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Item 1. Business

2021-03-16 compared with 2020-03-02 · 530 added, 811 removed, 16 unchanged (99% of the section changed)

We are a clinical-stage biopharmaceutical

company incorporated in May 2017 focused on developing new generation therapies for dermatological disorders.

We believe that

our pipeline has the potential to improve the quality of life for patients suffering from indications including atopic dermatitis

We are a clinical-stage biopharmaceutical company

and were formed in May 2017 to initially focus on developing new generation therapies for dermatological disorders.

that our pipeline has the potential to improve the quality of life for patients suffering from indications including atopic dermatitis

(also known as eczema), chronic wounds, psoriasis, asthma and acne.

primary asset is a sublicense agreement with Chelexa Biosciences, Inc.

(“Chelexa”) pursuant to which Chelexa has granted

us an exclusive sublicense to make, use, have made, import, offer for sale, and sell products based upon or involving the use

of (i) topical compositions comprising a zinc chelator and gentamicin and (ii) zinc chelators to inhibit biofilm formation (the

“BioLexa Platform”

or “BioLexa”), which rights were originally granted to Chelexa pursuant to an exclusive

license agreement with the University of Cincinnati.

In addition, Chelexa granted us the right to issue exclusive and nonexclusive

sublicenses (with the right to further sublicense to third parties) to make, use, have made, import, offer for sale, and sell

products based upon the BioLexa Platform.

The license enables us to develop the

platform for any indications in humans.

Our initial focus will be on the treatment of eczema through the application of a topical

Although our initial focus will be on the treatment of eczema, we intend to develop a second topical cream which, upon

application, is intended to reduce post-procedure infections, accelerate healing and improve clinical outcomes for patients undergoing

aesthetic dermatology procedures.

In addition, we conducted an initial pilot study on the efficacy of BioLexa to accelerate diabetic

wound healing and intend to conduct additional studies with respect to the regenerative effects of the BioLexa Platform in the

context of chronic diabetic ulcers, with and without substantial bacterial burden.

The BioLexa Platform combines a U.S.

Drug Administration (“FDA”) approved zinc chelator with one or more approved antibiotics in a topical dosage form

to address unchecked eczema flare-ups by preventing the formation of infectious biofilms and the resulting clogging of sweat ducts

which trigger symptoms.

To our knowledge, it is the first product candidate intended to prevent the symptom triggering flare-ups

rather than simply treating symptoms when they occur.

intend to initially use the BioLexa Platform to develop two different topical cream products:

(i) a product to treat eczema and

(ii) a product that reduces post-procedure infections, accelerates healing and improves clinical outcomes for patients undergoing

aesthetic dermatology procedures.

Biofilm Platform

BioLexa Platform is a proprietary, patented, drug compound platform for the treatment of eczema.

It combines an FDA-approved zinc

chelator with one or more approved antibiotics in a topical dosage form to address unchecked eczema flare-ups by preventing the

formation of infectious biofilms and the resulting clogging of sweat ducts.

IN INFECTIONS, DR TV RAO, MD https://www.slideshare.net/doctorrao/biofilms-2172226

technology is based on scientific research into the pathogenesis of bacterial biofilm formation conducted by Andrew B.

at the University of Cincinnati.

Herr’s work indicated that staph -biofilm formation requires the presence of

zinc in the cellular environment.

If the zinc is removed, the biofilms’

formation is inhibited, rendering the bacteria susceptible

to immune defenses and antibiotic therapy.

Herr conducted multiple in-vitro experiments, or experiments conducted in a controlled environment outside of a living organism,

in his laboratory demonstrating that chelation of zinc can prevent staph bacteria from forming colonies which in turn enables

the creation of staph-biofilm.

Prevention of the formation of colonies leaves the bacteria in their planktonic, or single cell

state and susceptible to host immune defenses, as well as antibiotic therapy.

Herr’s in-vitro work demonstrating that zinc is an enabler for staph -biofilm formation led to the design and implementation

of a series of in-vivo experiments, or experiments conducted using living organisms, specially, pigs, which experiments were conducted

at the University of Miami and intended to demonstrate that the combination of zinc removal, or chelation, and broad spectrum

antibiotic therapy was far more effective than either approach on its own.

in-vivo porcine deep partial thickness wound study was undertaken to determine the effects of an antimicrobial agent on

the proliferation of 10 6 Staphylococcus aureus (MRSA USA 300).

were chosen for the in-vivo study due to the morphological and biochemical similarity between porcine and human skin.

young female white Yorkshire/landrace specific pathogen-free pigs weighing 35-40 kg were kept in-house for at least one week prior

to initiating the study, and were studied under the same protocol with approximately two weeks separating the two studies.

was prepared by washing with a non-antibiotic soap (Neutrogena) and sterile water.

The area was blotted dry with sterile gauze.

Forty-four rectangular wounds per animal (88 total wounds) measuring 10mm x 7mm x 0.5mm deep were made in the paravertebral and

thoracic area with a specialized electrokeratome.

The wounds were separated from one another by approximately 15mm of unwounded

Four wounds (four per each treatment group) were randomly assigned to each treatment group (n=11), inoculated with 10 6

Staphylococcus aureus (MRSA USA 300) and then treated once per day for two days.

BioLexa Platform was formulated as a topical cream made up of Glyceryl Stearate/PEG-100 Stearate, Lanolin Alcohol, Cetyl Alcohol,

Mineral Oil, Sorbitol 70% Solution, Purified Water and the active components, Gentamicin and Ca-DTPA.

Gentamicin 0.1% cream (1-gram

cream contains 1 mg of Gentamicin base), a broad-spectrum antibiotic exhibiting bactericidal activity against both gram-positive

and gram-negative bacteria, is FDA cleared for both internal (not oral) and external application and provides a highly effective

topical treatment in primary and secondary bacterial infections of the skin.

Ca-DTPA, at the concentrations used, is treated as

an excipient and has also received FDA clearance to be safe and effective for internal usage to increase the rates of elimination

of heavy metals.

concentration of Gentamicin 0.1% was kept constant in the study, since that is the FDA-cleared topical cream concentration.

concentration was varied with the goal of achieving an optimal dose-response antimicrobial effect.

Results revealed that the combination

of both Gentamicin and Ca-DTPA is greater than the results achieved by Gentamicin alone or Ca-DTPA alone.

In addition, no new

chemical entities were formed within this formulation.

data tables below highlight these results.

School of Medicine, of the University of Miami and University of Cincinnati - Determination of the effects of a novel antimicrobial

agent used in conjunction with Gentamicin on Staphylococcus aureus using a porcine model:

preliminary evaluations

Jose Valdes, Joel Gil, Andrew Herr, Andrew Harding and Stephen Davis

School of Medicine, of the University of Miami and University of Cincinnati - Determination of the effects of a novel antimicrobial

agent used in conjunction with Gentamicin on Staphylococcus aureus using a porcine model:

preliminary evaluations

Jose Valdes, Joel Gil, Andrew Herr, Andrew Harding and Stephen Davis

BioLexa Platform has achieved positive results in its initial pre-clinical studies conducted at the University of Miami.

BioLexa’s

formulation is a new topical dosage form “repurposing”

the antibiotic, enabling it to be developed for use in patients

following a special regulatory pathway codified in Section 505(b)(2) of the FDA rules.

Section 505(b)(2) of the Federal Food,

Drug and Cosmetic Act (“FDCA”) was enacted to enable sponsors to seek New Drug Application (“NDA”)

approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical

safety studies and Phase 1 safety studies.

Proceeding under this regulatory pathway, we will be able to rely upon all of

the publicly available safety and toxicology data with respect to gentamicin and zinc chelator in our FDA submissions.

will be required to conduct a Phase 2 study to show the safety of the combination in humans and after such Phase 2 study will

be required to proceed to Phase 3 pivotal clinical trials.

We believe that this path will dramatically reduce the required clinical

development effort, costs and risks as compared to what would be required of us if we were required to conduct pre-clinical safety,

toxicology and animal studies together with Phase 1 human safety trials required for new chemical entities which are not eligible

to be reviewed pursuant to the Section 505(b)(2) regulatory pathway.

We estimate that by using the Section 505(b)(2) regulatory

pathway, that the clinical development process may be five to six years shorter than is required for a new chemical entity, and

the FDA approval process may be six to nine months shorter than the typical eighteen month period, which we believe may result

in lower development costs and shorter development time.

As of the date hereof, we have not submitted an NDA to the FDA.

we intend to submit our NDA for such indication by the end of 2021 with approval of such NDA anticipated to be in 2022.no assurances

can be given that we will receive approval of the NDA in a timely manner, if at all.

In September 2018, we attended the first

of a planned series of meetings with the FDA to review the requirements for submission and activation of an investigational new

drug application (“IND”) with respect to the BioLexa Platform for use in eczema.

In preparation for such pre-IND meeting,

we prepared and presented to the FDA our proposed Phase 2 clinical trial plan for the treatment of eczema in patients over the

age of one year old.

As part of our pre-IND meeting, the FDA provided us with general guidance with respect to specific animal

studies, dosing schedules and suggested human safety studies before we commence clinical trials in pediatric or adult patients.

