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What changed in PharmaCyte Biotech, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PharmaCyte Biotech, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+341 added−342 removedSource: 10-K (2025-08-11) vs 10-K (2024-08-13)

Top changes in PharmaCyte Biotech, Inc.'s 2025 10-K

341 paragraphs added · 342 removed · 263 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

95 edited+21 added−21 removed317 unchanged
Biggest changeIn order to address the clinical hold, the FDA has requested that we: · Provide additional sequencing data and genetic stability studies; · Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”); · Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer; · Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer; · Provide additional product release specifications for our encapsulated cells; · Demonstrate comparability between the 1st and 2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations; · Conduct a biocompatibility assessment using the capsules material; · Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File; · Conduct an additional nonclinical study in animals to assess the safety, activity, and distribution of the product candidate for pancreatic cancer; and · Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated. 2 The FDA also requested that we address the following issues as an amendment to our IND: · Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests for assessing purity, safety, and potency; · Perform qualification studies for the drug substance filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process; · Submit an updated batch analysis for the product candidate for the specific lot that will be used for manufacturing all future product candidates; · Provide additional details for the methodology for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays; · Provide a few examples of common microcatheters that fit the specifications in our Angiography Procedure Manual; · Clarify the language in our Pharmacy Manual regarding proper use of the syringe fill with the product candidate for pancreatic cancer; and · Provide a discussion with data for trial of the potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated toxicities in our study population.
Biggest changeIn order to address the clinical hold, the FDA has requested that we: · Provide additional sequencing data and genetic stability studies; · Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”); · Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer; · Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer; · Provide additional product release specifications for our encapsulated cells; · Demonstrate comparability between the 1st and 2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations; · Conduct a biocompatibility assessment using the capsules material; · Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File; · Conduct an additional nonclinical study in animals to assess the safety, activity, and distribution of the product candidate for pancreatic cancer; and · Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated.
Bavarian Nordic/GSF and Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License Agreement”) to reflect that: (i) the license granted was exclusive; (ii) a royalty rate increased from 3% to 4.5%; (iii) Bio Blue Bird assumed the patent prosecution expenses for the existing patents; and (iv) to make clear that the license will survive as a license granted by one of the licensors if the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions or declarations of insolvency. 5 In October 2016, Bavarian Nordic/GSF and Bio Blue Bird further amended the Bavarian Nordic License Agreement (“Second Amendment to Bavarian Nordic/GSF License Agreement”) in order to: (i) include the right to import in the scope of the license; (ii) reflect ownership and notification of improvements; (iii) clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement; (iv) provide rights to Bio Blue Bird to the clinical data after the expiration of the licensed patent rights; and (v) change the notice address and recipients of Bio Blue Bird.
Bavarian Nordic/GSF and Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License Agreement”) to reflect that: (i) the license granted was exclusive; (ii) a royalty rate increased from 3% to 4.5%; (iii) Bio Blue Bird assumed the patent prosecution expenses for the existing patents; and (iv) to make clear that the license will survive as a license granted by one of the licensors if the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions or declarations of insolvency. 4 In October 2016, Bavarian Nordic/GSF and Bio Blue Bird further amended the Bavarian Nordic License Agreement (“Second Amendment to Bavarian Nordic/GSF License Agreement”) in order to: (i) include the right to import in the scope of the license; (ii) reflect ownership and notification of improvements; (iii) clarify which provisions survive expiration or termination of the Bavarian Nordic License Agreement; (iv) provide rights to Bio Blue Bird to the clinical data after the expiration of the licensed patent rights; and (v) change the notice address and recipients of Bio Blue Bird.
Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is of 150 days, excluding stop-clocks.
Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding stop-clocks.
Pancreatic cancer accounts for about 3% of all cancers in the U.S. and about 7% of all cancer deaths. 6 Our goal is to satisfy a clear unmet medical need for patients with LAPC whose tumors no longer respond after 4-6 months of treatment with the chemotherapy combination of Abraxane ® plus gemcitabine or the four-drug combination known as FOLFIRINOX.
Pancreatic cancer accounts for about 3% of all cancers in the U.S. and about 7% of all cancer deaths. 5 Our goal is to satisfy a clear unmet medical need for patients with LAPC whose tumors no longer respond after 4-6 months of treatment with the chemotherapy combination of Abraxane ® plus gemcitabine or the four-drug combination known as FOLFIRINOX.
Compliance with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance. In July 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the European Union to the U.S. – the EU-U.S.
Compliance with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance. 22 In July 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the European Union to the U.S. – the EU-U.S.
Other states have implemented laws protecting identifiable health and personal information, many of which laws differ from each other in significant ways and may not be preempted by HIPAA, thus complicating compliance efforts. 30 The federal Physician Payments Sunshine Act under the ACA and its implementing regulations also require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions, to make annual reports to CMS regarding payments and other transfers of value made to or at the request of covered recipients, such as, but not limited to physicians, certain advanced non-physician healthcare providers, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family.
Other states have implemented laws protecting identifiable health and personal information, many of which laws differ from each other in significant ways and may not be preempted by HIPAA, thus complicating compliance efforts. 27 The federal Physician Payments Sunshine Act under the ACA and its implementing regulations also require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions, to make annual reports to CMS regarding payments and other transfers of value made to or at the request of covered recipients, such as, but not limited to physicians, certain advanced non-physician healthcare providers, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family.
Congress also recently amended the FDCA to give the agency the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA. 21 Regulation Outside of the U.S.
Congress also recently amended the FDCA to give the agency the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA. Regulation Outside of the U.S.
For more information, see Item 1A. “Risk Factors.” 9 U.S. Government Regulation The FDA is the main regulatory body that controls pharmaceuticals and biologics in the U.S. Its regulatory authority is based in the FDCA and the Public Health Service Act. Pharmaceutical products and biologics are also subject to other federal, state and local statutes and regulations.
For more information, see Item 1A. “Risk Factors.” U.S. Government Regulation The FDA is the main regulatory body that controls pharmaceuticals and biologics in the U.S. Its regulatory authority is based in the FDCA and the Public Health Service Act. Pharmaceutical products and biologics are also subject to other federal, state and local statutes and regulations.
Some long-term nonclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after an IND for an investigational drug or biologic candidate is submitted to the FDA and human clinical trials have been initiated. An IND is a request for authorization from the FDA to administer an investigational product candidate to humans.
Some long-term nonclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after an IND for an investigational drug or biologic candidate is submitted to the FDA and human clinical trials have been initiated. 8 An IND is a request for authorization from the FDA to administer an investigational product candidate to humans.
Congress also recently amended the FDCA, as part of the Consolidated Appropriations Act for 2023, in order to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug or biologic to support marketing authorization, to design and submit a diversity action plan for such clinical trial.
Congress also amended the FDCA, as part of the Consolidated Appropriations Act for 2023, in order to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug or biologic to support marketing authorization, to design and submit a diversity action plan for such clinical trial.
Such enforcement action may lead to a range of penalties that could have a significant commercial impact, including civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes its approved drug and biological products. 17 U.S.
Such enforcement action may lead to a range of penalties that could have a significant commercial impact, including civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes its approved drug and biological products. U.S.
Subject to certain payment adjustments and limits, Medicare generally pays for a Part B-covered drug based on a percentage of manufacturer-reported average sales price, which is regularly updated. 28 Different pricing and reimbursement schemes exist in other countries.
Subject to certain payment adjustments and limits, Medicare generally pays for a Part B-covered drug based on a percentage of manufacturer-reported average sales price, which is regularly updated. Different pricing and reimbursement schemes exist in other countries.
We have commenced testing to show that exposure of CypCaps™ to the contrast medium interventional radiologists ‌used to implant the CypCaps™ in a patient has no adverse effect on CypCaps™. Contrast medium is used to visualize the blood vessels during implantation. · Master Drug File Information .
We have commenced testing to show that exposure of CypCaps™ to the contrast medium interventional radiologists ‌used to implant the CypCaps™ in a patient has no adverse effect on CypCaps™. Contrast medium is used to visualize the blood vessels during implantation. 3 · Master Drug File Information .
Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor. The BPCIA is complex and is still being interpreted and implemented by the FDA and by federal judges.
Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor. 16 The BPCIA is complex and is still being interpreted and implemented by the FDA and by federal judges.
If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation became applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial. The Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.
If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation became applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial. 19 The Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.
A clinical trial involves the administration of the investigational product candidate to patients under the supervision of qualified investigators following GCP standards, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial (unless the consent requirement has been waived by an IRB) along with the requirement to ensure that the data and results reported fom the clinical trials are credible and accurate.
A clinical trial involves the administration of the investigational product candidate to patients under the supervision of qualified investigators following GCP standards, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial (unless the consent requirement has been waived by an IRB) along with the requirement to ensure that the data and results reported from the clinical trials are credible and accurate.
We are dependent on business relationships with parties in multiple countries, as disclosed in Item 1A. “Risk Factors—Risks Related to Our Dependence on Third Parties.” 32
We are dependent on business relationships with parties in multiple countries, as disclosed in Item 1A. “Risk Factors—Risks Related to Our Dependence on Third Parties.”
Having a SPA does not guarantee that a product candidate will receive FDA approval. 12 Concurrent with clinical trials, companies usually complete additional nonclinical studies and must also develop additional information about the physical characteristics of the drug or biological product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Having a SPA does not guarantee that a product candidate will receive FDA approval. 10 Concurrent with clinical trials, companies usually complete additional nonclinical studies and must also develop additional information about the physical characteristics of the drug or biological product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. 14 FDA Review and Approval Process for Combination Products A combination product is a product composed of a combination of two or more FDA-regulated product constituent parts or products, e.g., drug-device or biologic-device.
After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. 12 FDA Review and Approval Process for Combination Products A combination product is a product composed of a combination of two or more FDA-regulated product constituent parts or products, e.g., drug-device or biologic-device.
In this way, we believe that when a cancer prodrug is administered to a patient with a particular type of cancer that may be affected by the resulting active drug, the killing of the patient’s cancerous tumor may be optimized both by enhanced potency and limited exposure away from the target tumor.
In this way, we believe that when a cancer prodrug is administered to a patient with a particular type of cancer that may be affected by the resulting active drug, the killing or shrinking the patient’s cancerous tumor may be optimized both by enhanced potency and limited exposure away from the target tumor.
The result of this analysis of the sequence data confirmed that the genes are intact. 3 · Confirmation of the Exact Sequence of the Cytochrome P450 2B1 Gene Insert .
The result of this analysis of the sequence data confirmed that the genes are intact. · Confirmation of the Exact Sequence of the Cytochrome P450 2B1 Gene Insert .
We have been developing therapies for pancreatic tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug into its cancer-killing form. We encapsulate those cells using the Cell-in-a-Box® technology and place those capsules in the body as close as possible to the tumor.
We have been developing therapies for pancreatic tumors by using genetically engineered live human cells that we believe may be capable of converting a cancer prodrug into its cancer-killing form. We encapsulate those cells using the Cell-in-a-Box® technology and place those capsules in the body as close as possible to the tumor.
General Data Protection Regulation The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the European Union’s General Data Protection Regulation (“ GDPR”), which became effective on May 25, 2018.
General Data Protection Regulation The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the European Union’s General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018.
We have completed the determination of the exact sequence of the cytochrome P450 2B1 gene inserted at the site previously identified on chromosome 9 using state-of-the-art nanopore sequencing. This is a cutting edge, unique and scalable technology that permits real-time analysis of long DNA fragments.
We have completed the determination of the exact sequence of the cytochrome P450 2B1 gene inserted at the site previously identified on chromosome 9 using state-of-the-art nanopore sequencing. This is a scalable technology that permits real-time analysis of long DNA fragments.
More recently, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA. Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the U.S.
In August 2022, the Inflation Reduction Act of 2022, was signed into law, or the IRA. Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the U.S.
We have successfully completed the required product stability studies. The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C. These studies included container closure integrity testing for certain timepoints. · Additional Studies Requested by the FDA .
The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C. These studies included container closure integrity testing for certain timepoints. · Additional Studies Requested by the FDA .
Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. 19 Upon the approval of the first NDA or BLA for a drug or biologic designated as an Orphan Drug for a specified indication, the sponsor of that NDA or BLA is entitled to seven years of exclusive marketing rights in the U.S. for the drug or biologic for the particular indication, during which time the FDA may not approve any other applications to market the same drug for the same indication, except in very limited circumstances.
Upon the approval of the first NDA or BLA for a drug or biologic designated as an Orphan Drug for a specified indication, the sponsor of that NDA or BLA is entitled to seven years of exclusive marketing rights in the U.S. for the drug or biologic for the particular indication, during which time the FDA may not approve any other applications to market the same drug for the same indication, except in very limited circumstances.
These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA.
Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA.
We assembled a scientific and regulatory team to address the FDA requests. That team has been working diligently to complete the items requested by the FDA. The following provides a detailed summary of our activities to have the clinical hold lifted: · Stability Studies on Our Clinical Trial Product Candidate for Pancreatic Cancer .
That team has been working diligently to complete the items requested by the FDA. The following provides a detailed summary of our activities to have the clinical hold lifted: · Stability Studies on Our Clinical Trial Product Candidate for Pancreatic Cancer . We have successfully completed the required product stability studies.
We have long-lived assets, other than financial instruments, located in the following geographical areas: FY 2024 FY 2023 U.S.: $ 1,557,115 $ 5,129,308 All foreign countries, in total: $ 0 $ 0 We operate globally and are attempting to develop products in multiple countries.
We have long-lived assets, other than financial instruments, located in the following geographical areas: FY 2025 FY 2024 U.S.: $ 1,549,427 $ 1,549,427 All foreign countries, in total: $ 0 $ 0 28 We operate globally and are attempting to develop products in multiple countries.
