PMCB filing — read by section

Item 1. Business

ITEM 1. BUSINESS.

 Product Candidates 

 We are a biotechnology company focused on developing
cellular therapies for cancer, diabetes, and malignant ascites based upon a proprietary cellulose-based live cell encapsulation technology
known as “Cell-in-a-Box ®. .” The Cell-in-a-Box ® technology is intended to be used as a platform
upon which therapies for several types of cancer, including LAPC, will be developed. The current generation of our product candidate is
referred to as “CypCaps™.”

 The Cell-in-a-Box ® encapsulation
technology potentially enables genetically engineered live human cells to be used to produce various biologically -active molecules. The
technology is intended to result in the formation of pinhead -sized cellulose-based porous capsules in which genetically modified live
human cells can be encapsulated and maintained. In a laboratory setting, this proprietary live cell encapsulation technology has been
shown to create a micro-environment in which encapsulated cells survive and flourish. They are protected from environmental challenges,
such as the sheer forces associated with bioreactors and passage through catheters and needles, etc., which we believe enables greater
growth and production. The capsules are largely composed of cellulose (cotton) and are bio inert.

 We are developing therapies for pancreatic and
other solid cancerous tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug
into its cancer-killing form. We encapsulate those cells using the Cell-in-a-Box ® technology and place those capsules in
the body as close as possible to the tumor. In this way, we believe that when a cancer prodrug is administered to a patient with a particular
type of cancer that may be affected by the prodrug, the killing of the patient’s cancerous tumor may be optimized.

 We are also developing a way to delay the production and accumulation
of malignant ascites that results from many types of abdominal cancerous tumors. Our potential therapy for malignant ascites involves
using the same encapsulated cells we employ for pancreatic cancer but placing the encapsulated cells in the peritoneal cavity of a patient
and administering ifosfamide intravenously.

 We have also been developing a potential therapy
for Type 1 diabetes and insulin-dependent Type 2 diabetes. Our product candidate for the treatment of diabetes consists of encapsulated
genetically modified insulin-producing cells. The encapsulation will be done using the Cell-in-a-Box ® technology. Implanting
these encapsulated cells in the body is designed to have them function as a bio-artificial pancreas for purposes of insulin production.

 In addition to the two cancer programs discussed
above, we have been working on ways to exploit the benefits of the Cell-in-a-Box ® technology to develop therapies for cancer
that involve prodrugs based upon certain constituents of the Cannabis plant. However, until the FDA allows us to commence our clinical
trial in LAPC and we are able to validate our Cell-in-a-Box ® encapsulation technology in a clinical trial, we are not spending
any further resources developing our Cannabis Program.

 1 

 Cancer Therapy 

 Targeted Chemotherapy 

 Our therapy for cancer involves encapsulating genetically engineered
human cells that convert an inactive chemotherapy drug into its active or “cancer-killing” form. For pancreatic cancer, these
encapsulated cells are implanted in the blood supply to the patient’s tumor as close as possible to the site of the tumor. Once
implanted, a chemotherapy drug that is normally activated in the liver (ifosfamide) is given intravenously at one-third the normal dose.
The ifosfamide is carried by the circulatory system to where the encapsulated cells have been implanted. When the ifosfamide flows through
pores in the capsules, the live cells inside act as a “bio-artificial liver” and activate the chemotherapy drug at the site
of the cancer.

 2 

 3 

 Pancreatic Cancer 

 4 

 We believe an unmet medical need exists for patients
with LAPC whose pancreas tumor no longer responds after 4-6 months of treatment with either Abraxane ® plus gemcitabine
or the 4-drug combination known as FOLFIRINOX. Both combinations are the current standards of care for pancreatic cancer. We believe that
these refractory patients have no effective treatment alternative once their tumors no longer respond to these therapies. Treatments are
being tried at various cancer centers in the U.S. in an attempt to address this lack of an effective treatment for LAPC patients, but
their success is far from certain.

 Two of the most commonly used treatments for these
patients are 5-fluorouracil (“5-FU”) or capecitabine (a prodrug of 5-FU) plus radiation (chemoradiation therapy). More recently,
radiation treatment alone is being used at some cancer centers in the U.S.

 We believe that these treatments are only marginally
effective in treating the LAPC tumor and result in serious side effects.

 We believe that our therapy for LAPC, if approved,
can serve as a “consolidation therapy” that can be used with the current standards of care and thus address this critical
unmet medical need. On September 1, 2020, we submitted an Investigational New Drug Application (“IND”) to the FDA for a planned
Phase 2b clinical trial in LAPC. Highlights of our planned clinical trial are shown below:

 5 

 Clinical Hold 

 On October 1, 2020, we received notice from the
FDA that it had placed our IND on clinical hold. On October 30, 2020, the FDA sent us a letter setting forth the reasons for the clinical
hold and providing specific guidance on what we must do to have the clinical hold lifted.

 In order to address the clinical hold, the FDA
has requested that we:

 · 
 Provide additional sequencing data and genetic stability studies; 

 · 
 Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”); 

 · 
 Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps ™ ) with our product candidate for pancreatic cancer; 

 · 
 Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer; 

 · 
 Provide additional product release specifications for our encapsulated cells; 

 · 
 Demonstrate comparability between the 1 st and 2 nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations; 

 · 
 Conduct a biocompatibility assessment using the capsules material; 

 · 
 Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File; 

 · 
 Conduct an additional nonclinical study in a large animal (such as a pig) to assess the safety, activity, and distribution of the product candidate for pancreatic cancer; and 

 · 
 Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated. 

 The FDA also requested that we address the following
issues as an amendment to our IND:

 · 
 Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests for assessing purity, safety, and potency; 

 · 
 Perform qualification studies for the drug substance filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process; 

 · 
 Submit an updated batch analysis for the product candidate for the specific lot that will be used for manufacturing all future product candidates; 

 · 
 Provide additional details for the methodology for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays; 

 · 
 Provide a few examples of common microcatheters that fit the specifications in our Angiography Procedure Manual; 

 · 
 Clarify the language in our Pharmacy Manual regarding proper use of the syringe fill with the product candidate for pancreatic cancer; and 

 · 
 Provide a discussion with data for trial of the potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated toxicities in our study population. 

 We assembled a scientific and regulatory team
of experts to address the FDA requests. That team has been working diligently to complete the items requested by the FDA. To date we believe
we have made significant progress in fulfilling the FDA requests needed to lift the clinical hold.

 6 

 The following provides a detailed summary of our
activities to have the clinical hold lifted:

 · 
 Additional Regulatory Expertise Added to IND Team . In addition to ‌our existing team of regulatory experts, we retained Biologics Consulting to perform a regulatory “Gap Analysis” and to assist us with our resubmission of the IND. Biologics Consulting is a full-service regulatory and product development consulting firm for biologics, pharmaceuticals and medical devices and has personnel with extensive FDA experience. 

 · 
 Stability Studies on Our Clinical Trial Product Candidate for Pancreatic Cancer . We have successfully completed the required product stability studies. The timepoints were 3, 6, 9, 12, 18 and 24-months of our product candidate for pancreatic cancer being stored frozen at -80C. These studies included container closure integrity testing for certain timepoints. 

 · 
 Additional Studies Requested by the FDA . We have successfully completed various additional studies requested by the FDA, including a stability study on the cells from our MCB used to make our CypCaps™. We are already at the 36-month stability timepoint for the cells from our MCB. We are also collating existing information on the reproducibility and quality of the filling of the MCB cells into vials ready for CypCaps™ manufacturing. 

 · 
 Determination of the Exact Sequence of the Cytochrome P450 2B1 Gene . We have completed the determination of the exact sequence of the cytochrome P450 2B1 gene inserted at the site previously identified on chromosome 9 using state-of-the-art nanopore sequencing. This is a cutting edge, unique and scalable technology that permits real-time analysis of long DNA fragments. The result of this analysis of the sequence data confirmed that the genes are intact. 

 7 

 · 
 Confirmation of the Exact Sequence of the Cytochrome P450 2B1 Gene Insert . An additional, more ‌finely detailed, analysis of the integration site of the cytochrome P450 2B1 gene from the augmented HEK293 cell clone that is used in our CypCaps™ was found to be intact. In this new study, we were able to confirm the previously determined structure of the integrated transgene sequence using more data points. These studies also set the stage for a next step analysis to determine the genetic stability of the cytochrome P450 2B1 gene at the DNA level after multiple rounds of cell growth. This new study has been completed in which our original Research Cell Bank (“RCB”) cells were compared with cells from the MCB. The analysis confirmed that the cytochrome P450 2B1 and the surrounding sequence has remained stable with no changes detected at the DNA level. 

 · 

 Biocompatibility Studies . We have been involved with 10 biocompatibility
 studies requested by the FDA, 8 of which have been completed successfully. The remaining studies are underway or about to start. The Acute
 Systemic Toxicity Study of Empty Cellulose Sulphate Capsules in Mice is underway. The Skin Sensitization Study of Empty Cellulose Sulphate
 Capsules in Guinea Pigs is about to start. These last two studies ‌should be completed well before the pig study (see below) is completed.

 To enable the biocompatibility studies to be performed, we had Austrianova
 Singapore Pte. Ltd. (“Austrianova”) manufacture an additional 400 syringes of empty capsules.

 Systemic Toxicity Testing . We evaluated the potential toxicity
 of the capsule component of our product candidate for pancreatic cancer‌ and determined there is no evidence of toxicity in any of
 the parameters examined. The study also confirmed previous data that shows our capsule material is bioinert.
 
 · 
 Micro-Compression and Swelling Testing . This testing is underway. We are developing and optimizing two reproducible methods for testing and confirming the physical stability and integrity of our CypCaps™ under extreme pressure. These studies required the acquisition of new equipment by Austrianova as well as validation and integration into Austrianova’s Quality Control laboratory. 

 · 
 Break Force and Glide Testing . We are in the process of developing a protocol to measure whether the syringe, attached to the catheter when used to expel the capsules, will still have a break and glide force that is within the specifications we have established. We are setting the specifications based on the syringe/plunger manufacturer’s measured break and glide forces, or alternatively, accepted ranges for glide forces routinely used in the clinic. 

 · 
 Capsules Compatibility with the Syringe and Other Components of the Microcatheter Delivery System . We are in the process of showing that CypCaps™ are not in any way adversely affected by the catheters used by interventional radiologists to deliver them into a patient. Compatibility data is being generated to demonstrate that the quality of the CypCaps™ is maintained after passage through the planned microcatheter systems. 

 · 
 CypCaps Capsules and Cell Viability after Exposure to Contrast Medium . We have commenced testing to show that exposure of CypCaps™ to the contrast medium interventional radiologists ‌used to implant the CypCaps™ in a patient has no adverse effect on CypCaps™. Contrast medium is used to visualize the blood vessels during implantation. 

 · 
 Master Drug File Information . Austrianova is providing additional detailed confidential information on the manufacturing process, including information on the improvements and advancements made to our product candidate for pancreatic cancer since the last clinical trials were conducted with respect to reproducibility and safety. However, Austrianova has not changed the overall physical characteristics of CypCaps™ between the 1 st and 2 nd generations. We are supporting Austrianova financially with this work. 

 · 
 Additional Documentation Requested by the FDA . We are in the process of updating our IND submission documentation, including our discussion on immunological aspects of our treatment for LAPC. 

 · 
 Pig
 Study . We have commenced a study in pigs to address biocompatibility and long-term implantation and dispersion of
 CypCaps™. The study has two phases: (i) a pilot study with 2 pigs; and (ii) a 90-pig study. ‌The first phase has
 commenced. We believe this study should complement the positive data already available from the previous human clinical trials
 showing the safety of CypCaps™ implantation in human patients. On July 21, 2022, the first phase of the pig study
commenced. The second phase of the pig study may be delayed as a result of supply chain problems, including production delays at
Austrianova possibly related to their financial condition. 

 8 

 Malignant Ascites 

 9 

 We have been exploring ways to delay the production and
accumulation of malignant ascites that results from several types of abdominal tumors. Malignant ascites is a fluid that is secreted
by an abdominal tumor into the abdomen after the tumor reaches a certain stage of growth. This fluid contains cancer cells that can
seed and form new tumors throughout the abdomen. As this malignant ascites fluid accumulates in the abdominal cavity, it can cause
gross swelling of the abdomen, severe breathing difficulties and extreme pain. Accumulated malignant ascites must be removed by
paracentesis on a periodic basis. This procedure is painful and costly. We know of no available therapy that prevents or delays the
production and accumulation of malignant ascites. Seven preclinical studies were conducted by Translational Drug Development
(“TD2”), an early-stage clinical research organization (“CRO”) specializing in oncology, to determine
whether the combination of Cell-in-a-Box ® encapsulated cells plus low doses of ifosfamide could delay the production
and accumulation of malignant ascites. The data from these studies suggested that our cancer therapy might play a role in malignant
ascites fluid production and accumulation. However, the data were difficult to interpret with certainty.

 On May 23, 2022, we initiated the first in a new series of studies
to test the ability of our pancreatic cancer therapy to treat malignant ascites. This is the eighth and final preclinical study that may
lead to a Phase 1 clinical trial. Such a clinical trial may allow us to validate the Cell-in-a-Box ® technology much faster
than our planned Phase 2b clinical trial in LAPC.

 If this new series of studies is successful, we
plan to submit an IND to seek approval from the FDA to conduct a Phase 1 clinical trial to determine if our product candidate for pancreatic
cancer can delay the production and accumulation of malignant ascites.

 Diabetes Therapy 

 10 

 A Bio-Artificial Pancreas to Treat Diabetes 

 We are developing a therapy for Type 1 diabetes
and insulin-dependent Type 2 diabetes based upon the encapsulation of a human cell line genetically engineered to produce, store and release
insulin at levels in proportion to the levels of blood sugar in the human body.

 The cell line we select will be encapsulated using
the Cell-in-a-Box ® encapsulation technology.

 If appropriate animal testing is completed successfully,
we intend to submit an IND to the FDA to seek its approval to transplant encapsulated insulin-producing cells into diabetic patients.
The goal for this approach is to develop a bio-artificial pancreas for purposes of insulin production for diabetic patients who are insulin-dependent.

 11 

 Our diabetes program began with two of the most
critical components of a biological diabetes therapy - a line of human cells which release insulin in response to the blood glucose level
in their environment and a technology to protect the cells from an attack by the immune system once they are transplanted into a patient
to replace his or her own destroyed insulin-producing cells. This technology is the Cell-in-a-Box ® encapsulation technology.
The cells we initially used are Melligen cells. They are patent-protected and have been licensed to us by University of Technology Sydney
(“UTS”).

