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Item 1A. Risk Factors

2023-03-31 compared with 2022-03-30 · 466 added, 385 removed, 1145 unchanged (43% of the section changed)

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

You should carefully consider the following risk factors and the other

information in this Annual Report on Form 10-K before investing in our common stock.

Our business and results of operations could be

seriously harmed by any of the following risks.

An investment in our common stock involves

a high degree of risk.

You should carefully consider the following risk factors and the other information in this Annual Report on Form

10-K before investing in our common stock.

Our business and results of operations could be seriously harmed by any of the following risks.

The risks set out below are not the only risks we face.

Additional risks and uncertainties

not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition

and/or operating results.

If any of the following events occur, our business, financial condition and results of operations could be

materially adversely affected.

In such case, the value and trading price of our common stock could decline, and you may lose all or part

of your investment.

Related to Our Financial Position and Need for Capital

have generated no revenue from commercial sales to date and our future profitability is uncertain.

were incorporated in May 2017 and have a limited operating history and our business is subject to all of the risks inherent in the establishment

of a new business enterprise.

Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications

and delays frequently encountered in connection with development and expansion of a new business enterprise.

Since inception, we have

incurred losses and expect to continue to operate at a net loss for at least the next several years as we commence our research and development

efforts, conduct clinical trials and develop manufacturing, sales, marketing and distribution capabilities.

Our net losses for the years

ended December 31, 2021 and 2020 were $14,313,705 and $7,197,816, respectively, and our accumulated deficit as of December 31, 2021 and

2020 was $33,727,163 and $19,413,458, respectively.

There can be no assurance that the products under development by us will be approved

for sale in the U.S.

Additional risks and uncertainties not currently known to us or that we currently

deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

If any of the following

events occur, our business, financial condition and results of operations could be materially adversely affected.

In such case, the value

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

Risks Related to Our Financial Position and

Need for Capital

We have generated no revenue from commercial

sales to date and our future profitability is uncertain.

We were incorporated in May 2017 and have a limited

operating history and our business is subject to all of the risks inherent in the establishment of a new business enterprise.

Our likelihood

of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection

with development and expansion of a new business enterprise.

Since inception, we have incurred losses and expect to continue to operate

at a net loss for at least the next several years as we commence our research and development efforts, conduct clinical trials and develop

manufacturing, sales, marketing and distribution capabilities.

Our net losses for the years ended December 31, 2022 and 2021 were $11,371,953

and $14,313,705, respectively, and our accumulated deficit as of December 31, 2022 and 2021 was $45,099,116 and $33,727,163, respectively.

There can be no assurance that the products under development by us will be approved for sale in the U.S.

or elsewhere.

Furthermore, there can be no assurance that if such products are approved they will be successfully

commercialized, and the extent of our future losses and the timing of our profitability are highly uncertain.

If we are unable to achieve

profitability, we may be unable to continue our operations.

we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development and

you will likely lose your entire investment.

will need to continue to seek capital from time to time to continue development of our product candidates.

We cannot provide any assurances

that any revenues that we may generate in the future will be sufficient to fund our ongoing operations.

We believe that we will need

to raise substantial additional capital to fund our operations and the development and commercialization of our product candidates.

business or operations may change in a manner that may consume available funds more rapidly than anticipated and substantial additional

funding may be required to maintain operations, fund expansion, commercialize our product candidates, develop new or enhanced products,

acquire complementary products, business or technologies or otherwise respond to competitive pressures and opportunities, such as a change

in the regulatory environment or a change in preferred treatment modalities.

In addition, we may need to accelerate the growth of our

sales capabilities and distribution beyond what is currently envisioned, and this would require additional capital.

However, we may not

be able to secure funding on favorable terms, if at all.

we cannot raise adequate funds to satisfy our capital requirements, we may have to delay, scale back or eliminate our research and development

activities, clinical studies or operations.

We may also be required to obtain funds through arrangements with collaborators, which arrangements

may require us to relinquish rights to certain intellectual property, technologies or products that we otherwise would not consider relinquishing,

including rights to future product candidates or certain major geographic markets.

This could result in sharing revenues which we might

otherwise retain for ourselves.

Furthermore, there

can be no assurance that if such products are approved they will be successfully commercialized, and the extent of our future losses and

the timing of our profitability are highly uncertain.

If we are unable to achieve profitability, we may be unable to continue our operations.

If we fail to obtain the capital necessary

to fund our operations, we will be unable to continue or complete our product development and you will likely lose your entire investment.

We will need to continue to seek capital from

time to time to continue development of our product candidates.

We cannot provide any assurances that any revenues that we may generate

in the future will be sufficient to fund our ongoing operations.

We believe that we will need to raise substantial additional capital

to fund our operations and the development and commercialization of our product candidates.

Our business or operations may change in a manner

that may consume available funds more rapidly than anticipated and substantial additional funding may be required to maintain operations,

fund expansion, commercialize our product candidates, develop new or enhanced products, acquire complementary products, business or technologies

or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory environment or a change in preferred

treatment modalities.

In addition, we may need to accelerate the growth of our sales capabilities and distribution beyond what is currently

envisioned, and this would require additional capital.

However, we may not be able to secure funding on favorable terms, if at all.

If we cannot raise adequate funds to satisfy our

capital requirements, we may have to delay, scale back or eliminate our research and development activities, clinical studies or operations.

We may also be required to obtain funds through arrangements with collaborators, which arrangements may require us to relinquish rights

to certain intellectual property, technologies or products that we otherwise would not consider relinquishing, including rights to future

product candidates or certain major geographic markets.

This could result in sharing revenues which we might otherwise retain for ourselves.