We are currently investigating multiple potential venues for conducting such trial both in and outside of the U.S.

We have engaged

Camargo Pharmaceutical Services, LLC (“Camargo”) to assist us with the FDA process required for Section 505(b)(2)

applications and with the evaluation of potential clinical trial venues for the proof of concept study should we determine to

undertake such study.

Specifically, Camargo has provided and will continue to provide advice and guidance relative to the IND

preparation phase for the BioLexa Platform.

Camargo will assist us with the refinement of our non-clinical, clinical, clinical

pharmacology and biopharmaceutics strategy incorporating the preliminary feedback we received from the FDA during our pre-IND

believe that the key elements for our market success with respect to BioLexa include:

proprietary formulation of two FDA-approved drugs to treat bacterial proliferation reduces development time and costs by giving

us the ability to rely on safety and efficacy data from the two approved drugs;

proprietary formulation is not a topical corticosteroid, and may not be subject to the same FDA black box warning issues as

most commonly prescribed treatments currently in use;

recent peer-reviewed publication titled “

Staphylococcal Bacteria May Cause Eczema, Study Reveals ”, published

Allen, highlights that staph -induced biofilms are the root cause of flare-ups in eczema.

product candidate has been demonstrated to prevent the formation of these biofilms with the promise of delaying or completely

arresting flare-ups, rather than merely treating symptoms of a flare-up already underway.

with Chelexa Biosciences, Inc.

May 26, 2017, we entered into a sublicense agreement with Chelexa, as amended on August 22, 2018 and August 29, 2018, pursuant

to which Chelexa granted us an exclusive worldwide sublicense to make, use, have made, import, offer for sale, and sell products

based upon or involving the use of the BioLexa Platform, which rights were originally granted to Chelexa pursuant to an exclusive

license agreement with the University of Cincinnati.

In addition, Chelexa granted us the right to issue exclusive and nonexclusive

sublicenses (with the right to further sublicense to third parties) to make, use, have made, import, offer for sale, and sell

the products based upon the BioLexa Platform.

May 2017, we paid $300,000 to Chelexa pursuant to the sublicense agreement.

In addition, we issued Chelexa 250,000 shares of our

common stock, which was 10% of our fully-diluted equity at May 26, 2017, and Chelexa had the right to receive such number of additional

shares of common stock required to maintain its 10% interest in our fully-diluted equity until such time we raised a minimum of

$3,000,000 (the “Preemptive Right”).

As of the date hereof, we have issued Chelexa an aggregate of 476,943 additional

shares of common stock in accordance with the Preemptive Right.

However, the Company has raised more than $3,000,000 and therefore

the Preemptive Right has been terminated.

Furthermore, pursuant to the sublicense agreement, Chelexa has the right to participate

(the “Chelexa Participation Right”) in certain equity issuances made by us for purposes of raising capital based upon

its pro-rata share to enable Chelexa to retain 10% of our fully-diluted equity until such time as we consummate an initial public

offering pursuant to which we receive aggregate gross proceeds of not less than $5,000,000.

However, since we consummated an initial

public offering pursuant to which we received aggregate gross proceeds of $7,000,000, the Chelexa Participation Right has been

Chelexa agreement requires us to use our best commercial efforts to develop, produce and commercialize the BioLexa products on

a global basis.

It further provides for the payment by us of all development and commercialization expenses along with sales-based

royalties at percentages which range from mid to high single digits, with high sales volumes being subject to lower royalty rates,

and total milestone payments of $3.5 million.

Industry standard performance obligations for us are provided for in the sublicense

agreement with remedies for breach of such obligations.

The sublicense agreement will continue until the later of April 16, 2034

and the last to expire patent, unless earlier terminated pursuant to the terms of the agreement.

We, in our sole discretion, have

the first right of refusal to renew the term.

In addition, at any time after one year from the effective date of the sublicense

agreement, Chelexa may, at its sole option, terminate or render the license granted to us nonexclusive if, in Chelexa’s

judgment, our progress reports do not demonstrate that we have used our best commercial efforts to develop and seek regulatory

approval of BioLexa and/or we are engaged in manufacturing, marketing or sublicensing activity which is reasonably expected to

ensure that BioLexa is available to the public.

License Agreements

with the University of Cincinnati

May 18, 2018, we entered into an exclusive license agreement with the University of Cincinnati for a patented, novel genetic marker

for food allergies.

The genetic marker licensed by us from the University of Cincinnati may be use to (i) identify at risk infants

in predicting food allergies, including peanut and milk allergies, (ii) identify a person’s predisposition to an allergic

reaction, thereby avoiding such reaction and (iii) determine an individual’s propensity to develop atopic dermatitis (“AD”),

such as eczema.

We intend to utilize the genetic marker for purposes of determining an individual’s propensity to develop

eczema as well as to identify and treat allergies in at-risk infants.

to the terms of the license agreement, we agreed to pay the University of Cincinnati a one-time initial fee within 30 days of

the date of the agreement in addition to an annual license fee.

In addition, we agreed to pay the University of Cincinnati a yearly

minimum annual royalty and certain milestone payments upon successful proof of concept of determining an individual’s propensity

to food allergy and within 30 days of a marketing approval in the U.S.

The license agreement will continue until the later of

the date upon which a valid claim pursuant to the terms of the license agreement expires or 10 years after the first commercial

sale or until earlier terminated pursuant to the terms of the license agreement.

Since our formation, we have expanded our business to

also focus on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer;

a treatment for asthma and allergies using inhalational administration;

(iii) a topical treatment for patients with lupus;

a treatment for mast-cell derived cancers and anaphylaxis;

and (v) a treatment for lung diseases resulting from bacterial infections.

We are also focused on potentially developing a COVID-19 treatment as well as a diagnostic device for the detection of SARS-CoV-2

via a mobile device.

Dermatological Disorders

The BioLexa Platform

We have obtained an

exclusive license from the University of Cincinnati to make, use, have made, import, offer for sale, and sell products based upon

or involving the use of (i) topical compositions comprising a zinc chelator and gentamicin and (ii) zinc chelators to inhibit biofilm

formation (the “BioLexa Platform”

or “BioLexa”).

The license enables us to develop the platform for any

indications in humans.

The BioLexa Platform

is a proprietary, patented, drug compound platform for the treatment of eczema.

It combines an FDA-approved zinc chelator with

one or more approved antibiotics in a topical dosage form to address unchecked eczema flare-ups by preventing the formation of

infectious biofilms and the resulting clogging of sweat ducts.

We intend to initially use the BioLexa Platform to develop two different

topical cream products:

(i) a product to treat eczema and (ii) a product that reduces post-procedure infections, accelerates healing

and improves clinical outcomes for patients undergoing aesthetic dermatology procedures.

The technology is based on scientific research

into the mechanism of Staphylococcus biofilm formation conducted by Andrew B.

Herr, PhD at the University of Cincinnati.

conducted multiple in-vitro experiments, or experiments conducted in a controlled environment outside of a living organism, demonstrating

that chelation of zinc can prevent Staphylococcus bacteria from forming complex colonies called a biofilm.

used by bacteria as a defense mechanism against the host immune response and antibiotics.

Prevention of the biofilm formation leaves

the bacteria in their planktonic, or single cell state and susceptible to host immune defenses and antibiotic therapy.

in-vitro work demonstrating that zinc is an enabler for staph -biofilm formation led to the design and implementation

of a series of in-vivo experiments, or experiments conducted using living organisms.

These experiments were conducted at the University

of Miami using a minipig wound infection model and intended to demonstrate that the combination of zinc removal, or chelation,

and broad spectrum antibiotic therapy was more effective than either approach on its own.

These positive results supported development

of the BioLexa Platform for multiple indications with staph -biofilms as the causative agent.

We intend to develop

the BioLexa Platform for use in patients following the Section 505(b)(2) regulatory pathway of the U.S.

Food and Drug Administration (“FDA”)

Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FDCA”) was enacted to enable sponsors to

seek New Drug Application (“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake

time consuming and expensive pre-clinical safety studies and Phase 1 safety studies.

Proceeding under this regulatory pathway,

we will be able to rely upon publicly available data with respect to gentamicin and zinc chelator in our NDA submission to the

FDA for marketing approval.

In September 2018,

we attended the first of a series of meetings with the FDA to review the requirements for submission and activation of an investigational

new drug application (“IND”) with respect to the BioLexa Platform for use in eczema.

We prepared and presented to the

FDA our proposed first in human clinical trial plan for the treatment of eczema in patients over the age of one year old, and the

FDA provided us with general guidance with respect to specific animal studies, dosing schedules and suggested human safety studies

before we commence clinical trials in pediatric or adult patients.

The FDA requested that safety and efficacy of BioLexa be established

in adults prior to investigating pediatric and adolescent patients.

Therefore, we planned to conduct our first clinical trial for

BioLexa in Australia in order to enroll both adult and adolescents to support future clinical development.