 Putting Melligen cells and the Cell-in-a-Box ® 
technology together, we conducted the first functional study in diabetic mice. The results did not meet our expectations. We discovered
that, contrary to what we had expected and what we had read in published scientific papers on the Melligen cells published by UTS, the
cells are not stable. With extensive testing and experiments, we discovered that the Melligen cells lose some of their specific beneficial
properties over time.

 We entered into a research agreement with UTS
to create an advanced version of the Melligen cells for the treatment of diabetes. Under this agreement, improvements are to be made to
the Melligen cells that we believe will increase their stability, increase their insulin production and increase the bioactivity of the
produced insulin.

 Until recently, UTS has been conducting this research.
The work is being funded by us and UTS. Our portion of the funding was previously paid to UTS. The research to date has not produced the
results we had anticipated and is taking longer than we anticipated. It remains to be seen whether the Melligen cells are capable of producing
the required insulin to be a viable cell line for the treatment of diabetes. Further research is requied.

 Meanwhile, we have been working with two internationally
renowned academic institutions to develop a cell line that will form the backbone of our Diabetes Program. These institutions are developing
a stem-cell derived beta islet cell that we plan to encapsulate to treat Type 1 and insulin-dependent Type 2 diabetes. We are currently
negotiating agreements with these institutions, although no assurance can be give that the negotiations will be successful.

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 Cannabinoids to Treat Cancer 

 13 

 Numerous studies have demonstrated the therapeutic
potential of certain cannabinoids in patients with cancer. Studies have shown that cannabinoids are potentially: (i) anti-proliferative
(slow tumor growth); (ii) anti-metastatic (slow tumor spread); (iii) anti-angiogenic (slowing blood vessel development); and (iv) pro-apoptotic
initiate programed cell death). In in vitro and in vivo models, the therapeutic potential of cannabinoids is broad. Results
support the therapeutic potential in lung, brain, thyroid, lymphoma, liver, skin, pancreas, uterus breast and prostate cancers.

 We intend to use the Cell-in-a-Box ® 
technology in combination with genetically modified cell lines designed to activate cannabinoid molecules for the treatment of diseases
and their related symptoms. Our initial target will be glioblastoma – a very difficult-to treat form of brain cancer. However, until
the FDA allows us to commence our clinical trial in LAPC and we are able to validate our Cell-in-a-Box ® encapsulation technology
in a clinical trial, we are not spending any further resources developing our Cannabis Program.

 14 

 The goal of the original research was to develop
methods for the identification, separation and quantification of constituents of Cannabis , some of which are prodrugs, which could
potentially be used in combination with the Cell-in-a-Box ® technology to treat cancer. After achieving this milestone,
we then went on to assess the synthesis of the patG gene and its incorporation into a vector, transfection of human embryonic kidney cells
using this vector and assessment of cannabinoic acid decarboxylase activity. We later identified an organism whose genome contains the
genetic code for production of an enzyme capable of activating a cannabinoid prodrug into its active cancer-killing form.

 Our Cannabis Program now has two primary areas
of focus. The first is evaluating the therapeutic potential of cannabinoids in our main “target” tumor – glioblastoma.
In laboratory research, we have confirmed that a purified cannabinoid showed a potent dose-dependent decrease in cell viability for various
cancers, suggesting that this cannabinoid exhibits significant anti-proliferative effects (stops the growth and multiplication of cancer
cells). This activity has been demonstrated in brain, pancreas, breast, lung, colon and melanoma cancer cells. The second area of focus
is in finding an enzyme capable of converting an inactive, side-effect-free, cannabinoid prodrug into its active cancer-killing form.

 Clinically, targeted cannabinoid-based chemotherapy
would be accomplished by implanting the encapsulated bio-engineered cells near the site of a tumor, along with administration of a cannabinoid
prodrug which would become activated at the site of the tumor by an enzyme produced by the encapsulated cells. We believe this could lead
to better efficacy than existing therapies with minimal treatment related adverse events.

 Impact of the COVID-19 Pandemic on Operations 

 The coronavirus SARS-Cov2 pandemic (“COVID-19”)
continues to cause uncertainty and significant, industry-wide delays in clinical trials. The availability of vaccines holds promise for
the future; however, new variants of the virus and potential waning immunity from vaccines may result in continued impact from COVID-19
in the future, which could adversely impact our operations. Although we are not yet in a clinical trial, we have filed an IND with the
FDA to commence a clinical trial in LAPC. While the IND has been placed on clinical hold by the FDA, we have assessed the impact of COVID-19
on our operations.

 As of the date of this Report, COVID-19 has had
an impact upon our operations and that impact is increasing. The impact relates to, among other things, delays in (i) completing studies
required by the FDA; (ii) manufacturing a new batch of CypCap™ for our planned clinical trial in LAPC; (iii) manufacturing syringes
of CypCaps™ for use in our Malignant Ascites Program; (iv) securing third party contractors to conduct various research and development
projects; and (v) disruptions in our supply chain.

 As a result of COVID-19, commencement of our planned
clinical trial to treat LAPC may be delayed beyond lifting of the clinical hold by the FDA should that occur. Also, enrollment may be
difficult for the reasons discussed above. In addition, after enrollment in the trial, if a patient contracts COVID-19 during his or her
participation in the trial or is subject to isolation or shelter in place restrictions, this may cause him or her to drop out of our clinical
trial, miss scheduled therapy appointments or follow-up visits or otherwise fail to follow the clinical trial protocol. If a patient is
unable to follow the clinical trial protocol or if the trial results are otherwise affected by the consequences of COVID-19 on patient
participation or actions taken to mitigate COVID-19 spread, the integrity of data from the clinical trial may be compromised or not be
accepted by the FDA. This could further adversely impact or delay our clinical development program if the FDA allows it to proceed.

 Clinical trials in the biopharma industry may
be delayed due to COVID-19. There are numerous reasons for these potential delays. For example, patients have shown a reluctance to enroll
or continue in a clinical trial due to fear of exposure to COVID-19 when they are in a hospital or doctor’s office. There are local,
regional, and state-wide orders and regulations restricting usual normal activity by people. These discourage and interfere with patient
visits to a doctor’s office if the visit is not COVID-19 related. Healthcare providers and health systems are shifting their resources
away from clinical trials toward the care of COVID-19 patients. The FDA and other healthcare providers are making product candidates for
the treatment of COVID-19 a priority over product candidates unrelated to COVID-19.

 It is highly speculative in projecting the effects
of COVID-19 on our proposed clinical development program and our company generally. The effects of COVID-19 may quickly and dramatically
change over time. Its evolution is difficult to predict, and no one can say with certainty when the pandemic will fully subside.

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 History of the Business 

 In 2013, we restructured our operations to focus
on biotechnology. On January 6, 2015, we changed our name from “Nuvilex, Inc.” to “PharmaCyte Biotech, Inc.” to
reflect the nature of our business.

 We are a biotechnology company focused on developing
and preparing to commercialize cellular therapies for cancer, diabetes, and malignant ascites using our live cell encapsulation technology.
This resulted from entering into the following agreements.

 Commencing in May 2011, we entered into a series
of agreements and amendments with SG Austria Pte. Ltd. (“SG Austria”) to acquire certain assets from SG Austria as well as
an exclusive, worldwide license to use, with a right to sublicense, the Cell-in-a-Box ® technology and trademark for the
development of therapies for cancer (“SG Austria APA”).

 In June 2013, we and SG Austria entered a Third
Addendum to the SG Austria APA (“Third Addendum”). The Third Addendum materially changed the transaction contemplated by the
SG Austria APA. Under the Third Addendum, we acquired 100% of the equity interests in Bio Blue Bird and received a 14.5% equity interest
in SG Austria. We paid: (i) $500,000 to retire all outstanding debt of Bio Blue Bird; and (ii) $1.0 million to SG Austria. We also paid
SG Austria $1,572,193 in exchange for a 14.5% equity interest of SG Austria. The transaction required SG Austria to return to us the 66,667
shares of our common stock held by SG Austria and for us to return to SG Austria the 67 shares of common stock of Austrianova we held.

 Effective as of the same date we entered the Third
Addendum, we and SG Austria also entered a Clarification Agreement to the Third Addendum (“Clarification Agreement”) to clarify
and include certain language that was inadvertently left out of the Third Addendum. Among other things, the Clarification Agreement confirmed
that the Third Addendum granted us an exclusive, worldwide license to use, with a right to sublicense, the Cell-in-a-Box ® 
technology and trademark for the development of therapies for cancer.

 With respect to Bio Blue Bird, Bavarian Nordic
A/S (“Bavarian Nordic”) and GSF-Forschungszentrum für Umwelt u. Gesundheit GmbH (collectively, “Bavarian Nordic/GSF”)
and Bio Blue Bird entered into a non-exclusive License Agreement (“Bavarian Nordic/GSF License Agreement”) in July 2005, whereby
Bio Blue Bird was granted a non-exclusive license to further develop, make, have made (including services under contract for Bio Blue
Bird or a sub-licensee, by Contract Manufacturing Organizations, Contract Research Organizations, Consultants, Logistics Companies or
others), obtain marketing approval, sell and offer for sale the clinical data generated from the pancreatic cancer clinical trials that
used the cells and capsules developed by Bavarian Nordic/GSF (then known as “CapCells™”) or otherwise use the licensed
patent rights related thereto in the countries in which patents had been granted. Bio Blue Bird was required to pay Bavarian Nordic a
royalty of 3% of the net sales value of each licensed product sold by Bio Blue Bird and/or its Affiliates and/or its sub-licensees to
a buyer. The term of the Bavarian Nordic/GSF License Agreement continued on a country-by-country basis until the expiration of the last
valid claim of the licensed patent rights.

 Bavarian Nordic/GSF and Bio Blue Bird amended
the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License Agreement”) to reflect
that: (i) the license granted was exclusive; (ii) a royalty rate increased from 3% to 4.5%; (iii) Bio Blue Bird assumed the patent prosecution
expenses for the existing patents; and (iv) to make clear that the license will survive as a license granted by one of the licensors if
the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions or declarations of insolvency.

 In June 2013, we acquired from Austrianova an
exclusive, worldwide license to use the Cell-in-a-Box ® technology and trademark for the development of a therapy for Type
1 and insulin-dependent Type 2 diabetes (“Diabetes Licensing Agreement”). This allows us to develop a therapy to treat diabetes
through encapsulation of a human cell line that has been genetically modified to produce, store and release insulin in response to the
levels of blood sugar in the human body.

 In October 2014, we entered into an exclusive,
worldwide license agreement with the UTS (“Melligen Cell License Agreement”) in Australia to use insulin-producing genetically
engineered human liver cells developed by UTS to treat Type 1 diabetes and insulin-dependent Type 2 diabetes. These cells, named “Melligen,”
were tested by UTS in mice and shown to produce insulin in direct proportion to the amount of glucose in their surroundings. In those
studies, when Melligen cells were transplanted into immunosuppressed diabetic mice, the blood glucose levels of the mice became normal.
In other words, the Melligen cells reportedly reversed the diabetic condition.

 16 

 In December 2014, we acquired from Austrianova
an exclusive, worldwide license to use the Cell-in-a-Box ® technology and trademark in combination with genetically modified
non-stem cell lines which are designed to activate cannabinoid prodrug molecules for development of therapies for diseases and their related
symptoms using of the Cell-in-a-Box ® technology and trademark (“Cannabis Licensing Agreement”). This allows
us to develop a therapy to treat cancer and other diseases and symptoms through encapsulation of genetically modified cells designed to
convert cannabinoids to their active form using the Cell-in-a-Box ® technology and trademark.

 In July 2016, we entered into a Binding Memorandum
of Understanding with Austrianova (“Austrianova MOU”). Pursuant to the Austrianova MOU, Austrianova will actively work with
us to seek an investment partner or partners who will finance clinical trials and further develop products for our therapy for cancer,
in exchange for which we, Austrianova and any future investment partner will each receive a portion of the net revenue from the sale of
cancer products.

 In October 2016, Bavarian Nordic/GSF and Bio Blue
Bird further amended the Bavarian Nordic License Agreement (“Second Amendment to Bavarian Nordic/GSF License Agreement”) in
order to: (i) include the right to import in the scope of the license; (ii) reflect ownership and notification of improvements; (iii)
clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement; (iv) provide rights to Bio Blue Bird
to the clinical data after the expiration of the licensed patent rights; and (v) change the notice address and recipients of Bio Blue
Bird.

 In May 2018, the Company entered into a series
of binding term sheet amendments (“Binding Term Sheet Amendments”). The Binding Term Sheet Amendments provide that our obligation
to make milestone payments to Austrianova is eliminated in their entirety under the: (i) Cannabis License Agreement; and (ii) the Diabetes
License Agreement, as amended. The Binding Term Sheet Amendments also provide that our obligation to make milestone payments to SG Austria
for therapies for cancer be eliminated in their entirety. In addition, the Binding Term Sheet Amendments also provides that the scope
of the Diabetes License Agreement is expanded to include all cell types and cell lines of any kind or description now or later identified,
including, but not limited to, primary cells, mortal cells, immortal cells and stem cells at all stages of differentiation and from any
source specifically designed to produce insulin for the treatment of diabetes.

 In addition, one of the Binding Term Sheet Amendments
provides that we will have a 5-year right of first refusal from August 30, 2017 in the event that Austrianova chooses to sell, transfer
or assign at any time during this period the Cell-in-a-Box ® technology, tradename and Associated Technologies (defined
below), intellectual property, trade secrets and know-how, which includes the right to purchase any manufacturing facility used for the
Cell-in-a-Box ® encapsulation process and a non-exclusive license to use the special cellulose sulfate utilized with the
Cell-in-a-Box ® encapsulation process (collectively, “Associated Technologies”); provided, however, that the
Associated Technologies subject to the right of first refusal do not include Bac-in-a-Box ® (which is used to encapsulate
bacteria). Additionally, for a period of one year from August 30, 2017 one of the Binding Term Sheet Amendments provides that Austrianova
will not solicit, negotiate or entertain any inquiry regarding the potential acquisition of the Cell-in-a-Box ® and its
Associated Technologies.

 The Binding Term Sheet Amendments further provide
that: (i) the royalty payments on gross sales as specified in the SG Austria APA, the Cannabis License Agreement and the Diabetes License
Agreement are changed to 4%; and (ii) the royalty payments on amounts received by us from sublicensees on sublicensees’ gross sales
under the same agreements are changed to 20% of the amount received us from our sublicensees, provided, however , that in the event
the amounts received by us from sublicensees is 4% or less of sublicensees’ gross sales, Austrianova will receive 50% of what we
receive (up to 2%) and then additionally 20% of any amount we receive over that 4%.

