{"url_path":"/sec/aimd/10-k/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-30","source_url":"https://www.sec.gov/Archives/edgar/data/1014763/0001493152-26-013579-index.html","accession_number":"0001493152-26-013579","cik":"0001014763","ticker":"AIMD","issuer_name":"Ainos, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1014763/0001493152-26-013579-index.html","primary_entity_key":"0001014763","primary_entity_name":"Ainos, Inc."},"word_count":18681,"has_tables":true,"body_markdown":"**ITEM\n1A. RISK FACTORS.**\n\n \n\nInvestors\nshould carefully consider the following discussion of significant factors, events, and uncertainties that make an investment in our securities\nrisky. The events and consequences discussed in these risk factors could, in circumstances we may or may not be able to accurately predict,\nrecognize, or control, have a material adverse effect on our business, growth, reputation, prospects, financial condition, operating\nresults (including components of our financial results), cash flows, liquidity, and stock price. These risk factors do not identify all\nrisks that we face; our operations could also be affected by factors, events, or uncertainties that are not presently known to us or\nthat we currently do not consider to present significant risks to our operations. In addition, the global economic climate amplifies\nmany of these risks.\n\n \n\n**Risks\nrelated to our limited operating history, financial position, and need for additional capital**\n\n \n\n**We\nhave a history of operating losses that are expected to continue for the foreseeable future, and we are unable to predict the extent\nof future losses, or whether we will generate significant revenues or achieve or sustain profitability.**\n\n \n\nWe\nare focused on product development and have generated $123,360 and nil in revenues from AI Nose related product, and $797 and $20,321\nfrom pet supplements, in the years ended December 31, 2025 and 2024, respectively. We expect to continue to incur operating losses until\nwe are able to commercialize or license our other products. These operating losses have adversely affected and are likely to continue\nto adversely affect our working capital, total assets and stockholders’ equity. We have generated operating losses of $13,990,408\nand $13,841,204 in the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had cumulative losses\nof $67,520,328 and $52,749,316, respectively. We expect to make substantial expenditures and incur increasing operating costs in the\nfuture and our accumulated deficit will increase significantly as we expand development and clinical trial activities for our product\ncandidates. Because of the risks and uncertainties associated with product development, we are unable to predict the extent of any future\nlosses, whether we will ever generate significant revenues or if we will ever achieve or sustain profitability.\n\n \n\nWe\nbelieve that our cash on hand, along with the anticipated net proceeds from products sales and additional financing, will enable us to\nfund our operations over the short and medium terms based on our current plan. We are dependent on obtaining, and are continuing to pursue,\nnecessary funding from outside sources, including obtaining additional funding from the issuance of securities in order to continue our\noperations. Without adequate funding, we may not be able to meet our obligations. The successful commercialization of any of our products\nwill require us to perform a variety of functions, including:\n\n \n\n \n●\ncontinuing\nto undertake preclinical and clinical development;\n\n \n●\nengaging\nin the development of product candidate formulations and manufacturing processes;\n\n \n●\ninteracting\nwith the applicable regulatory authorities and pursuing other required steps for regulatory approval;\n\n \n●\nengaging\nwith payors and other pricing and reimbursement authorities;\n\n \n●\nsubmitting\nmarketing applications to and receiving approval from the applicable regulatory authorities; and\n\n \n●\nmanufacturing\nthe applicable products and product candidates in accordance with regulatory requirements and, if ultimately approved, conducting\nsales and marketing activities in accordance with health care, Taiwan Food and Drug Administration, or TFDA, U.S. Food and Drug Administration,\nor FDA, and similar foreign regulatory authority laws and regulations.\n\n \n\n8\n\n \n\n \n\n**We\nhave generated very little revenue from product sales and may never become profitable.**\n\n \n\nOur\nability to generate product sales and achieve profitability depends on our ability, alone or with collaborative partners, to successfully\ncomplete the development of, and obtain the regulatory approvals necessary to commercialize our current and future product candidates.\nOur product candidates will require additional clinical, manufacturing, and non-clinical development, regulatory approval, commercial\nmanufacturing arrangements, establishment of a commercial organization, significant marketing efforts, and further investment before\nwe generate significant product sales.\n\n \n\nWe\ncannot assure you that we will meet our timelines for our development programs, which may be delayed or not completed for a number of\nreasons. Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’ ability to successfully:\n\n \n\n \n●\ncomplete\nresearch and obtain favorable results from preclinical and clinical development of our current and future product candidates, including\naddressing any clinical holds that may be placed on our development activities by regulatory authorities;\n\n \n●\nseek\nand obtain regulatory and marketing approvals for any of our product candidates for which we complete clinical trials, as well as\ntheir manufacturing facilities;\n\n \n●\nlaunch\nand commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force,\nmarketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner;\n\n \n●\nqualify\nfor coverage and establish adequate reimbursement by government and third-party payors for any of our product candidates for which\nwe obtain regulatory and marketing approval;\n\n \n●\ndevelop,\nmaintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we\nmay develop;\n\n \n●\nestablish\nand maintain supply and manufacturing capabilities or capacities internally or with third parties that can provide adequate, in both\namount and quality, products, and services to support clinical development and the market demand for any of our product candidates\nfor which we obtain regulatory and marketing approval;\n\n \n●\nobtain\nmarket acceptance of current or any future product candidates and effectively compete to establish market share;\n\n \n●\nmaintain\na continued acceptable safety and efficacy profile of our product candidates following launch;\n\n \n●\naddress\ncompeting technological and market developments;\n\n \n●\nimplement\ninternal systems and infrastructure, as needed;\n\n \n●\nnegotiate\nfavorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in\nsuch collaborations;\n\n \n●\nmaintain,\nprotect, enforce, defend, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how;\n\n \n●\navoid\nand defend against third-party interference, infringement, and other intellectual property claims; and\n\n \n●\nattract,\nhire, and retain qualified personnel.\n\n \n\nEven\nif one or more of our current and future product candidates are approved for commercial sale, we anticipate incurring significant costs\nassociated with commercializing any approved product candidate. Our expenses could increase beyond our expectations if we are required\nby the TFDA, the FDA or other regulatory authorities to perform clinical and other studies in addition to those that we currently anticipate.\nIf we are required to conduct additional clinical trials or other testing of our product candidates that we develop beyond those that\nwe currently expect, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results\nof these trials or tests are not positive or are only modestly positive, or if there are safety concerns, we may be delayed in obtaining\nmarketing approval for our product candidates, not obtain marketing approval at all, or obtain more limited approvals. Even if we are\nable to generate revenues from the sale of any approved product candidates, we may not become profitable and may need to obtain additional\nfunding to continue operations.\n\n \n\nEven\nif we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to\nbecome and remain profitable would decrease the value of the Company and could impair our ability to raise capital, maintain our research\nand development efforts, expand our business or continue our operations. A decline in the value of our Company also could cause you to\nlose all or part of your investment.\n\n \n\n9\n\n \n\n \n\n**We\nneed to raise additional capital to operate our business. If we fail to obtain the capital necessary to fund our operations, we will\nbe unable to continue or complete our product development.**\n\n \n\nWe\nare a company primarily focused on product development and our product revenues may not be sufficient to fund our operations. Until,\nand if, we deploy AI Nose at scale or receive approval from the TFDA, FDA and other regulatory authorities for our POCT and VELDONA product\ncandidates, our revenues generated from these products may be limited. We had cash and cash equivalents of approximately $417 thousand\nas of December 31, 2025, and we will need to continue to seek capital from time to time to capitalize the development and commercialization\nof our product candidates and to acquire and develop other product candidates. Our actual capital requirements will depend on many factors.\nFor instance, our business or operations may change in a manner that would consume available funds more rapidly than anticipated and\nsubstantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products, acquire complementary\nproducts, business or technologies or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory\nenvironment or a change in disease treatment modalities. If we experience unanticipated cash requirements, we may need to seek additional\nsources of financing, which may not be available on favorable terms, if at all.\n\n \n\nHowever,\nwe may not be able to secure funding when we need it or on favorable terms. If we cannot raise adequate funds to satisfy our capital\nrequirements, we will have to delay, scale-back or eliminate our research and development activities, clinical studies or future operations,\nwe may be unable to complete planned nonclinical studies and clinical trials or obtain approval of our product candidates from the TFDA\nand FDA and other regulatory authorities. In addition, we could be forced to discontinue product development, reduce or forego sales\nand marketing efforts and attractive business opportunities, reduce overhead, or discontinue operations. We may also be required to obtain\nfunds through arrangements with collaborators, which arrangements may require us to relinquish rights to certain technologies or products\nthat we otherwise would not consider relinquishing, including rights to future product candidates or certain major geographic markets.\nWe may further have to license our technology to others. This could result in sharing revenues which we might otherwise retain for ourselves.\nAny of these actions may harm our business, financial condition and results of operations.\n\n \n\nThe\namount of capital we may need depends on many factors, including the progress, timing and scope of our product development programs;\nthe progress, timing and scope of our nonclinical studies and clinical trials; the time and cost necessary to obtain regulatory\napprovals; the time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing; our\nability to enter into and maintain collaborative, licensing and other commercial relationships; and our partners’ commitment\nof time and resources to the development and commercialization of our products.\n\n \n\n**We\nmay be unable to access the capital markets, and even if we can raise additional funding, we may be required to do so on terms that are\ndilutive to you.**\n\n \n\nThe\ncapital markets have been unpredictable in the recent past for unprofitable companies such as ours. The amount of capital that a company\nsuch as ours is able to raise often depends on variables that are beyond our control. As a result, we cannot assure you that we will\nbe able to secure financing on terms attractive to us, or at all. If we are able to consummate a financing arrangement, the amount raised\nmay not be sufficient to meet our future needs. If adequate funds are not available on acceptable terms, or at all, our business, results\nof operations, financial condition and our continued viability will be materially adversely affected.\n\n \n\n**Our\noperating results may fluctuate significantly, which will make our future results difficult to predict and could cause our results to\nfall below expectations.**\n\n** **\n\nOur\nquarterly and annual operating results may fluctuate significantly, which will make it difficult for us to predict our future results.\nThese fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including:\n\n \n\n \n●\nthe\nscalability of our product sales, which is difficult to predict\n\n \n●\nthe\ntiming and cost of, and level of investment in, research, development and commercialization activities, which may change from time\nto time;\n\n \n\n10\n\n \n\n \n\n \n●\nthe\ntiming and status of enrollment for our clinical trials;\n\n \n●\nthe\ntiming of regulatory approvals, if any, in the United States and internationally;\n\n \n●\nthe\ntiming of expanding our operational, financial and management systems and personnel, including personnel to support our clinical\ndevelopment, quality control, manufacturing and commercialization efforts and our operations as a public company;\n\n \n●\nthe\ncost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity produced, and the terms\nof any agreements we enter into with third-party suppliers;\n\n \n●\nthe\ntiming and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement;\n\n \n●\ncoverage\nand reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products;\n\n \n●\nthe\ntiming and cost to establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for\nwhich we may obtain marketing approval and intend to commercialize on our own or jointly with current or future collaborators;\n\n \n●\nexpenditures\nthat we may incur to acquire, develop or commercialize additional products and technologies;\n\n \n●\nthe\nlevel of demand for any future approved products, which may vary significantly over time;\n\n \n●\nfuture\naccounting pronouncements or changes in accounting principles or our accounting policies; and\n\n \n●\nthe\ntiming and success or failure of nonclinical studies and clinical trials for our product candidates or competing product candidates,\nor any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration\npartners.