On August 13, 2020,

we submitted our application for approval to conduct our clinical trial of BioLexa to the Belberry Human Research Ethics Committee

(“HREC”) in Australia and received approval from HREC on December 9, 2020.

We have engaged Novotech (Australia) Pty

Limited as our local clinical research organization in Australia to provide clinical management, data

management, biostatistical, medical monitoring, pharmacovigilance, and other related services to support the first in human clinical

trial of BioLexa.

We believe that the key elements for our market success with respect

to BioLexa include:

the proprietary formulation of two FDA-approved drugs to treat bacterial proliferation which may reduce development time and costs by giving us the ability to rely on safety and efficacy data from the two approved drugs;

our proprietary formulation is not a topical corticosteroid, and provides a novel mechanism of action and potentially a preferred safety profile as a market differentiator;

the recent literature set forth below reaffirms

the critical role that S.

aureus plays in the development of atopic dermatitis flare-ups within the international medical

community, supporting the targeted mechanism of action of BioLexa.

Shi et al, “MRSA Colonization

is Associated with Decreased Skin Commensal Bacteria in Atopic Dermatitis,”

Invest Dermatol.

Blicharz, et al, “Staphylococcus

an underestimated factor in the pathogenesis of atopic dermatitis?,”

Adv Dermatol Allergol 2019.

On February 1, 2020, we entered into a patent

license agreement with The George Washington University (“GW”) pursuant to which GW granted us a license to certain

patent rights to, among other things, make, use, offer and sell certain licensed products throughout the world with respect to

HT-001 which we intend to potentially use for treating dermatological side effects from epidermal growth factor receptor (“EGFR”)

inhibitors, and potentially other drugs used for the treatment of cancer.

HT-001 is a topical formulation under development for

the treatment of patients with rash and skin disorders associated with initial and repeat courses of tyrosine kinase EGFR inhibitor

EGFR inhibitors are used for the treatment of cancers with EGFR up-regulation (such as non-small cell lung cancer, pancreatic

cancer, breast cancer and colon cancer);

however, EGFR inhibitors are often associated with dose-limiting skin toxicities that

can result in the interruption or reduction of treatment.

HT-001 is targeted to treat these EGFR-induced skin disorders to allow

patients to achieve the best potential outcomes of EGFR therapy.

HT-001 has achieved positive results in its initial pre-clinical

studies conducted at GW.

In December 2020, we submitted a pre-IND meeting request to the FDA with respect to HT-001 as a concomitant

therapy with EGFR inhibitors.

In preparation for such pre-IND meeting, we prepared and submitted to the FDA our IND-opening clinical

trial plan in January 2021, which includes two phase 2 trials conducted in patients.

Based on the FDA’s feedback, we intend

to advance our IND-enabling activities for HT-001 as planned.

We believe that the key elements for our market success with respect

to HT-001 include:

To our knowledge, there are currently no drugs approved for the treatment of skin toxicities associated with EFGR inhibitor therapy and 49-100% of patients develop skin toxicities during EGFR inhibitory therapy;

The main active ingredient of HT-001 is already approved in oral and IV dosage forms which supports pursuit of the 505(b)(2) regulatory pathway to reduce development time and cost;

To our knowledge, there are no current topical formulations available using HT-001’s active ingredient so we believe that there is no direct market competition;

We have the potential to pursue other indications such as chronic pruritus, atopic dermatitis and other skin toxicities that develop from anti-cancer therapies using the HT-001 formulation.

On July 30, 2020 (the “Isoprene Effective

Date”), we entered into a Sublicense Agreement (the “Isoprene Sublicense Agreement”) with Isoprene Pharmaceuticals,

(“Isoprene”) pursuant to the commercial evaluation sublicense and option agreement dated March 8, 2019 by and

among us, the University of Maryland, Baltimore and Isoprene.

Pursuant to the Isoprene Sublicense Agreement, Isoprene granted us

an exclusive sublicense to certain intellectual property (i) to make, have made, use, sell, offer to sell and import certain licensed

products, (ii) in connection therewith, to use certain inventions and licensed materials and (iii) to practice certain patent rights

for the treatment of dermatological conditions or diseases, referred to as HT-003.

Retinoids, which include Vitamin A (retinol)

and its analogues (both synthetic and metabolites), play a critical role in cell signaling and biological processes, including

regulation of immune cells and inflammation, signaling pathways that control normal skin maintenance, embryonic development and

cell growth/differentiation/repair.

Deficiencies in retinoids and their active metabolites have been implicated in a wide variety

In the skin, retinol deficiency leads to hyperkeratosis and keratinizing metaplasia that is observed in skin disorders

like psoriasis and acne.

Vitamin A and retinoic acid also play a crucial role in regulating cell proliferation, differentiation,

and apoptosis and therefore, altered metabolism of retinoids has been suspected as playing a potential role in tumorigenesis.

retinoids have been approved in the US for treatment of acne and psoriasis as well as other therapeutic indications such as acute

promyelocytic leukemia and cutaneous T-cell lymphoma;

however, the therapeutic use of exogenous retinoids has been limited due

to negative effects associated with high systemic concentrations.

A new therapeutic approach to increase intracellular retinoic

acid (the active metabolite of retinol) potentially without causing negative side effects of exogenous retinoic acid is to use

inhibitors of retinoic acid metabolism (collectively, “RAMBAs”), which prolong the presence of retinoic acid.

is a novel RAMBA under investigation for topical treatment in acne and psoriasis applications.

In December 2019, we entered into a research

collaboration agreement with Weill Cornell Medicine for the completion of pre-clinical studies investigating the mechanism of action

of HT-003 that was renewed in January 2021 as a result of positive preclinical results.

Jonathan Zippin, M.D., Ph.D., FAAD,

Associate Professor of Dermatology at Weill Cornell Medicine and our Senior Scientific Advisor, is the principal investigator for

such pre-clinical studies.

The RAMBAs have the potential to be developed

as a platform for multiple inflammatory-based indications.

Accordingly, on December 22, 2020, we entered into an option agreement

to expand the therapeutic indication of the sublicensed RAMBAs from Isoprene.

The option agreement includes the investigation of

RAMBAs for treatment of inflammatory bowel diseases, including Crohn’s disease and ulcerative colitis.

Preclinical proof-of-concept

studies began in the first quarter of 2021.

HT-005 Z-Pods™

On August 19, 2019, we entered into a sublicense

agreement with Zylö

Therapeutics, Inc.

August 19, 2019 (the “Zylö

Effective Date”), we entered into the Sublicense Agreement with Zylö

Therapeutics, Inc.

pursuant to which Zylö

granted us an exclusive sublicense to the Licensed Patent Rights (as defined in

the Sublicense Agreement) and the Licensed Technology (as defined in the Sublicense Agreement) to, among other things, develop,

make and sell the Licensed Products (as defined in the Sublicense Agreement) and to practice the Licensed Technology in the United

States and Canada for any and all uses within the Field.

“Field”

means all therapeutic uses related to lupus in human

beings, subject to the Field Expansion Rights (as defined in the Sublicense Agreement).

The term of the Sublicense Agreement shall

commence on the Zylö

Effective Date and shall continue until the latest of (i) ten years from the date of First Commercial

Sale (as defined in the Sublicense Agreement) of the Licensed Product in such country and (ii) expiration of the last to expire

Valid Claim (as defined in the Sublicense Agreement) of the Licensed Patent Rights that would be infringed by the composition,

use or sale of such Licensed Product in such country unless terminated earlier pursuant to the terms of the agreement.

to the terms of the Sublicense Agreement, we shall establish, with Zylö, a joint development committee to plan,

review, coordinate and oversee our development activities with respect to the Licensed Products in the Field.

Pursuant to the

Sublicense Agreement, we shall pay Zylö

(i) an upfront license fee of $50,000 (less the $10,000 we previously paid);

(ii) sales-based royalties at percentages which range from mid to high single digits, with low sales volumes being subject

to lower royalty rates;

and total milestone payments of up to $13.5 million.

In addition, within 45 days of our next equity financing

pursuant to which we receive gross proceeds of at least $1 million, we shall purchase equity securities of Zylö

amount equal to $60,000.

Carolina State University License Agreement

On November 20, 2019 (the “NCSU

Effective Date”), we entered into a license agreement with NCSU pursuant to which NCSU granted us an exclusive license to,

among other things, develop, make, use, offer and sell certain licensed products throughout the world with respect to NCSU’s

exon skipping approach for treating allergic diseases.

The term of the license agreement shall commence on the NCSU Effective

Date and shall continue until the date of the expiration of the last to expire patent right granted pursuant to the license agreement

unless terminated earlier pursuant to the terms of the agreement.

Pursuant to the terms of the license agreement, we paid NCSU

a one-time license fee of $25,000 and are required to pay:

(i) sales based royalties at a low single digit percentage, (ii) minimum

royalties ranging from $0 to $50,000 and (iii) milestone payments of up to $585,000.

Washington University Patent License Agreement

On February 1, 2020 (the “GW Effective

Date”), we entered into a patent license agreement with GW pursuant to which GW granted us a license to certain patent rights

to, among other things, make, use, offer and sell certain licensed products throughout the world with respect to aprepitant as

used in treating side effects from drugs used for the treatment of cancer.