 One of the Binding Term Sheet Amendments requires
that we pay $900,000 to Austrianova ratably over a nine-month period in the amount of two $50,000 payments each month during the nine-month
period on the days of the month to be agreed upon between the parties, with a cure period of 20 calendar days after receipt by us of written
notice from Austrianova that we have failed to pay timely a monthly payment. As of April 30, 2020, the $900,000 amount has been paid in
full. The Binding Term Sheet Amendments also provide that Austrianova receives 50% of any other financial and non-financial consideration
received from our sublicensees of the Cell-in-a-Box ® technology.

 17 

 Goal and Strategies to Implement 

 Our goal is to become an industry-leading biotechnology
company using the Cell-in-a-Box ® technology as a platform upon which therapies for cancer, malignant ascites and diabetes
are developed and obtain marketing approval for these therapies from regulatory agencies in the U.S., the European Union, Australia and
Canada.

 Our strategies to implement our goal consist of
the following:

 · 
 Submission of our response to the FDA’s clinical hold and for the FDA to allow us to commence a clinical trial in LAPC; 

 · 
 Completion of preclinical studies and clinical trials that demonstrate the effectiveness of our product candidate in reducing the production and accumulation of malignant ascites fluid in the abdomen that is characteristic of pancreatic and other abdominal cancers; 

 · 
 Completion of preclinical studies and clinical trials that involve the encapsulation of the Melligen cells and genetically modified stem cells using the Cell-in-a-Box® technology to develop a therapy for Type 1 and insulin-dependent Type 2 diabetes; 

 · 
 Acquisition of contracts that generate revenue or provide research and development capital utilizing our sublicensing rights; 

 · 
 Further development of uses of the Cell-in-a-Box ® technology platform through contracts, licensing agreements and joint ventures with other companies; and 

 · 
 Completion of testing, expansion and marketing of existing and newly derived product candidates. 

 Market Opportunity and Competitive Landscape 

 The three areas we are developing for live cell
encapsulation-based therapies are cancer, diabetes and malignant ascites.

 The Cell-in-a-Box ® capsules are
comprised of cotton’s natural component - cellulose. Other materials used by competitors include alginate, collagen, chitosan, gelatin
and agarose. Alginate appears to be the most widely used of these. We believe the inherent strength and durability of our cellulose-based
capsules provides us with advantages over the competition. They do so with no evidence of rupture, damage, degradation, fibrous overgrowth
or immune system response. The cells within the capsules also remained alive and functioning during these studies. Other encapsulating
materials degrade in the human body over time, leaving the encapsulated cells open to immune system attack. Damage to surrounding tissues
has also been reported to occur over time when other types of encapsulation materials begin to degrade.

 The cells encapsulated using the Cell-in-a-Box ® 
technology can be frozen for extended periods of time. When thawed, the cells are recovered with approximately 85% viability. We are unaware
of any other cell encapsulation material that is capable of protecting their encapsulated cells to this degree. The implications of this
property of the Cell-in-a-Box ® technology are obvious - long-term storage of encapsulated cells and shipment of encapsulated
cells over long distances.

 We believe our live cell encapsulation technology
may have significant new advantages and opportunities for us in numerous and developing ways. For example:

 · 
 Cancerous diseases may be treated by placing encapsulated drug-converting cells that convert a chemotherapy prodrug near the cancerous tumor; 

 · 
 Confinement and maintenance of therapeutic cells that activate a chemotherapy prodrug may be placed at the site of implantation in a blood vessel near the cancerous tumor results in “targeted chemotherapy”; 

 · 
 Increased efficacy of a chemotherapy prodrug may allow for lower doses of the prodrug to be given to a patient, significantly reducing or even eliminating side effects from the chemotherapy; 

 · 
 Encapsulating genetically modified live cells has the potential for the treatment of systemic diseases of various types, including diabetes; 

 · 
 Multi-layered trade secret protection and marketing exclusivity for our technology exists and is being expanded; 

 · 
 Cell-in-a-Box ® capsules can prevent immune system attack of functional cells inside them without the need for immunosuppressive drug therapy; and 

 · 
 Promising data with the Cell-in-a-Box ® technology and the cells used with our technology from animal and initial human clinical trials. 

 18 

 Pancreatic cancer is increasing in most industrialized
countries. The American Cancer Society estimates that in 2022 there will be 62,210 people in the U.S. diagnosed with pancreatic cancer.
It also estimates 48,830 patients with pancreatic cancer will die in 2022. Pancreatic cancer accounts for about 3% of all cancers in the
U.S. and about 7% of all cancer deaths.

 Our goal is to satisfy a clear unmet medical need
for patients with LAPC whose tumors no longer respond after 4-6 months of treatment with the chemotherapy combination of Abraxane ®
 plus gemcitabine or the four-drug combination known as FOLFIRINOX. For these patients, there is currently no effective therapy.
We believe there will be no therapy comparable to our Cell-in-a-Box ® plus low dose of ifosfamide combination therapy when
it is used in these patients.

 We face intense competition in the field of treating
pancreatic cancer. There are dozens of startups, smaller biotech companies, big pharma, and several academic institutions and cancer centers
all trying to improve the outcome for pancreatic cancer patients. For example, in a single patient case report published June 2022 in
the New England Journal of Medicine, a study funded by the Providence Portland Medical Foundation in conjunction with the Earle A. Chiles
Research Institute reported objective regression of metastatic pancreatic cancer using genetically-engineered autologous T cells. There
are several drugs already available and in the pipelines of pharmaceutical companies worldwide, not the least of which is the combination
of the drugs of Abraxane ® and gemcitabine. This is the primary FDA-approved combination of drugs for treating advanced
pancreatic cancer. In Europe and in the U.S., the 4-drug combination FOLFIRINOX has also found use as a first-line treatment for advanced
pancreatic cancer. Some of our competitive strengths include the Orphan Drug Designation we have been granted by the FDA and the European
Medicines Agency for our pancreatic cancer therapy, our trade secrets, the patents we are seeking and the licensing agreements we have
that are described in this Report. Yet many of our competitors have substantially greater financial and marketing resources than we do.
They also have stronger name recognition, better brand loyalty and long-standing relationships with customers and suppliers. Our future
success will be dependent upon our ability to compete.

 We believe our product candidate for pancreatic
cancer has already shown promise through the completion of a Phase 1/2 and a Phase 2 clinical trial in advanced, inoperable pancreatic
cancer carried out in Europe by Bavarian Nordic in 1998 – 1999 and 2000, respectively.

 We have a number of competitors developing Cannabis -based
treatments for cancer. In February 2021, Jazz Pharmaceuticals Public Limited Company (“Jazz”), a neuroscience and oncology
focused company, acquired GW Pharmaceuticals, PLC for $7.2 billion. Jazz now has two approved cannabinoid extract-based products: Epidiolex ® 
(CBD) oral solution for the treatment of seizures associated with Lennox-Gastaut syndrome, Dravet syndrome or tuberous sclerosis complex,
and Sativex ® (THC/CBD) oromucosal spray for the treatment of severe multiple sclerosis spasticity. Sativex ® 
is currently being studied in conjunction with the Brain Tumour Charity and the UK National Health Service to examine effectiveness in
the treatment of recurrent glioblastoma brain tumor when used alongside the chemotherapeutic agent temozolomide. Jazz’s pipeline
indications include: neonatal hypoxic-ischemic encephalopathy, neuropsychiatry targets, autism spectrum disorders, epilepsy, spasticity
and undisclosed targets. Cannabis Science, Inc. (“CBIS”) has a number of indications in its product development pipeline,
all pre-clinical, the most advanced being for the treatment of oxidative stress, psychosis/anxiety, PTSD, and sleep deprivation. CBIS
also has plans to develop treatments for Stage 4 lung cancer and pancreatic cancer. CNBX Pharmaceuticals Inc. (previously Cannabics Pharmaceuticals,
Inc.) (“CNBX”) has a primary research focus on the development of cannabinoid therapies for the treatment of cancer, mainly
cancers of the gastrointestinal tract, skin, breast and prostate. CNBX’s other Cannabis -based areas of research include Alzheimer’s
disease, mental health conditions, and auto-immune diseases. Cannabotech Ltd. (“Cannabotech”), an Israeli company, in collaboration
with Haifa University, is studying an improved method for killing pancreatic and colon cancer cells using a botanical drug based on an
extract of the Cyathus striatus fungus and a cannabinoid extract. Cannabotech is also developing therapies for breast, lung and
prostate cancers.

 In contrast to the work being done by these companies, we plan to focus
on developing specific therapies based on chosen molecules rather than using Cannabis extracts. We intend to use the Cell-in-a-Box ® 
technology in combination with genetically -modified cell lines designed to activate cannabinoid molecules for the targeted treatment
of diseases and their related symptoms.

 The Centers for Disease Control and Prevention
estimates that in 2022 a total of 37.3 million people in the U.S. have been diagnosed with diabetes (11.3% of the U.S. population) and
another 8.5 million people (23.0% of adults) are undiagnosed. The diabetes market is estimated in the tens of billions of dollars, and
it continues to grow.

 19 

 The field of diabetes cell therapy development
is very competitive. There are numerous companies developing cell-based therapies for diabetes. These competitors include companies such
as ViaCyte, Inc. which has two stem cell-based product candidates in Phase 1/2 clinical trials for type 1 diabetes: PEC-Direct, which
is a pouch that is “open” to the surrounding vasculature and requires the use of immunosuppressive drugs, and PEC-Encap, which
is a pouch that contains the implanted cells and prevents contact with the vasculature and immune cells but still allows passage of nutrients
and proteins to travel between the cells inside the device and blood vessels which grow along the outside of the device. PEC-Encap is
reported to generally prevent immune rejection and immune sensitization. Conceptually, PEC-Encap has similarities with Cell-in-a-Box®.
Other companies developing some form of encapsulation-based diabetes therapy include Vertex Pharmaceuticals Inc., Defymed, Diatranz Otsuka
Limited, Seraxis, Inc., Unicyte AG, Sernova Corp., Betalin Therapeutics Ltd., Novo Nordisk, Beta-O2 Technologies Ltd., Eli Lilly &
Co. in collaboration with Sigilon Therapeutics, Inc. and the Diabetes Research Institute Foundation.

 Although such competition exists in the diabetes
space, we believe these other companies are developing encapsulation-based therapies using materials and methodologies that produce capsules
or devices that are far less robust than ours or that are associated with other problems, such as extremely short shelf-life of the product
and/or fibrotic overgrowth of their encapsulation products when implanted in the body. We believe these properties are not characteristic
of the Cell-in-a-Box ® capsules. Our product candidate for diabetes has shown promise. Completed research studies have resulted
in positive responses in animal models using the Melligen cells. We believe we are in a strong competitive position considering our unique
encapsulation technology and the genetically modified cells that we have the exclusive worldwide license to use in most industrialized
countries.

 Malignant ascites occurs when cancer cells irritate the peritoneum
causing an overproduction of ascitic fluid which causes the abdomen to swell as fluid accumulates. It is more likely to develop in patients
who have ovarian, uterine, cervical, colorectal, stomach, pancreatic, breast and liver cancers. In most patients, development of malignant
ascites is a sign of advanced disease and poor prognosis. Malignant ascites can result in impairment to the quality of life of a cancer
patient. In addition to abdominal distention, pain and difficulty breathing, it may also cause nausea, vomiting, early satiety, lower
extremity edema, weight gain and reduced mobility. These symptoms can interfere with a patient’s ability to eat, to walk and to
perform daily activities. They also reduce a patient’s ability to withstand anti-cancer therapies, potentially reducing survival.

 We are developing a therapy to delay the production
and accumulation of malignant ascites using our cancer therapy (i.e., ifosfamide converting encapsulated live cells). Preclinical studies
are underway in Germany, and, if successful, we plan to seek FDA approval to conduct a Phase 1 study. Typical treatments for malignant
ascites include paracentesis, percutaneously implanted catheters, peritoneal ports and peritoneovenous shunts. These treatments can be
painful, ineffective and expensive. There is currently no available treatment that delays the production and accumulation of malignant
ascites fluid, and we know of no competitors in this area.

 Previous Clinical Trials Using Encapsulation
Technology 

 20 

 Two previous clinical trials using what is now
our encapsulation technology were carried out in Europe by Bavarian Nordic in 1998-1999 and 2000, respectively. Both employed the combination
of the cellulose-based live cell encapsulation technology with low doses of the anticancer drug ifosfamide. However, the FDA may not accept
the results of these trials for various reasons, none of which are in our control. In such event, we may have to conduct a Phase 1 trial,
not a Phase 2b trial, or even further pre-clinical animal trials.

 The results of the two clinical trials have been
published in the peer-reviewed scientific literature and are summarized as follows:

 Phase 1/2 Clinical Trial 

 Dates of Trial and Location : This clinical
trial was opened on July 28, 1998 and closed on September 20, 1999. It was carried out at the Division of Gastroenterology, University
of Rostock, Germany.

 Identity of Trial Sponsors : The clinical
trial was sponsored by Bavarian Nordic.

 Trial Design : The clinical trial was an
open-label, prospective, single-arm and single center trial.

 Patient Information : A total of 17 patients
were enrolled in the clinical trial (51 were screened). A total of 14 patients were treated because two of the original 17 patients developed
severe infections before the start of the clinical trial and had to be treated by other means. For the other patient, angiography was
not successful, causing the patient to be disqualified from participating in the clinical trial.

 Trial Criteria : Criteria for enrolling
in the clinical trial included inoperable pancreatic adenocarcinoma Stage 3-4 (according to IUCC criteria) as determined by histology
and measured by computerized tomography (“CT”) scan and the patients must not have had any prior chemotherapy for their disease.

 Duration of Treatment and Dosage Information :
On day 0, celiac angiography was performed and 300 (in 13 patients, 250 in one) of the capsules containing the ifosfamide-activating cells
were placed by supraselective catheterization of an artery leading to the tumor. Each capsule (~0.7 mm in diameter) contained about 20,000
cells. The cells overexpressed CYP2B1 (a cytochrome P450 isoform), which catalyzed the conversion of the anticancer prodrug ifosfamide
into its “cancer-killing” form.

 On day 1, patients were monitored for evidence
of any clinically relevant adverse reactions, e.g., allergy and/or pancreatitis. On days 2-4, each patient received low-dose (1 g/m 2 
body surface area) ifosfamide in 250 ml of normal saline administered systemically as a 1-hour infusion. This was accompanied by a 60%
dose equivalent of the uroprotective drug Mesna, which is used to reduce the side effects of ifosfamide chemotherapy, given as three intravenous
injections. This regimen was repeated on days 23-25 for all but two patients who received only one round of ifosfamide. A total of only
two cycles of ifosfamide were given to the remainder of the patients.