Under these two options, the manufacturer demonstrates compliance with: (1) All cGMP regulations applicable to each separate regulated constituent part included in the combination product; or (2) either the drug cGMP or the QSR (if there is a device constituent part), as well as with specified provisions from the other of these two sets of requirements (also called the “streamlined approach”).
Under these two options, the manufacturer demonstrates compliance with: (1) All cGMP regulations applicable to each separate regulated constituent part included in the combination product; or (2) either the drug cGMP or the QSR (if there is a device constituent part), as well as with specified provisions from the other of these two sets of requirements (also called the “streamlined approach”). 13 Post Approval Regulations After regulatory approval of a drug or biologic is obtained, a company is required to comply with pervasive and continuing FDA requirements.
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 otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.
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 otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations. 23 As previously mentioned, the primary trend in the U.S. healthcare industry and elsewhere is cost containment.
The steps required before a new drug or biologic may be marketed in the U.S. generally include: · completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations; · submission to the FDA of an IND to support human clinical testing in the U.S.; · approval by an IRB at each clinical site before a trial may be initiated at that site; · performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices (“GCP”) and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product candidate for each target indication; · submission to the FDA of a New Drug Application (“NDA”) for a drug or Biologics License Application (“BLA”) for a biologic for marketing approval, including payment of application user fees · satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the investigational product candidate is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the product candidate’s identity, strength, quality and purity; · potential FDA audit of the clinical trial sites to assure compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA; · satisfactory completion of an FDA Advisory Committee review, if applicable; and · FDA review and approval of the NDA or BLA.
These sanctions could include, among other things, the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold on clinical trials, FDA refusal to approve pending marketing applications or supplements, withdrawal of previously granted approval, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. 7 The steps required before a new drug or biologic may be marketed in the U.S. generally include: · completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations; · submission to the FDA of an IND to support human clinical testing in the U.S.; · approval by an IRB at each clinical site before a trial may be initiated at that site; · performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices (“GCP”) and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product candidate for each target indication; · submission to the FDA of a New Drug Application (“NDA”) for a drug or Biologics License Application (“BLA”) for a biologic for marketing approval, including payment of application user fees · satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the investigational product candidate is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the product candidate’s identity, strength, quality and purity; · potential FDA audit of the clinical trial sites to assure compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA; · satisfactory completion of an FDA Advisory Committee review, if applicable; and · FDA review and approval of the NDA or BLA.
The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization. 23 Pediatric studies Prior to obtaining a marketing authorization in the European Union, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.
Pediatric studies Prior to obtaining a marketing authorization in the European Union, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.
Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make.
Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make. This could lead to the loss of current or prospective customers or other business relationships.
The ten-year market exclusivity in the European Union may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.
Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. 21 The ten-year market exclusivity in the European Union may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.
As previously mentioned, the primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies.
Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies.
On October 30, 2020, the FDA sent us a letter setting forth the reasons for the clinical hold and providing specific guidance on what we must do to have the clinical hold lifted.
On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold. On October 30, 2020, the FDA sent us a letter setting forth the reasons for the clinical hold and providing specific guidance on what we must do to have the clinical hold lifted.
The product candidate is administered to such patients to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific indications and to determine dosage tolerance and optimal dosage. Phase 2 clinical trials are typically well-controlled and closely monitored.
The product candidate is administered to such patients to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific indications and to determine dosage tolerance and optimal dosage.
Upon licensure by the FDA, an interchangeable biosimilar may be substituted for the reference product without the intervention of the healthcare provider who prescribed the reference product. 18 The biosimilar applicant must demonstrate that the product is biosimilar based on data from (1) analytical studies showing that the biosimilar product is highly similar to the reference product; (2) animal studies (including toxicity); and (3) one or more clinical studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.
The biosimilar applicant must demonstrate that the product is biosimilar based on data from (1) analytical studies showing that the biosimilar product is highly similar to the reference product; (2) animal studies (including toxicity); and (3) one or more clinical studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.
Other potential consequences include, among other things: · restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; · fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; 16 · refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals; · product seizure or detention, or refusal to permit the import or export of products; · injunctions or the imposition of civil or criminal penalties; · consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; and/or · mandated modification of promotional materials and labeling and the issuance of corrective information.
Other potential consequences include, among other things: · restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; · fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; · refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals; · product seizure or detention, or refusal to permit the import or export of products; · injunctions or the imposition of civil or criminal penalties; · consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; and/or · mandated modification of promotional materials and labeling and the issuance of corrective information. 14 In addition, the distribution of prescription pharmaceutical and biological products is subject to the Prescription Drug Marketing Act (“PDMA”) which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.
Our future success will be dependent upon our ability to compete. Material Agreements Third Addendum to the SG Austria APA In June 2013, we and SG Austria entered the Third Addendum and the Clarification Agreement.
Our future success will be dependent upon our ability to compete. Material Agreements Fourth Addendum to the SG Austria APA In May 2018, we and SG Austria entered the Fourth Addendum to the Asset Purchase Agreement.
The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug or biologic.
The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug or biologic. 18 The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a drug or biologic, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.
In the case of some products for severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. 11 Phase 2 Clinical Trial : A Phase 2 clinical trial is conducted on a limited number of patients; these patients can have a specific targeted disease.
In the case of some products for severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.
The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities substantially comply with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
Before approving an NDA or a BLA, the FDA will typically inspect the facilities at which the product is manufactured. The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities substantially comply with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
FDA also may require the development of a risk evaluation and mitigation strategy (“REMS”) if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug or biological product.
The FDA also may inspect the sponsor and one or more clinical trial sites to assure compliance with GCP requirements and the integrity of the clinical data submitted to the FDA. 11 FDA also may require the development of a risk evaluation and mitigation strategy (“REMS”) if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug or biological product.
GDPR sits alongside the amended United Kingdom Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law. Under the U.K.
Following the United Kingdom’s withdrawal from the European Union, the GDPR has been implemented in the United Kingdom (as the U.K. GDPR). The U.K. GDPR sits alongside the amended United Kingdom Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law. Under the U.K.
To obtain a marketing authorization of a drug in the European Union, we may submit marketing authorization applications, or MAA, either under the so-called centralized or national authorization procedures. 22 Centralized procedure The centralized procedure provides for the grant of a single marketing authorization following a favorable opinion by the European Medicines Agency, or EMA, that is valid in all EU member states, as well as Iceland, Liechtenstein and Norway.
Centralized procedure The centralized procedure provides for the grant of a single marketing authorization following a favorable opinion by the European Medicines Agency, or EMA, that is valid in all EU member states, as well as Iceland, Liechtenstein and Norway.
Combination products are subject to FDA user fees based on the type of application submitted for the product’s premarket approval or clearance.
Combination products are subject to FDA user fees based on the type of application submitted for the product’s premarket approval or clearance. For example, a combination product for which an NDA is submitted is subject to the NDA fee under PDUFA.
The current generation of our product candidate is referred to as “CypCaps™.” During the year ended April 30, 2024, we determined that research and development in the treatment of diabetes would no longer be pursued.
The current generation of our product candidate is referred to as “CypCaps™.” During the year ended April 30, 2024, we determined that research and development in the treatment of diabetes would no longer be pursued. On November 17, 2023, the Board formed the Strategic Scientific Committee (the “Scientific Committee”), chaired by Dr. Michael Abecassis.
We license technology and trademarks relating to two areas: (i) live cell encapsulation with cells that express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules and (ii) treatment of solid cancerous tumors.
We license technology and trademarks relating to two areas: (i) live cell encapsulation with cells that express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules and (ii) treatment of solid cancerous tumors. 6 Litigation may be required to protect our product candidates, intellectual property rights or to determine the validity and scope of the proprietary rights of others.
Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions or specific obligations.
Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower to assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for purposes of the federal False Claims Act, as discussed below.
Moreover, the intent standard under the Anti-Kickback Statute was amended by the ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it to have committed a violation. 26 In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower to assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for purposes of the federal False Claims Act, as discussed below.
Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the Commission, and should not be relied upon.
Our filings with the Commission are available free of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the Commission. Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the Commission, and should not be relied upon.
This is typically a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
This is typically a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Smaller Reporting Company We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act, and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K. 31 Financial Information Concerning Geographic Areas We had no revenues in the fiscal years ended April 30, 2024, and 2023, including no revenues from foreign countries.
Smaller Reporting Company We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act, and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K.
The applicant will receive a fee reduction for the marketing authorization application if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
The applicant will receive a fee reduction for the marketing authorization application if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted.
These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing. 27 In the European Union, many member states have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union.
In the European Union, many member states have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union. The downward pressure on healthcare costs in general, particularly prescription products, has become intense.
The cells encapsulated using the Cell-in-a-Box ® technology can be frozen for extended periods of time. When thawed, the cells are recovered with approximately 85% viability. We are unaware of any other cell encapsulation material that is capable of protecting their encapsulated cells to this degree.
When thawed, the cells are recovered with approximately 85% viability. We are unaware of any other cell encapsulation material that is capable of protecting their encapsulated cells to this degree. The implications of this property of the Cell-in-a-Box ® technology are obvious – long-term storage of encapsulated cells and shipment of encapsulated cells over long distances.
The federal Civil Monetary Penalties Law imposes fines against any person or entity that, among other things, is determined to have knowingly presented, or caused to be presented, a claim to a federal healthcare program that the person knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent. 29 The federal civil False Claims Act (“FCA”) prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal government.
The federal Civil Monetary Penalties Law imposes fines against any person or entity that, among other things, is determined to have knowingly presented, or caused to be presented, a claim to a federal healthcare program that the person knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent.
To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.
The designation programs are intended to expedite the process for the development and review of such products, and ultimately, to provide important new drugs or biologics to patients earlier than under standard FDA review procedures. 17 To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.
At the state level, individual states are increasingly aggressive in passing legislation and implementing 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, designed to encourage importation from other countries and bulk purchasing.
As of February 2024, the CMS Innovation Center continues to test the proposed models and has started to roll out plans for access model testing of certain product types (e.g., cell and gene therapies) by states and manufacturers. 24 At the state level, individual states are increasingly aggressive in passing legislation and implementing 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, designed to encourage importation from other countries and bulk purchasing.
In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
We expect that changes or additions to the ACA, the Medicare and Medicaid programs, and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry in the U.S. 26 Moreover, there has been heightened governmental scrutiny over the manner in which 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.
Moreover, there has been heightened governmental scrutiny over the manner in which 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.
In addition, NDA and BLA holders are subject to regulations governing, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label use”) and limitations on industry-sponsored scientific and educational activities.If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA/BLA or an NDA/BLA supplement, which may require the applicant to develop additional data or conduct additional nonclinical studies and clinical trials.
In addition, NDA and BLA holders are subject to regulations governing, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label use”) and limitations on industry-sponsored scientific and educational activities.
For example, under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which provide coverage for outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Parts A and B, Part D coverage is not standardized.
Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Parts A and B, Part D coverage is not standardized.
The restructuring resulted in us focusing our efforts to develop a novel, effective and safe way to treat cancer. In January 2015, we changed our name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the nature of our current business. Our corporate headquarters are located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169.
In 2013, we restructured our operations to focus on biotechnology. The restructuring resulted in us focusing our efforts to develop a novel, effective and safe way to treat cancer. In January 2015, we changed our name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the nature of our current business.
The cells within the capsules also remained alive and functioning during these studies. Other encapsulating materials degrade in the human body over time, leaving the encapsulated cells open to immune system attack. Damage to surrounding tissues has also been reported to occur over time when other types of encapsulation materials begin to degrade.
Other encapsulating materials degrade in the human body over time, leaving the encapsulated cells open to immune system attack. Damage to surrounding tissues has also been reported to occur over time when other types of encapsulation materials begin to degrade. The cells encapsulated using the Cell-in-a-Box ® technology can be frozen for extended periods of time.
Pediatric Exclusivity Pediatric exclusivity is a type of non-patent marketing exclusivity available in the U.S. and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.
In the future, if any of our product candidates receive FDA approval, we expect to apply for patent term extension on patents covering those products that may be eligible for such patent term restoration. 15 Pediatric Exclusivity Pediatric exclusivity is a type of non-patent marketing exclusivity available in the U.S. and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.
Austrianova from time to time has experienced significant supply chain delays, and we believe Austrianova may also be experiencing liquidity issues as well. If Austrianova is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement manufacturer for our product candidates.
If Austrianova is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement manufacturer for our product candidates.
Reference pricing used by various EU member states, and parallel trade, i.e., arbitrage between low-priced and high-priced member states, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for medicinal products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.
There can be no assurance that any country that has price controls or reimbursement limitations for medicinal products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.
Conditional approval In specific circumstances, EU legislation (Article 14(7) Regulation (EC) No 726/2004 and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.
Under the above-described procedures, before granting the marketing authorization, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. 20 Conditional approval In specific circumstances, EU legislation (Article 14(7) Regulation (EC) No 726/2004 and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.
Manufacturers of human cellular or tissue-based biologics also must comply with the FDA’s Good Tissue Practices (“GTP”), as applicable, and with the general biological product standards. The FDA also may inspect the sponsor and one or more clinical trial sites to assure compliance with GCP requirements and the integrity of the clinical data submitted to the FDA.
Manufacturers of human cellular or tissue-based biologics also must comply with the FDA’s Good Tissue Practices (“GTP”), as applicable, and with the general biological product standards.
The consultants are physicians, scientists, regulatory experts, clinical operation experts and cGMP experts. All of our research and development (“R&D”) work is handled by our consultants. 8 Our Corporate Information We are a Nevada corporation incorporated in 1996. In 2013, we restructured our operations to focus on biotechnology.