\n\n \n\nThe\ncumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.\nAs a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past\nresults as an indication of our future performance.\n\n \n\n**Risks\nrelated to product development and regulatory process**\n\n \n\n**AI\nNose is a developing platform, and we may be unable to successfully generate meaningful revenue.**\n\n** **\n\nAI\nNose is an artificial intelligence–based scent digitization platform that is still under development and early commercialization.\nAlthough we have conducted pilot deployments and early-stage commercial implementations, we have not yet established a significant history\nof large-scale commercial adoption, recurring revenue, or long-term customer retention for AI Nose. As a result, our ability to predict\ndemand, pricing, renewal rates, and long-term profitability for this platform is limited.\n\n \n\nThe\ncommercialization of AI Nose may require substantial additional investment in product development, hardware, software, personnel, customer\nsupport, and sales and marketing. There can be no assurance that these investments will result in increased adoption or revenue. If AI\nNose fails to achieve meaningful market acceptance or if commercialization efforts are delayed or unsuccessful, our business, operating\nresults, and financial condition could be adversely affected.\n\n \n\n**The\nmarket for AI-enabled scent digitization and SmellTech solutions may not develop as we expect.**\n\n** **\n\nThe\nmarket for AI-powered scent detection, classification, and interpretation remains nascent. Potential customers may not recognize scent\nas a valuable data modality or may choose not to adopt SmellTech solutions. If this market fails to develop, develops more slowly than\nexpected, or adopts alternative technologies, demand for AI Nose may be limited. In addition, the size, growth rate, and long-term demand\nfor this market are difficult to predict. Customers may choose to rely on traditional sensing technologies, alternative analytical methods,\nor internal processes rather than adopting AI Nose. If the market for AI-enabled scent digitization fails to develop, develops more slowly\nthan we expect, or evolves in a way that does not favor our platform, our ability to grow AI Nose–related revenue could be materially\nlimited.\n\n \n\n11\n\n \n\n \n\n**AI\nNose may fail to achieve acceptable accuracy, reliability, or performance across use cases and environments.**\n\n** **\n\nAI\nNose integrates sensor hardware, software, cloud connectivity, and artificial intelligence models, and its performance depends on numerous\nvariables, including environmental conditions, data quality, calibration, and model training. The platform may not perform as expected\nin all environments or applications, including healthcare-adjacent or industrial settings, and may require additional development, retraining,\nor customization to achieve acceptable results.\n\n \n\n**Our\nAI Nose platform may contain undetected errors, defects, or limitations that could impair adoption or result in liability.**\n\n** **\n\nDue\nto the complexity of the AI Nose platform, errors, defects, or limitations may not be identified until after deployment. These issues\nmay arise from hardware components, software code, data processing pipelines, model training methodologies, or interactions with third-party\nsystems. In some cases, errors may only become apparent after extended use or under specific conditions. Any such defects or failures\ncould result in inaccurate outputs, operational disruptions, or customer dissatisfaction. In addition, errors in AI Nose outputs could\nexpose us to warranty claims, contractual disputes, or other legal liabilities. Addressing these issues may require significant resources\nand may not fully mitigate the impact on customer confidence or market perception.\n\n \n\n**The\nperformance of AI Nose depends on data collection and model training, which may be insufficient or ineffective.**\n\n** **\n\nAI\nNose relies on the collection and labeling of scent and volatile organic compound data to train and improve its artificial intelligence\nmodels. We may face challenges in obtaining sufficient quantities of high-quality, representative data across diverse environments and\nuse cases. Data collected from limited deployments may not adequately reflect broader operating conditions.\n\n \n\nIf\nthe data used to train or refine AI Nose models is incomplete, biased, or otherwise inadequate, the platform’s performance may\nbe limited or inconsistent. In addition, collecting, storing, and managing scent data may be time-consuming and costly. Any inability\nto effectively build or maintain suitable datasets could adversely affect the accuracy, scalability, and commercial viability of AI Nose.\n\n \n\n**Customers\nmay be unwilling or unable to integrate AI Nose into existing systems or workflows.**\n\n** **\n\nAI\nNose is designed to integrate with customer infrastructure, operational processes, and third-party systems. Customers may face technical,\noperational, regulatory, or cost-related barriers to adoption. Integration challenges, deployment complexity, or the need for additional\ncustomization may reduce adoption or delay commercial rollout.\n\n \n\n**Expansion\ninto industrial and other non-healthcare environments may expose AI Nose to new and unforeseen risks.**\n\n** **\n\nWhile\nAI Nose was initially developed in healthcare-related settings, we are expanding its use into industrial and other environments. These\nenvironments may present conditions, requirements, or risks that differ materially from earlier use cases, including increased expectations\nfor reliability, safety, or uptime. Failures or performance issues in such environments could have more significant operational or financial\nconsequences.\n\n \n\n12\n\n \n\n \n\n**Our\nAI Nose platform is highly technical and may contain undetected errors, which could cause harm to our reputation and adversely affect\nour business.**\n\n** **\n\nOur\nAI Nose platform is highly technical and complex and, when deployed, may contain errors or defects. Despite testing, some errors in our\nproducts and services may only be discovered after they have been installed and used by customers. Any errors or defects discovered in\nour AI Nose platform after commercial release could result in failure to achieve market acceptance, loss of revenue or delay in revenue\nrecognition, loss of customers, and increased service and warranty cost, any of which could adversely affect our business, operating\nresults and financial condition. In addition, we could face claims for product liability, tort, or breach of warranty. The performance\nof our products and services could have unforeseen or unknown adverse effects on the networks over which they are delivered as well as\non third-party applications and services that utilize our products and services, which could result in legal claims against us, harming\nour business. Furthermore, we expect to provide implementation, consulting, and other technical services in connection with the implementation\nand ongoing maintenance of AI Nose, which typically involves working with sophisticated software, computing systems, and communications\nsystems. Defending a lawsuit, regardless of its merit, is costly and may divert our management’s attention and adversely affect\nthe market’s perception of us and our products and services. In addition, if our business liability insurance coverage proves inadequate\nor future coverage is unavailable on acceptable terms or at all, our business, operating results and financial condition could be adversely\nimpacted.\n\n \n\n**We\nare early in our development efforts of POCT and VELDONA candidates, and our business is dependent on the successful development of our\ncurrent and future POCT and VELDONA candidates. If we are unable to advance our current or future product candidates through clinical\ntrials, obtain marketing approval and ultimately commercialize any product candidates we develop, or experience significant delays in\ndoing so, our business will be materially harmed.**\n\n \n\nOur\nPOCT and VELDONA candidates are in different stages of clinical development. Our current and future product candidates may never achieve\nexpected levels of efficacy or an acceptable safety profile. Our use of clinically validated targets to pursue treatments does not guarantee\nefficacy or safety or necessarily reduce the risk that our current or future product candidates will not achieve expected levels of efficacy\nor an acceptable safety profile.\n\n \n\nThe\nsuccess of our business, including our ability to finance our Company and generate revenue from products in the future, will depend heavily\non the successful development and eventual commercialization of our POCT and VELDONA candidates, which may never occur. Our current POCT\nand VELDONA candidates, and any future POCT and VELDONA candidates we develop, will require additional nonclinical and clinical development,\nmanagement of clinical, nonclinical and manufacturing activities, marketing approval in the United States and other markets, obtaining\nsufficient manufacturing supply for both clinical development and commercial production, building of a commercial organization, and substantial\ninvestment and significant marketing efforts before we generate any revenues from product sales.\n\n \n\nAs\na company, we have limited experience in preparing, submitting and prosecuting regulatory filings. We have no prior experience in developing\nor securing regulatory approvals for veterinary drugs or treatments. If we do not receive regulatory approvals for current or future\nproduct candidates, we may not be able to continue our operations. Even if we successfully obtain regulatory approval to market a product\ncandidate, our revenue will depend, in part, upon the size of the markets in the territories for which we gain regulatory approval and\nhave commercial rights, as well as the availability of competitive products, third-party reimbursement and adoption by physicians.\n\n \n\nWe\nplan to seek regulatory approval to commercialize our product candidates both in the United States and in select foreign countries. While\nthe scope of regulatory approval in other countries is generally similar to that in the United States, in order to obtain separate regulatory\napproval in other countries we must comply with numerous and varying regulatory requirements of such countries. We may be required to\nexpend significant resources to obtain regulatory approval and to comply with ongoing regulations in these jurisdictions.\n\n \n\nThe\nsuccess of our current and future POCT and VELDONA candidates will depend on many factors, which may include the following:\n\n \n\n \n●\nsufficiency\nof our financial and other resources to complete the necessary nonclinical studies and clinical trials, and our ability to raise\nany additional required capital on acceptable terms, or at all;\n\n \n●\nthe\ntimely and successful completion of our nonclinical studies and clinical trials for which the TFDA, FDA, or any comparable foreign\nregulatory authority, agree with the design, endpoints, or implementation;\n\n \n●\nreceipt\nof regulatory approvals or authorizations to conduct future clinical trials or other studies beyond those planned to support approval\nof our POCT and VELDONA candidates;\n\n \n●\nsuccessful\nenrollment and completion of clinical trials;\n\n \n\n13\n\n \n\n \n\n \n●\nsuccessful\ndata from our clinical program that supports an acceptable risk-benefit profile of our POCT and VELDONA candidates in the intended\npopulations;\n\n \n●\ntimely\nreceipt and maintenance of marketing approvals from applicable regulatory authorities;\n\n \n●\nestablishing,\nscaling up and scaling out, either alone or with third-party manufacturers, cGMP (Current Good Manufacturing Practice) compliant\nmanufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing (including licensure), if any\nof our POCT and VELDONA candidates are approved;\n\n \n●\nentry\ninto collaborations to further the development of our POCT and VELDONA candidates in select indications or geographies;\n\n \n●\nobtaining\nand maintaining regulatory exclusivity for our POCT and VELDONA candidates as well as establishing competitive positioning amongst\nother therapies; and\n\n \n●\nsuccessfully\nlaunching commercial sales of our POCT and VELDONA candidates and obtaining and maintaining healthcare coverage and reimbursement\nfrom third party payors, if approved.\n\n \n\nIf\nwe are not successful with respect to one or more of these factors in a timely manner or at all, we could experience significant delays\nor an inability to successfully obtain regulatory approval of or commercialize the POCT and VELDONA candidates we develop, which would\nmaterially harm our business. If we do not receive marketing approvals for our current or future POCT and VELDONA candidates, we may\nnot be able to continue our operations. Even if regulatory approvals are obtained, we may never be able to successfully commercialize\nany products. Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of POCT\nand VELDONA to continue our business.\n\n \n\n**Clinical\nproduct development involves a lengthy and expensive process, with uncertain outcomes. We may experience delays in completing, or ultimately\nbe unable to complete, the development and commercialization of our current and future product candidates, which could result in increased\ncosts to us, delay or limit our ability to generate revenue and adversely affect our business, financial condition, results of operations\nand prospects.