 Specific Clinical Endpoints : Median survival
time from the time of diagnosis, the percentage of patients who survived one year or more and the quality of life of each patient were
examined in the clinical trial.

 Observational Metrics Utilized and Actual Results
Observed : Standard National Cancer Institute (“NCI”) criteria for evaluating tumor growth were used to assess results:

 · 
 stable disease (tumors 50-125% of initial size) (“SD”); 

 · 
 partial remission (more than 50% reduction in tumor volume) (“PR”); and 

 · 
 minor response (tumor reduction of between 25% and 50%) (“MR”). 

 Effects of the treatment on tumor size were measured
by CT scans. Control CT scans were scheduled for weeks 10 and 20, respectively. During the final visit, a control angiography was performed.
On the initial CT scan, the scan demonstrating the largest diameter of the primary tumor was identified and the area measured. Using appropriate
landmarks, an identical scan was used for comparison. CT scans were evaluated by two unrelated radiologists, one of whom was not involved
in the clinical trial. After formally finishing the clinical trial, patients were followed on an ambulatory basis with visits once every
three months.

 21 

 Toxicity was measured based on World Health Organization
(“WHO”)/NCI guidelines on common toxicity criteria. The WHO and the NCI use standardized classifications of the adverse events
associated with the use of cancer drugs. In cancer clinical trials, these are used to determine if a drug or treatment causes unwanted
side effects (“Adverse Events”) when used under specific conditions. For example, the most commonly used classification is
known as the “Common Terminology Criteria for Adverse Events” developed by the NCI in the U.S. Most clinical trials carried
out in the U.S. and the United Kingdom code their Adverse Event. This system consists of five grades. These are: 1 = mild; 2 = moderate;
3 = severe; 4 = life-threatening; 5 = death. In the studies reported for Cell-in-a-Box ® plus low-dose ifosfamide combination
in pancreatic cancer patients, the study investigators noted 11 Serious Adverse Events (“SAEs”) in 7 patients, none of which
were believed to be treatment-related.

 Each patient’s need for pain medication
and the quality of life (“QOL”) was monitored using a questionnaire established for diseases of the pancreas. A QOL questionnaire
for cancer patients, QLQ-C30, had been validated in several languages, but the module for pancreatic cancer per se was still under
development at the time of the study with respect to reliability, sensibility against changes and multicultural validation. Accordingly,
a version of the core questionnaire and a German QOL scale (published in 1995) for pancreatic cancer patients was used. QOL data were
documented independently from safety and efficacy data by having patients complete an independent questionnaire. Assessment of QOL data
did not interfere with routine documentation of Adverse Events reported by the patients. QOL questionnaires were analyzed according to
the criteria developed by the European Organization for Research and Treatment of Cancer (“EORTC”). As used in the description
of the QOL results discussed in the published report of the Phase 1/2 trial of the Cell-in-a-Box ® plus low-dose ifosfamide
combination in pancreatic cancer patients, the questionnaire was used to assess the QOL of patients undergoing treatment. The QOL was
analyzed in a similar manner to the way that a QOL questionnaire developed by the EORTC is usually analyzed. This latter questionnaire
is known as EORTC QLQ-C30. QOL data were available from the baseline evaluation for 14 patients and for analysis of change for 8 patients.

 A clinical benefit score based on variables, including
the “Karnofsky Score” and body weight, was determined. Pain and analgesic consumption were calculated from the QOL questionnaires.
The Karnofsky Score is a scale that is used to attempt to quantify a cancer patient’s general well-being and activities of daily
life. It is often used to judge the suitability of patients for inclusion into clinical trials. As a clinical trial progresses, a patient’s
Karnofsky Score can change. It is also used to assess a patient’s QOL as a clinical trial progresses. The scale starts at 100 (normal,
no complaints, no evidence of disease) and decreases in decrements of 10 down through 50 (requires considerable assistance and frequent
medical care) all the way to 10 (moribund, fatal processes progressing rapidly) and finally to 0 (deceased). Pain intensity was measured
on a visual analog scale ranging from 0 (no pain) to 100 (the most intensive pain imaginable) in increments of 10. Analgesic consumption
was assessed using a separate scale in which 0 indicated no regular consumption of analgesics and 25, 50 and 100 indicated administration
of non-steroidal anti-inflammatory drugs or opiates several times per year, per month or per week, respectively.

 The primary tumor did not grow in any of the 14
patients. Two patients had a PR; 12 patients exhibited SD; and two patients showed an MR.

 Median survival time of patients in this clinical
trial was 39 weeks. The one-year survival rate was 36%.

 Within the 20-week study period, three patients
died from disease progression (on days 9, 85 and 132). Upon postmortem examination, the patient who died on day 9 from recurrent pulmonary
embolism was found to have extensive tumor necrosis.

 The chemotherapy regimen was well tolerated. No
toxicity beyond Grade 2 (moderate adverse effect) was detected in any of the 14 patients.

 Eleven SAEs were seen in 7 patients during the
study period. None of them were treatment-related (due to capsule implantation or ifosfamide administration). These SAEs were attributed
to underlying disease and/or the effects associated with the disease.

 Implanting the capsules did not result in any
obvious allergic or inflammatory response, and no patients developed pancreatitis during the trial. Some patients exhibited elevated amylase
levels, presumably due to tumor infiltration of the pancreas and limited obstructive chronic pancreatitis. However, no further increase
in amylase levels was seen after angiography and capsule implantation.

 In accordance with the report of the study, only
one Adverse Event (increased lipase activity on day 15 after installation of the capsules), which was a Grade 1 Adverse Event, “may”
have been linked to implanting the capsules.

 22 

 Ten of 14 patients experienced a “clinical
benefit” which means either no increase or a decrease in pain intensity. For 7 of the patients, this was confirmed by their analgesic
consumption. None of these “benefited” patients registered an increased analgesic usage either in terms of dosage or WHO levels.

 None of the patients showed an increased Karnofsky
Score after treatment. However, 7 of the 14 patients had stable Karnofsky Scores at the week 10 assessment. For 4 of these patients, their
indices were still stable at the week 20 assessment.

 One patient’s body weight increased at both
weeks 10 and 20 and another patient showed increased weight at week 10 (this patient withdrew from the clinical trial and no week 20 weight
was obtained). Two patients showed stable body weights at week 10, one of whom dropped out of the clinical trial and the other showed
weight loss at week 20.

 Two scenarios were used to establish the overall
integrative clinical benefit response, where each patient was given a +2 score for an improved value, a +1 score for a stable value and
a -1 score for a worsened value for each of four criteria (pain, analgesic consumption, Karnofsky Score and body weight) as compared to
the relevant week 0 values.

 The “worst case scenario” required
a pain relief score of 20 points or more to be judged an improvement and a decrease in the Karnofsky Score of 10 points or more to indicate
worsening. Using this scenario, 50% or 7 of the treated patients experienced clinical benefit; 21.4% or 3 patients were neutral (benefits
were offset by impairments); and 28.6% or 4 patients had no clinical benefit. The latter included those passing away before the median
survival time.

 In the “best case scenario,” a pain
relief score of 10 points or more was an improvement. A decrease in Karnofsky Score of 20 points or more was considered a worsening. In
this scenario, 71.4% or 10 patients had clinical benefit, 14.2% of patients showed neither benefit nor deterioration and 14.3% patients
had no benefit.

 Standard of Care : At the time this clinical
trial was conducted, only one FDA-approved treatment for advanced, inoperable pancreatic cancer was available. That was the drug gemcitabine,
first approved by the FDA in 1996.

 An examination of the prescribing information
for gemcitabine reflects that the median survival seen in the Phase 3 pancreatic cancer clinical trial for gemcitabine was approximately
23 weeks (5.7 months). The percentage of one-year survivors was approximately 18%. In a Phase 3 clinical trial of Celgene’s Abraxane ® 
plus gemcitabine combination that was approved by the FDA in September 2013, the median survival time for patients was about 8.5 months
and the percentage of one-year survivors was approximately 35%.

 The treatment with gemcitabine of patients with
pancreatic cancer is often associated with severe side effects. According to the prescribing information for gemcitabine, for use to treat
pancreatic cancer the recommended dose is 1000 mg/m 2 given intravenously over 30 minutes. The schedule of administration is
weeks 1-8, weekly dosing for 7 weeks followed by one-week rest and then after week 8, weekly dosing on days 1, 8 and 15 of 28-day cycles.

 Reductions in the doses of gemcitabine are necessitated
by the occurrence of myelosuppression. Permanent discontinuation of gemcitabine is necessary for any of the following:

 · 
 unexplained dyspnea or other evidence of severe pulmonary toxicity; 

 · 
 severe hepatotoxicity; 

 · 
 hemolytic-uremic syndrome; 

 · 
 capillary leak syndrome; and 

 · 
 posterior reversible encephalopathy syndrome. 

 Gemcitabine should be withheld, or its dose reduced
by 50% for other severe (Grade 3 or 4) non-hematologic toxicity until that toxicity is resolved.

 Conclusions : In the opinion of the trial’s
investigators, in this Phase 1/2 clinical trial the use of the combination of Cell-in-a-Box ® capsules plus low-dose ifosfamide
was both safe and effective. This assessment was not based on the opinion of any drug regulatory authority and does not guarantee that
that this assessment will be maintained in any late-phase clinical trial or that any drug regulatory authority will ultimately determine
that the Cell-in-a-Box ® plus low-dose ifosfamide combination is safe and effective for the purposes of granting marketing
approval.

 23 

 In the Phase 1/2 clinical trial only a small number
of patients were evaluated. Statistical parameters were not used in the published reports of the Phase 1/2 trial to validate the anticancer
efficacy of the Cell-in-a-Box ® plus low-dose ifosfamide combination in patients with advanced, inoperable pancreatic cancer.
In the opinion of the investigators, the results indicate a trend towards efficacy; accordingly, the results should not be viewed as absolute
numbers. It should be noted, however, that because the results were not statistically significant, any observations of efficacy must be
weighed against the possibility that the results were due to chance alone. The purpose of the clinical trial was not to obtain data so
that marketing approval could be obtained from regulatory authorities. Rather, the clinical trial allowed the investigators to determine
whether the Cell-in-a- Box ® capsules plus low-dose ifosfamide combination holds promise as a therapy for advanced pancreatic
cancer. In the cancer arena, Phase 1/2 clinical trials are intended to: (i) establish the safety of the drug or treatment being investigated;
and (ii) determine if a trend towards efficacy exists. In accordance with FDA regulations and guidance, as well as similar regulations
and guidance from other regulatory authorities in countries other than the U.S., we realize that a large, multicenter, randomized, comparative
study needs to be conducted and the results from such a trial would have to confirm the results from this previous Phase 1/2 trial before
an application for marketing approval could be filed with the FDA or EMA.

 If our product candidate is approved by the regulatory
agencies, we believe it could provide a significant benefit to those with this devastating and deadly disease, not only in terms of lifespan
but also in terms of increased quality of life. Also, we believe that success of the live cell encapsulation technology in the pancreatic
cancer setting may lead to its successful use in developing therapies for other forms of solid cancerous tumors after preclinical studies
and clinical trials have been completed.

 Phase 2 Clinical Trial 

 Location of Trial : The clinical trial was
opened on November 16, 1999 and closed on December 1, 2000. This clinical trial was carried out at four centers in two countries in Europe.
These were in Berne, Switzerland, and in Rostock, Munich and Berlin, Germany.

 Trial Sponsor : The clinical trial was sponsored
by Bavarian Nordic.

 Trial Design : This was an open-label, prospective,
single-arm multi-site study.

 Patient Information : All 13 patients enrolled
in the trial were treated. Twelve patients exhibited Stage 4 disease. The remaining patient had Stage 3 disease. Ten of the 13 patients
exhibited metastases.

 Duration of Treatment and Dosage Information :
The number of capsules implanted varied from 221 to 300 with a mean of 244. On day 1, patients were monitored for any allergic reactions
to capsule implantation and/or pancreatitis. The administration schedule of the treatment was the same as in the earlier Phase 1/2 trial,
except that in this Phase 2 trial the dose of ifosfamide was doubled to 2 g/m 2 . In the Phase1/2 trial, it was 1g/m 2 .
On days 2-4, patients received 2 g/m 2 in normal saline as a one-hour infusion. The urinary tract protector Mesna was also given
as 3 intravenous injections. This regimen was repeated on days 23-25.

 Specific Clinical Endpoints : The primary
endpoint of the trial was to determine response rate as defined by SD, PR and MR as well as the clinical benefit (Karnofsky score) of
the treatment. The timing of the tumor size measurements and determination of tumor sizes by CT scans were done by independent radiologists.
A secondary endpoint was to determine time to progression, tumor response, duration of partial or complete remission, length of symptom-free
survival, survival time and quality of life. Another secondary endpoint was to evaluate the safety and tolerability of the treatment regimen,
with attention being paid to the appearance of pancreatitis or immediate allergic reactions.

 Safety Analysis of Angiography, Capsule Implantation
and Chemotherapy : On average, angiography took approximately 40 minutes. For 5 of the patients in this clinical trial, more than one
blood vessel had to be used for placement of the capsules. The administration of the capsules was well tolerated. There were no signs
of allergic reactions or hemorrhagic cystitis after implantation of the capsules. Two patients had increased levels of serum lipase at
baseline. After additional measurements, these were not considered to be clinically relevant. The dose of ifosfamide (2 g/m 2 )
used was found to be toxic in most patients. This resulted in one patient having to reduce the ifosfamide dose in the second of the two
cycles of treatment with the drug. The most common toxic effects were nausea, vomiting, malaise, anorexia and mild hematuria.

 24 

 Serious Adverse Events : A total of 16 SAEs
were documented in eight patients, including 3 SAEs leading to death. None of these SAEs were attributed to placement of the encapsulated
cells. One patient experienced neurological impairment (drowsiness, nocturnal enuresis, mild somnolence) which was attributed to treatment
with the 2 g/m 2 dose of ifosfamide. All patients experienced between 5 and 19 SAEs. Six SAEs were rated as life-threatening;
10.2% were rated as severe; 28.7% were rated as moderate; and 53.7% were rated as mild. None of the SAEs was thought to be related to
placement of the encapsulated cells, but 44% were related to the administration of ifosfamide at the elevated dose given. Most frequent
SAEs were alopecia, anemia, leucopenia, nausea and vomiting or encephalopathy. Other SAEs were new or worse symptoms of the patients’
underlying disease. A total of 65 events met the NCI’s common toxicity criteria. Of these, 46.2% had Grade 1, 40% had Grade 2, 9.2%
had Grade 3 and 4.6% had Grade 4 toxicities.