The term of the patent license agreement shall commence

on the GW Effective Date and shall continue until the later of (i) the date upon which the last patent granted pursuant to such

license expires or is abandoned and (ii) 10 years after the first sale of the first licensed product if no patent has been issued

from the patent rights as set forth in the agreement unless terminated earlier pursuant to the terms of the agreement.

to the Sublicense Agreement, we paid a $10,000 license initiation fee and shall pay (i) license maintenance fees on each anniversary

of the GW Effective Date until the first sale of the first licensed product pursuant to the agreement which shall amount to $2,000

in the first year and $5,000 thereafter, (ii) milestone payments ranging in the low to mid five figures, (iii) sale based royalties

at a low single digit percentage, (iv) minimum royalties ranging from $5,000 to $20,000 payable in quarterly period after the first

four quarters after the first sale pursuant to the agreement and (v) diligence minimums of $75,000 per year.

In addition, we shall

issue GW warrants to purchase shares of our common stock.

Development and Pipeline

intend to conduct our first Phase 1 study in healthy adults with an immediate transition to a randomized, vehicle controlled Phase

1b trial in adolescent eczema patients comparing BioLexa to the base vehicle.

This Phase 1b trial is intended to examine both

safety and efficacy.

We will assess the formulation of Ca-DTPA and Gentamicin 0.1% in our proprietary topical lotion delivered

by a metered pump system.

We will also assess the ability of BioLexa to clear harmful staph aureus bacterial from the skin of

atopic dermatitis patients.

our Phase 1b trial, we intend to conduct up to two Phase 2 trials in atopic dermatitis patients comparing BioLexa to the base

Subject numbers and allocation will be informed by the results of the Phase 1b trial.

We expect the clinical program

to be completed, subject to receipt of funding by us, by the end of 2020 or early 2021 with an NDA submission targeted for mid

to late 2021.

There is currently no active IND for our product candidate in the United States.

following table summarizes the BioLexa expected product development pipeline.

our initial focus will be on the treatment of eczema, we intend to develop a second topical cream which, upon application, is

intended to reduce post-procedure infections, accelerate healing and improve clinical outcomes for patients undergoing aesthetic

dermatology procedures.

In addition, we conducted an initial pilot study on the efficacy of BioLexa to accelerate diabetic wound

healing and intend to conduct additional studies with respect to the regenerative effects of the BioLexa Platform in the context

of chronic diabetic ulcers, with and without substantial bacterial burden.

and Atopic Dermatitis

is also referred to as atopic dermatitis.

According to the National Eczema Association, eczema affects over 32 million Americans

Eczema affects 10-20% of children with 60% of cases occurring within a child’s first year and 85% before the age

is no cure for eczema, but, in most cases, it is manageable.

The word eczema comes from a Greek word that means to effervesce

or bubble or boil over.

http://www.easeeczema.org/erc/symptoms_of_eczema.htm

main symptom of eczema is an inflamed, itchy red rash.

It can appear all over the body.

Many people have it on their elbows or

behind their knees.

Babies often have eczema on the face, especially the cheeks and chin.

They can also have it on the scalp,

trunk (chest and back), and outer arms and legs.

Children and adults tend to have eczema on the neck, wrists, and ankles, and

in areas that bend, like the inner elbow and knee.

People with eczema are usually diagnosed with it when they are babies or young

Eczema symptoms often become less severe as children grow into adults.

For some people, eczema continues into adulthood.

Less often, it can start in adulthood.

The rash of eczema is different for each person.

It may even look different or affect different

parts of the body from time to time.

It can be mild, moderate or severe.

Generally, people with eczema suffer from dry, sensitive

Eczema is also known for its intense itch.

The itch may be so bad that patients scratch their skin until it bleeds, which

can make the rash even worse, leading to increased inflammation and itching.

This is called the itch-scratch cycle.

and Symptoms of Eczema

sensitive skin

inflamed skin

leathery patches

colored patches of skin

to the National Eczema Association, people utilize many treatments for eczema to relieve the itch, including over-the-counter

remedies and prescription medications.

In addition, some people utilize alternative eczema treatments, such as herbal remedies.

However, a study referenced by the National Eczema Association found that the majority of people with eczema are likely not satisfied

with the effectiveness of their medications.

The most common complaints in the study included that the subjects’

messy to use;

too expensive;

side effects.

can be no assurances that, if approved, the BioLexa Platform will not be subject to the similar complaints set forth above about

Until clinical data is available, there can be no assurances that the BioLexa Platform will not have side effects.

addition to over-the-counter moisturizers, topical steroids are an important part of the treatment plan for most people with eczema.

When eczema flares up, applying cream, lotion or ointment containing a steroid will reduce inflammation, ease soreness and irritation,

reduce itching and relieve the need to scratch, allowing the skin to heal and recover.

are naturally-occurring substances that are produced in our bodies to regulate growth and immune function.

There are many kinds

of steroids, including “anabolic steroids”

such as testosterone, “female hormones”

such as estrogen (both

produced in the gonads) and corticosteroids such as cortisol, which is produced by the adrenal glands.

Corticosteroids are the

type of steroid used for the treatment of eczema.

Corticosteroids have many functions in the body, including effective control

of inflammation.

Corticosteroids reduce inflammation by temporarily altering the function of several types of cells and chemicals

to the National Eczema Association, there are many serious risks associated with the chronic use of topical steroids.

of the skin (skin atrophy) is a well-recognized, possible side effect.

This is especially true when potent topical corticosteroids

are applied too frequently and for a prolonged period of time without a break.

Early skin thinning can disappear if the topical

corticosteroid use is discontinued, and, while uncommon, prolonged use can cause permanent stretch marks (striae), usually on

the upper inner thighs, under the arms and in the elbow and knee creases.

patients with undertreated eczema have the opposite of skin thinning, and develop thickening, and sometimes darkening of the skin

(changes known as lichenification).

This is the skin’s response to rubbing and scratching.

and prolonged application of a topical corticosteroid to the eyelids can cause glaucoma and even cataracts.

Topical corticosteroids

can occasionally cause tiny pink bumps and acne, especially when used on the face and around the mouth.

On the body, greasy corticosteroid

ointments sometimes cause redness around hair follicles, sometimes with a pus bump centered in the follicle (folliculitis).

corticosteroids are applied to large body surface areas, enough may be absorbed to inhibit the body’s own production of

cortisol, a condition known as “adrenal suppression.”

The risk of adrenal suppression is highest with high potency

(Class 1-2) corticosteroids.

Infants and young children have a higher ratio of body surface area compared to their weight, so

they are more susceptible to topical corticosteroid absorption.

Moreover, if a child is given oral corticosteroids in large doses

or over a long term, prolonged adrenal suppression can be associated with growth suppression and weakened immune responses.

risks and side effects of prolonged steroid use are driving patients, physicians and the pharmaceutical industry to find safe

and effective alternatives.

Based upon data from the National Eczema Association our competitors include, but are not limited

to, the following:

of Therapies in the Market

- non steroid

- Corticosteroid

is common to all of the above candidates is that they are focused on treating or suppressing symptoms rather than causally preventing

or delaying flare-ups.

graphic below shows the numerous causes of flare-ups in eczema.

https://infodiseases.com/the-causes-symptoms-and-treatments-of-eczema.html

product development pipeline is focused on preventing flare-ups caused by staph biofilms.

The fundamental difference between

the product candidate we intend to develop and those in the table above is that ours are intended to prevent eczema flare-ups

rather than merely treat symptoms of a flare-up already underway.

Eczema Flare-Ups By Stopping Biofilms

is well known that the skin of eczema patients is colonized with Staphylococcus aureus ( S.

Aureus ) and this organism

has been shown to exist in both dry skin as well as areas of severe dermatitis.

It is well known that S.

Aureus bacteria

are programmed by nature to form micro-colonies as a means of self-preservation.

Once formed, these colonies secrete a polysaccharide

matrix “shield”

enabling the bacteria to grow unfettered by the host immune system or external antibiotic therapy.

These shielded bacteria are referred to as “biofilm.”

In eczema, biofilms are known to clog sweat ducts, triggering

Eczema severity has been directly correlated to the degree of S.

Aureus colonization and therapy generally fails

to improve symptoms in the presence of high S.

Aureus counts.

are implicated in 80% of all human infections.

Once formed, bacterial biofilms resist the host immune system and antibiotics.

Biofilms may require 1,000 times the antibiotic dose required to kill single bacteria, rendering biofilms virtually nontreatable

Despite these realities, existing technology focuses on treatment rather than prevention.

current competition in the eczema therapeutics market consists of conventional forms of therapy such as topical corticosteroids,

topical immunomodulators and emollients as the most prominent therapies.

Among all the available treatment options, topical corticosteroids

hold a majority share and dominate the market.

Topical corticosteroids, such as Vanos Cream, Aristorcort A Cream and Topicort

Cream are available in various strengths (mild, moderate, potent and very potent) and formulations (ointment, cream, lotion and

others), so that they can be used according to the severity of eczema.