Any of these actions may harm our business, financial condition and results of operations.

amount of capital we may need depends on many factors, including the progress, timing and scope of our product development programs;

the progress, timing and scope of our pre-clinical studies and clinical trials;

The amount of capital we may need depends on many

factors, including the progress, timing and scope of our product development programs;

the progress, timing and scope of our pre-clinical

studies and clinical trials;

the time and cost necessary to obtain regulatory approvals;

the time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing;

our ability to enter into

and maintain collaborative, licensing and other commercial relationships;

and our partners’ commitment of time and resources to

the development and commercialization of our products.

if we can raise additional funding, we may be required to do so on terms that are dilutive to you.

capital markets have been unpredictable in the recent past for unprofitable companies such as ours.

The amount of capital that a company

such as ours is able to raise often depends on variables that are beyond our control.

As a result, we may not be able to secure financing

on terms attractive to us, or at all.

If we are able to consummate a financing arrangement, the amount raised may not be sufficient to

meet our future needs.

If adequate funds are not available on acceptable terms, or at all, our business, including our results of operations,

financial condition and our continued viability will be materially adversely affected.

Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

are dependent upon the clinical success of our licensed products and technologies.

If we are unable to generate revenues from our licensed

products and technologies, our ability to create shareholder value may be limited.

do not currently generate revenues from any of our product candidates, and we may not be successful in obtaining regulatory approvals

to commence our clinical trials.

If we do not obtain such approvals, the time in which we expect to commence clinical programs for our

product candidates will be extended and such extension may increase our expenses and our need for additional capital.

Moreover, there

is no guarantee that our clinical trials will be successful or that we will continue clinical development in support of an approval from

the regulatory agencies for any indication.

We note that most drug candidates never reach the clinical stage and even those that do commence

clinical development have only a small chance of successfully completing clinical development and gaining regulatory approval.

our business currently depends entirely on the successful development, regulatory approval and commercialization of our product candidates,

which may never occur.

we have entered into the Voltron Agreement pursuant to which we and HaloVax intend to jointly develop products to prevent COVID-19, no

assurance can be given as to when, if ever, we will be able to develop any products for such purpose and if developed that such products

will be successfully commercialized.

March 2020, we entered into the Voltron Agreement pursuant to which we and HaloVax will work to jointly develop potential products candidates

to prevent COVID-19;

however, no assurance can be given as to when, if ever, we will be able to develop any products for such purpose.

Furthermore, we are subject to risks including, but not limited to, the following with respect to the development of a treatment for

Emergency Use Authorization marketing approval processes of the FDA are lengthy, time consuming and inherently unpredictable, and we

cannot guarantee that we will ever have a marketable product;

may encounter substantial delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate

adequate safety and efficacy to the satisfaction of applicable regulatory authorities;

successful clinical studies may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify

be commercially successful, physicians must be persuaded that using our products are effective alternatives to other existing therapies

and treatments;

may depend on third parties for manufacturing our proposed product candidates and any conflicts with such partners could delay or prevent

the development or commercialization of such product candidates;

third-party contract manufacturers upon whom we rely to formulate and manufacture our product candidates do not perform, fail to manufacture

according to our specifications or fail to comply with strict regulations, our clinical studies could be adversely affected and the development

of our product candidates could be delayed or terminated or we could incur significant additional expenses;

events involving our products may lead the FDA to delay or deny clearance for our products or result in product recalls that could harm

our reputation, business and financial results;

we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties

and our business, operations and financial condition could be adversely affected.

our joint venture with HaloVax, LLC (“HaloVax”) is not successful or if we fail to realize the benefits we anticipate from

such joint venture, we may not be able to capitalize on the full market potential of our potential products.

March 2020, we entered into the Voltron Agreement to form a joint venture entity named HaloVax to jointly develop potential product candidates

for the prevention of the COVID-19.

Pursuant to the terms of the Voltron Agreement we are entitled to receive sales-based royalties at

low single digit percentages.

In addition, in 2020, we purchased 6% of HaloVax’s outstanding membership interests and shall contribute

proceeds of the development of products to prevent COVID-19.

If and to the extent we and HaloVax are unable to develop potential product

candidates for the prevention of COVID-19, we will not be entitled to any sale-based royalties and the value of our ownership interest

in HaloVax could decline in which case we may lose all or part of our investment in HaloVax.

While Voltron has agreed

to cooperate and use commercially reasonable efforts to exchange information and resources that will lead to the development activities

and established a Joint Development Committee consisting of seven members, two of which were selected by us, to plan, review, coordinate

and oversee the performance of the development activities and timelines with respect to development activities, we have limited contractual

rights to direct its activities.

the time and cost necessary to further develop

manufacturing processes and arrange for contract manufacturing;

our ability to enter into and maintain collaborative, licensing and other

commercial relationships;

and our partners’ commitment of time and resources to the development and commercialization of our products.

Even if we can raise additional funding,

we may be required to do so on terms that are dilutive to you.

The capital markets have been unpredictable in

the recent past for unprofitable companies such as ours.

The amount of capital that a company such as ours is able to raise often depends

on variables that are beyond our control.

As a result, we may not be able to secure financing on terms attractive to us, or at all.

we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs.

If adequate funds

are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued

viability will be materially adversely affected.

Risks Related to Product Development, Regulatory

Approval, Manufacturing and Commercialization

We are dependent upon the clinical success

of our licensed products and technologies.

If we are unable to generate revenues from our licensed products and technologies, our ability

to create shareholder value may be limited.

We do not currently generate revenues from any

of our product candidates, and we may not be successful in obtaining regulatory approvals to commence our clinical trials.

obtain such approvals, the time in which we expect to commence clinical programs for our product candidates will be extended and such

extension may increase our expenses and our need for additional capital.

Moreover, there is no guarantee that our clinical trials will

be successful or that we will continue clinical development in support of an approval from the regulatory agencies for any indication.