 Tumor Reductions and Patient Survival Results :
The size of the primary tumor was measured before starting the live cell encapsulation plus ifosfamide therapy and at weeks 10 and 20
post-treatment. No PRs were observed, but 4 patients exhibited tumor size reductions, 4 patients showed tumor growth and the remaining
5 patients had SD over the “follow-up” period after chemotherapy.

 The median survival of patients was 40 weeks.
Most the survival benefit was shown early during the entire observation period. However, as time progressed, these patients succumbed
at the same rate as historical controls. This observation suggested to the investigators that prolongation of the survival benefit might
be achieved if additional courses of ifosfamide chemotherapy were given. The one-year survival rate was 23%. It was thought that this
may be attributable to the higher dose of ifosfamide used in this clinical trial.

 Quality of Life : An assessment of the quality
of life of the patients was performed in this clinical trial. Quality of life data were available for all the patients. According to this
QOL assessment, although pain during the night decreased, patients felt themselves to be less attractive and lost interest in sex. No
additional improvements in patients’ quality of life were observed.

 Conclusions : The opinions of the investigators
were as follows: (i) the lack of “problems” associated with the implanted encapsulated cells was noted as in the Phase 1/2
trial; (ii) administering more than two courses of treatment with ifosfamide might have beneficial effects on survival; and (iii) since
doubling the dose of ifosfamide from that used in the Phase 1/2 trial had no beneficial antitumor or survival effect but was associated
with increased side effects from the treatment, the dose of ifosfamide to be used in combination with the encapsulated cells for all future
trials should be 1 g/m 2 .

 Manufacturing 

 We are outsourcing all cell growth, processing
and encapsulation services needed for our future proposed clinical trials of the encapsulated cell-based cancer and diabetes product candidates.
The Cell-in-a-Box ® encapsulation will be done by Austrianova at its cGMP-compliant manufacturing facility in Bangkok, Thailand.
The encapsulation process is proprietary to Austrianova. Austrianova is experiencing significant supply chain disruptions. We believe
it may also be experiencing liquidity issues. If Austrianova is unwilling or unable to perform such manufacturing for us, we are not aware
of any replacement manufacturer for the Cell-in-a-Box ® technology.

 In March 2014, we entered a Manufacturing Framework
Agreement with Austrianova (“Manufacturing Framework Agreement”) pursuant to which Austrianova will encapsulate the genetically
-engineered live cells that will be used for our product candidate for the treatment of cancer. We have also contracted with Austrianova
to provide encapsulated insulin-producing cells for our preclinical studies in diabetes. At the appropriate time, we intend to enter into
a similar manufacturing framework agreement with Austrianova for the encapsulated cells we will need for our product candidate for the
treatment of diabetes.

 Government Regulation and Product Approval 

 As a development -stage biotechnology company
that operates in the U.S., we are subject to extensive regulation by the FDA and other federal, state, and local regulatory agencies.
The federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations set forth, among other things, requirements
for the research, testing, development, manufacture, quality control, safety, effectiveness, approval, labeling, storage, record keeping,
reporting, distribution, import, export, advertising, promotion, marketing and sale of our product candidates. Although the discussion
below focuses on regulation in the U.S., we anticipate seeking approval for, and marketing of, our product candidates in other countries.
Our activities in other countries will also be the subject of extensive regulation, although there can be important differences with the
U.S. The process of obtaining regulatory marketing approvals and the subsequent compliance with appropriate federal, state, local and
foreign statutes and regulations will require the expenditure of substantial time and financial resources and may not be successful.

 25 

 Regulatory approval, when obtained, may be limited
in scope which may significantly limit the uses for which a product may be placed into the market. Further, approved drugs or biologic
products, as well as their manufacturers, are subject to ongoing post-marketing review, inspection and discovery of previously unknown
issues regarding the safety and efficacy of such products or the manufacturing or quality control procedures used in their production.
These may result in restrictions on their manufacture, sale or use or in their withdrawal from the market. Any failure or delay by us,
our suppliers of manufactured drug product, collaborators or licensees in obtaining regulatory approvals could adversely affect the marketing
of our product candidates and our ability to receive product revenue, license revenue or profit-sharing payments. For more information,
see Item 1A. “Risk Factors.”

 U.S. Government Regulation 

 The FDA is the main regulatory body that controls
pharmaceuticals and biologics in the U.S. Its regulatory authority is based in the FDCA and the Public Health Service Act. Pharmaceutical
products and biologics are also subject to other federal, state and local statutes and regulations. A failure to comply with any requirements
during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions. These sanctions
could include the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold on clinical trials, refusal
to approve pending marketing applications or supplements, withdrawal of approval, warning letters, product recalls, product seizures,
total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution.

 The steps required before a new drug or biologic
may be marketed in the U.S. generally include:

 · 
 completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations; 

 · 
 satisfactory completion of an FDA inspection of the manufacturing facilities at which the investigational product candidate is produced to assess compliance with cGMP and proof that the facilities, methods and controls are adequate; 

 · 
 submission to the FDA of an IND to support human clinical testing in the U.S.; 

 · 
 approval by an IRB at each clinical site before a trial may be initiated at that site; 

 · 
 performance of adequate and well-controlled clinical trials in accordance with federal regulations and with Good Clinical Practices (“GCP”) to establish the safety and efficacy of the investigational product candidate for each target indication; 

 · 
 Submission to the FDA of a New Drug Application (“NDA”) or a drug or Biologics License Application (“BLA”) for a biologic such as the therapies we are developing; 

 · 
 satisfactory completion of an FDA Advisory Committee review, if applicable; and 

 · 
 FDA review and approval of the NDA or BLA. 

 Clinical Development 

 Before a drug or biologic product may be given
to humans, it must undergo preclinical testing. Preclinical tests include laboratory evaluation of a product candidate’s chemical
and biological activities and animal studies to assess potential safety and efficacy in humans. The results of these studies must be submitted
to the FDA as part of an IND which must be reviewed by the FDA for safety and other considerations before testing can begin in humans.

 An IND is a request for authorization from the
FDA to administer an investigational product candidate to humans. This authorization is required before interstate shipping and administration
can commence of any new drug or biologic product destined for use in humans in the U.S. A 30-day waiting period after the submission of
each IND is required before commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND within
this 30-day period after submission of the IND, the clinical trial proposed in the IND may begin. A clinical trial involves the administration
of the investigational product candidate to patients under the supervision of qualified investigators following GCP standards. These international
standards are meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and
monitors. A clinical trial is conducted under protocols that detail the parameters to be used in monitoring safety, and the efficacy criteria
to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part
of the IND.

 26 

 The product candidates in our pipeline are at
various stages of preclinical development. The path to regulatory approval includes three phases of clinical trials in which we collect
data to support an application to regulatory agencies to allow us to ultimately market a product for treatment of a specified disease.
There are many difficulties and uncertainties inherent in research and development of new products, and these can conceivably result in
a high rate of failure. To bring a drug or biologic from the discovery phase to regulatory approval, and ultimately to market, takes years
and the costs to do so are significant. Failure can occur at any point in the process, including after the product is approved, based
on post-marketing factors. New product candidates that appear promising in development may fail to reach the market or may have only limited
commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved
uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or
intellectual property rights of others. Uncertainties in the approval process of the regulatory agencies can result in delays in product
launches and lost market opportunities. Consequently, it is exceedingly difficult to predict which products will ultimately be submitted
for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits. Successful
results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a product candidate.

 Phase 1 Clinical Trial : A Phase 1 clinical
trial begins when a regulatory agency, such as the FDA, allows initiation of the clinical investigation of a new product candidate. The
clinical trial studies a product candidate’s safety profile and may include a preliminary determination of a product candidate’s
safe dosage range. The Phase 1 clinical trial can also determine how a drug is absorbed, distributed, metabolized and excreted by the
body and, therefore, the potential duration of its action.

 Phase 2 Clinical Trial : A Phase 2 clinical
trial is conducted on a limited number of patients; these patients can have a specific targeted disease. An initial evaluation of the
product candidate’s effectiveness on patients is performed. Additional information on the product candidate’s safety and dosage
range is obtained. For many diseases, a Phase 2 clinical trial can include up to several hundred patients.

 Phase 3 Clinical Trial : A Phase 3 clinical
trial is typically rigorously controlled, conducted in multiple centers and involves a larger target patient population that can consist
of from several hundred to thousands of patients (depending on the disease being studied) to ensure that study results are statistically
significant. During a Phase 3 clinical trial, physicians monitor patients to determine efficacy and to gather further information on safety.
A Phase 3 clinical trial is designed to generate all the clinical data necessary to apply for marketing approval to a regulatory agency.

 The decision to terminate development of an investigational
product candidate may be made by either a health authority body, such as the FDA, by IRB/ethics committees, or by the sponsor for various
reasons. The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or impose other sanctions, if it
believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to
the patients enrolled in the trial. In some cases, a clinical trial is overseen by an independent group of qualified experts organized
by the trial sponsor, or the clinical monitoring board. This group provides authorization for whether a trial may move forward at designated
checkpoints. These decisions are based on the limited access to data from the ongoing trial. The suspension or termination of development
can occur during any phase of a clinical trial if it is determined that the patients are being exposed to an unacceptable health risk.
There are also requirements for the registration of an ongoing clinical trial of a product candidate on public registries and the disclosure
of certain information pertaining to the trial, as well as clinical trial results after completion.

 A sponsor may be able to request a special protocol
assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design
and analysis that will form the primary basis of an efficacy claim. A sponsor meeting the regulatory criteria may make a specific request
for a SPA and provide information regarding the design and size of the proposed clinical trial. A SPA request must be made before the
proposed trial begins. All open issues must be resolved before the trial begins. If a written agreement is reached, it will be documented
and made part of the record. The agreement will be binding on the FDA and may not be changed by the sponsor or the FDA after the trial
begins, except with the written agreement of the sponsor and the FDA or if the FDA determines that a substantial scientific issue essential
to determining the safety or efficacy of the product candidate was identified after the testing began. A SPA is not binding if new circumstances
arise, and there is no guarantee that a study will ultimately be adequate to support an approval even if the study is subject to a SPA.
Having a SPA does not guarantee that a product candidate will receive FDA approval.

 Assuming successful completion of all required
testing in accordance with all applicable regulatory requirements, detailed investigational product candidate information is submitted
to the FDA in the form of an NDA or BLA to request regulatory approval for the product in the specified indication.

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 New Drug Applications and Biologic Licensing
Applications 

 To obtain approval to market a drug or biologic
in the U.S., a marketing application must be submitted to the FDA that provides data establishing the safety and effectiveness of the
product candidate for the proposed indication. The application includes all relevant data available from pertinent preclinical studies
and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating
to the product’s chemistry, manufacturing and controls, as well as the proposed labeling for the product, among other things. Data
can come from company-sponsored clinical trials intended to test the safety and effectiveness of a product, or from several alternative
sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality
and quantity to establish the safety and effectiveness of the investigational product candidate to the satisfaction of the FDA.

 In most cases, the NDA, in the case of a drug,
or BLA, in the case of a biologic, must be accompanied by a substantial user fee. There may be some instances in which the user fee is
waived. The FDA will initially review the NDA or BLA for completeness before it accepts the application for filing. The FDA has 60 days
from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold
determination that it is sufficiently complete to permit substantive review. After the NDA or BLA submission is accepted for filing, the
FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs and BLAs. During a normal review
cycle, a product is given an FDA action or Prescription Drug User Fee Act (“PDUFA”) date within 12 months of the submission
if the submission is accepted. The FDA can extend this review by three months to consider certain late-submitted information or information
intended to clarify information already provided in the submission. The FDA reviews the NDA or BLA to determine, among other things, whether
the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP
standards. The FDA may refer applications for novel product candidates which present difficult questions of safety or efficacy to an advisory
committee. This is typically a panel that includes clinicians and other experts for review, evaluation and a recommendation as to whether
the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but
it considers such recommendations carefully when making decisions.

 Before approving an NDA or a BLA, the FDA will
inspect the facilities at which the product is manufactured. The FDA will not approve the product candidate unless it determines that
the manufacturing processes and facilities follow cGMP requirements and are adequate to assure consistent production of the product within
required specifications. Manufacturers of human cellular or tissue-based biologics also must comply with the FDA’s Good Tissue Practices
(“GTP”), as applicable, and with the general biological product standards. After the FDA evaluates the NDA or BLA and the
sponsor company’s manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response
letter generally outlines the deficiencies in the submission and may require substantial additional testing or information for the FDA
to reconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of
the NDA or BLA, the FDA will issue an approval letter. Notwithstanding the submission of any requested additional information, the FDA
ultimately may decide that the application does not satisfy the regulatory criteria for approval.

 The time to final marketing approval can vary
from months to years, depending on several variables. These variables can include such things as the disease type, the strength and complexity
of the data presented, the novelty of the target or compound, risk-management approval and whether multiple rounds of review are required
for the agency to evaluate the submission. After evaluating the NDA or BLA and all related information, including the advisory committee
recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval
letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions
that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order
for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application
does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the
FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug or biologic with specific
prescribing information, which may include contraindications, warnings or precautions, for certain indications. After approval, some types
of changes to the approved product, such as adding new indications and additional labeling claims, are subject to further testing requirements
and FDA review and approval.

 28 

 Post Approval Regulations 

 After regulatory approval of a drug or biologic
is obtained, a company is required to comply with certain post-approval requirements. For example, as a condition of approval of an NDA
or BLA, the FDA may require post-marketing testing, including a Phase 4 clinical trial and surveillance to further assess and monitor
the product’s safety and effectiveness after commercialization has begun. Also, as a holder of an approved NDA or BLA, a company
is required to: (i) report adverse reactions and production problems to the FDA; (ii) provide updated safety and efficacy information;
and (iii) comply with requirements concerning advertising and promotional labeling for any of its products. Also, quality control and
manufacturing procedures must continue to conform to cGMP standards after approval to assure and preserve the long-term stability of the
drug or biological product. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP standards, which imposes
extensive procedural and substantive record keeping requirements. Also, changes to the manufacturing process are strictly regulated, and,
depending on the significance of the change, may require prior FDA approval before being implemented. In addition, FDA regulations require
investigation and correction of any deviations from cGMP standards and impose reporting and documentation requirements upon a company
and any third-party manufacturers that a company may decide to use. Manufacturers must continue to expend time, money and effort in production
and quality control to maintain compliance with cGMP standards and other aspects of regulatory compliance.

 Disclosure of Clinical Trial Information 

 A sponsor of a clinical trial of certain FDA-regulated
products, including prescription drugs and biologics, is required to register and disclose certain clinical trial information on a public
website. Information related to the product, patient population, phase of investigation, study sites and investigator involved, and other
aspects of the clinical trial are made public as part of the registration. A sponsor is also obligated to disclose the results of a clinical
trial after completion. Disclosure of the results can be delayed until the product or new indication being studied has been approved.
Competitors may use this publicly available information to gain knowledge regarding the design and progress of our development programs.