Human Capital As of April 30, 2025, we had two full-time employees and several consultants who devote substantial time to us. The consultants are physicians, scientists, regulatory experts, clinical operation experts and cGMP experts. All of our research and development (“R&D”) work is handled by our consultants. Our Corporate Information We are a Nevada corporation incorporated in 1996.
Other materials used by competitors include alginate, collagen, chitosan, gelatin and agarose. Alginate appears to be the most widely used of these. We believe the inherent strength and durability of our cellulose-based capsules provides us with advantages over the competition. They do so with no evidence of rupture, damage, degradation, fibrous overgrowth or immune system response.
We believe the inherent strength and durability of our cellulose-based capsules provides us with advantages over the competition. They do so with no evidence of rupture, damage, degradation, fibrous overgrowth or immune system response. The cells within the capsules also remained alive and functioning during these studies.
Additionally, marketing authorization may be granted to a similar product for the same indication at any time if: · the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; · the applicant consents to a second orphan medicinal product application; or · the applicant cannot supply enough orphan medicinal product. 24 PRIME designation The EMA grants access to the Priority Medicines, or PRIME, program to investigational medicines for which it determines there to be preliminary data available showing the potential to address an unmet medical need and bring a major therapeutic advantage to patients.
Additionally, marketing authorization may be granted to a similar product for the same indication at any time if: · the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; · the applicant consents to a second orphan medicinal product application; or · the applicant cannot supply enough orphan medicinal product.
The FDA has issued a combination product cGMP regulation, along with final guidance, describing two approaches a combination product manufacturer may follow to demonstrate compliance.
Since a combination product incorporates two or more constituent parts that have different regulatory requirements, a combination product manufacturer must comply with all cGMP requirements that apply to each constituent part. The FDA has issued a combination product cGMP regulation, along with final guidance, describing two approaches a combination product manufacturer may follow to demonstrate compliance.
Preclinical tests generally include laboratory evaluations of a product candidate’s chemical and biological activities, formulation and stability, as well as studies to evaluate toxicity in animals and potential for other adverse events, which support subsequent clinical testing and rationale for subsequent therapeutic use. 10 The Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L. 117-328) amended both the FDCA and PHSA to specify that nonclinical testing for drugs and biologics, respectively, may, but is not required to, include in vivo animal testing.
The Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L. 117-328) amended both the FDCA and PHSA to specify that nonclinical testing for drugs and biologics, respectively, may, but is not required to, include in vivo animal testing.
The FDA must take certain actions with respect to breakthrough therapies, such as holding timely meetings and providing advice, which are intended to expedite the development and review of an application for approval of a breakthrough therapy. 20 Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
We seek to resolve these non-clinical issues to enable FDA review of a new clinical protocol that reflects the standard of care for LAPC. 4 History of the Business In 2013, we restructured our operations to focus on biotechnology.
We seek to resolve these non-clinical issues to enable FDA review of a new clinical protocol that reflects the standard of care for LAPC. We assembled a scientific and regulatory team of experts to address the FDA requests.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur present and future capital requirements will be significant and will depend on many factors, including: · our ability to complete the studies requested by the FDA with respect to our IND filing; · whether the FDA lifts the clinical hold on our IND filing for LAPC; · the progress and results of our development efforts for our product candidates; · the costs, timing and outcome of regulatory review of our product candidates; · the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; · the effect of competing technological and market developments; · market acceptance of our product candidates; · the rate of progress in establishing coverage and reimbursement arrangements with domestic and international commercial third-party payors and government payors; · the extent to which we acquire or in-license other products and technologies; and · legal, accounting, insurance and other professional and business-related costs.
Biggest changeOur operating and capital requirements during this fiscal year and thereafter will vary based on several factors, including whether we can complete the studies requested by the FDA with respect to our IND filing, whether the FDA allows us to commence our planned clinical trial for LAPC, how quickly enrollment of patients in our such trial can be commenced, the duration of the clinical trial and any change in the clinical development plans for our product candidates and the outcome, timing and cost of meeting regulatory requirements established by the FDA and the EMA or other comparable foreign regulatory authorities. 33 Our present and future capital requirements will be significant and will depend on many factors, including: · our ability to complete the studies requested by the FDA with respect to our IND filing; · whether the FDA lifts the clinical hold on our IND filing for LAPC; · the progress and results of our development efforts for our product candidates; · the costs, timing and outcome of regulatory review of our product candidates; · the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; · the effect of competing technological and market developments; · market acceptance of our product candidates; · the rate of progress in establishing coverage and reimbursement arrangements with domestic and international commercial third-party payors and government payors; · the extent to which we acquire or in-license other products and technologies; and · legal, accounting, insurance and other professional and business-related costs.
We rely on Prof. Günzburg and Dr. Salmons for the development of our product candidates. If they decide to terminate their relationship with us, we may not be successful in the development of our product candidates. We rely on Prof. Walter H. Günzburg and Dr. Brian Salmons, officers of Austrianova, for the development of our product candidates.
If they decide to terminate their relationship with us, we may not be successful in the development of our product candidates. We rely on Prof. Walter H. Günzburg and Dr. Brian Salmons, officers of Austrianova, for the development of our product candidates.
Future collaborations we may enter may involve the following risks: · Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; · Collaborators may not perform their obligations as expected; · Changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities; 59 · Collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by us, stop or abandon preclinical or clinical development of a product candidate or must repeat or conduct new preclinical and clinical development of a product candidate; · Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than ours; · Product candidates may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of our product candidates; · Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development might cause delays or termination of the preclinical or clinical development or commercialization of product candidates.
Future collaborations we may enter may involve the following risks: · Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; · Collaborators may not perform their obligations as expected; · Changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities; · Collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by us, stop or abandon preclinical or clinical development of a product candidate or must repeat or conduct new preclinical and clinical development of a product candidate; · Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than ours; · Product candidates may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of our product candidates; · Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development might cause delays or termination of the preclinical or clinical development or commercialization of product candidates.
Restrictions under applicable healthcare laws and regulations include the following: 51 The Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; The False Claims Act imposes criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the Federal governments; and HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Restrictions under applicable healthcare laws and regulations include the following: The Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; The False Claims Act imposes criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the Federal governments; and HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
If, following approval of a product candidate, we or others discover that the product candidate is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following could occur: · A regulatory agency may withdraw its approval of the product candidate or seize the product candidate; · We may be required to recall the product candidate or change the way the product is administered; · Additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product candidate; · We may be subject to fines, injunctions or the imposition of civil or criminal penalties; · A regulatory agency may require the addition of labeling statements, such as a “black box” warning or a contraindication; · We may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution of our product candidate to patients; · We could be sued and held liable for harm caused to patients; · The product candidate may become less competitive; and · Our reputation may suffer.
If, following approval of a product candidate, we or others discover that the product candidate is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following could occur: · A regulatory agency may withdraw its approval of the product candidate or seize the product candidate; · We may be required to recall the product candidate or change the way the product is administered; · Additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product candidate; · We may be subject to fines, injunctions or the imposition of civil or criminal penalties; 52 · A regulatory agency may require the addition of labeling statements, such as a “black box” warning or a contraindication; · We may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution of our product candidate to patients; · We could be sued and held liable for harm caused to patients; · The product candidate may become less competitive; and · Our reputation may suffer.
Our clinical trials may be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of other reasons, such as: · delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute; · delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; 43 · delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; · inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; · delay or failure in recruiting and enrolling suitable volunteers or patients to participate in a trial; · delay or failure in developing and validating companion diagnostics, if they are deemed necessary, on a timely basis; · failure of trial participants to complete a trial or return for post-treatment follow-up; · inability to monitor trial participants adequately during or after treatment; · clinical sites and investigators deviating from trial protocols, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial; · failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by the FDA or comparable foreign regulatory authority due to observed safety findings or other reasons; · negative or inconclusive results in our clinical trials, and our decision to or regulators’ requirement that we conduct additional non-clinical studies, clinical trials or that we abandon one or more of our product development programs; or · inability to manufacture sufficient quantities of a drug candidate of acceptable quality for use in clinical trials.
Our clinical trials may be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of other reasons, such as: · delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute; · delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; · delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; 39 · inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; · delay or failure in recruiting and enrolling suitable volunteers or patients to participate in a trial; · delay or failure in developing and validating companion diagnostics, if they are deemed necessary, on a timely basis; · failure of trial participants to complete a trial or return for post-treatment follow-up; · inability to monitor trial participants adequately during or after treatment; · clinical sites and investigators deviating from trial protocols, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial; · failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by the FDA or comparable foreign regulatory authority due to observed safety findings or other reasons; · negative or inconclusive results in our clinical trials, and our decision to or regulators’ requirement that we conduct additional non-clinical studies, clinical trials or that we abandon one or more of our product development programs; or · inability to manufacture sufficient quantities of a drug candidate of acceptable quality for use in clinical trials.
Moreover, we have not obtained regulatory approval for any drug candidate in any jurisdiction and it is possible that none of our existing drug candidates or any drug candidates we may seek to develop in the future will ever obtain regulatory approval. 45 Our drug candidates could fail to receive, or could be delayed in receiving, regulatory approval for many reasons, including any one or more of the following: · the FDA or comparable foreign regulatory agencies may disagree with the design or implementation of our clinical trials; · we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory agencies that a drug candidate is safe and effective for its proposed indication; · the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; · we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks; · the FDA or comparable foreign regulatory agencies may disagree with our interpretation of data from preclinical studies or clinical trials; · the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of a NDA, BLA, or other submission or to obtain regulatory approval in the U.S. or elsewhere; · upon review of our clinical trial sites and data, the FDA or comparable foreign regulatory agency may find our record keeping or the record keeping of our clinical trial sites to be inadequate; · the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies may fail to meet the requirements of the FDA or comparable foreign regulatory agencies; · the FDA or comparable foreign regulatory agencies may fail to approve the companion diagnostics we contemplate developing internally or with partners; and · the change of the medical standard of care or the approval policies or regulations of the FDA or comparable foreign regulatory agencies may significantly change in a manner that renders our clinical data insufficient for approval.
Moreover, we have not obtained regulatory approval for any drug candidate in any jurisdiction and it is possible that none of our existing drug candidates or any drug candidates we may seek to develop in the future will ever obtain regulatory approval. 41 Our drug candidates could fail to receive, or could be delayed in receiving, regulatory approval for many reasons, including any one or more of the following: · the FDA or comparable foreign regulatory agencies may disagree with the design or implementation of our clinical trials; · we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory agencies that a drug candidate is safe and effective for its proposed indication; · the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; · we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks; · the FDA or comparable foreign regulatory agencies may disagree with our interpretation of data from preclinical studies or clinical trials; · the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of a NDA, BLA, or other submission or to obtain regulatory approval in the U.S. or elsewhere; · upon review of our clinical trial sites and data, the FDA or comparable foreign regulatory agency may find our record keeping or the record keeping of our clinical trial sites to be inadequate; · the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies may fail to meet the requirements of the FDA or comparable foreign regulatory agencies; · the FDA or comparable foreign regulatory agencies may fail to approve the companion diagnostics we contemplate developing internally or with partners; and · the change of the medical standard of care or the approval policies or regulations of the FDA or comparable foreign regulatory agencies may significantly change in a manner that renders our clinical data insufficient for approval.
The following examples are illustrative: · others may be able to make compositions that are the same as or like our product candidates, but that are not covered by the claims of any patents that we may own or exclusively license; · others may be able to make product that is like the product candidates we intend to commercialize that is not covered by any patents that we might own or exclusively license and have the right to enforce; · we, our licensors or any collaborators might not have been the first to make the inventions covered by issued patents or pending patent applications that we may own; 67 · we, our licensors or any collaborators might not have been the first to file patent applications covering certain of our inventions; · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; · it is possible that our pending patent applications will not lead to issued patents; · issued patents that we may own may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; · our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and · we may not develop additional proprietary technologies that are patentable.
The following examples are illustrative: · others may be able to make compositions that are the same as or like our product candidates, but that are not covered by the claims of any patents that we may own or exclusively license; · others may be able to make product that is like the product candidates we intend to commercialize that is not covered by any patents that we might own or exclusively license and have the right to enforce; · we, our licensors or any collaborators might not have been the first to make the inventions covered by issued patents or pending patent applications that we may own; · we, our licensors or any collaborators might not have been the first to file patent applications covering certain of our inventions; · others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; 62 · it is possible that our pending patent applications will not lead to issued patents; · issued patents that we may own may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; · our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and · we may not develop additional proprietary technologies that are patentable.
Also, later discovery of previously unknown adverse events or other problems with our product candidates or any products that may receive regulatory approval, or our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: · Restrictions on such products, approved manufacturers or manufacturing processes; · Restrictions on the labeling or marketing of a product; 50 · Restrictions on product distribution or use; · Requirements to conduct post-marketing studies or clinical trials; · Notices of noncompliance, such as warning or untitled letters from the FDA, or inspectional observations; · Withdrawal of the products from the market; · Refusal to approve pending applications or supplements to approved applications that we submit; · Recall of products; · Fines, restitution or disgorgement of profits or revenues; · Suspension or withdrawal of marketing approvals; · Clinical hold or suspension of any of our ongoing clinical trials; · Refusal to permit the import or export of products; · Product seizure; or · Injunctions, consent decrees, or the imposition of civil or criminal penalties Non-compliance with European requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties.
Also, later discovery of previously unknown adverse events or other problems with our product candidates or any products that may receive regulatory approval, or our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: · Restrictions on such products, approved manufacturers or manufacturing processes; · Restrictions on the labeling or marketing of a product; · Restrictions on product distribution or use; · Requirements to conduct post-marketing studies or clinical trials; · Notices of noncompliance, such as warning or untitled letters from the FDA, or inspectional observations; · Withdrawal of the products from the market; · Refusal to approve pending applications or supplements to approved applications that we submit; · Recall of products; · Fines, restitution or disgorgement of profits or revenues; · Suspension or withdrawal of marketing approvals; · Clinical hold or suspension of any of our ongoing clinical trials; · Refusal to permit the import or export of products; · Product seizure; or · Injunctions, consent decrees, or the imposition of civil or criminal penalties 46 Non-compliance with European requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties.