We note that most drug candidates never reach the clinical stage and even those that do commence clinical development have only a small

chance of successfully completing clinical development and gaining regulatory approval.

Therefore, our business currently depends entirely

on the successful development, regulatory approval and commercialization of our product candidates, which may never occur.

Although we have entered into the Voltron

Agreement pursuant to which we and HaloVax intend to jointly develop products to prevent COVID-19, no assurance can be given as to when,

if ever, we will be able to develop any products for such purpose and if developed that such products will be successfully commercialized.

In March 2020, we entered into the Voltron Agreement

pursuant to which we and HaloVax will work to jointly develop potential products candidates to prevent COVID-19;

however, no assurance

can be given as to when, if ever, we will be able to develop any products for such purpose.

Furthermore, we are subject to risks including,

but not limited to, the following with respect to the development of a treatment for COVID-19:

● the EUA marketing approval processes of the FDA are lengthy, time

consuming and inherently unpredictable, and we cannot guarantee that we will ever have a marketable product

● we may encounter substantial

delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate adequate safety

and efficacy to the satisfaction of applicable regulatory authorities;

● conducting successful clinical

studies may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit;

● to be commercially successful,

physicians must be persuaded that using our products are effective alternatives to other existing therapies and treatments;

● we may depend on third parties

for manufacturing our proposed product candidates and any conflicts with such partners could delay or prevent the development or commercialization

of such product candidates;

● if third-party contract manufacturers

upon whom we rely to formulate and manufacture our product candidates do not perform, fail to manufacture according to our specifications

or fail to comply with strict regulations, our clinical studies could be adversely affected and the development of our product candidates

could be delayed or terminated or we could incur significant additional expenses;

● adverse events involving our

products may lead the FDA to delay or deny clearance for our products or result in product recalls that could harm our reputation, business

and financial results;

● if we fail to comply with healthcare

regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial

condition could be adversely affected.

In addition to the foregoing, on January 31, 2023,

President Biden issued a Statement of Administration Policy indicating that the administration intends for the COVID-19 national emergency

and public health emergency to end on May 11, 2023.

EUAs are issued under a separate declaration based on a determination of whether certain

conditions are met.

Therefore, when the public health emergency ends, current EUAs may remain authorized and the FDA will continue to

have the authority to issue new EUAs as long as those conditions are met and until that authority is formally terminated by the Secretary

of HHS through a separate process.

The Company anticipates that the end of the public health emergency may reduce the likelihood of an

EUA pathway for its potential products candidates to prevent COVID-19 even if the EUA declaration remains in place and that the EUA pathway

may become unavailable within a short period after a notice of the termination of the EUA declaration is published in the Federal Register.

If our joint venture with HaloVax, LLC (“HaloVax”)

is not successful or if we fail to realize the benefits we anticipate from such joint venture, we may not be able to capitalize on the

full market potential of our potential products.

In March 2020, we entered into the Voltron Agreement to form a joint

venture entity named HaloVax to jointly develop potential product candidates for the prevention of the COVID-19.

Pursuant to the terms

of the Voltron Agreement we are entitled to receive sales-based royalties at low single digit percentages and shall contribute proceeds

of the development of products to prevent COVID-19.

In addition, in 2020, we purchased 6% of HaloVax’s outstanding membership interests;

however, during the fourth quarter of 2022, we identified indicators of impairment for the HaloVax investment as a result of adverse changes

in HaloVax’s business operations, including liquidity concerns.

As a result, we investment in HaloVax was valued at $0 and $350,000

as of December 31, 2022 and 2021.

If and to the extent we and HaloVax are unable to develop potential product candidates for the prevention

of COVID-19, we will not be entitled to any sale-based royalties and the value of our ownership interest in HaloVax could decline in which

case we may lose all or part of our investment in HaloVax.

While Voltron has agreed to cooperate and use

commercially reasonable efforts to exchange information and resources that will lead to the development activities and established a Joint

Development Committee consisting of seven members, two of which were selected by us, to plan, review, coordinate and oversee the performance

of the development activities and timelines with respect to development activities, we have limited contractual rights to direct its activities.

Moreover, we will not have any other control with respect to the operations of HaloVax.

Therefore, HaloVax

will have a greater influence with respect to its commercialization efforts and other operations.

In general, our joint venture with HaloVax

subjects us to a number of related risks including that:

we may not receive sales-based royalties pursuant to the terms of the Voltron Agreement;

we may not be successful in the development of any product candidates;

HaloVax may not commit sufficient resources to the marketing and distribution of our products;

HaloVax may infringe the intellectual property rights of third parties, which may expose us to litigation and other potential liability;

disputes may arise between us and HaloVax that result in the delay or termination of the commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources including, but not limited to, disputes with respect to commercializing products upon terms mutually agreeable or beneficial to us and HaloVax;

any products, if developed, will be sold or licensed on terms that are beneficial to us;

HaloVax may not provide us with timely and accurate information regarding commercialization status or results, which could adversely impact our ability to manage our own commercialization efforts, accurately forecast financial results or provide timely information to our shareholders regarding our commercialization efforts;

if any product candidates are successfully developed that we will be able to commercialize such products upon terms mutually agreeable or beneficial to us and HaloVax.

Therefore, HaloVax will have a greater influence

with respect to its commercialization efforts and other operations.

In general, our joint venture with HaloVax subjects us to a number

of related risks including that:

● we may not receive sales-based

royalties pursuant to the terms of the Voltron Agreement;

● we may not be successful in

the development of any product candidates;

● HaloVax may not commit sufficient

resources to the marketing and distribution of our products;

● HaloVax may infringe the intellectual

property rights of third parties, which may expose us to litigation and other potential liability;

● disputes may arise between

us and HaloVax that result in the delay or termination of the commercialization of our products or product candidates or that result

in costly litigation or arbitration that diverts management attention and resources including, but not limited to, disputes with respect

to commercializing products upon terms mutually agreeable or beneficial to us and HaloVax;

● any products, if developed,

will be sold or licensed on terms that are beneficial to us;

● HaloVax may not provide us

with timely and accurate information regarding commercialization status or results, which could adversely impact our ability to manage

our own commercialization efforts, accurately forecast financial results or provide timely information to our shareholders regarding

our commercialization efforts;

● if any product candidates are

successfully developed that we will be able to commercialize such products upon terms mutually agreeable or beneficial to us and HaloVax.

If HT-005 is not commercialized by Zylö

or otherwise acquired by a third party, we may not be able to capitalize on the full market potential of our interests with respect

or otherwise acquired by a third party, we may not be able to capitalize on the full market potential of our interests with respect to

In December 2021, we licensed HT-005 back to Zylö

and are entitled to receive a low single digit percent of the net proceeds attributable to

the sale of HT-005 to a third party, a low single digit percent of the net proceeds from

the sale of HT-005 in the United States and Canada and their respective territories (collectively,

the “Territory”) and a low double digit percent of any royalty Zylö receives

through the sublicense to a third party based on the net sales of HT-005 in the Territory.

In connection with the license of HT-005 back

to Zylö, we acquired 100,000 shares of Zylö’s Class B common stock.

December 31, 2021, we own 220,000 shares of Zylö’s Class B common stock.

is unable to sell or otherwise commercialize HT-005, we will not be entitled to any proceeds or sale-based royalties and the value of

our ownership interest in Zylö could decline in which case we may lose all or part of our investment in Zylö.

and are entitled to receive a low single digit percent of the net proceeds attributable to the sale of HT-005 to a third party, a low

single digit percent of the net proceeds from the sale of HT-005 in the United States and Canada and their respective territories (collectively,

the “Territory”) and a low double digit percent of any royalty Zylö receives through the sublicense to a third party

based on the net sales of HT-005 in the Territory.

In connection with the license of HT-005 back to Zylö, we acquired 100,000 shares

of Zylö’s Class B common stock.

As of December 31, 2022, we own 220,000 shares of Zylö’s Class B common stock.

Zylö is unable to sell or otherwise commercialize HT-005, we will not be entitled to any proceeds or sale-based royalties and the

value of our ownership interest in Zylö could decline in which case we may lose all or part of our investment in Zylö.

The marketing approval process of the FDA

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fail to receive marketing approval for many reasons, including among others:

the FDA or other regulatory agencies may disagree with the design or implementation of our clinical trials;

the FDA could determine that we cannot rely on Section 505(b)(2) for any of our product candidates;

the FDA may determine that we have identified the wrong reference listed drug or drugs or that approval of our Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs.

● the FDA or other regulatory

agencies may disagree with the design or implementation of our clinical trials;

● the FDA could determine that

we cannot rely on Section 505(b)(2) for any of our product candidates;

● the FDA may determine that

we have identified the wrong reference listed drug or drugs or that approval of our Section 505(b)(2) application for any of our product

candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs.

In addition, the process of seeking regulatory

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Events that may prevent successful or timely completion of clinical development include:

delays in reaching, or failing to reach, a consensus with regulatory agencies on study design;

delays in reaching, or failing to reach, agreement on acceptable terms with a sufficient number of prospective contract research organizations (“CROs”) and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● delays in reaching, or failing

to reach, a consensus with regulatory agencies on study design;

● delays in reaching, or failing

to reach, agreement on acceptable terms with a sufficient number of prospective contract research organizations (“CROs”)

and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs

and trial sites;

delays in obtaining required IRB or Ethics Committee (“EC”) approval at each clinical study site;

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failure by our CROs, other third parties or us to adhere to clinical study, regulatory or legal requirements;

failure to perform in accordance with the FDA’s GCP or applicable regulatory guidelines in other countries;

● failure to perform in accordance

with the FDA’s GCP or applicable regulatory guidelines in other countries;

delays in the testing, validation, manufacturing and delivery of sufficient quantities of our product candidates to the clinical sites;

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events associated with our other product candidates, we may:

be delayed in obtaining marketing approval for our product candidates, if approved at all;

● be delayed in obtaining marketing

approval for our product candidates, if approved at all;

obtain approval for indications or patient populations that are not as broad as intended or desired;

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Securing regulatory approvals to market a product requires the submission of pre-clinical, clinical, and/or

pharmacokinetic data, information about product manufacturing processes and inspection of facilities and supporting information to the

pharmacokinetic data, information about product manufacturing processes and inspection of facilities, proposed product labeling and supporting information to the

appropriate regulatory authorities for each therapeutic indication to establish a product candidate’s safety and efficacy for each

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We may not be able to obtain or maintain

orphan drug designation or exclusivity for our product candidates.

ODD or exclusivity for our product candidates.

Regulatory authorities in some jurisdictions,

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available in the United States for the type of disease or condition will be recovered from sales of the product.

Orphan drug designation entitles a party to financial

incentives, such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

Additionally, if

a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such

designation, the product is entitled to orphan drug exclusivity.

This means that the FDA may not approve any other applications to market

the same drug or biological product for the same indication for seven years, except in certain circumstances, including proving clinical

superiority (i.e., another product is safer, more effective or makes a major contribution to patient care) to the product with orphan

Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity,

or obtain approval for the same product but for a different indication than that for which the orphan product has exclusivity.

exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated

indication or may be lost if the FDA later determines that the request for designation was materially defective.

ODD entitles a party to financial incentives,

such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

Additionally, if a product

that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation,

the product is entitled to orphan drug exclusivity.

This means that the FDA may not approve any other applications to market the same

drug or biological product for the same indication for seven years, except in certain circumstances, including proving clinical superiority

(i.e., another product is safer, more effective or makes a major contribution to patient care) to the product with orphan exclusivity.

Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity, or obtain

approval for the same product but for a different indication than that for which the orphan product has exclusivity.

In addition, exclusive

marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication

or may be lost if the FDA later determines that the request for designation was materially defective.

Modifications to our products may require

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If the products are

already being used for these new indications, we may also be subject to significant enforcement actions.

already being promoted for these new indications, we may also be subject to significant enforcement actions.

Conducting clinical trials and

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Due to the substantial regulatory

changes that will need to be implemented by the Centers for Medicare & Medicaid Services and others, and the numerous processes

required to implement these reforms, we cannot predict which healthcare initiatives will be implemented at the federal or state level,

the timing of any such reforms, or the effect such reforms or any other future legislation or regulation will have on our business.

changes that will need to be implemented by the Centers for Medicare & Medicaid Services and others, and the numerous processes required

to implement these reforms, we cannot predict which healthcare initiatives will be implemented at the federal or state level, the timing

of any such reforms, or the effect such reforms or any other future legislation or regulation will have on our business.

In addition, other legislative changes have been

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could be adversely affected.

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:

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 of value;

the Omnibus Budget Reconciliation Act of

1993 (42 U.S.C.

§ 1395nn) (the “Stark Law”) prohibit referrals by a physician of “designated health services”

which are payable, in whole or in part, by Medicare or Medicaid, to an entity in which the physician or the physician’s immediate family

member has an investment interest or other financial relationship, subject to several exceptions.

The Stark Law also prohibits billing

for services rendered pursuant to a prohibited referral.

Several states have enacted laws similar to the Stark Law.

These state laws

may cover all (not just Medicare and Medicaid) patients.

Many federal healthcare reform proposals in the past few years have attempted

to expand the Stark Law to cover all patients as well.

We consider the Stark Law in planning our products, marketing and other activities,

and believe that our operations are in compliance with the Stark Law.

If we violate the Stark Law, our financial results and operations

could be adversely affected.

Penalties for violations include denial of payment for the services, significant civil monetary penalties,

and exclusion from the Medicare and Medicaid programs;

federal false claims and false statement laws, including the federal civil False Claims Act and the Civil Monetary Penalties Law (“CMPL”), 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;

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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.

the FDCA which among other things, strictly regulates drug and biologics

manufacturing, sales, distribution, prohibits the adulteration or misbranding of drugs and biologics prohibits manufacturers from marketing

drug products for off-label use and regulates the distribution of drug samples;

t he 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.

such as Stark Law, 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.

The laws and regulations applicable to our business

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business, financial condition, cash flows and results of operations.

We may be a party to various lawsuits, demands, claims, qui

tam suits, government investigations and audits, of which any could result in, among other things, substantial financial penalties

or awards against us, reputational harm, termination of relationships or contracts related to our business, mandated refunds, substantial

payments made by us, required changes to our business practices, exclusion from future participation in Medicare and other healthcare

programs and possible criminal penalties.

We may be a party to various lawsuits, demands, claims, qui tam

suits, government investigations and audits, of which any could result in, among other things, substantial financial penalties or awards

against us, reputational harm, termination of relationships or contracts related to our business, mandated refunds, substantial payments

made by us, required changes to our business practices, exclusion from future participation in Medicare and other healthcare programs, seizure of product

and possible criminal penalties.

If we are found in violation of applicable laws

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our CMO failing to perform as agreed upon or not remain in business;

our CMO’s plants being closed as a result of regulatory sanctions, natural disasters, health epidemics or otherwise.

our CMOs’ plants being closed as a result of regulatory sanctions,

natural disasters, health epidemics or otherwise.

Manufacturers of pharmaceutical products are subject

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Although there have been legal and political challenges

to certain aspects of the ACA, the Biden Administration has affirmed support for the law, entered its own executive orders to enforce

and strengthen it, and committed to examining and, where appropriate, reversing contrary Trump Administration policies.

The Tax Cuts and

Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the

ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the

“individual mandate.”

Because of the volatility surrounding the implementation

and enforcement of the ACA since its passage, and at this time, the full effect that the ACA would have on a pharmaceutical manufacturer

remains unclear.

This uncertainty is heightened by President Biden’s January 28, 2021 Executive Order on Strengthening Medicaid

and the Affordable Care Act which indicates that the Biden Administration may significantly modify the ACA and further reform the ACA

and other federal programs in manner that may impact our operations.

The Biden Administration has indicated that a goal of its administration

is to expand and support Medicaid and the ACA and to make high-quality healthcare accessible and affordable.

The potential increase in

patients covered by government funded insurance may impact our pricing.

Further, it is possible that the Biden Administration may further

increase scrutiny of drug pricing.

Additionally, in December 2019,

a federal appeals court held that the individual mandate portion of the ACA was

unconstitutional and left open the question whether the remaining provisions of

the ACA would be valid without the individual mandate.

However, on appeal, the Supreme

Court ruled in June 2021 that the parties challenging the law lacked standing, leaving the ACA in place.

is unclear how any other potential litigation challenging the ACA and the healthcare reform measures of the Biden administration will

impact the ACA.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or

administrative or executive action, either in the United States or abroad.

We expect that additional state and federal health care reform

measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care

products and services.

prescription drug pricing has been a recent focus of federal policymaking.

The Trump Administration issued a series of executive orders

and rules related to prescription drug pricing, including executive orders in July and September 2020 focused on reducing drug prices

and rules in November 2020 establishing a ‘Most Favored Nation’ rule tying Medicare Part B drug pricing to prices in other

countries, as well as a rule effectively banning rebates from Medicare Part D.

The Biden Administration has indicated that lowering prescription

drug prices is a priority for the Biden Administration as well.

to certain aspects of the ACA, the Biden Administration has affirmed support for the law and, entered its own executive orders to enforce

and strengthen it.