Calceurin inhibitors (Protopic (tacrolimus) and Elidel

(pimecrolimus)) showed higher efficacy in comparison to corticosteroids and these products were widely used after their respective

However, in 2005, the FDA issued black box warnings for the calceurin inhibitors (Protopic and Elidel), and this resulted

in declining sales of these products.

Emollients, such as Theraplex, Mustela and Temorate E* Emollient, have good efficacy as

well as good safety.

They hydrate, moisturize and repair the skin.

These products do not offer first line treatment, but they

are useful as maintenance therapy in eczema patients.

believe we have a two-fold competitive advantage over our competition.

First, currently available eczema treatment options focus

on treating or suppressing symptoms rather than causally preventing or delaying flare-ups.

Recent peer-reviewed publications highlight

that staph -induced biofilms are the root cause of flare-ups in eczema.

Our BioLexa product candidate has been demonstrated

to prevent the formation of these biofilms with the promise of delaying or completely arresting flare-ups, rather than merely

treating symptoms of a flare-up already underway.

Second, long-term use of corticosteroids, can have harmful side effects.

the BioLexa Platform does not use steroids, our treatment avoids these harmful side effects and gives us another advantage over

our competition.

(“Zylö”) pursuant to which Zylö

granted us an exclusive

sublicense to certain licensed patent rights and certain licensed technology to, among other things, develop, make and sell certain

licensed products and to practice certain licensed technology in the United States and Canada initially with respect to therapeutic

uses related to lupus in humans.

HT-005 Z-Pods™

include a novel topical delivery matrix (Z-Pods™) loaded with an endogenous

ligand with suspected immune-modulating action.

Z-Pods™

use patented xerogel-derived nanoparticles for sustained and controlled

topical delivery of active pharmaceutical ingredients.

In 2020, Zylö

completed positive proof of concept data in a lupus mouse

model to support further development activities in 2021.

Genetic Marker for Food Allergies

On May 18, 2018, we entered into an exclusive

license agreement with the University of Cincinnati for a patented, novel genetic marker for food allergies.

The genetic marker

licensed may be used to (i) identify at risk infants in predicting food allergies, including peanut and milk allergies, (ii) identify

a person’s predisposition to an allergic reaction and (iii) determine an individual’s propensity to develop atopic

dermatitis, such as eczema.

We intend to utilize the genetic marker in the future for purposes of determining an individual’s

propensity to develop eczema as well as to identify and treat allergies in at-risk infants.

Respiratory Products

On November 20, 2019, we entered into a license

agreement with North Carolina State University (“NC State”) pursuant to which NC State granted us an exclusive license

to, among other things, develop, make, use, offer and sell certain licensed products throughout the world with respect to HT-004

for treating allergic diseases.

HT-004 is a potential disease-modifying agent that uses exon-skipping oligonucleotide-targeted

methods to reduce mast cell responses to immunoglobulin E (IgE)-directed antigens, which is one of the key mechanisms in the pathophysiology

of asthma, atopic dermatitis and other allergic diseases.

HT-004 is currently under investigation for the treatment of asthma and

allergies using inhalational administration.

Preclinical proof-of-concept data was generated

in October 2020 supporting efficacy of HT-004 after inhalational delivery in a mouse model.

Critical proof-of-concept studies in

a humanized mouse model are planned to be conducted in 2021.

These studies are being conducted by our Scientific Advisory Board

Glenn Cruse, at NC State.

We believe that the key elements for our market

success with respect to HT-004 include:

To our knowledge, there are currently no disease-modifying agents for asthma or allergy diseases;

The active pharmaceutical ingredient in HT-004 is a novel molecular class that we believe would prevent generic competition after commercialization;

HT-004 is being developed for inhalational administration by either inhaler or nebulizer for easy access at home by patients;

HT-004 is applicable for both adult and pediatric patient populations with asthma and/or allergies.

On December 22, 2020, we entered into a non-exclusive

commercial evaluation license agreement with the U.S.

Army Medical Research and Development Command (“USAMRDC”), as

amended, pursuant to which USAMRDC granted us a non-exclusive commercial evaluation license to HT-006 for the treatment of lung

diseases resulting from bacterial infections.

We will initially target treatment of serious bacterial infections of the lung, such

as hospital-acquired pneumonia (“HAP”) and ventilator-associated pneumonia (“VAP”).

Given the indication,

we intend to develop HT-006 for inhalational administration.

Both HAP and VAP are considered life-threatening

diseases for which current treatment options are limited or not effective against multi-drug resistance bacteria.

As such, we intend

to pursue streamlined development opportunities under the FDA’s program for “antibacterial therapies for patients with

an unmet medical need for the treatment of serious bacterial diseases.”

This streamlined program allows for the use of nonclinical

animal studies to reduce clinical studies required for approval.

We intend to begin proof-of-concept preclinical

testing in the first quarter of 2021.

Cancer Treatments

We have obtained from NC State an exclusive,

worldwide, royalty bearing license to certain intellectual property to, among other things, discover, develop, make, have made,

use and sell certain licensed products and sell, use and practice certain licensed services with respect to cancer and anaphylaxis;

this is being developed as HT-KIT.

The HT-KIT drug is designed to more specifically target the receptor tyrosine kinase KIT in

mast cells, which is required for the proliferation, survival and differentiation of bone marrow-derived hematopoietic stem cells.

Mutations in the KIT pathway have been associated with several human cancers, such as gastrointestinal stromal tumors and mast

cell-derived cancers (mast cell leukemia and mast cell sarcoma).

Based on the initial proof-of-concept success, we intend to initially

target mast cell neoplasms for development of HT-KIT, which is a rare, aggressive cancer with poor prognosis.

The same target, KIT, also plays a key role

in mast cell-mediated anaphylaxis, a serious allergic reaction that is rapid in onset and may cause death.

Anaphylaxis typically

occurs after exposure to an external allergen that results in an immediate and severe immune response.

We also intend to pursue

the anaphylaxis indication for HT-KIT in parallel to cancer treatment.

COVID-19 Products

On May 18, 2020, we entered into an Exclusive

License Agreement with the Virginia Commonwealth University Intellectual Property Foundation (“VCU”) pursuant to which

VCU granted us an exclusive, royalty bearing license to HT-002, a novel peptide developed by researchers at VCU that

may be used to slow the transmission of SARS-CoV-2 (the “VCU Peptide”) and a non-exclusive royalty bearing,

worldwide license with respect to certain licensed technical information patents to make, have made, use, offer to sell, sell and

import certain licensed products and perform certain licensed services.

On June 29, 2020, we entered into a Sponsored Project Agreement

with VCU for the development of a potential COVID-19 treatment using the VCU Peptide.

Proof-of-Concept preclinical studies are expected

to be completed in 2021.

VaxCelerate SARS-CoV-2 Vaccine

On March 23, 2020, we entered into a Royalty

and Development Agreement (the “Voltron Agreement”) with Voltron Therapeutics, Inc.

(“Voltron”), pursuant

to which we formed a joint venture entity named HaloVax, LLC (“HaloVax”), to jointly develop potential product candidates

for the prevention of COVID-19 based upon certain technology that had been exclusively licensed by Voltron from The General Hospital

Corporation (d/b/a Massachusetts General Hospital) (“Mass Gen”).

The SARS-CoV-2 vaccine is being developed using VaxCelerate,

a self-assembling vaccine platform licensed from Mass Gen by HaloVax.

VaxCelerate offers two unique elements to combat SARS-CoV-2:

a fixed immune adjuvant and variable immune targeting, the combination which is designed to illicit a robust, protective immune

Critical IND-enabling preclinical studies are

planned to be completed in 2021.

On-the-Go Sars-Cov-2 Testing Device

On August 7, 2020, we entered into a patent

license agreement (the “GW Patent License Agreement”) with GW pursuant to which GW granted us an exclusive, worldwide,

royalty bearing license to certain intellectual property that can be used to develop a device designed to detect the presence of

Specifically, the GW Patent License Agreement permits us to make, have made, use, import, offer for sale and sell certain

licensed products in the field of virus sensing and detection.

On September 17, 2020, we entered into a sponsored research agreement

with GW relating to the development of a diagnostic device for the detection of SARS-CoV-2 via a mobile device as an aid in the

diagnosis of the COVID-19 infection.

Product Development Pipeline

The following table summarizes our product

development pipeline.

The biopharmaceutical industry utilizes rapidly

advancing technologies and is characterized by intense competition.

There is also a strong emphasis on intellectual property and

proprietary products.

In the segment of the biopharmaceutical industry, competition from different sources including major biopharmaceutical

companies, academic institutions, government agencies, and public and private research institutions will continue.

competitors have significantly greater financial resources and expertise in product candidate development and may have progressed

further toward approval and marketing.

In addition, smaller or early-stage companies may also prove to be significant competitors,

particularly through collaborative arrangements with large and established companies.

Manufacturing and Supply

We do not have any manufacturing capability

and therefore we currently rely on and intend to continue to rely on contract manufacturing organizations to produce our product

candidates in accordance with regulatory requirements.

Commercialization

business success with BioLexa depends not only on the successful development and approval of the product but also on its commercialization.

At present, our plan anticipates us making the investments necessary to build an in-house marketing and sales capability for the

market for BioLexa.

As BioLexa makes its way through clinical development in the U.S., we intend to approach pharmaceutical

and biotechnology companies outside the U.S.

to negotiate and enter into strategic partnerships that will enable development and

commercialization of BioLexa outside the U.S., where we believe the market opportunity is larger than that of the U.S.

far more complex to reach.

We have no operations outside the U.S., nor are we planning to have any non-U.S.

Manufacturing

do not have any manufacturing capability and therefore have engaged Particle Sciences, Inc.

(“Particle Sciences”),

a company with over 20 years of experience formulating and producing topical therapeutics under current good manufacturing practice

requirements (“cGMP”) regulations, to formulate and manufacture the BioLexa product candidate in accordance with cGMP

requirements.

Although we have not entered into a master service agreement with Particle Sciences, Particle Sciences is charged

with, among other things, the following pursuant to the terms of a quote provided to us by Particle Sciences:

the formulation of the BioLexa product candidate for ease of production and analysis;

and packaging the required doses of the BioLexa product candidate for all clinical testing under cGMP conditions;

the shelf life of the BioLexa product candidate employing industry standard stability testing techniques and protocol.

addition to the foregoing, Particle Sciences is required to identify and source the two raw materials, Ca-DTPA and Gentamicin,

used to produce the BioLexa product candidate.

Both DTPA and Gentamicin are available from multiple suppliers in the U.S., Europe

and Asia, and the Company anticipates that such raw materials will be readily available to the Company.

Particle Sciences is required

to vet and engage potential suppliers of the raw materials.

Although the Company is engaged in negotiations with suppliers of

the raw materials, the Company has not yet entered into any agreements for the supply of such raw materials.

The additional components

in the BioLexa formulation are all listed in the United States Pharmacopeia and are readily available from multiple U.S.

who routinely supply similar materials to the pharmaceutical and cosmetic industries.

Property Portfolio

believe that market exclusivity derived from our licensed intellectual property, the Hatch-Waxman provisions applicable to products

approved under 505(b)(2) and possible data protection rights will present barriers to entry and are keys to our success.

goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other proprietary

technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the

Our success depends not only on the successful

development and approval of our products candidates but also on the commercialization of our potential products.

If and when our

product candidates receive regulatory approval, we intend to engage third-parties such as pharmaceutical and biotechnology companies

for the commercialization of our products.

Intellectual Property Portfolio

Our goal is to obtain, maintain and enforce

patent protection for our products, formulations, processes, methods and other proprietary technologies, preserve our trade secrets,

and operate without infringing on the proprietary rights of other parties, both in the U.S.

and in other countries.

Our policy is to actively seek the broadest intellectual property protection possible for our products,

proprietary information and proprietary technology through a combination of contractual arrangements and patents, both in the

is to actively seek the broadest intellectual property protection possible for our products, proprietary information and proprietary

technology through a combination of contractual arrangements and patents, both in the U.S.

and elsewhere in the world.

In addition, we intend to actively pursue product life-cycle management initiatives to extend

our market exclusivity.

intend to cement our market exclusivity in conjunction with our formulation-development partners through additional patents based

on the pharmaceutical and clinical characteristics of our drug in the proprietary formulation and through the introduction of

line extensions such as combination drugs and new formulations.

addition to any granted patents, our products will be eligible for market exclusivity to run concurrently with the term of the

patent for three and a half years in the U.S.

per the Hatch-Waxman Act and pediatric exclusivity guideline and up to ten years

of market exclusivity in the E.U.

which includes eight years of data exclusivity and two years of market exclusivity from the

date of the NDA or the European equivalent referred to as Marketing Authorization Application, or MAA.

our biofilm-prevention technology, is covered by U.S.

9,821,063, which was issued on November 21, 2017 and expires

in 2033, and has issued patents in the E.U.

and Spain expiring in 2028.

Patent applications covering multiple formulations and

methods of use for the BioLexa Platform are presently pending in the U.S., Europe and Canada which, if issued, will expire in

authorities in the U.S.

and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion,

advertising, distribution and marketing of pharmaceutical products such as those being developed by us.

In the U.S., the FDA regulates

such products under the FDCA and implements related regulations.

Failure to comply with applicable FDA requirements, both before

and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA

to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production

or distribution, injunctions and/or criminal prosecution.

Food and Drug Administration Regulation

States Drug Development

the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under

the FDCA and its implementing regulations.

Drugs are also subject to other federal, state and local statutes and regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign

statutes and regulations requires the expenditure of substantial time and financial resources.

Failure to comply with the applicable

requirements at any time during the product development process, approval process or after approval, may subject an applicant

to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal to approve

pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product

recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions,

we intend to actively pursue product life-cycle management initiatives to extend our market exclusivity.

We intend to cement our market exclusivity

in conjunction with our formulation-development partners through additional patents based on the pharmaceutical and clinical characteristics

of our product candidates in the proprietary formulation and through the introduction of line extensions such as combination drugs

and new formulations.

In addition to any granted patents, our products

may be eligible for market exclusivity to run concurrently with the term of the patent for three and a half years in the U.S.

to the Hatch-Waxman Act and pediatric exclusivity guideline and up to ten years of market exclusivity in the E.U.

which includes

eight years of data exclusivity and two years of market exclusivity from the date we file an NDA or the European equivalent referred

to as Marketing Authorization Application.

Government Regulations

Governmental authorities in the U.S.

countries extensively regulate the research, development, testing, manufacture, labeling, promotion, advertising, distribution

and marketing of pharmaceutical products, including biological products, and medical devices, such as those being developed by

In the U.S., the FDA regulates such products under the FDCA and the Public Health Services Act and implements related regulations.

Failure to comply with applicable FDA requirements, both before and after approval, may subject us to administrative and judicial

sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning letters, product recalls,

product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution.

Food and Drug Administration Regulations

United States Drug Development

In the United States, the FDA regulates drugs

(including biological products, such as vaccines), medical devices and combinations of drugs and devices, or combination products,

under the FDCA and its implementing regulations.

These products are also subject to other federal, state and local statutes and

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local

and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

Failure to comply with

the applicable U.S.

requirements at any time during the product development process, approval process or after approval, may subject

an applicant to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal

to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary

product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions,

fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.

1 unchanged sentence

action could have a material adverse effect on us.

process required by the FDA before a drug may be marketed in the United States generally involves the following:

of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations,

including the FDA’s Good Laboratory Practice regulations;

to the FDA of an IND, which must become effective before human clinical trials may begin;

of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related

regulations, sometimes referred to as good clinical practices, or GCPs, to establish the safety and efficacy of the proposed

drug for its proposed indication;

to the FDA of an NDA;

completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components

thereof, are produced to assess compliance with the FDA’s cGMP requirements;

FDA audit of the clinical trial sites that generated the data in support of the NDA;

review and approval of the NDA prior to any commercial marketing or sale.

a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage.

Pre-clinical tests

include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies.

An IND sponsor

must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available

clinical data or literature, to the FDA as part of the IND.

The sponsor must also include a protocol detailing, among other things,

the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to

be evaluated if the initial clinical trial lends itself to an efficacy evaluation.

Some pre-clinical testing may continue even

after the IND is submitted.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns

or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period.

case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

Clinical holds also

may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed

on all drug products within a certain class of drugs.

The FDA also can impose partial clinical holds, for example, prohibiting

the initiation of clinical trials of a certain duration or for a certain dose.

clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations.

These regulations include the requirement that all research subjects provide informed consent in writing before their participation

in any clinical trial.

Further, an Institutional Review Board (“IRB”) must review and approve the plan for any clinical

trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually.

An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are

reasonable in relation to anticipated benefits.

The IRB also approves the information regarding the clinical trial and the consent

form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial

until completed.

new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval.

detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria,

and the parameters to be used to monitor subject safety.

clinical trials are typically conducted in three sequential phases that may overlap or be combined:

The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage

tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness.

the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be

unavoidably toxic, the initial human testing may be conducted in patients.

Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily

evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and

Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population

at geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit

relationship of the product and provide an adequate basis for product labeling.

Post-approval

trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These studies are

used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances,

the FDA may mandate the performance of Phase 4 trials.

Companies that conduct certain clinical trials also are required to register

them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United

States, within certain timeframes.

Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA,

and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings

from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing

that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse

reaction over that listed in the protocol or investigator brochure.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed

successfully within any specified period, if at all.

The FDA or the clinical trial sponsor may suspend or terminate a clinical

trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial

is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious

harm to patients.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the

clinical trial sponsor, known as a data safety monitoring board or committee.

This group provides authorization for whether a

trial may move forward at designated check points based on access to certain data from the study.

The clinical trial sponsor may

also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

with clinical trials, companies usually complete additional animal studies and must also develop additional information about

the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities

in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the

product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and

purity of the final product.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted

to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

and FDA Review Process

results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process,

analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of

an NDA for a new drug, requesting approval to market the product.

The submission of an NDA is subject to the payment of a substantial

user fee, and the sponsor of an approved NDA is also subject to an annual program user fee;

although a waiver of such fee may

be obtained under certain limited circumstances.

For example, the agency will waive the application fee for the first human drug

application that a small business or its affiliate submits for review.

FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting

an NDA for filing.

The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt.

The decision to

accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete

to permit a substantive review.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”),

the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the

receipt of the NDA.

The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended

by FDA requests for additional information or clarification and may go through multiple review cycles.

the NDA submission is accepted for filing, the FDA reviews the NDA 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 cGMPs to assure and

preserve the product’s identity, strength, quality and purity.

The FDA may refer applications for novel drug products or

drug products which present difficult questions of safety or efficacy to an advisory committee, 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.

The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions

between the FDA and us during the review process.

The review and evaluation of an NDA by the FDA is extensive and time consuming

and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.

approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine

whether they comply with cGMPs.

The FDA will not approve the product unless it determines that the manufacturing processes and

facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required

specifications.

In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with

GCP requirements.

After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an

approval letter or a Complete Response Letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing

information for specific indications.

A Complete Response Letter indicates that the review cycle of the application is complete

and the application will not be approved in its present form.

A Complete Response Letter usually describes all the specific deficiencies

in the NDA identified by the FDA.

The Complete Response Letter may require additional clinical data and/or an additional pivotal

Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies

or manufacturing.

If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies

identified in the letter, or withdraw the application.

Even if such data and information are submitted, the FDA may ultimately

decide that the NDA does not satisfy the criteria for approval.

Data obtained from clinical trials are not always conclusive,

and the FDA may interpret data differently than we interpret the same data.

is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant

difficulties or costs during the review process.

If a product receives marketing approval, the approval may be significantly limited

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

of the product.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the product

labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls

and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects

of approved products.

For example, the FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness

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

FDA may also place other conditions on approvals, including the requirement for a risk evaluation and mitigation strategy (“REMS”),

to assure the safe use of the drug.

If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS;

the FDA will not approve the NDA without an approved REMS, if required.

A REMS could include medication guides, physician communication

plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization

Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or

dispensing of products.

Product approvals may be withdrawn for non-compliance with regulatory requirements or if problems occur

following initial marketing.

505(b)(2) Regulatory Approval Pathway

505(b)(2) of the FDCA provides an alternate regulatory pathway for approval of a new drug by allowing the FDA to rely on data

not developed by the applicant.

Specifically, Section 505(b)(2) permits the submission of an NDA where one or more of the investigations

relied upon by the applicant for approval was not conducted by or for the applicant and for which the applicant has not obtained

a right of reference.

The applicant may rely upon published literature and/or the FDA’s findings of safety and effectiveness

for an approved drug already on the market.

Approval or submission of a 505(b)(2) application, like those for abbreviated new

drugs (“ANDAs”), may be delayed because of patent and/or exclusivity rights that apply to the previously approved

505(b)(2) application may be submitted for a new chemical entity, or NCE, when some part of the data necessary for approval is

derived from studies not conducted by or for the applicant and when the applicant has not obtained a right of reference.

data are typically derived from published studies, rather than FDA’s previous findings of safety and effectiveness of a

previously approved drug.

For changes to a previously approved drug however, an applicant may rely on the FDA’s finding

of safety and effectiveness of the approved drug, coupled with information needed to support the change from the approved drug,

such as new studies conducted by the applicant or published data.

When based on an approved drug, the 505(b)(2) drug may be approved

for all of the indications permitted for the approved drug, as well as any other indication supported by additional data.

505(b)(2) applications also may be entitled to marketing exclusivity if supported by appropriate data and information.

in more detail below, three-year new data exclusivity may be granted to the 505(b)(2) application if one or more clinical investigations

conducted in support of the application, other than bioavailability/bioequivalence studies, were essential to the approval and

conducted or sponsored by the applicant.

Five years of marketing exclusivity may be granted if the application is for an NCE,

and pediatric exclusivity is likewise available.

Book Listing and Paragraph IV Certification

NDA submissions, including those under Section 505(b)(2), applicants are required to list with the FDA certain patents with claims

that cover the applicant’s product.

Upon approval, each of the patents listed in the application is published in Approved

Drug Products with Therapeutic Equivalence Evaluations , commonly referred to as the Orange Book.

Any applicant who subsequently

files an ANDA or 505(b)(2) NDA that references a drug listed in the Orange Book must certify to the FDA that (1) no patent information

on the drug product that is the subject of the application has been submitted to the FDA;

The process required by the FDA before a drug

may be marketed in the United States generally involves the following:

completion of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice regulations;

submission to the FDA of an IND, which must become effective before human clinical trials may begin;

performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related regulations, sometimes referred to as good clinical practices (“GCPs”) to establish the safety and efficacy of the proposed drug for its proposed indication;

submission to the FDA of an NDA or biologics license application (“BLA”);

satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with the FDA’s current good manufacturing practice (“cGMP”) requirements;

potential FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA;

FDA review and approval of the NDA or BLA prior to any commercial marketing or sale.

Human clinical trials are typically conducted

in three sequential phases that may overlap or be combined:

The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness.

In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients.

Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.

Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling.

Post-approval trials, sometimes referred to

as Phase 4 clinical trials, may be conducted after initial marketing approval.

These studies are used to gain additional experience

from the treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may mandate the performance

of Phase 4 trials.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period,

The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including

a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an Institutional

Review Board (“IRB”), which oversees the conduct of clinical trials, can suspend or terminate approval of a clinical

trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the

product has been associated with unexpected serious harm to patients.

Additionally, some clinical trials are overseen by an independent

group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

group provides authorization for whether a trial may move forward at designated check points based on access to certain data from

The clinical trial sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or

competitive climate.

FDA Review Process

The results of product development, pre-clinical

studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed

labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug, or BLA for a biological product,

requesting approval to market the product.

The submission of an NDA or BLA is subject to the payment of a substantial user fee,

and the sponsor of an approved NDA or BLA is also subject to an annual program user fee;

although a waiver of such fee may be obtained

under certain limited circumstances.

The FDA reviews all NDAs submitted before it

accepts them for filing and may request additional information rather than accepting an NDA for filing.

Under the goals and policies

agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive

review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA.

The FDA does not always meet its

PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification

and may go through multiple review cycles.

The review and evaluation of an NDA or BLA

by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely

approval, if at all.

Before approving an NDA, the FDA will conduct

a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMPs.

FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP

requirements and adequate to assure consistent production of the product within required specifications.

In addition, before approving

an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements.

There is no assurance that the FDA will ultimately

approve a product for marketing in the United States, and we may encounter significant difficulties or costs during the review

If a product receives marketing approval, the approval may be significantly limited to specific diseases and dosages or

the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may

require that certain contraindications, warnings or precautions be included in the product labeling or may condition the approval

of the NDA or BLA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment

to conduct post-market testing or clinical trials and surveillance to monitor the effects of approved products.

For example, the

FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness and may require testing and surveillance

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

The FDA may also place other conditions on approvals,

including the requirement for a risk evaluation and mitigation strategy (“REMS”), to assure the safe use of the drug.

Section 505(b)(2) Regulatory Approval

Section 505(b)(2) of the FDCA provides an alternate

regulatory pathway for approval of a new drug by allowing the FDA to rely on data not developed by the applicant.

Specifically,

Section 505(b)(2) permits the submission of an NDA where one or more of the investigations relied upon by the applicant for approval

was not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

The applicant may

rely upon published literature and/or the FDA’s findings of safety and effectiveness for an approved drug already on the

Approval or submission of a 505(b)(2) application, like those for abbreviated new drugs (“ANDAs”), may be delayed

because of patent and/or exclusivity rights that apply to the previously approved drug.

A 505(b)(2) application may be submitted for

a new chemical entity (“NCE”) when some part of the data necessary for approval is derived from studies not conducted

by or for the applicant and when the applicant has not obtained a right of reference.

Section 505(b)(2) applications also may be

entitled to marketing exclusivity if supported by appropriate data and information.

Three-year new data exclusivity may be granted

to the 505(b)(2) application if one or more clinical investigations conducted in support of the application, other than bioavailability/bioequivalence

studies, were essential to the approval and conducted or sponsored by the applicant.

Five years of marketing exclusivity may be

granted if the application is for an NCE, and pediatric exclusivity is likewise available.

Orange Book Listing and Paragraph IV Certification

For NDA submissions, including those under

Section 505(b)(2), applicants are required to list with the FDA certain patents with claims that cover the applicant’s product.

Upon approval, each of the patents listed in the application is published in Approved Drug Products with Therapeutic Equivalence

Evaluations , commonly referred to as the Orange Book.

Any applicant who subsequently files an ANDA or 505(b)(2) NDA that references

a drug listed in the Orange Book must certify to the FDA that (1) no patent information on the drug product that is the subject

of the application has been submitted to the FDA;

(2) such patent has expired;

date on which such patent expires;

or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale

of the drug product for which the application is submitted.

(3) the date on which such patent expires;

such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application

is submitted.

This last certification is known as a Paragraph IV Certification.

an applicant has provided a Paragraph IV Certification to the FDA, the applicant must also send notice of the Paragraph IV Certification

to the holder of the NDA for the approved drug and the patent owner once the application has been accepted for filing by the FDA.

The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV Certification.

The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV Certification prevents the FDA from

approving the ANDA or 505(b)(2) application until the earlier of 30 months from the date of the lawsuit, the applicant’s

successful defense of the suit, or expiration of the patent.

If an applicant has provided a Paragraph IV

Certification to the FDA, the applicant must also send notice of the Paragraph IV Certification to the holder of the NDA for the

approved drug and the patent owner once the application has been accepted for filing by the FDA.

The NDA holder or patent owner

may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV Certification.

The filing of a patent

infringement lawsuit within 45 days of the receipt of a Paragraph IV Certification prevents the FDA from approving the ANDA or

505(b)(2) application until the earlier of 30 months from the date of the lawsuit, the applicant’s successful defense of

the suit, or expiration of the patent.

United States Medical Device Regulation

Medical devices, including diagnostic test

devices, also are subject to extensive and rigorous regulation by the FDA under the FDCA, as well as other federal and state regulatory

bodies in the United States, and laws and regulations of foreign authorities in other countries.

FDA requirements specific to medical

devices are wide ranging and govern, among other things, the design, development and manufacturing, human clinical trials, preclearance

or approval, advertising and promotion, and product import and export.

Unless an exemption applies, medical devices distributed

in the United States must receive either premarket clearance under Section 510(k) of the FDCA or premarket approval of a premarket

application (“PMA”).

During the COVID-19 public health emergency, the FDA has authorized COVID-19 diagnostic tests

under its Emergency Use Authorization authority.

Medical devices are classified into one of three classes—Class I, Class II,

or Class III—depending on the degree or risk associated with each medical device and the extent of control needed to

ensure safety and effectiveness.

Medical devices deemed to pose relatively low risk are placed in either Class I or II.

II devices generally require the manufacturer to submit a premarket notification under Section 510(k) of the FDCA requesting

permission for commercial distribution.

Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting

or implantable devices are placed in Class III requiring PMA approval.

Reimbursement

sales of any of our product candidates, if approved, will depend, at least in part, on the extent to which such products will

be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations.

These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services.

A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate

will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure that other payors

will also provide coverage for the drug product.

In addition, the U.S.

government, state legislatures and foreign governments

have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements

for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive

policies in jurisdictions with existing controls and measures, could further limit our future revenues and results of operations.

Decreases in third-party reimbursement or a decision by a third-party payor to not cover a product candidate, if approved, or

any future approved products could reduce physician usage of our products, and have a material adverse effect on our sales, results

of operations and financial condition.

the United States, the Medicare Part D program provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain

We do not know whether our product candidates, if approved, will be eligible for coverage under Medicare Part D, but

individual Medicare Part D plans offer coverage subject to various factors such as those described above.

Furthermore, private

payors often follow Medicare coverage policies and payment limitations in setting their own coverage policies.

Exclusivity and Pediatric Use

Pediatric Research Equity Act, or PREA, requires a sponsor to conduct pediatric studies for most drugs and biologics, for a new

active ingredient, new indication, new dosage form, new dosing regimen or new route of administration.

Under PREA, original NDAs,

biologics license applications and supplements thereto, must contain a pediatric assessment unless the sponsor has received a

deferral or waiver.

Unless otherwise required by regulation, PREA does not apply to any drug for an indication for which an orphan

drug designation has been granted.

The required assessment must assess the safety and effectiveness of the product for the claimed

indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for

which the product is safe and effective.

The sponsor or FDA may request a deferral of pediatric studies for some or all of the

pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the drug or biologic is ready

for approval for use in adults before pediatric studies are complete or that additional safety or effectiveness data needs to

be collected before the pediatric studies begin.

exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment

of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent

and orphan exclusivity.

This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond

to a written request from the FDA for such data.

The data does not need to show the product to be effective in the pediatric population

rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever

statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months.

Laws and Regulations

of our product candidates, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement

by the federal government and the states and foreign governments in which we might conduct our business.

The healthcare laws and

regulations that may affect our ability to operate include the following:

federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly,

solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including

the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare

program, such as Medicare or Medicaid.

Potential sales of any of our product candidates,

if approved, will depend, at least in part, on the extent to which such products will be covered by third-party payors, such as

government health care programs, commercial insurance and managed healthcare organizations.

These third-party payors are increasingly

limiting coverage and/or reducing reimbursements for medical products and services.

A third-party payor’s decision to provide

coverage for a drug product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination

to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.

government, state legislatures and foreign governments have continued implementing cost-containment programs, including

price controls, restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls

and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures,

could further limit our future revenues and results of operations.

Decreases in third-party reimbursement or a decision by a third-party

payor to not cover a product candidate, if approved, or any future approved products could reduce physician usage of our products,

and have a material adverse effect on our sales, results of operations and financial condition.

In the United States, the Medicare Part D program

provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain products.

We do not know whether our product

candidates, if approved, will be eligible for coverage under Medicare Part D, but individual Medicare Part D plans offer coverage

subject to various factors such as those described above.

Furthermore, private payors often follow Medicare coverage policies and

payment limitations in setting their own coverage policies.

Healthcare Laws and Regulations

Sales of our product candidates, if approved,

or any other future product candidate will be subject to healthcare regulation and enforcement by the federal government and the

states and foreign governments in which we might conduct our business.

The healthcare laws and regulations that may affect our

ability to operate include the following:

The federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly, solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid.

The term “remuneration”

has been broadly interpreted to include anything

false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person

or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including

Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent.

Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes

that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare

benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection

with the delivery of or payment for healthcare benefits, items or services.

as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations,

impose obligations on certain types of individuals and entities regarding the electronic exchange of information in common

healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information.

federal Physician Payments Sunshine Act requires 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 specific exceptions,

to report annually to the Centers for Medicare & Medicaid Services information related to payments or other transfers

of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their

immediate family members.

many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may

apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs.

Additionally,

we may be subject to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical

industry’s voluntary compliance guidelines, state laws that require drug manufacturers to report information related to

payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, as well as state

and foreign laws governing the privacy and security of health information, many of which differ from each other in significant

ways and often are not preempted by HIPAA.

Additionally,

to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.

of February 28, 2020, we employed a total of 2 full-time employees, 1 employee consultant, and no part-time employees.

not a party to any collective bargaining agreements.

has been broadly interpreted to include anything of value.

Federal false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent.

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations, impose obligations on certain types of individuals and entities regarding the electronic exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information.

The federal Physician Payments Sunshine Act requires 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 specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Also, many states have similar laws and regulations,

such as anti-kickback and false claims laws that may be broader in scope and may apply regardless of payor, in addition to items

and services reimbursed under Medicaid and other state programs.

Additionally, we may be subject to state laws that require pharmaceutical

companies to comply with the federal government’s and/or pharmaceutical industry’s voluntary compliance guidelines,

state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians

and other healthcare providers or marketing expenditures, as well as state and foreign laws governing the privacy and security

of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.

Additionally, to the extent that our product

is sold in a foreign country, we may be subject to similar foreign laws.

As of March 11, 2021, we employed a total

of 3 full-time employees, 1 employee consultant, and 1 part-time employee.

We are not a party to any collective bargaining agreements.

We believe that we maintain good relations with our employees.

Corporate Information

were incorporated as a Nevada corporation on May 16, 2017.

Our principal executive offices are located at 1 Rockefeller Plaza,

Suite 1039, New York, New York 10020 and our telephone number is (646) 756-2997.

website address is www.hoththerapeutics.com .

The contents of, or information accessible through, our website are not part

of this Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only.

Our Corporate Information

We were incorporated as a Nevada corporation

on May 16, 2017.

Our principal executive offices are located at 1 Rockefeller Plaza, Suite 1039, New York, New York 10020 and our

telephone number is (646) 756-2997.

Available Information

Our website address is www.hoththerapeutics.com.

The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K, and our website

address is included in this document as an inactive textual reference only.

We make our filings with the U.S.

Securities and Exchange Commission (“SEC”), including our Annual Report on Form

10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge

on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC.

may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington,

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information.

Securities and Exchange

Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form

8-K and all amendments to those reports, available free of charge on our website as soon as reasonably practicable after we file

such reports with, or furnish such reports to, the SEC.

The public may read and copy the materials we file with the SEC at the

SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.

The public may obtain information on the operation

of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Additionally, the SEC maintains an internet site that contains

reports, proxy and information statements and other information.

The address of the SEC’s website is www.sec.gov.

The information contained in the SEC’s website is not intended

to be a part of this filing.

information contained in the SEC’s website is not intended to be a part of this filing.

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

What changed 10-K

Item 1. Business