If approved by the FDA, the EMA or comparable foreign regulatory agencies, we expect to license our encapsulated live cell plus ifosfamide product candidate for pancreatic cancer to a large pharmaceutical company with greater resources and experience than us. 57 We may not be able to license our encapsulated live cell plus ifosfamide product candidate on reasonable terms, if at all.
If approved by the FDA, the EMA or comparable foreign regulatory agencies, we expect to license our encapsulated live cell plus ifosfamide product candidate for pancreatic cancer to a large pharmaceutical company with greater resources and experience than us. We may not be able to license our encapsulated live cell plus ifosfamide product candidate on reasonable terms, if at all.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. 65 If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our product candidates and technology.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our product candidates and technology.
If the clinical hold is not lifted or if the lifting takes an extended period of time, our business and prospects will likely suffer material adverse consequences. 35 We contract with Austrianova for the manufacture of our product candidates for preclinical studies and clinical trials, if allowed to proceed, and expect to continue to do so for commercialization.
If the clinical hold is not lifted or if the lifting takes an extended period of time, our business and prospects will likely suffer material adverse consequences. We contract with Austrianova for the manufacture of our product candidates for preclinical studies and clinical trials, if allowed to proceed, and expect to continue to do so for commercialization.
Significant efforts to change the PBM industry as it currently exists in the U.S. may affect the entire pharmaceutical supply chain and the business of other stakeholders, including biopharmaceutical developers like us. 53 In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our products.
Significant efforts to change the PBM industry as it currently exists in the U.S. may affect the entire pharmaceutical supply chain and the business of other stakeholders, including biopharmaceutical developers like us. In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our products.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. The majority of the technology that we license and use for our product candidates is not protected by patents, but rather is based upon confidential know-how and trade secrets.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. 61 The majority of the technology that we license and use for our product candidates is not protected by patents, but rather is based upon confidential know-how and trade secrets.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. 70 We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Enrollment delays may also delay or jeopardize our ability to commence sales and generate revenues from our product candidates., if approved Any of the foregoing could cause the value of our company to decline and limit our ability to obtain additional financing, if needed. 47 We may request priority review for our product candidates in the future.
Enrollment delays may also delay or jeopardize our ability to commence sales and generate revenues from our product candidates., if approved Any of the foregoing could cause the value of our company to decline and limit our ability to obtain additional financing, if needed. We may request priority review for our product candidates in the future.
For example, the Melligen cells are protected by patents only in the U.S. and Europe and we are only pursuing patent protection for our pancreatic cancer product candidate in the U.S., Australia and Canada. 61 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
For example, the Melligen cells are protected by patents only in the U.S. and Europe and we are only pursuing patent protection for our pancreatic cancer product candidate in the U.S., Australia and Canada. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Any of the foregoing circumstances could materially harm the commercial prospects for our product candidates. 46 If we experience delays or difficulties in the enrollment of patients in clinical trials, we may not achieve our clinical development timeline and our receipt of necessary regulatory approvals could be delayed or prevented.
Any of the foregoing circumstances could materially harm the commercial prospects for our product candidates. If we experience delays or difficulties in the enrollment of patients in clinical trials, we may not achieve our clinical development timeline and our receipt of necessary regulatory approvals could be delayed or prevented.
If any disruptions occur, they could have a material adverse effect on our business. We are subject to legal, regulatory, financial and other risks with our operations outside the U.S. We operate globally and are attempting to develop products in multiple countries.
If any disruptions occur, they could have a material adverse effect on our business. 71 We are subject to legal, regulatory, financial and other risks with our operations outside the U.S. We operate globally and are attempting to develop products in multiple countries.
We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our product candidates in any market. Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market.
We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our product candidates in any market. 45 Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market.
Such a determination could have a material adverse effect on our business operations, projected revenues and earnings, and growth prospects. We believe that we are not an investment company, and we have conducted and intend to continue to conduct our operations so that we will not be deemed to be an investment company.
Such a determination could have a material adverse effect on our business operations, projected revenues and earnings, and growth prospects. 69 We believe that we are not an investment company, and we have conducted and intend to continue to conduct our operations so that we will not be deemed to be an investment company.
Until such time, if ever, as the FDA lifts its clinical hold on our IND related to our planned clinical trial in LAPC, our Cell-in-a-Box ® encapsulation technology is validated in our planned clinical trial, and sufficient additional funding is available, we have halted spending on behalf of our development program with respect to cannabinoids. 38 Due to the significant resources required for the development of our programs, we must focus our programs on specific diseases and decide which product candidates to pursue and advance and the amount of resources to allocate to each.
Until such time, if ever, as the FDA lifts its clinical hold on our IND related to our planned clinical trial in LAPC, our Cell-in-a-Box ® encapsulation technology is validated in our planned clinical trial, and sufficient additional funding is available, we have halted spending on behalf of our development program with respect to cannabinoids. 34 Due to the significant resources required for the development of our programs, we must focus our programs on specific diseases and decide which product candidates to pursue and advance and the amount of resources to allocate to each.
Receiving priority review from the regulatory agencies does not guarantee approval within an accelerated timeline or thereafter. In some instances, we believe we may be able to secure approval from FDA to use accelerated development pathways.
Receiving priority review from the regulatory agencies does not guarantee approval within an accelerated timeline or thereafter. 43 In some instances, we believe we may be able to secure approval from FDA to use accelerated development pathways.
For a description of Breakthrough Therapy designation, see “Government Regulation – Fast Track, Breakthrough Therapy and Priority Review Designations.” 49 A Breakthrough Therapy or similar designation is within the discretion of the FDA or other applicable regulatory agencies.
For a description of Breakthrough Therapy designation, see “Government Regulation – Fast Track, Breakthrough Therapy and Priority Review Designations.” A Breakthrough Therapy or similar designation is within the discretion of the FDA or other applicable regulatory agencies.
The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by existing investors. 71 We may not be able to meet the continued listing requirements for Nasdaq or another nationally recognized stock exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by existing investors. 66 We may not be able to meet the continued listing requirements for Nasdaq or another nationally recognized stock exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions. 69 Our transactions and relationships outside the U.S. will be subject to the FCPA and similar anti-bribery and anti-corruption laws.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions. 64 Our transactions and relationships outside the U.S. will be subject to the FCPA and similar anti-bribery and anti-corruption laws.
International operations are subject to a variety of risks, including: · foreign currency exchange rate fluctuations; · greater difficulty in overseeing foreign operations; · logistical and communications challenges; · potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; · burdens and costs of compliance with a variety of foreign laws; · political and economic instability; · increases in duties and taxation; · foreign tax laws and potential increased costs associated with overlapping tax structures; · greater difficulty in protecting intellectual property; · the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our products; and · general social, economic and political conditions in these foreign markets. 78 ITEM 1B.
International operations are subject to a variety of risks, including: · foreign currency exchange rate fluctuations; · greater difficulty in overseeing foreign operations; · logistical and communications challenges; · potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws; · burdens and costs of compliance with a variety of foreign laws; · political and economic instability; · increases in duties and taxation; · foreign tax laws and potential increased costs associated with overlapping tax structures; · greater difficulty in protecting intellectual property; · the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by our products; and · general social, economic and political conditions in these foreign markets.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory agencies. 41 Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory agencies. 37 Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 70 We incur increased costs because of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 65 We incur increased costs because of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
Such investment companies are required to register and meet other requirements promulgated under the 1940 Act. Our purchases of securities of other companies, including pursuant to the Femasys Transaction and the MyMD Transaction (each as defined below), could give rise to a determination that we are or were an investment company subject to registration under the 1940 Act.
Such investment companies are required to register and meet other requirements promulgated under the 1940 Act. Our purchases of securities of other companies, including pursuant to the Femasys Transaction and the TNF Transaction (each as defined below), could give rise to a determination that we are or were an investment company subject to registration under the 1940 Act.
The same is true to a greater extent if the FDA requires us to commence a Phase 1 or other Phase 2 clinical trial instead of the planned Phase 2b clinical trial currently under clinical hold. 42 Development of a biologic involves a lengthy and expensive process with an uncertain outcome.
The same is true to a greater extent if the FDA requires us to commence a Phase 1 or other Phase 2 clinical trial instead of the planned Phase 2b clinical trial currently under clinical hold. 38 Development of a biologic involves a lengthy and expensive process with an uncertain outcome.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. 68 There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. 63 There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.
As of April 30, 2024, we had 2 full-time employees and numerous consultants. We are highly dependent on the R&D, clinical and business development expertise of the principal members of our management, scientific and clinical teams, specifically, on our Interim Chief Executive Officer and Chief Financial Officer.
As of April 30, 2025, we had 2 full-time employees and numerous consultants. We are highly dependent on the R&D, clinical and business development expertise of the principal members of our management, scientific and clinical teams, specifically, on our Interim Chief Executive Officer and Chief Financial Officer.
“Controls and Procedures,” the senior management has identified a material weakness in our internal controls over financial reporting and cannot assure you that additional material weaknesses will not be identified in the future. We cannot assure you that these steps will be successful in preventing material weaknesses or significant deficiencies in our internal controls over financial reporting in the future.
“Controls and Procedures,” the senior management has identified material weaknesses in our internal controls over financial reporting and cannot assure you that additional material weaknesses will not be identified in the future. We cannot assure you that these steps will be successful in preventing material weaknesses or significant deficiencies in our internal controls over financial reporting in the future.
The degree of market acceptance of our encapsulated live cell plus ifosfamide product candidate or any of our other product candidates, if approved for commercial sale, will depend on several factors, including: · The efficacy and safety of the product; · The potential advantages of the product compared to alternative treatments; · The prevalence and severity of any side effects; · The clinical indications for which the product is approved; · Whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; · Limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; · Our ability to offer the product for sale at competitive prices; · Our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; · The product’s convenience and ease of administration compared to alternative treatments; · The willingness of the target patient population to try, and of physicians to prescribe, the product; · The strength of sales, marketing and distribution support; · The approval of other new products for the same indications; · Changes in the standard of care for the targeted indications for the product; · The timing of market introduction of our approved products as well as competitive products and other therapies; · Availability and amount of reimbursement from government payors, managed care plans and other third-party payors; · Adverse publicity about the product or favorable publicity about competitive products; and · Potential product liability claims. 56 The potential market opportunities for our product candidates are difficult to estimate precisely.
The degree of market acceptance of our encapsulated live cell plus ifosfamide product candidate or any of our other product candidates, if approved for commercial sale, will depend on several factors, including: · The efficacy and safety of the product; · The potential advantages of the product compared to alternative treatments; · The prevalence and severity of any side effects; 51 · The clinical indications for which the product is approved; · Whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; · Limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; · Our ability to offer the product for sale at competitive prices; · Our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; · The product’s convenience and ease of administration compared to alternative treatments; · The willingness of the target patient population to try, and of physicians to prescribe, the product; · The strength of sales, marketing and distribution support; · The approval of other new products for the same indications; · Changes in the standard of care for the targeted indications for the product; · The timing of market introduction of our approved products as well as competitive products and other therapies; · Availability and amount of reimbursement from government payors, managed care plans and other third-party payors; · Adverse publicity about the product or favorable publicity about competitive products; and · Potential product liability claims.
The FDA could also require us to conduct further studies prior to considering or grantingour application or granting approval of any type and may require us to have a confirmatory trial to verify the clinical benefit of the product underway and partially or fully enrolled before granting approval.
The FDA could also require us to conduct further studies prior to considering or granting our application or granting approval of any type and may require us to have a confirmatory trial to verify the clinical benefit of the product underway and partially or fully enrolled before granting approval.
Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes will be limited to approximately $20 million and $11 million for federal and state, respectively.
Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes will be limited to approximately $24 million and $15 million for federal and state, respectively.
There can be no assurance that the MyMD Warrants will be in the money when exercisable, and as such they may expire worthless. 75 Our ownership of securities of other companies creates a risk that we will be categorized as an investment company that is subject to registration under the Investment Company Act of 1940 (the “1940 Act”).
There can be no assurance that the TNF Warrants will be in the money when exercisable, and as such they may expire worthless. Our ownership of securities of other companies creates a risk that we will be categorized as an investment company that is subject to registration under the Investment Company Act of 1940 (the “1940 Act”).
Factors that may affect operating results include: (i) the ability to obtain and retain customers; (ii) our ability to attract new customers at a steady rate and maintain customer satisfaction with products; (iii) our announcement or introduction of new products by us or our competitors; (iv) price competition; (v) the level of use and consumer acceptance of its products; (vi) the amount and timing of operating costs and capital expenditures relating to expansion of the business, operations and infrastructure; (vii) governmental regulations; (viii) general economic conditions; (ix) delays or disruptions in our supply chain; and (x) the adverse impacts caused by COVID-19. 40 We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure.
Factors that may affect operating results include: (i) the ability to obtain and retain customers; (ii) our ability to attract new customers at a steady rate and maintain customer satisfaction with products; (iii) our announcement or introduction of new products by us or our competitors; (iv) price competition; (v) the level of use and consumer acceptance of its products; (vi) the amount and timing of operating costs and capital expenditures relating to expansion of the business, operations and infrastructure; (vii) governmental regulations; (viii) general economic conditions; and (ix) delays or disruptions in our supply chain. 36 We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure.
In the U.S. and in some other jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates or any of our potential future product candidates, restrict or regulate post-approval activities, or affect our ability to profitably sell any product candidates for which we obtain marketing approval. 52 Increased scrutiny by the U.S.