**\n\n \n\nTo\nobtain the requisite regulatory approvals to commercialize any of our POCT and VELDONA candidates, we must demonstrate that our products\nare safe and effective in humans and animals with respect to our veterinary drug candidates. Clinical trials are expensive and can take\nmany years to complete, and their outcomes are inherently uncertain. We may experience delays in completing current and future clinical\ntrials. We may also experience numerous unforeseen events prior to, during, or as a result of our nonclinical studies or clinical trials\nthat could delay or prevent our ability to receive marketing approval or commercialize the POCT and VELDONA candidates we develop, including:\n\n \n\n \n●\nregulators,\nInstitutional Review Boards (“IRBs”) or ethics committees may not authorize us to conduct the clinical study;\n\n \n●\nwe\nmay experience delays due to challenges with third-party contractors and contract research organizations (“CROs”), including\nnegotiating agreement terms, compliance with regulatory requirements, compliance with clinical trial protocols;\n\n \n●\nit\nmay be difficult to enroll a sufficient number of suitable patients, or enrollment may be slower than we anticipate or participants\nmay drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate;\n\n \n●\nthe\nsupply or quality of materials for POCT and VELDONA candidates we develop or other materials necessary to conduct clinical trials\nmay be insufficient or inadequate; and\n\n \n●\nwe\nmay experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions,\nincluding any future significant outbreaks of diseases similar to the COVID-19 pandemic.\n\n \n\nWe\ncould encounter delays if a current or future clinical trial is suspended or terminated by us, by the TFDA, FDA or other regulatory authorities\nand/or review boards. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct\nthe clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations\nor trial site by the TFDA, FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues,\nfailure to demonstrate a benefit from using a product, changes in governmental regulations or administrative actions or lack of adequate\nfunding to continue the clinical trial. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical\ntrials may also ultimately lead to the denial of marketing approval of our POCT and VELDONA candidates.\n\n \n\n14\n\n \n\n \n\nIf\nwe experience termination or delays in the completion of any clinical trial of our POCT and VELDONA candidates, the commercial prospects\nof our POCT and VELDONA candidates will be harmed, and our ability to generate product revenues from any of these product candidates\nmay be delayed. In addition, any delays in completing our clinical trials will likely increase our costs, slow down our POCT and VELDONA\ncandidate development and approval process and impact our ability to commence product sales and generate revenues. Significant clinical\ntrial delays could also allow our competitors to bring products to market before we do, shorten any periods during which we may have\nthe exclusive right to commercialize our product candidates, impair our ability to commercialize our POCT and VELDONA candidates and\nharm our business and results of operations.\n\n \n\nAny\nof these occurrences may harm our business, financial condition and prospects significantly. Delays in clinical product development present\nmaterial uncertainty and risk with respect to our clinical trials, business, and financial condition.\n\n \n\n**We\nand our collaboration partners have conducted and intend to conduct clinical trials for selected product candidates at sites outside\nthe United States, and for any of our product candidates for which we seek approval in the United States, the FDA may not accept data\nfrom trials conducted in such locations or may require additional U.S.-based trials.**\n\n \n\nWe\nand our collaboration partners have conducted and plan to continue to conduct, clinical trials outside the United States, including in\nTaiwan. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject\nto certain conditions imposed by the FDA. There can be no assurance that the FDA will accept data from trials conducted outside of the\nUnited States. If the FDA does not accept the data from any clinical trials that we or our collaboration partners conduct outside the\nUnited States, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay\nor permanently halt our ability to develop and market these or other product candidates in the United States. In other jurisdictions,\nfor instance, in Taiwan, there is a similar risk regarding the acceptability of clinical trial data conducted outside of that jurisdiction.\n\n \n\n**Our\nlong-term prospects depend in part upon discovering, developing and commercializing additional products, including POCT and VELDONA candidates,\nwhich may fail in development or suffer delays that adversely affect their commercial viability.**\n\n \n\nOur\nfuture operating results are dependent on our ability to successfully discover, develop, obtain regulatory approval for and commercialize\nproduct candidates, including POCT and VELDONA candidates, beyond those we currently have in development. The success of a product candidate\nis unknown and initial product development success may not result in a viable commercial product. The product development process may\nrequire changes in manufacturing methods and formulation/design or additional validation testing. We may also make changes as we work\nto optimize our manufacturing processes, but we cannot be sure that even minor changes in our processes will result in products that\nare safe and effective or that will be approved for commercial sale. If a product candidate fails to develop as expected, or we experience\nadditional and/or unforeseen development costs and/or delays, we could face additional costs and/or loss of expected future revenue,\nwhich would adversely affect our current financial position and future prospects may be adversely affected.\n\n \n\n**Even\nif we complete the necessary nonclinical studies and clinical trials, the marketing approval process is expensive, time consuming and\nuncertain, which may prevent us or any of our future collaboration partners from obtaining approvals for the commercialization of our\ncurrent product candidates and any other product candidate we develop.**\n\n \n\nAny\ncurrent or future POCT and VELDONA candidates, including medical device products, we may develop and the activities associated with their\ndevelopment and commercialization, including their design, testing, manufacture, recordkeeping, labeling, storage, approval, advertising,\npromotion, sale, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the United\nStates and by comparable authorities in Taiwan and other countries. Failure to obtain marketing approval for a product candidate will\nprevent us from commercializing the product candidate in a given jurisdiction. It is possible that some of our current or future POCT\nand VELDONA candidates will not obtain regulatory approval in the jurisdiction we are targeting. We have limited experience in filing\nand supporting the applications necessary to gain marketing approvals, but we expect to rely on third-party CROs or regulatory consultants\nto assist us in this process. Securing regulatory approval requires the submission of extensive applications to the various regulatory\nauthorities. POCT and VELDONA candidates we develop may not be effective or may prove to have adverse characteristics that may preclude\nour obtaining marketing approval or prevent or limit commercial use.\n\n \n\n15\n\n \n\n \n\nThe\nprocess of obtaining marketing approvals, in Taiwan, the United States and other jurisdictions, is expensive, may take many years, if\napproval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty\nof the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment\nof additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the\napproval or rejection of an application. The FDA and comparable authorities in other countries may refuse to accept any application or\nmay decide that our data are insufficient for approval and require additional nonclinical, clinical or other studies. Any marketing approval\nwe ultimately obtain may be limited or subject to restrictions or post-approval commitments. If we experience delays in obtaining marketing\napproval or if we fail to obtain marketing approval of any current or future product candidates we may develop, the commercial prospects\nfor those product candidates may be harmed, and our ability to generate revenues will be materially impaired.\n\n \n\n**Even\nif a current or future product candidate, including AI Nose, POCT and VELDONA, receives marketing approval, it may fail to achieve the\ndegree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial\nsuccess.**\n\n \n\nIf\nany current or future product candidate we develop receives marketing approval, whether as a single agent or in combination with other\ntherapies, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, and others in the\nmedical community, or such participants may prefer existing treatment options. If the product candidates we develop, including medical\ndevice products, do not achieve an adequate level of market acceptance, we may not generate expected levels of revenues associated with\nsuch products, which may prevent those products from becoming profitable. The degree of market acceptance of any product candidate, if\napproved for commercial sale, will depend on a number of factors, including:\n\n \n\n \n●\nefficacy\nand potential advantages compared to alternative tools;\n\n \n●\nthe\nability to offer our products, if approved, for sale at competitive prices;\n\n \n●\nconvenience\nand ease of use;\n\n \n●\nthe\nwillingness of the target market to adopt new technologies; and\n\n \n●\nthe\nstrength of marketing and distribution support.\n\n \n\n**The\ntotal addressable market opportunity for our current and future products may be much smaller than we estimate.**\n\n \n\nOur\nestimates of the total addressable market for our product candidates are based on internal and third-party estimates as well as a number\nof significant assumptions. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on\nassumptions and estimates. These estimates, which have been derived from a variety of sources, including market research and our own\ninternal estimates, may prove to be incorrect. Further, the continued development of, and approval or authorizations for, vaccines and\ntherapeutic treatments may affect these market opportunity estimates. Our market opportunity may also be limited by new products that\nenter the market. If any of our estimates prove to be inaccurate, the market opportunity for platform and products could be significantly\nless than we estimate. If this turns out to be the case, our potential for growth may be limited and our business and future prospects\nmay be materially adversely affected.\n\n \n\n**We\nmay not obtain approval for our product candidates in any jurisdictions.**\n\n \n\nApproval\nof a product candidate in one jurisdiction by a regulatory authority, such as the TFDA or FDA, does not ensure approval of such product\ncandidate by regulatory authorities in other countries or jurisdictions. Commercialization of our product candidates will be subject\nto the regulatory requirements governing marketing authorization in the jurisdiction in which they are sold.\n\n \n\n16\n\n \n\n \n\nApproval\nprocedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than,\nthose in Taiwan and the United States, including additional nonclinical studies or clinical trials. In many countries outside Taiwan\nand United States, a product candidate must be approved for reimbursement before it can be approved for sale in that country. In some\ncases, the price that we intend to charge for any product candidates, if approved, is also subject to approval. For example, obtaining\napproval for our product candidates in the European Union (the EU) from the European Commission following the opinion of the EMA, would\nbe a lengthy and expensive process. The EMA may limit the indications for which the product may be marketed, require extensive warnings\non the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Approval\nof certain product candidates outside of Taiwan and the United States, particularly those that target diseases that are more prevalent\noutside of the United States, will be particularly important to the commercial success of such product candidates. Obtaining regulatory\napprovals in various jurisdictions and complying with the regulatory requirements of multiple jurisdictions could result in significant\ndelays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries.\n\n \n\n**Even\nif we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations or third-party\ncoverage and reimbursement policies, which would harm our business.**\n\n \n\nThe\nregulations that govern marketing approvals, pricing and reimbursement for new products vary widely from country to country. Some countries\nrequire approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after\nmarketing approval is granted. As a result, we might obtain marketing approval for a product candidate in a particular country but then\nbe subject to price regulations that delay our commercial launch of the product candidate. Adverse pricing limitations may hinder our\nability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval. Our ability\nto successfully commercialize any product candidates, whether as a single agent or in combination, will also depend in part on the extent\nto which coverage and reimbursement for these product candidates and related treatments is available from government authorities, private\nhealth insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance\norganizations, and establish reimbursement levels. It is difficult to predict at this time what government authorities and third-party\npayors may decide with respect to coverage and reimbursement for our programs (if approved).\n\n \n\nA\nprimary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities, particularly in the European\nUnion, and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products\nand requiring substitutions of generic products and/or biosimilars. Reimbursement may impact the demand for, or the price of, any product\ncandidate for which we obtain marketing approval. If reimbursement is not available or is available only to limited levels, we may not\nbe able to successfully commercialize any product candidate for which we obtain marketing approval.\n\n \n\n**If\nproduct liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization\nof any approved products.**\n\n \n\nWe\nface an inherent risk of product liability as a result of the clinical testing of product candidates and will face an even greater risk\nif we commercialize any products. For example, we may be sued if any product candidate we develop is found to be otherwise unsuitable\nduring clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing,\ndefects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims\ncould also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims,\nwe may incur substantial liabilities or be required to limit commercialization of any approved products. Even successful defense would\nrequire significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:\n\n \n\n \n●\ndecreased\ndemand for any approved product;\n\n \n●\ninjury\nto our reputation;\n\n \n\n17\n\n \n\n \n\n \n●\nwithdrawal\nof clinical trial participants;\n\n \n●\ninitiation\nof investigations by regulators;\n\n \n●\ncosts\nto defend litigation;\n\n \n●\na\ndiversion of management’s time and our resources;\n\n \n●\nsubstantial\nmonetary payments to trial participants or patients;\n\n \n●\nproduct\nrecalls, withdrawals or labeling, marketing or promotional restrictions;\n\n \n●\nloss\nof revenue;\n\n \n●\nexhaustion\nof any available insurance and our capital resources;\n\n \n●\nadverse\neffects to our results of operations and business;\n\n \n●\nthe\ninability to commercialize any product candidate; and\n\n \n●\na\ndecline in our share price.\n\n \n\nOur\ninability to obtain sufficient product liability insurance at an acceptable cost or at all to protect against potential product liability\nclaims could prevent or inhibit the commercialization of products we develop, alone or with collaboration partners.\n\n \n\nAdditionally,\ninsurance coverage is increasingly expensive. We may not be able to maintain insurance, including product liability insurance at a reasonable\ncost or in an amount adequate to satisfy any liability that may arise, if at all, that could have an adverse effect on our business and\nfinancial condition. Our product liability insurance policy contains various exclusions, and we may be subject to a product liability\nclaim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our\ncoverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such\namounts. Similar challenges to obtaining coverage and reimbursement will apply to companion POCTs that we or our collaborators may develop.\nEven if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not\nbe available or adequate should any claim arise.\n\n \n\n**Any\ndisruption in our research and development facility could adversely affect our business, financial condition and results of operations.**\n\n \n\nOur\nfacility may be affected by natural or man-made disasters. We are vulnerable to damage from other types of disasters, including power\nloss, attacks from extremist organizations, fires, floods, and similar events. If our facilities are affected by a natural or man-made\ndisaster, we may be forced to curtail our operations and/or rely on third-parties to perform some or all of our research and development\nactivities. Although we believe we possess adequate insurance in light of our current operations, such insurance may not be sufficient\nto cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. In the future, we may\nchoose to expand our operations in either our existing facilities or in new facilities.\n\n \n\n**Our\nbusiness and operations would be adversely affected in the event that our computer systems or those of our partners, contract research\norganizations, contractors, consultants or other third parties we work with were to suffer system failures, cyber-attacks, loss of data\nor other security incidents.**\n\n \n\nDespite\nthe implementation of security measures, our computer systems, as well as those of our partners, contract research organizations, contractors,\nconsultants, law and accounting firms and other third parties we work with, may sustain damage from computer viruses, unauthorized access,\ndata breaches, phishing attacks, ransomware attacks, denial-of-service attacks, cybercriminals, natural disasters, terrorism, war and\ntelecommunication and electrical failures. We rely on our partners and third-party providers to implement effective security measures\nand identify and correct for any such failures, deficiencies or breaches. The risks of a security breach or disruption, particularly\nthrough cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber-terrorists, have increased significantly\nand are becoming increasingly difficult to detect.\n\n \n\nIf\na failure, accident or security breach were to occur and cause interruptions in our operations, or the operations of our partners or\nthird-party providers, it could result in a misappropriation of confidential information, including our intellectual property or financial\ninformation or clinical trial participant personal data, a material disruption or delay in our drug development programs, and/or significant\nmonetary losses. For example, the loss of preclinical or clinical trial data from completed, ongoing or planned trials, or chemistry,\nmanufacturing and controls data for our product candidates could result in delays in regulatory approval efforts and significantly increase\nour costs to recover or reproduce the data. Any such breach, loss or compromise of clinical trial participant personal data may also\nsubject us to civil fines and penalties under the privacy laws of the European Union or other countries as well as state and federal\nprivacy laws in the United States.\n\n \n\n18\n\n \n\n \n\n**Risks\nrelated to reliance on third parties**\n\n \n\n**Our\nreliance on third-party components and cloud infrastructure could disrupt AI Nose operations, and any errors, disruption, performance\nproblems, or failure in their or our operational infrastructure could adversely affect our business, financial condition, and results\nof operations.**\n\n** **\n\nAI\nNose depends on third-party hardware components, cloud service providers, and connectivity. Interruptions, changes in service terms,\noutages, or failures of these third parties could impair the performance or availability of AI Nose, delay deployments, or increase costs,\nany of which could adversely affect customer relationships and adoption. We may have limited ability to control or influence the performance,\nsecurity, or reliability of these third parties.\n\n \n\nOur\nsystems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic\noccurrences such as earthquakes, floods, fires, power loss, telecommunication failures, cybersecurity threats, terrorist attacks, natural\ndisasters, public health crises, geopolitical and similar events, or acts of misconduct. Despite any precautions we may take, the occurrence\nof a catastrophic disaster or other unanticipated problems at our or our third-party vendors’ hosting facilities, or within our\nsystems or the systems of third parties upon which we rely, could result in interruptions, performance problems, or failure of our infrastructure,\ntechnology, or software, which may adversely impact our business. In addition, our ability to conduct normal business operations could\nbe severely affected. In the event of significant physical damage to one of these facilities, it may take a significant period of time\nto achieve full resumption of our services, and our disaster recovery planning may not account for all eventualities. In addition, any\nnegative publicity arising from these disruptions could harm our reputation and brand and adversely affect our business.\n\n \n\nWe\nmay experience, disruptions, failures, data loss, outages, and other performance problems with our infrastructure and cloud-based offerings\ndue to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, employee\nmisconduct, capacity constraints, denial of service attacks, phishing attacks, computer viruses, malicious or destructive code, or other\nsecurity-related incidents, and our disaster recovery planning may not be sufficient for all situations. If we experience disruptions,\nfailures, data loss, outages, or other performance problems, our business, financial condition, and results of operations could be adversely\naffected.\n\n \n\nA\nfailure to maintain our relationships with our third-party providers (or obtain adequate replacements), and to receive services from\nsuch providers that do not contain any material errors or defects, could adversely affect our ability to deliver effective products and\nsolutions to our customers and adversely affect our business and results of operations.\n\n \n\n**We\nrely on the availability of licenses to third-party technology that may be difficult to replace or that may cause errors or delay implementation\nof our software and services should we not be able to continue or obtain a commercially reasonable license to such technology.**\n\n** **\n\nOur\nproducts may include intellectual property licensed from third parties. It may be necessary in the future to renew licenses relating\nto various aspects of these software or to seek new licenses for existing or new software or other products. There can be no assurance\nthat the necessary licenses would be available on commercially acceptable terms, if at all. Third parties may terminate their licenses\nwith us for a variety of reasons, including actual or perceived failures or breaches of security or privacy, or reputational concerns,\nor they may choose not to renew their licenses with us. In addition, we may be subject to liability if third-party software that we license\nis found to infringe, misappropriate, or otherwise violate intellectual property or privacy rights of others. The loss of, or inability\nto obtain, certain third-party licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage\nin litigation regarding these matters, could result in product roll-backs, delays in product releases until equivalent technology can\nbe identified, licensed or developed, if at all, and integrated into our software, and may have a material adverse effect on our business,\nfinancial condition, and results of operations. Moreover, the inclusion in our software of software or other intellectual property licensed\nfrom third parties on a nonexclusive basis could limit our ability to differentiate our software from products of our competitors and\ncould inhibit our ability to provide the current level of service to existing customers.\n\n \n\n19\n\n \n\n \n\nIn\naddition, any data that we license from third parties for potential use in our software may contain errors or defects, which could negatively\nimpact the analytics that our customers perform on or with such data. This may have a negative impact on how our software is perceived\nby our current and potential customers and could materially damage our reputation and brand.\n\n \n\nChanges\nin or the loss of third-party licenses could lead to our software becoming inoperable or the performance of our software being materially\nreduced resulting in our potentially needing to incur additional research and development costs to ensure continued performance of our\nsoftware or a material increase in the costs of licensing, and we may experience decreased demand for our software.\n\n \n\n**We\nrely on third parties to manufacture our product and product candidates, and we intend to rely on third parties which increases the risk\nthat we will not have sufficient quantities of such product candidates or products or such quantities at an acceptable cost, which could\ndelay, prevent or impair our development or commercialization efforts.**\n\n \n\nWe\ndo not own or operate manufacturing facilities. Our current strategy is to outsource all manufacturing of our product and product candidates\nto other companies, including TCNT, our affiliate and product co-developer, and Swiss Pharmaceutical Co., Ltd.\n\n \n\nOur\nmanufacturers may be unable to successfully increase the manufacturing capacity for any of our product and product candidates in a timely\nor cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities and at any other time. If our manufacturers\nare unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing\nand clinical trials, if applicable, of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch\nof that product candidate may be delayed or not obtained, which could significantly harm our business.\n\n \n\nIf\nwe engage additional manufacturers in the future, our use of new manufacturers increases the risk of delays in production or insufficient\nsupplies of our product candidates.\n\n \n\nEven\nafter a third-party manufacturer has gained significant experience in manufacturing our product and product candidates or even if we\nbelieve we have succeeded in optimizing the manufacturing process, there can be no assurance that such manufacturer will produce sufficient\nquantities for us in a timely manner or continuously over time, or at all.\n\n \n\nWe\nmay be delayed if we need to change the manufacturing process used by our manufacturers. Further, if we change an approved manufacturing\nprocess, then we may be delayed if the FDA or a comparable foreign authority needs to review the new manufacturing process before it\nmay be used.\n\n \n\nOur\nfailure, or the failure of our manufacturers, to comply with applicable requirements could result in sanctions being imposed on us, including\nfines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product\ncandidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies\nof our product candidates.\n\n \n\nOur\nfuture product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing\nfacilities.\n\n \n\nIf\nthe third parties that we engage to supply any materials or manufacture product for our preclinical tests and clinical trials should\ncease to continue to do so for any reason, we likely would experience delays in advancing these tests and trials while we identify and\nqualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.