 Advertising and Promotion 

 The FDA and other federal regulatory agencies
tightly regulate the marketing and promotion of drugs and biologics through, among other things, standards and regulations for direct-to-consumer
advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities
involving the internet. A product cannot be commercially promoted before it is approved. After approval, product promotion can include
only those claims relating to safety and effectiveness that are consistent with the labeling approved by the FDA. Healthcare providers
are permitted to prescribe drugs or biologics for “off-label” uses (uses not approved by the FDA and therefore not described
in the drug’s labeling) because the FDA does not regulate the practice of medicine. However, FDA regulations impose stringent restrictions
on manufacturers’ communications regarding off label uses. Broadly speaking, a manufacturer may not promote a product for off-label
use, but may engage in non-promotional, balanced communication regarding off-label use under specified conditions. Failure to comply with
applicable FDA requirements and restrictions in this area may subject a company to adverse publicity and enforcement action by the FDA,
the U.S. Department of Justice (“DOJ”), the Office of the Inspector General of Health & Human Services (“HHS”)
and state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including
civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes drug and biologics.

 U.S. Patent Extension and Marketing Exclusivity 

 The Biologics Price Competition and Innovation
Act (“BPCIA”) amended the PHSA to authorize the FDA to approve similar versions of innovative biologics, commonly known as
biosimilars. A competitor seeking approval of a biosimilar must file an application to establish its product as highly like an approved
innovator biologic, among other requirements. The BPCIA bars the FDA from approving biosimilar applications for 12 years after an innovator
biological product receives initial marketing approval.

 29 

 Depending upon the timing, duration and specifics
of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term
extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”). The Hatch-Waxman
Act permits a patent extension term of up to five years, as compensation for patent term lost during product development and the FDA regulatory
review process. However, patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the product’s
approval date. The length of the patent term extension is related to the length of time the drug, biologic or medical device is under
regulatory review. It is calculated as half of the testing phase (the time between the IND submission becoming effective and the NDA,
BLA or premarket approval (“PMA”) submission) and all the review phase (the time between NDA, BLA or PMA submission and approval)
up to a maximum extension of five years. The time can be shortened if the FDA determines that the applicant did not pursue approval with
due diligence. Only one patent applicable to an approved product is eligible for the extension, and the application for the extension
must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office (“USPTO”), in consultation with
the FDA, reviews and approves the application for any patent term extension. Similar provisions are available in Europe and other foreign
jurisdictions to extend the term of a patent that covers an approved drug, biologic or medical device. In the future, if any of our product
candidates receive FDA approval, we expect to apply for patent term extension on patents covering those products that may be eligible
for such patent term restoration.

 Foreign Corrupt Practices Act 

 The Foreign Corrupt Practices Act (“FCPA”)
prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or
indirectly, to any foreign official, political party or candidate for influencing any act or decision of the foreign entity to assist
the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the U.S.
to comply with accounting provisions requiring such companies to maintain books and records that accurately and fairly reflect all transactions
of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls
for international operations. In Europe, and throughout the world, other countries have enacted anti-bribery laws and/or regulations similar
to the FCPA.

 European and Other International Government
Regulation 

 In addition to regulations in the U.S., we will
be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales
and distribution of our product candidates. There is no guarantee that a potential treatment will receive marketing approval or that decisions
on marketing approvals or treatment indications will be consistent across geographic areas. 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. Some countries outside of the U.S. have a similar process to that of the FDA in
that such countries require the submission of a clinical trial application (“CTA”) much like the IND prior to the commencement
of human clinical trials. In Europe, for example, a CTA must typically be submitted to each country’s national health authority
and an independent ethics committee, much like the FDA and an IRB. Once the CTA is approved in accordance with a country’s requirements,
a clinical trial may proceed in that particular country. In the EEA, the EU Clinical Trial Regulation (“CTR”) enables sponsors
since 31 January 2022 to submit one CTA via a single online platform, the Clinical Trials Information System (CTIS), to obtain approval
for a clinical trial in several EEA countries.

 To obtain regulatory approval to commercialize
a new drug or biologic under the European Union regulatory systems, we must submit a marketing authorization application (“MAA”)
with the European Medicines Agency, or “EMA”, the EEA authority in charge of medicinal products, or with a national drug approval
authority. National and European Union marketing authorization procedures are similar to FDA approval procedures.

 While the requirements governing the conduct of
clinical trials are broadly harmonized across the EEA, in particular due to the CTR, the regulatory regimes applicable to pricing and
reimbursement vary from country to country. Internationally, clinical trials are generally required to be conducted in accordance with
GCP standards, applicable regulatory requirements of each jurisdiction and the medical ethics principles that have their origin in the
Declaration of Helsinki.

 30 

 Orphan Drug Status 

 In accordance with laws and regulations pertaining
to regulatory agencies, a sponsor may request that the regulatory agencies designate a drug or biologic intended to treat a “Rare
Disease or Condition” as an “Orphan Drug.” For example, in the U.S., a “Rare Disease or Condition” is defined
as one which affects less than 200,000 people in the U.S., or which affects more than 200,000 people but for which the cost of developing
and making available the product is not expected to be recovered from sales of the product in the U.S. Upon the approval of the first
NDA or BLA for a drug or biologic designated as an Orphan Drug for a specified indication, the sponsor of that NDA or BLA is entitled
to 7 years of exclusive marketing rights in the U.S. for the drug or biologic for the particular indication unless the sponsor cannot
assure the availability of sufficient quantities to meet the needs of persons with the disease. In Europe, this exclusivity is 10 years.
However, Orphan Drug status for an approved indication does not prevent another company from seeking approval of a drug that has other
labeled indications that are not under orphan or other exclusivities. An Orphan Drug may also be eligible for federal income tax credits
for costs associated with the disease state, the strength and complexity of the data presented, the novelty of the target or compound,
the risk-management approval and whether multiple rounds of review are required for the agency to evaluate the submission. There is no
guarantee that a potential treatment will receive marketing approval or that decisions on marketing approvals or treatment indications
will be consistent across geographic areas. Our product candidate for pancreatic cancer received Orphan Drug status in the U.S. and European
Union. Unlike the U.S., in the European Union, to benefit from market exclusivity, a medicine must maintain its orphan designation at
the time of marketing authorization in addition to when the designation is applied.

 Special FDA Expedited Review and Approval Programs 

 The FDA has various programs, including fast track
designation, accelerated approval, priority review, and breakthrough therapy designation, which are intended to expedite or simplify the
process for the development and FDA review of drugs or biologics that are intended for the treatment of serious or life-threatening diseases
or conditions and demonstrate the potential to address unmet medical needs. The purpose of these programs is to provide important new
drugs or biologics to patients earlier than under standard FDA review procedures.

 To be eligible for a fast-track designation, the
FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition
and demonstrates the potential to address an unmet medical need. The FDA will determine that a product will fill an unmet medical need
if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy
or safety factors. The FDA may review sections of the NDA or BLA for a fast-track product on a rolling basis before the complete application
is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections
of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first
section of the NDA or BLA.

 The FDA may give a priority review designation
to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists. A priority review means that
the goal for the FDA to review an application is six months, rather than the standard review of ten months under current PDUFA guidelines.
Under the new PDUFA agreement, these six and ten-month review periods are measured from the “filing” date rather than the
receipt date for NDAs for new molecular entities, which typically adds approximately two months to the timeline for review and decision
from the date of submission. Most products that are eligible for fast-track designation are also likely to be considered appropriate to
receive a priority review.

 In addition, products tested for their safety
and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments
may be eligible for accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing
that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint
that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on irreversible
morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability
or lack of alternative treatments. As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval
to perform post-marketing studies to verify and describe the predicted effect on IMM or other clinical endpoint, and the drug may be subject
to accelerated withdrawal procedures.

 31 

 Moreover, under the provisions of the Food and
Drug Administration Safety and Innovation Act, or FDASIA, passed in July 2012, a sponsor can request designation of a product candidate
as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one
or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the
drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial
treatment effects observed early in clinical development. Drugs designated as breakthrough therapies are also eligible for accelerated
approval. The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development
and review of an application for approval of a breakthrough therapy.

 Even if a product qualifies for one or more of
these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period
for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.

 Accelerated Approval Pathway 

 The FDA may grant accelerated approval to a drug
for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based
upon a determination that the drug or biologic has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.
The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that
can be measured earlier than an effect on IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, considering
the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated
approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

 For the purposes of accelerated approval, a surrogate
endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict
clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly
than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely
to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on
intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic
effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding
that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

 The accelerated approval pathway is most often
used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical
benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has
been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally
to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to
demonstrate a clinical or survival benefit.

 The accelerated approval pathway is usually contingent
on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe
the drug’s clinical benefit. As a result, a drug candidate approved on this basis is subject to rigorous post-marketing compliance
requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure
to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw
the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are
subject to prior review by the FDA.

 Under a centralized procedure in the European
Union, the maximum timeframe for the evaluation of a MAA is 210 days (excluding “clock stops,” when additional written or
oral information is to be provided by the applicant in response to questions asked by the Committee for Medicinal Products for Human Use
(“CHMP”)). Accelerated evaluation might be granted by the CHMP in exceptional cases, for example, when a medicinal product
is expected to be of a major public health interest, which takes into consideration: (i) the seriousness of the disease (e.g., heavy disabling
or life-threatening diseases) to be treated; (ii) the absence or insufficiency of an appropriate alternative therapeutic approach; and
(iii) anticipation of high therapeutic benefit. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150
days.

 32 

 Healthcare Reform 

 The United States and many foreign jurisdictions
have enacted or proposed legislative and regulatory changes affecting the healthcare system. The United States government, state legislatures
and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid
healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded
prescription drugs.

 At the state level, legislatures have increasingly
passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases,
designed to encourage importation from other countries and bulk purchasing. We expect that additional federal, state and foreign healthcare
reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare
products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or
additional pricing pressures. Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status
of any drug products for which we obtain regulatory approval. In the U.S. and markets in other countries, sales of any products for which
we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors. Third-party
payors include government health administrative authorities, managed care providers, private health insurers and other organizations.
The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the
price or reimbursement rate that the payor will pay for the drug product. Third-party payors may limit coverage to specific drug products
on an approved list, or formulary, which might not include all the FDA-approved drugs for a certain indication. Third-party payors are
increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition
to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in to demonstrate the medical necessity and cost-effectiveness
of our product candidates, in addition to the costs required to obtain FDA approvals. Our product candidates, if approved, may not be
considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that
an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price
levels sufficient to realize an appropriate return on our investment in product development.

 Different pricing and reimbursement schemes exist
in other countries. In the European Union governments influence the price of pharmaceutical products through their pricing and reimbursement
rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Some jurisdictions
operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed upon.
To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness
of a product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines but
monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs, has become
more intense.

 The marketability of any product for which we
receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage
and reimbursement. Also, an increasing emphasis on managed care in the U.S. has increased and will continue to increase the pressure on
pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement
status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement
rates may be implemented in the future.

 Other U.S. Healthcare Laws and Compliance Requirements 

 In the U.S., our activities are potentially subject
to additional regulation by various federal, state and local authorities in addition to the FDA, including the CMS, other divisions of
the HHS and its Office of Inspector General, the Office for Civil Rights that has jurisdiction over matters relating to individuals’
privacy and protected health information, the DOJ, individual U.S. Attorney offices within the DOJ and state and local governments.

 33 

 The federal Anti-Kickback Statute prohibits, among
other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, to induce or
in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable
under Medicare, Medicaid or other federally financed healthcare program. The Anti-Kickback Statute has been interpreted broadly to proscribe
arrangements and conduct where only one purpose of the remuneration between the parties was to induce or reward referrals. The term remuneration
has been interpreted broadly to include anything of value. This statute has been interpreted to apply to arrangements between pharmaceutical
manufacturers, on one hand, and prescribers, purchasers and formulary managers on the other. Although there are several statutory exemptions
and regulatory safe harbors protecting some business arrangements from prosecution, the exemptions and safe harbors are drawn narrowly
and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they
do not qualify for an exemption or safe harbor. Our practices may not in all cases meet all the criteria for safe harbor protection from
federal Anti-Kickback Statute liability. Failure to meet all the requirements of an applicable safe harbor or statutory exemption, however,
does not make the arrangement or conduct per se unlawful under the Anti-Kickback Statute; instead, in such cases, the legality
of the arrangement would be evaluated on a case-by-case basis based on a consideration of all the facts and circumstances to ascertain
the parties’ intent. Moreover, the intent standard under the Anti-Kickback Statute was amended by the Affordable Care Act to a stricter
standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it to have
committed a violation.

 In addition, the Affordable Care Act codified
case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false
or fraudulent claim for purposes of the federal False Claims Act, as discussed below. The federal Civil Monetary Penalties Law imposes
penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to
a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or
fraudulent.

 The federal False Claims Act prohibits any person
from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using
or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. Through a
modification made to the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or
property presented to the U.S. government. Pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly
providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies
have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved—and
thus non-reimbursable—uses.

 The Federal Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit knowingly and willfully executing a scheme
to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or
covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment
for healthcare benefits, items or services. Also, many states have additional similar fraud and abuse statutes or regulations that apply
to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the type of payor.

 In addition, we may be subject to data privacy
and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, imposes requirements
relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s
privacy and security standards directly applicable to “business associates,” such as independent contractors or agents of
covered entities that receive or obtain protected health information with providing a service on behalf of a covered entity. HITECH also
increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons.
It also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal
HIPAA laws and seek attorney’s fees and costs associated with pursuing these actions. In addition, state laws govern the privacy
and security of health information in specified circumstances, many of which differ from each other in significant ways and may not have
the same effect - thus complicating compliance efforts.

 34 

 We may be subject to other state and federal privacy
laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security, laws that
place specific requirements on certain types of activities, such as data security and texting, and laws requiring holders of personal
information to maintain safeguards and to take certain actions in response to a data breach. EEA countries, the United Kingdom, Switzerland
and other jurisdictions have also adopted data protection laws and regulations, which impose significant compliance obligations.