In the U.S. and in some other jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates or any of our potential future product candidates, restrict or regulate post-approval activities, or affect our ability to profitably sell any product candidates for which we obtain marketing approval.
We may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. · We currently have no commercial revenue and may never become profitable. · If we are unable to obtain, or if there are delays in obtaining, required approval from the applicable regulatory agencies, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. · If allowed to proceed with our clinical development program, we intend to conduct clinical trials for certain of our product candidates at sites outside of the U.S., and the U.S. regulatory agencies may not accept data from trials conducted in such locations. · Promising results in previous clinical trials of our encapsulated live cell and ifosfamide combination for advanced pancreatic cancer may not be replicated in future clinical trials which could result in development delays or a failure to obtain marketing approval. · We may not be able to protect our intellectual property rights throughout the world. · We rely and expect to continue to rely heavily on third parties to conduct our preclinical studies, plan to rely on third parties to conduct our and clinical trials, assuming they are allowed to proceed, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such studies and trials. · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. · You may experience future dilution as a result of future equity offerings. · If we fail to comply with the continuing listing standards on Nasdaq, our securities could be delisted which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. · We may experience volatility in our stock price, which may adversely affect the trading price of our common stock. · A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and the conversion of preferred shares. · We are a “smaller reporting company” under the Commission’s disclosure rules and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies. · As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act. 34 Risks Related to Our Financial Position, FDA Clinical Hold, Need for Additional Capital and Overall Business We are a biotechnology company with limited resources, a limited operating history, and no products approved for clinical trials or commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
We may expend our limited resources on programs that do not yield a successful product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. · We currently have no commercial revenue and may never become profitable. · If we are unable to obtain, or if there are delays in obtaining, required approval from the applicable regulatory agencies, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. · If allowed to proceed with our clinical development program, we intend to conduct clinical trials for certain of our product candidates at sites outside of the U.S., and the U.S. regulatory agencies may not accept data from trials conducted in such locations. · Promising results in previous clinical trials of our encapsulated live cell and ifosfamide combination for advanced pancreatic cancer may not be replicated in future clinical trials which could result in development delays or a failure to obtain marketing approval. · We may not be able to protect our intellectual property rights throughout the world. · We rely and expect to continue to rely heavily on third parties to conduct our preclinical studies, plan to rely on third parties to conduct our and clinical trials, assuming they are allowed to proceed, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such studies and trials. · Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations and the financial condition of the third parties on which we rely, including Austrianova. 30 · You may experience future dilution as a result of future equity offerings. · If we fail to comply with the continuing listing standards on Nasdaq, our securities could be delisted which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. · We may experience volatility in our stock price, which may adversely affect the trading price of our common stock. · A large number of shares may be issued and subsequently sold upon the exercise of existing options and warrants and the conversion of preferred shares. · We are a “smaller reporting company” under the Commission’s disclosure rules and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies. · As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.
As of April 30, 2024, we had an accumulated deficit of approximately $115.6 million. Substantially all our losses have resulted from expenses incurred relating to our research and development programs and from general and administrative expenses and operating losses associated with our business. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
As of April 30, 2025, we had an accumulated deficit of approximately $85 million. Substantially all our losses have resulted from expenses incurred relating to our research and development programs and from general and administrative expenses and operating losses associated with our business. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
Our ability to generate revenue from our product candidates also depends on numerous additional factors, including our ability to: · successfully complete development activities, including the remaining preclinical studies and planned clinical trials for our product candidates; · complete and submit NDAs or BLAs to the FDA and MAAs to the EMA, and obtain regulatory approval for indications for which there is a commercial market; · complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; · manufacture any approved products in commercial quantities and on commercially reasonable terms; · develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; · achieve acceptance among patients, clinicians and advocacy groups for any products we develop; · obtain coverage and adequate reimbursement from third parties, including government payors; and · set a commercially viable price for any products for which we may receive approval.
Our ability to generate revenue from our product candidates also depends on numerous additional factors, including our ability to: · successfully complete development activities, including the remaining preclinical studies and planned clinical trials for our product candidates; · complete and submit NDAs or BLAs to the FDA and MAAs to the EMA, and obtain regulatory approval for indications for which there is a commercial market; · complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; · manufacture any approved products in commercial quantities and on commercially reasonable terms; · develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; · achieve acceptance among patients, clinicians and advocacy groups for any products we develop; · obtain coverage and adequate reimbursement from third parties, including government payors; and · set a commercially viable price for any products for which we may receive approval. 35 We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability.
As of April 30, 2024, we had federal net operating loss carryforwards of approximately $57 million, and approximately $27 million for state net operating losses, which will begin to expire in varying amounts beginning in 2024. Under Sections 382 and 383 of the U.S.
As of April 30, 2025, we had federal net operating loss carryforwards of approximately $61 million, and approximately $31 million for state net operating losses, which will begin to expire in varying amounts beginning in 2025. Under Sections 382 and 383 of the U.S.
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.
Increased scrutiny by the U.S. 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.
We have never commercialized a drug or biologic product. Even if one of our product candidates is approved by a regulatory agency for marketing and sale, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third party payors and others in the medical community.
Even if one of our product candidates is approved by a regulatory agency for marketing and sale, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third party payors and others in the medical community.
Even if we can establish such arrangements with another third-party manufacturer, reliance on a new third-party manufacturer entails additional risks, including: · Reliance on the third party for regulatory compliance and quality assurance; · The possible breach of the manufacturing agreement by the third party; · The possible misappropriation of our proprietary information, including our trade secrets and know-how; and · The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
Even if we can establish such arrangements with another third-party manufacturer, reliance on a new third-party manufacturer entails additional risks, including: · Reliance on the third party for regulatory compliance and quality assurance; · The possible breach of the manufacturing agreement by the third party; · The possible misappropriation of our proprietary information, including our trade secrets and know-how; and · The possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. 32 A new third-party manufacturer may not be able to comply with cGMP standards or the requirements of a regulatory agency.
Patient enrollment is a significant factor in the overall duration of a clinical trial and is affected by many factors, including: · The size and nature of the patient population; · The severity of the disease under investigation; · The proximity of patients to clinical sites; · The eligibility criteria for the trial; · Our ability to recruit clinical trial investigators with the appropriate competencies and experience; · The design of the clinical trial; · Efforts to facilitate timely enrollment; · The patient referral practices of physicians; · Competing clinical trials for the same patient population; and · Clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
In addition, some of our competitors may have ongoing clinical trials for drug candidates that treat the same indications as our drug candidates, and volunteers or patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ drug candidates. 42 Patient enrollment is a significant factor in the overall duration of a clinical trial and is affected by many factors, including: · The size and nature of the patient population; · The severity of the disease under investigation; · The proximity of patients to clinical sites; · The eligibility criteria for the trial; · Our ability to recruit clinical trial investigators with the appropriate competencies and experience; · The design of the clinical trial; · Efforts to facilitate timely enrollment; · The patient referral practices of physicians; · Competing clinical trials for the same patient population; and · Clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
To the extent we convert the MyMD Preferred Shares when the market price of the MyMD Common Shares is lower than the conversion price, we may realize a loss equal to the difference between the conversion price and the market price.
To the extent we convert the Notes when the market price of the Femasys Shares is lower than the conversion price, we may realize a loss equal to the difference between the conversion price and the market price.
In addition, if any of these consultants change their strategic focus, or if external factors cause any one of them to divert resources from our collaboration, or if any one of them independently develops products that compete directly or indirectly with our product candidates using resources or information it acquires from our collaboration, our business and results of operations could suffer.
In addition, if any of these consultants change their strategic focus, or if external factors cause any one of them to divert resources from our collaboration, or if any one of them independently develops products that compete directly or indirectly with our product candidates using resources or information it acquires from our collaboration, our business and results of operations could suffer. 54 Future preclinical and clinical development collaborations may be important to us.
If we are forced to mandatorily convert the Notes, we may realize additional loss. The MyMD Preferred Shares are convertible at a conversion price of $1.816 per share.
If we are forced to mandatorily convert the Notes, we may realize additional loss. The TNF Preferred Shares are convertible at a conversion price of $0.1832 per share.
If we or any of our contractors fail to comply with applicable GCP regulations, the clinical data generated in the applicable trial may be deemed unreliable and regulatory agencies may require us to perform additional clinical trials before approving a drug candidate for marketing, which we may not have sufficient cash or other resources to support and which would delay our ability to generate revenue from future sales of such drug candidate.We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database of regulatory agencies within specified timeframes.
If we or any of our contractors fail to comply with applicable GCP regulations, the clinical data generated in the applicable trial may be deemed unreliable and regulatory agencies may require us to perform additional clinical trials before approving a drug candidate for marketing, which we may not have sufficient cash or other resources to support and which would delay our ability to generate revenue from future sales of such drug candidate.
We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of several factors.
Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of several factors.
Reimbursement agencies in Europe may be more conservative than federal healthcare programs or private health plans in the U.S. For example, a number of cancer drugs are generally covered and paid for in the U.S. but have not been approved for reimbursement in certain European countries. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
In the U.S., reimbursement varies from payor to payor. Reimbursement agencies in Europe may be more conservative than federal healthcare programs or private health plans in the U.S. For example, a number of cancer drugs are generally covered and paid for in the U.S. but have not been approved for reimbursement in certain European countries.
Future preclinical and clinical development collaborations may be important to us. If we are unable to maintain these collaborations, or if these collaborations are not successful, our business could be adversely affected. For some of our product candidates, we may in the future determine to collaborate with pharmaceutical and biotechnology companies for development of our product candidates.
If we are unable to maintain these collaborations, or if these collaborations are not successful, our business could be adversely affected. For some of our product candidates, we may in the future determine to collaborate with pharmaceutical and biotechnology companies for development of our product candidates. We face significant competition in seeking appropriate collaborators.
Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third party research reports and other surveys.
The potential market opportunities for our product candidates are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third party research reports and other surveys.
As a result of the clinical hold that has been placed on our IND by the FDA, it has taken and may continue to take considerable time and expense to respond to the FDA and no assurance can be given that the FDA will remove the clinical hold in which case our business and prospects will likely suffer material adverse consequences.
If we do not address these risks and difficulties successfully, our business, operating results and financial condition will suffer. 31 As a result of the clinical hold that has been placed on our IND by the FDA, it has taken and may continue to take considerable time and expense to respond to the FDA and no assurance can be given that the FDA will remove the clinical hold in which case our business and prospects will likely suffer material adverse consequences.
The occurrence of any of these events could harm our business, financial condition, results of operations and prospects significantly. 44 We are seeking FDA approval to commence clinical trials in the U.S. of certain of our product candidates based on clinical data that was obtained in trials conducted outside the U.S., and it is possible that the FDA may not accept data from trials conducted in such locations or conducted nearly 20 years ago.
We are seeking FDA approval to commence clinical trials in the U.S. of certain of our product candidates based on clinical data that was obtained in trials conducted outside the U.S., and it is possible that the FDA may not accept data from trials conducted in such locations or conducted nearly 20 years ago.
The Notes are convertible at a conversion price of $1.18 per share. To the extent we convert the Notes when the market price of the Femasys Shares is lower than the conversion price, we may realize a loss equal to the difference between the conversion price and the market price.
To the extent we convert the TNF Preferred Shares when the market price of the TNF Common Shares is lower than the conversion price, we may realize a loss equal to the difference between the conversion price and the market price. The Femasys Series A Warrants are exercisable at an exercise price of $1.18 per share.
If such difficulties are encountered or failure to meet regulatory standards occurs, our ability to provide supply of our product candidates for clinical trials, if allowed to proceed, or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure. 60 The processes involved in manufacturing our product candidates are complex, expensive, highly regulated and subject to multiple risks.
If such difficulties are encountered or failure to meet regulatory standards occurs, our ability to provide supply of our product candidates for clinical trials, if allowed to proceed, or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the U.S. in several stages over the lifetime of the patents and/or applications.
Our patent protection could be reduced or eliminated for non-compliance with these requirements. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the U.S. in several stages over the lifetime of the patents and/or applications.
Factors that may affect the market price include the following: · Announcements of regulatory developments or technological innovations by us or our competitors; · Changes in our relationship with our licensors and other strategic partners; · Our quarterly operating results; · Litigation involving or affecting us; · Shortfalls in our actual financial results compared to our guidance or the forecasts of stock market analysts; 73 · Developments in patent or other technology ownership rights; · Acquisitions or strategic alliances by us or our competitors; · Public concern regarding the safety of our products; and · Government regulation of drug pricing.
Factors that may affect the market price include the following: · Announcements of regulatory developments or technological innovations by us or our competitors; · Changes in our relationship with our licensors and other strategic partners; · Our quarterly operating results; · Litigation involving or affecting us; · Shortfalls in our actual financial results compared to our guidance or the forecasts of stock market analysts; · Developments in patent or other technology ownership rights; · Acquisitions or strategic alliances by us or our competitors; · Public concern regarding the safety of our products; and · Government regulation of drug pricing. 67 The price of our common stock is volatile, which substantially increases the risk that our investors may not be able to sell their shares at or above the price that the investors have paid for their shares.
During the year ended April 30, 2024, shares of our common stock were quoted and traded at a high of $3.23 per share and a low of $1.92 per share.
During the year ended April 30, 2025, shares of our common stock were quoted and traded at a high of $2.42 per share and a low of $1.03 per share.
The development and commercialization of new drug products is highly competitive. We face competition with respect to our current product candidates. We will face competition with respect to any product candidates that we may seek to develop or commercialize in the future. Such competition may arise from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.
We will face competition with respect to any product candidates that we may seek to develop or commercialize in the future. Such competition may arise from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.
Failure to do so can result in fines, adverse publicity and civil and criminal sanctions. 58 Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors, and we will be unable to control whether or not our contracted third parties devote sufficient time and resources to our preclinical and clinical programs.
Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors, and we will be unable to control whether or not our contracted third parties devote sufficient time and resources to our preclinical and clinical programs.
The Series A Warrants are exercisable at an exercise price of $1.18 per share, and the Series B Warrants are exercisable at an exercise price of $1.475. There can be no assurance that the Femasys Warrants will be in the money when exercisable, and as such they may expire worthless.
The Femasys Series B Warrants expired on November 21, 2024. There can be no assurance that the Femasys Warrants will be in the money when exercisable, and as such they may expire worthless. The TNF Warrants are exercisable at an exercise price of $0.1832 per share.
Additional state and federal healthcare reform measures are expected to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for certain biopharmaceutical products or additional pricing pressures.
Additional state and federal healthcare reform measures are expected to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for certain biopharmaceutical products or additional pricing pressures. 50 In some foreign countries, particularly the member states of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control.
For instance, Austrianova from time to time has experienced significant supply chain delays, some of which may be related to COVID-19, and we believe it may be experiencing liquidity issues. We rely on numerous consultants for a substantial portion of our R&D related to our product candidates.
For instance, Austrianova from time to time has experienced significant supply chain delays and we believe it may be experiencing liquidity issues. We rely on numerous consultants for a substantial portion of our R&D related to our product candidates. If there are delays or failures to perform their obligations, our product candidates would be adversely affected.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected. If we are unable to maintain our collaborations, development of our product candidates could be delayed, and we may need additional resources to develop them.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected.
We own securities of other public companies, including the Notes, the MYMD Preferred Shares, the Femasys Warrants and the MyMD Warrants. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Femasys Transaction” and “– MyMD Transaction” for more information regarding these securities. Defined terms used in this risk factor are defined in such section.
We own securities of other public companies, including the Notes, the TNF Preferred Shares, the Femasys common stock, the Femasys Warrants and the TNF Warrants. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Femasys Transaction” and “– TNF Transaction” for more information regarding these securities.
Reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. Patients are unlikely to use our products, if they are approved for marketing, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such products.
Patients are unlikely to use our products, if they are approved for marketing, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such products.
If we are unable to obtain patents covering our product candidates or obtain data and/or marketing exclusivity for our product candidates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products, such as a biosimilar, earlier than might otherwise be the case.
If we are unable to obtain patents covering our product candidates or obtain data and/or marketing exclusivity for our product candidates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products, such as a biosimilar, earlier than might otherwise be the case. 59 Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies.
In addition, any delays in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process and jeopardize regulatory approval of our drug candidates and our ability to commence sales and generate revenues.
In addition, any delays in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process and jeopardize regulatory approval of our drug candidates and our ability to commence sales and generate revenues. The occurrence of any of these events could harm our business, financial condition, results of operations and prospects significantly.
If investors consider our common stock less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our common stock and our share price may be more volatile.
Until we cease to be a smaller reporting company, the scaled-back disclosure in our Commission filings will result in less information about our company being available than for other public companies. 68 If investors consider our common stock less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our common stock and our share price may be more volatile.
Additionally, on December 20, 2019, the Further Consolidated Appropriations Act for 2020 was signed into law (P.L. 116-94) and includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 (the “CREATES Act”).
There are likely to be continued political and legal challenges associated with implementing these reforms as they are currently envisioned. 48 Additionally, on December 20, 2019, the Further Consolidated Appropriations Act for 2020 was signed into law (P.L. 116-94) and includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 (the “CREATES Act”).
Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise.
Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. 29 Summary of Risks Associated with Our Business Our business is subject to numerous risks and uncertainties that you should consider before investing in our company.
The probability of success of these policies, many of which have been subjected to legal challenge in the federal court system, and their potential impact on the U.S. prescription drug marketplace is unknown. There are likely to be continued political and legal challenges associated with implementing these reforms as they are currently envisioned.
The probability of success of these policies, many of which have been subjected to legal challenge in the federal court system, and their potential impact on the U.S. prescription drug marketplace is unknown.
If there are delays or failures to perform their obligations, our product candidates would be adversely affected. If our collaboration with these consultants is unsuccessful or is terminated, we would need to identify new research and collaboration partners for our preclinical and clinical development.
If our collaboration with these consultants is unsuccessful or is terminated, we would need to identify new research and collaboration partners for our preclinical and clinical development.
Under the Consolidated Appropriations Act for 2023, the FDA may use expedited procedures to withdraw any product for which we receive accelerated approval if our confirmatory trials fail to verify the purported clinical benefits. 48 A failure to obtain accelerated approval or any other form of designation or program intended to expedite product development, review or approval for any of our product candidates that we determine to seek accelerated approval or designation for would result in a longer time to commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
A failure to obtain accelerated approval or any other form of designation or program intended to expedite product development, review or approval for any of our product candidates that we determine to seek accelerated approval or designation for would result in a longer time to commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
We have experienced negative operating cash flows since our inception and have funded our operations primarily through sales of our equity securities. We may need to seek additional funds in the future through equity or debt financings, or strategic alliances with third parties, either alone or in combination with equity financings to complete our product development initiatives.
We may need to seek additional funds in the future through equity or debt financings, or strategic alliances with third parties, either alone or in combination with equity financings to complete our product development initiatives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAny cybersecurity incident that occurs would be brought to the immediate attention of the Board. Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by a contracted third-party Information Security Officer.
Biggest changeOur cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by a contracted third-party Information Security Officer. Such individual has over 25 years of experience in information technology, including over 14 years of experience in cybersecurity, and has a master’s degree in cybersecurity.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure,” which disclosures are incorporated by reference herein. 79 In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure,” which disclosures are incorporated by reference herein.
Such individual has over 25 years of experience in information technology, including over 14 years of experience in cybersecurity, and has a master’s degree in cybersecurity. Our Information Security Officer is informed about and monitors our cybersecurity risk through his participation in the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan.
Our Information Security Officer is informed about and monitors our cybersecurity risk through his participation in the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan.
This includes penalties and settlements, of which there were none. Cybersecurity Governance; Management Cybersecurity is part of our overall risk management processes. In general, our Board oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure.
In general, our Board oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure. Any cybersecurity incident that occurs would be brought to the immediate attention of the Board.
Added
In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none. 73 Cybersecurity Governance; Management Cybersecurity is part of our overall risk management processes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on our financial condition or operating results. On December 4, 2023, H.C.
Biggest changeWhile the outcome of pending claims cannot be predicted with certainty, we do not believe that the outcome of any potential claims will have a material adverse effect on our financial condition or operating results. On May 16, 2025, we entered into a settlement and release agreement (“Settlement Agreement”) with H.C.
ITEM 3. LEGAL PROCEEDINGS From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.
ITEM 3. LEGAL PROCEEDINGS From time to time, we are subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.
To our knowledge, there are no other material legal proceedings pending against us or any material litigation against any of our officers or directors in their capacity as such, and no such litigation is contemplated by any governmental authorities.
We elected to issue the additional warrants with an effective date of July 29, 2025 To our knowledge, there are no other material legal proceedings pending against us or any material litigation against any of our officers or directors in their capacity as such, and no such litigation is contemplated by any governmental authorities.
Removed
Wainwright & Co., LLC (“Wainwright”) filed a complaint against us in the Supreme Court of the State of New York, County of New York, asserting a single cause of action for breach of contract and alleging that we breached an April 2021 engagement agreement with Wainwright by failing to pay a purported “tail fee” allegedly due in connection with a private placement transaction that closed in 2023.
Added
Wainwright & Co., LLC relating to a complaint filed on December 4, 2023, alleging a breach of contract. The Settlement Agreement resolved fully all differences, disputes or claims without admitting any liability, fault or wrongdoing on the part of all parties.
Removed
Wainwright seeks damages of not less than $1,950,000, warrants to purchase an aggregate of 656,250 shares of our common stock at an exercise price of $5.00 per share, and attorney’s fees. On February 28, 2024, we responded to the complaint with an answer and affirmative defenses.
Added
The Settlement Agreement requires us to pay $1.55 million, comprised of an initial payment of $1.25 million and twelve equal payments of $25,000 beginning on the one-month anniversary of the initial payment.
Removed
We intend to vigorously defend against Wainwright’s complaint and do not believe that any potential loss is reasonably probable at this time.
Added
On May 16, 2025, we also issued warrants “(First Warrant Issuance”) to purchase 343,183 shares of our common stock with an exercise price of $4.00 per share with a term of five years from the issuance date.
Added
We had the option to pay $226,254 or issue additional warrants (“Additional Warrants”) to purchase 313,067 shares of our common stock with an exercise price of $4.00 per share with a term of five years prior to the issuance date of this Annual Report on Form 10-K.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−2 removed5 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs May 1, 2023 – May 31, 2023 – – – $ 6,439,377 June 1, 2023 – June 30, 2023 – – – $ 6,439,377 July 1, 2023 – July 31, 2023 – – – $ 6,439,377 August 1, 2023 – August 31, 2023 – – – $ 6,439,377 September 1, 2023 – September 30, 2023 – – – $ 6,439,377 October 1, 2023 – October 31, 2023 78,109 $ 2.1118 78,109 $ 6.272.775 November 1, 2023 – November 30, 2023 60,695 $ 2.1863 60,695 $ 6.138.751 December 1, 2023 – December 31, 2023 60,072 $ 2.2901 60,072 $ 5.999.807 January 1, 2024 – January 31, 2024 58,066 $ 2.2465 58,066 $ 5.868.058 February 1, 2024 – February 29, 2024 36,482 $ 2.1610 36,482 $ 5,788,433 March 1, 2024 – March 31, 2024 353,480 $ 2.4701 353,480 $ 4,906,583 April 1, 2024 – April 30, 2024 93,573 $ 2.3797 93,573 $ 4,681,682 Total 740,477 $ 2.3502 740,477 $ 4,681,682 On June 2, 2022, the Company announced that the Board had authorized a share repurchase program to acquire up to $10 million of the Company’s outstanding common stock (the “First Repurchase Program”).
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs May 1, 2024 – May 31, 2024 25,851 $ 2.1927 25,851 $ 4,624,999 June 1, 2024 – June 30, 2024 260,795 $ 2.3828 260,795 $ 4,003,590 July 1, 2024 – July 31, 2024 33,700 $ 2.1219 33,700 $ 3,932,081 August 1, 2024 – August 31, 2024 29,795 $ 1.8429 29,795 $ 3,877,171 September 1, 2024 – September 30, 2024 56,663 $ 1.9103 56,663 $ 3,768,928 October 1, 2024 – October 31, 2024 596,578 $ 2.1027 596,578 $ 2,514,516 November 1, 2024 – November 30, 2024 55,707 $ 1.8498 55,707 $ 2,411,467 December 1, 2024 – December 31, 2024 38,172 $ 1.6901 38,172 $ 2,346,951 January 1, 2025 – January 31, 2025 35,486 $ 1.6826 35,486 $ 2,287,242 February 1, 2025 – February 28, 2025 36,242 $ 1.7061 36,242 $ 2,225,412 March 1, 2025 – March 31, 2025 47,646 $ 1.6677 47,646 $ 2,145,950 April 1, 2025 – April 30, 2025 25,227 $ 1.2708 25,227 $ 2,113,892 Total 1,241,862 $ 2.0677 1,241,862 $ 2,113,892 On June 2, 2022, the Company announced that the Board had authorized a share repurchase program to acquire up to $10 million of the Company’s outstanding common stock (the “First Repurchase Program”).
Recent Sales of Unregistered Securities None. 81 Issuer Purchases of Equity Securities The table below summarizes information about the Company’s purchases of its equity securities during the year ended April 30, 2024.
Recent Sales of Unregistered Securities None. 75 Issuer Purchases of Equity Securities The table below summarizes information about the Company’s purchases of its equity securities during the year ended April 30, 2025.
In addition, the terms of the certificate of designations governing our Preferred Shares presently restricts our ability to pay dividends. Our Board will decide any future payment of dividends, depending on the results of operations, financial condition, capital requirements and other relevant factors.
Our Board will decide any future payment of dividends, depending on the results of operations, financial condition, capital requirements and other relevant factors. We paid dividends on the Convertible Preferred Stock at 4% per annum as required.
The number of stockholders of record does not include beneficial owners of our securities whose shares are held in the name of various security brokers, dealers and registered clearing agencies. Dividend Policy We have not paid and do not plan to pay cash dividends in the foreseeable future.
Holders As of July 30, 2025, there were approximately 1,400 stockholders of record of our common stock. The number of stockholders of record does not include beneficial owners of our securities whose shares are held in the name of various security brokers, dealers and registered clearing agencies.
Removed
The following table sets forth the high and low bid quotations reported on Nasdaq through April 30, 2024 for our shares for each quarter during the two fiscal years (“FYs”) ended April 30, 2024 and 2023. The prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Added
Dividend Policy We have not paid and do not plan to pay cash dividends in the foreseeable future relating to our common stock. In addition, the terms of the certificate of designations governing our Preferred Shares presently restricts our ability to pay dividends on our common stock.
Removed
Bid Price FY 2024 HIGH LOW First Quarter $ 3.23 $ 2.66 Second Quarter $ 2.73 $ 1.94 Third Quarter $ 2.39 $ 1.92 Fourth Quarter $ 2.58 $ 1.94 FY 2023 First Quarter $ 2.51 $ 1.95 Second Quarter $ 3.02 $ 2.33 Third Quarter $ 3.10 $ 2.70 Fourth Quarter $ 3.04 $ 2.78 As of August 8, 2024, there were approximately 1,400 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

37 edited+35 added−9 removed40 unchanged
Biggest changeYear Ended April 30, 2024 Year Ended April 30, 2023 Net cash used in operating activities: $ (2,151,457 ) $ (3,793,731 ) Net cash used in investing activities: $ (5,000,000 ) $ – Net cash used in financing activities: $ (10,708,003 ) $ (13,559,743 ) Effect of currency rate exchange $ (508 ) $ (7,246 ) Increase (decrease) in cash $ (17,859,968 ) $ (17,360,720 ) Operating Activities: The cash and cash equivalents used in operating activities for the years ended April 30, 2024 and 2023 is a result of our net losses from operations offset by securities issued, assets impaired, changes in fair values of warrant liability, derivative liability, note receivable, warrant asset, changes to prepaid expenses, accounts payable and accrued expenses.