\nIn addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it\nwill be more difficult for us to develop our product candidates and compete effectively.\n\n \n\n20\n\n \n\n \n\nOur\ncurrent and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit\nmargins and our ability to develop product candidates and commercialize any products that receive marketing approval on a timely and\ncompetitive basis.\n\n \n\n**We\ncurrently have limited marketing capabilities. If we are unable to expand sales and marketing capabilities on our own or through third\nparties, or are delayed in establishing these capabilities, we will be unable to successfully commercialize our product candidates, if\napproved, or generate product revenue.**\n\n \n\nWe\ncurrently have limited marketing capabilities. To commercialize our product candidates, if approved, in the United States and other jurisdictions\nwe seek to enter, we must expand our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements\nwith third parties to perform these services, and we may not be successful in doing so. There are significant risks involved in building\nand managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales\nleads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing\nteam. Any failure or delay in the development of our internal sales, marketing, distribution and pricing/reimbursement/access capabilities\nwould impact adversely the commercialization of these products.\n\n \n\nTo\ncommercialize our products, we also intend to leverage the commercial infrastructure of our distributors. We may choose to collaborate\nwith additional third parties in various countries that have direct sales forces and established distribution systems, either to augment\nour own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into\nsuch arrangements on acceptable terms or at all, we may not be able to successfully commercialize our product candidates, especially\nin other countries where we currently do not have a foreign legal presence. The inability to commercialize successfully our product candidates,\neither on our own or through collaborations with one or more third parties, would harm our business, financial condition, operating results\nand prospects.\n\n \n\n**Our\nemployees, independent contractors, consultants, commercial or strategic partners, principal investigators or CROs may engage in misconduct\nor other improper activities, including noncompliance with regulatory standards and requirements and insider trading, which could have\na material adverse effect on our business.**\n\n \n\nWe\nare exposed to the risk of employee fraud or other misconduct. Misconduct by employees, independent contractors, consultants, commercial\npartners, principal investigators, contract manufacturing organizations (CROs) could include intentional, reckless, negligent, or unintentional\nfailures to comply with TFDA or FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the TFDA\nor FDA, properly calculate pricing information required by federal programs, report financial information or data accurately or disclose\nunauthorized activities to us. This misconduct could also involve the improper use or misrepresentation of information obtained in the\ncourse of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to\nidentify and deter this type of misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling\nunknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from\na failure to be in compliance with such laws or regulations. Moreover, it is possible for a whistleblower to pursue a False Claims Act\ncase against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs\ndefending against such a claim. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting\nour rights, those actions could have a significant impact on our business, financial condition, results of operations, stock price and\nprospects, including the imposition of significant fines or other sanctions.\n\n \n\n**We\nmay form or seek strategic partnerships in the future, and we may not realize the benefits of such alliances or licensing arrangements.**\n\n \n\nFrom\ntime to time, we may form or seek strategic partnerships, create joint ventures or collaborations or enter into licensing arrangements\nwith third parties that we believe will complement or augment our development and commercialization efforts with respect to our product\ncandidates and any future product candidates that we may develop. Any such relationships may require us to incur non-recurring and other\ncharges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management\nand business. These relationships also may result in a delay in the development of our product candidates if we become dependent upon\nthe other party and such other party does not prioritize the development of our product candidates relative to its other development\nactivities. Additionally, any joint ventures, collaborations, or licensing arrangements would be subject to the same product candidate\ndevelopment and compliance risks and obligations as we would be if we were to develop the product candidate on our own. Should any third\nparty with which we enter into any of these arrangements not comply with the applicable regulatory requirements, we or they may be subject\nto regulatory enforcement action and we or they may be delayed or prevented from obtaining marketing approval for the applicable product\ncandidate.\n\n \n\n21\n\n \n\n \n\nIn\naddition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and\ncomplex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangement for\nour product candidates because they may be deemed to be at too early of a stage of development for collaborative effort, and third parties\nmay not view our product candidates as having the requisite potential to demonstrate safety and efficacy. If we license products or acquire\nbusinesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing\noperations and company culture. Any licensed products or acquired businesses may also subject us to the risk of regulatory enforcement\nshould the product or business not be compliant with applicable regulatory requirements. We cannot be certain that, following a strategic\ntransaction or licensing arrangement, we will achieve the revenue or specific net income that justifies such a transaction.\n\n \n\n**Risks\nrelated to intellectual property, patents, and data privacy**\n\n \n\n**Issues\nin the use of AI in our software may result in reputational harm or liability.**\n\n** **\n\nAI\nis enabled by or integrated into AI Nose and is a significant and potentially growing element of our business. As with many developing\ntechnologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business.\nAI algorithms may be flawed. Datasets may be insufficient, of poor quality, or contain biased information. Inappropriate or controversial\ndata practices by data scientists, engineers, and end-users of our systems could impair the acceptance of AI solutions. The rapid evolution\nof AI and its evolving regulatory landscape may also require additional resources to develop, test and maintain our platforms and products\nto help ensure that AI is implemented appropriately in order to minimize unintended or harmful impact, which may be costly and may not\nproduce the benefits and results that we expect. If the recommendations, forecasts, or analyses that AI applications assist in producing\nare deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm. Some\nAI scenarios present ethical issues. Though our technologies and business practices are designed to mitigate many of these risks, if\nwe enable or offer AI solutions that are controversial because of their purported or real impact on human rights, privacy, employment,\nor other social issues, we may experience brand or reputational harm.\n\n \n\n**Intellectual\nproperty rights vary across foreign jurisdictions, and we may not be able to protect our intellectual property rights throughout the\nworld.**\n\n \n\nWe\ncannot assure you that any intellectual property rights that we currently have or may receive can be successfully asserted in the future\nor that they will not be invalidated, circumvented or challenged. In addition, the laws of some foreign countries do not protect proprietary\nrights to the same extent, as do the laws of the United States. Our means of protecting any proprietary rights we may receive in the\nUnited States or abroad may not be adequate. Filing, prosecuting, maintaining, defending and enforcing patents on our product candidates\nin all countries throughout the world would be prohibitively expensive. The requirements for patentability may differ in certain countries,\nparticularly developing countries, and the breadth of patent claims allowed can be inconsistent. In addition, the laws of some foreign\ncountries may not protect our intellectual property rights to the same extent as the laws in the United States. Consequently, we may\nnot be able to prevent third parties from practicing our inventions, or from selling or importing products made using our inventions\nin and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained\npatents to develop their own products and may export otherwise infringing products to territories where we have patents, but enforcement\nrights are not as strong as those in the United States. These products may compete with our product candidates and our patents or other\nintellectual property rights may not be effective or sufficient to prevent them from competing.\n\n \n\n22\n\n \n\n \n\nWe\nmay not have patent rights in certain foreign countries in which a market may exist in the future. Moreover, in foreign jurisdictions\nwhere we do have patent rights, proceedings to enforce such rights could result in substantial costs and divert our efforts and attention\nfrom other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, and our patent applications\nat risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate\nand the damages or other remedies awarded, if any, may not be commercially meaningful. Thus, we may not be able to stop a competitor\nfrom marketing and selling in foreign countries products that are the same as or similar to our product.\n\n \n\nMany\ncompanies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The\nlegal systems of some countries do not favor the enforcement or protection of patents, trade secrets and other intellectual property,\nwhich could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual\nproperty and proprietary rights generally. Proceedings to enforce our intellectual property rights in foreign jurisdictions could result\nin substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being\ninvalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims\nagainst us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially\nmeaningful.\n\n \n\nMany\nforeign countries, including some EU countries, India, Japan, and China, have compulsory licensing laws under which a patent owner may\nbe compelled under specified circumstances to grant licenses to third parties. In addition, many countries limit the enforceability of\npatents against government agencies or government contractors. In those countries, we may have limited remedies if patents are infringed\nor if we are compelled to grant a license to a third party, which could materially diminish the value of the applicable patents and limit\nour potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate\nto obtain a significant commercial advantage from the intellectual property that we develop or license, which could adversely affect\nour business, financial condition, results of operations and prospects.\n\n \n\n**If\nwe and our collaborators are unable to obtain and maintain sufficient patent and other intellectual property protection for our product\ncandidates and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and\nwe may not be able to compete effectively in our market or successfully commercialize any product candidates we may develop.**\n\n \n\nOur\nsuccess depends in significant part on our ability and the ability of our current or future collaborators and licensors to obtain, maintain,\nenforce and defend patents and other intellectual property rights with respect to our product candidates and technology and to operate\nour business without infringing, misappropriating, or otherwise violating the intellectual property rights of others. If we and our current\nor future collaborators and licensors are unable to obtain and maintain sufficient intellectual property protection for our product candidates\nor other future product candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently\nbroad, our competitors and other third parties could develop and commercialize product candidates similar or identical to ours, and our\nability to successfully commercialize our product candidates and other product candidates that we may pursue may be impaired.\n\n \n\nThe\nprocess of applying for patent protection itself is time consuming and expensive and we cannot assure you that we have prepared or will\nbe able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It\nis also possible that we will fail to identify patentable aspects of inventions made in the course of development and commercialization\nactivities before it is too late to obtain patent protection on them. In addition, our patents and applications may not be prosecuted\nand enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or\nfiling of our patents or patent applications may exist, or may arise in the future, for example, with respect to proper priority claims,\ninventorship, claim scope or patent term adjustments. We can provide no assurance that any of our current or future patent applications\nwill result in issued patents or that any issued patents will provide us with any competitive advantage. We cannot be certain that there\nis no invalidating prior art of which we and the patent examiner are unaware or that our interpretation of the relevance of prior art\nis correct. Failure to obtain issued patents could have a material adverse effect on our ability to develop and commercialize our product\ncandidates. Even if our patent applications do issue as patents, third parties may be able to challenge the validity and enforceability\nof our patents on a variety of grounds, including that such third party’s patents and patent applications have an earlier priority\ndate, and if such challenges are successful we may be required to obtain one or more licenses from such third parties, or be prohibited\nfrom commercializing our product candidates. We may not be able to obtain these licenses on acceptable or commercially reasonable terms,\nif at all, or these licenses may be non-exclusive, which could result in our competitors using the same intellectual property.