Item 1. Business
Item 1. Business.
Overview
We are a clinical-stage biopharmaceutical company
principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and to provide
other related services. Our proprietary products are derived from perinatal sources and manufactured to retain the naturally occurring
microRNAs, without the addition or combination of any other substance or diluent (“RAAM Products”). Our RAAM Products and
related services are principally used in the health care industry administered through doctors and clinics (“Providers”).
Since May 2019, Organicell has operated a placental
tissue bank processing laboratory in Miami, Florida for the purpose of performing research and development and the manufacturing and processing
of the anti-aging and cellular therapy derived products that we sell and distribute to our customers.
The Company’s leading product, Zofin™
(also known as Organicell TM Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured
to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent. This product contains
over 300 growth factors, cytokines, chemokines, and 102 unique microRNAs as well as other exosomes/nanoparticles derived from perinatal
tissues.
To date, the Company has obtained certain Investigation
New Drug (“IND”), and eighteen emergency IND (“eIND”) approvals from the FDA, including applicable Institutional
Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the
use of Zofin™ and related treatment protocols. The Company is pursuing efforts to complete its already approved clinical studies
(see below) as well as obtaining approval to commence additional studies for other specific indications it has identified that the use
of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than
are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having sufficient
available working capital to fund the substantial costs of completing clinical trials, which the Company currently does not have, and
ultimately, obtaining approval from the FDA.
New FDA guidance which was announced in November
2017 and which became effective in May 2021 (postponed from November 2020 due to the COVID-19 pandemic) requires that the sale of products
that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and
cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”).
We have not obtained any opinion or ruling regarding
the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject
to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products
fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our
products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts
on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our
ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses.
The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations
of products that would not fall under these regulations.
During November 2020, the Company formed Livin’
Again Inc., a wholly owned subsidiary, for the purpose of among other things, providing independent education, advertising and marketing
services, to Providers that provide medical and other healthcare, anti-aging and regenerative services. including FDA-approved IV vitamin
and mineral liquid infusions (“IV Drip Therapies”). To date, there has been no significant activity and the Company has no
timetable, if any, as to when IV Drip Therapies revenues will commence.
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Developments During the Fiscal Year ended October
31, 2021
In April 2020, the FDA approved an IND application
for the Company’s lead product, Zofin™, (IND # 19881) for a Phase I/II Randomized, Double Blinded, Placebo Trial to Evaluate
the Safety and Potential Efficacy of Intravenous Infusion of OrganicellTM Flow for the Treatment of Moderate to Severe Acute Respiratory
Syndrome (SARS) Related to COVID-19 Infection vs Placebo. The IRB was approved by the Institute of Regenerative and Cellular Medicine
(“IRCM”) during June 2020 (approval number: IRCM-2020-254). Enrollment for the clinical trial began in September 2020. A total
of ten patients have been enrolled to the study thus far and currently the clinical trial is not enrolling subjects due to the challenges
of enrolling the remaining study population.
In March 2021, Organicell entered into a Material
Cooperative Research and Development Agreement with the Centers for Disease Control and Prevention (the “CDC”) to determine
the anti-inflammatory and anti-infective effectiveness of Zofin™ in experimental models of influenza infection. Pursuant to the
agreement, Organicell will supply the CDC with Zofin™ and using well established in vitro and in vivo experimental models of influenza
infection, the CDC will test the anti-infective and anti-inflammatory properties of Zofin™. All the proposed experiments will be
performed in the appropriate biosafety levels and approved protocols at the Immunology and Pathogenesis Branch / Influenza Division of
the CDC.
In April 2021, the Company entered into a similar
agreement with Oklahoma State University to evaluate Zofin TM for the treatment of respiratory diseases caused by virus infections
of pandemic potential and the FDA approved an Investigational New Drug (“IND”) application for Zofin™, in the treatment
of knee osteoarthritis.
In June 2021, Organicell announced the results
of its expanded access (EA) intermediate size patient population trial (NCT04657406) for treatment of COVID-19 patients with Zofin™,
which EA trial had been authorized by the FDA in September 2020. The results of the EA trial indicated that treatment of participants
with Zofin™:
●
met endpoints for safety and efficacy in patients with mild to moderate COVID-19;
●
mitigated mild and moderate symptoms;
●
improved pulmonary opacities detected in chest X-rays; and
●
improved inflammatory biomarkers.
The trial was conducted at United Memorial Medical
Center in Houston, Texas. The study enrolled a total of 11 subjects: adults between the age of 35 to 69 who were fighting COVID-19 infection
and presented respiratory fatigue with and without exertion, cough, and shortness of breath and met all inclusion/exclusion criteria.
One patient withdrew before receiving any doses of Zofin TM . Two subjects withdrew at day 14 post treatment with Zofin TM .
As a result, eight subjects completed the day 30 follow-up and are included in the data analysis. The administration of Zofin TM in
the trial was well tolerated in all enrolled subjects, with no adverse events. Chest X-ray data demonstrated that 75% of subjects had
bilateral opacities caused by COVID-19 infection at day 0 (baseline), prior to treatment with Zofin TM and thirty (30)
days after Zofin TM treatment, chest X-ray data showed 83% of treated subjects had normal lung imaging, indicating complete
recovery. Upon such time that Organicell enrolls and submits additional patient data from the above-mentioned study, Organicell intends
to submit the updated results of the trial to the FDA for approval of an amendment to the Company’s previously approved IND (NCT04384445)
to perform a placebo-controlled Phase II clinical trial to confirm safety and efficacy in a randomized fashion.
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The Company is currently in the process of pursuing
the implementation of three other previously approved clinical trials:
●
In January 2021, the Company announced that the FDA had approved an IND application for its lead product, Zofin™, in the treatment of patients diagnosed with chronic obstructive pulmonary disease (“COPD”). This approved trial design will be a double blinded, placebo-controlled, phase I/II trial investigating the safety and potential efficacy of intravenous infusion (IV) of Zofin™ for the treatment of COPD. The Company and the clinical research organization (“CRO”) are currently working to initiate the trial which the Company expects enrollment to begin during the quarter ending April 30, 2022, subject to the successful negotiation and execution of definitive agreements with the site facility where the study patients will be treated and the Company raising sufficient working capital to finance the trial, as to all of which no assurance can be given.
●
In April 2021, the Company announced that the FDA had approved the IND application for its lead product, Zofin™, in the treatment of knee osteoarthritis. This approved trial design, will be a double blinded, placebo-controlled, phase I/II trial investigating the safety and potential efficacy of Zofin™ for patients suffering with knee osteoarthritis. The Company and the CRO are currently working to initiate the trial which the Company expects enrollment to begin during the quarter ending July 31, 2022, subject to the successful negotiation and execution of definitive agreements with the site facility where the study patients will be treated and the Company raising sufficient working capital to finance the trial, as to all of which no assurance can be given.
●
In July 2021, the Company announced that the FDA had approved an IND application for its lead product, Zofin™, for the treatment of ‘Prolonged COVID-19 Symptoms’ (“Long Haulers”). This approved trial design consists of a double blinded, placebo-controlled, randomized phase I/II trial designed to investigate the safety and potential efficacy of Zofin™ in treating COVID-19 Long Haulers. The Company and the CRO are currently working to initiate the trial which the Company expects enrollment to begin during February 2022, subject to the successful negotiation and execution of definitive agreements with the site facility where the study patients will be treated and the Company raising sufficient working capital to finance the trial, as to all of which no assurance can be given.
In June 2021, the Company announced that it was
launching a service platform for their first autologous product called Patient Pure X TM (PPX TM ). PPX TM
is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood. The Company began
to accept minimal orders for this service during October 2021. The Company expects that once capacity for providing the service is adequate
(either from processing capacity available or to become available at the Company’s existing facilities or through third party arrangements)
as well as continued favorable response from health care providers and patients from the use of PPX TM , the Company will seek
to expand this service on a larger scale.
In April 2021, we announced that an initial trial
of ten COVID -19 patients in India conducted by CWI India, our Indian partner, generated positive results. The trial had been conducted
by CWI India, our Indian partner with whom we had entered a product testing and distribution agreement in February 2021, to collaborate
on a study or studies to evaluate the effects of Zofin™ on moderate to severe COVID-19 patients in India. The ten patients in the
initial trial were treated at hospitals in Bangalore, Kozhikode and Chennai, and all ten patients recovered from their symptoms and were
discharged from the hospital. Based on the initial results of this trial, CWI India has since been seeking to obtain government approval
to conduct an expanded trial of up to sixty-five patients with moderate to severe COVID-19, who were to be treated at these hospitals.