 In the EEA, the collection and use of personal
data, including clinical trial data, is governed by the provisions of the General Data Protection Regulation (“GDPR”). The
GDPR became effective on May 25, 2018, repealing its predecessor directive and increasing responsibility and liability of pharmaceutical
and medical device companies in relation to the processing of personal data of EU data subjects. The GDPR, together with national legislation,
regulations and guidelines of the EU member states governing the processing of personal data, impose strict obligations and restrictions
on the ability to collect, use and transfer personal data, including health data from clinical trials and adverse event reporting. In
particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates, the information
provided to the individuals, the transfer of personal data out of the EEA, security breach notifications, security and confidentiality
of the personal data and imposition of substantial potential fines for breaches of the data protection obligations. The United Kingdom
has retained the GDPR following Brexit and supplemented it by the UK Data Protection Act 2018 (“UK GDPR”). National or local
data protection laws or regulations may apply in addition to the (UK) GDPR. Furthermore, European data protection authorities may interpret
the (UK) GDPR and national or local laws differently, and they may impose additional requirements, which add to the complexity of processing
personal data in or from the EEA or United Kingdom. Guidance on implementation and compliance practices are often updated or otherwise
revised.

 The federal Physician Payments Sunshine Act under
the Affordable Care Act and its implementing regulations also require that certain manufacturers of drugs, devices, biologics and medical
supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions,
to report information related to certain payments or other transfers of value made or distributed to physicians, certain other health
care professionals, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians,
health care professionals, and teaching hospitals. It also requires reporting annually certain ownership and investment interests held
by physicians and their immediate family members and payments or other “transfers of value” made to such physician owners.
Failure to submit timely, accurately and completely the required information may result in civil monetary penalties of up to, as adjusted
in 2021, an aggregate of $189,692 per year and up to an aggregate of $1,264,622 million per year for “knowing failures”. Manufacturers
were required to begin collecting data on August 1, 2013 and submit reports on aggregate payment data to the government for the first
reporting period of August 1, 2013 to December 31, 2013, by March 31, 2014. They are also required to report detailed payment data for
the first reporting period and submit legal attestation to the accuracy of such data by June 30, 2014. Thereafter, manufacturers must
submit reports by the 90th day of each subsequent calendar year. CMS made all reported data publicly available starting on September 30,
2014. Certain states also mandate implementation of compliance programs, impose additional restrictions on pharmaceutical manufacturer
marketing practices and/ or require the tracking and reporting of gifts, compensation and other remuneration to healthcare providers and
entities.

 Because of the breadth of these laws and the narrowness
of available statutory and regulatory exemptions, it is possible that some of our business activities could be subject to challenge under
one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other
governmental regulations that apply to us, we may be subject to penalties. These include criminal and civil monetary penalties, damages,
fines, imprisonment, exclusion from participation in government programs, injunctions, recall or seizure of products, total or partial
suspension of production, denial or withdrawal of pre-marketing product approvals, private “qui tam” actions brought by individual
whistleblowers in the name of the government or refusal to allow us to enter supply contracts and the curtailment or restructuring of
our operations. Any of these could adversely affect our ability to operate our business and our results of operations. To the extent any
of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance,
applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance
programs and reporting of payments or transfers of value to healthcare professionals.

 35 

 Controlled Substances Regulation 

 Our product candidates involving Cannabis 
contain controlled substances, as defined in the federal Controlled Substances Act of 1970 (“CSA”). The CSA and its implementing
regulations establish a “closed system” of regulations for controlled substances. The CSA imposes registration, security,
recordkeeping and reporting, storage, manufacturing, distribution, importation and other requirements under the oversight of the U.S.
Drug Enforcement Administration (“DEA”). The DEA is the federal agency responsible for regulating controlled substances. It
requires those individuals or entities that manufacture, import, export, distribute, research, or dispense controlled substances to comply
with the regulatory requirements to prevent the diversion of controlled substances to illicit channels of commerce. The DEA categorizes
controlled substances into one of five schedules—Schedule I, II, III, IV or V—with varying qualifications for listing in each
schedule. Although cannabis is legal in the State of North Carolina, we had to obtain a Schedule I license for our research with our research
university partner (University of Northern Colorado) that relies on federal grants. Schedule I substances have a high potential for abuse,
have no currently accepted medical use in treatment in the U.S. and lack accepted safety for use under medical supervision. They may be
used only in federally -approved research programs and may not be marketed or sold for dispensing to patients in the U.S. Pharmaceutical
products having a currently accepted medical use that are otherwise approved for marketing may be listed as Schedule II, III, IV or V
substances, with Schedule I substances presenting the highest potential for abuse and physical or psychological dependence. Schedule V
substances present the lowest relative potential for abuse and dependence. The regulatory requirements are more restrictive for Schedule
II substances than Schedule III substances. For example, all Schedule II drug prescriptions must be signed by a physician, physically
presented to a pharmacist in most situations and cannot be refilled. Following FDA approval of a drug containing a Schedule I controlled
substance, that substance must be rescheduled as a Schedule II, III, IV or V substance before it can be marketed. On November 17, 2015,
H.R. 639, Improving Regulatory Transparency for New Medical Therapies Act, passed through both houses of Congress. On November 25, 2015,
the bill was signed into law. The law removes uncertainty associated with timing of the DEA rescheduling process after FDA approval. Specifically,
it requires DEA to issue an “interim final rule,” pursuant to which a manufacturer may market its product within 90 days of
FDA approval. The law also preserves the period of orphan marketing exclusivity for the full seven years such that this period only begins
after DEA scheduling. This contrasts with the previous situation whereby the orphan “clock” began to tick upon FDA approval,
even though the product could not be marketed until DEA scheduling was complete.

 Facilities that manufacture, distribute, import
or export any controlled substance must register annually with the DEA. The DEA registration is specific to the location, activity and
controlled substance schedule. For example, separate registrations are required for importation and manufacturing activities, and each
registration authorizes which schedules of controlled substances the registrant may handle. However, certain coincident activities are
permitted without obtaining a separate DEA registration, such as distribution of controlled substances by the manufacturer that produces
them.

 The DEA inspects all manufacturing facilities
to review security, recordkeeping, reporting and handling prior to issuing a controlled substance registration. The specific security
requirements vary by the type of business activity and the schedule and quantity of controlled substances handled. The most stringent
requirements apply to manufacturers of Schedule I and Schedule II substances. Required security measures commonly include background checks
on employees and physical control of controlled substances through storage in approved vaults, safes and cages, and through use of alarm
systems and surveillance cameras. An application for a manufacturing registration as a bulk manufacturer for a Schedule I or II substance
must be published in the Federal Register and is open for 30 days to permit interested persons to submit comments, objections or requests
for a hearing. A copy of the notice of the Federal Register publication is forwarded by DEA to all those registered, or applicants for
registration, as bulk manufacturers of that substance.

 Once registered, manufacturing facilities must
maintain records documenting the manufacture, receipt and distribution of all controlled substances. Manufacturers must submit periodic
reports to the DEA of the distribution of Schedule I and II controlled substances, Schedule III narcotic substances and other designated
substances. Registrants must also report any controlled substance thefts or significant losses and must obtain authorization to destroy
or dispose of controlled substances. As with applications for registration as a bulk manufacturer, an application for an importer registration
for a Schedule I or II substance must also be published in the Federal Register, which remains open for 30 days for comments. Imports
of Schedule I and II controlled substances for commercial purposes are generally restricted to substances not already available from domestic
supplier or where there is not adequate competition among domestic suppliers. In addition to an importer or exporter registration, importers
and exporters must obtain a permit for every import or export of a Schedule I and II substance or Schedule III, IV and V narcotic, and
submit import or export declarations for Schedule III, IV and V non-narcotics. In some cases, Schedule III non-narcotic substances may
be subject to the import/export permit requirement, if necessary, to ensure that the U.S. complies with its obligations under international
drug control treaties.

 36 

 For drugs manufactured in the U.S., the DEA establishes
annually an aggregate quota for substances within Schedules I and II that may be manufactured or produced in the U.S. based on the DEA’s
estimate of the quantity needed to meet legitimate medical, scientific research and industrial needs. This limited aggregate amount of
 Cannabis that the DEA allows to be produced in the U.S. each year is allocated among individual companies, which, in turn, must
annually apply to the DEA for individual manufacturing and procurement quotas. The quotas apply equally to the manufacturing of the active
pharmaceutical ingredient and production of dosage forms. The DEA may adjust aggregate production quotas and individual manufacturing
or procurement quotas from time to time during the year, although the DEA has substantial discretion in whether to make such adjustments
for individual companies.

 The states also maintain separate controlled substance
laws and regulations, including licensing, recordkeeping, security, distribution and dispensing requirements. State authorities, including
boards of pharmacy, regulate use of controlled substances in each state. Failure to maintain compliance with applicable requirements,
particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material
adverse effect on our business, operations and financial condition. The DEA may seek civil penalties, refuse to renew necessary registrations,
or initiate proceedings to revoke those registrations. In certain circumstances, violations could lead to criminal prosecution.

 Patents, Intellectual Property and Trade Secrets 

 Intellectual property and patent protection are
of paramount importance to our business, as are the trade secrets and other strategies we have employed with Austrianova to protect the
proprietary Cell-in-a-Box ® technology. Although we believe we take reasonable measures to protect our intellectual property
and trade secrets and those of Austrianova, we cannot guarantee we will be able to protect and enforce our IP or obtain patent protection
for our product candidates as needed. We license technology and trademarks relating to three areas: (i) live cell encapsulation with cells
that express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules; (ii)
treatment of solid cancerous tumors and (ii) encapsulation of cells for producing retroviral particles for gene therapy. We also have
exclusive licensing rights to patents, trademarks and know-how using Cell-in-a-Box ® technology in the diabetes field and
in the treatment of diseases and related conditions using cannabinoids.

 Litigation may be required to protect our product
candidates, intellectual property rights or to determine the validity and scope of the proprietary rights of others. Establishment, maintenance
and enforcement of our intellectual property utilizes financial and operational resources. In addition, the possibility exists that our
intellectual property could be discovered to be owned by others, be invalid or be unenforceable - potentially bringing unforeseen challenges
to us.

 Intellectual Property Agreements 

 The following agreements are a material component
of our intellectual property:

 · 
 We are a party to the Bavarian Nordic/GSF License Agreement pursuant to which Bavarian Nordic/GSF are the licensors and Bio Blue Bird, our wholly owned subsidiary, is the licensee. The Bavarian Nordic/GSF License Agreement was signed in July 2005 and amended in December 2006. Pursuant to the Bavarian Nordic/GSF License, the licensee is granted an exclusive license to use Bavarian Nordic’s clinical data and know-how for encapsulating genetically modified human cells to treat cancer. The licensors have rights to terminate the license if the annuity and upkeep fees are not paid to Bavarian Nordic, there is not proper reporting or there is not a clearly documented effort to commercialize this technology. The term of the Bavarian Nordic/GSF License Agreement expired on March 27, 2017. 

 · 
 In October 2016, Bavarian Nordic/GSF and Bio Blue Bird amended the Bavarian Nordic/GSF License Agreement to include, among other things, the right to import within the scope of the license, reflect ownership and notification of improvements, clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement and provide rights to Bio Blue Bird to the clinical data and know-how after the expiration of the licensed patent rights. 

 · 
 The Diabetes Licensing Agreement provides us with an exclusive worldwide license, with a right to sublicense, to use the Cell-in-a-Box® trademark and its associated technology with genetically modified or non-modified non-stem cell lines and induced pluripotent stem (“iPS”) cells designed to produce insulin or other critical components for the treatment of diabetes. 

 37 

 · 
 The Cannabis Licensing Agreement provides us with an exclusive worldwide license, with a right to sublicense, to use the Cell-in-a-Box® trademark and its associated technology with genetically modified non-stem cell lines which are designed to convert cannabinoids to their active form to develop therapies for diseases and their related symptoms. 
 
 · 
 We entered into a Binding Term Sheet with SG Austria and Austrianova pursuant to which the parties reached an agreement to amend certain provisions in the SG Austria APA, the Diabetes Licensing Agreement and the Cannabis Licensing Agreement. 
 
 · 
 We entered into the amendments contemplated by the Binding Term Sheet Amendments. The Binding Term Sheet Amendments provide that our obligation to make milestone payments to Austrianova will be eliminated in their entirety under the: (i) Cannabis License Agreement; and (ii) the Diabetes License Agreement, as amended. The Binding Term Sheet Amendments also provides that our obligation to make milestone payments to SG Austria pursuant to the SG Austria APA, as amended and clarified, is eliminated in their entirety. One of the Binding Term Sheet Amendments also provides that the scope of the Diabetes License Agreement is expanded to include all cell types and cell lines of any kind or description now or later identified, including, but not limited to, primary cells, mortal cells, immortal cells and stem cells at all stages of differentiation and from any source specifically designed to produce insulin for the treatment of diabetes. 
 
 · 
 In addition, one of the Binding Term Sheet Amendments provides that we have a 5-year right of first refusal from August 30, 2017 in the event that Austrianova chooses to sell, transfer or assign at any time during this period the Cell-in-a-Box® technology, tradename and Associated Technologies; provided, however, that the Associated Technologies subject to the right of first refusal do not include Bac-in-a-Box. 
 
 · 
 The Binding Term Sheet Amendments further provide that: (i) the royalty payments on gross sales as specified in the SG Austria APA, the Cannabis License Agreement and the Diabetes License Agreement are changed to 4%; and (ii) the royalty payments on amounts received by us from sublicensees on sublicensees’ gross sales under the same agreements are changed to 20% of the amount received by us from our sublicensees, provided, however, that in the event the amounts received by us from sublicensees is 4% or less of sublicensees’ gross sales, Austrianova will receive 50% of what we receive (up to 2%) and then additionally 20% of any amount we receive over that 4%. 

 · 
 The Binding Term Sheet Amendments also provide that Austrianova will receive 50% of any other financial and non-financial consideration received from our sublicensees of the Cell-in-a-Box® technology. 

 · 
 
 The Melligen Cell License Agreement provides
us with an exclusive worldwide license, with a right to sublicense, to use genetically modified human cells that have been modified to
comprise pancreas islet cell glucokinase for use in developing a therapy for diabetes. The Melligen cells are patent protected in the
U.S. and Europe, which expire in August 2028, subject to any applicable patent term adjustment or extension that may be available.
 
 Material Agreements 

 Third Addendum to the SG Austria APA 

 In June 2013, we and SG Austria entered the Third
Addendum and the Clarification Agreement. The Third Addendum requires us to make the following payments for the purchased assets; these
payments were timely made in full under the payment deadlines set forth in the Third Addendum:

 · 
 A $60,000 payment due under the SG Austria APA; 

 · 
 A payment of Stamp Duty estimated to be $10,000-17,000 to the Singapore Government; 

 · 
 $500,000 to be used to pay off the existing debt of Bio Blue Bird; and 

 · 
 $1,000,000 to SG Austria. 

 38 

 Pursuant to the Third Addendum, we agreed to and
have entered a manufacturing agreement with SG Austria for the manufacture of the pancreatic cancer clinical trial product to treat LAPC.
The Manufacturing Framework Agreement requires us to pay Austrianova a one-time manufacturing setup fee in the amount of $647,000, of
which 50% is required to be paid on the effective date of the Manufacturing Framework Agreement and 50% is required to be paid three months
later. We have paid the full amount of the manufacturing setup fee.

 The Manufacturing Framework Agreement also requires
us to pay a fee for producing the final encapsulated cell product of $647 per vial of 300 capsules after production, with a minimum purchased
batch size of 400 vials of any Cell-in-a-Box ® product. The fees under the Manufacturing Framework Agreement are subject
to annual increases according to the annual inflation rate in the country in which the encapsulated cell products are manufactured. We
placed and have received an order to produce 400 vials for our clinical trial to treat LAPC. Austrianova has been paid the full amount
for the order.

 The Third Addendum also requires the Company to
make future royalty and milestone payments as follows:

 · 
 Two percent royalty on all gross sales received by us or our affiliates; 

 · 
 Ten percent royalty on gross revenues received by us or our affiliates from a sublicense or right to use the patents or the licenses granted by us or our affiliates; 

 · 
 Milestone payments of $100,000 within 30 days after enrollment of the first human patient in the first clinical trial for each product; $300,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial for each product; and $800,000 within 60 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA in Europe, or its equivalent based on the country in which it is accepted for each product; and 

 · 
 Milestone payments of $50,000 due 30 days after enrollment of the first veterinary patient in the first trial for each product and $300,000 due 60 days after having a BLA, a NDA or a MAA or its equivalent approved based on the country in which it is accepted for each veterinary product. 

 On May 14, 2018, we entered into amendments to
the Third Addendum. For a full description of these amendments, see Item 1. “History of the Business.”

 Diabetes Licensing Agreement 

 Under the Diabetes Licensing Agreement, we are
required to make a payment of $2,000,000 in two equal payments of $1,000,000 each. We made our first $1,000,000 payment on October 30,
2013. Our second payment of $1,000,000 was made on February 25, 2014.

 The Diabetes Licensing Agreement requires us to
pay Austrianova, pursuant to a manufacturing agreement to be entered between the parties, a one-time manufacturing setup fee in the amount
of approximately $600,000, of which 50% is required to be paid on the signing of a manufacturing agreement for a product and 50% is required
to be paid three months later. In addition, the Diabetes Licensing Agreement requires us to pay a manufacturing production fee, which
is to be defined in the manufacturing agreement, for producing the final encapsulated cell product of approximately $600.00 per vial of
300 capsules after production, with a minimum purchased batch size of 400 vials of any Cell-in-a-Box ® encapsulation-based
product. All costs for encapsulated cell products will be subject to an annual increase equal to the published rate of inflation in the
country of manufacture of the vials.

 39 

 The Diabetes Licensing Agreement requires us to
make future royalty and milestone payments as follows:

 · 
 Ten percent royalty of gross sales of all products we sell; 

 · 
 Twenty percent royalty of the amount received by us from a sub-licensee on its gross sales; and 

 · 
 Milestone payments of $100,000 within 30 days of beginning the first pre-clinical experiments using the encapsulated cells; 

 · 
 $500,000 within 30 days after enrollment of the first human patient in the first clinical trial; $800,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial and; 

 · 
 $1,000,000 within 90 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA in Europe, or its equivalent based on the country in which it is accepted for each product. 

 The license under the Diabetes Licensing Agreement,
as amended, may be terminated and all rights will revert to Austrianova if any of the following milestone events do not occur within the
following timeframes, subject to all the necessary and required research having been successful and the relevant product being sufficiently
prepared to enter a clinical trial:

 · 
 If we fail to enter a research program with the technology in the scope of the license providing a total funding equal to or greater than $400,000 within three years of June 25, 2013, the effective date of the Diabetes Licensing Agreement (we have met this requirement); or 

 · 
 If we fail to enter a clinical trial or its equivalent for a product within seven years of the effective date of the Diabetes Licensing Agreement. 

 In May 2018, we entered into amendments to the
Diabetes Licensing Agreement. For a full description of these amendments, see Item 1. “History of the Business.”

 Cannabis Licensing Agreement 

 Pursuant to the Cannabis Licensing Agreement,
we acquired from Austrianova an exclusive worldwide license to use the Cell-in-a-Box ® trademark and its associated technology
with genetically modified non-stem cell lines which are designed to activate cannabinoids to develop therapies involving Cannabis 
with a right to sublicense . 

 Under the Cannabis Licensing Agreement, we are
required to pay Austrianova an initial upfront payment of $2,000,000 (“Upfront Payment”). We have the right to make periodic
monthly partial payments of the Upfront Payment in amounts to be agreed upon between the parties prior to each such payment being made.
Under the Cannabis Licensing Agreement, the Upfront Payment must be paid in full by no later than June 30, 2015. The parties amended the
Cannabis Licensing Agreement twice pursuant to which the balance of the Upfront Payment is to be paid by June 30, 2016. We have paid the
Upfront Payment of $2,000,000 in full.

 The Cannabis Licensing Agreement requires us to
pay Austrianova, pursuant to a manufacturing agreement to be entered between the parties, a one-time manufacturing setup fee in the amount
of $800,000, of which 50% is required to be paid on the signing of a manufacturing agreement for a product and 50% is required to be paid
three months later. In addition, the Cannabis Licensing Agreement requires us to pay a manufacturing production fee, which is to be defined
in the manufacturing agreement, for producing the final encapsulated cell product of $800 per vial of 300 capsules after production with
a minimum purchased batch size of 400 vials of any Cell-in-a-Box ® product. All costs for encapsulated cell products, the
manufacturing setup fee and the manufacturing production fee will be subject to annual increases, in accordance with the inflation rate
in the country in which the encapsulated cell products are manufactured.

 40 

 The Cannabis Licensing Agreement requires us to
make future royalty and milestone payments as follows:

 · 
 Ten percent royalty of the gross sale of all products sold by us; 

 · 
 Twenty percent royalty of the amount received by us from a sublicense on its gross sales; and 

 · 
 Milestone payments of $100,000 within 30 days of beginning the first pre-clinical experiments using the encapsulated cells; $500,000 within 30 days after enrollment of the first human patient in the first clinical trial; $800,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial; and $1,000,000 within 90 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA or its equivalent based on the country in which it is accepted for each product. 

 The license under the Cannabis Licensing Agreement,
as amended, may be terminated and all rights will revert to Austrianova if any of the following milestone events do not occur within the
following timeframes:

 · 
 If we do not enter a research program involving the scope of the license within three years of December 1, 2014, the effective date of the Cannabis Licensing Agreement (we have met this requirement); or 

 · 
 If we do not enter a clinical trial or its equivalent for a product within 7 years of the effective date of the Cannabis Licensing Agreement. 

 In May 2018, we entered into amendments to the
Cannabis Licensing Agreement. For a full description of these amendments, see Item 1. “History of the Business.”

 Melligen Cell License Agreement 

 The Melligen Cell License Agreement requires that
we pay royalty, milestone and patent costs to UTS as follows:

 · 
 Six percent of gross exploitation revenue on product sales; 

 · 
 Twenty-five percent of gross revenues if the product is sublicensed by us; 

 · 
 Milestone payments of AU$ 50,000 at the successful conclusion of a preclinical study, AU$ 100,000 at the successful conclusion of a Phase 1 clinical trial, AU$ 450,000 at the successful conclusion of a Phase 2 clinical trial, and AU$ 3,000,000 at the successful conclusion of a Phase 3 clinical trial; and 

 · 
 Patent costs of fifteen percent of the costs paid by UTS to prosecute and maintain patents related to the licensed intellectual property. 

 In the event of a default under the Melligen Cell
License Agreement, the non-defaulting party may immediately terminate the agreement by notice in writing to the defaulting party if: (i)
the default has continued for not less than 14 days or occurred more than 14 days earlier and has not been remedied; (ii) the non-defaulting
party serves upon the defaulting party notice in writing requiring the default to be remedied within 30 days of such notice, or such greater
number of days as the non-defaulting party may in its discretion allow, and (iii) the defaulting party has failed to comply with the notice
referred to in (ii) above.

 The Melligen Cell License Agreement was amended
in April 2016 to change the name of the licensee to our current name and clarify certain ambiguities in the agreement. We are required
to pay the Melligen cell patent prosecution costs and to pay to UTS a patent administration fee equal to 15% of all amounts paid by UTS
to prosecute and maintain patents related to the Melligen cells.

 In August 2017, we entered into the Binding Term
Sheet pursuant to which the parties reached an agreement to amend certain provisions in the SG Austria APA, the Diabetes Licensing Agreement
and the Cannabis Licensing Agreement.

 In May 2018, we entered into agreements with SG
Austria and Austrianova to amend certain provisions of the SG Austria APA, the Diabetes Licensing Agreement and the Cannabis Licensing
Agreement pursuant to the Binding Term Sheet. For a full description of these amendments, see Item 1. “History of the Business.”

 41 

 Sources and Availability of Raw Materials 

 The entire encapsulation process relating to the
encapsulation of the cells for the oncology and diabetes-based therapies we are developing is to be carried out by Austrianova. Austrianova
is the sole source of our product candidates. Austrianova is responsible for acquiring all of the necessary raw materials used in this
process, including the cellulose sulfate necessary for encapsulating the live cells. Austrianova from time to time has experienced significant
supply chain delays, some of which may be related to COVID-19. We believe Austrinova may also be experiencing liquidity issues. Those
cells have been grown by Eurofins to populate a MCB for our future clinical trials. See also “—Manufacturing” in this
Item 1. “Business.”

 Employees 

 As of April 30, 2022, we had 4 full-time employees
and 23 consultants who devote substantial time to us. The consultants are physicians, scientists, regulatory experts, clinical operation
experts and cGMP experts. All of our research and development (“R&D”) work is handled by our consultants.

 Recent Developments 

 We recently received notice from Iroquois Capital
Management, LLC and certain of its affiliates nominating a slate of eight individuals for election to our Board of Directors for the 2022
annual meeting. If a proxy contest or consent solicitation results from this notice, our business could be adversely affected because:
(i) responding to proxy contests and other actions by activist shareholders can be costly and time-consuming, which could disrupt our
operations and divert the attention of management and our employees; (ii) perceived uncertainties as to our future direction could adversely
affect our relationships with customers, suppliers, investors, prospective and current team members and others, resulting in the loss
of potential business opportunities, or making it more difficult to attract and retain qualified personnel; and (iii) if individuals are
elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our
strategic plan. These actions could also cause our stock price to experience periods of volatility. In addition, future proxy contests
and other actions by activist shareholders could require us to incur significant legal fees and solicitation expenses and require significant
time and attention by management and the Board of Directors and could materially and adversely affect our business and operating results.
We may also be subject, from time to time, to other legal and business challenges in the operation of our company due to actions instituted
by activist shareholders. Responding to such actions could be costly and time-consuming.

 Medical and Scientific Advisory Board 

 We regularly seek advice and input from the members
of our Medical and Scientific Advisory Board on matters related to our R&D programs. The members of our Medical and Scientific Advisory
Board consist of experts across a wide range of key disciplines relevant to our clinical development programs. We intend to continue to
leverage the broad expertise of our advisors by seeking their counsel on important topics relating to our product development and clinical
development programs. The members of our Medical and Scientific Advisory Board are not our employees and may have commitments to, or consulting
or advisory contracts with, other entities that may limit their availability to us. In addition, our advisors may have arrangements with
other companies to assist those companies in developing products or other technologies. All the members of our Medical and Scientific
Advisory Board are affiliated with other entities and devote only a portion of their time to us. The members of our Medical and Scientific
Advisory Board are not officers or directors of our company. Our current advisors are:

 · 
 Dr. Manuel Hidalgo – Chief of the Division of Hematology and Medical Oncology at Weill Cornell Medicine and New York-Presbyterian/Weill Cornell Medical Center in New York, New York; 

 · 
 Dr. Brian Salmons – Chief Executive Officer and President of Austrianova and Co-Developer of Cell-in-a-Box ® and its Associated Technologies; 

 · 
 Dr. Mark L. Rabe – former Chief Executive Officer of Rabe Medical Solutions, San Diego, California; and 

 · 
 David A. Judd - cellular biologist for 35 years and a long-term employee of the Grand Island Biological Company with experience in culturing various types of human cells, including the cells that were transfected with the gene that activates the prodrug ifosfamide and that are encapsulated for our LAPC clinical trial. 

 42 

 Financial Information Concerning Geographic
Areas 

 We had no revenues in the fiscal years ended April
30, 2022, and 2021, including no revenues from foreign countries. We have long-lived assets, other than financial instruments, located
in the following geographical areas:

 FY 2022 
 FY 2021 

 United States: 
 $ 5,129,308 
 $ 5,128,992 

 All foreign countries, in total: 
 $ 0 
 $ 0 

 We operate globally and are attempting to develop
products in multiple countries. Consequently, we face complex legal and regulatory requirements in multiple jurisdictions, which may expose
us to certain financial and other risks. International operations are subject to a variety of risks, including:

 · 
 foreign currency exchange rate fluctuations; 

 · 
 greater difficulty in overseeing foreign operations; 

 · 
 logistical and communications challenges; 

 · 
 potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; 

 · 
 burdens and costs of compliance with a variety of foreign laws; 

 · 
 political and economic instability; 

 · 
 increases in duties and taxation; 

 · 
 foreign tax laws and potential increased costs associated with overlapping tax structures; 

 · 
 greater difficulty in protecting intellectual property; 

 · 
 the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our product candidates; 

 · 
 risks resulting from our extensive supply chain exposure to Asia; and 

 · 
 general social, economic and political conditions in these foreign markets. 

 We are dependent on business relationships with
parties in multiple countries, as disclosed in Item 1A. “Risk Factors—Risks Related to Our Dependence on Third Parties.”

 Our Corporate Information 

 We are a Nevada corporation incorporated in 1996.
In 2013, we restructured our operations to focus on biotechnology. The restructuring resulted in us focusing all of our efforts developing
a novel, effective and safe way to treat cancer and diabetes. In January 2015, we changed our name from Nuvilex, Inc. to PharmaCyte Biotech,
Inc. to reflect the nature of our current business.

 Our corporate headquarters are located at 3960
Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169. Our telephone number is (917) 595-2850. We maintain a website at www.pharmacyte.com 
to which we post copies of our press releases as well as additional information about us. Our filings with the SEC are available free
of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the SEC. Information
contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the SEC, and should
not be relied upon.

 43
PharmaCyte Biotech, Inc. 10-K

Item 1. Business