\n\n \n\n23\n\n \n\n \n\nWe\nseek to protect our proprietary positions by, among other things, filing patent applications in the United States and in relevant foreign\njurisdictions related to our current product candidates and other future product candidates that we may identify. Obtaining, maintaining,\ndefending and enforcing pharmaceutical patents is costly, time consuming and complex, and we may not be able to file and prosecute all\nnecessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications,\nat a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and\ndevelopment output before it is too late to obtain patent protection. Moreover, under certain of our license or collaboration agreements,\nwe may not have the right to control the preparation, filing, prosecution and maintenance of patent applications, or to maintain the\nrights to patents licensed to or from third parties.\n\n \n\nAlthough\nwe enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development\noutput, such as our employees, collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these\nparties may breach these agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to\nseek patent protection. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product\ncandidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications\nin the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all.\nTherefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications,\nor that we were the first to file for patent protection of such inventions.\n\n \n\nThe\npatent position of biotech companies generally is highly uncertain, involves complex legal, technological and factual questions and has,\nin recent years, been the subject of much debate and litigation throughout the world. The subject matter claimed in a patent application\ncan be significantly reduced or eliminated before the patent issues, if at all, and its scope can be reinterpreted or narrowed after\nissuance. Therefore, our pending and future patent applications may not result in patents being issued in relevant jurisdictions that\nprotect our product candidates, in whole or in part, or that effectively prevent others from commercializing competitive product candidates,\nand even if our patent applications issue as patents in relevant jurisdictions, they may not issue in a form that will provide us with\nany meaningful protection for our product candidates or technology, prevent competitors from competing with us or otherwise provide us\nwith any competitive advantage. Additionally, our competitors may be able to circumvent our patents by challenging their validity or\nby developing similar or alternative product candidates or technologies in a non-infringing manner. The issuance of a patent is not conclusive\nas to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United\nStates and abroad. An adverse determination in any such submission, proceeding or litigation could result in loss of exclusivity or ability\nto sell our products free from infringing the patents of third parties, patent claims being narrowed, invalidated or held unenforceable,\nin whole or in part, and limitation of the scope or duration of the patents directed to our product candidates, all of which could limit\nour ability to stop others from using or commercializing similar or identical product candidates or technology to compete directly with\nus, without payment to us, or result in our inability to manufacture or commercialize product candidates or approved products (if any)\nwithout infringing third-party patent rights. In addition, if the breadth or strength of the claims of our patents and patent applications\nis threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize\ncurrent or future product candidates, or could have a material adverse effect on our ability to raise funds necessary to continue our\nresearch programs or clinical trials. Such proceedings also may result in substantial cost and require significant time from our scientists\nand management, even if the eventual outcome is favorable to us.\n\n \n\n24\n\n \n\n \n\n**We\nmay become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming\nand unsuccessful, and issued patents directed towards our technology and product candidates could be found invalid or unenforceable if\nchallenged.**\n\n \n\nCompetitors\nand other third parties may infringe or otherwise violate our issued patents or other intellectual property or the patents or other intellectual\nproperty of our licensors and collaborators. In addition, our patents or the patents of our licensors and collaborators may become involved\nin inventorship or priority disputes. To counter infringement or other unauthorized use, we may be required to file infringement claims,\nwhich can be expensive and time-consuming. Significantly, our pending patent applications cannot be enforced against third parties practicing\nthe technology claimed in such applications unless and until a patent issue from such applications. Our ability to enforce patent rights\nalso depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components or methods\nthat are used in connection with their products and services. Moreover, it may be difficult or impossible to obtain evidence of infringement\nin a competitor’s or potential competitor’s product or service. Any claims we assert against perceived infringers could provoke\nthese parties to assert counterclaims against us alleging that we infringe their patents or that our patents are invalid or unenforceable.\nIn a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe\nthe patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents\ndo not cover the technology. An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at\nrisk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual\nproperty against some third parties.\n\n \n\nIf\nwe were to initiate legal proceedings against a third party to enforce a patent directed to our product candidates, or one of our future\nproduct candidates, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the United\nStates, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an\nalleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or insufficient\nwritten description. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the\npatent withheld relevant information from the United States Patent and Trademark Office (USPTO) or made a misleading statement during\nprosecution. Third parties may also raise similar claims before the USPTO or an equivalent foreign body, even outside the context of\nlitigation. Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way that they\nno longer cover our technology or any product candidates that we may develop. The outcome following legal assertions of invalidity and\nunenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating\nprior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of\ninvalidity or unenforceability, we would lose at least part, and perhaps all, of the patent rights directed towards the applicable product\ncandidates or technology related to the patent rendered invalid or unenforceable. Such a loss of patent rights would materially harm\nour business, financial condition, results of operations and prospects.\n\n \n\nInterference\nand/or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority\nof inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related\ntechnology or to attempt to license rights to it from the prevailing party. Our business could be materially harmed if the prevailing\nparty does not offer us a license on commercially reasonable terms. Furthermore, because of the substantial amount of discovery required\nin connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by\ndisclosure during this type of litigation.\n\n \n\nSome\nof our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain\nthe costs of complex patent litigation or proceedings more effectively than we can because of their greater financial resources and more\nmature and developed intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties\nfrom infringing, misappropriating or otherwise violating our intellectual property. Even if resolved in our favor, litigation or other\nlegal proceedings relating to intellectual property claims could result in substantial costs and diversion of management resources, which\ncould harm our business. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary\nto continue our clinical trials, continue our internal research programs, or in-license needed technology or other product candidates.\nThere could also be public announcements of the results of the hearing, motions, or other interim proceedings or developments. If securities\nanalysts or investors perceive those results to be negative, it could cause the price of shares of our common stock to decline. Any of\nthe foregoing events could harm our business, financial condition, results of operation and prospects.\n\n \n\n25\n\n \n\n \n\n**Patent\nterms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.**\n\n \n\nThe\nUSPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other\nsimilar provisions during the patent application process. In addition, periodic maintenance fees on issued patents often must be paid\nto the USPTO and foreign patent agencies over the lifetime of the patent. While an unintentional lapse can in many cases be cured by\npayment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result\nin abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.\nNon-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure\nto respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal\ndocuments. If we fail to maintain the patents and patent applications covering our product or procedures, we may not be able to stop\na competitor from marketing products that are the same as or similar to our product and technologies.\n\n \n\nPatents\nhave a limited lifespan. The terms of individual patents depend upon the legal term for patents in the countries in which they are granted.\nIn most countries, including the United States, if all maintenance fees are timely paid, the natural expiration of a utility patent is\ngenerally 20 years from its earliest non-provisional filing date in the applicable country. However, the actual protection afforded by\na patent varies from country to country, and depends upon many factors, including the type of patent, the scope of its coverage, the\navailability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability\nof the patent. Various extensions including patent term extension, or PTE, and patent term adjustment, or PTA, may be available, but\nthe lives of such extensions, and the protections they afford, are limited. Even if patents covering our product candidates are obtained,\nonce the patent life has expired, we may be open to competition from competitive products, including biosimilars and generics. Given\nthe amount of time required for the development, testing and regulatory review of new product candidates, patents protecting our product\ncandidates might expire before or shortly after we or our partners commercialize those candidates. As a result, our owned and licensed\npatent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.\n\n \n\n**If\nwe are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.**\n\n \n\nIn\naddition to seeking patents for our technologies and product candidates, we also rely on trade secret protection, as well as confidentiality\nagreements, non-disclosure agreements and invention assignment agreements with our employees, consultants and third-parties, to protect\nour know-how and other confidential and proprietary information, especially where we do not believe patent protection is appropriate\nor obtainable.\n\n \n\nIt\nis our policy to require our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants,\nadvisors, and other third parties to execute confidentiality agreements upon the commencement of employment or consulting relationships\nwith us. These agreements generally provide that all confidential information concerning our business or financial affairs developed\nby or made known to an individual or entity during the course of that party’s relationship with us is to be kept confidential and\nnot disclosed to third parties, except in certain specified circumstances. In the case of employees, the agreements provide that all\ninventions conceived by the individual, and that are related to our current or planned business or research and development or made during\nnormal working hours, on our premises or using our equipment or proprietary information, are our exclusive property. In the case of consultants\nand other third-party service providers, the agreements provide us with certain rights to all inventions arising from the services provided\nto us by those individuals or entities. However, we cannot guarantee that we have entered into such agreements with each party that may\nhave or have had access to our trade secrets or proprietary technologies and processes. Additionally, the assignment of intellectual\nproperty rights may not be self-executing, or assignment agreements may be breached, and we may be forced to bring claims against third\nparties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.\nWe may not be able to obtain adequate remedies for any breaches of such agreements. Ultimately, enforcing a claim that a party illegally\ndisclosed or misappropriated a trade secret can be difficult, expensive, and time-consuming, and the outcome is unpredictable.\n\n \n\n26\n\n \n\n \n\nIn\naddition to contractual measures, we try to protect the confidential nature of our proprietary information through other appropriate\nprecautions, such as physical and technological security measures. However, trade secrets and know-how can be difficult to protect. These\nmeasures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access,\nprovide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating\nour trade secrets and providing them to a competitor, and any recourse we might take against this type of misconduct may not provide\nan adequate remedy to protect our interests fully. In addition, our trade secrets may be independently developed by others in a manner\nthat could prevent us from receiving legal recourse. If any of our confidential or proprietary information, such as our trade secrets,\nwere to be disclosed or misappropriated, or if any of that information was independently developed by a competitor, our competitive position\ncould be harmed.\n\n \n\nIn\naddition, courts inside and outside the United States are sometimes less willing or unwilling to protect trade secrets. If we choose\nto go to court to stop a third party from using any of our trade secrets, we may incur substantial costs and we cannot guarantee a successful\noutcome. Even if we are successful, these types of lawsuits may consume significant amounts of our time and other resources. Any of the\nforegoing could have a material adverse effect on our business, financial condition, results of operations and prospects.\n\n \n\n**We\nmay be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our\ncompetitors or are in breach of non-competition or non-solicitation agreements with our competitors.**\n\n \n\nWe\ncould in the future be subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets\nor other proprietary information of former employers, competitors, or other third parties. Although we endeavor to ensure that our employees\nand consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for\nus, we may in the future be subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation\nagreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary\ninformation of a former employer or competitor. Litigation may be necessary to defend against these claims. Even if we are successful\nin defending against these claims, litigation could result in substantial costs and could be a distraction to management. If our defense\nto those claims fails, in addition to paying monetary damages, a court could prohibit us from using technologies or features that are\nessential to our product, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary\ninformation of the former employers or other third parties. An inability to incorporate technologies or features that are important or\nessential to our product may prevent us from selling our product. In addition, we may lose valuable intellectual property rights or personnel.\nMoreover, any such litigation or the threat thereof may adversely affect our ability to hire employees or contract with independent sales\nrepresentatives. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our product.\n\n \n\n**Changes\nin U.S. patent law, or laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect\nour product candidates.**\n\n \n\nAs\nis the case with other pharmaceutical and biotech companies, our success is heavily dependent on intellectual property, particularly\npatents. Obtaining and enforcing patents in the pharmaceutical industry involve a high degree of technological and legal complexity.\nTherefore, obtaining and enforcing pharmaceutical patents is costly, time consuming and inherently uncertain. Changes in either the patent\nlaws or in the interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property\nand may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued\npatents. We cannot predict the breadth of claims that may be allowed or enforced in our patents or in our licensor’s patents. In\naddition, Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us. For example, the\nU.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain\ncircumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty regarding our ability\nto obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.\nDepending on decisions by the U.S. Congress, the U.S. federal courts, the USPTO, or similar authorities in foreign jurisdictions, the\nlaws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce\nour existing patent and the patents we might obtain or license in the future. Additionally, the application and interpretation of China’s\nintellectual property right laws and the procedures and standards for granting patents, copyrights, know-how or other intellectual property\nrights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree\nwith our analysis. If we were found to have violated the intellectual property rights of others, we may be subject to liability and penalties\nfor our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced\nto develop alternatives of our own. As a result, our business and results of operations may be materially and adversely affected.\n\n \n\n27\n\n \n\n \n\n**Risks\nrelated to our business**\n\n \n\n**We\nwill need to increase the size of our Company and may not effectively manage our growth.**\n\n** **\n\nOur\nsuccess will depend upon growing our business and our employee base. Over the next twelve months, we plan to add additional employees\nto assist us with research and development and our commercialization efforts. Our future growth, if any, may cause a significant strain\non our management, and our operational, financial and other resources. Our ability to manage our growth effectively will require us to\nimplement and improve our operational, financial and management systems and to expand, train, manage and motivate our employees. These\ndemands may require the hiring of additional management personnel and the development of additional expertise by management. Any increase\nin resources devoted to research and product development without a corresponding increase in our operational, financial and management\nsystems could have a material adverse effect on our business, financial condition, and results of operations.\n\n \n\n**Our\nfuture success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.**\n\n \n\nWe\nare highly dependent on the research and development, clinical, financial, operational and other business expertise of our executive\nofficers, as well as the other principal members of our management, scientific and clinical teams. Although we have entered into employment\nagreements with our executive officers, each of them may terminate their employment with us at any time. We do not maintain “key\nperson” insurance for any of our executives or other employees. Recruiting and retaining qualified scientific, clinical, manufacturing,\naccounting, legal and sales and marketing personnel will also be critical to our success.\n\n \n\nThe\nloss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization\nobjectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers\nand key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry\nwith the breadth of skills and experience required to successfully develop, gain marketing approval of and commercialize products. Competition\nto hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable\nterms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition\nfor the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants\nand advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization\nstrategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory\ncontracts with other entities that may limit their availability to us. Our success as a public company also depends on implementing and\nmaintaining internal controls and the accuracy and timeliness of our financial reporting. If we are unable to continue to attract and\nretain high quality personnel, our ability to pursue our growth strategy will be limited.\n\n \n\n**As\nwe are actively involved in marketing VELDONA Pet supplements within a fiercely competitive industry, any inability to effectively compete\nmay adversely impact our operational results.**\n\n \n\nThe\npet health supplement industry is highly competitive. We compete on the basis of product and ingredient quality, product availability,\nbrand awareness, loyalty and trust, product variety and innovation, price and convenience and promotional efforts. The pet products are\nincreasingly competitive due to the expansion of pet-related product offerings by incumbents and new entrants. We face direct competition\nfrom companies that sell various products at a lower price point and distribute such products to traditional retailers, which are larger\nthan we are and have greater financial resources. Price gaps between products may result in market share erosion and harm our business.\nOur current and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties\nthat may further enhance their resources and offerings. Further, it is possible that domestic or foreign companies, some with greater\nexperience in the pet health and wellness industry or greater financial resources than we possess, will seek to provide products or services\nthat compete directly or indirectly with ours in the future.\n\n \n\n28\n\n \n\n \n\nMany\nof our competitors may have longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technical\ncapabilities, significantly greater financial, marketing and other resources and larger customer bases than we do. These factors may\nallow our competitors to derive greater net sales and profits from their existing customer base, acquire customers at lower costs or\nrespond more quickly than we can to new or emerging technologies and changes in consumer preferences or habits. These competitors may\nengage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive\npricing policies, which may allow them to build larger customer bases or generate net sales from their customer bases more effectively\nthan we do.\n\n \n\nOur\ncompetitors may be able to identify and adapt to changes in consumer preferences more quickly than us due to their resources and scale.\nThey may also be more successful in marketing and selling their products, better able to increase prices to reflect cost pressures and\nbetter able to increase their promotional activity, which may impact us and the entire pet health and wellness industry. Increased competition\nas to any of our products could result in price reduction, increased costs, reduced margins and loss of market share, which could negatively\naffect our profitability. There can be no assurance that we will be able to successfully compete against these other companies. Expansion\ninto markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could materially\nadversely affect our business, financial condition and results of operations.\n\n \n\n**The\npoint-of-care testing (“POCT”) market is extremely competitive and rapidly evolving, making it difficult to evaluate our\nbusiness and future prospects.**\n\n \n\nThe\nmarket for POCT testing is extremely competitive. Further, the POCT testing industry, as well as the manner in which healthcare services\nare delivered more broadly, is currently experiencing rapid change, technological and scientific breakthroughs, new product introductions\nand enhancements and evolving industry standards, as well as the emergence of telehealth and other changes in the way healthcare services\nare delivered. All of these factors could affect the degree to which our products gain market acceptance or approval or result in our\nproducts being less marketable or becoming obsolete. Our future success will depend on our ability to successfully compete with established\nand new market participants and to keep pace with scientific and technological changes and the evolving needs of customers and the healthcare\nmarketplace.\n\n \n\nWe\nwill be required to continuously enhance our products and develop new tests to keep pace with evolving standards of care. If we do not\nupdate our products to keep pace with technological and scientific advances, our products could become obsolete and sales of our products\ncould decline or fail to grow as expected.\n\n \n\nMany\nof our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources\nand expertise than we do in research and development, manufacturing, obtaining regulatory clearances and approvals and regulatory compliance,\nand sales and distribution. Mergers and acquisitions involving POCT testing or other healthcare companies may result in even more resources\nbeing concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors,\nparticularly through collaborative arrangements with large and established companies or customer networks. Our commercial opportunity\ncould be reduced or eliminated if our competitors develop and commercialize POCT products or services that are more accurate, more convenient\nto use or more cost-effective than our products. Our competitors also may obtain FDA or other regulatory clearance or approval for their\nproducts more rapidly than we may obtain clearance or able to enter a particular market.\n\n \n\nFurther,\nsome of our competitors’ products may be sold at prices that may be lower than our pricing, which could adversely affect our sales\nor force us to reduce our prices, which could harm our revenue, operating income or market share. If we are unable to compete successfully,\nwe may be unable to increase or sustain our revenue or achieve profitability and our future growth prospects may be materially harmed.\n\n \n\nCentral\nlabs continue to represent the most significant portion of the POCT testing market, and as a result we will be competing against very\nlarge and well-established lab companies such as Quest Diagnostics, Inc. and Laboratory Corporation of America. These companies have\nalso expanded beyond centralized laboratory testing into home sample collection. In addition, we also face intense competition from other\ncompanies that develop or already have molecular tests, whether at point-of-care or at-home, as well as companies that have or are developing\nantigen and antibody tests.\n\n \n\n29\n\n \n\n \n\nTo\nremain competitive, we will need to develop improvements to our products and other offerings. We cannot assure you that we will be able\nto successfully compete in the marketplace or develop and commercialize new tests or improvements to our products and other offerings\non a timely basis. Our competitors may develop and commercialize competing or alternative products or services and improvements faster\nthan we are able to do so, which would negatively affect our ability to increase or sustain our revenue or achieve profitability and\ncould materially adversely affect our future growth prospects.\n\n \n\n**Research\nand development of drug candidates such as VELDONA is extremely expensive and complex, and it’s difficult to evaluate the likelihood\nof the outcome of clinical trials, regulatory approvals, and our business and future prospects.**\n\n \n\nThe\ndiscovery and development of new products such as our VELDONA candidates, as well as the development of additional uses for existing\nproducts, are necessary for the continued strength of our business. Our product lines must be replenished over time to offset revenue\nlosses when products lose exclusivity or market share, as well as to provide for earnings growth, primarily through internal R&D\nor through collaborations, acquisitions, JVs, licensing or other arrangements. Growth depends in large part on our ability to identify\nand develop new products or new indications for existing products that address unmet medical needs and receive reimbursement from payers.\nHowever, balancing current growth, investment for future growth and the delivery of shareholder return remains a major challenge. The\ncosts of product development continue to be high, as are regulatory requirements in many therapeutic areas, which may affect the number\nof candidates we are able to fund as well as the sustainability of the R&D portfolio. Decisions made early in the development process\nof a drug or vaccine candidate can have a substantial impact on the marketing strategy and payer reimbursement possibilities if the candidate\nreceives regulatory approval. We try to plan clinical trials prudently and to reasonably anticipate and address challenges, but there\nis no assurance that an optimal balance between trial conduct, speed and desired outcome will be achieved.\n\n \n\nAdditionally,\nour product candidates can fail at any stage of the R&D process, and may not receive regulatory approval even after many years of\nR&D. We may fail to correctly identify indications for which our science is promising or allocate R&D investment resources efficiently,\nand failure to invest in the right technology platforms, therapeutic areas, product classes, geographic markets and/or licensing opportunities\ncould adversely impact the productivity of our pipeline. Further, even if we identify areas with the greatest commercial potential, the\nscientific approach may not succeed despite the significant investment required for R&D, and the product may not be as competitive\nas expected because of the highly dynamic market environment and the hurdles in terms of access and reimbursement. For example, our VELDONA\nproduct candidates are based on a novel technology with only a few gene therapies approved to date, which makes it difficult to predict\nthe time and cost of development and the ability to obtain regulatory approval. Further, our VELDONA therapies may face difficulties\nin gaining the acceptance of patients or the medical community.\n\n \n\n**If\nwe fail to develop and maintain our brand, or the quality of our products that customers have come to expect, our business could suffer.**\n\n \n\nWe\nbelieve that developing and maintaining our brand and the quality of our products may affect our success. The importance of our brand\nrecognition and the quality of our products may become even greater as competitors offer more products similar to ours. Our financial\nsuccess may depend on our target customers’ perception of our brand and our products. Our brand-building activities involve providing\nhigh-quality products, increasing awareness of our brand, creating and increasing the availability of our products.\n\n \n\nThe\nsuccess of our brand may suffer if our marketing plans or product initiatives do not have the desired impact on our brand’s image\nor its ability to attract customers. Further, our brand value could diminish significantly due to a number of factors, including consumer\nperception that we have acted in an irresponsible manner, adverse publicity about our products (whether or not valid), our failure to\nmaintain the quality of our products, product contamination, the failure of our products to deliver consistently positive consumer experiences,\nor the products becoming unavailable to consumers. The growing use of social and digital media by consumers increases the speed and extent\nthat information and opinions can be shared. Negative posts or comments about us or our brands or products on social or digital media\ncould damage our brands and reputation. If we fail to maintain the favorable perception of our brands, our business, financial condition\nand results of operations could be negatively impacted.\n\n \n\n30\n\n \n\n \n\n**Our\nbusiness, operations, clinical development plans and timelines, and supply chain could be adversely affected by the effects of epidemics***,\n**including but not limited to COVID-19.***\n\n \n\nOur\nbusiness could be adversely affected by health epidemics wherever we have clinical trial sites or other business operations. In addition,\nhealth epidemics could cause significant disruption in the operations of third-party manufacturers, contract research organizations and\nother third parties upon whom we rely. For example, the COVID-19 pandemic has presented a substantial public health and economic challenge\nworldwide. Besides the COVID-19 pandemic, the United States and other countries have experienced, and may experience in the future, public\nhealth outbreaks such as Zika virus, Avian Flu, SARS, and H1N1 influenza. A prolonged occurrence of contagious diseases such as these\ncould result in significant challenges affecting employees, patients, communities, supply chains, business operations, as well as the\nU.S. economy and financial markets. These challenges may negatively impact productivity, disrupt our business and delay our clinical\nprograms and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations\non our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations\ncould negatively impact our business, operating results and financial condition.\n\n \n\n**Our\nbusiness activities are subject to the Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery and anti-corruption laws\nof other countries in which we operate, including Taiwan, as well as U.S. and certain foreign export controls, trade sanctions, and import\nlaws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to\nliability if we violate them.**\n\n \n\nOur\nbusiness activities are subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries\nin which we operate. The FCPA generally prohibits companies and their employees and third party intermediaries from offering, promising,\ngiving or authorizing the provision of anything of value, either directly or indirectly, to a non-U.S. government official in order to\ninfluence official action or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and\nrecords that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal\naccounting controls. There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply\nwith all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and\nregulations could result in fines, criminal sanctions against us, our officers or our employees, disgorgement, and other sanctions and\nremedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to\noffer our products in one or more countries and could materially damage our reputation, our brand, our international activities, our\nability to attract and retain employees and our business, prospects, operating results and financial condition.\n\n \n\nIn\naddition, our products and technology may be subject to applicable foreign export controls, trade sanctions and import laws and regulations.\nGovernmental regulation of the import or export of our products and technology, or our failure to obtain any required import or export\nauthorization for our products, when applicable, could harm our international sales and adversely affect our revenue. Compliance with\napplicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international\nmarkets or, in some cases, prevent the export of our products to some countries altogether. If we fail to comply with export and import\nregulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges. Moreover,\nany new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or\nin the countries, persons, or products targeted by such regulations, could result in decreased use of our products by, or in our decreased\nability to export our products to existing or potential customers with international operations. Any decreased use of our products or\nlimitation on our ability to export or sell access to our products would likely adversely affect our business.\n\n \n\n**An\nactive trading market for our common stock may not develop, and the market price of our common stock and warrants could be volatile.**\n\n \n\nOur\ncommon stock and public warrants are currently quoted on the Nasdaq Capital Market.\n\n \n\nThe\ntrading market for our common stock in the future could be subject to wide fluctuations in response to several factors, including, but\nnot limited to:\n\n \n\n \n●\nactual\nor anticipated variations in our results of operations;\n\n \n●\nour\nability or inability to generate revenues or profit;\n\n \n●\nthe\nnumber of shares in our public float; and\n\n \n●\nincreased\ncompetition.\n\n \n\n31\n\n \n\n \n\nFurthermore,\nour stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations,\nas well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations\nmay adversely affect the market price of our common stock. Additionally, moving forward we anticipate having a limited number of shares\nin our public float, and as a result, there could be extreme fluctuations in the price of our common stock.\n\n \n\n**We\ndo not intend to pay dividends for the foreseeable future, and, as a result, our ability to achieve a return on your investment will\ndepend on appreciation in the price of our common stock.**\n\n \n\nWe\nhave not declared or paid any cash dividends on our capital stock in 2025, and we do not intend to pay any cash dividends in the foreseeable\nfuture. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and may be restricted by\nthe terms of any then-current credit facility. Accordingly, investors must rely on sales of their common stock after price appreciation,\nwhich may never occur, as the only way to realize any future gains on their investments.\n\n \n\n**We\nhave acquired, and may in the future acquire, assets and technologies as part of our business strategy. If we acquire companies or technologies\nin the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our operating\nresults and the value of our common stock.**\n\n \n\nAs\npart of our business strategy, we may acquire, enter into joint ventures with, or make investments in complementary or synergistic companies,\nservices, and technologies in the future. Acquisitions and investments involve numerous risks, including without limitation:\n\n \n\n \n●\ndifficulties\nin identifying and acquiring products, technologies, proprietary rights or businesses that will help our business;\n\n \n●\ndifficulties\nin integrating operations, technologies, services, and personnel;\n\n \n●\ndiversion\nof financial and managerial resources from existing operations;\n\n \n●\nthe\nrisk of entering new development activities and markets in which we have little to no experience;\n\n \n●\nrisks\nrelated to the assumption of known and unknown liabilities;\n\n \n●\nrisks\nrelated to our ability to raise sufficient capital to fund additional operating activities; and\n\n \n●\nthe\nissuance of our securities as partial or full payment for any acquisitions and investments could result in material dilution to our\nexisting stockholders.\n\n \n\nIf\nwe fail to integrate our patent assets into our operations, or if we fail to properly evaluate other acquisitions or investments, we\nmay not achieve the anticipated benefits of any such acquisitions, we may incur costs in excess of what we anticipate, and management\nresources and attention may be diverted from other necessary or valuable activities.\n\n \n\n**Any\nfailure to maintain effective internal control over financial reporting could harm us.**\n\n \n\nOur\nmanagement is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over\nfinancial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation\nof financial statements in accordance with U.S. generally accepted accounting principles. If our management is unable to conclude that\nwe have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if material weaknesses\nin our internal controls are identified in the future, we could have difficulty in timely and accurately reporting our financial results\nand could be subject to regulatory scrutiny and a loss of public confidence, any of which could have a material adverse effect on our\nbusiness and our stock price. Our management has concluded there were deficiencies in the design and implementation of our internal controls\nas of December 31, 2021. If we are unable to remediate the deficiencies identified adequately or otherwise fail to maintain adequate\nfinancial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report\nour financial performance on a timely basis, which could cause a decline in our common stock price and adversely affect our results of\noperations and financial condition.\n\n \n\n32\n\n \n\n \n\n**Our\nissuance of additional capital stock in connection with financings, acquisitions, investments, our 2023 Stock Incentive Plan or otherwise\nwill dilute all other stockholders.**\n\n \n\nWe\nmay need to raise additional capital through equity and debt financings in order to fund our operations. If we raise capital through\nequity financings in the future, that will result in dilution to all other stockholders. We also expect to grant equity awards to employees,\ndirectors, and consultants under our 2023 Stock Incentive Plan. As part of our business strategy, we may acquire or make investments\nin complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. These,\nand any additional such issuances of capital stock will cause stockholders to experience significant dilution of their ownership interests\nand the per-share value of our common stock to decline."}