To date, CWI India has not obtained the required approval and it is uncertain if they will ultimately be successful in doing so. If approval
is eventually obtained, we anticipate that CWI India will conduct the trials in a timely manner. If the results of the expanded trial
prove to be positive, Organicell and CWI India intend to file with the ICMR (Indian Council for Medical Research) for Emergency Use Approval
to use Zofin™ in India as a therapeutic for treating COVID-19.
In May 2021, the Company announced that its Zofin TM therapy
has been approved by Pakistani regulators to be used for a treatment of a named COVID-19 patient hospitalized at the Pakistan Institute
of Medical Sciences on compassionate grounds. In addition to this compassionate grounds authorization, Organicell received further indications
from the Pakistani regulators to begin a broader trial of Zofin TM with up to 60 additional patients suffering from moderate
to severe COVID-19. The Company has already shared data with Pakistani regulatory authorities in the country in support of this effort.
To date, the Company and the Company’s Pakistani partner for the proposed study have not obtained the required approval and the
Company is uncertain if they will ultimately be successful in doing so. If approval is eventually obtained, we anticipate that the trial
will be conducted in a timely manner. In addition, in May 2021, Organicell also entered into a one-year exclusive distribution agreement
with Apex Services Pakistan to import and distribute Zofin TM to hospitals and clinics in the country, subject to the issuance
of all necessary approvals and licenses by the Drug Regulatory Authority of Pakistan, which as previously stated, have not yet been obtained.
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On June 17, 2021, Organicell received a subpoena
dated June 14, 2021, from the Atlanta Regional Office of the SEC requiring the production of certain documents and communications in connection
with the treatment and results of various COVID-19 patients, as discussed in the Company’s Current Reports on Form 8-K filed with
the SEC during the period from May 27, 2020 through May 11, 2021. The Company is fully cooperating with the SEC’s investigation
and believes that it will be able to provide all of the information requested by the SEC. The Company can make no assurances as to the
time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation
or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s
future operations.
Recent Development
On January 11, 2022, the Company entered into
a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (the “Purchaser”), pursuant to which
we sold a Promissory Note in the principal amount of $600,000 (the “Note”) to the Purchaser in a private transaction to for
a purchase price of $540,000 (giving effect to original issue discount of $60,000). In connection with the sale of the Note, the Company
also paid the Purchaser’s legal fees and due diligence costs of $12,500 and brokerage fees of $9,000 to J.H. Darbie & Co., a
registered broker-dealer. After payment of the legal fees and brokerage fees, the net proceeds to the Company were $518,500, which will
be used for working capital and other general corporate purposes.
The Note matures on July 11, 2022, subject to
extension at the option of the Company for up to an additional six month period, bears interest at the a rate of 10% per annum for the
first six months and 12% per annum thereafter if extended, and only following an event of default (as defined in the Note), is convertible
into shares of the Company’s common stock at a conversion price equal to the lower of the “VWAP” (as hereinafter defined)
of the common stock during (i) the twenty (20) trading day period preceding the issuance date of the Note; or (ii) the twenty (20) trading
day period preceding the date of conversion of the Note. As used in the Note, “VWAP” means, for any date, the price of our
common stock as determined by the first of the following clauses that applies: (i) if the common stock is then listed or quoted on one
or more established stock exchanges or national market systems, the daily volume weighted average price of the common stock for such date
on the trading market on which the common stock is then listed or quoted as reported by Bloomberg L.P.; or (ii) if the common stock is
regularly quoted on an automated quotation system (including applicable tiers of the over-the-counter market maintained by OTC Market
Group, Inc.) or by a recognized securities dealer, the volume weighted average price of the common stock for such date on the applicable
OTC Markets Group, Inc. tier or as quoted by such securities dealer. In accordance with the terms of the SPA, as of January 11, 2022,
the Company has reserved 36,923,080 shares of its authorized but unissued common stock for issuance in the event the Purchaser exercises
its right to convert the Note following an event of default.
The Note
may be prepaid by the Company at any time without penalty. The Note also contains covenants, events of defaults, penalties, default
interest and other terms and conditions customary in transactions of this nature.
Pursuant to the terms of the SPA, the Company
paid a commitment fee to the Purchaser in the amount of $200,000 (the “Initial Commitment Fee”) in the form of 3,076,921 shares
of the Company’s common stock (the “Initial Commitment Fee Shares”). In addition, if the Company exercises the option
to extend the maturity date of the Note, the Company will pay an additional commitment fee to the Purchaser in the amount of $100,000
(the “Additional Commitment Fee,” and together with the Initial Commitment Fee, collectively, the “Commitment Fee”)
in the form of an additional 1,538,462 shares of its common stock (the “Additional Commitment Fee Shares,” and together with
the Initial Commitment Fee Shares, collectively, the “Commitment Fee Shares”). In the event that by the first anniversary
of repayment of the Note by the Company, the Purchaser has not generated the amount of the Commitment Fee from public sales of the Commitment
Fee Shares, the Company shall either pay the amount of any such shortfall either (i) by issuing additional shares of our common stock
at a price equal to the VWAP for the common stock during the five (5) trading day period prior to such anniversary date; or (ii) in cash,
in which case, the Company shall repurchase any unsold Commitment Fee Shares then held by the Purchaser for such shortfall amount.
The offer and sale of the Note to the Purchaser
was made in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”), in reliance on exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.
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COVID-19 Impact on Economy and Business Environment
The adverse public health developments and economic
effects of the ongoing COVID-19 outbreak in the United States have adversely affected the demand for our products and services by our
customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect.
These restrictions have adversely affected the Company’s sales, results of operations and financial condition. In response to the
COVID-19 outbreak, the Company (a) has accelerated its research and development activities; (b) is seeking to raise additional debt and/or
equity financing to support working capital requirements; and (c) continues to take steps to stabilize and increase revenues from the
sale of its products.
There is no assurance as to when the adverse impact
to the United States and worldwide economies resulting from the COVID-19 outbreak will be eliminated, if at all, and whether any new or
recurring pandemic outbreaks will occur again in the future causing a similar or worse devastating impact to the United States and worldwide
economies or our business.
Industry Overview
The traditional health care industry in the United
States is predominantly controlled by the rules of the Centers for Medicare & Medicaid Services (“CMS”) (wwws.cms.gov)
and commercial health insurance companies. This control limits patients’ access to alternative medical therapies, that recent medical
literature demonstrates highly beneficial outcomes in the field of anti-aging and regenerative medicine. Traditional allopathic medicine
of health care provided to patients in the United States relies on government and commercial health insurance for payment of the costs
associated with their day-to-day health care. Because of this close relationship, physicians must follow government and commercial insurers
guidelines in order to stay in the plans and receive reimbursement. Physicians are restricted in their ability to expand the nature of
the treatments provided beyond industry practices because of legal ramifications and/or lack of knowledge concerning protocol of cutting-edge
anti-aging and regenerative medical treatments.
Despite the above, anecdotal and medical literature
has shown an increased demand by patients for access to alternative medical therapies and treatments. Patients are seeking these alternatives
to traditional allopathic medicine, due to the adverse events associated with traditional pharmaceuticals, risks associated with surgeries,
and that traditional medicine and insurers are not addressing wellness or preventive medicine sufficiently. To address a wide variety
of aging issues, safe alternatives to pathologies, including access to other treatments and pharmaceuticals and to achieve beneficial
“elective” health treatments, we intend utilize the latest regenerative technologies. These alternative pathways to date have
had significant restrictions because of regulations imposed by the FDA, other regulatory bodies and insurers due to lack of randomized
controlled studies, yet many published case series demonstrate safety and efficacy. Patients and consumers are looking to safe alternatives
compared more traditional medicine, including the following:
● Cellular/ Tissue based therapies
○ Adipose-derived stromal vascular fraction
○ Bone marrow-derived stem cell therapies
○ Peripheral blood derived therapies ( i.e., platelet rich plasma);
○ Placental-based therapies
Ø Technology documented since 1910 for safety and efficacy, tissue processed from human amniotic membrane
and fluid, donated by consenting mothers delivering a full-term healthy baby by scheduled Caesarean section, avoiding any ethical or moral
concerns, proven safety record, case series documented success in a multitude of systemic and local pathologies
○ Growth factor, cytokine therapies
● Anti-Aging
○ Supplements
Ø Vitamin
Ø Mineral
Ø Medical foods
○ Weight control
○ Topical lotions and creams for the largest organ the skin
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● Nontraditional medical alternatives
○ Acupuncture
○ Naturopathic
○ Chiropractic
● Self-directed
○ Meditation
○ Yoga
○ Tai Chi
Currently, patients who desire alternative treatments
rely on the following options:
■ Medical Tourism
○ In United States
○ Off-shore United States
Ø Central and South America
Ø Caribbean
Ø Europe
■ Consulting directly with physicians knowledgeable in providing regenerative medical services
■ Unlicensed life coaches
Current Business Strategy
Our current business strategy is to achieve the
following goals and milestones:
● Execute on our current strategy to complete existing clinical studies and secure approval to commence
additional studies for other specific indications that we identify that the use of our products will provide more favorable and desired
health related benefits for patients seeking alternative treatment options than are currently available;
● Perform clinical based studies associated with the use of our products (independently and/or in conjunction
with Providers, Manufacturers, Government Agencies and Educational Institutions) and seek accelerated approval where available for each
product application in accordance with the 21st Century Cures Act (“Cures Act”) and/or through the granting of an FDA-approved
biologics application (“BLA”) to allow products to be lawfully marketed and/or sold in the United States;
● Assure the Company’s maintains compliance with existing and the anticipated changes to FDA regulations,
including the guidance related to the use and sale of tissue-based products (“HCT/Ps”) which was published in November 2017
and took effect in May 2021 (postponed from November 2020 due to the COVID-19 pandemic), as well as readiness to respond to ongoing future
changes to regulations impacting our products;
● Continue to expand our laboratory facilities to meet expected production, processing and research requirements;
● Engage high profile and industry recognized medical advisors, researchers and/or scientists to help identify
and develop new and emerging technologies concerning biologics and to assure our Products remain cutting edge and competitive to products
offered by other companies;
● Identify alternative products and services to (a) offset any potential decline in revenues resulting from
FDA limitations on the sales and distribution of our existing products currently being sold and distributed and/or future expected FDA
restrictions on RAAM products; and (b) provide our Providers with alternative product and treatment options to remain competitive with
the market and our Providers to meet the needs and demands of their patients;
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● Identify sources of exclusive and superior suppliers of RAAM products and/or raw materials used by us
in processing our RAAM products;
● Identify strategic relationships and acquisition targets that would enhance and/or accelerate the growth
of the Company; (a) existing raw material and/or medical device suppliers or owners of IP associated with existing and/or additional desired
RAAM products, (b) alliances with Providers that specialized in RAAM products, and/or (c) alliances with marketing and distribution companies
of RAAM products.
● Develop and expand operations to provide for growth of our revenues;
○ Expand our sales market and network of Providers within and outside of the United States to increase revenues
for RAAM related products through:
▪ Hiring additional in-house sales personnel;
▪ Selectively engaging independent distributors;
▪ Marketing private label products to distributors;
▪ Increasing market recognition for our Organicell brand from: marketing and participating in industry trade
shows;
○ Increase the number of RAAM product offerings for various modalities using proprietary processing, formulas
and administration techniques, including the Company’s new product PPX TM
○ Extend our referral network of Providers based on:
▪ Superior product offerings;
▪ Demonstrating a realistic and executable regulatory roadmap to assure Company and product compliance with
current and anticipated FDA regulations; and
▪ Developing and providing educational support to Providers regarding our products and regulatory concerns;
● Secure additional working capital;
○ Fund shortfalls in working capital to fund ongoing expenses and required payments to vendors and creditors
until revenues are stabilized;
○ Fund ongoing costs to complete current pipeline of clinical trials as well as future clinical trials;
○ Fund capital expenditures associated with maintaining compliance of our facilities and products;
○ Fund our strategy to develop and expand our revenues for the sales and distribution of RAAM related products
described above;
○ Hire additional personnel to support our growth and planned expansion; and
○ Enhance our CRM, e-commerce and ERP capabilities to facilitate marketing, sales and distribution functionality
and accounting for our operations.
● Enhance Company Corporate Governance;
○ Appoint additional independent members to the Board of Directors that will provide overall industry expertise
and fulfill audit committee and independent director requirements to meet listing requirements for the national stock exchanges; and
○ Continue to develop and expand the Company’s internal control policies; and
○ Continue to explore previously announced plans to uplist the Company to the Nasdaq for the purpose of
enhancing interest and investment opportunities for the Company once the Company is able to demonstrate compliance with initial listing
requirements, including minimum share price and stockholder’s equity thresholds.
Market Overview
The population of the United States and the developed
world is getting older and living longer. According to a United States Consensus Bureau’s report, “An Aging World: 2015,”
America’s 65-and-over population is projected to nearly double over the next three decades, ballooning from 48 million to 88 million
by 2050 and that worldwide, the 65-and-over population will more than double to 1.6 billion by 2050. According to the report, in 2015,
14.9% of the U.S. population was 65 or over and the United States was the 48th oldest country out of 228 countries and areas in the world
in 2015. Baby boomers began reaching age 65 in 2011 and by 2050 the older share of the U.S. population will increase to 22.1%.
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The world average age of death has increased by
35 years since 1970, with declines in death rates in all age groups, including those aged 60 and older (Source: Institute for Health Metrics
and Evaluation, 2013; Mathers et al., 2015). The leading causes of death are shifting, in part because of increasing longevity. Between
1990 and 2013, the number of deaths from non-communicable diseases (“NCDs”) has increased by 42%; and the largest increases
in the proportion of global deaths took place among the population aged 80 and over. An estimated 42.8% of deaths worldwide occur in the
population aged 70 and over, with 22.9% in the population aged 80 and over.
Also, according to the Centers for Disease Control
(the “CDC”), “Medical Tourism” (a term commonly used to describe people traveling outside their home country for
medical treatment) is a worldwide, multibillion-dollar phenomenon that is expected to grow substantially in the next 5–10 years.
Studies have estimated that hundreds of thousands of medical tourists travel from the United States annually and that
p atients pursue medical care abroad for a variety of reasons, including a desire to receive a procedure or therapy not available
in their country of residence. Common categories of procedures that US travelers pursue during medical tourism trips include orthopedic
surgery, cosmetic surgery, cardiology (cardiac surgery), oncologic care, and dentistry. Common destinations include Thailand, Mexico,
Singapore, India, Malaysia, Cuba, Brazil, Argentina, and Costa Rica.
If we are able to implement our intended business
plan, we believe that we will be well situated to address this increased consumer demand for alternative medical treatments.
Marketing and Sales
Currently, we market our RAAM products and services
to a network of Providers through in-house, contracted sales personnel and/or from independent distributors. As of October 31, 2021, we
had four salespeople who marketed our RAAM products and services. In addition, we had arrangements with several independent distributors
that were marketing and distributing our products. We intend in the future to expand our in-house sales force and independent distributors
as our working capital improves, our product line expands and as volumes increase. We also intend to develop and offer ongoing training
seminars to provide the best possible information on the latest advances on anti-aging, and regenerative medicine to Providers.
Raw Materials and Sources of Supply
We acquire the raw materials and supplies for
our RAAM research and development and the manufacturing of our RAAM placental-related products from unaffiliated third-party laboratories
pursuant to supply arrangements.
In the event any one or more of our current suppliers
are unwilling or unable to sell us required raw materials and/or products, for any reason, we may not be able to provide replacement products
to our customers, or if other supply arrangements can be made, the replacement products and terms may not be as favorable.
Customers
Our RAAM business is not dependent on any one
or more customers, especially as our customer and distribution network expands. Our customer base is increasingly broad based and throughout
the United States and worldwide.
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Intellectual Property
The table below sets forth a summary of our intellectual
property rights.
Patents:
None
Patent Applications:
Organicell TM has a U.S. Patent Application on file for its Organicell TM line of products and the proprietary techniques used in during processing perinatal fluid.
U.S. Patent Application No. 17/226,587
Titled : COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF
Filed : April 9, 2021
Inventor : Maria Ines Mitrani
Applicant : Organicell Regenerative Medicine, Inc.
Conversion Filing Deadline : April 10, 2021
Assignment : MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee)
Recorded : April 9, 2021
Real/Frame : 055878 / 0801 & 055878 / 0900
Organicell TM has an International Patent Application on file for its Organicell TM line of products and the proprietary techniques used in during processing perinatal fluid.
International Patent Application No. PCT/IB2021/052982
Titled : COMPOSITIONS COMPRISING NANOPARTICLES, METHOD OF MAKING AND USES THEREOF
Filed : April 10, 2021
Inventor : Maria Ines Mitrani
Applicant : Organicell Regenerative Medicine, Inc.
National Phase Filing Deadline : October 10, 2022
Assignment : MARIA INES MITRANI (Assignor), ORGANICELL REGENERATIVE MEDICINE, INC. (Assignee)
Organicell TM has a U.S. Provisional Patent Application on file for its Organicell TM PPX product and the proprietary techniques used in the administration of blood-derived exosomes to treat pain.
U.S. Provisional Patent Application No. 63/287,466
Titled : METHOD OF TREATING PAIN IN A PATIENT COMPRISING THE USE OF EXTRACELLULAR VESICLES
Filed : December 8, 2021
Inventors : Maria Ines Mitrani, Michael Bellio, and Albert Mitrani
Applicant : Organicell Regenerative Medicine, Inc.
Conversion Filing Deadline : December 8, 2022
Trademarks:
Word Mark : ZENOX
Goods/Services : Radiation sterilized biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001)
Serial Number : 90331202
Filing Date : November 19, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of allowance received August 17, 2021
Word Mark : ZENOX
Goods/Services : Radiation sterilized biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005)
Serial Number : 90331195
Filing Date : November 19, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of allowance received August 17, 2021
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Word Mark : XENOX
Goods/Services : Radiation sterilized biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001)
Serial Number : 97075336
Filing Date : October 14, 2021
Owner : Organicell Regenerative Medicine, Inc.
Status : Pending, awaiting examination
Word Mark : XENOX
Goods/Services : Radiation sterilized biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005)
Serial Number : 97075340
Filing Date : October 14, 2021
Owner : Organicell Regenerative Medicine, Inc.
Status : Pending, awaiting examination
Word Mark : XOTIN
Goods/Services : Biologically derived nanoparticles, namely, exosomes and extracellular vesicles, developed from perinatal tissue material for aesthetic purposes, other than for medical or veterinary purposes (IC 001)
Serial Number : 90168590
Filing Date : September 9, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of Allowance issued January 26, 2021; 1 st extension of time requested and approved.
Word Mark : XOTIN
Goods/Services : Biologically derived nanoparticles, namely, exosomes and extracellular vesicles, developed from perinatal tissue for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005)
Serial Number : 90168599
Filing Date : September 9, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of Allowance issued January 26, 2021; 1 st extension of time filed and approved.
Word Mark : ZOFIN
Goods/Services : Biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005)
Serial Number : 90050511
Filing Date : July 13, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of allowance issued May 18, 2021 – 1 st extension of time filed and approved
10
Word Mark : Organicell
Goods/Services: Biologically derived products developed from perinatal tissue material in the nature of cultured biological tissue and non-cultured biological tissue, for aesthetic purposes, other than for medical or veterinary purposes (IC 001); Biologically derived products developed from perinatal tissue material for medical and medical regenerative purposes, namely, biological tissue grafts, implants comprising living tissue, surgical implants comprising living tissue, and biological implants for cushioning tissues and supporting tissue repair and homeostasis (IC 005)
Serial Number : 88903989
Filing Date : May 6, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of Allowance issued December 22, 2020; Office Action received July 27, 2021
Word Mark : Organicell
Goods/Services : Non-medicated anti-aging serum; non-medicated skin serums; all of the aforementioned goods are made in whole or in substantial part of organic ingredients (IC 003)
Serial Number : 87311045
Filing Date : January 23, 2017
Owner : Organicell Regenerative Medicine, Inc.
Registration Number: 5289671
Registration Date: September 19, 2017
Status : Live
Word Mark : PATIENT PURE X - PPX
Goods/Services : plasma extracts for medical use, namely, plasma extract containing purified and concentrated exosomes derived from whole human blood
Serial Number : 88771931
Filing Date : January 24, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of Allowance issued July 28, 2020 – 2nd extension of time filed and approved
Word Mark : PATIENT PURE X - PPX
Goods/Services : plasma processing services for others, namely, extracting purified and concentrated exosomes based on whole blood harvested from patients for use by hospitals, clinics, or other organizations or persons involved in delivering healthcare services to patients
Serial Number : 88771934
Filing Date : January 24, 2020
Owner : Organicell Regenerative Medicine, Inc.
Status : Notice of Allowance issued August 18, 2020 – 2nd extension of time filed and approved
11
Pursuant to our employment agreements with our
executives, all work product that is created, prepared, produced, authored, edited, amended, conceived or reduced to practice by each
executive individually or jointly with others during the period of their employment by the Company and relating in any way to the business
or contemplated business, research or development of the Company (regardless of when or where the Work Product is prepared or whose equipment
or other resources is used in preparing the same), as well as any and all rights in and to copyrights, trade secrets, trademarks (and
related goodwill), patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related
rights of priority under international conventions with respect thereto, including all pending and future applications and registrations
thereof, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, “Intellectual
Property Rights”), the sole and exclusive property of the Company. All of the Work Product consisting of copyrightable subject matter
shall be deemed “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company
or if not applicable, deemed to be irrevocably assigned to the Company, for no additional consideration. The Intellectual Property Rights
in any “Pre-existing Materials” included contained in the Work Product shall be retained by the executive but the executive
shall be deemed to have granted to the Company an irrevocable, worldwide, unlimited, royalty-free license to use, publish, reproduce,
display, distribute copies of, and prepare derivative works based upon, such Pre-Existing Materials and derivative works thereof. The
Company may not assign, transfer and sublicense such rights to others without executive’s consent, other than to a wholly owned
subsidiary of the Company. The executive shall provide written notice to the Company’s Chief Executive Officer therein notifying
the Company new intellectual property including the Pre-Existing Materials.
Competition
The regenerative medicine field is highly competitive
and subject to rapid technological change and regulation. Companies compete on the basis of product efficacy, pricing, and ease of handling/logistics.
A critically important factor for growth in the US market is third-party reimbursement, which is difficult to obtain, and the process
can be time-consuming and expensive. We expect that it will take some time before RAAM products will be widely accepted under health insurance
coverage. In addition, growth of this industry is expected to expand as additional research and development into the benefits of regenerative
products and specific products becomes more widely accepted as a result of FDA mandated or optional clinical trials are performed by industry
stakeholders.
As stated previously, companies competing in the
industry must now meet the new and more stringent regulatory deadlines imposed by the FDA in connection with regulation of RAAM products
that went into effect in May 2021 (postponed from November 2020 due to the COVID-19 pandemic). As a result of these concerns, the Company
and our competitors are expected to need to pursue research and development efforts, submit IND applications for FDA approval to commence
clinical trials for RAAM products and ultimately obtaining a biologic license for their products to be sold, to assure that their respective
operations and products remain compliant with FDA regulations and there is no adverse impact to future operations.
We have not obtained any opinion or ruling regarding
the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject
to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products
fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our
products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts
on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our
ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses.
The efforts include continuing with clinical trials both domestically and internationally, expanding sales internationally and developing
new product offerings and/or designations of products that would not fall under these regulations, including the Company’s recent
launching of PPX TM .
We intend to perform clinical trials for our RAAM
Products for the purpose of obtaining biologics license status from the FDA to provide us with advantages over our competitors, including
acceleration for acceptance of our products in traditional insurance plans, compliance with FDA regulations and/or to provide our customers
with superior education and support of the benefits of our products. Initially we are positioning ourselves as a cash-based health care
alternative for consumers that can provide higher levels of improvement, that is not available from traditional allopathic medicine at
this time.
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The Company competes in multiple areas of clinical
treatment where regenerative biomaterials may be employed to modulate inflammation, enhance healing and reduce scar tissue formation:
advanced wound care treatment, including spine, orthopedic, sports medicine, and surgical as well as regenerative and aesthetics applications.
The primary competitive products in this space
and which are now subject to being classified as an HCT/P product that must meet current regulatory guidelines and require IND approvals,
clinical trials, and ultimately biologic license are allograft products derived from perinatal sources including amniotic fluid, amniotic
and placental powders, amniotic or placental frozen tissues or liquids, cord blood derived products, and Wharton’s jelly derived
products. As a result of this increased regulatory oversight of HCT/P’s, competitors have begun shifting their product portfolios
to autologous solutions including serums derived from blood, bone marrow, and adipose tissue. These products are the fastest growing sector
of regenerative medicine due to their compliant regulatory position with the FDA.
Our allogenic competitors are primarily producer-distributor
companies which historically included Predictive Biotech, Kimera Labs, MiMedix Group, Inc., Invitrx Therapeutics, Liveyon, BioD (“dermaSciences”),
Signature Biologics, Direct Biologics and Vitti Labs, as well as a number of distributors who sell white-labeled products from those producer-distributor
entities. Additionally, there are a variety of accredited blood, bone, and soft tissue banks that we historically competed against, including
Utah Cord Bank and Cord for Life. Currently one of the largest companies in the autologous segment is Regenexx. We also expect to see
the growth of many additional autologous equipment manufacturers during 2022, including APEX Biologix LLC.
In connection with the new FDA regulations that
went into effect in May 2021 described above, the Company believes that two of the largest perinatal product manufacturers in the United
States, Predictive Biotech and Utah Cord Bank, have closed their operations. In addition, the FDA has indicated that hundreds of other
manufacturers and clinics have already received warning letters of violations of the new FDA regulations. To date, the Company has not
received any warning letters or correspondence from the FDA indicating that our products were not in compliance with the current FDA regulations.
As stated previously, the demand for RAAM products
is very high and expected to grow with the growing baby boomer generation getting older, the increase in patients desiring to seek health
care options outside of traditional therapies, the growing trend in the desire of individuals to remain active longer in life and the
ongoing rise in health care costs which RAAM products may provide a more efficient and economical alternative for certain conditions.
Government Regulation
General
The Company’s operations are subject to
FDA regulations in connection with the sales and distribution of its RAAM products. In addition, the Company relies on supply agreements
with birth tissue recovery companies, supply manufacturers and/or third party distributors for the supply of RAAM products and/or the
Company’s intended objectives to conduct research and development and clinical trials of RAAM products, all of whom are required
to comply with FDA regulations. We anticipate these regulations will be heavily enforced and subject to more restrictive regulations by
the FDA in the future. A summary of the current FDA regulations is set forth below.
FDA Premarket
Clearance and Approval Requirements
Tissue Products
Currently the products that are sold by the Company
are derived from human tissue that is purchased by the Company and processed directly in the Company’s laboratory facilities. At
times when the Company did not manufacture its own products, the products sold were manufactured and processed by third party manufacturers.
As discussed below, some tissue-based products are regulated solely under Section 361 of the Public Health Service Act as human cells,
tissues and cellular and tissue-based products, or HCT/Ps, which do not require premarket clearance or approval by the FDA. Other tissue
products are regulated as biologics and, in order to be lawfully marketed in the United States, require an FDA-approved BLA.
The FDA is continually changing and formulating
new guidelines for this industry. In addition, the FDA has published some additional draft guidelines related to this industry and the
ultimate form of the regulations are not yet known.
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Products Regulated as HCT/Ps
The FDA has specific regulations governing human
cells, tissues and cellular and tissue-based products, or HCT/Ps. An HCT/P is a product containing or consisting of human cells or tissue
intended for transplantation into a human patient. HCT/Ps that meet the criteria for regulation solely under Section 361 of the Public
Health Service Act (so-called “361 HCT/Ps”) are not subject to approval requirements and they are subject to post-market regulatory
requirements.
To be a 361 HCT/P, a product generally should
meet following criteria:
● Be minimally manipulated, no structural change, or be mixed with anything;
● Be intended for homologous use, essentially used for the same purpose that it was used in the donor;
● Its manufacture must not involve combination with another article, except for water, crystalloids or a
sterilizing, preserving or storage agent; and
● It must not be dependent upon the metabolic activity of living cells for its primary function.
Products Regulated as Biologics-
The BLA Pathway
The typical steps for obtaining FDA approval of
a BLA to market a biologic product in the U.S. include:
● Completion of preclinical laboratory tests, animal studies and formulations studies under the FDA’s
good laboratory practices regulations;
● Submission to the FDA of an Investigational New Drug Application (“IND”) for human clinical
testing, which must become effective before human clinical trials may begin and which must include independent Institutional Review Board
(“IRB”) approval at each clinical site before the trials may be initiated;
● Performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices
to establish the safety and efficacy of the product for each indication;
● Submission to the FDA of a Biologics License Application for marketing the product, which includes, among
other things, reports of the outcomes and full data sets of the clinical trials, and proposed labeling and packaging for the product;
● Satisfactory completion of an FDA Advisory Committee review; and
● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the
product is produced to assess compliance with Current Good Manufacturing Practices (“cGMP”) regulations.
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Generally, clinical trials are conducted in three
phases:
● Phase I trials typically involve a small number of healthy volunteers and are designed to provide
information about the product safety.
● Phase II trials are conducted in a larger but limited group of patients afflicted with a specific
diagnosis in order to determine preliminary efficacy, and to identify possible adverse effects.
o Dosage studies are designated as Phase IIA and efficacy studies are designated as Phase IIB.
● Phase III clinical trials are generally large-scale, multi-center, comparative trials conducted
with patients who have a specific condition in order to provide statistically valid proof of efficacy, as well as safety and potency.
● In some cases, the FDA will require Phase IV , or post-marketing trials, to collect additional data
after a product is on the market.
The process of obtaining an approved BLA requires
the expenditure of substantial time, effort and financial resources and may take years to complete.
FDA Post-Market Regulation
Tissue processors are required to register as
an establishment with the FDA. We intend on becoming a registered establishment, accredited by the American Association of Tissue Banks
(“AATB”) for the storage and distribution of tissue products that we purchase directly or indirectly from third party manufacturers.
Once we are registered, we will be required to comply with regulations, including those regulations regarding storage, controls, access,
labeling, record keeping, security, processes, compliance with established Good Tissue Practices, and documentation associated with the
sale of our products by our customers to their patients. Our facilities will be subject to periodic inspections to assess our records
and determination of our compliance with the regulations.
Products covered by a BLA, 510(k) clearance, or
a PMA are subject to numerous additional regulatory requirements, which include, among others, compliance with cGMP, which imposes certain
procedural, substantive and record keeping requirements, labeling regulations, the FDA’s general prohibition against promoting products
for unapproved or “off-label” uses, and additional adverse event reporting.
Other Regulation Specific
to Tissue Products
The AATB, has issued operating standards for tissue
banking, whether manufacturing and/or storing products as a distributor of manufactured products by third parties. Compliance with these
standards is a requirement in order to become a licensed tissue bank.
21st
Century Cures Act
In December
2016, President Obama signed the 21st Century Cures Act (the “Act”) into law. The Act includes many provisions
that aim to speed up the process of bringing new drugs and devices to market. One of the Act’s most significant amendments to the
Federal Food, Drug and Cosmetic Act allows the FDA to grant accelerated approval to regenerative medicine products, while also providing
the agency with wide discretion on creating new approaches to regenerative medicine. This legislative development is the result of increased
pressure from patients and other stakeholders to move regenerative medicine advancements more quickly from the lab into the clinic.
Specifically, the new accelerated approval pathway
authorized by the Act allows certain regenerative medicine products to be designated as “regenerative advanced therapy” and
become eligible for priority review by FDA. To qualify for this pathway, the product must be aimed at a serious disease and have the potential
to deal with currently unmet medical needs. It must also meet the Act’s new definition of a regenerative advanced therapy, which
is defined as “cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using
any such therapies or products, except for those regulated solely under section 361 of the Public Health Service Act.” This broad
definition would seem to encompass the majority of regenerative medicine products known to be currently in the development stages.
15
As with the existing accelerated approval pathway
for drugs and biologics, this new regulatory pathway would allow a regenerative medicine product to be approved for marketing based on
surrogate or intermediate clinical trial endpoints rather than longer term clinical outcomes. The use of such endpoints can decrease the
number, duration, and complexity of clinical trials that are needed to prove a longer-term outcome. Subsequently, a sponsor would have
to conduct confirmatory clinical trials to ensure that the surrogate or intermediate endpoint was in fact predictive of patients’
clinical response to the product, otherwise the accelerated approval could be withdrawn.
The Act also requires the FDA to work with the
National Institute of Standards and Technology (“NIST”) and other stakeholders to develop standards and consensus definitions
for regenerative medicine products. Such standards are expected to play a large role in advancing this nascent industry by allowing companies
to rely on FDA-recognized standards, rather than creating and validating their own as is the case today.
The Act attempts to create a research network
and a public-private partnership to assist developers in generating definitive evidence about whether their proposed therapies indeed
provide clinical benefits that are hoped for. The Act also requires the FDA to track and report the number and type of applications filed
for regenerative medicine products, including the number of products approved through the new accelerated approval pathway. The law also
includes provisions that require the FDA to publish guidance on how it will design and implement an approval process for regenerative
medicine devices.
November 2017 FDA Guidelines
In November 2017, the FDA released four guidance
documents (two final, two draft) in an effort to implement a “comprehensive policy framework” for existing laws and regulations
governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“HCT/Ps”).
These guidance documents build upon the previous regulatory framework for these products, which was completed in 2005. A guidance
document cannot alter a regulation, but can clarify how the FDA intends to enforce the regulation. The Comprehensive regenerative medicine
policy framework intends to spur innovation, efficient access to potentially transformative products, while ensuring safety & efficacy.
The framework builds upon the FDA’s existing
risk-based regulatory approach to more clearly describe what products are regulated as drugs, devices, and/or biological products. Further,
two of the guidance documents propose an efficient, science-based process for helping to ensure the safety and effectiveness of these
therapies, while supporting development in this area. The suite of guidance documents also defines a risk-based framework for how the
FDA intends to focus its enforcement actions against those products that raise potential significant safety concerns. This modern framework
is intended to balance the agency’s commitment to safety with mechanisms to drive further advances in regenerative medicine so innovators
can bring new, effective therapies to patients as quickly and safely as possible. The policy also delivers on important provisions of
the Act.
Final Guidance Documents
The two final guidance documents clarify the FDA’s
interpretation of the risk-based criteria manufacturers use to determine whether a product is subject to the FDA’s premarket review.
The first guidance provides greater clarity
around when cell and tissue-based products would be exempted from the established regulations if they are removed from and implanted into
the same individual within the same surgical procedure and remain in their original form. The second final guidance helps stakeholders
better understand how existing regulatory criteria apply to their products by clarifying how the agency interprets the existing regulatory
definitions “minimal manipulation” and “homologous use.” As this field advances, the FDA has noted that there
are a growing number of regenerative medicine products subject to FDA premarket authorization. These guidance documents will help explain
how the FDA will provide a risk-based framework for its oversight. The policy framework defines how the FDA intends to take action against
unsafe products while facilitating continued innovation of promising technologies.
To accomplish this goal, the guidance document
has clarified the FDA’s view of “minimal manipulation” and “homologous use.” These are two concepts that
are defined in current regulation to establish the legal threshold for when a product is subject to the FDA’s premarket approval
requirements. By further clarifying these terms in the final guidance, the FDA is applying a modern framework for its oversight.
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FDA regulations at 21 C.F.R. Part 1271, previous
draft guidance documents, and untitled letters establish the agency’s approach to regulating HCT/Ps. Some HCT/Ps are exempt from
premarket approval and are subject to regulation solely under section 361 of the Public Health Service Act (“PHS Act”) (so - called
“361 HCT/Ps”) whereas others require premarket approval (i.e., as a drug, device, or biologic) (so - called
“351 HCT/Ps”). Both 361 HCT/Ps and 351 HCT/Ps are subject to FDA requirements (at Part 1271) for registration and listing,
donor-eligibility, current good tissue practices, and other requirements intended to prevent transmission of communicable diseases. Those
that are the subject of the “same surgical procedure” exception – are exempt from both premarket approval requirements
and the requirements of Part 1271. This regime is outlined in a flow chart, which is one of the few new features of the final guidance
documents and is presented below:
Enforcement Discretion
In order to allow manufacturers of products time
to comply with the requirements, the FDA announced that it intended (originally through November 2020 and extended to May 2021 because
of the COVID-19 pandemic) to exercise enforcement discretion for certain products that are subject to the FDA’s premarket review
under the existing regulations, but are not currently meeting these requirements. The FDA does not intend to exercise such enforcement
discretion for those products that pose a potential significant safety concern. Going forward, the FDA will apply a risk-based approach
to enforcement, taking into account how products are being administered as well as the diseases and conditions for which they are being
used. This risk-based approach allows product manufacturers time to engage with the FDA, as to determine if they need to submit a marketing
authorization application and, if so, submit their application to the FDA for approval.
17
The FDA’s enforcement discretion policy
for IND and premarket approval requirements does not apply to products that have been associated with reported safety concerns or have
the potential to cause significant safety concerns to patients. The FDA has stepped up its oversight of cellular and related products
in recent years and has issued compliance actions, including numerous warning and untitled letters, and pursued litigation for serious
violations of the law, including some involving patient harm.
The FDA has indicated it intends to focus enforcement
actions on “products with higher risk,” taking into account factors such as non - autologous
(allogeneic) use, the route of administration, the site of administration, and whether the product is intended for homologous or non-homologous
use. For example, HCT/Ps administered via intravenous injection or infusion, aerosol inhalation, intraocular injection, or injection or
infusion into the central nervous system, will be prioritized over HCT/Ps administered by intradermal, subcutaneous, or intra-articular
injection. Similarly, HCT/Ps intended for non-homologous use, particularly those intended to treat serious or life-threatening conditions,
“are more likely to raise significant safety concerns than HCT/Ps intended for homologous use”.
The Company believes that the new regulatory restrictions
being implemented by the FDA are intended to assure that all parties involved in the chain of gathering, processing, distributing and/or
administrating RAAM related products have met the required standards to assure that the manufacturing, marketing the administration of
the RAAM regulated products are not misleading and are performed in a safe and ethical manner and in accordance with the “objective
intent” of the manufacturer.
We have not obtained any opinion or ruling regarding
the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject
to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products
fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our
products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts
on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our
ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses.
The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations
of products that would not fall under these regulations.
New Draft Guidance Documents
The two draft guidances provide important information
to help spur development and access to innovative regenerative therapies. The first draft guidance, which builds off the regenerative
medicine provisions in the Act, addresses how the FDA intends to simplify and streamline its application of the regulatory requirements
for devices used in the recovery, isolation, and delivery of regenerative medicine advanced therapies, including combination products.
The guidance specifies that devices intended for use with a specific RMAT may, together with the RMAT, be considered to comprise a combination
product.
The second draft guidance describes the expedited
programs that may be available to sponsors of regenerative medicine therapies, including the new Regenerative Medicine Advanced Therapy
(“RMAT”) designation created by the 21st Century Cures Act, Priority Review, and Accelerated Approval. In addition, the guidance
describes the regenerative medicine therapies that may be eligible for RMAT designation – including cell therapies, therapeutic
tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, as well as
gene therapies that lead to a durable modification of cells or tissues (including genetically modified cells).
Fraud, Abuse and False Claims
We are directly and indirectly subject to various
federal and state laws governing relationships with healthcare providers and pertaining to healthcare fraud and abuse, including anti-kickback
laws. In particular, the federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering,
receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the
furnishing, arranging for or recommending a good or service for which payment may be made in whole or part under federal healthcare programs,
such as the Medicare and Medicaid programs. (See 42 U.S.C. § 1320a-7b). Penalties for violations include criminal penalties
and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. The
Anti-Kickback Statute is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. In
implementing the statute, the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”) has
issued a series of regulations, known as the “safe harbors.” These safe harbors set forth provisions that, if all
their applicable requirements are met, will assure healthcare providers and other parties that they will not be prosecuted under the Anti-Kickback
Statute.
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AdvaMed has established guidelines and protocols
for medical device manufacturers in their relationships with healthcare professionals on matters including research and development, product
training and education, grants and charitable contributions, support of third-party educational conferences, and consulting arrangements. Adoption
of the AdvaMed Code by a medical device manufacturer is voluntary, and while the OIG and other federal and state healthcare regulatory
agencies encourage its adoption and may look to the AdvaMed Code, they do not view adoption of the AdvaMed Code as proof of compliance
with applicable laws. We have incorporated the principles of the AdvaMed Code in our standard operating procedures, sales force
training programs, and relationships with health care professionals.
Manufacturing (Processing)
We intend on becoming a registered establishment,
accredited by the American Association of Tissue Banks (“AATB”) for the storage and distribution of tissue products that we
purchase directly or indirectly from third party manufacturers.
Our laboratory and distribution facilities are
subject to periodic unannounced inspections by regulatory authorities based on the activities we may be engaged, and may undergo compliance
inspections conducted by the FDA and corresponding state and foreign agencies based on our operations. We intend to seek American Association
Blood Banks (“AABB”) or AATB accreditation in connection with the storage of products we intend to distribute.
FDA Compliance Steps
To date, the Company has obtained certain IND
and emergency IND (“eIND”) approvals from the U.S. Food and Drug Administration (the “FDA”), including applicable
Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection
with the use of Zofin™ and related treatment protocols.
In connection with the Company’s approved
eINDs, the approvals authorize physicians to treat their patients with Zofin TM under a specified protocol when there is no
comparable or satisfactory therapy option available for an individual patient who has a serious or immediately life-threatening disease.
These are not formal clinical trials and the Company is not given access to full patient data associated with such treatments. Following
FDA’s reporting requirements, the Company submitted an annual report for all of the eINDs to the FDA to formally close each of the
eINDs. The annual report consists of a written summary of the results including any adverse effects.
For each of the Company’s approved eIND’s
described below, the approved protocol consisted of administering three or four individual doses of Zofin TM over an 8-day period
and monitoring the patient for a period of 21-days from the date of administering the initial dose.
The use of an eIND for “expanded access”
is primarily to treat patients with the investigational drug and not to answer safety or efficacy questions about the drug.