Because of the volatility surrounding the implementation and enforcement of the ACA since its passage, and at this

time, the full effect that the ACA would have on a pharmaceutical manufacturer remains unclear.

This uncertainty is heightened by President

Biden’s January 28, 2021 Executive Order on Strengthening Medicaid and the Affordable Care Act which indicates that the Biden Administration

may significantly modify the ACA and further reform the ACA and other federal programs in manner that may impact our operations.

Administration has indicated that a goal of its administration is to expand and support Medicaid and the ACA and to make high-quality

healthcare accessible and affordable.

The potential increase in patients covered by government funded insurance may impact our pricing.

Further, it is possible that the Biden Administration may further increase scrutiny of drug pricing.

Indeed, the Biden Administration

has been vocal that lowering prescription drug prices is a priority for the Biden Administration.

In addition, we cannot predict the likelihood,

nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the

United States or abroad.

We expect that additional state and federal health care reform measures will be adopted in the future, any of

which could limit the amounts that federal and state governments will pay for health care products and services.

Further, there is uncertainty surrounding the

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by such breaches.

Risks Relating to Our Intellectual Property

Risks Related to Our Intellectual Property

We rely upon licenses granted to us by various

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protecting critical intellectual property.

Although we do not own and only license intellectual

property, to the extent we develop intellectual property, our commercial success will depend in part on obtaining and maintaining patent,

trade secret, copyright and trademark protection of our technologies in the United States and other jurisdictions as well as successfully

enforcing and defending such intellectual property rights against third-party challenges.

We will only be able to protect our intellectual

property from unauthorized use by third parties to the extent that valid and enforceable intellectual property protection, such as patents

or trade secrets, cover them.

In particular, we place considerable emphasis on obtaining patent and trade secret protection for significant

new technologies, products and processes.

Furthermore, the degree of future protection of our proprietary rights is uncertain because

legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.

Moreover, the degree of future protection of our proprietary rights is uncertain for products that are currently in the early stages of

development because we cannot predict which of these products will ultimately reach the commercial market or whether the commercial versions

of these products will incorporate proprietary technologies.

To the extent we develop intellectual property,

our commercial success will depend in part on obtaining and maintaining patent, trade secret, copyright and trademark protection of our

technologies in the United States and other jurisdictions as well as successfully enforcing and defending such intellectual property rights

against third-party challenges.

We will only be able to protect our intellectual property from unauthorized use by third parties to the

extent that valid and enforceable intellectual property protection, such as patents or trade secrets, cover them.

In particular, we place

considerable emphasis on obtaining patent and trade secret protection for significant new technologies, products and processes.

the degree of future protection of our proprietary rights is uncertain because legal means afford only limited protection and may not

adequately protect our rights or permit us to gain or keep our competitive advantage.

Moreover, the degree of future protection of our

proprietary rights is uncertain for products that are currently in the early stages of development because we cannot predict which of

these products will ultimately reach the commercial market or whether the commercial versions of these products will incorporate proprietary

technologies.

Patent positions in our industry are highly

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we are unable to do so could materially harm our business.

We or our licensors have applied for and will

We and/or our licensors have applied for and will

continue to apply for patents for certain products.

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may have to expend resources to protect our interests from possible infringement by others.

Related Risks to the Company

Risks Related to the Company

We have expanded and may continue to expand,

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managerial resources, which could have an adverse effect on our business.

Our business may be adversely affected

by the ongoing coronavirus pandemic.

The outbreak of the novel

Coronavirus (COVID-19) evolved into a global pandemic.

The coronavirus has spread to many regions of the world.

The extent to which the

coronavirus impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately

predicted, including new information that may emerge concerning the coronavirus, including variants, and the actions to contain the coronavirus

or treat its impact, among others.

Should the coronavirus

continue to spread, our business operations could be delayed or interrupted.

For instance, our clinical trials may be affected by the

Site initiation, participant recruitment and enrollment, participant dosing, distribution of clinical trial materials, study

monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations,

prioritization of hospital resources toward pandemic efforts, or other reasons related to the pandemic.

If the coronavirus continues to

spread, some participants and clinical investigators may not be able to comply with clinical trial protocols.

For example, quarantines

or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or

interrupt healthcare services, and we may be unable to conduct our clinical trials.

Further, if the spread of the coronavirus pandemic

continues and our operations are adversely impacted, we risk a delay, default and/or nonperformance under existing agreements which may

increase our costs.

These cost increases may not be fully recoverable or adequately covered by insurance.

Infections and deaths

related to the pandemic may disrupt the United States’ healthcare and healthcare regulatory systems.

Such disruptions could divert

healthcare resources away from, or materially delay FDA review and/or approval with respect to, our clinical trials.

It is unknown how

long these disruptions could continue, were they to occur.

Any elongation or de-prioritization of our clinical trials or delay

in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates.

We currently utilize

third parties to, among other things, manufacture raw materials.

If any third parties in the supply chain for materials used in the production

of our product candidates are adversely impacted by restrictions resulting from the coronavirus outbreak, our supply chain may be disrupted,

limiting our ability to manufacture our product candidates for our clinical trials and research and development operations.

In the event of a shelter-in-place order

or other mandated local travel restrictions, our employees conducting research and development, or manufacturing activities may not be

able to access their laboratory or manufacturing space, and our core activities may be significantly limited or curtailed, possibly for

an extended period of time.

The spread of the coronavirus,

which has caused a broad impact globally, including restrictions on travel and quarantine policies put into place by businesses and governments,

may have a material economic effect on our business.

While the potential economic impact brought by and the duration of the pandemic may

be difficult to assess or predict, it has already caused, and is likely to result in further, significant disruption of global financial

Our business may be adversely affected by health epidemics such

as the coronavirus pandemic.

The outbreak of the novel Coronavirus (“COVID-19”)

evolved into a global pandemic and spread to many regions of the world.

The extent to which the coronavirus impacts our business and operating

results may continue to depend on future developments that are uncertain and cannot be accurately predicted, including new information

that may emerge concerning the coronavirus, including variants, and the actions to contain the coronavirus or treat its impact, among

For example, staffing issues related to a health

epidemic such as COVID-19 may disrupt our business operations ,including our clinical trials.

Site initiation, participant recruitment

and enrollment, participant dosing, distribution of clinical trial materials, study monitoring and data analysis may be paused or delayed

due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward other

efforts, or other staffing issues related to any such health epidemic.

Also, some participants and clinical investigators may not be able

to comply with clinical trial protocols.

For example, quarantines or other travel limitations (whether voluntary or required) stemming

from a health epidemic may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we

may be unable to conduct our clinical trials.

In addition, if any third parties in the supply chain for materials used in the production

of our product candidates are adversely impacted by a health epidemic such as COVID-19, our supply chain may be disrupted, limiting our

ability to manufacture our product candidates for our clinical trials and research and development operations.

Furthermore, we may be

at a risk of delaying, defaulting and/or not performing under existing agreements, which may increase our costs.

These cost increases

may not be fully recoverable or adequately covered by insurance.

Infections and deaths related to a health epidemic may also disrupt the

United States’ healthcare and healthcare regulatory systems which could divert healthcare resources away from, or materially delay

FDA review and/or approval of our product candidates.

The spread of the coronavirus, which caused a

broad impact globally, may have a material economic effect on our business.

While the potential economic impact brought by the pandemic

may be difficult to assess or predict, it has already caused, and is likely to result in further, significant disruption of global financial

markets, which may reduce our ability to access capital either at all or on favorable terms.

In addition, a recession, depression or other

sustained adverse market event resulting from the spread of the coronavirus could materially and adversely affect our business and the

value of our common stock.

The ultimate impact of

the current pandemic, or any other health epidemic, is highly uncertain and subject to change.

We do not yet know the full extent of potential

delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole.

these effects could have a material impact on our operations, and we will continue to monitor the situation closely.

sustained adverse market event resulting from COVID-19 could materially and adversely affect our business and the value of our common

The ultimate impact of the current pandemic, or

any other health epidemic, is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts

on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole.

However, these effects

could have a material impact on our operations.

Risks Related to Our Common Stock

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if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.

Market and economic conditions may negatively

impact our business, financial condition and share price.

Concerns over inflation, energy costs, geopolitical

issues, the U.S.

mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile

oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer

confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth

going forward, increased unemployment rates, and increased credit defaults in recent years.

Our general business strategy may be adversely

affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions.

If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete,

Unstable market and economic conditions and adverse developments

with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial

condition and stock price.

The global credit and

financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability,

declines in consumer confidence, declines in economic growth, inflationary pressure and interest rate changes, increases in unemployment

rates and uncertainty about economic stability.

The financial markets and the global economy may also be adversely affected by the current

or anticipated impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other geopolitical events.

Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely

impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate

market and economic instability.

More recently, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership

with the Federal Deposit Insurance Corporation (“FDIC”) created bank-specific and broader financial institution liquidity

risk and concerns.

Although the Department of the Treasury, the Federal Reserve, and the FDIC jointly released a statement that depositors

at SVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic

risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry

may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional

market and economic uncertainty.

We have significant cash balances at financial institutions which, throughout the year, regularly exceed

the federally insured limit of $250,000.

Any loss incurred or a lack of access to such funds could have a significant adverse impact on

our financial condition, results of operations, and cash flows.

There can be no assurance

that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.

business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued

unpredictable and unstable market conditions.

If the equity and credit markets deteriorate, or if adverse developments are experienced

by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult,

more costly and more dilutive.

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

adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or

commercialization plans.

If securities or industry analysts do not

publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.

The trading market for our common stock will rely

in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors.

We do not control these analysts.

If securities analysts do not cover our common stock, the lack of research coverage may adversely affect

the market price of our common stock.

Furthermore, if one or more of the analysts who do cover us downgrade our stock or if those analysts

issue other unfavorable commentary about us or our business, our stock price would likely decline.

If one or more of these analysts cease

coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease,

which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing

customers and attract new customers.

adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development

In addition, there is a risk that one or more of our financial institutions, manufacturers and other third parties with whom we

engage may be adversely affected by the foregoing risks, which may have a material adverse effect on our business.

Future sales and issuances of our securities

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may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders.

We do not intend

to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.

We do not intend to pay cash dividends on

our shares of common stock so any returns will be limited to the value of our shares.

We have never paid or declared any cash dividends

on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

We currently anticipate

that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying

any cash dividends for the foreseeable future.

Any return to shareholders will therefore be limited to the increase, if any, of our share

that we will retain future earnings for the development, operation and expansion of our business.

Any future determination to pay dividends

will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial

condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors that our board of directors

deems relevant.

Therefore, any return to shareholders will be limited to the increase, if any, of our share price.

We are an “emerging growth company”

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of our common stock.

If we fail to comply

with the continued listing requirements of The Nasdaq Capital Market, our common stock may be delisted and the price of our common stock

and our ability to access the capital markets could be negatively impacted.

On December 30, 2021, we received

written notice from the Nasdaq Stock Market, LLC (“Nasdaq”) t hat

we were not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of our common stock had been below $1.00

per share for 30 consecutive business days.

In accordance with Nasdaq Listing Rule 5810, we

have a period of 180 calendar days, or until June 28, 2022, to regain compliance with the minimum bid price requirement.

To regain compliance,

the closing bid price of our common stock must meet or exceed $1.00 per share for at least 10 consecutive business days during this 180

calendar day period.

In the event we do not regain compliance by June 28, 2022, we may be eligible for an additional 180 calendar day

grace period if we meet the continued listing standards, with the exception of bid price, for The Nasdaq Capital Market, and we provide

written notice to Nasdaq of our intention to cure the deficiency during the second compliance period.

Although we may effect a reverse

stock split of our issued and outstanding common stock in the future, there can be no assurance that such reverse stock split will enable

us to regain compliance with the Nasdaq minimum bid price requirement.

Financial reporting obligations of being

a public company in the United States are expensive and time-consuming, and our management will be required to devote substantial time

to compliance matters.

As a publicly traded company we incur significant

legal, accounting and other expenses.

The obligations of being a public company in the United States require significant expenditures

and places significant demands on our management and other personnel, including costs resulting from public company reporting obligations

under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under Sarbanes-Oxley, the

Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of The Nasdaq Capital Market.

These rules require

the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting

and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain

compliance with.

Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will

make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” Our

management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements

and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted,

among other potential problems.

If we fail to comply with the rules under

Sarbanes-Oxley related to internal controls and procedures in the future, or, if we discover material weaknesses and other deficiencies

in our internal controls over financial reporting, our stock price could decline significantly and raising capital could be more difficult.

Section 404 of Sarbanes-Oxley requires annual

management assessments of the effectiveness of our internal controls over financial reporting.

If we fail to comply with the rules under

Sarbanes-Oxley related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficiencies

in our internal controls over financial reporting, our stock price could decline significantly and raising capital could be more difficult.

If material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the adequacy of our

internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over

financial reporting in accordance with Section 404 of Sarbanes-Oxley.

Moreover, effective internal controls are necessary for us to produce

reliable financial reports and are important to helping prevent financial fraud.

If we cannot provide reliable financial reports or prevent

fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and

the trading price of our common stock could drop significantly.

We are currently

listed on The Nasdaq Capital Market.

If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock

price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more

difficult for our shareholders to sell their securities.

Although our common stock

is currently listed on The Nasdaq Capital Market, we may not be able to continue to meet the exchange’s minimum listing requirements

or those of any other national exchange.

The Listing Rules of Nasdaq require listing issuers to comply with certain standards in order

to remain listed on its exchange.

If, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should

delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction

in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:

the liquidity of our common stock;

the market price of our common stock;

our ability to obtain financing for the continuation of our operations;

the number of investors that will consider investing in our common stock;

the number of market makers in our common stock;

the availability of information concerning the trading prices and volume of our common stock;

the number of broker-dealers willing to execute trades in shares of our common stock.

Our Articles of Incorporation, as amended

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ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees

or agents and may result in increased costs to our shareholders, which may discourage such lawsuits against us and our directors,

officers, other employees and agents.

Alternatively, if a court were to find the choice of forum provision contained in our Amended and

Restated Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action

in other jurisdictions, which could have a material adverse effect on our business, results of operations, and financial condition.

or agents and may result in increased costs to our shareholders, which may discourage such lawsuits against us and our directors, officers,

other employees and agents.

Alternatively, if a court were to find the choice of forum provision contained in our Amended and Restated

Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other

jurisdictions, which could have a material adverse effect on our business, results of operations, and financial condition.

General Risk Factors

If securities or industry analysts do not

publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.

The trading market for our common stock will rely

in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors.

We do not control these analysts.

If securities analysts do not cover our common stock, the lack of research coverage may adversely affect

the market price of our common stock.

Furthermore, if one or more of the analysts who do cover us downgrade our stock or if those analysts

issue other unfavorable commentary about us or our business, our stock price would likely decline.

If one or more of these analysts cease

coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease,

which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing

customers and attract new customers.

Financial reporting obligations of being

a public company in the United States are expensive and time-consuming, and our management will be required to devote substantial time

to compliance matters.

As a publicly traded company we incur significant

legal, accounting and other expenses.

The obligations of being a public company in the United States require significant expenditures

and places significant demands on our management and other personnel, including costs resulting from public company reporting obligations

under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under Sarbanes-Oxley, the

Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of The Nasdaq Capital Market.

These rules require

the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting

and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain

compliance with.

Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will

make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” Our

management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements

and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted,

among other potential problems.

to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our

common stock.

If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

Section 404 of Sarbanes-Oxley requires annual

management assessments of the effectiveness of our internal controls over financial reporting.

internal control over financial reporting is necessary for us to provide reliable financial reports in a timely manner.

In connection

with the audit of our financial statements for the year ended December 31, 2022, our independent registered public accounting firm identified

a material weakness.

A material weakness is a significant deficiency, or a combination of significant deficiencies, in internal controls

over financial reporting such that it is reasonably possible that a material misstatement of the annual or interim financial statements

will not be prevented or detected on a timely basis.

The material weakness that has been identified by our independent registered public

accounting firm relates to the lack of sufficient resources necessary to provide adequate segregation of duties related to the

preparation and review of financial information used in financial reporting and review of controls over the financial reporting process,

including cutoff related to accruals and prepaids.

While we intend to take steps to remediate the

material weakness in our internal control over financial reporting by updating and expanding our accounts payable tracking and booking,

we may not be successful in remediating such weakness in a timely manner, if at all, which may undermine our ability to provide accurate,

timely and reliable reports on our financial and operating results.

Furthermore, if we remediate our current material weakness but identify

new material weaknesses in our internal control over financial reporting in the future, investors may lose confidence in the accuracy

and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a result of such failures,

we could also become subject to investigations by Nasdaq, the SEC, or other regulatory authorities, and become subject to litigation from

investors and shareholders, which could harm our reputation, financial condition or divert financial and management resources from our

UNRESOLVED STAFF COMMENTS

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors