financial condition, and

results of operations could be materially and adversely affected.

If we experience delays or difficulties in

identifying and enrolling patients in clinical trials, it may lead to delays in generating clinical data and the receipt of necessary

regulatory approvals.

If we experience delays or difficulties in identifying

and enrolling patients in clinical trials, it may lead to delays in generating clinical data and the receipt of necessary regulatory approvals.

Clinical trials of a new drug or biologic candidate

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who would otherwise be eligible for our clinical trials instead enrolling in clinical trials for other drug or biologic candidates.

Topline data may not accurately reflect or

may materially differ from the complete results of a clinical trial.

Topline data may not accurately reflect or may

materially differ from the complete results of a clinical trial.

From time to time, we may publicly disclose topline

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conclusions reached, our business, financial condition, and results of operations could be materially and adversely affected.

We rely upon third-parties to conduct our

clinical trials and other studies for our product candidates, and if they do not successfully fulfill their obligations, the development

of our product candidates may be materially impacted.

We rely upon third-parties to conduct our clinical

trials and other studies for our product candidates, and if they do not successfully fulfill their obligations, the development of our

product candidates may be materially impacted.

We rely upon third-party CROs, medical institutions,

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or at all, for the applicable drug or biologic candidate, or to commercialize such drug or biologic candidate being tested in such studies

A number of different factors could prevent

us from advancing into clinical development, obtaining regulatory approval, and ultimately commercializing our product candidates on a

timely basis, or at all.

Before obtaining regulatory approval for the sale

of any drug or biologic candidate, we must conduct extensive preclinical tests and successful clinical trials to demonstrate the safety

and efficacy of our product candidates in humans.

Changes in U.S.

and international trade policies

may adversely impact our business and operating results.

From time to time, proposals are made to significantly

change existing trade agreements and relationships between the U.S.

and other countries.

In recent years, the U.S.

government has implemented

substantial changes to U.S.

trade policies, including import restrictions, increased import tariffs and changes in U.S.

participation

in multilateral trade agreements.

Because some of our vendors, manufactures and suppliers are located in other foreign countries, we are

exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations

of the United States or foreign governments, as well as political unrest or unstable economic conditions in foreign countries.

government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate,

certain existing bilateral or multi-lateral trade agreements.

For example, on February 1, 2025, President Donald Trump signed executive

orders imposing a 25% tariff on certain imports from Mexico and Canada, and a 10% tariff on certain imports from China, which were to

take effect on February 4, 2025.

President Donald Trump also announced a plan for reciprocal tariffs which are to take effect on April

Our supply may in the future be subject to these tariffs, which could increase our manufacturing costs and could make our products,

if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to these tariffs.

We may otherwise experience supply disruptions or delays, and our suppliers may not continue to provide us with clinical supply in our

required quantities, to our required specifications and quality levels or at attractive prices.

Such disruption could have adverse effects

on the development of our product candidates and our business operations.

A number of different factors could prevent us

from advancing into clinical development, obtaining regulatory approval, and ultimately commercializing our product candidates on a timely

basis, or at all.

Before obtaining regulatory approval for the sale of

any drug or biologic candidate, we must conduct extensive preclinical tests and successful clinical trials to demonstrate the safety and

efficacy of our product candidates in humans.

Before human clinical trials may commence, we must submit to the FDA an IND.

involves the completion of preclinical studies and the submission of the results, together with proposed clinical protocols, manufacturing

information, analytical data and other data in the IND submission.

The FDA may require us to complete additional preclinical studies or

disagree with our clinical trial study design.

Also, animal models may not exist for some of the disease areas we choose to develop our

product candidates for.

An IND involves

the completion of preclinical studies and the submission of the results, together with proposed clinical protocols, manufacturing information,

analytical data and other data in the IND submission.

The FDA may require us to complete additional preclinical studies or disagree with

our clinical trial study design.

Also, animal models may not exist for some of the disease areas we choose to develop our product candidates

As a result, our clinical trials may be delayed or we may be required to incur more expense than we anticipated.

Clinical trials require the review and oversight

of IRBs, which approve and continually review clinical investigations and protect the rights and welfare of patients.

Clinical trials require the review and oversight of

IRBs, which approve and continually review clinical investigations and protect the rights and welfare of patients.

Before our clinical

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the FDA suspending or terminating the clinical trial and refusing to approve a particular drug or biologic candidate for any or all indications

An additional number of factors could affect the

timing, cost or outcome of our drug development efforts, including the following:

An additional number of factors could affect the timing,

cost or outcome of our drug development efforts, including the following:

Delays in filing or acceptance of INDs, NDAs, or BLA for our product candidates;

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Adverse results obtained by other companies developing similar drugs.

A failure of any preclinical study or clinical

trial can occur at any stage of testing.

A failure of any preclinical study or clinical trial

can occur at any stage of testing.

Any delay or failure in obtaining required approvals may prevent us from completing our preclinical

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financial condition, and results of operations.

We are subject to significant competition

and may not be able to compete successfully.

The biotechnology and pharmaceutical industries

are intensely competitive, contain a high degree of risk and there are many other companies actively engaged in the discovery, development

Disruptions at the FDA, including due to a reduction

in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our

business relies, which could negatively impact our business.

The ability of the FDA to review and approve new products

or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate

government budget and funding levels, a reduction in the FDA’s workforce and its ability to hire and retain key personnel.

at the FDA and other agencies may also increase the time to meet with and receive agency feedback, review and/or approve our submissions,

conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated

products, which would adversely affect our business.

In addition, government proposals to reduce or eliminate budgetary deficits may include

reduced allocations to the FDA and other related government agencies.

For example, the current President Trump administration (the “ Trump

Administration ”) recently established the Department of Government Efficiency, which implemented a federal government hiring

freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government.

It is unclear how these executive actions or other potential actions by the Trump Administration or other parts of the federal government

will impact the FDA or other regulatory authorities that oversee our business.

These budgetary pressures may reduce the FDA’s ability

to perform its responsibilities.

If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly

reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our

regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a

material adverse effect on our business.

We are subject to significant competition and

may not be able to compete successfully.

The biotechnology and pharmaceutical industries are

intensely competitive, contain a high degree of risk and there are many other companies actively engaged in the discovery, development

and commercialization of products that may compete with our product candidates.

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approval may not be successful.

We also face competition acquiring technologies

complementary to our INTASYL technology.

Further, we may face competition with respect to product efficacy and safety, ease of use and

adaptability to modes of administration, acceptance by physicians, timing and scope of regulatory approvals, reimbursement coverage, price

and patent position, including dominant patent positions of others.

We also face competition acquiring technologies complementary

to our INTASYL technology.

Further, we may face competition with respect to product efficacy and safety, ease of use and adaptability

to modes of administration, acceptance by physicians, timing and scope of regulatory approvals, reimbursement coverage, price and patent

position, including dominant patent positions of others.

If we are not able to successfully obtain regulatory approval or commercialize

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The use of our product candidates in clinical trials

and, if any of our product candidates receive regulatory approval, the sale of our product candidates for commercial use expose us to

and, if any of our product candidates receive regulatory approval, the sale of our product candidates for commercial use exposes us to

the risk of product liability claims.

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will need to either develop, contract for, or otherwise arrange for the necessary manufacturers for these supplies.

There are a limited number of manufacturers that

make oligonucleotides and we currently contract with multiple manufacturers for the supply of our product candidates to reduce the risk

of supply interruption or availability.

However, there is no assurance that our supply of our product candidates will not be limited,

interrupted, of satisfactory quality or be available at acceptable prices.

For example, constraints on the supply chain and availability

of resources have resulted in delays and shortages at manufacturing facilities.

While we have engaged with multiple manufacturers for

the supply of our product candidates in order to mitigate the impact of the loss or delay of any one manufacturer, there can be no assurance

that our efforts will be successful.

If for any reason we are unable to obtain the clinical supply of our product candidates from our

current manufacturers, we would have to seek to contract with another major manufacturer.

If we or any of these manufacturers are unable

or unwilling to increase its manufacturing capacity or if we are unable to establish alternative arrangements on a timely basis or on

acceptable terms, the development and commercialization of such an approved product may be delayed or there may be a shortage in supply.

Any inability to manufacture our product candidates or future approved drugs in sufficient quantities when needed would seriously harm

our business.

Approval of any of our product candidates will

not occur unless the manufacturing facilities are in compliance with the FDA’s cGMP regulations in order to ensure that drug products

There are a limited number of manufacturers that make

oligonucleotides and we currently contract with multiple manufacturers for the supply of our product candidates to reduce the risk of

supply interruption or availability.

However, there is no assurance that our supply of our product candidates will not be limited, interrupted,

of satisfactory quality or be available at acceptable prices.

For example, constraints on the supply chain and availability of resources

have resulted in delays and shortages at manufacturing facilities.

While we have engaged with multiple manufacturers for the supply of

our product candidates in order to mitigate the impact of the loss or delay of any one manufacturer, there can be no assurance that our

efforts will be successful.

If for any reason we are unable to obtain the clinical supply of our product candidates from our current manufacturers,

we would have to seek to contract with another major manufacturer.

If we or any of these manufacturers are unable or unwilling to increase

its manufacturing capacity or if we are unable to establish alternative arrangements on a timely basis or on acceptable terms, the development

and commercialization of such an approved product may be delayed or there may be a shortage in supply.

Any inability to manufacture our

product candidates or future approved drugs in sufficient quantities when needed would seriously harm our business.

Approval of any of our product candidates will not

occur unless the manufacturing facilities are in compliance with the FDA’s cGMP regulations in order to ensure that drug products

are safe and that they consistently meet applicable requirements and specifications.

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periodic inspections of the manufacturing facilities and can result in enforcement action, such as warning letters, fines and suspension

of production if they are found to not be in compliance with the regulations.

of production if they are found not to be in compliance with the regulations.

If our suppliers or manufacturers do not comply with the

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result in delays, additional expenses, and may have a material adverse effect on our ability to complete the development of our product

Unstable market and economic conditions,

including elevated and sustained inflation, may have serious adverse consequences on our business, financial condition and stock price.

Unstable market and economic conditions, including

elevated and sustained inflation, may have serious adverse consequences on our business, financial condition and stock price.

As has been widely reported, we are currently operating

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availability, declines in consumer confidence, declines in economic growth, uncertainty about economic stability and increased inflation.

There can be no assurance that deterioration in

credit and financial markets and confidence in economic conditions will not occur.

Our general business strategy may be adversely affected

by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.

If the current

equity and credit markets deteriorate, or do not improve, it may make any necessary debt or equity financings more difficult, more costly,

and more dilutive.

There can be no assurance that deterioration in credit

and financial markets and confidence in economic conditions will not occur.

Our general business strategy may be adversely affected by

any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.

If the current equity

and credit markets deteriorate, or do not improve, it may make any necessary debt or equity financings more difficult, more costly, and

more dilutive.

Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect

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economic times, which could directly affect our ability to attain our operating goals.

Our business and operations would suffer

in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity.

Despite the implementation of security measures,

our internal computer systems and those of our third-party contractors and collaborators are vulnerable to damage from computer viruses,

unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures, cyberattacks or cyber-intrusions

over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign

governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions

from around the world have increased.

Our business and operations would suffer in the

event of computer system failures, cyberattacks or a deficiency in our cybersecurity.

Despite the implementation of security measures, our

internal computer systems and those of our third-party contractors and collaborators are vulnerable to damage from computer viruses, unauthorized

access, natural disasters, terrorism, war and telecommunication and electrical failures, cyberattacks or cyber-intrusions over the Internet,

attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

The risk of a security

breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber

terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world

have increased.

Such an event could cause interruption of our operations.

As part of our business, we and our third-party

contractors and collaborators maintain large amounts of confidential information, including non-public personal information on patients

and our employees.

Breaches in security could result in the loss or misuse of this information, which could, in turn, result in potential

regulatory actions or litigation, including material claims for damages, interruption to our operations, damage to our reputation or otherwise

have a material adverse effect on our business, financial condition and operating results.

We expect to have appropriate information security

policies and systems in place in order to prevent unauthorized use or disclosure of confidential information, including non-public personal

information, but there can be no assurance that such use or disclosure will not occur.

As part of our business, we and our third-party contractors

and collaborators maintain large amounts of confidential information, including non-public personal information on patients and our employees.

Breaches in security could result in the loss or misuse of this information, which could, in turn, result in potential regulatory actions

or litigation, including material claims for damages, interruption to our operations, damage to our reputation or otherwise have a material

adverse effect on our business, financial condition and operating results.

We expect to have appropriate information security policies

and systems in place in order to prevent unauthorized use or disclosure of confidential information, including non-public personal information,

but there can be no assurance that such use or disclosure will not occur.

Risks Relating to Our Intellectual Property

We may be involved in litigation to protect

our patents and intellectual property rights and our ability to protect our patents and intellectual property rights is uncertain and

may subject us to potential liabilities.

We have filed patent applications, have pending

patents that we have licensed and those that we own and expect to continue to file patent applications.

We may also need to license patents

and patent applications from research sponsored by us with third-parties.

There is no assurance that these applications will result in

any issued patents or that those patents would withstand possible legal challenges or protect our technologies from competition.

We may be involved in litigation to protect our

patents and intellectual property rights and our ability to protect our patents and intellectual property rights is uncertain and may

subject us to potential liabilities.

We have filed patent applications, have pending patents

that we have licensed and those that we own and expect to continue to file patent applications.

We may also need to license patents and

patent applications from research sponsored by us with third-parties.

There is no assurance that these applications will result in any

issued patents or that those patents would withstand possible legal challenges or protect our technologies from competition.

granting authorities have upheld stringent standards for the RNAi patents that have been prosecuted so far and, consequently, pending

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issue with much narrower claims than those in the pending applications.

In addition, others may challenge the patents or

patent applications that we currently license or may license in the future or that we own and, as a result, these patents could be narrowed,

In addition, others may challenge the patents or patent

applications that we currently license or may license in the future or that we own and, as a result, these patents could be narrowed,

invalidated or rendered unenforceable, which would negatively affect our ability to exclude others from using the technologies described

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Our efforts to enforce and maintain our intellectual property rights may not be successful and may

result in substantial costs and diversion of management and key employee’s time.

result in substantial costs and diversion of management and key employees’ time.

If we are unable to defend our licensed or owned

intellectual property, it may have a materially and adverse impact on our business, results of operations and financial condition.

Third-parties may claim that we infringe

their patents, which may result in substantial liabilities and prevent us from pursuing the development of our product candidates.

intellectual property, it may have a material and adverse impact on our business, results of operations and financial condition.

Third-parties may claim that we infringe their

patents, which may result in substantial liabilities and prevent us from pursuing the development of our product candidates.

Because the field we operate in is constantly changing

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It is possible that we may become a party to such proceedings.

If a claim should be brought against us and we

are found to infringe the rights of others, we may be required to pay substantial damages, be forced to stop the development of product

candidates affected by the claim, and/or establish licenses or similar arrangements.

Furthermore, any such licenses may not be available

when needed, on commercially reasonable terms or at all.

Whether an infringement claim is successful or not, the cost of these proceedings

may be significant and divert the attention of management and other key employees.

As a result, we cannot be certain that our patents

or those we license will not be challenged by others, which could have a material adverse effect on our business, results of operations

and financial condition.

We are dependent on the patents we own and

the technologies we license, and if we fail to maintain our patents or lose the right to license such technologies, our ability to develop

If a claim should be brought against us and we are

found to infringe the rights of others, we may be required to pay substantial damages, be forced to stop the development of product candidates

affected by the claim, and/or establish licenses or similar arrangements.

Furthermore, any such licenses may not be available when needed,

on commercially reasonable terms or at all.

Whether an infringement claim is successful or not, the cost of these proceedings may be significant

and divert the attention of management and other key employees.

As a result, we cannot be certain that our patents or those we license

will not be challenged by others, which could have a material adverse effect on our business, results of operations and financial condition.

We are dependent on the patents we own and the

technologies we license, and if we fail to maintain our patents or lose the right to license such technologies, our ability to develop

new products would be harmed.

Our success depends upon our ability to obtain

and maintain intellectual property protection for our product candidates.

Any patents issued to us or our licensors may not provide us

with any competitive advantages, and there is no assurance that the patents of others will not have an adverse effect on our ability to

do business or to continue to develop our product candidates freely.

Our success depends upon our ability to obtain and

maintain intellectual property protection for our product candidates.

Any patents issued to us or our licensors may not provide us with

any competitive advantages, and there is no assurance that the patents of others will not have an adverse effect on our ability to do

business or to continue to develop our product candidates freely.

Pending patents that we have licensed and those that we own may continue

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scope, competitors may develop products based on technology that is not covered by our licenses or patents or patent applications that

If we are unable to derive value from our licensed or owned intellectual property, it may have a materially and adverse impact

on our business, results of operations and financial condition.

If we are unable to derive value from our licensed or owned intellectual property, it may have a material and adverse impact on

our business, results of operations and financial condition.

Third parties may hold or seek to obtain additional

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To acquire new technologies, licenses or products.

We are dependent on obtaining funding from third

parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations.

cannot assure you that additional financing will be available to us on acceptable terms, or at all.

If we cannot, or are limited in the

ability to, issue equity, incur debt or enter into strategic collaborations, we may be unable to fund the discovery and development of

our product candidates or improve our technology.

If we fail to obtain additional funding when needed, we may ultimately be unable to

continue to develop and potentially commercialize our product candidates, and we may be forced to scale back or terminate our operations

or seek to merge with or be acquired by another company.

We have a history

of net losses, and we expect to continue to incur net losses for the foreseeable future and may not achieve or maintain profitability.

We are dependent on obtaining funding from third parties,

such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations.

assure you that additional financing will be available to us on acceptable terms, or at all.

If we cannot, or are limited in the ability

to, issue equity, incur debt or enter into strategic collaborations, we may be unable to fund the discovery and development of our product

candidates or improve our technology.

If we fail to obtain additional funding when needed, we may ultimately be unable to continue to

develop and potentially commercialize our product candidates, and we may be forced to scale back or terminate our operations or seek to

merge with or be acquired by another company.

We have a history of

net losses, and we expect to continue to incur net losses for the foreseeable future and may not achieve or maintain profitability.

We have generated significant losses to date, have

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to achieve or sustain profitability, which could have a material adverse effect on our business, financial condition and results of operations.

Future financing may be obtained through,

and future development efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our stockholders

or may otherwise adversely affect our business.

If we raise funds through the issuance of debt

or equity, any debt securities or preferred stock issued will have rights, preferences and privileges senior to those of holders of our

common stock in the event of a liquidation.

In such event, there is a possibility that once all senior claims are settled, there may be

no assets remaining to pay out to the holders of common stock.

The terms of debt securities may also impose restrictions on our operations,

which may include limiting our ability to incur additional indebtedness, to pay dividends on or repurchase our capital stock, or to make

certain acquisitions or investments.

In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios,

and our ability to satisfy such covenants may be affected by events outside of our control.

If we raise funds through the issuance of

additional equity, whether through private placements or public offerings, such an issuance would dilute current stockholders’ ownership

in us, perhaps substantially.

The issuance of a significant amount of shares of common stock could cause the market price of our common

stock to decline or become highly volatile.

We expect to continue to incur significant

research and development expenses, which may make it difficult for us to attain profitability, and may lead to uncertainty as to our ability

to continue as a going concern.

Future financing may be obtained through, and

future development efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our stockholders or

may otherwise adversely affect our business.

If we raise funds through the issuance of debt or equity,

any debt securities or preferred stock issued will have rights, preferences and privileges senior to those of holders of our Common Stock

in the event of a liquidation.

In such event, there is a possibility that once all senior claims are settled, there may be no assets remaining

to pay out to the holders of Common Stock.

The terms of debt securities may also impose restrictions on our operations, which may include

limiting our ability to incur additional indebtedness, to pay dividends on or repurchase our capital stock, or to make certain acquisitions

or investments.

In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability

to satisfy such covenants may be affected by events outside of our control.

If we raise funds through the issuance of additional equity,

whether through private placements or public offerings, such an issuance would dilute current stockholders’ ownership in us, perhaps

substantially.

The issuance of a significant amount of shares of Common Stock could cause the market price of our Common Stock to decline

or become highly volatile.

We expect to continue to incur significant research

and development expenses, which may make it difficult for us to attain profitability, and may lead to uncertainty as to our ability to

continue as a going concern.

We expend substantial funds to develop our technologies,

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Under that provision,

we can carryforward our net operating losses to offset our future taxable income, if any, until such net operating losses are used or

we can carry forward our net operating losses to offset our future taxable income, if any, until such net operating losses are used or

Net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but are limited

to offset up to 80% of future taxable income.

Certain of our net operating loss carryforwards predating December 31, 2017 could expire

unused before offsetting potential future income tax liabilities.

to offsetting up to 80% of future taxable income.

Certain net operating loss carryforwards predating December 31, 2017, could expire unused

before offsetting potential future income tax liabilities.

Additionally, an ownership

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loss or tax credit carryforwards before utilization.

We have completed multiple assessments of the

available net operating loss and tax credit carryforwards under Sections 382 and 383 of the Code through the year ended December 31,

2023 and determined that we underwent multiple ownership changes during the period from inception to 2023.

As a result, our net operating

losses and tax credit carryforwards are subject to substantial annual limitations under Sections 382 and 383 of the Code due to these

ownership changes.

The Company has adjusted its net operating loss and tax credit carryforwards to address the impact of the ownership

We assess the need to conduct an ownership change analysis to determine whether any changes occurred in ownership that would

limit net operating loss or tax credit carryforwards on an annual basis.

We may experience ownership changes in the future as a result

of subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership change occurs and our ability

to use our net operating loss and tax credit carryforwards is materially limited, it could harm our future operating results by effectively

increasing our future tax obligations.

We have completed multiple assessments of the available

net operating loss and tax credit carryforwards under Sections 382 and 383 of the Code through the year ended December 31, 2024 and determined

that we underwent multiple ownership changes during the period from inception to 2024.

As a result, our net operating losses and tax credit

carryforwards are subject to substantial annual limitations under Sections 382 and 383 of the Code due to these ownership changes.

Company has adjusted its net operating loss and tax credit carryforwards to address the impact of the ownership changes.

We assess the

need to conduct an ownership change analysis to determine whether any changes occurred in ownership that would limit net operating loss

or tax credit carryforwards on an annual basis.

We may experience ownership changes in the future as a result of subsequent shifts in

our stock ownership, some of which may be outside of our control.

If an ownership change occurs and our ability to use our net operating

loss and tax credit carryforwards is materially limited, it could harm our future operating results by effectively increasing our future

tax obligations.

Risks Relating to Our Securities

The price of our common stock has been and

may continue to be volatile.

The price of our Common Stock has been and may

continue to be volatile.

Our stock price has historically fluctuated widely

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General economic, industry and market conditions.

The stock markets, in general, and the markets

for drug delivery and pharmaceutical company stocks, in particular, have experienced extreme volatility, that has often been unrelated

to the operating performance of these particular companies.

These broad market fluctuations may adversely affect the trading price of

our common stock and could result in the loss of all or part of your investment.

In addition, the limited trading volume of our stock

may contribute to its volatility.

Moreover, if we are unable to trade above $1.00 for a certain period of time, or fulfill the other continued

listing standards, The Nasdaq Stock Market (“ Nasdaq ”) may delist our common stock.

Delisting our common stock from

Nasdaq would adversely affect our trading volume and would likely negatively impact our trading price.

We may not be able to regain compliance with

The stock market, in general, and the markets for drug

delivery and pharmaceutical company stocks, in particular, have experienced extreme volatility, that has often been unrelated to the operating

performance of these particular companies.

These broad market fluctuations may adversely affect the trading price of our Common Stock

and could result in the loss of all or part of your investment.

In addition, the limited trading volume of our stock may contribute to

its volatility.

Moreover, if we are unable to trade above $1.00 for a certain period of time, or fulfill the other continued listing standards,

The Nasdaq Stock Market (“ Nasdaq ”) may delist our Common Stock.

Delisting our Common Stock from Nasdaq would adversely

affect our trading volume and would likely negatively impact our trading price.

We may not be able to maintain compliance with

the continued listing requirements of The Nasdaq Capital Market.

On January 24, 2024, we received notice (the “ Notification

Letter ”) from Nasdaq notifying us that we are not in compliance with the minimum bid price requirements set forth in Nasdaq

Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(a)(2) requires listed securities

to maintain a minimum bid price of $1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price

requirement exists if the deficiency continues for a period of 30 consecutive business days.

Based on the closing bid price of our common

stock for the 30 consecutive business days prior to the date of the Notification Letter, we no longer meet the minimum bid price requirement.

The Notification Letter does not impact our listing

on The Nasdaq Capital Market at this time.

The Notification Letter states that we have 180 calendar days, or until July 22, 2024, to regain

To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum

of 10 consecutive business days at any time prior to July 22, 2024.

In the event that we do not regain compliance by July 22, 2024, we

may be eligible for additional time to reach compliance with the minimum bid price requirement.

However, if we fail to regain compliance

with the minimum bid price listing requirement or fail to maintain compliance with all other applicable continued listing requirements

and Nasdaq determines to delist our common stock, the delisting could adversely impact us by, among other things, reducing the liquidity

and market price of our common stock;

reducing the number of investors willing to hold or acquire our common stock;

limiting our ability

to issue additional securities in the future;

and limiting our ability to fund our operations.

Our Board of Directors has the authority

to issue shares of “blank check” preferred stock and the terms of the preferred stock may reduce the value of our common stock.

To maintain continued listing on The Nasdaq Capital

Market, we must satisfy minimum financial and other requirements.

For example, Nasdaq Listing Rule 5550(b)(1) requires companies listed

on the Nasdaq Capital Market to maintain stockholders’ equity of at least $2.5 million for continued listing.

As of December 31,

2024, our stockholders’ equity was $4.7 million and there can be no assurance that we will be able to maintain or increase our stockholders’

equity in the future.

If our stockholders’ equity falls below $2.5 million, as a result of operating losses or for other reasons,

or if we are unable to demonstrate to Nasdaq’s satisfaction that we subsequently regained compliance with this requirement, Nasdaq

will notify us of such non-compliance.

If we receive such notice from Nasdaq, in accordance with the Nasdaq Listing Rules, we will have

45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1).

If our compliance

plan is accepted, we may be granted up to 180 calendar days from the date of the initial notification to evidence compliance.

If our compliance

plan is not accepted or we are otherwise unable to evidence compliance within Nasdaq’s allotted timeframe, Nasdaq may take steps

to delist our Common Stock.

In addition, Nasdaq Listing Rule 5550(a)(2) requires

a minimum bid price of at least $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid

price requirement exists if the deficiency continues for a period of 30 consecutive business days.

Although the Company is currently in

compliance with this requirement, there can be no assurance that we will be able to maintain compliance.

We have in the past effected

reverse stock splits of our Common Stock in order to regain or maintain compliance with this requirement (most recently on July 5, 2024).

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet this requirement and has effected a reverse stock

split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative

ratio of 250 shares or more to one, may not be eligible for an automatic 180-day grace compliance period and the Nasdaq Listing Qualifications

Department is obligated to immediately issue a delisting determination.

Therefore, if we were to fall out of compliance with the minimum

bid price requirement prior to July 5, 2025, we would not be able to effect a reverse stock split and would immediately be issued a delisting

determination.

Such a delisting would have an adverse effect on the

market liquidity of our securities, decrease the market price of our securities, result in the potential loss of confidence by investors,

suppliers, customers and employees and fewer business development opportunities, and adversely affect our ability to obtain financing

for the continuation of our operations.

Our Board of Directors has the authority to issue

shares of “blank check” preferred stock and the terms of the preferred stock may reduce the value of our Common Stock.

We are authorized to issue up to 10,000,000 shares

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ventures that may be unsuccessful and could dilute your ownership interest in the Company.

As part of our business strategy, we may pursue

future acquisitions of other complementary businesses and technology licensing arrangements.

As part of our business strategy, we may pursue future

acquisitions of other complementary businesses and technology licensing arrangements.

We also may pursue strategic alliances.

have limited experience with respect to acquiring other companies and with respect to the formation of collaborations, strategic alliances

limited experience with respect to acquiring other companies and with respect to the formation of collaborations, strategic alliances

and joint ventures.

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develop such assets could diminish our prospects.

To finance future acquisitions, we may choose to

issue shares of our common stock or preferred stock as consideration, which would dilute current stockholders’ ownership interest

To finance future acquisitions, we may choose to issue

shares of our Common Stock or preferred stock as consideration, which would dilute current stockholders’ ownership interest in us.

Alternatively, it may be necessary for us to raise additional funds through public or private financings.

Additional funds may

not be available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders.

Any future acquisitions by us also could result in large and immediate write-offs, the incurrence of contingent liabilities or amortization

of expenses related to acquired intangible assets, any of which could harm our operating results.

Additional funds may not be

available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders.

acquisitions by us also could result in large and immediate write-offs, the incurrence of contingent liabilities or amortization of expenses

related to acquired intangible assets, any of which could harm our operating results.

Provisions of our certificate of incorporation

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Establish advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Although we believe these provisions collectively

provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our Board, they would apply even

if the offer may be considered beneficial by some stockholders.

In addition, these provisions may frustrate or prevent any attempts by

our stockholders to replace or remove our current management team by making it more difficult for stockholders to replace members of our

Board, which is responsible for appointing the members of our management.

Although we believe these provisions collectively provide

for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our Board, they would apply even if the offer

may be considered beneficial by some stockholders.

In addition, these provisions may frustrate or prevent any attempts by our stockholders

to replace or remove our current management team by making it more difficult for stockholders to replace members of our Board, which is

responsible for appointing the members of our management.

Moreover, because we are incorporated in Delaware,

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

What changed 10-K

Item 1A. Risk Factors