Biggest changeYear Ended April 30, 2025 Year Ended April 30, 2024 Net cash used in operating activities: $ (2,978,296 ) $ (2,151,457 ) Net cash used in investing activities: $ (7,000,000 ) $ (5,000,000 ) Net cash used in financing activities: $ (25,029,151 ) $ (10,708,003 ) Effect of currency rate exchange $ (358 ) $ (508 ) Decrease in cash $ (35,007,805 ) $ (17,859,968 ) Operating Activities: The cash used in operating activities for the year ended April 30, 2025 is a result of our net income of $30,656,050, offset by non-cash transactions, change in fair value of warrant asset in Femasys of $2,091,000 and legal settlement of $1,550,000, stock based compensation of $478,637, legal settlement warrant liability of $469,000, change in fair value of TNF warrants of $2,367,684, offset by the gain on related party investment of $(21,395,734) the changes in fair value of warrant liability of $(10,446,000), investment – TNF of $(5,063,950), derivative liability of $(2,184,000), convertible note receivable of $(941,000), change in unrealized gain of marketable securities of $(66,316), non-cash interest income of $(300,000), and changes to prepaid expenses, accounts payable, accrued expenses, and accrued dividends totaling $(193,667). 82 The cash used in operating activities for the year ended April 30, 2024 is a result of our net income of $333,763, convertible note receivable of $(1,089,000), changes in fair value of warrant liability of $(3,343,000), derivative liability of $(586,000), warrant asset – Femasys of $(1,818,000), other non-cash adjustments of $(195,000) offset by stock based compensation of $674,693, asset impairment of $2,000,000, loss on long term asset of $1,572,193, and changes to prepaid expenses, accounts payable and accrued expenses of $298,894.
The Company estimates the fair value of the convertible note receivable using the income approach, which uses as inputs the fair value of debtor’s common stock and estimates for the equity volatility and volume volatility of debtor’s common stock, the time to expiration of the convertible note, the discount rate, the stated interest rate compared to the current market rate, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.
The fair value of the convertible note receivable using the income approach, which uses as inputs the fair value of debtor’s common stock and estimates for the equity volatility and volume volatility of debtor’s common stock, the time to expiration of the convertible note, the discount rate, the stated interest rate compared to the current market rate, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.
We are engaged preparing for a clinical trial in LAPC using encapsulated live cells. On September 1, 2020, we submitted an IND to the FDA for our planned clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold.
We are engaged preparing for a clinical trial in LAPC using encapsulated live cells. 76 On September 1, 2020, we submitted an IND to the FDA for our planned clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical hold.
The Long-Term Warrants are exercisable for TNF Common Shares immediately, at an exercise price of $1.816 per share and expire five years from the date of issuance. The Short-Term Warrants are exercisable for TNF Common Shares immediately, at an exercise price of $1.816 per share and expire 18 months from the date of issuance.
The Long-Term Warrants are exercisable for TNF Common Shares immediately, at an initial exercise price of $1.816 per share and expire five years from the date of issuance. The Short-Term Warrants are exercisable for TNF Common Shares immediately, at an initial exercise price of $1.816 per share and expire 18 months from the date of issuance.
Other income, net for the year ended April 30, 2024 is attributable to interest income of $3,398,819, changes in fair values of warrant liability of $3,343,000, derivative liability of $586,000, convertible note receivable of $1,089,000 and warrant asset of $1,818,000, less loss on write-off of long term asset of $1,572,193 net of other income of $191,145.
Other income, net for the year ended April 30, 2024 of $8,853,771 is attributable to interest income of $3,398,819, changes in fair values of warrant liability of $3,343,000, derivative liability of $586,000, convertible note receivable of $1,089,000 and warrant asset of $1,818,000, less loss on write-off of long-term asset of $1,572,193 net of other income of $191,145.
Fair Value of Financial Instruments Fair value measurements are based upon certain market assumptions and pertinent information available as of and during the year ended April 30, 2024.
Fair Value of Financial Instruments Fair value measurements are based upon certain market assumptions and pertinent information available as of and during the year ended April 30, 2025.
In addition, the Company elects to account for its convertible note receivable, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value, including interest, are recorded as a component of non-operating income (loss) in the consolidated statements of operations.
In addition, we elect to account for its convertible note receivable, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value, including interest, are recorded as a component of non-operating income (loss) in the consolidated statements of operations.
Business under the Section entitled, “Clinical Hold” of this Report. 82 Private Placement On May 9, 2023, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we issued and sold, in a private placement (the “PIPE”), an aggregate of (i) 35,000 Series B Preferred Shares, initially convertible into up to 8,750,000 shares of common stock at a conversion price of $4.00 per share, and (ii) warrants (the “PIPE Warrants”) to acquire up to 8,750,000 shares of common stock at an exercise price of $4.00 per share.
Private Placement On May 9, 2023, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we issued and sold, in a private placement (the “PIPE”), an aggregate of (i) 35,000 Series B Preferred Shares, initially convertible into up to 8,750,000 shares of common stock at a conversion price of $4.00 per share, and (ii) warrants (the “PIPE Warrants”) to acquire up to 8,750,000 shares of common stock at an exercise price of $4.00 per share.
The Certificate of Change had no impact on the number of authorized shares of preferred stock, which remains at 10,000,000. 85 Performance Indicators Non-financial performance indicators used by management to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically modified human cells and having them encapsulated for our preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies on the cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our planned clinical trial in LAPC.
Performance Indicators Non-financial performance indicators used by management to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically modified human cells and having them encapsulated for our preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies on the cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our planned clinical trial in LAPC.
Financing Activities: The cash and cash equivalents used in financing activities for the year ended April 30, 2024 was mainly attributable to the Repurchase Programs of approximately $28,198,000, redemption of preferred stock of approximately $16,161,000, and the cash provided by proceeds from the issuance of preferred stock of approximately $33,650,000, net of transaction costs.
Financing Activities: The cash used in financing activities for the year ended April 30, 2025 is mainly attributable to the repurchase of common stock of approximately $2,542,000 and redemption of preferred stock of approximately $22,487,000.The cash used in financing activities for the year ended April 30, 2024 was mainly attributable to the Repurchase Programs of approximately $28,198,000, redemption of preferred stock of approximately $16,161,000, offset by the cash provided by proceeds from the issuance of preferred stock of approximately $33,650,000, net of transaction costs.
In connection with the Femasys Transaction, we entered into a registration rights agreement with Femasys, pursuant to which Femasys was required to file a resale registration statement with the Commission, registering 100% of the shares issuable pursuant to the Notes and the Femasys Warrants.
The Series B Warrants expired on November 21, 2024. In connection with the Femasys Transaction, we entered into a registration rights agreement with Femasys, pursuant to which Femasys was required to file a resale registration statement with the Commission, registering 100% of the shares issuable pursuant to the Notes and the Femasys Warrants.
That team has been working to complete the list of items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to lift the clinical hold, see Item 1.
That team has been working to complete the list of items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to lift the clinical hold, see Item 1. Business under the Section entitled, “Clinical Hold” of this Report.
The TNF Certificate of Designations includes certain triggering events, including, among other things, the failure by TNF to file and maintain an effective registration statement covering the sale of the securities registrable pursuant to a registration rights agreement and the failure by TNF to pay any amounts to us when due.
The Notes provide for certain events of default, including, among other things, Femasys’ failure to file and maintain an effective registration statement covering the sale of the securities registrable pursuant to a registration rights agreement and Femasys’ failure to pay any amounts due to us when due.
We do not believe there are factors which will cause materially different amounts to be reported than those presented in this Report. We aim to assess this regularly to provide accurate information to our shareholders.
We do not believe there are factors which will cause materially different amounts to be reported than those presented in this Report.
Our future capital requirements are difficult to forecast and will depend on many factors, but we believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our consolidated financial statements. 86 Year ended April 30, 2024, compared to year ended April 30, 2023 Revenue We had no revenues in the fiscal years ended April 30, 2024, and 2023.
Our future capital requirements are difficult to forecast and will depend on many factors, but we believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our consolidated financial statements.
Other Income (Expenses), Net Other income, net for the year ended April 30, 2024, was $8,853,771, as compared to other income, net of $2,139,501 in the year ended April 30, 2023.
Other Income (Expenses), Net Other income, net for the year ended April 30, 2025, was $35,033,912, as compared to other income, net of $8,853,771 in the year ended April 30, 2024.
Beginning six months after issuance, Femasys may require us to convert our Notes into Femasys Shares if the closing price of the Femasys Shares exceeds $2.36 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions described in the Notes are satisfied. 83 The Notes provide for certain events of default, including, among other things, Femasys’ failure to file and maintain an effective registration statement covering the sale of the securities registrable pursuant to a registration rights agreement and Femasys’ failure to pay any amounts due to us when due.
Beginning six months after issuance, Femasys may require us to convert our Notes into Femasys Shares if the closing price of the Femasys Shares exceeds $2.36 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions described in the Notes are satisfied.
The Notes are senior unsecured obligations of Femasys and accrue interest at a rate of 6.00% per annum, payable annually, in cash or Femasys Shares at Femasys’ option, and mature two years after the date of issuance. The Notes are convertible into Femasys Shares at our election at any time at an initial conversion price of $1.18.
The Notes are senior unsecured obligations of Femasys and accrue interest at a rate of 6.00% per annum, payable annually, in cash or Femasys Shares at Femasys’ option, and mature two years after the date of issuance. The initial annual interest payment was paid in stock.
At any time after the issuance date of the TNF Preferred Shares, TNF has the option to redeem in cash all or any portion of the outstanding TNF Preferred Shares then outstanding at a premium upon notice to the Company.
In April 2025, the conversion price was adjusted to $0.1832 per share as a result of stock option grants. At any time after the issuance date of the TNF Preferred Shares, TNF has the option to redeem in cash all or any portion of the outstanding TNF Preferred Shares then outstanding at a premium upon notice to the Company.
See Note 2 of the Consolidated Financial Statements to this Report for more information. Discussion of Operating, Investing and Financing Activities The following table presents a summary of our sources and uses of cash for the years ended April 30, 2024 and 2023.
Discussion of Operating, Investing and Financing Activities The following table presents a summary of our sources and uses of cash for the years ended April 30, 2025 and 2024.
Under the terms of the Notes, Femasys is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of assets, among other matters.
Under the terms of the Notes, Femasys is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of assets, among other matters. 78 The Series A Warrants are exercisable for Femasys Shares immediately at an exercise price of $1.18 per share and expire five years from the date of issuance.
The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications and similar corporate events. Femasys agreed in the Femasys Purchase Agreement and the Notes not to issue or sell any of its equity securities at a price below the then-current conversion price for a period of 18 months after closing, subject to certain exceptions.
Femasys agreed in the Femasys Purchase Agreement and the Notes not to issue or sell any of its equity securities at a price below the then-current conversion price for a period of 18 months after closing, subject to certain exceptions. During the years ended April 30, 2025 and 2024, the Notes earned $300,000 and $137,500, respectively.
The TNF Preferred Shares are convertible into TNF Common Shares at our election at any time at an initial conversion price of $1.816.
The Preferred Shares are convertible into common stock (the “Conversion Shares”) at the election of the holder at any time at an initial conversion price of $4.00 (the “Conversion Price”).
Additionally, we have the right to nominate one individual to serve on TNF’s board of directors until the Company no longer beneficially owns 20% of the TNF Common Shares on an as-converted basis. 84 The terms of the TNF Preferred Shares are as set forth a certificate of designations (the “TNF Certificate of Designations”), which TNF filed with the Secretary of State for the State of Delaware on May 21, 2024.
Additionally, we have the right to nominate one individual to serve on TNF’s board of directors until the Company no longer beneficially owns 20% of the TNF Common Shares on an as-converted basis.
We are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial Statements are prepared.
Critical Accounting Estimates Our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures.
Our significant accounting policies are discussed in Note 2 of the Notes to our Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this Report.
However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. 83 Our significant accounting policies are discussed in Note 2 of the Notes to our Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this Report.
We determined that due to the SG Austria financial position, negative book value and viability make for an inconclusive determination of a specific value range of our minority interest in SG Austria and the value as of the present time is likely minimal. Therefore, we determined that there should be a full impairment of the approximately $1.6 million carrying value.
We determined that research in the treatment of diabetes would no longer be pursued until the Cell-in-a-Box® use in pancreatic cancer treatment can be substantiated in a clinical trial and a viable cell line is acquired. 84 We determined that due to the SG Austria financial position, negative book value and viability make for an inconclusive determination of a specific value range of our minority interest in SG Austria and the value as of the present time is likely minimal.
The decrease in cash is attributable to the repurchase of our common stock pursuant to the Repurchase Programs, recorded as treasury stock and an increase in our operating expenses.
Working capital was approximately $19.5 million as of April 30, 2025, and approximately $43 million as of April 30, 2024. The decrease in cash is attributable to our investment in TNF, the redemption of preferred stock, the repurchase of our common stock pursuant to the Repurchase Programs, recorded as treasury stock and our operating expenses.
Impairment of Assets We determined that the diabetes licensed asset technology would likely not prove to be a viable technique for the production of insulin producing cells and the treatment of diabetes. We believe that a buyer of this technology would ascribe a de minimis value to this asset.
Probability of default is estimated using the S&P Global default rate for companies with a similar credit rating to debtor’s Fair Value of Long-Lived Assets We determined that the diabetes licensed asset technology would likely not prove to be a viable technique for the production of insulin producing cells and the treatment of diabetes.
Liquidity and Capital Resources As of April 30, 2024, our cash and cash equivalents totaled approximately $50.2 million, compared to approximately $68 million as of April 30, 2023. Working capital was approximately $43 million as of April 30, 2024, and approximately $67.6 million as of April 30, 2023.
We aim to assess this regularly to provide accurate information to our shareholders. 80 Liquidity and Capital Resources As of April 30, 2025, our cash and cash equivalents totaled approximately $15.2 million, compared to approximately $50.2 million as of April 30, 2024.
On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.
We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial Statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance with U.S. GAAP.
Operating Expenses Our total operating expenses during the year ended April 30, 2024 were $8,520,008, representing an increase of $2,064,514 compared to the year ended April 30, 2023. The increase is mainly attributable to increases in compensation expenses, director fees and general and administrative expenses, net of decreases in R&D and legal and professional expenses.
The decrease is mainly attributable to decreases in compensation expenses, director fees, impairment of asset, legal and professional and general and administrative expenses, net of an increase in R&D. Research and development expenses R&D expense was $438,416 for the year ended April 30, 2025, as compared to $407,431 for the year ended April 30, 2024, an increase of $30,985.
For descriptions of the Series B Preferred Shares and the PIPE Warrants, see “Note 12 – Preferred Stock” and Note 6 – Stock Options and Warrants,” respectively. Femasys Transaction On November 14, 2023, we entered into a securities purchase agreement (the “Femasys Purchase Agreement”) with Femasys Inc.
Femasys Transaction On November 14, 2023, we entered into a securities purchase agreement (the “Femasys Purchase Agreement”) with Femasys Inc.
TNF’s ability to settle conversions and make dividend make-whole payments by issuing TNF Common Shares is subject to certain limitations set forth in the TNF Certificate of Designations.
TNF’s ability to settle conversions and make dividend make-whole payments by issuing TNF Common Shares is subject to certain limitations set forth in the TNF Certificate of Designations. 79 The TNF Certificate of Designations includes certain triggering events, including, among other things, the failure by TNF to file and maintain an effective registration statement covering the sale of the securities registrable pursuant to a registration rights agreement and the failure by TNF to pay any amounts to us when due.
Other income, net for the year ended April 30, 2023 is attributable to interest income of $1,937,499 net settlement of accounts payable of $152,976 and net of other income and expense of $49,026. 87 Loss on write-off of long-term asset For the year ended April 30, 2024, the Company recorded an asset loss of $1,572,193, related to the Company’s investment in SG Austria, reducing the carrying value of such investment to zero.
Other income is attributable to recovery of accrued expenses of $195,000 less income taxes and foreign exchange loss. For the years ended April 30, 2025 and 2024, we recorded an asset loss of $0 and $1,572,193, respectively, related to the Company’s investment in SG Austria, reducing the carrying value of such investment to zero.
Femasys has the right to call the exercise of the Series B Warrants if the closing price of the Femasys Shares exceeds 200% of the exercise price for 10 consecutive trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain equity conditions are satisfied.
We may require holders to convert their Preferred Shares into Conversion Shares if the closing price of the common stock exceeds $6.00 per share for 20 consecutive trading days and the daily trading volume of the common stock exceeds 1,000,000 shares per day during the same period and certain equity conditions described in the Certificate of Designations are satisfied.
Therefore, we determined that there should be a full impairment of the $2 million carrying value. We determined that research in the treatment of diabetes would no longer be pursued until the Cell-in-a-Box® use in pancreatic cancer treatment can be substantiated in a clinical trial and a viable cell line is acquired.
Therefore, we determined that there should be a full impairment of the approximately $1.6 million carrying value.
Removed
The Series A Warrants are exercisable for Femasys Shares immediately at an exercise price of $1.18 per share and expire five years from the date of issuance.
Added
The terms of the Preferred Shares are as set forth in a Certificate of Designations (the “Certificate of Designations”), which was filed with the Secretary of the State of Nevada on May 10, 2023.
Removed
The Series B Warrants are exercisable for Femasys Shares immediately at an exercise price of $1.475 per share and expire one year from the date of issuance.
Added
The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).
Removed
Operating expenses: Year ended April 30, 2024 Change - Increase (Decrease) and Percent Year ended April 30, 2023 R&D $ 407,431 $ (61,105 ) $ 468,536 (13% ) Compensation expense $ 1,322,414 $ 87,458 $ 1,234,956 7% Director fees $ 1,141,215 $ 189,868 $ 951,347 20% Impairment of asset $ 2,000,000 $ 2,000,000 – – General and administrative, legal and professional $ 3,648,948 $ (151,707 ) $ 3,800,655 (4% ) Loss from Operations Loss from operations during the year ended April 30, 2024 was $8,520,008, an increase of $2,064,514 compared to the year ended April 30, 2023.
Added
We are required to settle the Preferred Shares in equal monthly installments, commencing on November 9, 2023.
Removed
The increase is mainly attributable to increases in compensation expenses, director fees and general and administrative expense, impairment of asset, net of decreases in R&D and legal and professional expenses. See the table under “ Operating Expenses ” above for more detail.
Added
The amortization payments due upon such redemption are payable, at our election, in cash, or subject to certain limitations, in shares of common stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) a 20% discount to the average of the three lowest closing prices of our common stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) the lower of $0.556 and 20% of the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) on the date of receipt of Nasdaq Stockholder Approval (as defined below); provided that if the amount set forth in clause B is the lowest effective price, we will be required to pay the amortization payment in cash.
Removed
Other income is attributable to recovery of accrued expenses of $195,000 less income taxes and foreign exchange loss.
Added
The holders of the Preferred Shares are entitled to dividends of 4% per annum, compounded monthly, which are payable in cash or shares of common stock at our option, in accordance with the terms of the Certificate of Designations.
Removed
Investing Activities: On November 14, 2023, we entered into a securities purchase agreement, pursuant to which agreed to purchase a convertible note receivable in the amount of $5 million, convertible into common stock and warrants (Series A and B) to purchase additional common stock. See Note 3 – Investment in Debt and Equity Securities.
Added
Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Preferred Shares will accrue dividends at the rate of 15% per annum. The holders of Preferred Shares have no voting rights on account of the Preferred Shares, other than with respect to certain matters affecting the rights of the Preferred Shares.
Removed
We had no investing activities for the year ended April 30, 2023.
Added
Notwithstanding the foregoing, our ability to settle conversions and make amortization payments using shares of common stock is subject to certain limitations set forth in the Certificate of Designations, including a limit on the number of shares that may be issued until the time, if any, that our stockholders have approved the issuance of more than 19.9% of the our outstanding shares of common stock in accordance with Nasdaq listing standards (the “Nasdaq Stockholder Approval”).
Removed
For the year ended April 30, 2023, the cash and cash equivalents used is mainly attributable to the Repurchase Programs of approximately $13,561,000. 88 Critical Accounting Estimates Our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Added
We received Nasdaq Stockholder Approval at its special meeting of stockholders held on August 31, 2023.
Removed
New Accounting Pronouncements Effective in Future Periods For a discussion of new accounting pronouncements effective in future periods, see “Recent Accounting Pronouncements” in Note 2 of our Notes to our Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this Report. 89
Added
Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of, or as part of any amortization payment under, the Certificate of Designations or Warrants. 77 The Certificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to a registration rights agreement entered into by us and the Investors simultaneously with the Purchase Agreement and our failure to pay any amounts due to the holders of the Preferred Shares when due.
Added
In connection with a Triggering Event, each holder of Preferred Shares will be able to require us to redeem in cash any or all of the holder’s Preferred Shares at a premium set forth in the Certificate of Designations. As of April 30, 2025, all preferred shares were redeemed and no remaining obligations exist.
Added
The Notes are convertible into Femasys Shares at our election at any time at an initial conversion price of $1.18. The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications and similar corporate events.
Added
On November 21, 2024, we received a settlement of twelve months of interest in the form of 315,790 shares of Femasys common stock. The fair value of the shares was measured at April 30, 2025, resulting in an unrealized gain of $66,316.
Added
The terms of the TNF Preferred Shares are as set forth a certificate of designations (the “TNF Certificate of Designations”), which TNF filed with the Secretary of State for the State of Delaware on May 21, 2024. The TNF Preferred Shares are convertible into TNF Common Shares at our election at any time at an initial conversion price of $1.816.
Added
In April 2025, the exercise price for both the Long-Term Warrants and Short-Term Warrants was adjusted to $0.1832 per share. As a result of the exercise price adjustment, the number of warrant shares attributable to both the Long-Term and Short-Term Warrants increased to 38,209,611 each.
Added
The Certificate of Change had no impact on the number of authorized shares of preferred stock, which remains at 10,000,000.
Added
Year ended April 30, 2025, compared to year ended April 30, 2024 Revenue We had no revenues in the fiscal years ended April 30, 2025, and 2024. Operating Expenses Our total operating expenses during the year ended April 30, 2025 were $4,377,862, representing a decrease of $4,142,146 compared to the year ended April 30, 2024.
Added
The increase in cost is primarily due to entering into an agreement with consultants to conduct additional research into the treatment of pancreatic cancer. 81 General and administrative expenses The majority of our operating losses from operations are from general and administrative expenses.
Added
General and administrative expenses consist primarily of costs associated with our overall operations and with being a public company. These costs include personnel, legal and professional services, insurance, investor relations and compliance related fees. These expenses were $3,939,446 and $6,112,577, respectively, for the years ended April 30, 2025 and 2024, a decrease of $2,173,131, or 36%.
Added
Compensation expenses decreased by $37,210 to a reduction in accrued vacation. Director fees decreased by $585,271 due to a reduction in equity compensation and payments made to directors. Investor relations decreased by $198,364 due to having two stockholder meetings in 2024 and one meeting in 2025.
Added
Legal and professional fees decreased by $300,266 primarily due to a reduction in legal fees relating to non-recurring legal issues. Warrant issuance costs decrease of $913,640 incurred in 2024 were non-recurring in 2025. Impairment asset impairment For the year ended April 30, 2024, we impaired a license in the amount of $2,000,000.
Added
Other income, net for the year ended April 30, 2025 is attributable to interest income of $1,415,561, changes in fair values of warrant liability of $10,446,000, derivative liability of $2,184,000, convertible note receivable of $941,000, preferred stock investment – TNF of $5,063,950, and gain on related party investment – TNF of $21,395,734 and unrealized gain on the fair value of marketable securities of $66,316, less decreases in the fair value of Femasys warrant asset of $2,091,000, TNF warrant asset of $2,367,684, settlement of legal complaint of $2,019,000 and other expenses of $965.
Added
Investing Activities: The cash used in investing activities for the year ended April 30, 2025 is mainly attributable to our entry into the TNF Purchase Agreement with a public company operating in the medical industry, Pursuant to the TNF Purchase Agreement, we purchased (i) 7,000 shares of TNF’s Series G Convertible Preferred Stock (the “Preferred Shares” or “Series G Preferred Stock”), representing approximately 33% of TNF’s issued and outstanding share capital on an as-converted basis (and approximately 78% of all shares of Series G Preferred Stock outstanding), at a price of $1.816 per Preferred Share, which are convertible into 3,854,626 shares of Common Stock (as defined below); (ii) warrants to purchase up to 3,854,626 shares of TNF’s Common Stock with a five-year term; and (iii) warrants to purchase up to 3,854,626 shares of TNF’s Common Stock with a 18-month, for an aggregate purchase price of $7,000,000.
Added
The cash used in investing activities for the year ended April 30, 2024 is mainly attributable to our entry into a Securities Purchase Agreement (the “Femasys Purchase Agreement”) with Femasys Inc.
Added
(“Femasys”), pursuant to which we purchased from Femasys for a sum of $5,000,000, (i) senior unsecured convertible notes (the “Femasys Notes”) in an aggregate principal amount of $5,000,000, convertible into shares of Femasys common stock, par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per share, (ii) Series A Warrants (the “Series A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.18 per share, and (iii) Series B Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Femasys Warrants,” and, together with the Notes, the “Femasys Securities”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.475 per share.
Added
The Series B Warrants expired on November 21, 2024.
Added
We estimate the fair value of the convertible note receivable using the income approach, which uses as inputs the fair value of debtor’s common stock and estimates for the equity volatility and volume volatility of debtor’s common stock, the time to expiration of the convertible note, the discount rate, the stated interest rate compared to the current market rate, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.
Added
Therefore, the estimate of expected future volatility is based on the actual volatility of debtor’s common stock and historical volatility of debtor’s common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date. The risk-free interest rate is determined by reference to the U.S.
Added
Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration.
Added
We believe that a buyer of this technology would ascribe a de minimis value to this asset. Therefore, we determined that there should be a full impairment of the $2 million carrying value.
Added
New Accounting Pronouncements Effective in Future Periods In August 2023, the FASB issued ASU 2023-05 – Business Combinations – Joint Venture Formations (Subtopic 805-60), which requires public entities that qualify as a joint venture or corporate joint venture to establish a new basis of accounting upon formation.
Added
The guidance is effective for our annual periods beginning May 1, 2025, and early adoption is permitted. We are evaluating the impact of adoption of this standard on its financial statements and disclosures but does not expect it to have a material effect on its consolidated financial statements.
Added
In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold.
Added
The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for our annual periods beginning May 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted.
Added
We are evaluating the impact of adoption of this standard on its financial statements and disclosures but does not expect it to have a material effect on our consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses. The guidance requires additional, disaggregated disclosure about certain income statement expense line items.

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