UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31 2019, 2021

or

Commission File Number 001-37428

RITTER PHARMACEUTICALS, INC.Qualigen Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

1880 Century Park East, Suite 10002042 Corte Del Nogal, Carlsbad, California92011

Los Angeles, CA 90067

(Address and zip code of principal executive offices) (Zip Code)

(760)918-9165

Registrant’s Telephone Number, Including Area Code:(310) 203-1000telephone number, including area code

Securities Registered Pursuantregistered pursuant to Section 12(b) of the Exchange Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] ☐ No [X] ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] ☐ No [X] ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the Registrantregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] ☐ No [X] ☒

As of June 28, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter),30, 2021, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately $7.1 million $57,063,765 based uponon the closing price for the common stock of $1.99 on that date. Shares of common stock held by the registrant’s executive officers and directors have been excluded from this calculation, as such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of March 25, 2022, there were 35,295,541 shares of the registrant’s common stock of $1.07 as reported by the Nasdaq Capital Market on that date.outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

As of March 25, 2020, there were 45,713,862 shares outstanding

Portions of the registrant’s common stock, par value $0.001 per share.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement relating to its 2020 annual meeting of shareholders (the “2020 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2020 Proxy Statement willfor the 2022 Annual Meeting of Stockholders, to be filed with the U.S. Securities and Exchange Commission withinpursuant to Regulation 14A not later than 120 days after the end of the fiscal yearperiod covered by this Annual Report on Form 10-K, are incorporated by reference in Part III, Items 10 to which14 of this report relates.Annual Report on Form 10-K. Except for the portions of the Proxy Statement specifically incorporated by reference in this Form 10-K, the Proxy Statement shall not be deemed to be filed as part hereof.

RITTER PHARMACEUTICALS, INC.

ANNUAL REPORT ON FORM 10-KTABLE OF CONTENTS

For the Year Ended December 31, 2019

Table of Contents

SPECIAL
 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements by Qualigen Therapeutics, Inc. that involve substantial risks and uncertainties. Alluncertainties and reflect our judgment as of the date of this Report. These statements other than statements of historical facts contained in this Annual Report, including statements regardinggenerally relate to future events or our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended toor operating performance. In some cases, you can identify forward-looking statements although not allbecause they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Such forward-looking statements contain these identifying words. These statements involve knownmay relate to, among other things, potential future development, testing and unknown risks, uncertaintieslaunch of products and other important factors thatproduct candidates. Actual events or results may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that we believe could cause actual results to differ from those anticipated or predicted include:our expectations due to a number of factors.

These forward-looking statements include, but are not limited to, statements about:

By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics, and healthcare, regulatory and scientific developments and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Annual Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent in some future periods with the forward-looking statements contained in this Annual Report, they may not be predictive of results or developments in other future periods.

Any forward-looking statement that we make in this Annual Report speaks only as of the date of this report,Annual Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Annual Report, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Future filings with the Securities and Exchange Commission (the “SEC”), future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may also contain forward-looking statements. Because such statements include risks and uncertainties, many of which are beyond our control, actual results may differ materially from those expressed or implied by such forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date of this Annual Report. You should also read carefully the factors describedon which they are made.

PART I

As used in the “Risk Factors” section of this Annual Report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Qualigen” refer to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.Qualigen Therapeutics, Inc.

This Annual Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.

PART I

Item 1. Business

Overview

We were formedare a diversified life sciences company focused on developing treatments for adult and pediatric cancers with potential for Orphan Drug designation, while also commercializing diagnostics. Our cancer therapeutics pipeline includes QN-302, QN-247 and RAS-F. Our investigational QN-302 compound is a small molecule G4 selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells. Such binding could, by stabilizing the G4s against “unwinding,” help inhibit cancer cell proliferation. QN-247 is a DNA coated gold nanoparticle cancer drug candidate that has the potential to target various types of cancer; the nanoparticle conjugate technology is similar to the core nanoparticle coating technology used in our blood-testing diagnostic products. The foundational aptamer of QN-247 is QN-165 (formerly referred to as AS1411), which the Company has deprioritized as a Nevada limited liability companydrug candidate for treating COVID-19 and other viral-based infectious diseases. RAS-F is a family of RAS oncogene protein-protein interaction inhibitor small molecules for preventing mutated RAS genes’ proteins from binding to their effector proteins; preventing this binding could stop tumor growth, especially in RAS-driven tumors such as pancreatic, colorectal and lung cancers. Although we have no ongoing development efforts for STARS, a DNA/RNA-based therapeutic device product concept for removing precisely targeted tumor-produced and viral compounds from circulating blood, we are currently identifying strategic partnering opportunities.

Our FastPack System diagnostic instruments and test kits are sold commercially primarily in the United States, as well as certain European countries. The FastPack System menu includes a rapid, highly accurate immunoassay diagnostic testing system for cancer, men’s health, hormone function, and vitamin D status. We provide analyzers to our customers (physician offices, clinics and small hospitals) at low cost in order to increase sales volumes of higher-margin test kits. We currently use our diagnostics distribution partner Sekisui Diagnostics, LLC (“Sekisui”) for most FastPack distribution worldwide pursuant to a distribution agreement, but maintain direct distribution for certain house accounts, including selling our total testosterone test kits to Low T Center, Inc. (“Low T”), the largest men’s health group in the United States, with 40 locations. The distribution agreement with Sekisui will expire on March 29, 200431, 2022, at which time the services currently provided by Sekisui will revert to us and we will recognize 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits. We have licensed and technology-transferred our FastPack System technology to Yi Xin Zhen Duan Jishu (Suzhou) Ltd. for the China diagnostics market.

Completion of Reverse Recapitalization Transaction with Ritter Pharmaceuticals, Inc.

On May 22, 2020, we completed a “reverse recapitalization” transaction with Qualigen, Inc. (not to be confused with the Company); pursuant to which our merger subsidiary merged with and into Qualigen, Inc. with Qualigen, Inc. surviving as a wholly owned subsidiary of the Company. The Company, which had previously been known as Ritter Pharmaceuticals, Inc., was renamed Qualigen Therapeutics, Inc., and the former stockholders of Qualigen, Inc. acquired, via the recapitalization, a substantial majority of the shares of the Company. Ritter/Qualigen Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under the nameticker symbol “RTTR,” commenced trading on Nasdaq, on a post-reverse-stock-split adjusted basis, under the ticker symbol “QLGN” on May 26, 2020.

We are no longer pursuing the gastrointestinal disease treatment business on which Ritter Natural Sciences, LLC. Since our inception, we havePharmaceuticals, Inc. had focused onbefore the developmentreverse recapitalization transaction.

Product Candidates

Therapeutics and Diagnostics Pipeline

Our lead drug compound QN-302 (formerly SOP1812) is being developed to target regulatory regions of therapeutic productscancer genes that modulate the gut microbiomedown-regulate gene expression in multiple cancer pathways. Our anticancer drug candidate, QN-247 (formerly referred to as ALAN or AS1411-GNP) is aptamer-based and currently in development to treat gastrointestinal diseases.a variety of cancer types, including liquid and solid tumors. Our onlyRAS-F portfolio is designed to suppress the interaction of endogenous RAS with c-RAF, upstream of the KRAS, HRAS and NRAS effector pathways.

Our Selective Target Antigen Removal System (STARS) is a therapeutic device product concept, currently in discovery stage, designed to remove circulating tumor cells, viruses, inflammation factors and immune checkpoints.

Our deprioritized, non-core drug candidate RP-G28,QN-165 (formerly referred to as AS1411, thus not featured in the chart above) is a drug candidate for the potential broad-spectrum treatment of infectious diseases such as COVID-19.

QN-302 (formerly referred to as SOP1812)

We exclusively in-licensed the global rights to the G4 selective transcription inhibitor platform from University College London (“UCL”) in January 2022. The licensed technology comprises lead compound QN-302 (formerly SOP1812) and back-up compounds that target regulatory regions of cancer genes that down-regulate gene expression in multiple cancer pathways. Developed by Dr. Stephen Neidle and his group at UCL, the G4 binding concept is derived from over 30 years in nucleic acid research, including that of G4s, which are higher order DNA and RNA structures formed by sequences containing guanine-rich repeats. G4s are overrepresented in telomeres as well as promoter sequences and untranslated regions of many oncogenes. Their prevalence is therefore significantly greater in cancer cells compared to normal human cells.

G4-selective small molecules such as QN-302 and backup compounds target the regulatory regions of those cancer genes which have a high prevalence of enriched G4s in a process that can be predicted by bioinformatics. Stable G4-QN-302 complexes can be impediments to replication, transcription or translation of those cancer genes containing G4s, and the drugs’ binding to G4s stabilize the G4s against possible “unwinding.” G4 binders like QN-302 could be efficacious in a variety of cancer types with a high prevalence of G4s. This has been supported by in-vitro and in-vivo studies that have shown that G4 stabilization by QN-302 results in inhibition of target gene expression and cessation of cell growth in a variety of G4 prevalent cancers, including pancreatic ductal adenocarcinoma (“PDAC”) which represents 98% of pancreatic cancers.

Pancreatic cancer is the tenth most common cancer and fifth deadliest cancer in the United States and has one of the lowest rates of survival of all cancer types, with 98% of those diagnosed dying from the disease and one in four dying within the first month of diagnosis. The chemotherapy drug gemcitabine has been standard of care for patients with metastatic pancreatic cancer for more than 15 years. Numerous clinical trials have tested new drugs, either alone or in combination, with gemcitabine. We believe that QN-302 has the potential to demonstrate superior efficacy and activity against PDAC compared to existing agents, with a distinct mechanism of action and preclinical target profile.

In vitro studies show QN-302 potently inhibits the growth of several PDAC cell lines at low nM concentrations. Likewise, QN-302 shows longer survival duration in a KPC genetic mouse model for pancreatic cancer than gemcitabine has historically shown. Additional preclinical studies suggest activity in gemcitabine resistant PDAC. Data from therapy studies on three patient-derived PDAC xenografts indicated that QN-302 had significant anti-tumor activity in PDAC. Early safety indicators suggest no adverse toxic effects at proposed therapeutic doses in pancreatic cancer in-vivo models.

We plan to seek to obtain Orphan Drug status for QN-302 for one or more indications, such as PDAC. Orphan Drug status, if obtained, would be expected to confer advantages that may include faster regulatory review and increased market protection.

QN-247 (formerly referred to as ALAN or AS1411-GNP)

QN-247 is an orally administered, high purity galacto-oligosaccharide (“GOS”),aptamer-based drug candidate that is designed to treat different types of cancer, including liquid and solid tumors. QN-247 inhibits nucleolin, a key multi-functional regulatory protein that is overexpressed in cancer cells; QN-247 may thereby be able to inhibit the cells’ proliferation. QN-247 has shown promise in preclinical studies for the treatment of lactose intoleranceacute myeloid leukemia (“LI”AML”). This novel technology may have several other potential applications, including enhancement of radiation therapy, enhancement of tumor imaging, and delivery of other anti-cancer compounds directly to tumor cells.

A key component of this drug candidate, DNA aptamer QN-165, has been shown, primarily on a preclinical basis, to have the potential to target and destroy cancer cells. This component has been administered in Phase 1 and Phase 2 clinical trials to over 100 AML or renal cell carcinoma cancer patients and appears to be well tolerated with no evidence of severe side effects, with at least seven patients appearing to have long-lasting clinical responses where their cancers disappeared or shrank substantially. (QN-165 may also be useful against infectious diseases – see below.)

QN-247 is an enhanced version of QN-165 (which in turn was formerly referred to as AS1411) where the DNA aptamer is attached to a gold nanoparticle.

In a Qualigen-sponsored University of Louisville (“UofL”) in-vitro preclinical study involving tumor-associated macrophages, QN-247 was shown to have stronger anti-cancer activity than QN-165 alone did. Tumor-associated macrophages are a class of immune cells present in high numbers around solid tumors and affect most aspects of tumor cell biology; they drive pathological phenomena including tumor cell proliferation, tumor angiogenesis, invasion and metastasis, immunosuppression, and drug resistance. In most cancers, the tumor-associated macrophages have an M2 phenotype, which may inhibit the anti-tumor effects of immune checkpoint inhibitor drugs, such as Merck’s Keytruda (pembrolizumab). We believe that converting these M2 macrophages to the M1 phenotype could enhance the activity of these immune checkpoint inhibitors. In the UofL study, QN-247 increased the conversion of M2 macrophages to the M1 phenotype, while also reducing the overall proliferation of macrophages.

A UofL in-vitro preclinical study with triple negative breast cancer cells (MDA-MB-231) indicated that QN-247, in combination with radiation therapy, resulted in reduced tumor cell colony size (i.e., a conditionresulted in increased tumor cell necrosis) compared to radiation alone.

We plan to seek to obtain Orphan Drug status for QN-247 for one or more indications, such as pancreatic cancer, AML and pediatric neuroblastoma. Orphan Drug status, if obtained, would be expected to confer advantages that affects millionsmay include faster regulatory review and increased market protection.

In October 2020, we entered into an amended sponsored research agreement with UofL to advance development of people worldwide. RP-G28 isour QN-247 drug candidate. The work being performed under the original sponsored research agreement, entered into in August 2018, comprises animal studies to assess antitumor efficacy and safety of different QN-247 compositions designed to selectively stimulatetreat pediatric and adult AML. Under the growthamended sponsored research agreement, UofL is performing preclinical studies on AML and on additional indications including glioblastoma, a malignant brain cancer that is difficult to treat because most drugs cannot pass the blood-brain membrane, and non-small cell lung cancer, which comprises approximately 85% of lactose-metabolizing bacteriathe 1.6 million global lung cancer cases each year. Additionally, we and UofL will study how QN-247 may inhibit metastasis of cancer cells as a potential adjuvant therapy.

RAS-F

In July 2020, we entered into an exclusive worldwide license agreement with UofL for the intellectual property covering the “RAS-F” family of RAS oncogene protein-protein interaction inhibitor small molecule drug candidates, which would work by blocking RAS mutations directly and thereby inhibiting tumor formation (especially in pancreatic, colorectal and lung cancers). Pursuant to the license agreement, we in-licensed the “RAS-F” compound family of drug candidates and will seek to identify and develop a lead drug candidate from the compound family and, upon commercialization, will pay UofL royalties in the colon, thereby effectively adaptinglow-to-mid-single-digit percentages on net sales of RAS protein-protein interaction inhibitor licensed products.

RAS is the gut microbiome to assistmost common oncogene in digesting lactose (the sugarhuman cancer. Activating mutations in one of the three human RAS gene isoforms (KRAS, HRAS or NRAS) are present in about one-fourth of all cancers. For example, mutant KRAS is found in milk) that reaches the large intestine.

Ourfirst prototype LI product, Lactagen^™, was an alternative LI treatment method98% of pancreatic ductal adenocarcinomas, 52% of colon cancers, and 32% of lung adenocarcinomas. For these three cancer types, cancers with a mechanism of action similar to RP-G28. In 2004, clinical testing was conducted with Lactagen, which included a 61-subject double-blind placebo controlled clinical trial. The results were publishedmutant KRAS are diagnosed in more than 170,000 people each year in the FederationUnited States and cause more than 120,000 deaths. There is currently no FDA-approved direct RAS protein inhibitor available. Drugs that target signaling downstream of American SocietiesRAS are available; however, such drugs have shown disappointing clinical activity because RAS is a “hub” that activates multiple effectors, so drugs that block a single pathway downstream do not account for Experimental Biologythe many other activated pathways.

In March 2022, we signed an amendment to our active sponsored research agreement with UofL to extend our partnership. Under the revised agreement, the collaboration extends until the first quarter of 2023 and commits additional resources to support ongoing discovery and preclinical efforts for the RAS-F platform.

STARS™

Our FastPack diagnostic system and related core technologies are now the basis for potential blood-filtering therapeutic applications for the treatment of cancer and infectious disease. Our Selective Target Antigen Removal System (“STARS”) therapeutic device concept is intended to utilize core expertise in May 2005.advanced reagents and coatings to remove disease associated agents, including viruses and tumor-produced compounds, directly from a patient’s blood. The key components of STARS, membranes coated with target capture reagents, will utilize several proprietary processes developed and used in the FastPack product lines. Proprietary STARS cartridges are expected to be designed for use with conventional dialysis or hemofiltration machines to remove immune checkpoints, metastatic cells and inflammation factors from cancer patients’ bloodstreams. We believe STARS may also be able to be developed to treat infectious diseases, by removing circulating viruses sufficiently to facilitate patient stabilization and recovery. Although we have no ongoing development efforts for STARS, we are currently identifying strategic partnering opportunities.

In August 2020, the United States Patent and Trademark Office issued to us patent No. 10,744,258 entitled “Devices and Methods for On-Line Whole Blood Treatment” regarding our STARS technology.

QN-165 (formerly referred to as AS1411)

In early 2008,June 2020, we initiatedentered into an exclusive royalty-bearing license agreement with UofL for UofL’s intellectual property for the use of QN-165 as a prescription drug development programcandidate for the treatment of COVID-19. In September 2020 we and UofL jointly filed a United States provisional patent application, entitled “Methods of inhibiting or treating coronavirus infection, and methods for delivering an anti-nucleolin agent.” The application was filed in conjunction with Drs. Paula J. Bates and Kenneth E. Palmer from UofL, and covers methods for using QN-165 as an antiviral drug candidate to prevent SARS-CoV-2 from entering the body through mucous membranes in the nose, mouth and eyes. As stated in the patent application, we believe that QN-165 could be administered by developing RP-G28,means of inhalers, nose spray or eye drops to individuals who have recently come in contact with SARS-CoV-2, or are at high risk of contracting the virus.

We believe that the mechanism by which QN-165 is believed to work, by blocking the ability of viruses to replicate in the body, may also make the drug candidate effective against future mutations in COVID-19 as well as against other dangerous viruses including seasonal influenza. Moreover, we believe that in addition to its proposed use as a therapeutic, QN-165 might be able to be used as a protective defense or prophylaxis against COVID-19 and/or other viral-based diseases such as seasonal influenza.

On July 13, 2021, we filed an improved, second-generation version of Lactagen, based on the belief that if we were successful in gaining approval fromInvestigational New Drug (“IND”) application with the U.S. Food and Drug Administration (“FDA”), we to seek approval to commence Phase 1b/2a clinical studies with QN-165 in hospitalized COVID-19 patients. On August 11, 2021, the FDA informed us that additional preclinical studies would be ablerequired in order for such application to make stronger claims of both efficacy and safety, garner more medical community support and reach a wider market inbe cleared. There can be no assurance when (if ever) the effortFDA would clear this IND application or any other IND application we may file. We have decided to treat LI.

In November 2010, we were awarded a grant fromdeprioritize the United States government’s Health Care BillQN-165 program the Qualifying Therapeutic Discovery Project, to help fund the development of RP-G28. This grant program provides support for innovative projects that are determined by the U.S. Department of Health and Human Services to have reasonable potential to result in new therapies that treat areas of unmet medical need and/or prevent, detect or treat chronic or acute diseases and conditions.

In November 2011, we completed a Phase 2a clinical trial of RP-G28. Positive trends were seen when the entire per protocol study population was analyzed, including some statistically significant subgroup. The combined data demonstrated proof of concept and suggested that RP-G28 administration produced a positive therapeutic effect. RP-G28 was also well tolerated with no significant study-drug related adverse effects.

In October 2016, we completed a Phase 2b multi-center, randomized, double-blind, placebo-controlled, parallel group trial of RP-G28. Topline results of the trial were announced in March 2017. Results showed a clinically meaningful benefit to subjects in the reduction of LI symptoms across a variety of outcome measures. The majority of analyses showed positive outcome measures and the robustness of the data point to a clear drug effect. Treatment patients not only reported meaningful reduced symptoms, but also 30 days after taking the treatment, patients reported adequate relief from LI symptoms and satisfaction with the results of the treatment, with RP-G28 preventing or treating their LI symptoms. Greater milk and dairy product consumption was also reported by patients.as our therapeutics strategy is focused on oncology.

In August 2017, we held an End-of-Phase 2 meeting with the FDA’s Division of Gastroenterology and Inborn Errors Products.

FastPack^®

The purposeFastPack System is a patent-protected rapid, onsite immunoassay testing system consisting of the meetingFastPack Analyzer and the FastPack test pouch, a single-use, disposable, foil packet which includes the FastPack reagent chemistry. Since the initial conception of the system, we have developed successive versions of the analyzer and test pouch, known as “1.0,” “IP” and “PRO”, and have expanded our assay menu to nine tests, including tests for prostate cancer, thyroid function, metabolic disorders, and research applications. We have sold FastPack products in the United States and overseas for over 20 years, and since inception, our sales of FastPack products have exceeded $120 million. We manufacture the FastPack products at our FDA and International Standards Organization (“ISO”) certified Carlsbad, California facility. We maintain direct distribution for certain house accounts, including Low T, but pursuant to a distribution agreement, our diagnostics distribution partner Sekisui holds most FastPack distribution rights until March 31, 2022, after which time we will resume full commercial responsibility.

In July 2020, we submitted an official notification to the FDA to commence sales in the United States of our FastPack SARS-CoV-2 IgG test for COVID-19 antibodies, which was designed for use with our new FastPack PRO. The test was previously submitted to obtain the FDA’s feedback on our Phase 3 program. We reached general consensusFDA for Emergency Use Authorization (“EUA”). In April 2021, we withdrew this EUA. During the nine months during which the EUA was with the FDA, on certain elementsalternative tests and testing practices became widespread and we determined that there was no longer a viable business case for scale-up of the test.

Strategic Partners

As of January 2022, we have entered into a royalty-bearing license agreement with UCL, including intellectual property and know-how covering lead and backup compounds for our Phase 3G4 selective transcription inhibitor program, and clear guidance and recommendations on many necessaryQN-302.

We have entered into a royalty-bearing license agreement for key components of QN-247 from UofL and we have commissioned sponsored research from UofL’s development teams in order to optimize and prepare QN-247 for human trials. A separate team at UofL, funded by us under a sponsored research agreement, is developing RAS-F. We have an active royalty-bearing license agreement for the RAS-F program as well.

In 2016, we entered into an agreement with Sekisui, whereby Sekisui distributes our Phase 3 program; includingdiagnostic product line worldwide. As described above, this distribution agreement will expire on March 31, 2022.

We in-license patents from DIAsource ImmunoAssays S.A. and Future Diagnostics B.V., for reagents that are used in our FastPack Vitamin D assay.

We had exclusive rights to the clinical, non-clinical,core QN-165 aptamer from Advanced Cancer Therapeutics, LLC; this agreement terminated on March 1, 2022.

Sales Channels

We currently sell our FastPack diagnostic product line primarily through our distribution partner Sekisui under a distribution agreement whereby Sekisui receives a portion of sales revenue. In the United States, Sekisui commercializes the FastPack product line through its own direct sales force and chemistry, manufacturingdistribution agreements with McKesson Medical-Surgical, Henry Schein Medical, Medline Industries and controls (“CMC”) requirements needed to support a new drug application (“NDA”) submission.

In June 2018, we initiatedNational Distribution & Contracting, the first pivotal Phase 3 clinical triallargest distributors of RP-G28. Called “Liberatus”, this study was to determine the efficacy, safety and tolerability of RP-G28 to treat LI when compared to placebo. The study was a multicenter, randomized, double-blind, placebo-controlled, parallel-group study conductedphysician office laboratory products in the United States. Trial enrollment exceeded expectations, concluding with approximately 557 subjects randomized. More than 30 U.S. sites participated in the study. The protocol design included a 2-week screening period that included one week of study drug administration, a randomized 30-day study drug treatment period and a 90-day “real world experience” period to assess study drug response and durability of effect after treatment as patients consumed their normal diets including dairy products. The primary endpointOutside of the study wasUnited States, Sekisui commercializes the mean changeFastPack product line through a network of distributors in LI symptom composite score 30-days post-treatment comparedEurope, Asia, Middle East, and North Africa. Our distribution agreement with Sekisui will expire on March 31, 2022, at which time the services currently provided by Sekisui will revert to baseline. Secondary endpoints wereus and we will recognize 100% of the revenue from the sales of our FastPack diagnostic instruments and test kits. Once the distribution agreement expires, we do not expect any interruption to examineour diagnostics sales and marketing engine as we will continue to leverage established partnerships with our various distributors in both the safety, tolerabilityUnited States and meaningfulness of treatment benefit with RP-G28 and the durability of effect of treatment with RP-G28 on reduction of LI symptoms after real-world lactose exposure. The study utilized the prior validated symptom assessment measure and patient questionnaires to capture relevant outcomes. abroad.

In addition, risk-based data review was usedamong our other direct sales accounts, we currently sell FastPack products directly to monitor and assess potential protocol deviations and site quality indicators.

We completed enrollmentLow T. Sales to Sekisui accounted for 62% of our Liberatus Phase 3 clinical trialtotal revenues during the fiscal year ended December 31, 2021, and sales to Low T accounted for 22% of RP-G28 in March 2019our total revenues during this period. The remaining revenue was comprised of warranties and last patient visit in July 2019. product sales to our other direct sales accounts as well as license revenues.

In September 2019, we announced that our Phase 3 clinical trial of RP-G28 for LI failed to demonstrate statistical significance in its pre-specified primary and secondary endpoints.

On October 7, 2019, we announced publicly that we had engaged A.G.P./Alliance Global Partners (“AGP”) as a financial advisor to explore and evaluate potential strategic alternatives, as we continued to analyze the results of the trial to better understand the data and clinical outcome to assess a path forward for RP-G28. All further development efforts for RP-G28 have been suspended, until such time as we determine a path forward.

On January 15, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”)agreement with Qualigen,Yi Xin Zhen Duan Jishu (Suzhou) Ltd (“Yi Xin”), pursuant to which a wholly-owned subsidiaryYi Xin obtained exclusive rights to manufacture and sell new generations of Ritter (the “Merger Sub”) will merge withFastPack-based products as well as Yi Xin-manufactured versions of our existing FastPack 1.0, IP and into Qualigen, with Qualigen surviving as a wholly-owned subsidiary of Ritter Pharmaceuticals, Inc. (“Ritter”)

If the merger is consummated, the combined company does not intend to continue the clinical development of RP-G28. Pursuant to the terms of the Merger Agreement, at the Effective Time, Ritter, John Beck, as the initial CVR Holders’ Representative, and Andrew Ritter,PRO product lines in his capacity as a consultant to Ritter, will enter into the CVR Agreement, pursuant to which, each Ritter Stockholder of record as of immediately prior to the Effective Time (after giving effect to the exercise of any outstanding Ritter stock options or warrants and the conversion of any outstanding Ritter preferred stock, but not toChina. We would be adjusted for any reverse split to be effected in connection with the merger) will receive one CVR for each share of Ritter capital stock held by such stockholder, entitling the holderentitled to receive the net proceeds, if any, from a Legacy Monetization that is entered into during the period beginning on the date the Merger Agreement was signed and ending on the third anniversary of the closing date of the Merger. Under the CVR Agreement, the combined company agreed to commit up to $350,000 (subject to reduction pursuant to the terms of the Merger Agreement) for certain expenses to be incurred by Ritter in pursuing and closing any Legacy Monetization. The CVRs will not be transferable by the CVR Holders, except in certain limited circumstances, will not be certificated or evidenced by any instrument, will not accrue interest and will not be registered with the SEC or listed for tradingroyalties on any exchange. The CVRssuch sales. After May 1, 2022, Yi Xin will terminatehave the right to sell its new generations of FastPack-based diagnostic test systems throughout the world, other than to our then-current FastPack customers; and on the CVR Termination Date. No payments with respect to the CVRs will be payable in respect of any Legacy Monetization proceeds actually received after the CVR Termination Date by Ritter. From and after the CVR Termination Date, any further proceeds received by Ritter arising from any Legacy Monetization will be retained by Ritter and will not be distributed to the CVR Holders.

We may not be successful in completing the merger. If the merger is not completed, we may seek to pursue the development and commercialization of RP-G28 as either a prescription drug, OTC product or dietary supplement for the consumer healthcare industry, which would, in any case, require significant additional funding. If we are unable to obtain funding for the development of RP-G28, whether through potential collaborative, partnering or other strategic arrangements or otherwise, we will likely be required to cease operations. See “Risk Factors—Our business has been entirely dependent on the success of RP-G28, its only product candidate. The failure of RP-G28 to demonstrate statistical significance in its pre-specified primary and secondary endpoints in our Liberatus Phase 3 clinical trial has severely diminished our prospects to continue as a going concern. If the merger is not completed, we may seek to recommence the development and commercialization of RP-G28 as a prescription drug (which may require the filing of a new investigational new drug (“IND”) or explore its potential development as an OTC product or a dietary supplement for the consumer healthcare industry, which would, in any case, require significant additional funding. If we are unable to obtain funding for and to advance the development of RP-G28, we would likely be required to cease operations. Even if we are able to obtain funding for and to advance the development of RP-G28 (as either a prescription drug, OTC product or dietary supplement), we may never receive marketing approval for, or successfully commercialize, RP-G28 for any indication.”

The Gut Microbiome

The human gut is a relatively under-explored ecosystem providing an opportunity for using dietary intervention strategies to reduce the impact of digestive disorders and gastrointestinal disease. The human body carries about 100 trillion microorganisms in the intestines, which is 10 times greater than the number of cells in the human body. This microbial population is responsible for a number of beneficial activities such as fermentation, strengthening the immune system, preventing growth of pathogenic bacteria, providing nutrients, and providing hormones. The increasing knowledge of how these microbial populations impact human health provides opportunities for novel therapies to treat an assortment of diseases such as neurological disease, cardiovascular disease, obesity, irritable bowel syndrome, inflammatory bowel disease, colon cancer, allergies, autism and depression.

Lactose Intolerance (LI)

LI is a common condition attributed to the absence or insufficient levels of the naturally-occurring enzyme lactase in the body. Lactase is needed to properly digest lactose, a complex sugar found in milk, milk-containing foods and other dairy products.

Studies have suggested that LI is a widespread condition affecting over one billion people worldwide and over 40 million peoplebasis, except in the United States, (or 15%Yi Xin will also have the right to sell Yi Xin-manufactured versions of our existing FastPack 1.0, IP and PRO product lines. We would be entitled to receive royalties on any of these sales, as well. After March 31, 2022, Yi Xin will have the U.S. population), with an estimated nine million of those individuals demonstrating moderateright to severe symptoms. Current annual spending on OTC LI aidsbuy Qualigen FastPack 1.0, IP and PRO products from us at distributor prices for resale in the United States, has been estimated at approximately $2.45 billion. However, these options are limited and there is no long-term treatment available.again excluding resales toward our then-current FastPack customers.

Manufacturing

We develop, manufacture and assemble our diagnostic products at our approximately 23,000 square feet facility in Carlsbad, California. Our laboratory and manufacturing practices are governed by a series of internally published Standard Operating Procedures, in accordance with FDA and ISO guidelines. While we produce many of our own raw materials and sub-components for diagnostic products, we also purchase certain materials from third-party suppliers such as Thermo Fisher Scientific, Equitech-Bio, Surmodics, OYC Americas, Amcor, 3M, VWR, Gilson, Impact Project Management, Enstrom, Hi-Tech Products, and Hamamatsu.

We do not have in-house manufacturing capability for our therapeutics product candidates.

Research and Development

For research and development of our drug candidates, we are leveraging the scientific and technical resources and laboratory facilities of UofL and UCL, through technology licensing, sponsored research, and other consulting agreements, which are focused on Aptamer technology and applications in the cancer and infectious disease fields. We would engage contract research organizations for any clinical trials of our drug candidates. We intend to focus our internal research and development on continuing support of the FastPack diagnostic line.

Regulatory Matters

We have obtained 17 FDA clearances/approvals and 28 CE Marks for our diagnostic products (FastPack analyzers, immunoassays, control kits, calibration kits and verifications kits) to date. We have not obtained FDA or other regulatory approval for any drug candidate.

Medical Device Regulatory Clearances and Approvals

The medical devices that we manufacture and market are subject to regulation by numerous worldwide regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing development, testing, manufacturing, labeling, marketing and distribution. Medical devices are also generally subject to varying levels of regulatory control based on the risk level of the device.

In the United States, unless an exemption applies, before we can commercially distribute medical devices, we must obtain, depending on the type of device, either premarket notification clearance or premarket approval (“PMA”) from the FDA. The FDA classifies medical devices into one of three classes. Devices deemed to pose lower risks are placed in either class I or II, which typically requires the manufacturer to submit to the FDA a premarket notification requesting permission to commercially distribute the device. Some low-risk devices are exempted from this requirement. Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared device, are placed in class III, generally requiring PMA.

The premarket notification process requires that a premarket notification (510(k)) be made to the FDA to demonstrate that a new device is as safe and effective as, or substantially equivalent to, a legally marketed device (the “predicate” device). This process is generally known as obtaining 510(k) clearance for a new device. Under this process, applicants must submit performance data to establish substantial equivalence. In some instances, data from human clinical trials must also be submitted in support of a 510(k) premarket notification. If so, these data must be collected in a manner that conforms to the applicable Investigational Device Exemption (“IDE”) regulations. The FDA must issue a decision finding substantial equivalence before commercial distribution can occur. Changes to cleared devices that do not significantly affect the safety or effectiveness of the device can generally be made without additional 510(k) premarket notifications; otherwise, a new 510(k) is required.

The PMA approval process requires the submission of a PMA application to the FDA to demonstrate that the new device is safe and effective for its intended use. This approval process applies to most Class III devices and generally requires clinical data to support the safety and effectiveness of the device, obtained in adherence with IDE requirements. The FDA will approve the PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose and that the proposed manufacturing is in compliance with the Quality System Regulation (“QSR”). For novel technologies, the FDA may seek input from an advisory panel of medical experts and seek their views on the safety, effectiveness and benefit-risk of the device. The PMA process is generally more detailed, lengthier and more expensive than the 510(k) process.

Unlike many common gastrointestinal conditions,In the European Union (“EU”), we are required to comply with the Medical Device Regulation (“MDR” or “EU MDR”), which became effective May 2021, superseding existing Medical Device Directives. Medical devices that have a valid CE Certificate to the prior Directives (issued before May 2021) can continue to be sold until May 2024 or until the CE Certificate expires, whichever comes first, providing there are no significant changes to the design or intended use. The CE Mark, which is required to sell medical devices in the EU is affixed following a Conformity Assessment and either approval from the appointed independent Notified Body or through self-certification by the manufacturer. The selected pathway to CE marking is based on device risk classification. CE marking indicates conformity to the applicable General Safety and Performance Requirements (“GSPRs”) for the MDR. The MDR changes multiple aspects of the regulatory framework for CE marking, such as irritable bowel syndrome, inflammatory bowel diseases, gastroesophageal reflux disease, or dyspepsia (amongincreased clinical evidence requirements, changes to labelling, and new requirements, including Unique Device Identification (“UDI”), and many others), LI symptoms can be completely abated by avoiding dietary lactose. In this regard, LI is an avoidance condition, similar to celiac sprue, food intolerances, or various environmental allergies. However, dairy avoidance may lead to inadequate calciumnew post-market reporting obligations. MDR also modifies and vitamin D intake, which can predispose individuals to decreased bone accrual, osteoporosis, hypertension, rickets, osteomalacia, and possibly certain cancers. Although supplements and calcium-rich foods are available,increases the 2010 National Institutes of Health conference on LI highlighted the long-term consequences of dairy avoidance demonstrating both the importance of treating the condition and the need to find improved solutions for patients.

Diagnosis

LI is often diagnosed by evaluating an individual’s clinical history, which reveals a relationship between lactose ingestion and onset of symptoms. Hydrogen breath tests, milk challenges and short-term dairy avoidance dieting may also be utilized to diagnose LI. Further tests can be conducted to rule out other digestive diseases or conditions, including stool examination to document the presence of a parasite, blood tests to determine the presence of celiac disease, and intestinal biopsies to determine mucosal problems leading to malabsorption, such as inflammatory bowel disease or ulcerative colitis.

Health Consequences

Substantial evidence indicates that LI is a major factor in limiting calcium intake in the diet of individuals who are lactose intolerant. Several studies have shown that LI patients had an average calcium intake of only 300-388 mg/day, significantly less than the 1000-1200 mg/day adult dietary recommended levels.

At the 2010 National Institute of Health (“NIH”) Consensus Development Conference: LI and Health, the NIH highlighted numerous health risks tied to reduced calcium intake in those suffering from LI such as: osteoporosis; hypertension; and low bone density. Adequate calcium intake is essential to reducing the risks of osteoporosis and hypertension.In addition, chronic calcium depletion has been linked to increased arterial blood pressure, thereby establishing a relationship between hypertension and low calcium intake.Moreover, there is evidence of a correlation between calcium intake and both colon and breast cancer.

RP-G28

Overview

RP-G28 is a novel, highly-purified GOS, which is synthesized enzymatically. The product was being developedcompliance requirements for the treatment of LI, to be taken orally (a powder solution mixed in water) for 30 consecutive days. The proposed mechanism of action of RP-G28 is to selectively increase the intestinal growthmedical device industry and colonization of strains of bacteria that preferentially metabolize lactose to compensate for a patient’s intrinsic inability to digest lactose. Once this colonization of beneficial bacteria has occurred, it is hypothesized that patients will continue to tolerate lactose so long as theyrequire significant investment over the next few years to transition all products by May 2024. The CE mark continues to be a prerequisite for successful registration in many other global geographies.

We are also required to comply with the regulations of every other country where we commercialize products before we can launch or maintain their beneficial microflora balance.

Galacto-oligosaccharides (GOS)

RP-G28 is a >95% purified GOS product derived from a commercially available GOS food ingredient, which is designated as “generally recognized as safe” (“GRAS”) by the FDA. GOS refers to a group of compounds containing β-linkages of 1 to 6 galactose units with a single glucosenew products on the compound’s terminal endmarket. Regulatory requirements are becoming more stringent, with the China National Medical Product Administration (“NMPA”) recently increasing the regulatory requirements to market and are found at low levelsmaintain products in human milk. GOS is purified to a pharmaceutical grade by minimizing residual glucose, lactose, galactoseChina, and other impurities. Further processing includes ultra-filtration, nano-filtration, decolorization, deionization, and concentration to yield GOS 95 syrup, which is the starting material for RP-G28.

GOS products resist hydrolysis, or chemical breakdown, by salivary and intestinal enzymesintroduction of the upper digestive system because of the configuration of their glycosidic bonds and thus reach the colon virtually intact. The undigested GOS enhances the growth of beneficial, lactose-metabolizing colonic bacteria that already existsuch regulatory requirements in many countries in the subject’s digestive track, including multiple speciesMiddle East and strains of bifidobacteria and lactobacilli. Once colonies of these bacteria have increased, continued lactose exposure should maintain tolerability of lactose without further exposure to RP-G28 so long as the beneficial microflora balance is maintained.

While formal nonclinical studies evaluating the safety of RP-G28 have not been performed, other commercially available GOS products have been successfully evaluated in acute and repeat-dose general toxicology studies, reproductive toxicology studies, juvenile toxicology studies, genetic toxicology studies and in long-term safety studies.

Clinical studies of GOS products were reviewed as part of the safety evaluation to support the IND for RP-G28. These include studies in adults (including pregnant women and geriatrics), children, infants and newborns (preterm and full term). The safety of GOS products in humans has been evaluated in 1,316 adults at doses of 2.5 to 20 g/day for up to 12 months, and in 1,125 children > 1 year of age at doses of 2.0 to 12 g/day for up to 1 year. Overall, no safety concerns attributable to the consumption of GOS were reported. Where side effects were observed, they were typically mild and limited to increased flatulence, abdominal discomfort, and changes in stool consistency and frequency; however, effects were not consistently observed in all studies. Similar observations of increased flatulence have been reported following the consumption fructo-oligosaccharides (FOS) (15 g/day) over a 7-day period (Alles, 1996), and this symptom represents a localized effectSoutheast Asia that is expected in association with the consumption of indigestible fiber in large quantities. There were no reports of events in other System Organ Class suggestive of systemic toxicity.

The significance of a higher purity GOS, namely RP-G28, was highlighted in a 2010 study by Klaenhammer. The in-vitro study concluded that RP-G28 promoted growth of lactobacilli and bifidobacteria butpreviously did not promote multiple strains of E. coli. In contrast, lower purity GOS stimulated both bifidobacteria as well as the strains of E. coli evaluated.have medical device regulations, or had minimal regulations. As seen below in Figure 1, NCK 430 (E. coli) grew in the presence of low purity GOS (GOS 2). Alternatively, the higher purity GOS (RP-G28/GOS 1) did not promote the growth of E. coli.

Figure 1

Mechanism of Action

RP-G28 is understood to resist hydrolysis, or chemical breakdown, by salivary and intestinal enzymes of the upper digestive system because of the configuration of their glycosidic bonds and thus reach the colon virtually intact. The product is then broken down intracellularly by galactosidases, and eventually β-galactosidase hydrolyzes the terminal lactose generating a new nutrition supply for lactose digesting bacteria strains. This leads to selective alterations in the composition and activity of the microbiome favoring the growth of lactose-metabolizing bacteria, including species of Bifidobacteria and Lactobacilli (30). In our Phase 2a Clinical Trial (G28-001), shifts in the fecal microbiome in 82% of participants on treatment and increases in relative abundance of both Bifidobacteria and Lactobacilli were reported. RP-G28 had a bifidogenic effect in 90% of responders, which included species Bifidobacterium longum, Bifidobacterium adolenscentis, Bifidobacterium catenulatum, Bifidobacterium breve, and Bifidobacterium dentium (30). The understood mechanism of action is that by increasing lactose-metabolizing bacteria, less undigested lactose is fermented, and thus reduces gas production and related LI symptoms. Data correlating bacterial taxa and symptom metadata support this proposed hypothesis. In the Phase 2a study, microbiome changes correlated with clinical outcomes of improved lactose tolerance in which an increase in Bifidobacterium was associated with decreased pain and cramping outcomes.

Market Opportunity

Unmet Medical Needs

LI is a challenging condition to manage. According to a market research study conducted by Objective Insights in April 2012, approximately 60% of lactose intolerant sufferers reported experiencing symptoms daily, or bi-weekly. Not only can symptoms be painful and embarrassing, they can also dramatically affect one’s quality of life, social activities, and health. Currently there are few reliable, or effective, treatments available that provide consistent or satisfactory relief.

Currently, there is no approved prescription treatment for LI. Most persons with LI attempt to avoid ingestion of milk and dairy products while others substitute non-lactose-containing foods in their diet. However, complete avoidance of lactose-containing foods is difficult to achieve (especially for those with moderate to severe symptoms) and can lead to significant long-term morbidity (i.e., dietary deficiencies of calcium and vitamin D).

Treatment Options

Doctors generally recommend the following treatments for the management of LI: (1) dairy avoidance; (2) lactase supplements; (3) probiotics/dietary supplements; and (4) dairy substitutes/lactose free products. Despite educating their patients on all viable treatment options, physicians generally tend to advise their patients to refrain from consuming any dairy products whatsoever. However, in a 2008 survey conducted by Engage Health, 47% of LI sufferers reported that this method was not effective (largely due to hidden dairy products in ingredients), and only 30% of LI sufferers reported lactase supplements as being effective in managing their LI.A 2019 survey conducted by Cadence Communications and Research found that while these treatment options can be effective for mildly symptomatic patients, up to 50% of moderate to severe patients continue to experience symptoms after treatment, according to physicians. Further, while probiotics/dietary supplements have been demonstrated to aid and support one’s digestive system, helping break down general foods consumed, they don’t directly help with LI. The 2008 survey by Engage Health suggests that the majority of LI patients are dissatisfied with current treatment options.

Patients Unsatisfied with Current Management Options

Growing Prevalence and Awareness

LI prevalence continues to increase in both the developed and developing world. It has been estimated that gastroenterologists see approximately 15 new patients with LI each month. Education and awareness have increased, and diets in both the developed and developing world have changed greatly over the past decade to include more dairy-based goods. As the populace is growing older, the prevalence of LI also increases because more people tend to develop LI later in life. Increased education and diagnosis is making more people aware of their allergies and digestive conditions. Physicians may compound the growth of LI prevalence and its associated disorders by recommending individuals avoid dairy products, a practice which, in and of itself, may increase severity of the intolerance.

Clinical and Regulatory

Type C Meeting with the FDA

In February 2013, we held a Type C meeting with the FDA’s Division of Gastroenterology and Inborn Errors Products. The purpose of the meeting was to obtain the FDA’s feedback on the planned Phase 2 program and Phase 3 programs, inform the FDA of our ongoing development plans, gain feedback on relevant clinical trial design and end points related to patient meaningful benefits, and to inform the FDA of the status of our product characterization

IND Application/Phase 1

The IND for RP-G28 was activated initially to support a Phase 2a safety, tolerability and efficacy study in lactose intolerant patients. Standard Phase 1 single and repeat dose safety and tolerability studies in healthy volunteers were not needed because other GOS products that contain similar GOS constituents are generally regarded as safe and therefore supported the safety of RP-G28 in humans. The IND was inactivated on February 21, 2020, as a result of our determination notthe United Kingdom’s departure from the EU, we also expect a U.K. Regulation to proceedbe implemented beginning July 2023, with the clinical development of RP-G28 in light of the anticipated merger.

In 2018, a Phase 1 study was conductedrequirements to understand the potential for systemic absorption of RP-G28 and any impact the presence of food may have on the pharmacokinetic profile of RP-G28. Additional Phase 1 studies may be required prior to any filing of an NDA based on the results of future in-vitro studies and discussions with the FDA.

Phase 2a Clinical Trial

In November 2011, we completed a double-blinded, randomized, multi-center, placebo-controlled Phase 2a clinical trial to validate the efficacy, safety and tolerability of RP-G28 compared to placebo. We evaluated RP-G28 in 62 patients with LI over a treatment period of 35 consecutive days. Post-treatment, subjects reintroduced dairy into their diets and were followed for an additional 30 days to evaluate lactose digestion, as measured by hydrogen production and symptom improvements. The primary endpoints included tracking patients’ gastrointestinal symptoms via a patient-reported symptom assessment instrument (a Likert Scale, measuring individual symptoms of flatulence, bloating, cramping, abdominal pain and diarrhea, on a scale of 0 (none) to 10 (worst)) at baseline, day 36 and day 66; as well as the measurement of hydrogen gas levels in their breath following a 25-gram lactose challenge.

Positive trends were seen when the entire per protocol study population was analyzed, including some statistically significant subgroup analyses. Although there were few primary and secondary efficacy endpoints with statistically significant results, which we believe were due to the small cohort size, the combined data suggest that RP-G28 administration produced a positive therapeutic effect. RP-G28 was also well tolerated with no significant study-drug related adverse effects.

The clinical results of our Phase 2a study were published in Nutrition Journal in a manuscript entitled “Improving lactose digestion and symptoms of LI with a novel galacto-oligosaccharide (RP-G28): a randomized, double-blind clinical trial.” The microbiome results were publishedsell in the ProceedingsU.K. already in place including appointment of the National Academy of Science in a manuscript entitled“Impact of short-chain galacto-oligosaccharides on the gut microbiome of lactose-intolerant individuals.”

Phase 2b Clinical Trial

In March 2016, we began enrollment in a multi-center, randomized, double-blind, placebo-controlled, parallel-group Phase 2b clinical trial to validate the efficacy, safetyU.K. Responsible Person and tolerability of two dosing regimens of RP-G28 compared to a placebo in 368 patientsdevice registration with moderate to severe LI.

Two hundredThe Medicines and forty-seven (247) patients received RP-G28 while 121 patients received placebo. Twenty-four (24) patients were discontinued prematurely from the study and 344 (91.2%) completed the study.

The trial assessed patients with LI symptoms as measured on a Likert scale after a lactose challenge. Entry criteria in the Phase 2b trial included a hydrogen breath test to validate lactase deficiency. The Phase 2b trial design included a screening period, a 30-day course treatment period, and a 30-day post-treatment “real world” observation period during which subjects were followed while lactose containing foodHealthcare products were re-introduced into their diets. The study was designed to escalate the dose beyond the 15 gm/day dose level evaluated in the Phase 2a study. Study subjects abstained from lactose containing food products and were then randomized evenly (1:1:1) to receive one of two doses of RP-G28 or placebo for 30 days.

The primary endpoint for the Phase 2b clinical trial was a LI symptom composite score response at day 31. A response was based on change from baseline (Day -7, visit 1) to end of treatment period at day 31 (visit 5), combined average of four maximum symptom scores taken over 0.5, 1, 2, 3, 4, and 5 hours for each symptom (abdominal pain, cramping, bloating, and gas movement) after a lactose challenge test. A response was defined as a 4-point or greater decrease from baseline or a composite score of zero at day 31. The Phase 2b trial further required the collection of fecal samples from patients enrolled to evaluate the baseline and changes to the patient’s microbiome that correlate to symptom reduction and lactose tolerance.

We held a Type C meeting with the FDA in March 2017, to discuss our development plans and Phase 2b clinical trial. The focus of the meeting was to obtain the FDA’s feedback on our Phase 2b clinical trial, including our Statistical Analysis PlanRegulatory Agency (“SAP”), prior to unblinding any data.

Topline results of the Phase 2b clinical trial were announced in March 2017. Due to inconsistent data results from one study site, the data from this site was excluded from the primary analysis population (Efficacy Subset mITT, n=296). After excluding the data from the one anomalous study site, results showed a clinically meaningful benefit to subjects in the reduction of LI symptoms across a variety of outcome measures. The majority of analyses showed positive outcome measures and the robustness of the data point to a clear drug effect. Treatment patients not only reported meaningful reduced symptoms, but also 30-days after taking the treatment, patients reported adequate relief from LI symptoms and satisfaction with the results of the treatment, with RP-G28 preventing or treating their LI symptoms. Greater milk and dairy product consumption was also reported by patients.

In the Efficacy Subset mITT Analysis group, the primary endpoint met statistical significance, (39.7% of the pooled dosing group compared to 25.8% of the placebo group responded (p=0.0159)MHRA”). BecauseIn addition, other EU countries continue to impose significant local registration requirements despite the primary analysis was statistically significant, the primary endpoint comparison between the high dose groupimplementation of MDR.

The FDA and the placebo group was then testedother worldwide regulatory agencies and also met statistical significance (38.1%competent authorities actively monitor compliance to local laws and regulations through review and inspection of the high dose group, compared to 25.8% of the placebo group responded (p=0.0294)). The comparison between the low dose groupdesign and the placebo group further met statistical significance (p=0.0434).

In the entire study population (mITT population), including patients from the excluded study site, taking at least one dose of drug (n=368), the comparison between the pooled treatment groups and the placebo group narrowly missed statistical significance (p=0.0618), (40.1% of the pooled treatment group responded compared to 31.4% of the placebo group). Both low dose and high dose group arms demonstrated a higher proportion of responders than the placebo group.

In the Efficacy Subset Per-protocol population (Efficacy Subset PP), significant and meaningful symptom improvement was consistently seen across key individual LI symptoms by patientsmanufacturing practices, record-keeping, reporting a ≥4-point improvement from baseline (proportion of subjects on treatment that reported improvement in severity of each symptom). Of the treatment patients, 56.1% reported significant improvement in abdominal pain compared to 45.7% in the placebo group (p=0.1046). Of the treatment patients, 54.5% reported statistically significant improvement in cramping compared to 40.2% in the placebo group (p=0.0257). Of the treatment patients, 55% reported statistically significant improvement in bloating compared to 41.3% in the placebo group (p=0.0282). Finally, 44.4% of treatment patients reported significant improvement in gas movement compared to 32.6% in the placebo group (p=0.0599). See Figure 4 below.

Figure 4

In a more stringent assessment, many patients reported that they experienced complete elimination of LI symptoms, scoring a 0 out of 10 on a Likert pain scale post-treatment (Efficacy Subset PP). Of the treatment patients, 37.0% reported complete elimination of abdominal pain compared to 21.7% in the placebo group (p=0.0144). Of the treatment patients, 34.9% reported complete elimination of cramping compared to 16.3% in the placebo group (p=0.0020). Of the treatment patients, 29.6% reported complete elimination of bloating compared to 16.3% in the placebo group (p=0.015). Of the treatment patients, 16.4% reported complete elimination of gas movement compared to 2.2% in the placebo group (p=0.0005). Symptoms of abdominal pain, cramping, bloating and gas movement were then combined into a composite endpoint representing the key symptoms of LI. Of the treatment patients, 13% experienced complete elimination of LI symptoms compared to 2% in the placebo group (p=0.004). See Figure 5 below.

Figure 5

Observing global patient-reported assessments (Efficacy Subset PP) on multiple aspects of their symptom severity and treatment benefit experience 30 days after treatment and adding dairy and milk products back into their diets, 81.9% of treatment patients reported no or mild LI symptoms compared to 63.7% in the placebo group (p=0.0013). Of the treatment patients, 66.3% reported being very or extremely satisfied with RP-G28 preventing or treating their LI symptoms compared to 51.6% in the placebo group (p=0.0302).

Of the treatment patients, 83.2% reported adequate relief from LI symptoms compared to 72.5% in the placebo group (p=0.042). Of the treatment patients, 39.7% reported much or very much improvement in their LI symptoms compared to 25.3% in the placebo group (p=0.0343). See Figure 6 below.

Figure 6

Further, a real-world milk intake assessment was conducted on treatment and placebo group patients (Efficacy Subset PP). At baseline, LI patients reported consuming 0.2 cups/d of milk. After RP-G28, treatment patients increased their milk consumption to 1.5 cups/d of milk, consuming 1.3 cups/d more of milk (p=0.0084), 39% more milk consumed per day than placebo patients reported consuming (See Figure 7 below). We believe this is significant because the USDA recommends healthy individuals to consume 1.5 cups/d of milk. Overall, 62% of treatment patients consumed ≥1 cups/d of milk after being treated (p=0.0095). The increase in milk consumption is meaningful for dairy avoiders because it reflects increased lactose tolerance and may lead to more dietary calcium intake post-treatment as milk contains a higher percentage of one’s daily intake of calcium.

Figure 7

No serious adverse events related to treatment were reported and the number of adverse events, reported was similar between treatmentlabeling and placebo groups.

End-of-Phase 2 Meetingpromotional practices. The FDA can ban certain medical devices, detain or seize adulterated or misbranded medical devices, order recall or market withdrawal of these devices and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA

In August 2017, we held an End-of-Phase 2 meeting with the FDA’s Division of Gastroenterology may also enjoin and Inborn Errors Products. The purposerestrain a company for certain violations of the meeting was to obtain the FDA’s feedback on our planned Phase 3 program. We reached general consensus with the FDA on certain elements of our Phase 3 programFood, Drug and received clear guidance and recommendations on many necessary components of our Phase 3 program; including the clinical, non-clinical, and CMC requirements needed to support an NDA. We incorporated much of this guidance into our Phase 3 program.

Given the established safety profile of GOS in humansCosmetic Act (“FDCA”) and the lackSafe Medical Devices Act, pertaining to medical devices, or initiate action for criminal prosecution of significant safety concerns with RP-G28 administered to subjectssuch violations. Regulatory agencies and authorities in the Phase 2acountries where we do business can halt production in or distribution within their respective country or otherwise take action in accordance with local laws and Phase 2b clinical trials, it was agreed with the FDA that no additional non-clinical safety studies would be required to support continued evaluationregulations.

International sales of RP-G28medical devices manufactured in the Phase 3 program. The FDA also agreedUnited States that no rat fertility, rat peri-post natal reproductive toxicity, genotoxicity or, importantly, rodent carcinogenicity studies would be needed for the NDA submission.

The FDA recommended that we continue to evaluate females of child-bearing potential who are willing to use appropriate contraception throughout the duration of any study. ICH-compliant embryo-fetal development toxicology studies of RP-G28 in the rat and rabbit may be needed to support an NDA submission. Additional general toxicity studies may also need to be conducted for an NDA submission.

The requirement for additional in-vitro fertility, peri-post natal reproductive toxicity, genotoxicity or carcinogenicity studies may be reassessednot approved by the FDA for use in the future based on subsequent eventsUnited States, or changesthat are banned or deviate from lawful performance standards, are subject to FDA export requirements. Additionally, exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated. Frequently, regulatory approval may first be obtained in a foreign country prior to application in the agency’s NDA submission requirements.

Phase 3 Clinical Trial (“Liberatus”)

In June 2018, we began enrollmentUnited States due to differing regulatory requirements; however, other countries, such as China, for example, require approval in the first pivotal Phase 3 clinical trialcountry of RP-G28, known as Liberatus.origin first. Most countries outside of the United States require that product approvals be recertified on a regular basis. The purposerecertification process requires the evaluation of this study wasany device changes and any new regulations or standards relevant to determine the efficacy, safetydevice and, tolerabilitywhere needed, conduct appropriate testing to document continued compliance. Where recertification applications are required, they must be approved in order to continue selling our products in those countries.

Medical Device Quality Assurance

We are committed to providing high quality products to our customers and the patients they serve. Our quality system starts with the initial product specification and continues through the design of RP-G28the product, component specification process and the manufacturing, sale and servicing of the product. Our quality system is intended to treat LI when comparedbuild in quality and process control and to placebo. The study was a multicenter, randomized, double-blind, placebo-controlled, parallel-group study conductedutilize continuous improvement concepts throughout the product life. Our quality system is also designed to enable us to satisfy various international quality system regulations, including those of the FDA with respect to products sold in the United States. The protocolAll of our medical device manufacturing facilities and distribution centers are certified under the ISO 13485 quality system standard, established by the ISO for medical devices, which includes requirements for an implemented quality system that applies to component quality, supplier control, product design includedand manufacturing operations. This certification can be obtained only after a two-week screening period that included one week of study drug administration, a randomized 30-day study drug treatment period and a 90-day “real world experience” period to assess study drug response and durability of effect after treatment, as patients consume their normal diets including dairy products. There was a second randomized, 30-day, study drug treatment period to assess safety and efficacycomplete audit of a repeat round of therapy. The primary endpointcompany’s quality system by an independent outside auditor, and maintenance of the study was the mean change in LI symptom composite score 30-days post-treatment compared to baseline. Secondary endpoints were to examine the safety, tolerabilitycertification requires that these facilities undergo periodic re-examination.

United States—FDA Drug Approval Process

The research, development, testing, and meaningfulnessmanufacture of treatment benefit with RP-G28 and the durability of effect of treatment with RP-G28 on reduction of LI symptoms after real-world lactose exposure. The study utilized the prior validated symptom assessment measure and patient questionnaires to capture relevant outcomes. In addition, risk-based data review was used to monitor and assess potential protocol deviations and site quality indicators.

In March 2019, we announced that we had completed, ahead of schedule, enrollment in Liberatus. Trial enrollment exceeded expectations, concluding with approximately 557 subjects randomized. More than 30 U.S. sites participated in the study. No single site enrolled more than 10.2% of the total population, and 43% of sites enrolled at least 15 subjects. Demographics, even though blinded, indicated a broad population distribution with gender balance and ethnic diversity. No safety signals were reported, which was consistent with the well-tolerated safety and tolerability profile seen in earlier clinical studies.

On September 12, 2019, we announced publicly that its Liberatus Phase 3 clinical trial of RP-G28 in LI had failed to demonstrate statistical significance in its pre-specified primary and secondary endpoints. Top-line data from the 557-subject Phase 3 clinical trial indicated that RP-G-28 provided significant symptom improvements in patients; however, there was no, or little difference compared to the placebo. In the primary endpoint, measuring LI symptom reduction at day 61 (30 days post-treatment) compared to baseline, the treatment group reported a 3.159 mean reduction compared to a reported 3.420 mean reduction in the placebo group (p-value, one-sided = 0.106). In addition, RP-G28 missed its first secondary endpoint of responders with a meaningful treatment benefit: 36.2% of treatment group compared to 34.1% of placebo group (p-value, one-sided = 0.284). The remaining secondary endpoints also missed statistical significance with treatment and placebo groups generally reporting similar results to each other. RP-G28 was generally well-tolerated, with placebo and treatment groups reporting similar safety profiles. In light of these results, we also announced that we planned to continue in the near term to analyze the results of the trial to better understand the data and clinical outcomes to assess a path forward, and publicly announced that our board of directors was conducting a review of a range of strategic alternatives.

Weinactivated the IND for RP-G28 on February 21, 2020, as a result of our determination not to proceed with the clinical development of RP-G28 in light of the anticipated merger.

Manufacturing

We do not own or operate manufacturing facilities. We have an exclusive worldwide agreement (the “Supply Agreement”) with Ricerche Sperimentali Montale SpA (“RSM”) pursuant to which RSM manufactures a higher purity form of GOS (referred to as “Improved GOS”) in connection with our clinical and nonclinical studies. RSM has also agreed that it will not, except as necessary for RSM to perform its obligations under the Supply Agreement, market or sell Improved GOS, or any galacto-oligosaccharides that are of greater purity to any third-party.

Pursuant to the terms of the Supply Agreement, as amended on July 24, 2015, we purchased the exclusive worldwide assignment of all right, title and interest to the Improved GOS (the “Improved GOS IP”) on July 30, 2015 for $800,000. We also issued 100,000 shares of our common stock to RSM pursuant to a stock purchase agreement.

Under the terms of the Supply Agreement, as amended, if we fail to make any future option payment required under the terms of the Supply Agreement, we may be required to return the Improved GOS IP to RSM. The terms of the Supply Agreement, as amended, require us to pay RSM $400,000 within 10 days following FDA approval of a new drug application for the first product owned or controlled by us using Improved GOS as its active pharmaceutical ingredient.

Commercialization

We have not established a commercial organization or distribution capabilities. If the merger is not completed and RP-G28 is ultimately approved by the necessary regulatory authorities, our plan would be to evaluate a possible partnership to commercialize RP-G28 for the treatment of LI in patients in the United States and/or Europe. Outside of the United States and Europe, subject to obtaining necessary marketing approvals, we would likely seek to commercialize RP-G28 through distribution or other collaboration arrangements for patients suffering from LI.

Competition

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Although we are unaware of any drug candidate, other than RP-G28, that is in advanced clinical trials for treating LI, other biopharmaceutical companies may be able to develop compounds or drugs that are able to achieve similar or better results. Our potential competitors, if the merger is not completed and we elect to continue the development of RP-G28, would include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies and universities and other research institutions. Some of the pharmaceutical and biotechnology companies we expect we would compete with include publicly-traded microbiome-based development companies such as Synlogic, Inc., Seres Therapeutics, Inc., Evelo Biosciences, Inc. and Synthetic Biologics, Inc. Smaller or early-stage companies could also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. We would also compete with providers of a wide variety of lactase supplements (the most widely used supplement in the United States being Lactaid^®), probiotic/dietary supplements, and lactose-free and dairy-free products. We believe that the key competitive factors that would affect the development and commercial success of any approved product candidates are efficacy, safety and tolerability profile, reliability, convenience of dosing, price and reimbursement.

Intellectual Property

We have sought patent protection in the United States and internationally for uses of RP-G28 and our discovery programs, and any other inventions to which we have rights, where available and when appropriate. Our policy has been to pursue, maintain and defend patent rights, whether developed internally or licensed from third parties, and to protect the technology, inventions and improvements that are commercially important to the development of its business. We have also relied on trade secrets that may be important to the development of our business. We do not have composition of matter patent protection in the United States for RP-G28, which may result in competitors being able to offer and sell products so long as these competitors do not infringe any other patents that we hold, including patents directed to oral dosage forms containing RP-G28, methods of manufacturing purified RP-G28, or methods of using RP-G28.

Patents and Proprietary Rights Covering RP-G28

Ourintellectual property portfolio directed to RP-G28 contains more than 15 issued patents relating to RP-G28 dosage forms, or to uses of RP-G28. That portfolio also includes at least ten other related, pending patent applications in the United States and worldwide. We also own a patent family-including claims generally directed to processes for producing an improved form of galacto-oligosaccharides (GOS) mixtures (higher purity); this family includes issued patents in United States (not expiring until 2030), Europe (validated in Germany, France, the Netherlands, Great Britain, Ireland, and Switzerland, not expiring until 2030), Italy (not expiring until 2029), and China, India, Japan, and Korea (not expiring until 2030), as well as applications pendingextensively regulated by governmental authorities in the United States and other jurisdictions. This portfolio includes patents and proprietary rights related to:

We also have patent applications still pending in the United States, Europe, Japan and other jurisdictions, and, if they issue as patents, will not expire until at least 2030, and include claims generally directed to (i) oral dosage forms of a higher purity galacto-oligosaccharides (GOS), (ii) use of galacto-oligosaccharides (GOS) for treating LI, (iii) methods of preventing or reducing certain symptoms of LI using galacto-oligosaccharides (GOS) dosage forms, (iv) methods of improving gastrointestinal health using galacto-oligosaccharides (GOS) dosage forms and (v) methods for assessing efficacy of an oligosaccharide mixture in improving gastrointestinal health by measuring a change in at least one abdominal symptom.

Trade Secrets

In addition to patents, we have relied on trade secrets and know-how to develop and maintain our competitive position. Trade secrets and know-how can be difficult to protect. We have sought to protect our proprietary processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners. These agreements are designed to protect our proprietary information. We have also sought to preserve the integrity and confidentiality of its data, trade secrets and know-how by maintaining physical security of its premises and physical and electronic security of its information technology systems.

Government Regulation and Product Approval

Governmental authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, packaging, promotion, storage, advertising, distribution, marketing and export and import of products. Any product candidate must be approved by the FDA through the NDA process before it may be legally marketed in the United States and by the European Medicines Agency (“EMA”) through the Marketing Authorization Application (“MAA”) process before it may be legally marketed in Europe. Product candidates are subject to similar requirements in other countries prior to marketing in those countries. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

United States Government Regulation

NDA Approval Processes

In the United States, the FDA regulates drugs under the FDCA and implementedits implementing regulations. Failure

The steps required to comply with the applicable FDA requirements at any time during the product development process or approval process, or after approval, may subject an applicant to administrative or judicial sanctions, any of which could have a material adverse effect on us. These sanctions could include:

The process required by the FDAbe completed before a drug may be marketed in the United States generally involves the following:include, among others:

Once a pharmaceutical candidate is identified for development, it enters the preclinical or nonclinical testing stage. NonclinicalPreclinical tests include laboratory evaluationsevaluation of product chemistry, toxicity, and formulation, as well as animal studies. A sponsorThe conduct of an INDthe preclinical tests and formulation of the compounds for testing must submit thecomply with federal regulations and requirements, including GLP regulations. The results of the nonclinicalpreclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of the IND. Some nonclinical testingan IND application, which must become effective before human clinical trials may continue even after thebegin. An IND is submitted. In addition to including the results of the nonclinical studies, the INDapplication will also include a clinical protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the first phase lends itself to an efficacy determination. The IND automatically becomesbecome effective 30 days after receipt by the FDA, unless before that time the FDA withinraises concerns or questions about issues such as the 30-day time period, notifiesconduct of the sponsor oftrials as outlined in the IND application, and places the clinical trial(s) on a clinical hold. In such a case, the IND application sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can begin. A clinical hold may occur at any time during the lifeproceed. We cannot be certain that submission of an IND and may affect one or more specific studies or all studies conducted underapplication will result in the IND.

AllFDA allowing clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCPs. They must be conducted under protocols detailing the objectives of the trial, dosing procedures, research subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as an amendment to the IND, and progress reports detailing the status of the clinicalbegin.

Clinical trials must be submitted to the FDA annually in the IND Annual Report. Sponsors must also report to the FDA, within required timelines, serious and unexpected adverse reactions, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigation brochure, or any findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug. An IRB at each institution participating in the clinical trial must review and approve the protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal representative, monitor the study until completed and otherwise comply with IRB regulations.

Human clinical trialsnecessary for product approval are typically conducted in three sequential phases, thatbut the Phases may overlap or be combined:combined. The study protocol and informed consent information for study subjects in clinical trials must also be approved by an IRB for each institution where the trials will be conducted, and each IRB must monitor the study until completion. Study subjects must provide informed consent and sign an informed consent form before participating in a clinical trial. Clinical testing also must satisfy the extensive GCP regulations for, among other things, informed consent and privacy of individually identifiable information.

Human clinical trials are inherently uncertain and Phase 1, Phase 2 and Phase 3 testing may not be successfully completed. The FDA or the sponsor may suspend a clinical trial at any time for a variety of reasons, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

During the development of a new drug, sponsors are given opportunitiesPost-approval trials, sometimes referred to meet with the FDA at certain points. These pointsas Phase 4 clinical trials, may be priorconducted after receiving initial marketing approval. These trials are used to gain additional experience from the submissiontreatment of an IND, atpatients in the end of Phase 2intended therapeutic indication and before an NDA is submitted. Meetings with the FDA may be granted at other times during the development program when requested.

Concurrent with clinical trials, sponsors usually completeare commonly intended to generate additional animal safety studies and also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing commercial quantitiesdata regarding use of the product in accordancea clinical setting. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or, in certain circumstances, post-approval.

The FDA has various programs, including fast track designation, breakthrough therapy designation, priority review and accelerated approval, which are intended to expedite or simplify the process for the development, and the FDA’s review of drugs (e.g., approving an NDA on the basis of surrogate endpoints subject to post-approval trials). Generally, drugs that may be eligible for one or more of these programs are those intended to treat serious or life-threatening diseases or conditions, those with cGMP requirements. The manufacturing process mustthe potential to address unmet medical needs for those disease or conditions, and/or those that provide a meaningful benefit over existing treatments. For example, a sponsor may be capablegranted FDA designation of consistently producing quality batches ofa drug candidate as a “breakthrough therapy” if the drug candidate is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and the manufacturer must develop methods for testing the identity, strength, quality, purity and potency of the drug. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstratepreliminary clinical evidence indicates that the drug candidatemay demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. If a drug is designated as breakthrough therapy, the FDA will take actions to help expedite the development and review of such drug. Moreover, if a sponsor submits an NDA for a product intended to treat certain rare pediatric or tropical diseases or for use as a medical countermeasure for a material threat, and that meets other eligibility criteria, upon approval such sponsor may be granted a priority review voucher that can be used for a subsequent NDA. From time to time, we anticipate applying for such programs where we believe we meet the applicable FDA criteria. A company cannot be sure that any of its drugs will qualify for any of these programs, or even if a drug does not undergo unacceptable deterioration over its proposed shelf-life.qualify, that the review time will be reduced.

The results of product development, nonclinicalthe preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical testsclinical studies, together with other detailed information, including information on the manufacture and other control mechanisms, proposed labeling and other relevant informationcomposition of the drug, are submitted to the FDA as partin the form of an NDA requesting approval to market the product.product for one or more proposed indications. The submissiontesting and approval process requires substantial time, effort and financial resources. Unless the applicant qualifies for an exemption, the filing of an NDA is subjecttypically must be accompanied by a substantial “user fee” payment to the payment of user fees, but a waiver of such fees may be obtained under specified circumstances. The FDA has 60 days from its receipt of an NDA to determine whetherFDA. To support marketing approval, the application will be accepted for filing based on the agency’s threshold determination of whether it is sufficiently complete to permit substantive review. It may request additional information rather than accept an NDA for filing. In this event, the NDAdata submitted must be resubmitted withsufficient in quality and quantity to establish the additional information. The resubmitted application also is subjectsafety and efficacy of the product in the proposed patient population to review before the FDA accepts it for filing.

Oncesatisfaction of the submissionFDA. After an NDA is accepted for filing, the FDA begins an in-depth review. NDAs receive either standard or priority review. A drug representingsubstantively reviews the application and may deem it to be inadequate, and companies cannot be sure that any approval will be granted on a significant improvement in treatment, prevention or diagnosis of disease may receive priority review.timely basis, if at all. The FDA may refusealso refer the application to approvean appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation as to whether the application should be approved, but is not bound by the recommendations of the advisory committee.

Before approving an NDA, the FDA usually will inspect the facility or the facilities at which the drug is manufactured and determine whether the manufacturing and production and testing facilities are in compliance with cGMP regulations. The FDA also may audit the clinical trial sponsor and one or more sites at which clinical trials have been conducted to determine compliance with GCPs and data integrity. If the NDA and the manufacturing facilities are deemed acceptable by the FDA, it may issue an approval letter, and, if not, the applicable regulatory criteria areAgency may issue a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the drug with specific prescribing information for a specific indication(s). A CRL indicates that the review cycle of the application is complete and the application is not satisfied orready for approval. A CRL may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other data.significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. Even if such data areadditional information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. The FDA reviews ancould also require, as a condition of NDA approval, post-marketing testing and surveillance to determine, amongmonitor the drug’s safety or efficacy or impose other things, whetherconditions, or a product is safeREMS that may include both special labeling and effective for its intended use and whether its manufacturing is cGMP-compliant. The FDA may refer the NDAcontrols, known as Elements to an advisory committee for review and recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured and tested.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of any FDA marketing approval of RP-G28, one of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND, and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension and the application for extension must be made prior to expiration of the patent. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. We could apply for restorations of patent term for some of its currently owned or licensed patents to add patent life beyond their current expiration date, dependingAssure Safe Use, on the expected length of clinical trialsdistribution, prescribing, dispensing and other factors involved in the submission of the relevant NDA.

Market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an approved NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric Exclusivity and Pediatric Use

Under the Best Pharmaceuticals for Children Act (“BPCA”), certain drugs may obtain an additional six months of exclusivity, if the sponsor submits information requested in writing by the FDA (a Written Request) relating to the use of the active moiety of the drug in children. The FDA may not issue a Written Request for studies on unapproved or approved indications or where it determines that information relating to the use of a drug in a pediatric population, or part of the pediatric population, may not produce health benefits in that population.

We have not received a Written Request for such pediatric studies, although we could ask the FDA to issue a Written Request for such studies in the future. To receive the six-month pediatric market exclusivity, we would have to receive a Written Request from the FDA, conduct the requested studies in accordance with a written agreement with the FDA or, if there is no written agreement, in accordance with commonly accepted scientific principles, and submit reports of the studies. A Written Request may include studies for indications that are not currently in the labeling if the FDA determines that such information will benefit the public health. The FDA will accept the reports upon its determination that the studies were conducted in accordance with and are responsive to the original Written Request or commonly accepted scientific principles, as appropriate, and that the reports comply with the FDA’s filing requirements.

In addition, the Pediatric Research Equity Act (“PREA”) requires all applications (or supplements to an application) submitted under section 505 of the FDCA (21 U.S.C. §355) for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to contain a pediatric assessment unless the applicant has obtained a waiver or deferral. It also authorizes the FDA to require holders of approved NDAs for marketed drugs to conduct pediatric studies under certain circumstances. In general, PREA applies only to those drugs developed for diseases and/or conditions that occur in both the adult and pediatric populations. Products intended for pediatric-specific indications will be subject to the requirements of PREA only if they are initially developed for a subset of the relevant pediatric population.

As part of the Food and Drug Administration Safety and Innovation Act, Congress reauthorized both BPCA and PREA, which were slated to expire on September 30, 2012, and made both laws permanent.

Orphan Drugs

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 individuals in the United States and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

If the merger is not completed and we elect to continue the development of RP-G28, we may explore orphan drug designation for RP-G28 for any orphan indication in which there is a medically plausible basis for treatment of the indication through colonic adaptation of gut bacteria.

Post-approval Requirements

product. Once an approval is granted,issued, the FDA may withdraw theproduct approval if, compliance withamong other things, ongoing regulatory requirements isare not maintainedmet, certain defects exist in the NDA, or ifsafety or efficacy problems occur after the product reaches the market. Later discovery

Intellectual Property

We currently maintain a portfolio of previously unknown problems with a product may result in restrictions on the product147 issued, allowed, in-licensed or even complete withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changespending patents, patent applications and additional labeling claims, are subject to further FDA review and approval. In addition, the FDA may require testing and surveillance programs to monitor the effect of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs.

Any drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things:

Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and some state agencies for compliance with cGMP and other laws.

We have relied on third parties for the production of clinical and commercial quantitiesprovisional patent applications covering various aspects of our products. Future FDAproducts and state inspections could identify compliance issues at the facilities of our contract manufacturers that could disrupt production or distribution or require substantial resources to correct.

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition, FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect a business and its products. It is impossible to predict whether legislative changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.

Regulation Outside of the United States

In addition to regulationsproduct candidates in the United States, Canada, Mexico, Europe, Japan, China, Korea, Israel, South Africa, and Australia. In addition, we are subject to regulations of other countries governing clinical trialshave seven issued and commercial sales and distribution of its products. Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities of countries outside of28 pending trademark registrations in the United States beforepertaining to our diagnostics and therapeutics businesses. There are currently no contested proceedings or third party claims against any Qualigen intellectual property.

Within our diagnostics patent portfolio, we can commence clinical trials in such countrieshold two issued patents covering FastPack 1.0, IP and approval of the regulators of such countries or economic areas, such as the EU, beforePRO and 23 issued patents covering FastPack 2.0. In addition, we may market products in those countries or areas. The approval processin-licensed one issued patent covering our Vitamin D assay from DIAsource ImmunoAssays S.A.. We also, with Gen-Probe Incorporated, hold 24 issued joint patents covering FastPack Molecular, an inactive product program. Last, we hold five issued patents and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.10 patents-pending covering our development-stage STARS theranostic system.

Under EU regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralized procedure. The centralized procedure, which is compulsory for medicines produced by biotechnology or those medicines intended to treat AIDS, cancer, neurodegenerative disorders or diabetes and optional for those medicines which are highly innovative, provides for the grant of a single marketing authorization that is valid for all EU member states. The decentralized procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states. Within 90 days of receiving the applications and assessments report, each member state must decide whether to recognize approval. If a member state does not recognize the marketing authorization, the disputed points are eventually referred to the European Commission, whose decision is binding on all member states.

Reimbursement

If RP-G28 or any other future product candidate is approved by regulatory authorities, sales of such product will depend, in part, on the extent to which the costs of such products will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of federal and state governments and the prices of drugs have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit net revenue and results. If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products after approved as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

The MMA imposed new requirements for the distribution and pricing of prescription drugs for Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage of outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Part A and B, Part D coverage is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase demand for any of our products that receive marketing approval. However, any negotiated prices for our products covered by a Part D prescription drug plan would likely be lower than the prices we might otherwise obtain. Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.

The American RecoveryWithin our therapeutics patent portfolio, we have 43 issued and Reinvestment Act of 2009 provides funding for11 patents-pending, including patent applications, covering the federal governmentQN-247 program set to compareexpire 2032-2038. In addition, we have two patent applications covering the effectiveness of different treatments forQN-165 program and 15 pending patents covering the same illness. A plan for the research will be developed by the Department of HealthRAS program. All 71 patents, pending patents and Human Services, the Agency for Healthcare Researchapplications covering QN-247, QN-165, and Quality and the National Institutes for Health, and periodic reports on the status of the research and related expenditures will be made to Congress. Although the results of the comparative effectiveness studiesRAS are not intended to mandate coverage policies for public or private payors, it is not clear what effect, if any, the research will have on the sales of any product, if any such product or the condition that it is intended to treat is the subject of a study. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of Ritter’s product candidates. If third-party payors do not consider our products to be cost-effective compared to other available therapies, they may not cover Ritter’s products as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow Ritter to sell its products on a profitable basis.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “ACA”), enacted in March 2010, substantially changed the way healthcare is financed by both government health plans and private insurers. The ACA was designed to expand coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, the ACA expanded and increased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirements under the Medicare Part D program.

The broader paradigm shift caused by the ACA towards performance-based reimbursement, and the launch of several value-based purchasing initiatives, have also placed demands on the pharmaceutical industry to offer products with proven real-world outcomes data and a favorable economic profile. Ritter cannot predict the full impact of the ACA on pharmaceutical companies, as many of the ACA reforms require the promulgation of detailed regulations implementing the statutory provisions, which has not yet occurred. Since January 2017, President Trump has signedin-licensed from ULRF. Finally, we exclusively in-licensed 11 patents, two executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed repeal legislation, the Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Congress may consider other legislation to repeal or replace elements of the ACA, all of which addsare issued, from UCL covering our QN-302 program and set to the uncertainty of the legislative changes enacted as part of the ACA.expire 2030-2033.

In addition, in some non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Historically, products launched in the EU do not follow price structures of the United States and generally tend to be significantly lower.Human Capital Management

Employees

As of March 25, 2020,2022, we had five46 employees, all39 of whom were full timefull-time employees. None of our employees areis represented by a labor union or subject tocovered by a collective bargaining agreement.

CorporateEmployee Engagement, Benefits & Development. We believe that our future success is dependent upon our ability to recruit, hire and retain exceptional employees. We frequently benchmark our compensation practices and benefits programs against those of comparable industries and in the geographic area where our facility is located. We provide our employees with competitive cash compensation, opportunities to own equity, and an employee benefit program that promotes well-being, including healthcare, a 401(k) Plan with matching contributions, and paid time-off. The success of our business is fundamentally connected to the well-being, health and safety of our employees. In an effort to protect the health and safety of our employees, we took proactive action from the earliest signs of the COVID-19 outbreak, which included implementing social distancing policies at our facilities, facilitating remote working arrangements and imposing employee travel restrictions.

Diversity & Inclusion. We value diversity across our workforce and we will continue to focus on diversity and inclusion initiatives. We seek to have an inclusive and positive culture that is centered on our shared corporate mission and values, and that is free from discrimination of any kind, including sexual or other discriminatory harassment. Our employees have multiple avenues available through which inappropriate behavior can be reported. All reports of inappropriate behavior are promptly investigated with appropriate action taken to stop such behavior.

Additional Information

We wereRitter Pharmaceuticals, Inc. (our predecessor) was formed as a Nevada limited liability company on March 29, 2004 under the name Ritter Natural Sciences, LLC. In September 2008, wethis company converted into a Delaware corporation under the name Ritter Pharmaceuticals, Inc. On May 22, 2020, upon completing the “reverse recapitalization” transaction with Qualigen, Inc., Ritter Pharmaceuticals, Inc. was renamed Qualigen Therapeutics, Inc. Qualisys Diagnostics, Inc. was formed as a Minnesota corporation in 1996, reincorporated to become a Delaware corporation in 1999, and then changed its name to Qualigen, Inc. in 2000. Qualigen, Inc. is now a wholly-owned subsidiary of the Company.

Our website address is www.qualigeninc.com. We completedpost links to our initial public offering in June 2015. Our common stock is currently traded onwebsite to the Nasdaq Capital Market underfollowing filings as soon as reasonably practicable after they are electronically filed with or furnished to the trading symbol “RTTR”.

Available Information

We fileSEC: annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy andstatements, information statements, beneficial ownership reports and any amendments to those reports or statements filed or furnished pursuant to Sections 13(a), 14 andor 15(d) of the Securities Exchange Act of 1934, as amended with the SEC. The SEC maintains a(the “Exchange Act”). All such filings are available through our website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding Ritter Pharmaceuticals, Inc. and other companies that file materials with the SEC electronically. As soon as practicable after filing with the SEC, Ritter also makes copies of its reports on Form 10-K, Forms 10-Q and Forms 8-K available to the public, free of charge,charge. However, the information contained on or accessed through the investor relations tab on its web site, http://www.ritterpharmaceuticals.com/investors.

Properties

Wecurrently lease approximately 2,780 square feet of office space located at 1880 Century Park East, Suite 1000, Los Angeles, California 90067 for our headquarters.

Legal Proceedings

From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We arewebsite does not currently a party to any legal proceeding that, in the opinion of its management, is likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

We operate in a dynamic and rapidly changing business environment that involves multiple risks and substantial uncertainty. The following discussion addresses risks and uncertainties that could cause, or contribute to causing, actual results to differ from expectations in material ways. In evaluating our business, investors should pay particular attention to the risks and uncertainties described below and in other sectionsconstitute part of this Annual Report, and references to our website address in this Annual Report are inactive textual references only.

Item 1A. Risk Factors

An investment in our subsequentcommon stock involves risks. You should carefully consider the risks described below, together with all of the other information included in this Annual Report, as well as in our other filings with the SEC. TheseSEC, in evaluating our business. If any of the following risks actually occur, our business, financial condition, operating results and uncertainties, or other eventsfuture prospects could be materially and adversely affected. In that we do not currently anticipate or that we currently deem immaterial also may affect our results of operations, cash flows and financial condition. Thecase, the trading price of our common stock could alsomay decline due to any of these risks, and you couldmight lose all or part of your investment. The followingrisks described below, which are the risks we judge (rightly or wrongly) to be the most significant to investors, are not the only ones we face. Additional risks that we currently do not judge to be among the “most significant” may also impair our business, financial condition, operating results and prospects.

Certain statements below are forward-looking statements. For additional information, should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” andsee the financial statements and related notes included in Part II, Item 8, “Financial Statements and Supplementary Data”section of this Annual Report.Report under the caption “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to the MergerOur Therapeutics and Diagnostics Pipeline

Our business strategy is high-risk

We are focusing our resources and efforts primarily on development of therapeutic product candidates, which requires extensive cash needs for research and development activities. This is a high-risk strategy because there is no assurance that our products will ever become commercially viable (commercial risk), that we will prevent other companies from depriving us of market share and profit margins by selling products based on our inventions and developments (legal risk), that we will successfully manage a company in a new area of business and on a different scale than we have operated in the past (operational risk), that our product candidates will be able to achieve the desired therapeutic results (scientific risk), or that our cash resources will be adequate to develop our product candidates until we become profitable, if ever (financial risk). This may make our stock an unsuitable investment for many investors.

FailureWe do not currently have enough working capital to complete the merger may result inexecute fully our havingstrategic plan.

We have suffered recurring losses from operations, and we will need capital to paying a termination fee to Qualigen and could significantly harm the market pricesupport our intended development of our common stock and negatively affecttherapeutics business. We believe that future financings will be necessary in order for us to properly execute our future business and operations of each company.

If the merger is not completed and the Merger Agreement is terminated under certain circumstances, we may be required to pay Qualigen a termination fee of $100,000. Even if a termination fee is not payable in connection with a termination of the Merger Agreement, we will have incurred significant fees and expenses, most of which must be paid whether or not the merger is completed. Further, if the merger is not completed, it could significantly harm the market price of our common stock and will likely result our being involuntarily delisted from Nasdaq. See section entitled “Risk Factors–Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock and the termination of the Merger Agreement by Qualigen.”

In addition, if the Merger Agreement is terminated and our board of directors determines to seek another business combination, therestrategic plan. There can be no assurance that wesuch future financings will be able to find a partner and close an alternative transactionbe obtained (or, if they can be obtained, that they can be obtained on terms that are as favorable or more favorable than the terms set forthdesirable terms).

We may, in the Merger Agreement. Seeshort and long-term, seek to raise capital through the section entitled “Risk Factors—Ifissuance of equity securities or through other financing sources. To the merger is not completed,extent that we seek to raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may include financial and other covenants that could restrict our use of the proceeds from such financing or impose other business and financial restrictions on us. In addition, we may consider alternative approaches such as licensing, joint venture, or partnership arrangements to provide long term capital. Additional funding may not be unsuccessful in completing an alternative transactionavailable to us on acceptable terms, that are as favorable as the terms of the merger with Qualigen, or at all,all.

Our product candidates are still in the early stages of development. We have not begun clinical trials or obtained regulatory approval for any drug candidate or STARS. We may never obtain approval for any of our drug candidates or STARS.

We are still early in our development efforts and we may otherwisehave not yet begun enrollment in any clinical trials evaluating QN-302, QN-247, RAS-F or STARS. There can be unableno assurance that QN-302, QN-247, RAS-F or STARS will achieve success in their clinical trials or obtain regulatory approval.

Our ability to continue to operate our business. Our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholdersgenerate revenues from drug candidates or STARS will depend heavily on the timingsuccessful development and eventual commercialization of such liquidation as well asQN-302, QN-247, RAS-F or STARS. The success of these products will depend on several factors, including the amount of cash that will need to be reserved for commitments and contingent liabilities.”following:

The issuance of our common stock to Qualigen stockholders pursuant to the Merger Agreement and the resulting change in control resulting from the merger must be approved by our stockholders (pursuant to Nasdaq rules) along with certain other matters, and the Merger Agreement and transactions contemplated thereby must be approved by the Qualigen’s stockholders. Failure to obtain these approvals would prevent the closing of the merger.

Before the merger can be completed, the stockholders of each of Ritter and Qualigen must approve the merger. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the merger. Any delay in completing the merger may materially adversely affect the timing and benefits that are expected to be achieved from the merger and could result in our being involuntarily delisted from Nasdaq. See “Risk Factors–Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock and the termination of the Merger Agreement by Qualigen.”

The merger may be completed even though certain events occur prior to the closing that materially and adversely affect Ritter or Qualigen.

The Merger Agreement provides that either Ritter or Qualigen can refuse to complete the merger if there is a material adverse change affecting the other party between January 15, 2020, the date of the Merger Agreement, and the closing. However, certain types of changes do not permit either party to refuse to complete the merger, even if such change could be said to have a material adverse effect on Ritter or Qualigen, including:

If adverse changes occur and we still complete the merger, the market price of the combined company’s common stock may suffer. This in turn may reduce the value of the merger to the stockholders of Ritter, Qualigen or both.

Some of our officers and directors have interests in the merger that are different from those of our stockholders and that may influence them to support or approve the merger without regard to the interests of our stockholders.

Certain of our officers and directors participate in arrangements that provide them with interests in the merger that are different from the interests of our stockholders.

For example, we have entered into executive severance and change of control agreements with our executive officers that will result in the receipt by such executive officers of cash severance payments, vesting of equity awards and other benefits in the event of a covered termination of employment of each executive officer’s employment in connection with a change of control of Ritter.

The CVR Agreement provides that our legacy executives, if any, who assisted a particular Legacy Monetization on behalf of Parent, will be entitled to receive a cash bonus, in an amount equal in the aggregate to 30% of the net proceeds of such Legacy Monetization (a “Success Bonus”) which shall be allocated among the Legacy Executives in accordance with, during the Consultant Term, the sole, good-faith discretion of the Consultant or, after expiration or termination of the Consultant Term, the sole, good-faith discretion of the CVR Holders’ Representative.

These interests, among others, may influence our officers and directors to support or approve the merger.

The market price of our common stock following the merger may decline as a result of the merger.

The market price of our common stock may decline as a result of the merger for a number of reasons, including if:

Alpha Capital Anstalt will own a large percentage of the combined company, which may dissuade others from investing in Ritter. The Investor may also have different interests than other stockholders of the combined company following the merger.

Alpha Capital Anstalt (the “Investor’) is expected to own securities representing in excess of 25% of the fully-diluted outstanding securities of Ritter as of immediately after the merger. Although the derivative securities of Ritter owned after the merger by the Investor will be subject to a 9.9% “blocker” provision (meaning that they will not be convertible or exercisable to the extent that conversion or exercise results in the Investor owning, following the conversion or exercise, more than 9.9% of Ritter common stock), the Investor’s ownership may have an impact on the future willingness of other persons to invest in Ritter. The Investor may have different interests and goals than other stockholders, and its sales of our common stock could depress our stock market price.

Our securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the Closing as compared to their current ownership and voting interest in our company.

If the proposed merger is completed, our current securityholders will own a smaller percentage of the combined company than their current ownership in Ritter prior to the merger. Applying the current estimate of the exchange ratio, the pre-merger Ritter securityholders are expected to own approximately 7.5% of the combined company, on a fully diluted basis, Accordingly, the issuance of shares of our common stock to Qualigen stockholders in the merger will reduce significantly the relative voting power of each share of common stock held by our current stockholders. Consequently, our stockholders as a group will have less influence over the management and policies of the combined company after the merger than prior to the merger.

Our stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the merger, our stockholders will have experienced substantial dilution of their ownership interests without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the merger.

The combined company will need to raise additional capital by issuing securities or debt or through licensing or other strategic arrangements, which may cause dilution to the combined company’s stockholders or restrict the combined company’s operations or impact its proprietary rights.

The combined company may be required to raise additional funds sooner than currently planned. If either or both of Ritter or Qualigen hold less cash at the time of the Closing than the parties currently expect, the combined company will need to raise additional capital sooner than expected. Additional financing may not be available to the combined company when it needs it or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such an issuance may cause significant dilution to the combined company’s stockholders’ ownership and the terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing, partnering or other strategic arrangements, it may be necessary to relinquish rights to some of the combined company’s technologies or product candidates and proprietary rights, or grant licenses on terms that are not favorable to the combined company.

During the pendency of the merger, we may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect their respective businesses.

Covenants in the Merger Agreement impede our ability to make acquisitions, subject to certain exceptions relating to fiduciary duties, or to complete other transactions that would endanger the listing of our common stock on Nasdaq. As a result, if the merger is not completed, we may be at a disadvantage to our competitors during such period. In addition, while the Merger Agreement is in effect, we are generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets, or other business combination with any third-party that would endanger the listing of our common stock on Nasdaq, subject to certain exceptions relating to fiduciary duties. Any such transactions could be favorable to our stockholders.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals to us, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The terms of the Merger Agreement prohibit us from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when our board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that failure to cooperate with the proponent of the proposal would be reasonably likely to be inconsistent with our board of director’s fiduciary duties. Any such transactions could be favorable to our stockholders.

If the conditions to the merger are not met, or the Merger Agreement is terminated pursuant to the conditions set forth in the Merger Agreement, the merger will not occur and it is likely that we will be involuntarily delisted from Nasdaq.

There can be no assurances that the necessary stockholder approvals will be obtained to complete the merger. Failure to obtain stockholder approval may result in a material delay in, or the abandonment of, the merger. Even if the merger is approved by Ritter stockholders and Qualigen stockholders, certain other specified conditions set forth in the Merger Agreement must be satisfied or waived to complete the merger. The Merger Agreement may also be terminated by the parties in certain circumstances, including, without limitation, by Qualigen if we fail to maintain our listing on Nasdaq. We cannot assure you that all of the conditions will be satisfied or waived, or that the Merger Agreement will not be terminated prior to the closing. If the conditions are not satisfied or waived, or the Merger Agreement is terminated, the merger will not occur or will be delayed, and we may lose some or all of the intended benefits of the merger. If the merger is not consummated, it is also likely that we will be involuntarily delisted from Nasdaq. See “Risk Factors–Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock and the termination of the Merger Agreement by Qualigen.”

Litigation relating to the merger could require us to incur significant costs and suffer management distraction, and could delay or enjoin the merger.

Wecould be subject to demands or litigation related to the merger, whether or not the merger is consummated. Such actions may create uncertainty relating to the merger, or delay or enjoin the merger, result in substantial costs to us and divert management time and resources.

Risks Related to the Proposed Reverse Stock Split

The proposed reverse stock split may not increase the combined company’s stock price over the long-term.

One of the proposals to be voted on at the special meeting to vote on the merger, is a proposal to approve a reverse stock split of our outstanding common stock immediately prior to the merger. One of the purposes of the proposed reverse stock split is to increase the per-share market price of our common stock in order to comply with the continued listing requirements of Nasdaq. It cannot be assured, however, that the proposed reverse stock split will accomplish this objective for any meaningful period of time. While it is expected that the reduction in the number of our outstanding shares will proportionally increase the market price of our common stock, it cannot be assured that the proposed reverse stock split will increase the market price of our common stock by a multiple of the proposed reverse stock split ratio, or result in any permanent or sustained increase in the market price of our common stock, which is dependent upon many factors, including the combined company’s business and financial performance, general market conditions and prospects for future success. Thus, while the stock price of the combined company might meet the continued listing requirements of Nasdaq, it cannot be assured that it will continue to do so.

The proposed reverse stock split may decrease the liquidity of the combined company’s common stock.

Although our board of directors believes that the anticipated increase in the market price of the combined company’s common stock could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the proposed reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for our common stock.

The proposed reverse stock split may lead to a decrease in the combined company’s overall market capitalization.

Should the market price of the combined company’s common stock decline after the proposed reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the proposed reverse stock split. A reverse stock split may be viewed negatively by the market and, consequently, can lead to a decrease in the combined company’s overall market capitalization. If the per share market price does not increase in proportion to the proposed reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of the combined company’s common stock will remain the same after the proposed reverse stock split is effected, or that the proposed reverse stock split will not have an adverse effect on the stock price of our common stock due to the reduced number of shares outstanding after the proposed reverse stock split.

Risks Related to Our Financial Condition and Our Need for Additional Financing, and Additional Risks Related to the Merger

There is no assurance that the merger will be completed in a timely manner or at all. If the merger is not completed, our business could suffer materially and our stock price could decline, and we will likely be involuntarily delisted from Nasdaq.

The closing of the merger is subject to the satisfaction or waiver of a number of closing conditions, as described above, including the required approvals by Ritter stockholders and Qualigen stockholders and other customary closing conditions. See the risk factors above titled, “The issuance of our common stock to Qualigen stockholders pursuant to the Merger Agreement and the resulting change in control from the merger (pursuant to Nasdaq rules) along with certain other matters must be approved by our stockholders, and the Merger Agreement and transactions contemplated thereby must be approved by the Qualigen stockholders. Failure to obtain these approvals would prevent the closing of the merger.” If the conditions are not satisfied or waived, the merger may be materially delayed or abandoned. If the merger is not consummated, our ongoing business may be adversely affected and, without realizing any of the benefits of having consummated the merger, we will be subject to a number of risks, including the following:

Many of these factors are beyond our control, and it is possible that none of our drug candidates or STARS will ever obtain regulatory approval even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our drug candidates or STARS. For example, our business could be harmed if results of the clinical trials of QN-302, QN-247, RAS-F, any other drug candidates or STARS vary adversely from our expectations.

Drug and device development involves a lengthy and expensive process. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of QN-302, QN-247, RAS-F or STARS.

Most drug candidates fail, and taking a medical device from concept through clinical trials and regulatory approval is not easy or guaranteed. We are unable to predict when or if our drug candidates or STARS, our therapeutic medical device concept, will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of these products, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of these products for humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to the outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim or preliminary results of a clinical trial do not necessarily predict final results.

We may experience numerous unforeseen events that could delay or prevent our ability to obtain marketing approval or commercialize our drug candidates or STARS, including:

We also could be subject to litigation related to any failure to consummate the merger or to perform our obligations under the Merger Agreement. If the merger is not completed, these risks may materialize and may adversely affect our business, financial condition and the market price of our common stock. If the merger is not consummated, it is also likely that we will be involuntarily delisted from Nasdaq. See “Risk Factors–Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock and the termination of the Merger Agreement by Qualigen.”

If the merger is not completed, we may be unsuccessful in completing an alternative transaction on terms that are as favorable as the terms of the merger with Qualigen, or at all, and we may otherwise be unable to continue to operate our business. Our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

Our assets currently consist primarily of cash, cash equivalents and short-term investments, our RP-G28 assets, our listing on the Nasdaq Capital Market and the Merger Agreement with Qualigen. While we have entered into the Merger Agreement with Qualigen, the closing of the merger may be delayed or may not occur at all and there can be no assurance that the merger will deliver the anticipated benefits we expect or enhance stockholder value. If we are unable to consummate the merger, our board of directors may elect to pursue an alternative strategy, one of which may be a strategic transaction similar to the merger. If the merger is not consummated, it is likely that we will be involuntarily delisted from Nasdaq, which may make it more difficult for us to complete an alternative transaction. Attempting to complete an alternative transaction like the merger will be costly and time consuming, and we can make no assurances that such an alternative transaction would occur at all.

If the merger is not consummated, our board of directors may elect to continue our operations to determine if we can identify a path forward for RP-G28. We may seek to recommence the development and commercialization of RP-G28 as a prescription drug (which may require the filing of a new IND), or explore its potential development as an OTC product or dietary supplement for the consumer healthcare industry. However, our existing capital resources will not be adequate to enable us to conduct and complete any additional clinical trials that would be required to obtain the necessary regulatory approvals to commercialize RP-G28. We would need significant additional funding to initiate and complete any additional clinical trials of RP-G28 and to otherwise further the development of our RP-G28 program.

If the merger is not completed and we are unable to raise sufficient additional funds for the continued development of RP-G28, whether through potential collaborative, partnering or other strategic arrangements or otherwise, or if we otherwise determine to discontinue the development of our RP-G28 program, we will likely determine to cease operations.

If our board of directors pursues a dissolution and liquidation, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision, as with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations. In addition, if our board of directors were to approve and recommend, and our stockholders were to approve, a dissolution and liquidation, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. Our commitments and contingent liabilities may include severance obligations, regulatory and clinical obligations, and certain fees and expenses related to the merger. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation with our advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, our stockholders could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up.

The issuance of shares of our common stock to Qualigen stockholders in the merger will substantially dilute the voting power of our current stockholders.

If the merger is completed, pre-merger Ritter securityholders are expected to own approximately 7.5% of the combined company, on a fully-diluted basis. Accordingly, the issuance of shares of our common stock to Qualigen stockholders in the merger will reduce significantly the relative voting power of each share of common stock held by our current stockholders. Consequently, our stockholders as a group will have significantly less influence over the management and policies of the combined company after the merger than prior to the merger. These estimates are based on the anticipated exchange ratio and are subject to adjustment as provided in the Merger Agreement.

Ritter stockholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.

The right of our stockholders to receive any future payment for or derive any value from the CVRs will be contingent solely upon our ability to monetize all or any part of our current business or all or any part of our intellectual property or technology through a Legacy Monetization within the time periods specified in the CVR Agreement and the consideration received being greater than the amounts permitted to be retained or deducted by us (including the success bonus contemplated by the CVR Agreement) under the CVR Agreement. There is currently no third-party sale or transaction involving RP-G28 planned or contemplated and there is no guarantee that we will be able to find a buyer or strategic partner for these assets, particularly in light of our failed Liberatus Phase 3 clinical trial. If a Legacy Monetization is not achieved within the time periods specified in the CVR Agreement or the consideration received is not greater than the amounts permitted to be retained or deducted by us, no payments will be made under the CVR Agreement, and the CVRs will expire valueless. Qualigen has agreed to commit up to $350,000 to support our pursuit of a Legacy Monetization, subject to reductions.

Following the Effective Time, neither Ritter nor Qualigen will have any obligation to develop RP-G28, or to expend any effort or resources to divest or otherwise monetize RP-G28. If the up to $350,000 (or any such reduced amount) is insufficient to fund the expenses incurred in connection with a Legacy Monetization, neither Ritter nor Qualigen will have any obligation to provide further funding.

Furthermore, the CVRs will be unsecured obligations of the combined company and all payments under the CVRs, all other obligations under the CVR Agreement and the CVRs and any rights or claims relating thereto will be subordinated in right of payment to the prior payment in full of all current or future senior obligations of the combined company.

The tax treatment of the CVRs is uncertain.

The tax treatment of the CVRs is uncertain. There is no authority directly on point addressing the U.S. federal income tax treatment of contingent value rights with characteristics similar to the CVRs. Therefore, it is possible that the issuance of the CVRs may be treated as a distribution of equity with respect to our stock, as an “open transaction,” or as a “debt instrument” for U.S. federal income tax purposes, and such questions are inherently factual in nature.

We have incurred losses since inception, and we anticipate that we will continue to incur losses for the foreseeable future.

Our net losses were $10.1 million for the year ended December 31, 2019. As of December 31, 2019, we had an accumulated deficit of $80.3 million. These losses, among other things, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. We expect to continue to incur significant expenses and increased operating losses for the foreseeable future.

We have financed our operations primarily through the issuance and sale of common stock and warrants in public and private offerings, and have devoted substantially all of our financial resources and efforts on research and development, including clinical development of RP-G28. However, in September 2019 weannounced that our Liberatus Phase 3 clinical trial of RP-G28 for LI failed to demonstrate statistical significance in its pre-specified primary and secondary endpoints.The failure of the Liberatus Phase 3 clinical trial to achieve its endpoints has significantly depressed our stock price and has severely harmed our ability to raise additional capital and to secure potential collaborative, partnering or other strategic arrangements for its RP-G28 assets, and consequently, our prospects to continue as a going concern have been severely diminished.

To become and remain profitable, we must develop and eventually commercialize a product with market potential, which would require us to raise additional capital. Currently, we have no ongoing collaborations for the development and commercialization of RP-G28 or any other product candidate and have limited sources of revenue. If the merger is not completed and we are unable to raise sufficient additional funds for the continued development of our RP-G28 program, whether through potential collaborative, partnering or other strategic arrangements or otherwise, or if we otherwise determine to discontinue the development of our RP-G28 program, we will likely determine to cease operations.

Even if we are able to raise additional funds to permit the continued development of RP-G28 or another product candidate, if we and/or any potential collaborators are unable to develop and commercialize RP-G28 or another product candidate, if development is further delayed or is eliminated, or if sales revenue from any product upon receiving marketing approval, if ever, is insufficient, we may never become profitable and it will not be successful.

We are substantially dependent on our remaining employees to facilitate the consummation of the merger.

As of the date of this Annual Report, we have only five full-time employees. Our ability to successfully complete the merger depends in large part on our ability to retain our remaining personnel. Despite our efforts to retain these employees, one or more may terminate their employment with us on short notice. The loss of the services of these employees could potentially harm our ability to consummate the merger, to run our day-to-day business operations, and to continue to fulfill our reporting obligations as a public company.

The pendency of the merger could have an adverse effect on the trading price of our common stock and our business, financial condition and prospects.

The pendency of the merger could disrupt our business in many ways, including:

Our product development costs will increase if we experience delays in preclinical studies or clinical trials or in obtaining marketing approvals. We do not know whether any of our planned preclinical studies or clinical trials will begin on a timely basis or at all, will need to be restructured or will be completed on schedule, or at all. For example, the FDA may place a partial or full clinical hold on any of our clinical trials for a variety of reasons.

The occurrence of these eventsSignificant preclinical or others resulting from the proposed merger could adversely affect the trading price of our common stock or harm its business, financial condition and prospects.

Risks Related to Regulatory Approval Status of RP-G28 and Ongoing Regulatory Requirements if the Merger is not Completed

Our business has been entirely dependent on the success of RP-G28, our only product candidate. The failure of RP-G28 to demonstrate statistical significance in its pre-specified primary and secondary endpoints in our Liberatus Phase 3 clinical trial has severely diminished our prospects to continue as a going concern. If the merger is not completed,delays also could shorten any periods during which we may seekhave the exclusive right to recommence the developmentcommercialize our drug candidates or STARS or allow our competitors to bring products to market before we do and commercialization of RP-G28 as either a prescription drug (which may require the filing of a new IND), or explore its potential development as an OTC product or a dietary supplement for the consumer healthcare industry, which would, in any case, require significant additional funding. If we are unable to obtain funding for and to advance the development of RP-G28, we would likely be required to cease operations. Even if we are able to obtain funding for and to advance the development of RP-G28 (as either a prescription drug, OTC product or dietary supplement), we may never receive marketing approval for, or successfully commercialize, RP-G28 for any indication.

We currently have only one product candidate, RP-G28, previously in clinical development as a prescription drug, and our business has depended on RP-G28’s successful clinical development, regulatory approval and commercialization. In September 2019, we announced that our Liberatus Phase 3 clinical trial of RP-G28 for lactose intolerance failed to demonstrate statistical significance in its primary and secondary endpoints.

The failure of the Liberatus trial to achieve its primary and secondary endpoints has significantly depressed our stock price and has severely harmedimpair our ability to raise additional capitalsuccessfully commercialize our drug candidates or STARS.

Any delays in the commencement or completion, or termination or suspension, of our future clinical trials, if any, could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

Before we can initiate clinical trials of a drug candidate or STARS, we must submit the results of preclinical studies to secure potential collaborative, partneringthe FDA along with other information as part of an IND or other strategic arrangementsIDE application or similar regulatory filing, and the FDA (or corresponding foreign regulatory body) must approve the application. We have not yet submitted our IND application for our RP-G28 assets,QN-302 for pancreatic cancer) and consequently, our prospects to continue aswe remain in a going concern have been severely diminished.

Following the Effective Time, neither Ritter nor Qualigen will have any obligation to continue the development of RP-G28, or to expend any funds or effortsstage with respect to RP-G28. Pursuant toSTARS and any subsequent IDE. We cannot guarantee the terms oftiming for submitting the CVR Agreement, Qualigen has agreed to commit up to $350,000 (subject to possible reduction pursuant to the terms of the Merger Agreement) to support our continued pursuit of a Legacy Monetization. If the up to $350,000IND application for QN-302, and we do not know when this IND application (or any such reduced amount) is insufficient to fundother IND or IDE application) would be approved, if ever.

Before obtaining marketing approval from the expenses incurred in connection with a Legacy Monetization, however, neither Ritter nor Qualigen will haveFDA for the sale of QN-302, QN-247, RAS-F, any obligation to provide further funding.

Even ifother drug candidate or STARS, we were to obtain the additional funding necessary to advance the development of RP-G28 (as a prescription drug, OTC product or dietary supplement), including through a strategic partnership, the process for obtaining regulatory approval or completing the regulatory process necessary to commercialize RP-G28 could bemust conduct extensive and lengthy. There can be no guarantee that we would ever obtain the regulatory approvals or the regulatory hurdles necessary to commercialize RP-G28 in these ways.

To commercialize RP-G28 as a prescription drug or OTC product, we will needclinical studies to demonstrate to the FDA the safety and efficacy of RP-G28 for its intended use. Additional clinicalefficacy. Clinical testing is expensive, time consuming and uncertain as to outcome. OTC drugs must generally either receive premarket approval by theThe FDA through the NDA process or conform to a “monograph” for a particular drug category, as established by the FDA’s OTC Drug Review. These monographs specify conditions whereby OTC drug ingredients are generally recognized as safe and effective, and not misbranded. Certain OTC drugs may remain on the market without an NDA approval until a monograph for its class of drugs is finalized as a regulation. However, once the FDA has made a final determination on the status of an OTC drug category, such products must either be the subject of an approved NDA or comply with the appropriate monograph for an OTC drug. No assurance can be given that RP-G28 may be sold as an OTC drug product under and NDA or under the FDA’s OTC monograph product regulations. Of the large number of drugs in development in the United States, only a small percentage of drugs successfully complete the FDA regulatory process and are commercialized. Accordingly, even if we are able to complete development of RP-G28, we cannot assure you that RP-G28 will ever be commercialized.

If the merger is not completed, we may also seek to explore the development and commercialization of RP-G28 as a dietary supplement. A dietary supplement is a product taken by mouth that contains a “dietary ingredient” intended to supplement the diet. The “dietary ingredients” in these products may include: vitamins, minerals, herbs or other botanicals, amino acids, and substances such as enzymes, organ tissues, glandulars, and metabolites. Dietary supplements can also be extracts or concentrates, and may be found in many forms such as tablets, capsules, soft gels, gel caps, liquids, or powders. Whatever their form may be, the Dietary Supplement Health and Education Act (“DSHEA”) places dietary supplements in a special category under the general umbrella of “foods,” not drugs, and requires that every supplement be labeled a dietary supplement. The DSHEA created a new regulatory framework for the safety and labeling of dietary supplements. Under DSHEA, a firm is responsible for determining that the dietary supplements it manufactures or distributes are safe and that any representations or claims made about them are substantiated by adequate evidence to show that they are not false or misleading. This means that dietary supplements do not need approval from the FDA before they are marketed. Except in the case of a new dietary ingredient, where pre-market review for safety data and other information is required by law, a firm does not have to provide the FDA with the evidence it relies on to substantiate safety or effectiveness before or after it markets its products.

RP-G28 is a >95% purified GOS, product derived from a commercially available GOS food ingredient, which is designated as “generally recognized as safe” (“GRAS”) by the FDA. In 2016, the FDA published an updated draft guidance, which is intended, among other things, to help manufacturers and distributors of dietary supplement products determine when they are required to file with the FDA a New Dietary Ingredient (“NDI”), notification with respect to a dietary supplement product. In this draft guidance, the FDA highlighted the necessity for marketers of dietary supplements to submit NDI notifications as an important preventive control to ensure that consumers are not exposed to potential unnecessary public health risks in the form of new ingredients with unknown safety profiles. Ritter cannot provide any assurance that if it decided to pursue RP-G28 as a dietary supplement, it would not be required to submit an NDI notification. If the FDA were to conclude that we should have filed an NDI notification, then we could be subject to enforcement actions by the FDA. Such enforcement actions could include product seizures and injunctive relief being granted against us, any of which would harm its business.

Additional or more stringent regulations of dietary supplements and other products have been considered from time to time. In recent years, there has been increased pressure in the United States and other markets to increase regulation of dietary supplements. New regulations, or new interpretations of those regulations, could impose additional restrictions, including requiring reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, additional adverse event reporting, or other new requirements.

RP-G28 may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require it to be taken off the market, require us to include safety warningsconduct additional preclinical studies for any drug candidate or otherwise limit sales.STARS before it allows us to initiate clinical trials under any IND or IDE, which may lead to additional delays and increase the costs of our preclinical development programs.

IfAny delays in the merger is not completed and we elect to recommence thecommencement or completion of our ongoing, planned or future clinical trials could significantly increase our costs, slow down our development and commercialization of RP-G28 as a prescription drug (which may require the filing of a new IND) or explore its potential development as an OTC product or a dietary supplement for the consumer healthcare industry,approval process and we are able to obtain the necessary funding for such development, the detection of any undesirable side effects could delay or prevent marketing approval or commercialization. Alternatively, if we are able to identify and secure a Legacy Monetization for RP-G28, and undesirable side effects of RP-G28 are later identified, we could face seller liability.

There were no notable differences observed between placebo-treated subjects and RP-G28-treated subjects in the Phase 3 clinical trial. However, unforeseen side effects from RP-G28 could arise at any time during clinical development or, if approved, after RP-G28 has been marketed. Any undesirable or unacceptable side effects associated with RP-G28 could interrupt, delay or halt clinical trials, and result in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities, and could impactjeopardize our ability to attract potential third-party collaborators,commence product sales and generate revenues. We do not know whether our planned trials will begin on time or could result in our facing seller liability in the event RP-G28 is sold to another party.at all, or be completed on schedule, if at all. The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

Even if we receive regulatory approval for RP-G28, we may still face future development and regulatory difficulties.

RP-G28, if approved (as either a prescription drug or OTC product) or launched as a dietary supplement, will be subject to ongoing regulatory requirements for labeling, packaging, storage, advertising, promotion, record-keeping and submission of safety and other post-market information. In addition, products, manufacturers and manufacturers’ facilities are required to comply with extensive FDA and EMA requirements and requirements of other similar agencies, including ensuring that quality control and manufacturing procedures conform to applicable current good manufacturing practice (“cGMPs”), whether governing drugs or dietary supplements. Accordingly, we and others with whom we works must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control. We will also be required to report certain adverse reactions and production problems, if any, to the FDA and EMA and other similar agencies and to comply with certain requirements concerning advertising and promotion for its products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions by the FDA and must be consistent with the information in the product’s approved label. Accordingly, we may not promote its approved products, if any, for indications or uses for which they are not approved. Similarly, the U.S. Federal Trade Commission (the “FTC”) exercises jurisdiction over the advertising of OTC product and dietary supplements and has instituted numerous enforcement actions against OTC product and supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. Our failure to comply with applicable regulations could result in substantial monetary penalties, which could have a material adverse effect on our financial condition or results of operations.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, it may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If RP-G28, or any product candidate we develop in the future, fails to comply with applicable regulatory requirements, a regulatory agency may:

If we market products in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties.

In addition to FDA and FTC restrictions on marketing of pharmaceutical products, several other types of state and federal healthcare laws, commonly referred to as “fraud and abuse” laws, have been applied in recent years to restrict certain marketing practices in the pharmaceutical and supplement industry. Other jurisdictions such as Europe have similar laws. These laws include false claims and anti-kickback statutes. If we market our products and our products are paid for by governmental programs, it is possible that some of our business activities could be subject to challenge under one or more of these laws.

Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid. The federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service covered by Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers or formulary managers on the other. Although there are several statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Most states also have statutes or regulations similar to the federal anti-kickback law and federal false claims laws, which apply to items and services covered by Medicaid and other state programs, or, in several states, apply regardless of the payor. Administrative, civil and criminal sanctions may be imposed under these federal and state laws.

Over the past few years, a number of pharmaceutical and other healthcare companies have been prosecuted under these laws for a variety of promotional and marketing activities, such as: providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers; reporting inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion; and submitting inflated best price information to the Medicaid Rebate Program to reduce liability for Medicaid rebates.

Risks Related to Dependence on Third Parties

Any collaborative arrangements that we establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these collaborations. In addition, any future collaborative arrangements may place the development and commercialization of our product candidates outside our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us.

If the merger with Qualigen is not completed, we may continue to seek partnering, collaborative or similar strategic arrangements with third parties to develop and commercialize RP-G28 either as a prescription drug or OTC product or as a dietary supplement, but we may be unsuccessful in locating a third-party collaborator to develop and market RP-G28. If we are able to locate a third-party collaborator, the collaboration may not be successful or we may otherwise not realize the anticipated benefits from such collaboration.

Dependence on collaborative arrangements subjects us to a number of risks, including:

Any delay or disruption in the manufacture and supply of any product may negatively impact our operations.

We do not intend to manufacture any product that is offered for sale. We currently have an agreement with RSM, our contract manufacturer, for the production of Improved GOS, the active pharmaceutical ingredient in RP-G28, and the formulation of sufficient quantities of Improved GOS for the clinical and nonclinical studies that we believe we will need to conduct prior to seeking regulatory approval for RP-G28 if we decide to pursue the development of RP-G28. However, we do not have agreements for commercial supplies of RP-G28 and we may not be able to reach agreement with RSM or any other contract manufacturer for sufficient supplies to commercialize RP-G28 if it is approved or any other product candidate we may develop in the future.

Reliance on third-party manufacturers entails risks, to which we would not be subject if it manufactured its products itself, including:

AnyWe could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs/ECs of the institutions in which such trials are being conducted, by a Data Safety Monitoring Board for such trial or by the FDA. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using the product under investigation, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these factorschanges. Amendments may require us to resubmit our clinical trial protocols to IRBs/ECs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.

If we experience delays or difficulties in enrolling patients in our ongoing or planned clinical trials, our receipt of necessary regulatory approval could be delayed or prevented.

We may not be able to initiate or continue our ongoing or planned clinical trials for our products if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA. In addition, some of our competitors may have ongoing clinical trials for products that would treat the same patients as QN-302, QN-247, RAS-F or STARS, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ products. In addition, introduction of new drugs or devices to the marketplace may have an effect on the number of patients available or timing of the availability of the patients.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

Adverse side effects or other safety risks associated with QN-302, QN-247, RAS-F or STARS product candidates could delay or preclude approval, cause us to suspend or discontinue any clinical trials or abandon further development, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if any.

Results of our planned clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our products could result in the delay, suspension or termination of clinical trials by us or the FDA for a number of reasons.

Moreover, if our products are associated with undesirable side effects in clinical trials or have characteristics that are unexpected, we may elect to abandon or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial expectations for our products, if approved. We may also be required to modify our study plans based on findings in our clinical trials. Many drug candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development. In addition, regulatory authorities may draw different conclusions or require additional testing to confirm these determinations.

It is possible that as we test our drug candidates and STARS in larger, longer and more extensive clinical trials, including with different dosing regimens, or as the use of our drug candidates and STARS becomes more widespread following any regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by patients.

The development and commercialization of RP-G28pharmaceutical and device products are subject to extensive regulation, and we may not obtain regulatory approvals for QN-302, QN-247, RAS-F, STARS or any other product candidates, on a timely basis or at all.

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting, including the submission of safety and other post-marketing information and reports, and other possible activities relating to QN-302, QN-247, RAS-F and STARS, as well as any other product candidate that we may develop in the future, (inare subject to extensive regulation.

Regulatory approval of drugs in the eventUnited States requires the merger is not completed), or cause ussubmission of an NDA to incur higher costs. Furthermore, if RP-G28 or another product candidate is approved and contract manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable pricesFDA and we are unablenot permitted to find onemarket any pharmaceutical product candidate in the United States until we obtain approval from the FDA of the NDA for that product. An NDA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology, chemistry, manufacturing and controls.

The current anticipated regulatory pathway for STARS in the United States will require the submission of a PMA to the FDA to demonstrate that the device is safe and effective for its intended use. This approval process generally requires clinical data to support the safety and effectiveness of the device.

FDA approval of an NDA or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumesPMA is not guaranteed, and qualitythe review and on a timely basis, we would likely be unable to meet demand for our productapproval process is an expensive and could lose potential revenue. Ituncertain process that may take several years to establish an alternative source of supply for RP-G28 or any other product candidateyears. The FDA also has substantial discretion in the approval process. The number and to have any such new source approved by the government agencies that regulate our products. In the event we do need to identify alternative manufacturing partners, we may have to secure licenses to manufacturing and/or purification technologies, including third-party patent licenses, to allow us to manufacture RP-G28 or any other product candidate that is suitable for the late-stage regulatory review process and/or adequate to manufacture commercial quantities for such product candidate.

We have historically depended on third-party contractors for a substantial portion of our operations and may not be able to control our work as effectively as if we performed these functions itself.

If the merger is not completed and we elect to continue the clinical development of RP-G28 (as either a prescription drug, OTC product or dietary supplement) we will continue to outsource substantial portions of our operations to third-party service providers, including the conducttypes of preclinical studies and clinical trials collectionthat will be required for NDA or PMA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to treat and analysisthe regulations applicable to any particular product candidate. Despite the time and expense associated with preclinical studies and clinical trials, failure can occur at any stage. The results of data,preclinical and manufacturing. Our agreements with third-party service providersany clinical trials of QN-302, QN-247, RAS-F, STARS or any other product candidate may not be predictive of the results of our later-stage clinical trials.

Clinical trial failure may result from a multitude of factors including flaws in trial design, dose selection, placebo effect, patient enrollment criteria and contract research organizations (“CROs”) are on a study-by-studyfailure to demonstrate favorable safety or efficacy traits, and project-by-project basis. Typically,failure in clinical trials can occur at any stage. Companies in the pharmaceutical and device industry frequently suffer setbacks in the advancement of clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Based upon negative or inconclusive results, we may terminate the agreements with notice and would be responsible for the supplier’s previously incurred costs.decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. In addition, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may further delay, limit or prevent regulatory approval.

Even if we are able to commercialize any CRO that we retain will bedrug candidates, the products may become subject to the FDA’s and EMA’s regulatory requirements and similar standards outside of the United States and Europe and we do not have control over compliance with theseunfavorable pricing regulations, by these providers. Consequently, if these providers do not adhere to applicable governingthird-party reimbursement practices and standards, the development and commercialization of our product candidates could be delayed or stopped,healthcare reform initiatives, which could severelywould harm our businessbusiness.

The regulations that govern marketing approvals, pricing, coverage and financial condition.

Because we have relied on third parties, our internal capacityreimbursement for new drug products vary widely from country to perform these functions is limited to management oversight. Outsourcing these functions involvescountry. Current and future legislation may significantly change the riskapproval requirements in ways that third parties may not perform to our standards, may not produce results in a timely manner or may fail to perform at all. Although we have not experienced any significant difficulties with its third-party contractors, it is possible that we could experience difficulties in the future. In addition, the use of third-party service providers requires us to disclose its proprietary information to these parties, which could increase the risk that this information will be misappropriated. There are a limited number of third-party service providers that specialize or have the expertise required to achieve its business objectives. Identifying, qualifying and managing performance of third-party service providers can be difficult, time consuminginvolve additional costs and cause delays in our development programs. We currently haveobtaining approvals. Some countries require approval of the sale price of a small number of employees, which limitsdrug before it can be marketed. In many countries, the internal resources we have available to identify and monitor third-party service providers.pricing review period begins after marketing or product licensing approval is granted. To the extent we are unable to identify, retain and successfully manage the performance of third-party service providersobtain reimbursement or pricing approval in the future, our business may be adversely affected, andsome countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our drug candidate to other available therapies. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a drug candidate in a particular country, but then be subject to price regulations that delay commercial launch of the imposition of civil or criminal penaltiesproduct, possibly for lengthy time periods, and negatively impact the revenues, if their conduct of clinical trials violates applicable law.

Reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance. If there is not sufficient reimbursement for RP-G28, it is less likely that it will be widely used.

In the eventany, we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more drug candidates, even if such drug candidates obtain the additional funding necessaryregulatory approval.

Our ability to advance the clinical development of RP-G28, and RP-G28 is ultimately approved for sale by the applicable regulatory authorities, market acceptance and sales of RP-G28commercialize any drug candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement policiesfor these products and mayrelated treatments will be affected by, among other things, future healthcare reform measures. Government authorities andavailable from third-party payors, such asincluding government healthcare programs, private health insurers and health maintenance organizations,other organizations. Third-party payors decide which drugsmedications they will coverpay for and establish paymentreimbursement levels. We cannot be certainA primary trend in the U.S. healthcare industry and elsewhere has been cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Coverage and reimbursement willmay not be available for RP-G28. Also,any product that we cannotcommercialize and, even if these are available, the level of reimbursement may not be certain that reimbursement policies will not reducesatisfactory. Reimbursement may affect the demand for, or the price paidof, any drug candidate for which we obtain regulatory approval. Obtaining and maintaining coverage and adequate reimbursement for our products.products may be difficult. We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies. If coverage and adequate reimbursement isare not available or reimbursement is available on aonly to limited basis,levels, we may not be able to successfully commercialize RP-G28.any drug candidate for which we obtain regulatory approval.

In

There may also be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulatory authorities outside of the United States,States. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the Medicare Prescription Drug, Improvement,use of the drug and Modernization Actthe clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of 2003 (the “MMA”), changed the way Medicare covers and pays for pharmaceutical products. The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the numberlaws that presently restrict imports of drugs that willfrom countries where they may be covered in any therapeutic class. The MMA also introduced a new reimbursement methodology based on average salessold at lower prices for physician-administered drugs. Any negotiated prices for our products covered by a Part D prescription drug plan would likely be lower than the prices it might otherwise obtain in the United States. Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, privateThird-party payors often followrely upon Medicare coverage policy and payment limitations in setting their own payment rates. Any reductionreimbursement policies, but also have their own methods and approval process apart from Medicare determinations.

We expect that the Affordable Care Act, as well as other healthcare reform measures that may be adopted in payment that results from the MMAfuture, may continue to result in a similar reductionmore rigorous coverage criteria and in payments from non-governmental payors.additional downward pressure on the price that providers receive for any approved therapeutics products of ours. This would adversely affect the prices we receive and could also adversely affect providers’ willingness to prescribe our therapeutics products, if any.

TheWe may not be able to obtain or maintain orphan drug designation or exclusivity for our drug candidates.

Regulatory authorities in some jurisdictions, including the United States, and several other jurisdictions are considering,may designate drugs for relatively small patient populations as “orphan drugs.” Under the Orphan Drug Act of 1983, as amended, the FDA may designate a drug candidate as an orphan drug if it is intended to treat a rare disease or have already enacted,condition, which is generally defined as a numberpatient population of legislative and regulatory proposals to changefewer than 200,000 individuals in the healthcare system in ways that could affect our ability to sell its products profitably. Among policy makers and payorsUnited States, or if the disease or condition affects more than 200,000 individuals in the United States and elsewhere, there is significant interestno reasonable expectation that the cost of developing and making a drug product available in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States for the pharmaceutical industrytype of disease or condition will be recovered from sales of the product.

Orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. Additionally, if a product that has beenorphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity. This means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in certain circumstances, including proving clinical superiority (i.e., another product is safer, more effective or makes a major contribution to patient care) to the product with orphan exclusivity. Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity, or obtain approval for the same product but for a different indication than that for which the orphan product has exclusivity. In addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective.

We intend to seek orphan drug designation in the United States for QN-302, QN-247, and/or RAS-F for one or more indications, such as pancreatic cancer, AML and pediatric neuroblastoma. Orphan drug status does not ensure that we will receive marketing exclusivity in a particular focusmarket, and there is no assurance that any application for orphan drug designation will be granted. Orphan drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process.

We rely, and intend to continue to rely, on third parties to conduct our preclinical studies and clinical trials and perform some of our research and preclinical studies. If these third parties do not satisfactorily carry out their contractual duties, fail to comply with applicable regulatory requirements or do not meet expected deadlines, our development programs may be delayed or subject to increased costs or we may be unable to obtain regulatory approval.

We are dependent on third parties to conduct our planned preclinical studies and clinical trials of QN-302, QN-247, RAS-F and STARS. The timing of the initiation and completion of these effortstrials will therefore be partially controlled by such third parties and has been significantly affected by major legislative initiatives. If RP-G28may result in delays to our development programs. We have relied heavily, and expect to continue to rely, on UofL for preclinical studies related to QN-247 and RAS-F, and we expect to rely heavily on contract research organizations (“CROs”) and sponsored academic researchers for preclinical studies related to QN-302. As to any clinical trials, we expect to rely on CROs, sponsored academic researchers, clinical investigators and consultants to play a significant role in the conduct of these trials and the subsequent collection and analysis of data. However, we will not be able to control all aspects of their activities. Nevertheless, we are responsible for ensuring that each clinical trial is ultimately approved for sale byconducted in accordance with the applicable protocol and legal, regulatory authorities,and scientific standards, including GCP, requirements, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.

There is no guarantee that any such CROs, clinical trial investigators or other third parties on which we expect that it wouldrely will devote adequate time and resources to our development activities or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise perform in a substandard manner, or terminate their engagements with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated. If a Qualigen clinical trial site terminates for any reason, we may experience pricing pressuresthe loss of follow-up information on subjects enrolled in connectionsuch clinical trial unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct clinical trials in accordance with the sale of RP-G28, dueregulatory requirements or our stated protocols, we will not be able to the trend toward managed healthcare, the increasing influence of health maintenance organizationsobtain, or may be delayed in obtaining, regulatory approvals for QN-302, QN-247, RAS-F or STARS and additional legislative proposals.will not be able to, or may be delayed in our efforts to, successfully commercialize our products.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “ACA”), enacted in March 2010, is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on health industry and impose additional health policy reforms. With regard toManufacturing pharmaceutical products is complex and subject to product loss for a variety of reasons. We contract with third parties for the manufacture of our product candidates for preclinical testing and clinical trials and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

We rely, and expect to continue to rely, on third parties for the manufacture of our products for preclinical and any clinical testing, as well as for commercial manufacture if any of our product candidates obtain regulatory approval. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

We may be unable to establish any agreements with third-party manufacturers or to do so on favorable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

We do not have manufacturing agreements in place for any of our current drug candidates. We acquire many key materials on a purchase order basis. As a result, we do not have long-term committed arrangements with respect to our product candidates and other materials. If we obtain regulatory approval for any of our product candidates, we will need to establish an agreement for commercial manufacture with a third-party.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or regulatory approval. We do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for QN-302, QN-247 or RAS-F.

We may enter into collaborations with third parties for the development and commercialization of our products. If those collaborations are not successful, we may not be able to capitalize on the market potential of these products. Even if they are successful, they may result in a limitation of our upside potential.

We may in the future seek third-party collaborators for the development and commercialization of some of our products on a selected basis. Our likely collaborators for any collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for a collaboration will depend, among other things, the ACA is expected to expand and increase industry rebates for drugs covered under Medicaid programs and make changes to the coverage requirements under Medicare Part D program. Although it is too early to determine the full effectupon our assessment of the ACA,collaborator’s resources and expertise, the law appears likely to continue the pressure on pharmaceutical pricing, especially under the Medicare program,terms and may also increase our regulatory burdens and operating costs. Since its enactment, there have been judicial and Congressional challenges to certain aspectsconditions of the ACA. Congress and President Trump have expressed their intentions to repeal and replace the ACA. President Trump issued an Executive Order and both chambers of Congress passed bills, all with the goal of fulfilling their intentions. However, to date, the Executive Order has had limited effectproposed collaboration and the Congressional activities have not resulted in the passageproposed collaborator’s evaluation of a law. If a law is enacted, many if not allnumber of the provisions of the ACA may no longer apply to prescription drugs.factors.

Risks Related

If we do enter into any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that such collaborators dedicate to the Commercializationdevelopment or commercialization of RP-G28 or our products. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.

Any Other Product Candidate Developedcollaboration will necessarily result in a sharing of economics with the collaborator, which might otherwise have been captured by Us in the Future in the Event the Merger is not Completedus directly.

AnyEven if any of our product approved for sale by the applicable regulatory authorities, or launched as an OTC product without the need forcandidates receives regulatory approval, we may notfail to achieve broadthe degree of market acceptance amongby physicians, patients, and healthcarethird-party payors and as a result our revenues generated from sales of any such product may be limited.

The commercial success of any product we launch will depend upon its acceptance amongothers in the medical community includingnecessary for commercial success.

If any of our product candidates receives regulatory approval, we may nonetheless fail to gain sufficient market acceptance by physicians, health carepatients, third-party payors and patients.others in the medical community. For example, current cancer treatments, such as existing targeted therapies, chemotherapy, and radiation therapy, are well established in the medical community, and doctors may continue to rely on these treatments. If our product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of aour product candidates, if approved for commercial sale, will depend on a number of factors, including:

If RP-G28We face substantial competition, which may result in others discovering, developing or anycommercializing products before or more successfully than we do.

The development and commercialization of pharmaceutical and device therapeutics products is highly competitive. We face competition from major pharmaceutical and device companies, specialty pharmaceutical and device companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our product candidates and other product candidate we develop is approved by the applicable regulatory authorities (or launched without the needplatform technologies that may be effective in developing therapeutics. Some of these competitive products, therapies and technologies are based on scientific approaches that are similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for regulatory approval), but does not achieve an adequate level of acceptance by physicians, patients, the medical communityresearch, development, manufacturing and healthcare payors, sufficient revenue may not be generated from its sales and we may not become or remain profitable. In addition, efforts to educate the medical community and third-party payors on the benefits of any product candidate may require significant resources and may never be successful.commercialization.

The OTCWe expect that our oncology drug business is subjectproduct candidates and our STARS system will face competition from traditional small or large molecule drugs that target specific cancers that are FDA-approved and marketed for the indications that we are pursuing, in addition to significant competitive pressures.off-label use of current therapeutics and therapeutics in development; and from other drugs using targeted approaches to direct payloads to cancerous tumors, as well as newer approaches, such as immuno-oncology, which attempts to harness the patient’s own immune system to fight cancer itself.

IfMany of the merger is not completed,companies against which we are competing or against which we may continue to seek partnering, collaborative or similar strategic arrangements with third parties to developcompete in the future have significantly greater financial resources and commercialize RP-G28 as an OTC product. The OTC healthcare product industry, however, is highly competitive. Many participantsexpertise in this industry have substantially greater capital resources, technical staffs, facilities,research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing resources, product development, and distribution experienceselling approved products than we do. We believe that our ability to competeMergers and acquisitions in the OTC healthcare product industry will depend on a number of factors, including product quality and price, availability, speed to market, consumer marketing, reliability, credit terms, brand name recognition, delivery time and post-sale service and support. However, our failure to appropriately and timely respond to consumer preferences and demand for new products could significantly harm its business, financial condition and results of operations. Furthermore, unfavorable publicity or consumer perception of products we develop and commercialize could have a material adverse effect on our business and operations. There can be no assurance that we would be able to compete successfully in this highly competitive OTC industry. If we are unable to compete effectively, our earnings would be significantly negatively impacted.

We have no internal sales, distribution and/or marketing capabilities and we would have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing arrangements in the event the merger is not completed and we decide to continue operations.

We have no internal sales, distribution and/or marketing capabilities at this time. To develop these capabilities, we would need to invest significant amounts of financial and management resources, some of which may need to be committed prior to any confirmation that a particular product candidate will be approved. We could also face a number of additional risks, including:

We may have limited or no control over the sales, marketing and distribution activities of third parties. Its future revenues could depend heavily on the success of the efforts of third parties.

Risks Relating to Our Intellectual Property if the Merger is not Completed

If our patent position does not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.

Our commercial success will depend in part on obtaining, maintaining and enforcing patent protection and on developing, preserving and enforcing current trade secret protection. In particular, it will depend in part on our ability to obtain, maintain and enforce patents, especially those directed to methods of using our products and those directed to the methods used to develop and manufacture our products, as well as successfully defending these patents against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell or importing our products depends on the extent to which we have rights under valid and enforceable patents (and/or trade secrets) that cover these activities. We cannot be sure that patents will be granted with respect to any of its pending patent applications or with respect to any patent applications it files in the future, nor can we be sure that any of its existing patents or any patents that may be granted to it in the future will withstand subsequent challenges to their validity, enforceability, and/or patentability, or if they will be commercially useful in protecting our product candidates, discovery programs and processes. Furthermore, we cannot be sure that our existing patents and patent applications will embrace (or “claim”) the particular uses for RP-G28 or any other product candidate that may be approved by the FDA. Our inability to protect our patents, would also likely impact our ability to attract potential third-party collaborators.

The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved.

No consistent policy regarding the patentability and/or validity of patent claims related to pharmaceutical patents has emerged, to date, in the United States or in most jurisdictions outside of the United States. Changes in either the patent laws (be they substantive or procedural) or in the interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of any claims that will issue or will be enforceable in the patents that have or may be issued from the patents and applications we currently own or may in the future own or license from third parties. Further, if any patents we obtain, or to which we obtain licenses, are deemed invalid, unpatentable and unenforceable, our ability to commercialize or license our technology could be adversely affected.

In the future others may file patent applications directed to products, uses for products, and manufacturing techniques and related technologies that are similar, identical or competitive to our or important to our business. We cannot be certain that any patent or patent application owned by a third-party will not have priority over patent applications filed or in-licensed by us in the future, or that we or our licensors will not be involved in interference, opposition, inter partes review or invalidity proceedings before U.S. or non-U.S. patent offices or courts.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect its rights or permit us to gain or keep its competitive advantage. For example:

Patents directed to pharmaceutical compositions containing RP-G28 or methods of using RP-G28 expire in 2030 if the appropriate maintenance fee renewal, annuity, or other government fees are paid, unless a patent term extension based on regulatory delay is obtained. We expect that expiration in 2030 of some of its pharmaceutical composition and method-of-use patents directed to RP-G28 and its use in treating lactose intolerance will have a limited impact on its ability to protect its intellectual property in the United States, where we have additional issued patents directed to such compositions and uses that extend until 2030. In other countries, our issued patents and pending patent applications directed to compositions containing or methods of using RP-G28 for treating other indications, if issued, would expire in 2030. If we decide to pursue the continued development of RP-G28, including with a strategic partner, we will attempt to mitigate the effect of patent expiration by seeking data exclusivity, or the foreign equivalent thereof, in conjunction with product approval, as well as by filing additional patent applications covering improvements in its intellectual property.

We expect that the other patent applications for the RP-G28 portfolio, if issued, and if the appropriate maintenance, renewal, annuity or other governmental fees are paid, would expire in 2030. We own pending applications in the United States, Europe, and certain other countries directed to uses of RP-G28 to treat a variety of disorders, including lactose intolerance. Patent protection, to the extent these patents issue, would be expected to extend to 2030, unless a patent term extension based on regulatory delay is obtained.

Due to the patent laws of a country, or the decisions of a patent examiner in a country, or our own filing strategies, we may not obtain patents directed to all of its product candidates or methods involving these candidates in the parent patent application. We could pursue divisional patent applications or continuation patent applications in the United States and other countries to obtain claims directed to inventions that were disclosed but not claimed in the parent patent application.

We also may rely on trade secrets to protect its technology, especially where we do not believe patent protection is appropriate or feasible. However, trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, its employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third-party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

Our patents are not directed to RP-G28 as a composition of matter.

Although we own certain patents and patent applications with claims directed to specific pharmaceutical compositions and methods of using RP-G28 to treat LI, we do not have patents directed to RP-G28 as a composition of matter in the United States or elsewhere. As a result, we may be limited in our ability to list our patents in the FDA’s Orange Book if our product or the use of our product, consistent with its FDA-approved label, would not fall within the scope of our patent claims. Also, our competitors may be able to offer and sell products so long as these competitors do not infringe any other patents that we (or third parties) hold, including patents with claims directed to the manufacture of RP-G28, pharmaceutical compositions containing RP-G28, and/or method of using RP-G28. In general, pharmaceutical composition patents and method of use patents are more difficult to enforce than composition of matter patents because, for example, of the risks that FDA may approve alternative uses of the subject compounds not covered by the method of use patents, and others may engage in off-label sale or use of the subject compounds. Physicians are permitted to prescribe an approved product for uses that are not described in the product’s labeling. Although off-label prescriptions may infringe our method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. FDA approval of uses that are not covered by our patents would limit its ability to generate revenue from the sale of RP-G28, if approved, for commercial sale. Off-label sales would limit our ability to generate revenue from the sale of RP-G28, if approved for commercial sale. Any of these factors could impact our ability to attract potential third-party collaborators.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

If we choose to go to court to stop another party from using the inventions claimed in any patents we obtain, that individual or company may seek a post grant review (including inter partes review) of our patents, and has the right to ask the court to rule that such patents are invalid or should not be enforced against that third-party. These lawsuits and administrative proceedings are expensive and would consume time and resources and divert the attention of managerial and scientific personnel even if we were successful in stopping the infringement of such patents. In addition, there is a risk that the court or administrative body will decide that such patents are not valid or unpatentable and that we do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity/patentability of such patents is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our patents. In addition, the U.S. Supreme Court and the Court of Appeals for the Federal Circuit have articulated and/or modified certain tests used by the U.S. Patent and Trademark Office (the “USPTO”), in assessing patentability and by the courts in assessing validity and claim scope, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood that others may succeed in challenging any patents we obtain or license.

We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop it from commercializing or increase the costs of commercializing our product candidates.

Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our products, methods of manufacture, or uses of RP-G28 (or any future product candidate), will not infringe third-party patents. Furthermore, a third-party may claim that we or our manufacturing or commercialization collaborators are using inventions covered by the third-party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling its product candidates. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. There is a risk that a court would decide that we or our commercialization collaborators are infringing the third-party’s patents and would order us or our collaborators to stop the activities covered by the patents. In that event, we or our commercialization collaborators may not have a viable way around the patent and may need to halt commercialization of the relevant product. In addition, there is a risk that a court will order us or our collaborators to pay the other party damages for having violated the other party’s patents. In the future, we may agree to indemnify our commercial collaborators against certain intellectual property infringement claims brought by third parties. The pharmaceutical and biotechnology industries have producedmay result in even more resources being concentrated among a proliferation of patents, and it is not always clear to industry participants, including Ritter, which patents cover various types of products or methods of use. The scope of coverage of a patent is subject to interpretation by the courts, and the interpretation is not always uniform.

If we are sued for patent infringement, the patentee would need to demonstrate, by a preponderance of the evidence that our products or methods infringe the patent claims of the relevant patent, and we would need to demonstrate either that we do not infringe or, by clear and convincing evidence, that the patent claims are invalid; we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity or enforceability of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, otherwise fail to defend an infringement action successfully or have a court hold that any patent we infringe is invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing its product candidates to market and may be precluded from manufacturing or selling its product candidates.

We cannot be certain that others have not filed patent applications for technology claimed in its pending applications, or that we were the first to invent the technology, because:

Our competitors may have filed, and may in the future file, patent applications directed to technology similar to ours. Any such patent application may have priority over our patent applications, which could further require us to obtain rights to issued patents directed to such technologies. If another party has filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a losssmaller number of our U.S. patent position with respect to such inventions. Other countries have similar laws that permit secrecy of patent applications,competitors. Smaller and other parties may be entitled to priority over our applications in such jurisdictions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue its operations or to attract potential third-party collaborators.

Obtaining and maintaining our patent portfolio depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patents could be deemed abandoned or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We employ an outside firm to pay fees due to non-U.S. patent agencies and this outside firm has systems in place to ensure compliance on payment of fees. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business. Furthermore, our inability to protect its patents, would also likely impact its ability to attract potential third-party collaborators.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished.

As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including competitors or potential competitors. We may be subject to claims that these employees, or that we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we were successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

We have relied on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We have also relied in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Failure to secure trademark registrations could adversely affect our business.

We have not developed a trademark for our RP-G28 product. Hence, we do not currently own any actual or potential trademark rights associated with our RP-G28 product. If we seek to register any trademarks in the future, our trademark applications may not be allowed for registration or our registered trademarks may not be maintained or enforced. During trademark registration proceedings, we may receive rejections. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many other jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we do not secure registrations for our trademarks, we may encounter more difficulty in enforcing them against third parties than we otherwise would.

Risks Relating to Our Business and Strategy if the Merger is not Completed

If the merger is not completed and we decide to continue our operations and the development of RP-G28 as either a prescription drug, OTC product or dietary supplement, we will face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.

Although we know of no other drug candidates in advanced clinical trials for treating lactose intolerance, the biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. If the merger is not completed and we decide to continue our operations and the development of RP-G28 as either a prescription drug, OTC product or dietary supplement, we would have potential competitors in the United States, Europe and other jurisdictions, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical and generic drug companies and universities and other research institutions. Many of these potential competitors have greater financial and other resources, such as larger research and development staff and more experienced marketing and manufacturing organizations. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and manufacturing pharmaceutical products. These companies also have significantly greater research, sales and marketing capabilities and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we develop obsolete.

As a result of all of these factors, these potential competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing and commercializing drugs for the diseases that we would target before we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Some of the pharmaceutical and biotechnology companies we couldThese third parties compete with include microbiome-based development companies: Second Genome, Inc., Seres Health, Inc., Enterome SA, Vedanta Biosciences, Inc.,us in recruiting and Rebiotix Inc. In addition, many universitiesretaining qualified scientific, management and privatesales and public research institutes may become activemarketing personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our target disease areas. These potentialprograms.

Our commercial opportunity could be reduced or eliminated if our competitors may succeed in developing, acquiring or licensing on an exclusive basis, technologiesdevelop and drugcommercialize products that are safer, more effective, have fewer or less costly,severe side effects, are approved for broader indications or patient populations, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other marketing approval for their products more rapidly than any approval we may obtain, which could renderresult in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products. The key competitive factors affecting the success of QN-302, QN-247, RAS-F and STARS are likely to be efficacy, safety, scope and limitations of marketing approval, and availability of reimbursement.

If we are unable to obtain and maintain sufficient patent protection for our therapeutic product candidates and platform technologies, or if the scope of the patent protection is not sufficiently broad, third parties, including our competitors, could develop and commercialize products obsoletesimilar or identical to ours, and noncompetitive.our ability to commercialize our product candidates successfully may be adversely affected.

Our commercial success depends significantly on our ability to protect our proprietary (and exclusively in-licensed) technologies that we believe are important to our business, including pursuing, obtaining and maintaining patent protection in the United States and other countries intended to cover the composition of matter of our product candidates, for example, QN-302, QN-247, RAS-F and STARS, the methods of use, related technologies, and other inventions that are important to our business. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. If we do not adequately pursue, obtain, maintain, protect or enforce our intellectual property, third parties, including our competitors and/or collaborators, may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

To protect our proprietary position, we file patent applications in the United States and abroad related to our product candidates, their methods of manufacture and use. The patent application and approval process is expensive, time-consuming and complex. We believemay not be able to prepare, file, prosecute and maintain all necessary or desirable patent applications at a reasonable cost or in a timely manner or in all jurisdictions. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, depending on the terms of any future license agreements to which we may become a party, we may not have the right to control the preparation, filing, and prosecution of patent applications, or to maintain or defend the patents, covering technology licensed from third parties. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patents, whether any issued patents will be found invalid and unenforceable or will be threatened by third parties or whether any issued patents will effectively prevent others from commercializing competing technologies and product candidates. We have not filed patent applications in every jurisdiction, and some filings are only pending in the United States.

Because patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file or invent (before March 16, 2013) the invention disclosed in any patent application related to our product candidates or technology.

Moreover, because the issuance of a patent, although presumptive, is not conclusive as to its inventorship, scope, validity or enforceability, our patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in our patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products or limit the duration of the patent protection of our technology and products. Such challenges also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us.

Our and our licensors’ pending and future patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or that effectively prevent others from commercializing competitive products. Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors and other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. Our competitors and other third parties may also seek approval to market their own products similar to or otherwise competitive with our products. Alternatively, our competitors or other third parties may seek to market generic versions of any approved products by submitting abbreviated NDAs to the FDA during which process they may claim that patents owned by us are invalid, unenforceable or not infringed. In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

The term of our patents may be inadequate to protect our competitive position on our products.

Given the amount of time required for the development, testing and regulatory review of drug candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. In such an event (and if we are unable to obtain patent term extension or the term of any such extension is less than we request), our competitors and other third parties may be able to obtain approval of competing products following patent expiration and take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case. Generic competition usually results in serious price erosion for the original drug brand.

Risks Related to Our Diagnostics Business

We may face challenges distributing our diagnostic products after our distribution agreement with Sekisui expires.

We currently rely on our diagnostics distribution partner Sekisui for most of our FastPack® distribution worldwide, pursuant to the terms of our distribution agreement with Sekisui. We maintain direct distribution for certain house accounts, including Low T.

Our distribution agreement with Sekisui expires on March 31, 2022. We will incur costs re-establishing and maintaining a direct sales force, and we may also face logistical issues and relationship issues with customers during the transition period. In addition, there is the risk that the direct sales force assembled and used by us will not be as efficient and effective as Sekisui’s distribution efforts.

Our diagnostic products face heavy competition.

Our FastPack system is a mature technology and faces heavy competition from manufacturers of more complex immunoassay systems designed primarily for central laboratory use, but that also are sold to physician offices. Many of our competitors have substantially greater financial, technical, research and other resources and capabilities. We also face competition from companies that have developed or are developing newer blood testing systems for use in physician offices. The FastPack system may not continue to be competitive in light of future technological developments by others.

Our diagnostic products are disadvantaged by reduced Medicare reimbursement and third-party payer pricing.

As noted above, a primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical devices, especially mature ones such as ours. Decreases in Medicare and private-insurer reimbursement for diagnostic tests such as ours in recent years are a negative factor in our attempts to maintain and grow our diagnostics business. This factor constrains the price that we can charge to providers for our diagnostic products. Moreover, if adequate reimbursement is not available or reimbursement is available only to limited levels, some physician offices, clinics and small hospitals may choose not to offer (or to discontinue offering) some or all of our diagnostic products. During the Transition Period, Low T discontinued our Total PSA test for this reason.

Yi Xin may not meet expectations in its China/overseas business.

We have largely ceded our overseas diagnostics business to Yi Xin. Yi Xin is a new and untested company and there is no assurance that its financial and other capabilities will enable it to succeed in commercializing FastPack-based diagnostic products. We would receive royalties from Yi Xin if and only if Yi Xin achieves sales of FastPack-based diagnostic products.

Risks Related to Employee Matters, Managing Growth, Potential Dilution, Stock Price Variability and Other Risks Related to Our Business

Our future success depends on our ability to retain key employees and to attract, retain and motivate qualified personnel.

We are highly dependent on Michael Poirier, our Chief Executive Officer and Chairman, Christopher Lotz, our Chief Financial Officer and Vice President of Finance, Amy Broidrick, our President and Chief Strategy Officer, Dr. Wajdi Abdul-Ahad, our Chief Scientific Officer and Vice President of Research & Development, Shishir Sinha, our Chief Operating Officer, and Dr. Tariq Arshad, MD, our Chief Medical Officer, as well as other members of scientific, operations and corporate development teams.

Our ability to compete depends upon our ability to attract, retain and motivate highly skilled and experienced personnel with scientific, clinical, regulatory, manufacturing and management skills and experience. We may not be able to attract or retain qualified personnel in the future. Many of the companies against which we compete have greater financial and other resources, different risk profiles and a longer history in the industry than we do. Our competitors may provide higher compensation, more diverse opportunities and/or better opportunities for career advancement. Any or all of these competing factors may limit our ability to continue to attract and retain high quality personnel, which could negatively affect our ability to successfully competedevelop and commercialize our product candidates and to grow our business and operations as currently contemplated.

We expect that we will dependneed to expand our development and regulatory capabilities as our product candidates progress through the clinic, or additional product candidates are developed; if any products are approved, we would have to implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing growth, which could disrupt our operations.

As of March 25, 2022, we had 46 employees, 39 of whom were full-time employees. Although we outsource many drug development functions and may choose to continue to do so in the future, we expect to experience growth in the number of employees and the scope of our operations, particularly in the areas of clinical development, clinical operations, manufacturing, and regulatory affairs as we progress QN-302, QN-247, RAS-F and STARS through the clinic and develop additional product candidates. In addition, in anticipation of the expiration of our distribution agreement with Sekisui on amongMarch 31, 2022, we are currently recruiting direct sales personnel. If any of our therapeutics product candidates receives regulatory approval, we would potentially need to expand into sales, marketing and distribution. To manage anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. We may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert management and business development resources.

We currently rely, and for the foreseeable future will continue to rely, in substantial part, on certain third-party contract research organizations, sponsored academic researchers, advisors and consultants to provide certain services, including assuming substantial responsibilities for the conduct of our clinical trials and the manufacture of QN-302, QN-247, RAS-F, STARS or any of our other things:current or future product candidates. We cannot assure that the services of such third-party contract research organizations, sponsored academic researchers, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval of QN-302, QN-247, RAS-F, STARS or any of our other current or future product candidates or otherwise advance our business. We cannot assure that we will be able to properly manage our existing vendors or consultants or find other competent outside vendors and consultants on economically reasonable terms, or at all.

We may engage in strategic transactions that could impact liquidity, increase expenses and present significant distractions to management.

From time to time, we may consider strategic transactions, such as acquisitions of companies, businesses or assets and out-licensing or in-licensing of products, drug candidates or technologies. Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, in-licensing, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction may require us to incur non-recurring or other charges, may increase near term or long-term expenditures and may pose significant integration challenges or disrupt management or business, which could adversely affect our operations and financial results. For example, these transactions may entail numerous operational and financial risks, including:

If our competitors market products that are more effective, safer or less expensive, or that reach the market sooner than any of our product candidate approved for sale, we may not achieve commercial success. In addition, the biopharmaceutical industry is characterized by rapid technological change. Because our research approach integrates many technologies, it may be difficult for us to stay abreast of the rapid changes in each technology. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.

If the merger is not completed and we are able to raise the additional funds necessary to pursue the continued development of RP-G28 (either as a prescription drug, OTC product or dietary supplement), we will need to expand our operations and increase the size of its company, and we may experience difficulties in managing growth.

If the merger is not completed and we are able to raise the additional funds necessary to pursue the continued development of RP-G28 (either as a prescription drug, OTC product or dietary supplement), we will need to increase its product development, scientific and administrative headcount to manage the development and commercialization of our product candidates. If we are unable to successfully manage this growth and increased complexity of operations, our business may be adversely affected.

We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants.

If we are not able to attract and retain necessary personnel and consultants to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and its ability to implement our business strategy. There is also a risk that other obligations could distract our officers and employees from its business, which could have negative impact on our ability to effectuate its business plans.

Competition to hire and retain consultants from a limited pool is intense. Further, because these advisors are not our employees, they may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us, and typically they will not enter into non-compete agreements with us. If a conflict of interest arises between their work for us and their work for another entity, we may lose their services. In addition, our advisors may have arrangements with other companies to assist those companies in developing products or technologies that may compete with ours.

If the merger is not completed and we decide to pursue the development of RP-G28 as either a prescription drug, OTC product or dietary supplement, we may face product liability exposure, and if successful claims are brought against us, we may incur substantial liability for a product candidate and may have to limit its commercialization.

The use of our product candidates in clinical trials and the sale of any products for which we may obtain marketing approval expose us to the risk of product liability claims. Product liability claims may be brought against us or our potential future collaborators by participants enrolled in its clinical trials, patients, health care providers or others using, administering or selling its products. If we cannot successfully defend ourselves against any such claims, we would incur substantial liabilities. Regardless of merit or eventual outcome, product liability claims may result in:

Our reported financial condition and results of operations may fluctuate significantly from quarter to quarter and year to year, which makes them difficult to predict or understand.

We expect our financial condition and results of operations to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. In particular, the warrant liabilities from our issued “exploding warrants” (and change in the fair value of warrant liabilities, over a reporting period) results in distortions and sharp variability in reported periodic results. Accordingly, you should not blindly rely upon the results of any quarterly or annual periods as indications of future operating performance. Other investors may, however, attach undue significance to reported results which are heavily influenced by such distortions and variability, which in turn could cause our stock price to rise or fall despite there being no corresponding change in our prospects or position as a practical matter.

We have a substantial amount of derivative securities outstanding.

As of December 31, 2021 there were 4,841,856 stock options outstanding under our equity incentive plans for service providers. In addition, as of December 31, 2021, we had 9,821,399 outstanding warrants, of which 5,469,994 were held by Alpha Capital Anstalt. Outstanding stock options, warrants and preferred stock can potentially result in dilution to the holders of existing outstanding common stock.

We rely significantly upon information technology, and any failure, inadequacy, interruption or security lapse of that technology, including any cyber security incidents, could harm our ability to operate our business effectively and result in a material disruption of our product development programs.

We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company. Outside parties may attempt to penetrate our systems or those of our partners or fraudulently induce our employees or employees of our partners to disclose sensitive information to gain access to our data. Like other companies, we may experience threats to our data and systems, including malicious codes and computer viruses, cyber-attacks or other system failures. Any system failure, accident or security breach that causes interruptions in our operations, for us or our partners, could result in a material disruption of our product development programs and business operations, in addition to possibly requiring substantial expenditures of resources to remedy. For example, the loss of clinical trial data from completed clinical trials could result in delays in our regulatory approval efforts and we could incur significant increases in costs to recover or reproduce the data. The risk of cyber incidents could also be increased by cyberwarfare in connection with the ongoing conflict between Russia and Ukraine, including potential proliferation of malware from the conflict into systems unrelated to the conflict. To the extent that any disruption or security breach results in a loss of, or damage to, our data or applications, or inappropriate public disclosure of confidential or proprietary information, we may incur liabilities and the further development of our product candidates may be delayed.

The number and complexity of these security threats continue to increase over time. If a breach of our security systems or that of our partners occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose business and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely.