As filed with the Securities and Exchange Commission on June 2,29, 2023

Registration No. 333-267366

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 34 to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Vitro Biopharma, Inc.

(Exact Name of Registrant as Specified in Its Charter)

3200 Cherry Creek Drive South, Suite 720
Denver, Colorado 80209
(855) 848-7627

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Christopher Furman

Chief Executive Officer

3200 Cherry Creek Drive South, Suite 720

Denver, Colorado 80209

(855) 848-7627

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary prospectus is not complete and may be changed. WeThese securities may not sell these securitiesbe sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we areit is not soliciting offersan offer to buy these securities in any jurisdictionstate where the offer or sale is not permitted.

1,818,181Shares

Common Stock

Vitro Biopharma, Inc.

This is a firm commitment public offering of shares of common stock of Vitro Biopharma, Inc. We anticipate that the initial public offering price of our shares will be between $$5.00 and $                .$6.00.

We intend to list our common stock on NYSE American, or the “NYSE American”, under the symbol “VTRO.” We believe that upon completion of this offering contemplated by this prospectus, we will meet the standards for listing on the NYSE American. However, we cannot guarantee that we will be successful in listing our common stock on the NYSE American. The completion of this offering is contingent upon the successful listing of our common stock on the NYSE American.

Prior to the closingOn June 23, 2023, our Board of this offering, we intend to implementDirectors (the “Board”) approved a reverse split of our issued and outstanding common stock at a ratio of between 1 share for 2026 shares and 1 share for 30 shares, the exact ratioa reduction of which will be decided within that range in the discretion of our Board of Directors (the “Board”) and to reduce the number of shares of our authorized common stock by the same ratio.ratio (the “Reverse Stock Split”). Other than our historical financial statements and notes thereto, and except where otherwise noted, all references to our common stock presented in this prospectus have been adjusted to reflect a reverse splitthe Reverse Stock Split of 1 share for 26 shares, which we anticipate will become effective on or about June 30, 2023, prior to the anticipated ratio within that range (the “Reverse Stock Split”).closing of this offering.

Investing in our common stock involves a high degree of risk. See the section titled “Risk Factors” beginning on page 14.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We have granted a 45-day option to the representative of the underwriters to purchase up to           additional shares of common stock solely to cover over-allotments, if any.

The underwriters expect to deliver the shares to purchasers on or about                , 2023.

ThinkEquity

The date of this prospectus is                , 2023

TABLE OF CONTENTS

In this prospectus, “Vitro,” the “Company,” “we,” “us,” and “our” refer to Vitro Biopharma, Inc. and, unless otherwise indicated, its subsidiaries. We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of, any other information that others may provide you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock. Our business, financial condition, results of operations, and future growth prospects may have changed since that date.

“Vitro Biopharma,” “AlloRx,” “MSC-Gro,” the Vitro logos, and other trade names, trademarks, or service marks of Vitro appearing in this prospectus are the property of Vitro. Other trade names, trademarks, or service marks appearing in this prospectus are the property of their respective holders. Solely for convenience, trade names, trademarks, and service marks referred to in this prospectus appear without the ®, ™ and SM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trade names, trademarks, and service marks.

Until             , 2023 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Reverse Stock Split

Prior toOn June 23, 2023, the closingBoard approved a reverse split of this offering, we intend to implement the Reverse Stock Split to split our issued and outstanding common stock at a ratio of between 1 share for 2026 shares and 1 share for 30 shares, the exact ratioa reduction of which will be decided within that range in the discretion of our Board and to reduce the number of shares of our authorized common stock by the same ratio. Other than our historical financial statements and notes thereto, and except where otherwise noted, all references to our common stock presented in this prospectus have been adjusted to reflect the Reverse Stock Split of 1 share for 26 shares, which we anticipate will become effective on or about June 30, 2023 (the “Reverse Stock Split Effective Date”), prior to the anticipated ratio within that range.closing of this offering. No fractional shares will be issued in connection with the Reverse Stock Split. Instead, (i) holders of fewer than 26 shares of common stock prior to the Reverse Stock Split Effective Date (who would otherwise be entitled to receive fractional shares) will receive cash in lieu of such fractional share interests, based upon $6.00 per whole share and (ii) holders of 26 or more shares of common stock prior to the Reverse Stock Split Effective Date (who would otherwise be entitled to receive fractional shares) will receive one additional whole share in lieu of any such fractional share interests. Adjustments to reflect the Reverse Stock Split may not take into account rounding resulting from fractional shares, which is not expected to result in material differences.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” and our audited consolidated financial statements and unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus before making an investment decision.

Overview

We are an innovative biotechnology company targeting autoimmune diseases and inflammatory disorders. Through our proprietary platform, AlloRx Stem Cell therapy, we are developing novel cellular therapeutic candidates that are derived from culture-expanded mesenchymal stem cells (“MSCs”) sourced from the Wharton’s jelly of umbilical cords (“UCs”) donated by healthy volunteers following childbirth. In the United States, we are authorized to conduct two clinical trials under two U.S. Food and Drug Administration (“FDA”) Investigational New Drug (“IND”) applications to assess the safety and efficacy of AlloRx Stem Cell therapy in Pitt Hopkins syndrome (“PTHS”) and post-acute sequelae to SARs-CoV-2 (“PASC”), or long COVID (“Long COVID”), and expect to commence those trials in mid to late 2023 pending completion of this offering. As of March 15,May 31, 2023, over 348381 subjects have received treatment with our AlloRx Stem Cells, primarily in foreign clinical studies conducted by third parties. Our lead clinical program is expected to focus on PTHS, a rare neurogenetic disorder primarily affecting children that is characterized by global developmental delays including autistic features, language delays, intellectual disability, neuro-irritability and significant behavioral concerns. We generate revenue from our other technologies through a number of other activities, including providing research services and through the sale of our stem cell products as well as cosmeceuticals through InfiniVive MD, LLC (“InfiniVive MD”), our wholly-owned subsidiary, which helps to alleviate our capital expenses.

Our Science

The starting raw material source for our AlloRx Stem Cells is the Wharton’s jelly of donated UCs. Based on extensive pre-clinical studies and research conducted by us and third-parties, as further described herein, we believe UC-derived MSCs like AlloRx Stem Cells may have advantages compared to MSCs derived from other starting raw material sources, such as MSCs derived from bone-marrow (“BM-MSCs”), adipose/fat (“AD-MSCs”), and placenta (“P-MSCs”). In our extensive pre-clinical, in vitro studies described below, we analyzed various biological characteristics of AlloRx Stem Cells (UC-derived MSCs) in head-to-head comparisons to AD-MSCs, BM-MSCs, and P-MSCs, including:

Growth rate. Because MSCs must be expanded in vitro prior to use in a clinical setting, we believe that the growth and expansion characteristics of MSCs in vitro are an important consideration. In a pre-clinical, in vitro study, we analyzed MSCs’ growth in cell cultures in head-to-head comparisons and observed that AlloRx Stem Cells (UC-derived MSCs) doubled in size in vitro after only 25 hours, as compared to longer doubling times of 35 hours, 40 hours and 53 hours for AD-MSCs, P-MSCs and BM-MSCs, respectively, indicating an increased growth rate of AlloRx Stem Cells as compared to these other MSCs.

Immunomodulatory potency by quantification of γ-IFN-induced IDO activity: In a pre-clinical, in vitro study, we analyzed the immunomodulatory potency of AlloRx Stem Cells (UC-derived MSCs) in a head-to-head comparison to AD-MSCs, BM-MSCs, and P-MSCs by measuring the activity of γ-IFN-induced indoleamine 2,3-dioxygenase (“IDO”), as quantified by the conversion of tryptophan to kynurenine. IDO, an immunomodulatory substance secreted by MSCs, initiates the conversion of tryptophan to kynurenine, and kynurenine expression plays a critical role in regulating the body’s immune response. As illustrated in the chart below, we observed a significant difference in γ-IFN-induced IDO activity in AlloRx Stem Cells (UC-derived MSCs) as compared to AD-MSCs, BM-MSCs, and P-MSCs. Maximal IDO activity at 10 ng/ml γ-IFN was approximately two-fold greater in AlloRx Stem Cells versus the MSCs derived from other sources. We believe these results indicate UC-derived MSCs like AlloRx Stem Cells may have greater immunomodulatory cellular potency by quantification of γ-IFN-induced IDO activity, as compared to AD-MSCs, P-MSCs, and BM-MSCs.

Immunomodulatory potency of AlloRx Stem Cells (UC-derived MSCs), AD-MSCs, P-MSCs and BM-MSCs by the γ-IFN induced IDO activity assay is shown above.

Cellular ATP expression (an energy molecule): In a pre-clinical, in vitro study, we performed a quantitative assessment of mitochondrial function by measuring ATP expression of AlloRx Stem Cells (UC-derived MSCs) in a head-to-head comparison to AD-MSCs, BM-MSCs, and P-MSCs. As illustrated in the chart below, AlloRx Stem Cells (UC-derived MSCs) showed a significant difference in cellular ATP-content. ATP expression is a measure of cellular energy, as ATP is the primary molecule that stores and transfers energy in a cell and powers metabolic processes within the body. Due to the fact that mitochondria produce most ATP within the body, we believe these results indicate the potential for increased mitochondrial functionality of UC-derived MSCs like AlloRx Stem Cells as compared to AD-MSCs, P-MSCs, and BM-MSCs.

In the chart above, cellular ATP is shown as a function of cells per well. Cellular potency is measured by the slope of this relation.

Cell migration in response to Substance P: In a pre-clinical, in vitro study, we analyzed the migration of AlloRx Stem Cells in a head-to-head comparison to AD-MSCs, BM-MSCs, and P-MSCs, in response to exposure to Substance P. Substance P is a peptide that presents itself when an injury occurs, thus simulating an environment of injury. As illustrated in the chart below, AlloRx Stem Cells (UC-derived MSCs) showed a significant difference in cell migration in response to Substance P, as AlloRx Stem Cells (UC-derived MSCs) showed greatest closure at 50 pg/mL Substance P (~40% closure), while AD-MSC, P-MSC, and BM-MSC had a closure between 5-15% all within a 72-hour period. Due to the fact that Substance P is a peptide that presents itself in response to an injury, we believe that UC-derived MSCs’ ability to migrate to Substance P reaction at a faster rate may be indicative of an ability to more quickly migrate to the source of injury within the body as compared to AD-MSCs, P-MSCs, and BM-MSCs.

Comparison of migration into cell-free regions. Migration was measured by percent closure of the occluded plate region and is plotted as a function of time following exposure to 50 pg/ml Substance P.

In addition, UC-derived MSCs are also the youngest stem cells and are therefore generally free from issues related to age (such as mutations), and prior medical conditions that come with the use of BM-MSCs and AD-MSCs. In addition, unlike BM-MSCs or AD-MSCs, UC-derived MSCs involve a non-invasive collection process, are sourced and collected after childbirth, and may provide significant economies of scale in the manufacturing process, as further described below. We believe these factors taken together may provide us with a competitive and financial advantage compared to other cell therapies currently in development that are derived from BM-MSCs, AD-MSCs, or P-MSCs.

Our Lead Product Candidate and Pipeline

Our pipeline includes five core development programs:

Phase 1/2a clinical trial of Pitt Hopkins syndrome. According to the Pitt Hopkins Research Foundation, PTHS impacts between 1 in 34,000 and 1 in 41,000 individuals according to some estimates. Although the exact incidence of PTHS is unknown, we believe it would meet the prevalence requirements for an Orphan Drug Designation (“ODD”) from the FDA if the other designation requirements are met, although any determination as to whether PTHS qualifies as a “rare disease or condition” will be made by FDA.

Phase 1/2a clinical trial of PASC/Long COVID. Long COVID is a newly recognized condition following the onset of the COVID-19 pandemic, which is characterized by persistent and prolonged symptoms or long-term complications four weeks or more after first being infected with the SARs-CoV-2 virus. Long COVID results from COVID-19 infection and produces prolonged symptoms of fatigue, cognitive impairment and various additional symptoms that can be debilitating. According to the Centers for Disease Control and Prevention (“CDC”), a recent study found that approximately two-thirds of respondents who had tested positive for COVID-19 experienced long-term symptoms often associated with SARs-CoV-2 infection. Given the emerging nature of COVID-19 and new virus variants resulting from mutations, we believe the incidence of Long COVID will continue to increase.

We intend to initiate our FDA cleared clinical trials for PTHS and Long COVID in mid to late 2023 pending completion of this offering and institutional review board (“IRB”) approval of clinical trial agreements or other agreements with contemplated collaborators and clinical trial sites. In addition, we are also currently focused on our pre-clinical development programs for multiple sclerosis (“MS”), Lupus/systemic lupus erythematosus (“Lupus (SLE)”) and Alzheimer’s disease. We plan to submit two additional IND applications to FDA to initiate Phase 1/2a clinical trials to assess the safety and efficacy of AlloRx Stem Cell therapy in adults with Lupus (SLE) sometime in 2023 or early 2024 and in adults with MS in late 2023 or 2024, which will be subject to FDA clearance prior to the initiation of any clinical trials for these indications. We are also advancing and actively pursuing preclinical research and development activities of AlloRx Stem Cell therapy for the potential treatment of Alzheimer’s disease with the goal of progressing towards a potential IND filing for this indication in the future.

Our development programs are illustrated in the pipeline chart below:

MSC-Gro™

Our “clinical grade” formulation of MSC-Gro™ (“MSC-Gro”), our proprietary specialty culture media, is sold by us to a single customer in Australia that utilizes MSC-Gro to manufacture its stem cell therapy product candidate currently being investigated for the potential treatment of osteoarthritis; this customer is planning to commence a pivotal Phase 3 clinical trial in Australia in late 2023 and, upon a successful outcome, expects that its stem cell therapy product candidate may be eligible to obtain regulatory approval for commercialization in Australia in 2026. If this customer’s stem cell therapy product candidate is ultimately approved for commercialization in Australia, we expect to benefit from the increased sales of MSC-Gro to this particular customer as it scales up manufacturing to meet commercial demand.

Our Market

We are currently focused on the treatment of autoimmune diseases and inflammatory disorders, which represent a significant burden to society and the healthcare systems. There are over 80 recognized autoimmune disorders, which are caused by an acute or chronic imbalance in the immune system where the immune system recognizes proteins of the body as foreign and elicits a specific immune response that leads to the immune system improperly attacking certain bodily tissues, cells or organs (for example, in MS, the immune system recognizes myelin basic protein as foreign). Some inflammatory and autoimmune conditions are caused by genetic or environmental factors, or a combination of both, while others may be caused from complications associated with other diseases or trauma or the treatment of other diseases or trauma. In general, inflammatory and autoimmune disorders share certain biological characteristics, in that the immune system imbalance results from the improper activation of certain immune cells that can lead to extensive tissue damage and destruction and cause pain and loss of function. Inflammatory and autoimmune disorders represent major areas of unmet clinical needs, as well as substantial commercial opportunities.

Our Business Model

While our primary business strategy is to become a leading regenerative medicine and cellular therapy company through the development and commercialization of AlloRx Stem Cell therapy, we currently generate revenue from our proprietary technologies through a variety of sources further described below:

Our Strategy

Our primary business strategy is to become a leading regenerative medicine and cellular therapy company through the development and commercialization of novel cell therapy products for unmet medical needs, with an emphasis on autoimmune disorders and inflammatory disease indications. Key elements of our business strategy are as follows:

Manufacturing

We manufacture under strict environmental and laboratory controls in accordance with cGMP. The manufacturing facility that we lease in Golden, Colorado is cGMP compliant, with a QMS that is globally recognized as ISO 9001:2015 and ISO 13485:2016 certified. We manufacture AlloRx Stem Cells and certain other of our products and technologies, including CAFs, at this manufacturing facility. With 30 years of research and by leveraging the potential biological advantages of UC-derived MSCs, we believe we may have a significant cost and competitive advantage over our competitors, within our scalable and standardized manufacturing process.

Our Team

We are led by a team of executives with extensive experience in corporate finance and biologics drug discovery and development. Christopher Furman, our Chief Executive Officer and a director, is a finance industry leader with more than 25 years’ experience in private and public capital markets. Dr. Jim Musick, the co-founder of Vitro, is our Chief Science Officer, a director and previously served as Chief Executive Officer from 1986 to 2020. Nathan Haas, our Chief Financial Officer, previously served as Chief Financial Officer of InfiniVive MD as well as Fitore, Inc. (“Fitore”), a company he co-founded, until their acquisition by us in August 2021. Dr. Caroline Mosessian, our Chief Regulatory Officer and a director, has an extensive background in regulatory science including a PhD and Masters in Regulatory Sciences & Quality Systems in addition to Health Administration degrees, and has led numerous clinical studies of medical devices and pharmaceuticals through regulatory agency approval. We have a talented core of cell processing and manufacturing experts who oversee and manage our in-house manufacturing of AlloRx Stem Cells, AlloEx Exosomes, our research products and our other experimental product candidates.

Financial Overview

We have experienced significant losses since inception and, as of January 31,April 30, 2023, had an accumulated deficit of approximately $23.9$25.3 million. We expect to incur additional losses in the future and expect cumulative losses to increase. Since 2017, we have received over $8.0 million in new capital. In fiscal year 2022 and the threesix months ended January 31,April 30, 2023, we generated approximately $3.3 million and $0.3$0.7 million, respectively, in non-grant revenue, primarily from our sales of research products, our collaboration with European Wellness, and sales of AlloRx Stem Cells to foreign third-party clinics and medical centers.

Summary of Risk Factors

Our business and operations are subject to a number of risks, which you should be aware of prior to making a decision to invest in our common stock. These risks are discussed more fully in the “Risk Factors” section of this prospectus immediately following this prospectus summary. Below is a summary of these risks.

Risks Related To Our Financial Condition

Risks Related To Our Business

Risks Related To Intellectual Property

Risks Related To Regulatory Approval And Other Government Regulations

Additional Risks Related To Our Supply Arrangements With Third-Party Foreign Medical Centers

Risks Related To Ownership Of Our Common Stock

Our Company

We were incorporated under the laws of the State of Nevada on March 31, 1986 under the name Imperial Management, Inc. On December 17, 1986, we merged with Labtek, Inc., a Colorado corporation, and the name of the company was changed to Labtek, Inc. The name of the company was thereafter changed to Vitro Diagnostics, Inc on February 6, 1987. From November 1990 to July 31, 2000, we were engaged in the development, manufacture and distribution of purified human antigens and the development of diagnostic products and related technologies. In August 2000, we sold the assets used in that business, following which we focused on developing therapeutic products, our stem cell technology, our patent portfolio and proprietary technology and cell lines for applications in autoimmune diseases and inflammatory disorders and stem cell research. On February 3, 2021, our name was changed to Vitro Biopharma, Inc. and in August 2021, we completed the acquisitions of InfiniVive MD and Fitore. On July 6, 2022, Christopher Furman joined our Board and became our Chief Executive Officer. Our principal executive offices are located at 3200 Cherry Creek Drive South, Suite 720, Denver, CO 80209, and our telephone number is (855) 848-7627.

Our website address is www.vitrobiopharma.com. The information on, or that can be accessed through, our website is not part of this prospectus and is not incorporated by reference herein. We have included our website address as an inactive textual reference only.

Our common stock was previously registered under Section 12 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, and until 2016, we filed reports with the Securities and Exchange Commission, which we refer to as the SEC, under Section 13(a) of the Exchange Act as required by reason of our Section 12 registration. In October 2020, our registration under Section 12 was revoked by the SEC for our failure to file the reports required by Section 13(a). Commencing after our fiscal year ended October 31, 2021, we again became required to register our common stock under Section 12(g) of the Exchange Act because the value of our total assets and number of stockholders exceeded applicable limits, and to file with the SEC thereafter reports and other documents required under Section 13(a) of the Exchange Act by virtue of that Section 12(g) registration. On September 12, 2022, we filed a registration statement on Form 10 with the SEC to again register our common stock under the Exchange Act in accordance with the requirements of Section 12(g), which such registration statement, as amended, became effective on November 11, 2022. As a result, we are required to file reports with the SEC under Section 13(a) of the Exchange Act, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. If our securities are accepted for listing on the NYSE American in connection with this public offering or otherwise, we will file a registration statement to register our common stock under Section 12(b) of the Exchange Act.

Implications of Being a Smaller Reporting Company

We are a smaller reporting company as defined in the Exchange Act. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our annual reports on Form 10-K and have reduced disclosure obligations regarding executive compensation, and if we are a smaller reporting company with less than $100 million in annual revenue, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

THE OFFERING

Unless we specifically state otherwise or the context otherwise requires, the number of shares of our common stock to be outstanding after this offering is based on 4,429,237 shares of common stock outstanding as of May 31,June 15, 2023, and excludes:

Unless we specifically state otherwise or the context otherwise requires, this prospectus reflects and assumes the following:

Summary Consolidated Financial Data

The following tables summarize our consolidated financial data for the periods and as of the dates indicated. We have derived the summary financial data for the years ended October 31, 2022 and 2021 from our audited consolidated financial statements and related notes included elsewhere in this prospectus. The summary data for the threesix months ended January 31,April 30, 2023 and 2022 is derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. Our historical results are not necessarily indicative of results that may be expected in the future. You should read the following summary consolidated financial data together with our audited and unaudited consolidated financial statements, and the related notes included elsewhere in this prospectus and the information in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Except as indicated below, the following tables have not been adjusted to reflect the Reverse Stock Split.

RISK FACTORS

Investing in shares of our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all of the other information contained in this prospectus, including our financial statements and related notes included elsewhere in this prospectus, before making an investment decision. The risks described below are not the only ones facing us. The occurrence of any of the following risks, or of additional risks and uncertainties not presently known to us or that we currently believe to be immaterial, could materially and adversely affect our business, financial condition, reputation, or results of operations. In such case, the trading price of shares of our common stock could decline, and you may lose all or part of your investment.

Risks Related To Our Financial Condition

As described in the report of our auditors for the years ended October 31, 2022 and 2021 and the notes to our consolidated financial statements, there is substantial doubt about our ability to continue as a going concern, and if we are unable to continue, you may lose your entire investment.

The uncertainty about our ability to continue in operation is based on our continuing losses from operation, limited revenue and limited working capital, among other things which existed as of year-end October 31, 2022 and January 31,April 30, 2023. As of January 31,April 30, 2023, we had a cash balance of $0.2$0.3 million, a working capital deficit of $38,000$208,000 and an accumulated deficit of $23.9$25.3 million. Included in the accumulated deficit are losses of $6.9 million for the year ended October 31, 2022 and $1.2$2.6 million for the threesix months ended January 31,April 30, 2023. Given all these facts, we are dependent on obtaining funding from operations and the sale of debt or equity to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Our ability to continue as a going concern depends on the success of this offering and receipt of additional funds through debt or equity financing and our operations. In the event we are unable to obtain such funding, we may have to delay, reduce or eliminate certain of our planned operations, including some of our research and development and/or clinical trials, reduce overall overhead expense, or divest assets. This in turn may have an adverse effect on our ability to realize the value of our assets. If we are unable to continue as a going concern, you may lose all or part of your investment.

We have limited revenue and cash flow and are dependent on improving operations, along with receipt of additional working capital, to fund continued development and implementation of our business plan, and our failure to obtain this capital may cause the partial or total loss of your investment.

As of January 31,April 30, 2023, our ongoing cash flow is inadequate to implement our business plan. In the recent past, we have relied on equity and debt financing to supplement operations to provide necessary cash flow and will depend on the receipt of funds through additional debt or equity financings, including the proceeds of this offering for the foreseeable future. Since significant amounts of capital are required for companies to pursue clinical trials in pursuit of FDA approval, we are dependent on improving our cash flow and revenue, as well as receipt of additional working capital, to fund continued development and implementation of our business plan. In addition to funds required for research and the development of our product candidates, we will require capital to pay our administrative expenses, including salaries and rent. The proceeds of this offering have been budgeted for a limited period of time and we expect to raise additional financing in the future to meet future needs. Any future equity financing may be at prices or on terms that are disadvantageous to existing stockholders. We may not be able to obtain additional capital at all and may be forced to curtail or cease our operations. We will continue to rely on equity or debt financing and limited revenue to finance operations until such time, if ever, that we generate sufficient cash flow. The inability to obtain necessary financing may adversely impact our ability to develop our product candidates and to expand our business operations.

We have incurred substantial losses in recent years and may never be profitable.

During the fiscal years ended October 31, 2022 and 2021, we incurred losses of approximately $6.9 million and $4.5 million, respectively. During the threesix months ended January 31,April 30, 2023, we incurred losses of approximately $1.2$2.6 million. In the future, our ability to become profitable will depend on our ability to commercialize one or more of our product candidates, expand sales of our subsidiaries and generate revenue sufficient to cover our costs and expenses. As we advance the preclinical and clinical development of our programs, we expect to continue to incur significant expenses and operating losses, for which we do not have sufficient offsetting revenue. We expect that our sales, research and development and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future programs and product candidates, contracting with contract research organizations (“CROs”) to support preclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations. There is no assurance that we will ever be profitable.

The acquisitions of our two subsidiaries were only recently completed and we may not successfully grow those businesses to be profitable and contribute to our cash flow. We expect that sales of Fitore products in the future will be limited.

The acquisition of both InfiniVive MD and Fitore were completed effective August 1, 2021. Accordingly, we have had only a limited time to become familiar with the businesses and determine whether and how we can grow the businesses. Neither entity is profitable on a stand-alone basis and each contributed to our net loss in 2022. In June 2022, we terminated the chief executive officer and all other employees of Fitore; consequently,Fitore and are currently selling Fitore products solely from remaining inventory and with minimal marketing efforts. We do not anticipate manufacturing any additional Fitore products in the foreseeable future or at all. Consequently, we expect that sales of Fitore products in the future will be limited. Our ability to grow the business of InfiniVive MD is dependent on our ability to improve marketing and sales to the point that revenue will be sufficient to offset operating expenses of that entity. If we are unable to grow this business, our operations will consume the proceeds of this offering sooner than we expect, and our stock price may suffer.

A significant portion of our revenue is concentrated on a few large customers and we have suspended work on an agreement with one of those customers pending discussions regarding amounts believed to be owed to us for work already completed. If we lose one or more of them, our results of operations may be adversely impacted.

Our revenue is currently concentrated in a small number of our domestic customers and European Wellness/BioPep. The sales to three domestic customers accounted for approximately 17%, 15% and 14% of our sales in fiscal year 2022. The consulting revenue from European Wellness/BioPep has accounted for approximately 18% of our sales in fiscal year 2022. With respect to European Wellness/BioPep, we have recently suspended delivering work product to it under our agreement while we engage in discussions regarding amounts believed to be owed to us under that agreement for work already completed. If those discussions are unsuccessful, we do not expect our agreement with them, which is scheduled to terminate by its current terms on July 31, 2023, may be less likely to be renewed or extended andbeyond its scheduled termination date. In addition, if those discussions are unsuccessful, we may not be able to collect all of the amounts believed to be owed to us through the date of termination or the other amounts originally expected to be received by us under the agreement for completion of all services thereunder as originally contemplated. The loss of all or a part of our revenue from one or more of these customers could have a material adverse effect on our revenue, cash flow, operating results and financial condition until an alternative partnership or collaboration might be developed, and there can be no assurance that an alternative partnership or collaboration will be available to us, on terms acceptable to us or at all, in such a circumstance.

Servicing our debt may require a significant amount of cash. We may not have sufficient cash flow from our business to pay our indebtedness.

As of January 31,April 30, 2023, we have outstanding approximately $2 million in indebtedness to our Chief Science Officer on account of past-due compensation and accrued interest, and approximately $500,000 to a former officer on account of the acquisition of Fitore. These obligations mature in 2024 and 2025, respectively. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance and receipt of additional capital, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. Repayment of these obligations, even if we are able to obtain the requisite capital, would decrease the funds available to further our business plan. In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.

Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.