With respect to the Company’s approved INDs
and ongoing clinical trials, until such time that the clinical trial is closed and the associated data is reviewed and analyzed by third
parties, the Company is not privy to actual patient outcomes and is unable to provide updates on the results of such clinical trials.
To date, there has not been a severe adverse event
that has been reported to be associated with the use of Zofin ™ .
19
The information provided below represents the
Company’s most up to date information regarding results from the Company’s FDA approved and submitted eINDs and approved phase
I/II INDs and other trial related activities:
For each of the patients that have been treated
under the Company’s approved eIND’s described below, the Company had endeavored to obtain initial and follow-up patient information
beginning with the initial date that Zofin TM was administered. As stated earlier, the collection of this information was not
required by applicable FDA regulations, but the Company desired to obtain such information in an effort to support and improve its ongoing
research and development activities. The patient outcome information provided below for each eIND identified is based on information provided
by the patient’s treating physicians, has not been audited and/or verified by the Company or by any independent third party for
accuracy or completeness and the Company does not make any representations as to the accuracy or completeness of such information. Furthermore,
the Company is not making any claims and/or inferences as to any direct or indirect correlation of the reported patient outcomes and the
use of Zofin TM by providing such information.
1. eIND#22370 approved on 05/11/2020 - Treatment for Acute hypoxic respiratory failure with ARDS secondary
to COVID-19 infection for single patient. Patient required mechanical ventilation prior to treatment and developed acute metabolic encephalopathy
with ICU delirium along with acute kidney injury and anemia. The patient was treated in May 2020. Patient’s respiratory function
at 21-days post treatment, transitioned from a 21% t-collar to room air PMV and decannulation on day 26. The physician reported that patient
was discharged from hospital after 29-days post treatment. The single eIND was closed during FDA’s annual reporting.
2. eIND#22371 approved on 05/11/2020 - Treatment for Acute hypoxic respiratory secondary to bilateral pneumonia
secondary to COVID-19 with ARDS for single patient. Patient had also developed acute kidney failure due to sepsis and was placed on hemodialysis.
The patient was treated in May 2020. During the course of the treatment, patient’s respiratory function transitioned from CPAP 5
PS 10 30% ventilation to 30% T-Collar ventilation by day 28. The patient’s acute delirium improved. During the observational 21-day
period, the physician reported that the patient remained in the step-down unit and required regular hemodialysis treatment due to the
kidney injury. The physician reported that the patient passed away 104 days after treatment. The single eIND was closed during FDA’s
annual reporting.
3. eIND#22897 approved on 05/29/2020 – Treatment for Acute respiratory failure with hypoxia, secondary
to COVID-19 with ARDS for single patient. Patient had respiratory impairment due to ARDS and an acute kidney injury that required regular
hemodialysis. The patient was treated in June 2020. After receiving the treatment, the patient’s respiratory function improved with
a complete decannulation from oxygen therapy by day 4. The patient had a complete recovery of renal function, with decreased creatinine
concentration levels, and was removed from hemodialysis by day 17. The physician indicated that the patient was discharged 26-days post
treatment initiation. The single eIND was closed during FDA’s annual reporting.
4. eIND#25426 approved on 07/24/2020 - Treatment of COVID-19 positive for single patient. The patient was
treated in July 2020. The patient was experiencing fatigue, cough, and shortness of breath at rest and upon exertion. At baseline, the
patient’s oxygen saturation was 94% with elevated inflammatory biomarkers TNF-a, IL-6, CRP, and D-dimer. Patient reported improvement
in fatigue, cough, and shortness of breath by day 21. Furthermore, inflammatory biomarkers IL-6, CRP, and TNF-alpha all decreased into
normal range within 21 days. The physician indicated that the patient reported returning to normal activity by day 28. The single eIND
was closed during FDA’s annual reporting.
5. eIND#25888 approved on 8/01/2020 - Treatment of post COVID-19 complication for single patient. The patient
was treated in August 2020. Patient was experiencing shortness of breath, fevers, total malaise, arthropathies vomiting, diarrhea, headaches,
and loss of smell. At baseline, bilateral pneumonia with shortness of breath was the primary factor that lead to the long-hauler diagnosis.
Blood oxygen saturation level was 95%. The patient began to experience improvements in shortness of breath complications early in the
treatment protocol. By the conclusion of the study, the physician indicated that the patient returned to normal with no observation of
impairments or respiratory distress. The single eIND was closed during FDA’s annual reporting.
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6. eIND#26560 approved on 8/17/2020 - Treatment of post-COVID-19 complications for single patient. The patient
was treated in August 2020. At baseline, the patient reported prolonged fatigue and shortness of breath. No abnormalities were found in
chest x-ray images, oxygen saturation, or inflammatory biomarkers. 20 days post treatment, the physician indicated that the patient continued
to experience post-COVID-19 fatigue, shortness of breath, muscle aches, and hair loss. The single eIND was closed during FDA’s annual
reporting.
7. eIND#26561 approved on 8/17/2020 - Treatment of post-COVID-19 complications for single patient. The patient
was treated in August 2020. At baseline, the patient reported prolonged fatigue, shortness of breath, body aches and headaches. Significant
improvements in fatigue, mental fog, and shortness of breath with exertion were reported 3 days after the 3 rd dose. The
physician indicated that the patient refused to have further follow up 3 days after the 3 rd dose. The single eIND was closed
during FDA’s annual reporting.
8. eIND#26676 approved on 8/20/2020 - Treatment of respiratory failure due to COVID-19 infection for single
patient. The patient was treated in August 2020. Patient was in ICU in severe critical condition prior to initiation of the treatment.
The physician indicated that the patient passed away 5 days after initiation of the treatment, having received two of the three doses
of Zofin TM as per the protocol. The single eIND was closed during FDA’s annual reporting
9. eIND#26700 approved on 8/21/2020 - Treatment for ARDS associated with COVID-19 for a single patient. The
patient was treated in August 2020. Patient was in ICU in severe critical condition prior to initiation of the treatment. The physician
indicated that the patient passed away 7 days after initiation of the treatment, having received two of the three doses of Zofin TM
as per the protocol. The single eIND was closed during FDA’s annual reporting.
10. eIND#26776 approved on 8/25/2020 - Treatment of COVID-19 positive for single patient. The patient was
treated in September 2020. Patient was experiencing significant fatigue, cough, and shortness of breath; inflammatory biomarker CRP was
also elevated at baseline. Initial O2 saturation levels fluctuated from 88-95%. Significant improvements were first noted 2 days after
the 2nd dose including a decrease in fever and overall improvement in wellbeing. At day 14, the physician reported that the patient returned
to work, with a resolution of all reported symptoms. The patients O2 saturation returned to a stable 98% and CRP biomarker levels decreased
to normal levels by day 14. The single eIND was closed during FDA’s annual reporting.
11. eIND#26777 approved on 8/25/2020 - Treatment of COVID-19 positive for single patient. The patient was
treated in September 2020. At baseline, patient was experiencing symptoms of fever, fatigue, cough, and shortness of breath. Patient first
reported 25% improvement after the first dose and 95% improvement 2 days after the second dose. At the day 8 time point, the only clinical
feature still present was an occasional cough. The physician reported that the patient returned to work 24 hours after the 3rd dose. The
single eIND was closed during FDA’s annual reporting.
12. eIND#26864 approved on 9/05/2020 - Treatment of COVID-19 positive for single patient. The patient was
treated in September 2020. Patient was in ICU in severe critical condition, on ECMO, prior to initiation of the treatment. The patient
received 4 doses of Zofin TM and the physician indicated that the patient remained stable on ECMO 21 days after the 1st dose.
The physician reported that the patient passed away 41 days after treatment initiation. The single eIND was closed during FDA’s
annual reporting.
13. eIND#26821 approved on 9/22/2020 - Treatment of post COVID-19 complications for single patient. The patient
was treated in September 2020. At time of initiation of the treatment, the patient reported symptoms to include generalized myalgias,
headaches and fatigue. On day 60, the physician indicated that the patient reported marked improvement with arthralgias and achiness but
still had complaints of fatigue, headaches and shortness of breath.. The single IND was closed during FDA’s annual reporting.
14. eIND#26964 approved on 10/10/2020 - Treatment for ARDS associated with COVID-19 for single patient. The
patient was treated in October 2020. Patient was in ICU for 16 days and in severe critical condition receiving 100% FiO2, PC mode of ventilator
and PEEP 10 prior to initiation of treatment. The physician reported that the patient passed away 1 day after treatment initiation (only
1 dose of the protocol was administered). The single eIND was closed during FDA’s annual reporting.
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15. eIND#26972 approved on 10/14/2020 - Treatment for ARDS associated with COVID-19 for single patient. The
patient was treated in October 2020. Patient was in ICU in severe critical condition prior to initiation of the treatment. The physician
reported that the patient passed away 13 days after initiation of the first dose and having only received 2 of the 4 doses as per the
protocol. The single eIND was closed during FDA’s annual reporting.
16. eIND#26978 approved on 10/16/2020 - Treatment for ARDS associated with COVID-19 for single patient. The
patient was treated in October 2020. Patient was in ICU suffering with pneumonia and respiratory failure. Initiation of treatment was
6-days post hospital admission and the patient received a total of 4 doses of Zofin TM . Physician reported patient was discharged
and reported to be in stable condition with complete respiratory improvement. The single eIND was closed during FDA’s annual reporting.
17. eIND#27128 approved on 12/04/2020 - Treatment of mild to moderate symptoms of COVID-19 for a single patient.
The patient was treated in December 2020. Clinical features prior to infusion included low-grade fever, chills, muscle and joint aches,
severe headaches, dry cough, feeling slightly breathless and fatigue. Upon day 13, physician reported the patient had less muscle and
joint aches and increased energy. The single eIND was closed during FDA’s annual reporting.
18. eIND#27165 approved on 12/15/2020 - Treatment of COVID-19 pneumonia and respiratory failure with ARDS
for a single patient. The patient was treated in December 2020. Patient had a severely debilitating medical situation following COVID-19.
Prior to the use of Zofin TM , patient required use of 100% oxygen non-rebreather face mask. The physician reported that the
patient passed away 75 days after only receiving the initial dose of the protocol (only 1 dose of Zofin TM was administered,
the patient refused the second and third doses at day 4 and 8 as prescribed by the protocol). The single eIND was closed during FDA’s
annual reporting.
19. Expanded Access to Zofin TM (Organicell TM Flow) approved on 09/24/2020 - Treatment
of Patients with COVID-19 Outpatient and Inpatient Population. The IRB was approved by the Institute of Regenerative and Cellular Medicine
on December 16, 2020 (approval number: IRCM-2020-269). The trial was conducted at United Memorial Medical Center in Houston, Texas. The
study enrolled a total of 11 subjects: adults between the age of 35 to 69 who were fighting COVID-19 infection and presented respiratory
fatigue with and without exertion, cough, and shortness of breath and met all inclusion/exclusion criteria. One patient withdrew before
receiving any doses of Zofin TM . Two subjects withdrew at day 14 post treatment with Zofin TM . As a result, eight
subjects completed the day 30 follow-up and are included in the data analysis. The administration of Zofin TM in the trial
was well tolerated in all enrolled subjects, with no adverse events. Chest X-ray data demonstrated that 75% of subjects had bilateral
opacities caused by COVID-19 infection at day 0 (baseline), prior to treatment with Zofin TM and thirty (30) days after
Zofin TM treatment, chest X-ray data showed 83% of treated subjects had normal lung imaging, indicating complete recovery.
Upon such time that Organicell enrolls and submits additional patient data from the above-mentioned study, Organicell intends to submit
the updated results of the trial to the FDA for approval of an amendment to the Company’s previously approved IND (NCT04384445)
to perform a placebo-controlled Phase II clinical trial to confirm safety and efficacy in a randomized fashion.
20. IND # 19881 approved on 04/30/2020 - A Phase I/II Randomized, Double Blinded, Placebo Trial to Evaluate
the Safety and Potential Efficacy of Intravenous Infusion of OrganicellTM Flow for the Treatment of Moderate to Severe Acute Respiratory
Syndrome (SARS) Related to COVID-19 Infection vs Placebo. IRB was approved by the Institute of Regenerative and Cellular Medicine (“IRCM”)
on 06/04/2020 (approval number: IRCM-2020-254). The clinical trial is currently in process. A total of ten patients have been enrolled
to the study thus far and currently the clinical trial is not enrolling subjects due to the challenges of enrolling the remaining study
population.
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21. IND #27378 approved on 06/24/21. A Phase I/II Randomized, Double Blinded, Placebo Trial to Evaluate the
Safety and Potential Efficacy of Intravenous Infusion of Zofin TM (Organicell TM Flow) for the Treatment of Post COVID-19
Complications “Long Haulers” vs Placebo. The Company and the CRO are currently working to initiate the trial which the
Company expects enrollment to begin during February 2022, subject to the successful negotiation and execution of definitive agreements
with the site facility where the study patients will be treated and the Company raising sufficient working capital to finance the trial,
as to all of which no assurance can be given.
22. IND # 23198 approved on 01/27/2021. A Phase I/II Double Blinded, Placebo Trial to Evaluate the Safety
and Potential Efficacy of Intravenous Infusion of Zofin™ (Organicell TM Flow) for the Treatment of patients diagnosed
with chronic obstructive pulmonary disease (COPD). Expected to start trial during the quarter ending April 30, 2022. The Company and the
CRO are currently working to initiate the trial which the Company expects enrollment to begin during the quarter ending April 30, 2022,
subject to the successful negotiation and execution of definitive agreements with the site facility where the study patients will be treated
and the Company raising sufficient working capital to finance the trial, as to all of which no assurance can be given.
23. IND # 23788 approved on 04/06/2021. A Phase I/II Randomized, Double Blinded, Placebo Trial to Evaluate
the Safety and Potential Efficacy of Zofin TM Infused Intravenously in Patients Suffering with Knee Osteoarthritis vs Placebo.
The Company and the CRO are currently working to initiate the trial which the Company expects enrollment to begin during the quarter ending
July 31, 2022, subject to the successful negotiation and execution of definitive agreements with the site facility where the study patients
will be treated and the Company raising sufficient working capital to finance the trial, as to all of which no assurance can be given.
24. In April 2021, we announced that an initial trial of ten COVID -19 patients in India conducted by CWI
India, our Indian partner, generated positive results. The trial had been conducted by CWI India, our Indian partner with whom we had
entered a product testing and distribution agreement in February 2021, to collaborate on a study or studies to evaluate the effects of
Zofin™ on moderate to severe COVID-19 patients in India. The ten patients in the initial trial were treated at hospitals in Bangalore,
Kozhikode and Chennai, and all ten patients recovered from their symptoms and were discharged from the hospital. Based on the initial
results of this trial, CWI India has since been seeking to obtain government approval to conduct an expanded trial of up to sixty-five
patients with moderate to severe COVID-19, who were to be treated at these hospitals. To date, CWI India has not obtained the required
approval and it is uncertain if they will ultimately be successful in doing so. If approval is eventually obtained, we anticipate that
CWI India will conduct the trials in a timely manner. If the results of the expanded trial prove to be positive, Organicell and CWI India
intend to file with the ICMR (Indian Council for Medical Research) for Emergency Use Approval to use Zofin™ in India as a therapeutic
for treating COVID-19.
25. In May 2021, the Company announced that its Zofin TM therapy has been approved by Pakistani
regulators to be used for a treatment of a single COVID-19 patient hospitalized at the Pakistan Institute of Medical Sciences under compassionate
grounds. In addition to this compassionate grounds authorization, Organicell received further indications to begin a broader trial of
Zofin TM with up to 60 additional patients suffering from moderate to severe COVID-19. The Company has already shared data
with Pakistani regulatory authorities in the country in support of this effort. To date, the Company and the Company’s Pakistani
partner for the proposed study have not obtained the required approvals and the Company is uncertain if they will ultimately be successful
in doing so. If approval is eventually obtained, we anticipate that the trial will be conducted in a timely manner. In addition, in May
2021, Organicell also entered into a one-year exclusive distribution agreement with Apex Services Pakistan to import and distribute Zofin TM
to hospitals and clinics in the country, subject to the issuance of all necessary approvals and licenses by the Drug Regulatory Authority
of Pakistan, which as previously stated, have not yet been obtained.
The Company is pursuing efforts to complete all
of its approved clinical trials and to obtain approval for and commence additional studies for other specific indications it has identified
that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment
options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company
having sufficient available working capital to fund the substantial costs of completing clinical trials, which the Company currently does
not have, and ultimately, obtaining approval from the FDA.
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Environmental Laws
Since May 2019, we have operated laboratory facilities
that process or directly handled biomedical materials whereby we receive and/or generate wastes that are required to be disposed. We contract
with third parties for the transport, treatment, and disposal of the waste that we obtain and at all times plan on being compliant with
applicable laws and regulations promulgated by the Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency and
similar state agencies.
Employees
At October 31, 2021, we had approximately 22 full-time
employees and no part-time employees. We also engaged two other persons as consultants that assisted with various regulatory and administrative
activities. From time to time, the Company engages independent contractors for sales and administration activities. There are no collective
bargaining agreements.