We recognize deferred tax assets when the tax benefit is considered to be more likely than not of being realized; otherwise, a valuation allowance is applied against deferred tax assets. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize the deferred tax assets could be impacted. Additionally, future changes in tax laws could limit our ability to obtain the future tax benefits represented by our deferred tax assets. As of January 31,April 30, 2023, our net deferred tax assets were $3.7 million. We have recorded a full valuation allowance against this asset.

The use of our product candidates and our other products, including AlloRx Stem Cells, InfiniVive MD products, MSC-Gro, CAFs and our other products, or any future products in individuals may expose us to product liability claims, and we may not be able to obtain adequate product liability insurance.

Because of the nature of our products, including our product candidates like AlloRx Stem Cell therapy as well as our AlloRx Stem Cells, InfiniVive MD products, MSC-Gro, CAFs and our other products, we face an inherent risk of product liability claims. None of our product candidates or other products have been widely used over an extended period of time, and our safety data is therefore limited. We derive the raw materials for our product candidates from human donor sources, the manufacturing process is complex, and the handling requirements are specific, all of which increase the likelihood of quality failures and subsequent product liability claims. In addition, we supply AlloRx Stem Cells to certain foreign clinics pursuant to purchase orders issued by our customers, which are likely to be favorable to those customers. We generally do not enter into long-term purchase agreements with our customers that obligate them to purchase our products or protect us from product liability claims made by the patients such customers treat using AlloRx Stem Cells. We will need to increase our insurance coverage if and when we receive approval for and begin commercializing our product candidates. We may not be able to obtain or maintain product liability insurance on acceptable terms with adequate coverage or at all. If we are unable to obtain insurance, or if claims against us substantially exceed our coverage, then our business could be adversely impacted. Whether or not we are ultimately successful in any product liability litigation, such litigation either before or after product approval and marketing could consume substantial amounts of our financial and managerial resources and could result in, among other things:

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

In order to successfully implement our plans and strategies, we will need to grow our organization, and we may experience difficulties in managing this growth.

As of March 31,June 15, 2023, we had 10 full-time employees, 21 part time employees, 2 full-time consultants, and 6 part-time consultants. Of these full-time employees and consultants, 8 are engaged in research and development activities. In order to successfully implement our development and commercialization plans and strategies, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel. Future growth would impose significant added responsibilities on members of management, including:

Our future financial performance and our ability to successfully develop and, if approved, commercialize, any current or future product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services, including key aspects of clinical development and manufacturing. We cannot assure you that the services of independent organizations, 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 third party service providers is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain marketing approval of our current and future product candidates or otherwise advance our business. We cannot assure you that we will be able to manage our existing third-party service providers or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and/or engaging additional third-party service providers, we may not be able to successfully implement the tasks necessary to further develop and commercialize our current and future product candidates and, accordingly, may not achieve our research, development and commercialization goals.

We have in the past and may in the future enter into transactions that give rise to conflicts of interest with our affiliates and related parties and such transactions may harm our business and financial condition if they are not structured in our best interest.

Every transaction that the Company enters into with affiliates is subject to an inherent conflict of interest. As further described below (see “Certain Relationships and Related-Party Transactions”), effective August 2021, we acquired InfiniVive MD, a company that at the time was solely owned by Dr. Zamora, and Fitore, a company that at the time was partially owned by Dr. Zamora. At the time of these transactions, Dr. Zamora was serving as our Chief Executive Officer and was member of our Board of Directors; he was also a stockholder of our company. Our Board of Directors was aware of the interests of Dr. Zamora in each transaction and insisted that he recuse himself from any Board deliberations or votes with regard to each of these transactions in order to address these inherent conflicts of interest between our interests and those of Dr. Zamora. As a result of these and other efforts, our Board of Directors believes that these transactions were negotiated at arms’ length and these transactions were consummated on terms as favorable to us as they could have been if obtained from non-affiliated persons. In addition, each of these transactions was approved by all of the disinterested members of our Board of Directors. While an effort has been made, and will continue to be made, to engage in transactions and enter into agreements with affiliated persons and other related parties on terms as favorable to us as they could have been if obtained from non-affiliated persons, there will always be an inherent conflict of interest between our interests and those of our affiliates and related parties if they have any interest adverse to those of our company. The Company may be adversely impacted if any related party agreement or transaction has been made, or is made in the future, on unfavorable terms.

Risks Related to our Business

We are heavily dependent on the successful development and commercialization of AlloRx Stem Cell therapy, and if we encounter delays or difficulties in the development of this product candidate, we may not generate sufficient revenue to continue our business operations and our business could be harmed.

AlloRx Stem Cell therapy is currently in the early stage of development and will require substantial time, resources, research and development, and regulatory approval prior to potential commercialization in the United States. To generate sales revenue from our product candidates, we must conduct extensive preclinical studies and clinical trials to demonstrate that our product candidates are safe and effective, and we must obtain required regulatory approvals. We will need to devote significant additional research and development, financial resources, and personnel to develop commercially viable products. It is likely to take several years to obtain the required regulatory approvals for our product candidates, or we may never gain the necessary approvals.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical trials after achieving positive results in preclinical development or early-stage clinical trials, and we cannot be certain that we will not face similar setbacks. Significant adverse effects caused by, or other unexpected properties of, any product candidates that we may choose to develop could cause us, an IRB or regulatory authority to interrupt, delay or halt clinical trials of one or more of such product candidates and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable non-U.S. regulatory authorities. If any product candidate that we may choose to develop is associated with significant adverse effects or other unexpected properties, we may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which those undesirable characteristics would be expected to be less prevalent, less severe or more tolerable from a risk-benefit perspective. Moreover, preclinical and clinical data is often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or other regulatory authority approval. If we fail to produce positive results in clinical trials of our product candidates, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects, would be negatively impacted. If we fail to obtain such approvals, we may not generate sufficient revenues to continue our business operations.

Even if we obtain regulatory approval of a product, that approval may be subject to limitations on the indicated uses for which it may be marketed. Even after granting regulatory approval, the FDA and regulatory agencies in other countries continue to review and inspect marketed products, manufacturers, and manufacturing facilities, which may create additional regulatory burdens. Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market or a withdrawal of the approved application by the FDA. Furthermore, FDA may require post-approval studies or other commitments from us, and failure to comply with or meet those commitments could result in withdrawal of the approved application by FDA. Regulatory agencies may also establish additional regulations, policies, or guidance that could prevent or delay regulatory approval of our product candidates.

As a result, our business could be materially harmed if we encounter difficulties in the development of this product candidate, such as:

If any of the above were to occur, this could significantly and adversely affect the development and commercialization of our AlloRx Stem Cell therapy or other products and could have a material adverse effect on our business, financial condition, and results of operations.

If the potential of our product candidates, particularly AlloRx Stem Cell therapy, to treat various diseases and conditions is not realized, the value of our technology and our development programs could be significantly reduced.

We are currently planning Phase 1/2a clinical trials with the intent to establish safety, tolerability and efficacy proof-of-concept and/or evidence of biological activity of AlloRx Stem Cell therapy in various indications. We have not yet proven in clinical trials that AlloRx Stem Cell therapy will be a safe and effective treatment for any disease or condition. This product candidate is susceptible to various risks, including undesirable and unintended side effects, unintended immune system responses, inadequate therapeutic efficacy, or other characteristics that may prevent or limit its marketing approval or commercial use. We have not yet completed all of the testing necessary to allow us to make a determination that serious unintended consequences will not occur. If the potential of this product candidate to treat diseases or conditions is not realized, the value of our technology and our development programs could be significantly reduced. Because our product candidates are based on MSCs, any negative developments regarding the therapeutic potential or side effects of our MSCs, or to scientific and medical knowledge about MSCs in general, could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We have never commercialized a biologic or drug product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize any products if we attain an EUA or other regulatory approval for commercialization of AlloRx Stem Cell therapy or any other product candidates.

We have never commercialized a biologic or drug product candidate, and we currently have no sales force, marketing or distribution capabilities for such a product. To achieve commercial success for our biologic or drug product candidates, which we may license to others, we may rely on the assistance and guidance of those collaborators who will provide sales and marketing support as well as logistic and distribution services. For product candidates for which we retain commercialization rights, we will have to develop our own sales, marketing and supply organization or outsource these activities to a third party.

Factors that may affect our ability to commercialize any future approved products on our own include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our products and other unforeseen costs associated with creating an independent sales and marketing organization. Developing a sales and marketing organization will be expensive and time-consuming and could delay the launch of our future approved products. We may not be able to build an effective sales and marketing organization. If we are unable to build our own distribution and marketing capabilities or find suitable partners for the commercialization of our future approved products, we may not generate revenues from them or be able to reach or sustain profitability.

We have a limited operating history with our current business model, which may make it difficult for you to evaluate our current business and predict our future success and viability.

We are an early-stage clinical development company with a limited operating history with our current business model upon which you can evaluate our business and prospects. Prior to 2020, our historical operations were limited to research and development and limited sales of research-related products. In 2020, we began the transition to become a clinical stage biotechnology company focused primarily in the field of regenerative medicine. Since 2020, we have devoted substantially all of our resources and efforts to reorganizing and staffing our company, business planning, expanding our research and development capabilities, expanding our manufacturing facility, raising capital, evaluating and completing acquisitions, developing product candidates, pursuing related intellectual property rights and organizing clinical trials of AlloRx Stem Cell therapy.

Our limited operating history developing clinical-stage product candidates may make it more difficult for us to succeed or for investors to evaluate our business and prospects. In addition, as an early-stage development company, we have limited experience in development activities, including conducting clinical trials, or seeking and obtaining regulatory approvals, even though certain of our executives have had relevant experience at other companies. We will also need to transition from a company with a research focus to a company capable of conducting clinical trials and, if successful, supporting commercial activities beyond our current InfiniVive MD and Fitore products. Such a transition will involve substantial additional capital requirements to launch and market a product and significant adjustment to personnel, compared to a development company. In addition, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in the biopharmaceutical area. To execute our business plan, we will need to successfully:

If we are unsuccessful in accomplishing these objectives, we may not be able to develop product candidates, raise capital or expand our business, or continue our operations.

Our product development programs are based on novel technologies and are inherently risky.

We are subject to the risks of failure inherent in the development of product candidates based on new technologies. The novel nature of our product candidates creates significant challenges in regard to product development and optimization, manufacturing, government regulation, third-party reimbursement, and market acceptance. For example, although the FDA has approved several autologous (i.e., taken from, and given to, the same individual) cell therapy products, the FDA has not approved any allogeneic (i.e., taken from one individual and given to a different person) cell therapy products, and the FDA has relatively limited experience with regulating these kinds of therapies, and its regulations and policies are still evolving. As a result, the pathway to regulatory approval for our current and future product candidates may accordingly be more complex and lengthier.

Additionally, stem cells that are taken from one person and transplanted into a different individual may pose additional risks. For example, stem cells that are not autologous but are instead allogeneic are subject to donor-to-donor variability, which can make standardization more difficult. As a result of these factors, the development and commercialization pathway for our therapies may be more complex, lengthier, and subject to increased uncertainty, as compared to the pathway for new conventional (i.e., new chemical entity) drugs.

There are no FDA-approved allogeneic, cell-based therapies for PTHS, Long COVID, Lupus (SLE), MS, Alzheimer’s disease, or many other indications targeted by AlloRx Stem Cell therapy, our lead investigational product candidate. This could complicate and delay FDA approval of our product candidate for these indications.

Although FDA has approved several autologous cell therapy products, there are no allogeneic cell-based or stem cell therapies currently approved for the treatment of PTHS, Long COVID, Lupus (SLE), MS or Alzheimer’s disease. To obtain FDA approval for any indication for the disease states we are studying, we will have to demonstrate, among other things, that our product candidates are safe and effective for that indication in the target population. The results of our clinical trials must be statistically significant, meaning that there must be sufficient data to indicate that it is unlikely the outcome occurred by chance. The FDA will also require us to demonstrate an appropriate dose (i.e., number of cells) and dosing interval for our product candidates, and to identify and define treatment responders, which may require additional clinical trials. As a result, the clinical endpoints, the criteria to measure the intended results of treatment, and the correct dosing for our cell-based therapeutic approaches for these indications may be difficult to determine. These challenges may prevent us from developing and commercializing products on a timely or profitable basis, or at all.

Our product candidates represent new classes of therapy that the marketplace may not understand or accept.

Even if we successfully develop and obtain regulatory approval for our product candidates, the market may not understand or accept them. We are developing product candidates that represent novel treatment approaches and will compete with a number of more conventional products and therapies manufactured and marketed by others, including major pharmaceutical companies. The degree of market acceptance of any of our developed and potential products will depend on a number of factors, including:

If the health care community does not accept our product candidates or future approved products for any of the foregoing reasons, or for any other reason, it could affect our sales or have a material adverse effect on our business, financial condition, results of operations, and prospects.

If we are not able to recruit and retain additional qualified management and scientific personnel, we may fail in obtaining financing, pursuing collaborations or developing our technologies and product candidates.

Our future success depends to a significant extent on the skills, experience, and efforts of the principal members of our scientific and management personnel. These members include Christopher Furman, our Chief Executive Officer, Dr. James Musick, our Chief Science Officer, and Dr. Caroline Mosessian, our Chief Regulatory Officer, among others. The loss of any or all of these individuals could harm our business and might significantly delay or prevent the achievement of research, development or business objectives. Competition for regulatory, clinical manufacturing and management personnel in the pharmaceutical industry is intense. We may be unable to recruit or retain personnel with sufficient management skills in the area of cell therapeutics or attract or integrate other qualified management and scientific personnel in the future.

We may, in the future, enter into arrangements with third-party collaborators to help us develop our product candidates and commercialize our products, and our ability to commercialize such products may be impaired or delayed if collaborations are unsuccessful.

We expect to enter into clinical trial agreements with third-party investigators and research and clinical institutions in the United States to conduct our clinical trials in the United States, including our Phase 1/2a trials for PTHS and Long COVID, although we have not yet entered into any clinical trial agreement(s) for these contemplated Phase 1/2a clinical trials at this time. We may be unable to enter into these clinical trial agreements or related agreements on a timely basis or at all, which are contingent on approvals required to be obtained from the clinical institutions and clinical trial sites. We do not expect that any future collaborations pursuant to one or more clinical trial agreements will involve the type of collaborative arrangements in which we would share the risks and rewards of any such clinical trials or otherwise with the third-party clinical institution.

We are dependent upon the success of our current and any future collaborators in performing their responsibilities in connection with the relevant collaboration. If we fail to maintain these collaborative relationships for any reason, we would need to perform the activities that we currently anticipate would be performed by our collaborators on our own at our sole expense. This could substantially increase our capital needs, and we may not have the capability or financial capacity to undertake these activities on our own, or we may not be able to find other collaborators on acceptable terms, or at all. This may limit the programs we are able to pursue and result in significant delays in the development, sale, and manufacture of our product candidates and products, and may have a material adverse effect on our business, financial condition, and results of operations.

Our dependence upon our current and potential future collaborations exposes us to a number of risks, including that our collaborators (i) may fail to cooperate or perform their contractual obligations, including financial obligations, (ii) may choose to undertake differing business strategies or pursue alternative technologies, or (iii) may take an opposing view regarding ownership of clinical trial results or intellectual property. Due to these factors and other possible events, we could suffer delays in the research, development, or commercialization of our product candidates and future products or we may become involved in litigation or arbitration, which could be time-consuming and expensive. We additionally may be compelled to split revenue with our collaborators, which could have a material adverse effect on our business, financial condition, and results of operations.

We rely on third-party healthcare professionals to administer AlloRx Stem Cell therapy and AlloRx Stem Cells to patients, and our business could be harmed if these third parties administer these incorrectly or fail to follow our instructions or recommendations.

We rely, or will rely in the future, on the expertise of third-party physicians, nurses and other associated medical personnel to administer, as the case may be, AlloRx Stem Cell therapy and AlloRx Stem Cells in clinical trials in the United States and as part of compassionate use treatments authorized by FDA, as well as in foreign third-party conducted clinical studies. If these medical personnel are not properly trained to administer, or do not properly administer, AlloRx Stem Cell therapy and AlloRx Stem Cells, the therapeutic effect of AlloRx Stem Cell therapy and AlloRx Stem Cells may be reduced or the patient may suffer injury.

In addition, we freeze our AlloRx Stem Cells prior to shipping and distribution to third parties, which requires third-party medical personnel to be trained on proper methodology for proper storage, quality control and deployment procedures for all AlloRx Stem Cells received from us. If these or other processes are not performed correctly, the cells may become damaged and/or the patient may suffer injury. While we intend to provide training materials and other resources to these third-party medical personnel, the storage, quality control and deployment procedures, including the thawing and subsequent peripheral intravenous infusion or direct injection, of AlloRx Stem Cell therapy and AlloRx Stem Cells will occur outside our supervision and may not be performed or administered properly. If, due to a third-party error, people believe that AlloRx Stem Cells are ineffective or harmful, the desire to use AlloRx Stem Cells may decline, which would negatively impact our business, reputation and prospects. We may also face significant liability even though we may not be responsible for the actions of these third parties.

Our business would be adversely affected if our relationships with third-party healthcare professionals on which we rely were disrupted.

Our contractual relationships with our network of healthcare professionals which provide for consulting and other services may implicate certain state laws in the United States that generally prohibit non-physician entities from practicing medicine, exercising control over physicians or engaging in certain practices such as fee-splitting with physicians. Although we believe that we have structured our arrangements to ensure that the healthcare professionals maintain exclusive authority regarding the delivery of medical care when deemed clinically appropriate, there can be no assurance that these laws will be interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could have a material and adverse effect on our business, financial condition and results of operations. Regulatory authorities, state medical boards of medicine, state attorneys general and other parties, including our affiliated healthcare professionals, may assert that we are engaged in the prohibited corporate practice of medicine, or that our arrangements with our network of healthcare professionals constitute unlawful fee-splitting. If a state’s prohibition on the corporate practice of medicine or fee-splitting law is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our relationship with our healthcare professionals to bring our activities into compliance with such laws. A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, damages, fines, and a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations. State corporate practice of medicine doctrines and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding the corporate practice of medicine, which could discourage physicians and other healthcare professionals from participating in our network of providers.

We may be unable to develop a new manufacturing facility on a timely basis or at all, which may impact our ability to capitalize on the potential biological advantages of UC-derived MSCs, to comply with all FDA requirements to support a BLA, or to commercialize any future approved products following any regulatory approval.

As we proceed with our clinical trial efforts and in advance of any commercialization, we must be able to demonstrate to the FDA that we can manufacture our product candidates with consistent characteristics. While we currently manufacture our product candidates in our own facility, scaling up the manufacturing process would require us to develop a larger facility, which would require significant time and capital investments to conform to applicable manufacturing standards.

We are planning a new, separate manufacturing facility that, if completed, will be used exclusively for the manufacture of AlloRx Stem Cell therapy and AlloRx Stem Cells. We believe that this separate facility will be necessary to comply with all FDA requirements to support a BLA and related inspections for the manufacture of AlloRx Stem Cell therapy, given that AlloRx Stem Cell therapy is a product intended for parenteral use in humans. We plan to use highly scalable, fully automated closed system bioprocessing in the new cGMP biomanufacturing facility, which we believe is necessary for us to fully capitalize on the potential biological advantages of UC-derived MSCs.

We expect to commence development of the new manufacturing facility in 2024once we have the necessary capital resources, but may be unable to commence or complete development on a timely basis, or at all. Developing a new manufacturing facility, which we expect will contain fully automated closed system bioprocessing equipment, and recruiting necessary additional personnel will be expensive and time-consuming, and we may not be able to raise sufficient funds to develop such facility and to buy such equipment. In addition, although we intend to use our existing cash and any additional funds received upon the exercise for cash of our outstanding warrants for the acquisition of fully automated closed system bioprocessing and other equipment and for the development of a new biomanufacturing facility, receipt of any funds from warrant holders will only occur in the event that warrant holders elect to exercise their warrants. We cannot predict if or when the warrants will be exercised, and it is possible that the warrants may expire and never be exercised. Accordingly, we are unable to control the timing or amount of receipt of such funds or to determine when or if we will receive such funds, which may impact our ability to fund the development of a new manufacturing facility on a timely basis or at all.

In addition, the development of a new manufacturing facility may require additional regulatory approvals. If we are unable to develop a new manufacturing facility in compliance with regulatory requirements or to hire additional necessary manufacturing personnel, we may encounter delays or additional costs in achieving our research, development and commercialization objectives, which could materially damage our business and financial prospects. In addition, our ability to complete any ongoing clinical trials may be negatively affected.

We may be dependent on third parties for the manufacture or distribution of any product candidates, and any problems experienced by these third parties could result in a delay or interruption in the supply of our product candidate in our clinical trials and any future approved products.

If we are unable to develop a new manufacturing facility, we may need to outsource manufacturing on a large scale for AlloRx Stem Cells and AlloRx Stem Cell therapy, which would cause us to be materially dependent on these suppliers for supply of components of consistent quality. Reliance on third-party manufacturers entails risks such as the failure of the third party to follow regulatory guidelines, possible breach of the manufacturing agreement, and possible termination or non-renewal of that agreement. Our ability to complete any ongoing clinical trials may be negatively affected in the event that we are forced to seek and validate a replacement source for any of these critical components. If we are not able to obtain adequate supplies of these items of consistent quality from our third-party suppliers, it will also be more difficult to manufacture commercial quantities of our product candidates that are approved for commercial sale.

In addition, if one or more of our product candidates is approved for commercial sale, we intend to rely on third parties for their distribution. Proper shipping and distribution require compliance with specific storage and shipment procedures (e.g., prevention of damage to shipping materials and prevention of temperature excursions during shipment). Failure to comply with such procedures will necessitate return and replacement, potentially resulting in additional cost and causing us to fail to meet supply requirements.

Changes in the manufacturing process or procedure, including a change in the location where the product is manufactured or a change of a third-party manufacturer, may require prior FDA review and approval of the manufacturing process and procedures in accordance with the FDA’s cGMPs. Any new facility is subject to a pre-approval inspection by the FDA and would again require us to demonstrate product comparability to the FDA. We would also need to verify, such as through a manufacturing comparability study, that any new manufacturing process would produce our product candidate according to the specifications previously submitted to the FDA, and there are comparable foreign requirements. The delays associated with the verification of a new third-party manufacturer, or a new facility built by us, could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget. This review may be costly and time consuming and could delay or prevent the launch of a product.

We will be reliant on third parties to conduct, manage, and monitor our clinical studies, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We currently do not have the ability to independently conduct nonclinical studies that comply with Good Laboratory Practice (“GLP”) requirements. We intend to rely substantially on CROs and clinical study sites to ensure the proper and timely conduct of our clinical studies, and we have limited influence over their actual performance.

We rely upon CROs to monitor and manage data for our clinical programs, as well as for the execution of nonclinical studies. We control only certain aspects of our CROs’ activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with current GLP and Current Good Clinical Practice (“cGCP”) regulations and guidelines enforced by the FDA and are also required by the competent authorities of the member states of the European Economic Area and comparable foreign regulatory authorities to comply with the International Council for Harmonization guidelines for any of our product candidates that are in nonclinical and clinical development, respectively. The regulatory authorities enforce cGCP regulations through periodic inspections of clinical study sponsors, CROs, and clinical study sites. Although we rely on CROs to conduct our GLP-compliant nonclinical studies and cGCP-compliant clinical studies, we remain responsible for ensuring that each of our nonclinical studies and clinical studies is conducted in accordance with our investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities. If we, our CROs or clinical study sites fail to comply with cGCP requirements, the clinical data generated in our clinical studies may be deemed unreliable and the FDA or comparable foreign regulatory authorities may reject our marketing applications or require us to perform additional clinical studies before approving our marketing applications. Accordingly, if we or our CROs fail to comply with these regulations or other applicable laws, regulations or standards, or fail to recruit a sufficient number of subjects, we may be required to repeat clinical studies, which would delay the relevant regulatory approval process. Failure by our CROs to properly execute study protocols in accordance with applicable law could also create product liability and healthcare regulatory risks for us as the sponsor of those studies.

While we have agreements governing their activities, our CROs are not our employees, and we do not control whether or not they devote sufficient time and resources to our future clinical and nonclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies, or other drug development activities which could harm our competitive position. We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret and intellectual property protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our (or their own) clinical protocols or regulatory requirements or for any other reasons, our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop. As a result, our financial results and the commercial prospects for any product candidate that we develop could be harmed, our costs could increase, and our ability to generate revenue could be delayed.

In addition, we and our CROs are subject to various data privacy laws in the U.S., Europe, and elsewhere that are often uncertain, contradictory, and evolving. It is possible that these data privacy laws may be interpreted and applied inconsistent with our or our CROs’ practices. If so, this could result in government-imposed fines or orders requiring that we or our CROs change our practices, which could adversely affect our business.

If our relationships with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms or in a timely manner. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have an adverse impact on our business, financial condition, and prospects.

Favorable results from compassionate use treatment or initial interim results from a clinical trial do not ensure that later clinical trials will be successful and success in early-stage clinical trials does not ensure success in later-stage clinical trials.

AlloRx Stem Cells have been administered as part of compassionate use treatments, which permit the administration of the AlloRx Stem Cells outside of clinical trials. No assurance can be given that any positive results are attributable to the AlloRx Stem Cells, or that administration of AlloRx Stem Cells to other patients will have positive results. Compassionate use is a term that is used to refer to the use of an investigational drug outside of a clinical trial to treat a patient with a serious or immediately life-threatening disease or condition who has no comparable or satisfactory alternative treatment options. Regulators often allow compassionate use on a case-by-case basis for an individual patient or for defined groups of patients with similar treatment needs.

There is no assurance that we will obtain regulatory approval for AlloRx Stem Cells. We will only obtain regulatory approval to commercialize a product candidate if we can demonstrate to the satisfaction of the FDA or other applicable regulatory authorities, in well-designed and conducted clinical trials, that the product candidate is safe and effective and that the product candidate, including the cell production methodology, otherwise meets the appropriate standards required for approval. Clinical trials can be lengthy, complex and extremely expensive processes with uncertain results. A failure of one or more clinical trials may occur at any stage of testing.

Success in pre-clinical and early clinical trials does not ensure that later clinical trials will be successful, and initial results from a clinical trial do not necessarily predict final results. While results from treating patients through compassionate use have in certain cases been successful, we cannot be assured that further trials will ultimately be successful. Results of further clinical trials may be disappointing.

Even if pre-clinical and early-stage clinical trials are successful, we may need to conduct additional clinical trials for product candidates with patients receiving the drug for longer periods before we are able to seek approvals to market and sell these product candidates from the FDA and regulatory authorities outside the United States. Even if we are able to obtain approval for our product candidates through an accelerated approval review program, we may still be required to conduct clinical trials after such an approval. If we are not successful in commercializing any of our lead product candidates, or are significantly delayed in doing so, our business will be materially harmed.

In addition, adverse events involving our product candidates or candidates of others that are cell based, either in compassionate use treatments, third-party foreign clinical trials or studies or otherwise, could negatively impact future clinical trials and the approval process for AlloRx Stem Cells. Any such adverse event would affect our ability to commercialize and sell AlloRx Stem Cells.

Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data. These results and related findings and conclusions are based on assumptions, estimations, calculations and conclusions, and are subject to change following the generation of additional data or a more comprehensive review of the data related to the particular study or trial. As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our preclinical studies and clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more subject data become available or as subjects from our clinical trials continue other treatments for their disease. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could have a material adverse effect on our business, financial condition, and results of operations.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on other product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other therapeutic platforms or product candidates or for other indications that later prove to have greater commercial potential or a greater likelihood of success. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs, therapeutic platforms and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.

If our competitors develop similar or comparable treatments for the target indications of our product candidates that are approved more quickly, marketed more successfully or are demonstrated to be safer or more effective than our product candidates, or if FDA approves biosimilar competitors to our products post-approval, our commercial opportunity will be reduced or eliminated.

We compete in an industry characterized by rapidly advancing technologies, intense competition, a changing regulatory and legislative landscape and a strong emphasis on the benefits of intellectual property protection and regulatory exclusivities. Our competitors include other biotechnology companies, pharmaceutical companies, academic institutions, government agencies and other private and public research organizations. AlloRx Stem Cell therapy or any future product candidates, if successfully developed and approved, may compete with established therapies and with new treatments that may be introduced by our competitors. We believe that competitors are actively developing competing products to our product candidates, and in some cases, such as with autism spectrum disorders, there may be tens or hundreds of companies seeking to commercialize therapeutics.

Many of our competitors and potential competitors have substantially greater scientific, research, and product development capabilities, as well as greater financial, marketing, sales and human resources capabilities than we do. In addition, many specialized biotechnology firms have formed collaborations with large, established companies to support the research, development and commercialization of products that may be competitive with ours. Accordingly, our competitors may be more successful with respect to their products than we may be in developing, commercializing, and achieving widespread market acceptance for our products. If a competitor obtains approval for an orphan drug that is the same drug or the same biologic as one of our candidates before we do, we will be blocked from obtaining FDA approval for seven years from the date of the competitor’s product, unless we can establish that our product is clinically superior to the previously-approved competitor’s product or we can meet another exception, such as by showing that the competitor has failed to provide an adequate supply of its product to patients after approval. In addition, our competitors’ products may be more effective or more effectively marketed and sold than any treatment we may commercialize and may render our product candidates obsolete or non-competitive before we can recover the expenses related to developing and supporting the commercialization of any of our product candidates. Developments by competitors may render our product candidates obsolete or noncompetitive. After one of our product candidates is approved, FDA may also approve a generic version with the same dosage form, safety, strength, route of administration, quality, performance characteristics and intended use as our product. These generic equivalents would be less costly to bring to market and could generally be offered at lower prices, thereby limiting our ability to gain or retain market share.

The acquisition or licensing of pharmaceutical products is also very competitive, and a number of more established companies, which have acknowledged strategies to in-license or acquire products, may have competitive advantages as may other emerging companies taking similar or different approaches to product acquisitions. The more established companies may have a competitive advantage over us due to their size, cash flows, institutional experience and historical corporate reputation.

MSCs are biological entities obtained from living humans that can pose risks to the recipient. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly. We may incur significant costs to comply with current or future environmental, health and safety laws and regulations.

MSC therapies require many manufacturing steps. Cells must be harvested from donor tissue, isolated, and expanded in cell culture to produce a sufficient number of cells for use. Each step carries risks of contamination by other cells, microbes, or adventitious agents. The transfer of cells into a recipient can also carry risks and complications associated with the procedure itself, and a recipient may reject the transplanted cells. Any failure by us to adequately mitigate such risks and complications could have a material adverse effect on our reputation or our ability to market our products, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We and our suppliers and other collaborators are subject to federal, state and local regulations governing the use, manufacture, storage, handling and disposal of materials and waste products. Even if we and these suppliers and collaborators comply with the standards prescribed by law and regulation, the risk of accidental contamination or injury from biological materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result, and any liability could exceed the limits or fall outside the coverage of any insurance we may obtain and exceed our financial resources. We may not be able to maintain insurance on acceptable terms, or at all.

We are also subject to numerous environmental, health and safety laws and regulations. We may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Our product candidates are derived from human UCs and therefore have the potential for disease transmission.

The utilization of donated umbilical cords creates the potential for transmission of cancer and communicable disease, including but not limited to human immunodeficiency virus (HIV), viral hepatitis A, B and C, COVID-19, syphilis, Creutzfeldt-Jakob disease, and other viral, fungal, or bacterial pathogens. Although we and our suppliers are required to comply with federal and state regulations intended to prevent communicable disease transmission, we or our suppliers may fail to comply with such regulations. Further, even with compliance, our products might nevertheless be viewed by the public as being associated with transmission of disease, and a clinical trial subject or patient who contracts an infectious disease might assert that the use of our product candidate or products resulted in disease transmission, even if the individual became infected through another source.

Any actual or alleged transmission of communicable disease could result in clinical trial subject or patient claims, litigation, distraction of management’s attention, potentially increased expenses, and adverse regulatory authority action. Further, any failure in screening, whether by us or other manufacturers of similar products, could adversely affect our reputation, the support we receive from the medical community, and overall demand for our products. As a result, such actions or claims, whether or not directed at us, could have a material adverse effect on our reputation with our customers and our ability to market our products, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Ethical and other concerns surrounding the use of stem cell therapy or human tissue may negatively affect public perception of us or our products or product candidates or may negatively affect regulatory approval of our products or product candidates, thereby reducing demand for our products.

The commercial success of our product candidates will depend in part on general public acceptance of the use of MSC therapy for the prevention or treatment of human diseases. The use of embryonic cells and fetal tissue for research and MSC therapy has been the subject of substantial national and international debate regarding related ethical, legal, and social issues. In the U.S., for example, until March 2009, federal government funding of embryonic stem cell research was limited to specifically identified cell lines and was not otherwise available. We do not use embryonic stem cells or fetal tissue, but the public may not be able to, or may fail to, differentiate our use of adult MSCs from the use of embryonic stem cells or fetal tissue by others, especially considering our use of donor umbilical cords. This could result in a negative perception of our company or our products or product candidates, thereby reducing demand, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We may obtain MSCs from umbilical cords donated by healthy adult female donors from non-profit organizations that collect and process tissue donations. Umbilical cord donors receive payment, but ethical concerns have been raised by some about the use of donated human tissue in a for-profit setting, as we are doing. Future adverse events in the field of stem cell therapy, changes in public policy, or changes to the FDA’s regulatory approval framework for these products could also result in greater governmental regulation of our product candidates or products, and potential regulatory delays relating to their testing or approval.

The successful commercialization of our current or future product candidates will depend on obtaining reimbursement from government and third-party payors.

If we successfully develop and obtain necessary regulatory approvals, we intend to sell our product candidates in the United States and outside of the United States where the regulatory environment allows us to expand such products. In the United States and any other jurisdictions in which we may market our product, the market for any pharmaceutical product is affected by the availability of reimbursement from government and third-party payors, such as government health administration authorities, private health insurers, health maintenance organizations, and pharmacy benefit management companies. MSC therapies may be expensive compared with conventional pharmaceuticals, due to the higher cost and complexity associated with the research, development, and production of product candidates, the small size and large geographic diversity of the target patient population for some indications, and the complexity associated with the distribution of signaling cell therapies which require special handling, storage, and shipment procedures and protocols. This, in turn, may make it more difficult for us to obtain adequate reimbursement from government and third-party payors, particularly if we cannot demonstrate a favorable cost-benefit relationship. Government and third-party payors may also deny coverage or offer inadequate levels of reimbursement for our potential products if they determine that the product has not received appropriate clearances from the FDA or other government regulators or is experimental, unnecessary or inappropriate.

In some other countries where we may seek to market our products, such as The Commonwealth of the Bahamas, Antigua and The Grand Cayman Islands, the pricing of prescription pharmaceutical products and services and the level of government reimbursement are subject to governmental control. In these countries, pricing negotiations with governmental authorities can take six to twelve months or longer after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we or our potential future collaborators may be required to conduct one or more clinical trials that compare the cost effectiveness of our product candidates or products to other available therapies. Conducting one or more additional clinical trials would be expensive and could result in delays in commercialization of our product candidates.

Managing and reducing health care costs has been a general concern of federal and state governments in the United States and various foreign governments. Although we do not believe that any recently enacted or presently proposed legislation in any jurisdictions in which we currently operate should impact our business based on our current model, we might be subject to future regulations or other cost-control initiatives that materially restrict the price we would receive for our products. In addition, government and third-party payors are increasingly challenging the price and cost-effectiveness of medical products and services, and many limit reimbursements for newly approved health care products. In particular, government and third-party payors may limit the indications for which they will reimburse patients who use any products that we may develop. Cost control initiatives could decrease the price for products that we may develop, which could result in lower product revenues to us.

A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.

We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

Biotechnology is a well-capitalized area, and as a result, we may not be able to keep up with other well-capitalized companies in the market.

Biotechnology and biotechnological inventions are heavily capitalized and very competitive. The biotechnology industry is subject to significant and rapid technological change. Accordingly, our success may depend, in part, on our ability to respond quickly to such change through the development and introduction of new products or revised treatment regimens. Our ability to compete successfully against currently existing and future alternatives to our product candidates and systems and competitors who compete directly with us in the biotechnology industry may depend, in part, on our ability to attract and retain skilled personnel, develop superior products, be competitively priced, obtain patent or regulatory approvals as well as being early entrants to the market and to manufacture, market, and sell our products, independently or through collaborations. If we are unable to keep up with these changes and competition, our business could be significantly affected.

If our product candidates are approved by the FDA, then potential competitors could seek to use a publicly available stem-cell products to compete with our products for the same therapeutic uses, taking advantage of an abbreviated approval pathway as interchangeable with our product candidates. If we are unable to prevent entry of these products into our targeted market, our business could be significantly affected.

Risks Related To Intellectual Property

If our intellectual property does not adequately protect our products and uses, others could compete against us more directly, which could harm our business and have a material adverse effect on our business, financial condition, and results of operations.

Our success depends, in large part, on our ability to obtain and maintain intellectual property protection for product candidates, process candidates and manufacturing/scale-up processes. Patent positions for biotechnology companies are generally uncertain, involve complex legal and factual questions, and can be subject to litigation.

We have no U.S. patents and we may never be awarded one. Our portfolio contains several patent applications, including one provisional applications.application. Provisional applications may be converted to non-provisional and/or foreign applications, but these applications may not result in a patent. If patents do not issue, we may not have exclusivity for our products and methods of use.

The claims of U.S. and foreign patent applications and patentssuch as our Patent Cooperation Treaty (“PCT”), a placeholder for filing international applications, if granted may not confer significant commercial protection against competing products and may not preclude entry by third parties into the marketplace. Furthermore, to the extent that we eventually own patent rights covering our business, the granted patents may be narrow and provide patent limited protection. In addition, third parties may challenge or design around those patents; for example, by asserting that the patents are invalid or arguing that the patent claims should be narrowly construed, and thereby avoid infringement actions. A third party may also develop technology not encompassed by the claims of the patents and/or patent applications. Further, if a foreign patent is awarded, the laws of foreign countries may not protect intellectual property rights to the same extent as laws of the United States.

Our patent applications on MSC technologies include claims directed to MSC-containing compositions and therapeutic uses. The MSC technology area is subject to competition and as a result, third parties may challenge the validity of any patents to facilitate entry into the market. PatentsIf awarded patents from these patent applications, the patents might not contain claims that are sufficiently broad to prevent others from practicing our technologies or from competing with us with their own MSC technologies in the fields of interest to us. Consequently, competitors may independently develop competing products that do not infringe any patents or do not violate other intellectual property rights.

Obtaining and enforcing patents in the biopharmaceutical industry requires a high level of technological and legal complexity. Therefore, obtaining and enforcing patents is costly, time-consuming and as a result unpredictable.

PendingOur pending patent applications may not issue or may issue with substantially narrower claims than currently pending claims. These narrower claims may not confer protection of our products.

Because of the extensive time required for development, testing, and regulatory review of a potential product, it is possible that a patent may expire or remain in force for a short period following commercialization, thereby limiting the period of exclusivity. To the extent our product candidates may not be protected, third parties are not precluded from making using, or selling a competing product or method.

Additionally, the background technologies used in some development of our therapeutics and treatments may be known by third parties. This could allow for third parties to compete using the same prior technologies.

If we fail to obtain assignment of rights of our intellectual property from all inventors or fail to obtain assignment of rights of our intellectual property in a timely fashion, we may not own or exclusively own our intellectual property, and this could adversely affect our ability to protect our product and have a materially effect on our business.

Control over patented technology requires us to obtain formal assignment of patents and patent applications from all inventors. If inventor assignments are not received or not received in a timely manner, we may not exclusively own the rights in the patents or patent applications.applications and this may further affect processes in the U.S. and foreign jurisdictions.

While we believe that each inventor on each patent application or patent has already assigned the intellectual property rights by obligation of employment with us or, if it has not yet been formally assigned, is under an obligation to be assigned to us, if such is not the case, our business, financial condition, results of operations, and prospects could be adversely affected. Further, we have certain rights of assignment by employee inventors regarding patents and we have been assigned some of the patents and patent applications by certain parties, while some of assignments are still outstanding. As such there is a risk that the inventorswere obtained after assignments were due which may refuse to assign the intellectual property.adversely affect ownership rights. In addition, an inventor may have rights in the intellectual property by way of co-ownership. Under U.S. patent law, each co-inventor where there is no assignment or agreement (e.g., percent ownership or assignment requirement), has joint and several ownership of the whole application or patent regardless of individual contribution. In the absence of any agreement to the contrary, each of the joint owners or inventors without assignment of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners. In certain instances, negotiation and/or litigation may be required to compel the execution of those documents where assignment obligation can be verified.

If we are unable to protect the confidentiality of our proprietary information, trade secrets, and know-how, our competitive position could be impaired and our business, financial condition, results of operations, and prospects could be adversely affected.

Some aspects of our technology, especially regarding MSC expansion, manufacturing, and storage processes, are unpatented. This confidential information is protected by trade secret. These trade secrets are valuable to us and maintaining the secrecy of our processes is important to the success of our business. Trade secrets remain valid and enforceable without regard to limitations such as term restrictions that are imposed on patents. Trade secrets are not enforceable against a third party that innovates these processes independently. To date, our trade secrets and know-how are protected by confidentiality and/or employment agreements. These agreements, however, may not provide us with adequate protection against improper use or disclosure of confidential information, and these agreements may be breached. A breach of confidentiality could affect our competitive position. In addition, in some situations, these agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants, collaborators, or advisors have previous employment or consulting relationships. Also, others may independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets or other proprietary information.

Adequate remedies may not exist in the event of unauthorized use or disclosure of confidential information. The disclosure of trade secrets or other proprietary information could impair our competitive position and could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Third-party claims of patent infringement may prevent or delay our product development efforts.

There is a risk of litigation involving patents and other intellectual property rights. Numerous U.S. and foreign patents, and pending patent applications, are owned by third parties in the fields in which we are developing product candidates. There is a risk that our product and formulation candidates, methods of making product candidates, and methods of using our product candidates may give rise to claims of infringement by third parties. Third parties may assert that we infringe their patents or are otherwise employing their proprietary technology without authorization. If our MSCs are approved by the FDA to treat our targeted indications, third parties may seek to enforce their patents by filing a patent infringement lawsuit.

Additionally, there may be third-party patents of which we are currently unaware with claims related to the use or manufacture of our product or therapeutic use candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in patents that our product or therapeutic use candidates may infringe. Some of these patent applications may not yet be available for public review because they are not yet publicly available. If any third-party patents were held by a court of competent jurisdiction to cover our targeted therapeutic uses, formulations or dosing regimens, or any final product itself, the holders of any such patents may be able to block our ability to commercialize targeted processes and compositions unless we are able to obtain a license regarding the applicable patents, or until such patents expire or they are finally determined to be held not infringed, unpatentable, invalid or unenforceable. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use or dosing regimens, including combination therapy or patient selection criteria, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate and/or our methods of use unless we obtain a license or until such patent expires or is finally determined to be held not infringed, unpatentable, invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.

Parties making claims against us may seek and obtain injunctive or other equitable relief, which, if granted would block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of Company resources from our business. In the event of a successful claim of infringement, we may have to pay substantial damages, obtain one or more licenses from third parties, pay royalties or redesign accused products and/or methods, which may be impossible or require substantial time and monetary expenditure.

Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance research or allow commercialization of product candidates and in certain cases, to avoid litigation. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize product candidates, which could harm our business significantly.

We may become involved in lawsuits to protect or enforce ourany patents we might obtain in the future, which could be expensive and time consuming.

Litigation may be necessary to enforce patent rights to protect trade secrets or know-how; or to defend the scope and validity of patent rights. Litigation, opposition, or other patent office proceedings in the U.S. and foreign jurisdictions, as applicable, could result in substantial additional costs and diversion of management focus. If we are ultimately unable to protect our intellectual property, we may be subject to competition which will potentially impact profitably. Competitors may infringe our patents.any patents we might obtain in the future. As a result, we may be required to file infringement claims against one or more competitors to protect our intellectual property rights, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent is invalid or unenforceable, thus preventing enjoinment of a third party or may refuse to enjoin the other party from using the technology at issue. An adverse determination of any litigation or defense proceedings could put one or more of our patents we might obtain in the future at risk of being invalidated or interpreted narrowly. Litigation or other patent office proceedings may fail and, even if successful, may result in substantial costs and distraction to management. We may not be able, alone or with our collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the local laws may not protect or enforce such rights as fully as in the U.S.

Furthermore, though we would seek protective orders where appropriate, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised. Disclosure of confidential information during this type of litigation could cause harm to our business.

Intellectual property litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common stock to decline.

During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished. Accordingly, the value of our company may decline. These declines could be significant. Such announcements could also harm our reputation or the market for future products, which could have a material adverse effect on our current business, current financial condition, and prospects.

Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

Laws change and these changes in laws could have an impact on our business. U.S. patent laws that govern filing, prosecution and patentable subject matter are constantly in flux. These laws can include provisions that affect the way patent applications are filed, the way in which patent applications are prosecuted and may also affect patent litigation. New laws confirmed by lower courts and new procedures available through USPTO proceedings may also affect our ability to obtain patents and to prevent our claims from being narrowly construed or invalidated. The availability of these processes to third parties could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Depending on decisions by the U.S. Congress, the U.S. federal courts, the USPTO, or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain patents or to enforce our patents we might obtain in the future.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Patents have a limited lifespan. In the United States, if a patent remains in good standing, the natural expiration of a patent is 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the term of a patent, and the protection it affords, are limited. In addition, patent life can be reduced if it is found that patented claims have overlapping subject matter of a related co-owned patent and a terminal disclaimer is filed, reducing the life of the subject patent to less than 20 years. Even if patents directed to our product candidates are obtained, once the patent term has expired, we may be open to competition from competitive products. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

If we do not obtain patent term extension for our product candidates and/or methods of their use, our business may be materially harmed.

Depending upon the timing, duration, and specifics of any applicable FDA marketing approval of our product candidates and our methods of use, one or more 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, or the Hatch-Waxman Amendments, or the Biologics Price Competition and Innovation Act of 2009. These laws permit a patent restoration or extension of term as compensation for patent term lost during product development and the FDA regulatory review process. These extensions are limited to a single patent being extended per FDA-approved product. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended.

Patent term extension may also be available in certain foreign countries upon regulatory approval of our product candidates and/or therapeutic uses of these product candidates. However, we may not be granted an extension. If we are unable to obtain patent term extension or restoration or the term of any such extension is less than applied for, our business could be affected. In addition, competitors may obtain approval of competing products at the same time or following our patent expiration, and our revenue could be reduced, possibly materially. Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

We may not be able to protect our intellectual property rights throughout the world.

We may not have patents in every jurisdiction in which we sell, thus creating competition that could impact our profitability. Although we have pending patent applications in the U.S. and certain other countries,PCT placeholder applications, filing, prosecuting, and defending patents in all countries throughout the world would be prohibitively expensive. Due to local laws and other causes, our intellectual property rights in some countries outside the U.S. can be less robust than those in the U.S. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S. whether we have filed an application in that country or not. In addition, we may not be able to prevent third parties from selling or importing products made using our inventions in and into the U.S. or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S. These products may compete with our product candidates and/or therapeutic uses, and this could have adverse effects on our business.

Further, it is costly and time-consuming to assert infringement of intellectual property rights against a competitor in a foreign country. Besides cost and time, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. Some legal systems in foreign countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our intellectual property or stop marketing of competing products in violation of proprietary rights. As noted above, proceedings to enforce patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, efforts to protect and enforce our intellectual property rights in foreign jurisdictions may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patents. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected in that country and overall.

Maintenance of patents and patent applications is expensive and loss of patent rights by non-payment of required fees could impact the company. We rely on our outside legal counsel to assist with these matters by sending reminders, as well as, on third parties to pay these fees when due.

Additionally, the USPTO and various foreign patent offices require compliance with procedural, documentary, fee payment and other similar provisions during the patent application process and once a patent is issued or granted. We employ reputable law firms and other professionals to help us comply, and if needed for an inadvertent lapse many of these deadlines can be extended and a lapse in payment cured by applying a late fee or by other means in accordance with rules applicable to the particular jurisdiction. However, there are situations in which noncompliance and/or non-payment can result in abandonment or lapse of the patent or patent application without chance of reinstatement, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If such an event were to occur, it could have a material adverse effect on our business, financial condition, and commercial operations.

Risks Related To Regulatory Approval And Other Government Regulations

If we are not able to conduct our clinical trials properly and on schedule, marketing approval by FDA and other regulatory authorities may be delayed or denied.

The commencement and completion of our clinical trials may be delayed or terminated for many reasons, including, but not limited to, if:

Our development costs will increase if we have material delays in our clinical trials, or if we are required to modify, suspend, terminate, or repeat a clinical trial. If we are unable to conduct our clinical trials properly and on schedule, marketing approval may be delayed or denied by the FDA.

Producing and marketing an approved drug or other medical product is subject to significant and costly post-approval regulation.

Even if approved for commercial sale, we may be required to conduct Phase 4 clinical trials or comply with other post-marketing requirements for the products. Even if we obtain approval of a product, we can only market the product for the approved indications. After granting marketing approval, the FDA and regulatory agencies in other countries continue to review and inspect marketed products, manufacturers, and manufacturing facilities, creating additional regulatory burdens. Later discovery of previously unknown problems with a product, manufacturer, or facility may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market. Further, regulatory agencies may establish different or additional regulations that could impact the post-marketing status of our products.

If we violate the guidelines pertaining to promotion and advertising of our clinical candidates or approved products, either inadvertently or otherwise, we may be subject to disciplinary action by the FDA’s Office of Prescription Drug Promotion (“OPDP”) or other regulatory bodies.

The FDA’s Office of Prescription Drug Promotion, or OPDP, is responsible for reviewing prescription drug advertising and promotional labeling to ensure that the information contained in these materials is not false or misleading. There are specific disclosure requirements and the applicable regulations mandate that advertisements cannot be false or misleading or omit material facts about the product. Prescription drug promotional materials must present a fair balance between the drug’s effectiveness and the risks associated with its use. Most warning letters from OPDP cite inadequate disclosure of risk information.

OPDP prioritizes its actions based on the degree of risk to the public health, and often focuses on newly introduced drugs and those associated with significant health risks. There are two types of letters that OPDP typically sends to companies that violate its drug advertising and promotional guidelines: notice of violation letters, or untitled letters, and warning letters. In the case of an untitled letter, OPDP typically alerts the drug company of the violation and issues a directive to refrain from future violations but does not typically demand other corrective action. A warning letter is typically issued in cases that are more serious or where the company is a repeat offender. Although we have not received any such letters from OPDP, we may inadvertently violate OPDP’s guidelines in the future and be subject to a OPDP untitled letter or warning letter, which may have a negative impact on our business. Similarly, we and our collaborators may inadvertently violate the guidelines of the foreign equivalent of the FDA’s OPDP.

We and any of our future development partners will be required to report to regulatory authorities if any of our approved products cause or contribute to adverse medical events, and any failure to do so would result in sanctions that would materially harm our business.

If we and any future development partners are successful in commercializing our products, FDA and foreign regulatory authorities would require that we and any future development partners report certain information about adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event. We and any future development partners may fail to report adverse events we become aware of within the prescribed timeframe. We and any future development partners may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we and any future development partners fail to comply with our reporting obligations, FDA or a foreign regulatory authority could take action against us including criminal prosecution, the imposition of civil monetary penalties, seizure of our products, or delay in approval or clearance of future products.

Our business could target benefits from various regulatory incentives, such as orphan drug exclusivity, breakthrough therapy designation, fast track designation, and priority review, but we may not ultimately qualify for or benefit from these incentives.

We may seek various regulatory incentives, such as orphan drug exclusivity, breakthrough therapy designation, fast track designation, accelerated approval, priority review and Priority Review Vouchers (“PRVs”), where available, that provide for certain periods of exclusivity, expedited review and/or other benefits, and we may also seek similar designations elsewhere in the world. Often, regulatory agencies have broad discretion in determining whether products qualify for such regulatory incentives and benefits. We cannot guarantee that we will be able to receive orphan drug status from FDA or equivalent regulatory designations elsewhere. We also cannot guarantee that we will obtain breakthrough therapy or fast track designation, which may provide certain potential benefits such as more frequent meetings with FDA to discuss the development plan, intensive guidance on an efficient drug development program, and potential eligibility for rolling review or priority review. Legislative developments in the U.S., including proposed legislation that would restrict eligibility for PRVs, may affect our ability to qualify for these programs in the future.

Even if we are successful in obtaining beneficial regulatory designations by FDA or other regulatory agency for our product candidates, such designations may not lead to faster development or regulatory review or approval and does not increase the likelihood that our product candidates will receive marketing approval. We may not be able to obtain or maintain such designations for our product candidates, and our competitors may obtain these designations for their product candidates, which could impact our ability to develop and commercialize our product candidates or compete with such competitors, which would adversely impact our business, financial condition or results of operations.

Obtaining and maintaining regulatory approval of a product in one jurisdiction does not mean that we will be successful in obtaining or maintaining regulatory approval in other jurisdictions.

Obtaining and maintaining regulatory approval of a product in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. For example, even if the FDA grants marketing approval of a product, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion and reimbursement of the product in those countries. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. Moreover, product types or regulatory classifications, as well as approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including different or additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Obtaining foreign regulatory approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we or any future collaborator fails to comply with the regulatory requirements in international markets or fails to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

If any of our product candidates are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as our product candidates, if approved. In particular, an approved product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label, which is within their purview as part of their practice of medicine. If we are found to have promoted such off-label uses, however, we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. The FDA may also issue a public warning letter or untitled letter to the company. If we cannot successfully manage the promotion of our future approved products, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

The FDA and other comparable foreign regulatory authorities may not accept data from trials or studies conducted in locations outside of their jurisdiction.

We currently supply AlloRx Stem Cells to certain foreign third-party clinics and medical centers. Such foreign third-party clinics and medical centers are currently using, or intend to use, AlloRx Stem Cells to conduct clinical studies for the potential treatment of a wide variety of indications, and we may choose to conduct international clinical trials or studies in the future. The primary purpose of these clinical studies is for the open-label treatment of the respective indication; accordingly, there is no randomized control group for patients treated in these foreign clinical studies.

The acceptance of study data by the FDA, or other comparable foreign regulatory authority from clinical trials or studies conducted outside of their respective jurisdictions may be subject to certain conditions. In cases where data from foreign clinical trials or studies are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (1) the data are applicable to the United States population and United States medical practice; (2) the trials are performed by clinical investigators of recognized competence and pursuant to cGCP requirements; and (3) the FDA is able to validate the data through an on-site inspection or other appropriate means. The FDA may accept the use of some foreign data to support a marketing approval if the clinical trial meets certain requirements. Additionally, the FDA’s clinical trial requirements, including the adequacy of the subject population studied and statistical powering, must be met. Furthermore, such foreign trials or studies would be subject to the applicable local laws of the foreign jurisdictions where the trials or studies are conducted, including from our ongoing and planned pre-clinical studies of AlloRx Stem Cells, for which we plan to enroll cohorts outside the United States. There can be no assurance that the FDA or any applicable foreign regulatory authority will accept data from trials or studies conducted outside of its respective jurisdiction. Moreover, since the foreign third-party conducted clinical studies using AlloRx Stem Cells are neither placebo-controlled nor blinded, the FDA may be less likely to accept such data. If the FDA, or any applicable foreign regulatory authority does not accept such data, it may result in the need for additional studies, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval for commercialization in the applicable jurisdiction.

In addition, foreign clinical studies conducted by The Foundation for Orthopaedics and Regenerative Medicine in St. John’s, Antigua and Barbuda using AlloRx Stem Cells are run by Chadwick Prodromos, M.D., who holds (i) 844,800 shares of our common stock, which were issued upon the conversion of shares of Series A Preferred Stock, (ii) Class A Warrants to purchase up to 15,384 shares of our common stock at an exercise price of $13.00 per share, and (iii) Class B Warrants to purchase up to 15,384 shares of our common stock at an exercise price of $26.00 per share. As part of future drug approval applications to the FDA, we must disclose certain financial interests of investigators who participated in any of the clinical studies being submitted in support of approval or must certify to the absence of such financial interests. The FDA evaluates the information contained in such disclosures to determine whether disclosed interests may have an impact on the reliability of a study. If the FDA determines that financial interests of any clinical investigator, including that of Dr. Prodromos, raise serious questions of data integrity, the FDA can institute a data audit, request that we submit further data analyses, conduct additional independent studies to confirm the results of the questioned study, or refuse to use the data from the questioned study as a basis for approval. A finding by the FDA that a financial relationship of an investigator raises serious questions of data integrity could delay or otherwise adversely affect approval of our products.

We may attempt to secure approval from the FDA or comparable foreign regulatory authorities through an expedited review program, and if we are unable to do so, then we could face increased expense to obtain, and delays in the receipt of, necessary marketing approvals.

We may in the future seek approval for one or more of our product candidates under one of the FDA’s expedited review programs for serious conditions. These programs are available to sponsors of therapies that address an unmet medical need to treat a serious condition. The qualifying criteria and requirements vary for each expedited program. Prior to seeking review under one of these expedited programs for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive marketing approval through an expedited review program.

In August 2021, we submitted an initial request for ODD for PTHS to FDA’s Office of Orphan Products Development. In November 2021, FDA indicated that it was unable to grant our initial ODD request but indicated that we may submit an amendment to our initial request containing additional information, specifically outcome data from our Phase 1/2a clinical trial for PTHS. FDA has not yet made a determination as to whether PTHS qualifies as a “rare disease or condition,” and we expect such determination will be made on the basis of the facts and circumstances if and when the amendment to our request for ODD is submitted.

There can be no assurances that, after our evaluation of the FDA’s feedback and other factors, we will decide to pursue one or more of these expedited review programs. Similarly, there can be no assurance that after subsequent FDA feedback we will continue to pursue one or more of these expedited programs, even if we initially decide to do so. Furthermore, FDA could decide not to grant our request to use one or more of the expedited review programs for a product candidate, even if the FDA’s initial feedback is that the product candidate would qualify for such program(s). Moreover, FDA can decide to stop reviewing a product candidate under one or more of these expedited review programs if, for example, the conditions that warranted expedited review no longer apply to that product candidate.

Some of these expedited programs (e.g., accelerated approval) also require post-marketing clinical trials to be completed and, if any such required trial fails, the FDA could withdraw the approval of the product. If one of our product candidates does not qualify for any expedited review program, then this could result in a longer time period to approval and commercialization of such product candidate, could increase the cost of development of such product candidate, and could harm our competitive position in the marketplace.

Our research and development activities could be affected or delayed due to possible restrictions on animal testing.

Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity. Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means. To the extent the activities of these groups are successful, or if the laws and regulations regarding animal testing otherwise change, our research and development activities may be interrupted, delayed or become more expensive.

We may face difficulties from changes to current statutes or regulations and future legislation or regulations, both in the U.S. as well as in other foreign jurisdictions where we may be operating.

Existing statutes or regulations may be revised and additional legislation or regulations may be codified that could prevent, limit, delay or otherwise adversely affect regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

For example, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges and attempts to repeal or replace certain aspects of the ACA. While Congress has not passed comprehensive repeal legislation, legislation affecting the implementation of the ACA have passed. On December 22, 2017, President Trump signed into law federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which includes a provision eliminating, 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, which is commonly referred to as the “individual mandate”. In addition, the Further Consolidated Appropriations Act of 2020, signed into law December 20, 2019, permanently eliminates, effective January 1, 2020, the ACA-mandated “Cadillac” tax on certain high-cost employer-sponsored health coverage and the excise tax on non-exempt medical devices and, effective January 1, 2021, also eliminates the annual fee imposed on certain health insurance providers based on market share. The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the ACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that pharmaceutical manufacturers participating in the Medicare Coverage Gap Discount Program must provide to eligible Medicare Part D beneficiaries during the coverage gap phase of the Part D benefit, commonly referred to as the “donut hole,” and to reduce standard beneficiary cost sharing in the coverage gap from 30% to 25% in most Medicare Part D plans. In December 2018, the Centers for Medicare & Medicaid Services, or CMS, published a new final rule permitting further collections and payments to and from certain ACA-qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. On December 14, 2018, a Texas U.S. District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. Additionally, on December 18, 2019, the U.S. Court of Appeals for the 5th Circuit ruled that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. On June 17, 2021, the U.S. Supreme Court dismissed this challenge without specifically ruling on the constitutionality of the ACA.

In addition, other legislative changes have been proposed and adopted in the United States that could impact our future business and operations, including those that may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our product candidates, if approved, and accordingly, our business, financial condition, and results of operations.

Moreover, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. While several proposed reform measures will require additional Congress to pass legislation to become effective, Congress and the Biden administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. The Biden administration has taken several recent executive actions that signal changes in policy from the prior administration. For example, on July 9, 2021, President Biden signed an executive order (the “Executive Order”) to promote competition in the U.S. economy that included several initiatives addressing prescription drugs. Among other provisions, the Executive Order directed the Secretary of Health and Human Services (“HHS”) to issue a report to the White House that includes a plan to, among other things, reduce prices for prescription drugs, including prices paid by the federal government for such drugs. In response to the Executive Order, on September 9, 2021, HHS issued a Comprehensive Plan for Addressing High Drug Prices that identified potential legislative policies and administrative tools that Congress and the agency can pursue in order to make drug prices more affordable and equitable, improve and promote competition throughout the prescription drug industry, and foster scientific innovation. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and marketing cost disclosure and transparency measures, and, in some cases, mechanisms designed to encourage importation from other countries and bulk purchasing.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for biotechnology products. We cannot be sure whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

Our relationships with healthcare providers, clinical investigators, CROs and third-party payors in connection with our current and future business activities may be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws, government price reporting, and health information privacy and security laws, which could expose us to, among other things, criminal sanctions, civil penalties, contractual damages, exclusion from governmental healthcare programs, reputational harm, administrative burdens and diminished profits and future earnings.

Healthcare providers and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain future marketing approval. Our current and future arrangements with healthcare providers, clinical investigators, CROs, third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations include, without limitation, the following:

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to certain payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. Some state laws require pharmaceutical companies to report information on the pricing of certain drug products. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. For instance, the collection and use of health data in the European Union is governed by the General Data Protection Regulation (the “GDPR”), which extends the geographical scope of European Union data protection law to non-European Union entities under certain conditions, tightens existing European Union data protection principles, creates new obligations for companies and new rights for individuals. Failure to comply with the GDPR may result in substantial fines and other administrative penalties. In addition, on June 28, 2018, the State of California enacted the California Consumer Privacy Act, or CCPA, which took effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability, and similar laws have been passed or proposed in other states and proposed at the federal level.

Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve on-going substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, temporary or permanent debarment, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Risks Related To The Cosmetic Product Industry And InfiniVive MD Products

A recall or suspension of sale of our InfiniVive MD products, or the discovery of serious safety issues with our products or the incorrect application of such products by medical professionals to which we sell such products, could have a significant negative impact on us.

The FDA and equivalent foreign regulatory authorities have the authority to require the recall or suspension, either temporarily or permanently, of commercialized products in the event of material deficiencies or defects in quality systems, product design or manufacture or in the event that a product poses an unacceptable risk to health. Regulatory authorities have broad discretion to require the recall or suspension of a product or to require that manufacturers alert customers of safety risks and may do so even in circumstances where we do not believe our product poses an unacceptable risk to health. Recalls, suspensions or other notices relating to any products that we distribute would divert managerial and financial resources, and have an adverse effect on our reputation, financial condition and operating results.

In addition, regulatory authorities may require us to, or we may voluntarily, suspend sales of a product if we become aware that the medical professionals to which we sell our products have not followed our instructions for application. For example, InfiniVive MD’s Exosome Serum contains conditioned media derived from AlloRx Stem Cells containing various secreted products including proteins, RNA and exosomes and must be applied topically by a professional. When such product is marketed and sold by us to plastic surgeons, cosmetic surgeons and aestheticians throughout the United States and internationally, we include instructions specifying that such product must be applied topically by these medical professionals. Administration outside of those specific directions could result in us running afoul of FDA rules and regulations. As further discussed below under “Our Products,” from June 2022 to July 2022, out of an abundance of caution, we voluntarily suspended sales of InfiniVive MD’s Exosome Serum in the United States in order to conduct an investigation into the potential improper administration of this product by medical professionals that have purchased this product directly from us or via distribution from other medical professionals. Although the investigation ultimately resulted in the conclusion that InfiniVive MD’s Exosome Serum was not being misused or misapplied, there can be no assurance that medical professionals have not or will not misuse or misapply our products, which could expose us to administrative or civil liability.

InfiniVive MD products may fail to achieve the broad degree of physician adoption and use or consumer demand necessary for commercial success.

InfiniVive MD products, which are used solely in a clinical setting, may fail to gain sufficient market acceptance by physicians, consumers and others in the medical aesthetics community. The commercial success of these products and any future products will depend significantly on the broad adoption and use of the resulting product by physicians for the treatment of aesthetic indications that we may seek to pursue. We are aware that other companies are seeking to develop alternative products and treatments, any of which could impact the demand for our InfiniVive MD products.

The degree and rate of physician adoption of our exosome serums and any future products depend on a number of factors, including the cost, profitability to our customers, consumer demand, characteristics and effectiveness of the product. Our success will also depend our ability to create compelling marketing programs and ability to overcome any biases physicians or consumers may have toward the use, safety and efficacy of existing products over our InfiniVive MD products. Moreover, our competitors may offer more compelling marketing or discounting programs than we are able to offer, including by bundling multiple aesthetic products to provide a more comprehensive offering than we can. We can provide no assurance that health professionals will continue to recommend our products at their current levels, or at all. Additionally, we may be unable to continue to grow our network of health professionals and therefore may not continue to achieve revenue growth through this channel.

With respect to consumer demand, treatment with InfiniVive MD products is an elective procedure, the cost of which must be borne by the consumer, and we do not expect costs related to the treatment to be reimbursable through any third-party payor, such as Medicaid, Medicare or commercial insurance. The decision by a consumer to undergo treatment with InfiniVive MD products for aesthetic indications may be influenced by a number of factors, including the cost, efficacy, safety, perception, marketing programs for, and physician recommendations of InfiniVive MD products versus competitive products or procedures. Moreover, consumer demand may fluctuate over time as a result of consumer sentiment about the benefits and risks of aesthetic procedures generally and InfiniVive MD products in particular, changes in demographics and social trends, and general consumer confidence and consumer discretionary spending, which may be impacted by the COVID-19 outbreak, economic and political conditions.

If our InfiniVive MD products or any future product candidates fail to achieve the broad degree of physician adoption necessary for commercial success or the requisite consumer demand, our operating results and financial condition will be adversely affected, which may delay, prevent or limit our ability to generate revenue and continue our business.

FDA and FTC may undertake enforcement action against our cosmetic products if they do not accept our advertising and marketing or if those products are used beyond the intended uses that we authorize.

If our products are marketed outside of their intended use, for example if they are advertised for the treatment, diagnosis, cure, prevention, or mitigation of a disease, then regulatory agencies may issue a warning letter or further investigate our marketing practices to ensure we are complying with advertising and promotional rules that apply to the product category.

If we fail to develop and maintain our InfiniVive MD brand, our business could suffer.

We believe that InfiniVive MD is a brand that has contributed to the success of our business since it was acquired by us in 2021, and we believe our continued success depends on our ability to maintain and grow the value of our InfiniVive MD brand. Maintaining, promoting and positioning our brand and reputation will depend on, among other factors, the success of our product offerings, product safety, quality assurance, marketing and merchandising efforts, our continued focus on delivering well-designed and effective products to our consumers and our ability to provide a consistent, high-quality consumer experience. Any negative publicity, regardless of its accuracy, could have an adverse effect on our business. Brand value is based on perceptions of subjective qualities, and any incident that erodes the loyalty of our consumers, suppliers or manufacturers, including changes to our products or packaging, adverse publicity or a governmental investigation, litigation or regulatory enforcement action, could significantly reduce the value of our brands and adversely affect our business, financial condition, results of operations and prospects.

Our InfiniVive MD brand and reputation may be diminished due to real or perceived quality, safety, efficacy or environmental impact issues with its products, which could have an adverse effect on our business, financial condition, results of operations and prospects.

Any loss of confidence on the part of consumers in our InfiniVive MD products or the ingredients used in our products, whether related to product contamination or product safety or quality failures, actual or perceived, environmental impacts, or inclusion of prohibited ingredients, or ingredients that are perceived to be “toxic”, or any societal apprehension about the use of stem cells in consumer products, could tarnish the image of our brand and could cause consumers to choose other products. Allegations of contamination or other adverse effects on product safety or efficacy or suitability for use by a particular consumer or on the environment, even if untrue, may require us to expend significant time and resources responding to such allegations and could, from time to time, result in a recall of a product from any or all of the markets in which the affected product was distributed. Any such issues or recalls could negatively affect our ability to achieve or maintain profitability and brand image.

We also have no control over our InfiniVive MD products once purchased by consumers. For example, consumers may store or use our InfiniVive MD products under conditions and for periods of time inconsistent with approved directions for use or the listed expiration date or required warnings or other governmental guidelines on our labels, which may adversely affect the quality and safety of our products.

If our InfiniVive MD products are found to be, or perceived to be, defective or unsafe, or if they otherwise fail to meet our consumers’ expectations, our relationships with consumers could suffer, the appeal of our brands could be diminished, we may need to recall some of our InfiniVive MD products and/or become subject to regulatory action, and we could lose sales or market share or become subject to boycotts or liability claims. In addition, safety or other defects in our competitors’ products could reduce consumer demand for our own products if consumers view them to be similar. Any such adverse effect could be exacerbated by our market positioning as a purveyor of cosmetic products and may significantly reduce our brand’s value. Issues regarding the safety, efficacy, quality or environmental impact of any of our products, regardless of the cause, may have an adverse effect on our brand, reputation and operating results. Negative publicity about us, our brand or our InfiniVive MD products could seriously damage our brand and reputation. Any loss of confidence on the part of consumers in the quality, safety, efficacy or environmental suitability of our products would be difficult and costly to overcome, even if such concerns were based on inaccurate or misleading information. If we do not maintain the favorable perception of our InfiniVive MD brand, our business, financial condition, results of operations and prospects could be adversely affected.

The cosmetics industry is highly competitive, and if InfiniVive MD’s products are unable to compete effectively our results will suffer.

InfiniVive MD faces vigorous competition from companies throughout the world, including large multinational consumer products companies that have many cosmetics brands under ownership and standalone cosmetics brands. Competition in the cosmetics industry is based on the introduction of new products, pricing of products, quality of products and packaging, brand awareness, perceived value and quality, innovation, in-store presence and visibility, promotional activities, advertising, editorials, e-commerce and other activities. Any future direct to consumer products that we may develop, must compete with a high volume of new product introductions and existing products by diverse companies across several different distribution channels.

Many multinational consumer companies have greater financial, technical, or marketing resources, longer operating histories, greater brand recognition or larger customer bases than we do and may be able to respond more effectively to changing business and economic conditions than we can. Our competitors may attempt to gain market share by offering products at prices at or below the prices at which our InfiniVive MD products are typically offered, including through the use of large percentage discounts and “buy one and get one free” offers. Competitive pricing may require us to reduce our prices, which would decrease our profitability or result in lost sales. Our competitors, many of whom have greater resources than we do, may be better able to withstand these price reductions and lost sales.

Risks Related To The Dietary And Nutritional Supplements Industry And Fitore Products

Adulterated or misbranded products appearing on the market under the Fitore brand may subject us to costs or liabilities or damage our reputation and brand.

Adulterated or misbranded supplements sold under our Fitore brand in the future could contain harmful or unlawful ingredients or may not perform as intended. In the future, we could become involved in investigations with the FDA or other federal and state agencies as a result of adulterated or misbranded supplements. We may incur costs or liabilities resulting from an investigation or become involved in product liability litigation resulting from adulterated or misbranded supplements. Even if there is no customer harm, adulterated or misbranded products that do not perform as intended could damage our reputation and brand and lead to a loss of customer sales as a result.

We and our suppliers are subject to numerous laws and regulations that apply to the manufacture, sale and marketing of products that promote health and wellness, including cosmetics, dietary supplements, and other personal care products, and compliance with these laws and regulations, as they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to sell certain products, subject us or our suppliers to the risk of enforcement action, or otherwise adversely affect our business, results of operations and financial condition.

As a distributor of products that promote health and wellness, including cosmetics, dietary supplements, and other personal care products, we are subject to numerous health and safety laws and regulations. Our third-party manufacturers for Fitore products are also subject to such laws and regulations. These laws and regulations apply to many aspects of our business, including the manufacturing, packaging, labeling, distribution, advertising, sale, quality and safety of products we sell, as well as the health and safety of our team members and the protection of the environment. We are subject to regulation by various government agencies, including the FDA, the FTC, as well as various state and local agencies. For example, certain of our products are subject to numerous and extensive laws and regulations governing the type of claims we can make regarding our products, the product constituents that can be used to manufacture our products, and whether our product constituents or the products themselves require pre-market review or pre-market notification. Outside the United States, our activities and products are also subject to numerous similar statutes and regulations. Many of these laws and regulations involve a high level of subjectivity, are inherently fact-based and subject to interpretation, and vary significantly from market to market.

Dietary supplements are regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA), a statute which is administered by the FDA which amended the FFDCA. DSHEA expressly permits supplements to bear statements describing how a product affects the structure, function or general well-being of the body. However, no statement may expressly or implicitly represent that a supplement will diagnose, cure, mitigate, treat or prevent a disease. DSHEA has not been materially amended since it was enacted in 1994 but the newly constituted U.S. Congress or executive branch could decide to revisit whether changes are necessary to modernize this legislation.

Our dietary supplement products are required to be manufactured in compliance with current cGMP requirements. As a result, the third-party manufacturing facilities used by us or any of our current or future suppliers must be compliant with cGMPs. These manufacturing facilities are subject to ongoing periodic unannounced inspections by the FDA and corresponding state and international authorities for compliance with cGMPs and similar regulatory requirements. If we or our manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA and any applicable foreign regulatory authority, our products may be deemed noncompliant, and we could face sanctions being imposed on us, including fines, injunctions, civil penalties, delays, operating restrictions, interruptions in supply, recalls, withdrawals, issuance of safety alerts and criminal prosecutions, any of which could have a material adverse impact on our business, financial condition, results of operations and prospects. Finally, we also could experience manufacturing delays if our contractors give greater priority to the manufacture and supply of other products over our products or otherwise do not satisfactorily perform according to the terms of their agreements with us.

The FDA has broad authority to enforce the provisions of the FFDCA applicable to the safety, labeling, manufacturing and promotion of dietary supplements, including powers to issue a public warning letter to a company, publicize information about illegal products, institute an administrative detention, request or order a recall of illegal products from the market and request the Department of Justice to initiate a seizure action, an injunction action or a criminal prosecution in the U.S. courts. Pursuant to the Food Safety Modernization Act (“FSMA”), the FDA also has the power to refuse the import of dietary supplement from a foreign supplier that is not appropriately verified as in compliance with all FDA laws and regulations. Moreover, the FDA has the authority to administratively suspend the registration of any facility producing dietary supplements, deemed to present a reasonable probability of causing serious adverse health consequences.

In connection with the marketing and advertisement of certain of the products we sell, we could be the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and the consumer protection statutes of some states. Furthermore, in recent years, the FDA has been aggressive in enforcing its regulations with respect to nutrient content claims, unauthorized “health claims,” which are defined as claims that characterize the relationship between a food or food ingredient and a disease or health condition, and other claims that impermissibly suggest therapeutic benefits for certain products including dietary supplements. These events could interrupt the marketing and sales of our products, severely damage our brand reputation and public image, increase the cost of our products, result in product recalls, market withdrawals or litigation and impede our ability to deliver our products, any of which could result in a material adverse effect on our business, financial condition and results of operations.

As is common in the dietary supplements industry, we rely on our suppliers to ensure that the Fitore products that they manufacture for us comply with all applicable regulatory and legislative requirements. However, there is no assurance that our suppliers comply with such requirements and any claims of non-compliance could significantly damage our reputation and consumer confidence in our products.

We cannot predict the nature of future laws, regulations, interpretations or applications, or determine what effect either additional government regulations or administrative orders, when and if promulgated, or disparate federal, state and local regulatory schemes would have on our business in the future. They could, however, increase our costs or require the reformulation of certain products to meet new standards, the recall or discontinuance of certain products not able to be reformulated, additional recordkeeping, expanded documentation of the properties of certain products, expanded or different labeling or scientific substantiation. Another example is that the FDA could require the production of efficacy data for nutritional supplements. Any or all of such requirements could have a material adverse effect on our business, financial condition and results or operation.

If Fitore’s products cause undesirable side effects, our business may suffer.

Although many of the ingredients in Fitore’s current products are vitamins, minerals and other substances for which there is a long history of human consumption, they also contain innovative ingredients or combinations of ingredients. Although we believe all of such products and the combinations of ingredients in them will not result in adverse events when taken as directed, the products could have certain undesirable side effects if not taken as directed or if taken by a consumer that has certain medical conditions. In addition, such products may not have the effect intended if they are not taken in accordance with certain instructions, which include certain dietary restrictions. Furthermore, there can be no assurance that any of the products, even when used as directed, will have the effects intended or will not have harmful side effects in an unforeseen way or affect populations differently. If any of our Fitore products or products we develop or commercialize in the future are shown to be harmful or generate negative publicity from perceived harmful effects, our business, financial condition, results of operations and prospects would be harmed significantly.

Additional Risks Related To Our Supply Arrangements With Third-Party Foreign Medical Centers

FDA could prohibit us from exporting products for use in compassionate use programs or clinical studies in foreign jurisdictions.

Currently, we are exporting products for use in clinical studies for indications that are not subject to an FDA-authorized IND. In order to export the drug legally, we must comply with FDA regulations including 21 C.F.R. Part 312.110 and 21 C.F.R. Part 312.120. These FDA regulations require us to provide written certification to FDA regarding the countries that we plan to export the drug to and certify that the drug, among other things, complies with the foreign countries’ laws and that our clinical studies are in compliance with FDA’s regulations for foreign clinical studies that are not conducted under an IND. If FDA determines that we have not provided the proper written certification prior to export, or that our clinical studies are not in compliance with FDA rules, FDA can prohibit us from exporting the product. This could impact our revenue from our patient-sponsored studies as well as our ability to receive approval for use of AlloRx Stem Cell therapy in the United States.

FDA, FTC, and other regulatory agencies actively enforce against medical tourism companies and medical providers advertising to patients in the United States if the claims or procedures are not substantiated or in compliance with the local countries’ laws.

If one of our medical tourism partners does not take care to properly substantiate their claims or properly contextualize their claims made about their services, FTC can take enforcement action, sometimes in conjunction with foreign governments, against companies offering medical treatments in foreign countries. Enforcement can be in the form of civil money penalties or prohibitions from exporting the product to these jurisdictions.

A substantial portion of our sales of AlloRx Stem Cells for use in foreign clinical studies are completed on a purchase order basis without any written agreements. Such customers may issue fewer or smaller purchase orders than we expect under our current arrangements, which could negatively impact our revenues. In addition, although these purchase orders are generally not cancelable, such customers may decide to delay or cancel orders, which could also negatively impact our revenues.

Generally, under our arrangements with foreign third-party clinics and medical centers, customers must issue purchase orders for AlloRx Stem Cells. Although these purchase orders stipulate key terms including order quantity, price, payment terms, and delivery instructions, these arrangements are typically not governed by any written agreement and have no minimum purchase requirements. In addition, although orders covered by firm purchase orders are generally not cancelable, customers may decide to delay or cancel orders, and we may have difficulty enforcing the provisions of the purchase order. In the event that customers with whom we supply AlloRx Stem Cells, including foreign third-party clinics and medical centers, issue fewer or smaller purchase orders than we expect, or we experience any delays or cancellations in orders (due to current distress in the global economy caused by the COVID-19 pandemic or otherwise), our revenues could decline substantially. Any such decline could result in us incurring net losses, increasing our accumulated deficit and needing to raise additional capital to fund our operations.

Risks Related to Ownership of our Common Stock

Our principal stockholders and management, including our Chief Science Officer and our former Chief Executive Officer in particular, own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Prior to this offering, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 59.6%59.1% of our common stock and, upon completion of this offering, that same group will beneficially own approximately %40.1% of our outstanding common stock (assuming no purchases of shares in this offering by any of this group). Subject to the terms of a Standstill Agreement, dated November 20, 2022, between the Company and Dr. Jack Zamora (the “Standstill Agreement”), Dr. Zamora, our former Chief Executive Officer and former Chair of the Board of Directors, beneficially owns approximately 31%31.2% of our common stock prior to this offering and will beneficially own approximately %20.9% of our outstanding voting stock following this offering. Pursuant to the Standstill Agreement, Dr. Zamora granted an irrevocable proxy and power-of-attorney to our Chief Executive Officer, Christopher Furman, for so long as he is acting in such position, and our Chair of the Board, which such position is currently held by John Packs, to vote or act by written consent with respect to the shares of our common stock held by Dr. Zamora until the expiration of the Standstill Term (as defined below). See “Certain Relationships and Related-Party Transactions” for additional information regarding the Standstill Agreement.

This concentration of control creates a number of risks. After this offering, this group of stockholders will have the ability to exert significant influence over us through this ownership position. These stockholders may be able to exert significant influence over all matters requiring stockholder approval, including with respect to elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets or other major corporate transaction, and our stockholders may find it difficult to replace members of management should our stockholders disagree with the manner in which the Company is operated. Furthermore, this concentration of ownership may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders.

The price of our stock may be volatile, and you could lose all or part of your investment.

The trading price of our common stock following this offering is likely to be highly volatile and subject to wide fluctuations in response to various factors, some of which we cannot control. The stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this prospectus, these factors include:

The realization of any of the above risks or any of a broad range of other risks, including those described in this “Risk Factors” section, could have a dramatic and adverse impact on the market price of our common stock.

If our common stock is accepted for listing on the NYSE American, we will be subject to the continued listing standards of the NYSE American, and our failure to satisfy these criteria may result in delisting of our common stock.

We intend to apply for listing of our common stock on the NYSE American. If we are successful in obtaining that listing, maintaining it will generally require that we maintain a minimum amount of stockholders’ equity, a minimum number of public stockholders and a minimum aggregate market value of shares publicly held, subject to certain exceptions. The NYSE American may also delist the securities of any issuer if the issuer’s common stock is selling for a substantial period of time at a low price per share and the issuer fails to effect a reverse split of such shares within a reasonable time after being notified that the NYSE American deems such action to be appropriate under all the circumstances. In addition to its more quantitative standards, the NYSE American may delist the securities of any issuer if, in its opinion, the issuer’s financial condition and/or operating results appear unsatisfactory; if it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make continued listing inadvisable; if the issuer sells or disposes of principal operating assets or ceases to be an operating company; if an issuer fails to comply with the NYSE American’s listing requirements; or if any other event occurs or any condition exists which makes continued listing on the NYSE American, in its opinion, inadvisable.

If the NYSE American were to subsequently delist our common stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities, reduced liquidity, decreased analyst coverage of our securities, and an inability for us to obtain additional financing to fund our operations.

You will experience immediate and substantial dilution in the net tangible book value of the shares of common stock you purchase in this offering. Raising additional capital in the future may also cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.