Inmune Bio, Inc. (INMB) Risk Factors

Item 1A. Risk Factors

Summary of Risk Factors

Below is a summary of the
principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that
we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under
the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other
filings with the SEC, before making an investment decision regarding our common stock.

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You should carefully consider
the risks described below as well as other information provided to you in this document, including information in the section of this
document entitled “Information Regarding Forward Looking Statements.” If any of the following risks actually occur, the Company’s
business, financial condition or results of operations could be materially adversely affected, the value of the Company’s Common
Stock could decline, and you may lose all or part of your investment.

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RISKS RELATED TO OUR BUSINESS

There is a Substantial Doubt About Our Ability to Continue as a
Going Concern

As of December 31, 2025, the
Company had an accumulated deficit of $209,037,000. These losses primarily reflect the substantial resources devoted to research and development
of our product candidates, along with general and administrative expenses, and the absence of revenues until commercialization of our
products.

These factors raise substantial
doubt about our ability to continue as a going concern for the 12 months following the issuance of these financial statements. The financial
statements do not include adjustments that might result if we are unable to continue as a going concern, including the possible impact
on the recoverability and classification of assets or the amounts and classifications of liabilities.

Management intends to pursue
additional funding and implement its strategic plan to support continuation of the Company, but there can be no assurance that these efforts
will be successful. The opinion of our independent registered public accounting firm on our audited financial statements for the year
ended December 31, 2025, includes an explanatory paragraph regarding this substantial doubt.

We Have a History of Losses and May Never Achieve or Sustain Profitability

We have incurred losses since our inception in September 2015 and are
not currently profitable. We reported net losses of $45.9 million and $42.1 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, we had cash and cash equivalents of $24.8 million.

We expect to continue incurring significant losses
for the foreseeable future as we advance the research, development, and regulatory approval of our product candidates. The costs of clinical
development increase substantially at each phase, and the total expenses to achieve marketing approval for any product candidate, even
in a single jurisdiction, will be substantial. Due to the inherent risks and uncertainties of pharmaceutical product development, we cannot
predict when, or if, we will generate revenue or achieve profitability.

Our ability to achieve and sustain profitability
depends on, among other factors, our success in developing, obtaining regulatory approval for, and commercializing our product candidates,
alone or through collaborations, as well as our ability to control costs. If we are unable to achieve or sustain profitability, or if
revenues from approved products are insufficient, our business, financial condition, and the value of our common stock will be materially
and adversely affected.

Limitations on Capital Raising Due to Low Public Float

Our ability to raise additional capital, including
through sales of common stock under our ATM Program, may be limited if the public float of our common stock remains below $75.0 million.

Under SEC rules, if the aggregate market value of our common stock held by non-affiliates (public float) is less than $75.0 million at
the time we file an Annual Report—or in some cases, earlier—the amount we can raise through primary public offerings using
shelf registration statements is limited to one-third of our public float in any 12-month period. However, the SEC has recently published
a Corporate Finance Interpretation stating that the Staff will not object if a company continue offering and selling the full amount of
securities covered by any prospectus supplement filed prior to its Section 10(a)(3) update (such as filing of an annual report on Form
10-K) , without being limited to one-third of its public float in any 12-month period, even when such company will not meet the public
float requirement of Instruction I.B.1 of Form S-3 at the time it files its annual report. As of December 31, 2025, our public float was
approximately $36.8 million and the amount of securities we would be able to sell under our Form S-3 would be reduced; however, as we
have an effective Form S-3 registration statement, we were eligible to offer and sell securities in reliance on General Instruction I.B.1,
and we filed a prospectus supplement for the offering of the common stock under our ATM program prior to the date of this Annual Report,
we believe, based on the SEC’s Corporate Finance Interpretation, that we will be able to continue using our existing ATM without the aforementioned
limitation.

We face intense competition in the markets targeted by our product
candidates. Many competitors have substantially greater resources, and all of our product candidates are expected to face strong competition
from existing and future drugs.

If approved, our product candidates may compete
with drugs marketed by large pharmaceutical and biotechnology companies. Competitors could market products more effectively, identify
drug candidates or develop products faster, or produce therapies that are more effective, safer, or lower cost than ours.

If a competitor obtains FDA approval before us
for a similar drug, approval of our product candidate may be delayed or precluded due to periods of non-patent exclusivity or patent listings
by the competitor.

These competitive pressures may require substantial
additional research and development to establish new product targets, increasing costs and timelines, and could adversely affect our ability
to commercialize products and achieve revenue and profits.

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Competition and Technological Change Could
Reduce the Attractiveness of Our Product Candidates

We face intense competition from established pharmaceutical
and biotechnology companies pursuing treatments for the same indications as our product candidates. Many competitors have substantially
greater financial, research, and regulatory resources, and may succeed in developing products more quickly, obtaining FDA approvals sooner,
or creating therapies that are more effective than ours.

Research and development by others could render
our technologies or product candidates obsolete or noncompetitive. Competitors may also acquire or internally develop technologies that
limit or prevent our commercialization efforts, reducing potential revenues.

Even if we successfully develop and obtain regulatory
approval for our product candidates, there can be no assurance that physicians, patients, or payors will adopt our products as a preferred
treatment. Approval of competing products before ours could further complicate our regulatory path or market acceptance.

The pharmaceutical and biotechnology industry is
complex, diverse, and rapidly changing. Factors such as competition, intellectual property disputes, market acceptance, and evolving regulations
make it difficult to predict revenues or profitability with certainty.

We are substantially dependent on the
success of CORDStrom, and we may never obtain regulatory approval.

Our future success is highly
dependent on our ability to obtain regulatory approval for CORDStrom for the treatment of recessive dystrophic epidermolysis bullosa (“RDEB”).
Although we believe the clinical data generated to date support the potential therapeutic benefit of CORDStrom, regulatory authorities
may interpret the data differently or determine that the evidence is insufficient to support approval. Regulatory agencies may require
additional preclinical studies or clinical trials, impose limitations on the indicated patient population, or determine that the benefit-risk
profile does not support approval. As a result, we may experience significant delays in the development and review process, incur substantial
additional costs, or ultimately be unable to obtain regulatory approval for CORDStrom. Failure to obtain approval would materially and
adversely affect our business, financial condition and results of operations.

Global economic
uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts,
such as the conflict between Russia and Ukraine and the recent military conflict in the Middle East involving Iran, could make it more
difficult for us to access financing and could adversely affect our business and operations.

Our
ability to access capital markets and raise additional funds depends in large part on investor confidence and market valuations of our
securities. The market value and liquidity of our common stock are subject to significant fluctuations based on factors beyond our control,
including changes in general economic conditions, interest rate environments, inflationary pressures, investor sentiment toward biotechnology
and early-stage issuers, and overall equity market volatility. Periods of macroeconomic weakness or recession, rising interest rates,
tightening credit markets, or risk-off investor behavior may limit the availability of equity or debt financing on acceptable terms, or
at all. A decline in the market price of our securities could also impair our ability to raise capital without substantial dilution to
existing shareholders.

In
addition, geopolitical developments and international conflicts, such as instability or war in the Middle East, the ongoing conflict between
Russia and Ukraine, or a deterioration in relations between the United States and China, may contribute to global uncertainty, disrupt
financial and commodity markets, and adversely affect investor risk appetite. Resulting government actions, including the imposition of
sanctions, export controls, tariffs, or other trade restrictions, could disrupt global supply chains and trade flows, further exacerbating
inflationary or recessionary pressures. Such events may impair our ability to source key raw materials, reagents, or specialized components
required for our research and development programs and clinical manufacturing activities, potentially leading to increased costs, delays
in development timelines, or operational interruptions.

Continued
market instability or geopolitical tension could also constrain venture capital and institutional investment into the life sciences sector
more broadly, reduce valuations for comparable companies, and limit opportunities for strategic partnerships or follow-on financings.
If we are unable to obtain additional capital when needed, or only on unfavorable terms, we may be forced to delay, scale back, or discontinue
one or more of our product development programs, which could materially and adversely affect our business, financial condition, and prospects.

Even if we commercialize our product candidates, pricing, reimbursement,
and healthcare regulations could limit their market success.

The commercial success of our products will depend
largely on coverage and reimbursement by government programs (such as Medicare and Medicaid), private insurers, and other third-party
payors, both in the U.S. and abroad. If reimbursement is unavailable, limited, or insufficient, we may be unable to successfully commercialize
our products or achieve a meaningful return on investment.

Third-party coverage and reimbursement policies
for newly approved drugs are uncertain and vary significantly across countries. Some jurisdictions require pricing approval before marketing,
and ongoing governmental price controls may apply even after initial approval. Consequently, we could face delays in product launches
or limitations on revenues, which may hinder our ability to recoup development and commercialization costs.

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We are subject to extensive government regulations.

The manufacture and sale of human therapeutic products
in the U.S. and abroad are governed by numerous laws and regulations. These requirements include approval of manufacturing facilities,
controlled preclinical and clinical testing, submission of extensive data on safety and efficacy, compliance with current Good Manufacturing
Practices (cGMP) during production and storage, and oversight of marketing activities, including advertising and labeling.

The products we are developing require substantial
investment, development, and testing before commercialization. Obtaining regulatory approvals is costly and time-consuming, and there
is no assurance that any product will prove safe and effective or receive the necessary approvals. Investors should be aware that our
business is subject to significant regulatory risks, delays, and expenses inherent in the development and commercialization of therapeutic
products.

If we cannot keep pace with rapid technological changes or compete
effectively, we may not operate profitably.

We operate in a rapidly evolving field with intense
competition from established pharmaceutical and biotechnology companies, smaller companies, and academic or governmental institutions.
Many competitors have greater financial resources, expertise in research, development, manufacturing, regulatory approvals, and marketing,
as well as ongoing product pipelines. They also compete for qualified scientific and management personnel.

Competition will be based on product efficacy and
safety, regulatory approvals, supply, marketing and sales capabilities, pricing, reimbursement, and patent protection. There is no assurance
that our competitors will not develop more effective or affordable products, secure earlier approvals, or achieve earlier commercialization.
Even as we seek to expand our technological capabilities, research by others may render our products less competitive, obsolete, or inferior
to alternative therapies.

We may request priority review, but the FDA may not grant it,
and even if granted, it may not accelerate approval.

We may seek priority review for our product candidate
if the FDA determines it offers a major advance in treatment or addresses a condition with no adequate therapy. Priority review sets a
goal of six months for FDA action rather than the standard ten-month review. However, the FDA has broad discretion in granting this designation,
and our product candidate may not receive it. Even if granted, priority review does not guarantee faster approval or confer any advantage
in the ultimate regulatory decision.

If we are unable to obtain accelerated approval or other expedited
regulatory designations, development and commercialization of our product candidates may be delayed or more costly.

We may seek accelerated approval
for our product candidates under FDA or comparable non-U.S. regulatory pathways intended for therapies addressing serious or life-threatening
conditions. Such pathways often rely on surrogate or intermediate clinical endpoints reasonably likely to predict clinical benefit, and
approval may be contingent on conducting confirmatory post-approval studies. If these studies fail to confirm clinical benefit, regulatory
authorities may withdraw approval.

There can be no assurance
that we will pursue, be granted, or successfully achieve accelerated or expedited approval. Regulatory authorities could require additional
preclinical studies or clinical trials, delay acceptance of our submissions, or impose other conditions that could increase development
costs, extend timelines, and harm our competitive position.

Clinical drug development is lengthy, expensive, and inherently
uncertain, and our product candidates may never receive regulatory approval.

Our product candidates are in early stages of development,
and the risk of failure is high. Before obtaining marketing approval, we must complete preclinical studies and extensive clinical trials
to demonstrate safety and efficacy. Clinical development is time-consuming, costly, and uncertain, and a failure can occur at any stage.
Product candidates may fail to demonstrate efficacy, may cause unacceptable adverse events, may not perform consistently across patient
populations, or may fail to meet regulatory requirements. Even if a product candidate shows promising results in early studies, those
results may not be replicated in later-stage trials.

Clinical trial outcomes can be affected by numerous
factors, including trial design, patient selection, protocol adherence, statistical analysis, and variability across trial sites. Preclinical
and clinical data are subject to differing interpretations, and regulatory authorities may disagree with our conclusions regarding safety
or efficacy. As a result, we may incur substantial additional costs, experience significant delays, or be unable to obtain marketing approval
for our product candidates, which would materially harm our business and prospects.

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Preclinical and early-stage clinical trial
results may not predict later results, and interim or preliminary data may change materially.

Results from preclinical studies or early-stage
clinical trials may not be predictive of outcomes in later-stage trials or final results. Initial success in a clinical trial, particularly
in small early trials, may not indicate success in larger or later-stage studies. Preclinical and clinical data are subject to varying
interpretations, and many drug candidates that initially appeared promising have failed to achieve marketing approval. Any setbacks in
our clinical development could materially harm our business, financial condition, results of operations, and prospects.

Interim or top-line data from ongoing trials may
differ materially from final results. Such preliminary data are subject to audit, verification, and changes as additional patient data
become available. Adverse differences between early data and final results could negatively affect our reputation, investor perception,
and business prospects.

If clinical trials fail to demonstrate safety and efficacy to
the satisfaction of regulatory authorities, we may incur additional costs, experience delays, or be unable to commercialize our product
candidates.

We cannot market or sell any product candidate
in the United States without FDA approval, nor in other jurisdictions without comparable regulatory authorizations. Clinical testing is
expensive, time-consuming, complex, and inherently uncertain. We have not previously submitted an NDA or equivalent application to any
regulatory authority, and there is no guarantee that we will obtain marketing approval for any product candidate.

Failure to successfully complete preclinical or
clinical development, or unfavorable trial outcomes, could delay or prevent approval, result in narrower indications or restrictive labeling,
require additional post-marketing studies, or lead to withdrawal from the market. Any of these outcomes could materially increase costs,
delay revenue generation, and harm our business, financial condition, and results of operations.

Unforeseen events in clinical trials could delay or prevent marketing
approval of our product candidates.

We may experience a variety of challenges during
clinical trials that could adversely affect the development and approval of our product candidates. These include unfavorable or inconclusive
trial results, slower-than-expected patient enrollment or higher dropout rates, safety concerns or adverse events among participants,
failure of third-party contractors to meet regulatory or contractual obligations, supply interruptions, or changes in regulatory requirements.
Regulators or institutional review boards may also impose suspensions, terminations, or clinical holds, or disagree with our trial design,
interpretation of data, or manufacturing processes.

Delays or failures in clinical trials could increase
our development costs, require us to secure additional funding, shorten periods of potential market exclusivity, allow competitors to
enter the market first, and impair our ability to successfully commercialize our product candidates. Many of the factors that delay or
complicate clinical trials may ultimately contribute to the denial of marketing approval.

Regulatory Approval of Product Brand Names

Any pharmaceutical product we develop cannot be
marketed in the U.S. or other countries until it completes rigorous regulatory review processes, including approval of a brand name. All
proposed brand names for our product candidates require FDA approval, regardless of whether we have obtained a trademark registration
from the U.S. Patent and Trademark Office (USPTO).

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The FDA evaluates proposed brand names for potential
confusion with existing products and may object if a name inappropriately implies medical claims. If the FDA objects to a proposed brand
name, we may need to select an alternative name, which could result in the loss of benefits associated with our existing trademark applications
and require additional resources to secure a suitable replacement. Failure to obtain timely approval of an acceptable brand name could
limit our ability to establish brand recognition and commercialize our product candidates effectively.

Risk of Noncompliance with Regulatory Requirements

Our success depends on our ability, and that of
our collaborators, to comply with regulatory requirements, including current Good Manufacturing Practices (cGMP) and safety reporting
obligations. Failure to comply could lead to fines, civil or criminal penalties, injunctions, suspension or revocation of regulatory approvals,
denial of pending applications, product recalls or seizures, and restrictions on operations or production, any of which could materially
harm our business, financial condition, and prospects.

Even if our product candidates are approved, they may fail to
achieve sufficient market acceptance, which could limit revenue and affect our business.

We have never commercialized a product. Even if
CORDStrom or any other product candidate is approved, physicians, patients, third-party payors, and others in the medical community may
be reluctant to adopt new therapies. Educating the medical community and securing reimbursement may require significant resources and
may not be successful.

The degree of market acceptance will depend on
factors such as the efficacy and safety of the product, advantages over alternative treatments, side effect profile, approved indications,
pricing, convenience of administration, sales and marketing support, competitive products, changes in standard of care, reimbursement
availability, publicity, and potential product liability claims. In addition, our estimates of potential market size are inherently uncertain
and based on assumptions that may prove inaccurate, which could result in actual market opportunities being smaller than expected. Failure
to achieve adequate market acceptance could materially and adversely affect our business, financial condition, and results of operations.

Even if we obtain regulatory approvals for CORDStrom or any product,
ongoing regulation may limit our ability to manufacture and commercialize these products.

Approved products and the
facilities used to manufacture them will remain subject to continuous review and inspections by the FDA and other U.S. and foreign regulatory
authorities. Regulatory agencies may impose restrictions on the indicated uses, labeling, marketing, or manufacturing processes of these
products, and any material changes to manufacturing may require prior regulatory approval.

We are required to comply
with current Good Manufacturing Practices (“cGMP”) and maintain quality control, quality assurance, and documentation standards.
Discovery of previously unknown safety issues, manufacturing problems, or noncompliance with regulatory requirements could result in product
recalls, withdrawal from the market, fines, civil or criminal penalties, additional clinical trials, labeling changes, or other sanctions.
Such events could materially harm our ability to commercialize our products, affect our reputation, and subject us to lawsuits, including
class action claims.

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If our product candidates are approved and later found to be
less effective than expected or to cause previously unidentified side effects, our business could be materially harmed.

Clinical trials are conducted in limited patient
populations under controlled conditions, and results may not fully predict effectiveness or safety in the broader population. If, after
approval, a product is discovered to be less effective or to cause adverse effects, we could face regulatory actions such as withdrawal
of approval, recalls, restrictions on marketing or manufacturing, labeling changes (including “black box” warnings), or additional
post-marketing requirements.

We could also face civil or criminal liability,
reputational harm, loss of market share, reduced competitiveness, and decreased revenues. Any of these outcomes could materially and adversely
affect our business, financial condition, and results of operations.

Even if we obtain marketing approval for a product candidate,
we will remain subject to extensive ongoing regulatory requirements, and failure to comply could materially harm our business.

Any approved product, its
manufacturing processes, labeling, promotional activities, and post-approval clinical data will be subject to continuing regulation by
the FDA and other authorities. These requirements include safety reporting, post-marketing studies, registration and listing obligations,
adherence to good manufacturing practices (“GMP”), quality control and assurance, and recordkeeping. Approvals may also be
limited to specific indications or include conditions that require costly post-marketing testing or surveillance.

Later discovery of previously
unknown safety or efficacy issues, or failure to comply with regulatory obligations, could result in restrictions on manufacturing or
distribution, labeling or marketing limitations, requirements for additional clinical trials or a Risk Evaluation and Mitigation Strategy
(REMS), warning letters, fines, product recalls, withdrawal or suspension of approvals, import/export prohibitions, injunctions, or civil
or criminal penalties. Any of these actions could materially and adversely affect our ability to commercialize a product candidate and
harm our business, financial condition, and results of operations.

We currently have no marketing or sales
organization, and our inability to establish these capabilities or collaborate with third parties could limit our product revenue.

We have no experience in marketing
or selling pharmaceutical products, and building internal sales, marketing, and distribution capabilities would require substantial capital,
management attention, and time. Recruiting, training, and retaining qualified personnel is competitive, and we may be unable to establish
an effective commercial organization.

If we rely on third parties
to market and sell our products, our revenue will depend on their efforts, which may not be successful. We may have limited control over
their activities, and competition for third-party collaborators may limit our ability to secure or maintain such relationships. Any failure
to develop internal capabilities or establish successful third-party arrangements could materially and adversely affect our ability to
generate revenue from our product candidates.

We face substantial competition from other pharmaceutical and
biotechnology companies and our operating results may suffer if we fail to compete effectively.

The development and commercialization
of new drug products is highly competitive. We expect to face significant competition from major pharmaceutical companies, specialty pharmaceutical
companies, and biotechnology companies worldwide with respect to any product candidates we may develop or commercialize.

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Dependence on Key Personnel

Our success depends largely on the continued service
and performance of our principal members of management and scientific staff. The loss of any of these individuals could materially impede
our ability to achieve our business objectives.

In addition, our ability to attract, retain, and
motivate qualified scientific, technical, and commercial personnel is critical to our growth and operational success. Competition for
experienced professionals in the biotechnology, pharmaceutical, and healthcare industries—as well as at universities and research
institutions—is intense. We may be unable to hire or retain personnel on terms acceptable to us, which could adversely affect our
research, development, and commercialization efforts.

We also rely on a significant number of consultants
to support the execution of our business objectives. Any disruption in these relationships could negatively impact our operations.

During August 2025, Raymond J. Tesi, Ph.D., retired
as our President and Chief Executive Officer. David Moss, previously our Chief Financial Officer, succeeded Dr. Tesi as President and
CEO and joined our Board of Directors.

Product liability claims could result in substantial costs, divert
resources, and limit the development or commercialization of our product candidates.

We face inherent risks of
product liability claims as a result of clinical testing of our product candidates, and these risks would increase if we commercialize
any products. Claims could be based on alleged defects in design or manufacturing, failure to warn of risks, negligence, strict liability,
breach of warranties, or violations of consumer protection laws. Any such claims, even if without merit or successfully defended, could
result in costly litigation, adverse publicity, injury to our reputation, withdrawal of trial participants, loss of revenue, or reduced
managerial resources, and could limit or delay commercialization.

Although we plan to maintain
general liability insurance, it may not fully cover potential claims, and insurance coverage is increasingly costly. If we are unable
to obtain or maintain adequate insurance at reasonable cost, we could face significant financial exposure, which could materially and
adversely affect our business, financial condition, results of operations, and prospects.

We will need to expand our organization and may encounter challenges
in managing this growth.

To execute our business plan, we will need to hire
additional management, scientific, regulatory, manufacturing, and operational personnel, as well as expand our capabilities to support
research, development, clinical trials, and potential commercialization. Recruiting and retaining highly skilled employees, particularly
in scientific and medical roles, is competitive and may be difficult.

If we are unable to attract and retain qualified
personnel, effectively manage our organizational growth, or build the necessary operational and technical capabilities, our product development,
regulatory submissions, and commercialization efforts could be delayed or impaired, which could materially harm our business, financial
condition, and results of operations.

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Our manufacturing processes are complex and subject to numerous
risks that could increase costs and limit the supply of our drug candidates.

The production of our drug
candidates is highly regulated and susceptible to disruptions from contamination, equipment failures, operator error, labor shortages,
natural disasters, epidemics, pandemics, power outages, or other operational factors. Even minor deviations from standard procedures could
reduce yields, cause product defects, or necessitate costly remediation, lot failures, or recalls.

Any interruption in manufacturing
could delay clinical trials, regulatory submissions, or commercialization, result in inventory write-offs, increase costs, and materially
and adversely affect our ability to supply our drug candidates and achieve anticipated revenues.

We and our contract manufacturers
are subject to extensive regulatory requirements with respect to the manufacture of our product candidates, and any failure to comply
with these requirements could materially harm our business.

All materials used in clinical
trials or for commercial sale must be manufactured in accordance with current Good Manufacturing Practices (“cGMP”) and other
applicable regulatory standards. If we fail to maintain cGMP compliance, experience quality control issues, or do not pass inspections
by the FDA, EMA, or other regulatory authorities, approval of our product candidates could be delayed, suspended, or denied, or previously
granted approvals could be withdrawn.

Regulatory authorities may
also audit or inspect these facilities at any time following approval. Any deficiencies identified could require costly or time-consuming
remedial actions, including suspension of clinical trials or commercial production. Any interruption in supply, inability to secure compliant
manufacturers, or delays in regulatory approvals could materially and adversely affect our development timelines, commercialization prospects,
and financial results.

Risk Related to Hazardous and Biological Materials

Our research and development activities involve
the use of potentially hazardous chemical and biological materials by us and our third-party manufacturers. Federal, state, and local
laws regulate the handling, storage, use, and disposal of such materials. Despite implementing safety procedures, we cannot eliminate
the risk of contamination, injury, or legal violations. Accidents could result in liability for damages, fines, or restrictions on our
operations, and we currently have no insurance coverage for such liabilities. Compliance with environmental and safety regulations is
costly, and changes in such regulations could impair our research, development, or production efforts, adversely affecting our business,
financial condition, and results of operations.

We rely on third parties to conduct and support clinical trials
for our product candidates, and any failure by these parties to meet their obligations could materially delay or impair our development
programs and regulatory approvals.

We engage contract research organizations, investigators,
and other third parties to conduct our clinical trials, manage data, and provide related services. While we maintain oversight and retain
responsibility for trial design and compliance with regulatory requirements, including good clinical practice (“GCP”) standards,
our reliance on these third parties reduces our direct control over certain aspects of trial execution. If these third parties fail to
perform as expected, do not comply with regulatory requirements, or generate incomplete or unreliable data, our ability to obtain or maintain
marketing approval could be delayed or compromised.

We also rely on third parties to manufacture, store,
and distribute drug supplies for our clinical trials. Any failure by these parties could disrupt trial timelines, increase costs, or adversely
affect the validity of clinical results, which could materially and adversely impact our ability to commercialize our product candidates
and achieve anticipated revenues.

Current and future healthcare reform measures
and pricing regulations may increase the difficulty and cost of commercializing our product candidates and may materially reduce the prices
we may obtain and the revenues we may generate if any of our product candidates are approved.

In the United States and certain
foreign jurisdictions, there have been and continue to be significant legislative and regulatory changes affecting the healthcare system,
including initiatives intended to control healthcare costs, reduce pharmaceutical pricing, increase transparency, and impose additional
manufacturer obligations. Federal healthcare reform laws, including the Patient Protection and Affordable Care Act, as amended, expanded
manufacturers’ rebate obligations, increased financial liabilities for branded drug manufacturers, and enhanced government oversight
of pricing and reimbursement. Private payors frequently adopt policies consistent with government reimbursement limitations, which may
further constrain pricing, coverage, and reimbursement for any approved products.

More recently, the Inflation
Reduction Act of 2022 introduced substantial changes to the Medicare program, including authorizing government price negotiation for certain
high-expenditure products, imposing inflation-based rebate obligations, redesigning the Medicare Part D benefit structure in a manner
that increases manufacturer financial responsibility, and capping beneficiary out-of-pocket costs. Although certain provisions apply only
after a product has been marketed for a specified period and meets statutory criteria, these measures may increase pricing pressure across
the pharmaceutical market and materially reduce the prices we may be able to charge. In addition, federal and state governments continue
to consider and implement further healthcare reform and drug pricing initiatives, and payment methodologies may evolve in ways that reduce
reimbursement levels or increase compliance costs.

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Outside the United States,
many countries, including those in the European Union and the United Kingdom, impose governmental price controls, reimbursement restrictions,
and market access requirements that may delay commercialization or limit pricing flexibility. The long-term impact of these and future
healthcare reform measures is uncertain. If any of our product candidates are approved, existing and future pricing and reimbursement
reforms could materially reduce demand, lower realized prices, increase our financial and compliance obligations, and adversely affect
our ability to generate revenues or achieve profitability.

Further, the current administration has issued executive orders focused on decreasing prescription drug prices,
including directing the Secretary of HHS to establish a mechanism through which American patients can buy drugs directly from manufacturers
who sell at a most-favored-nation price and directing the U.S. Trade Representative and Secretary of Commerce to take action to ensure
foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the U.S.
In November 2025, CMS announced a voluntary initiative called the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid Model)
to introduce the option of most-favored-nation pricing to the Medicaid program, whereby a drug manufacturer may voluntarily offer supplemental
rebates to participating state Medicaid programs for a manufacturer’s covered outpatient drugs. Government agreements with pharmaceutical
companies and other measures that use most-favored-nation pricing targets for prescription drugs or that increase generic and biosimilar
drug entry sooner than expected can have a material adverse effect on our industry, ability to set adequate pricing for new drugs to recover
R&D costs, ability to attract potential investors and potential buyers in the future, or the pricing of our approved product in the
U.S. and in foreign countries.

The regulatory approval processes of the
FDA, EMA, and other comparable foreign regulatory authorities are complex, time-consuming and inherently unpredictable. If we are not
able to obtain, or if there are delays in obtaining, required regulatory approvals for CORDStrom, we may not be able to commercialize,
or may be delayed in commercializing, CORDStrom, and our ability to generate revenue will be materially impaired.

The process of obtaining regulatory approvals in the United States, the EU, and other jurisdictions is complex,
expensive and typically takes many years following commencement of clinical trials, if approval is obtained at all, and can vary substantially
based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. We cannot commercialize
CORDStrom in the United States without first obtaining regulatory approval from the FDA. Similarly, we cannot commercialize CORDStrom
outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities. Before obtaining regulatory
approvals for the commercial sale of CORDStrom, we must demonstrate through complex and expensive preclinical studies and clinical trials
that CORDStrom is both safe and effective for each targeted indication. Securing regulatory approval also requires the submission of information
about the drug manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authorities. Further,
CORDStrom may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities
or other characteristics that may preclude our obtaining marketing approval. The FDA, EMA, and comparable foreign regulatory authorities
have discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval
and require additional preclinical, clinical or other data. CORDStrom could be delayed in receiving, or fail to receive, regulatory approval
for many reasons, including: the FDA, EMA, or comparable foreign regulatory authorities may disagree with the design or implementation
of our clinical trials; we may be unable to demonstrate to the satisfaction of the FDA, EMA, or comparable foreign regulatory authorities
that CORDStrom is safe and effective for its proposed indication; the results of clinical trials may not meet the level of statistical
significance required by the FDA, EMA, or comparable foreign regulatory authorities for approval; serious and unexpected drug-related
side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to CORDStrom; we may be unable
to demonstrate that CORDStrom’s clinical and other benefits outweigh its safety risks; the FDA, EMA or comparable foreign regulatory
authorities may disagree with our interpretation of data from preclinical studies or clinical trials; the data collected from clinical
trials of CORDStrom may not be acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory
approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; the FDA, EMA, or the applicable
foreign regulatory authority may disagree regarding the formulation, labeling and/or the specifications of CORDStrom; the FDA, EMA, or
comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with
which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA, EMA, or comparable foreign
regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. Thus, the approval
requirements for CORDStrom are likely to vary by jurisdiction such that success in one jurisdiction is not necessarily predictive of success
elsewhere. Further, the FDA and comparable foreign regulatory authorities may undergo leadership changes, change their policies, issue
additional regulations or revise existing regulations, or take other actions, which may impact our clinical development plans or prevent
or delay approval of our product candidates under development on a timely basis. Such policy or regulatory changes could impose additional
requirements upon us that could delay our ability to obtain approvals and increase the costs of compliance.

Of the large number of drugs in development, only a small percentage successfully complete the FDA, EMA, or foreign
regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical
trial results may result in our failing to obtain regulatory approval to market CORDStrom, which would significantly harm our business,
results of operations and prospects.

If we were to obtain approval, regulatory authorities may approve CORDStrom for fewer or more limited indications
than we request, including failing to approve the most commercially promising indications, may grant approval contingent on the performance
of costly post-marketing clinical trials, or may approve CORDStrom with a label that does not include the labeling claims necessary or
desirable for the successful commercialization of CORDStrom. If we are not able to obtain, or if there are delays in obtaining, required
regulatory approvals for CORDStrom, we may not be able to commercialize, or may be delayed in commercializing, CORDStrom and our ability
to generate revenue could be materially impaired.

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Deterioration in general economic conditions
in the United States, Canada and globally, including the effect of prolonged periods of inflation on our suppliers, third-party
service providers and potential partners, could harm our business and results of operations.

Our business and results of
operations may be adversely affected by unfavorable national or global economic conditions, including inflationary pressures, elevated
interest rates, volatility in capital markets, reduced access to financing, disruptions in supply chains, labor shortages, geopolitical
instability, and other macroeconomic developments. Although inflation rates have fluctuated in recent years, sustained or renewed inflationary
pressures could increase our operating costs, including costs for clinical trial services, manufacturing, raw materials, logistics, and
personnel.

Adverse economic conditions
may also reduce the availability of capital or increase our cost of capital, which could impair our ability to raise additional funds
on acceptable terms, if at all. In addition, economic uncertainty or government actions taken to address economic conditions could result
in reduced investment, research and development spending, strategic transactions, or partnership activity within the biotechnology and
pharmaceutical industries. Any of these factors could increase our costs, delay our development programs, limit our access to financing,
or otherwise materially and adversely affect our business, financial condition, and results of operations.

Public health emergencies or other widespread health events could
adversely affect our operations and financial results.

Public health emergencies,
including pandemics, epidemics, or other outbreaks of highly communicable diseases, could disrupt our business operations and delay or
impair our research and development activities. Such events may result in clinical site closures, reduced patient enrollment or retention,
supply chain disruptions, travel restrictions, workforce shortages, delays in regulatory review, or other operational interruptions affecting
us or the third parties on whom we rely.

Because we depend on third-party
clinical trial sites, contract research organizations, manufacturers, suppliers, and regulatory authorities in multiple jurisdictions,
any future public health emergency affecting these parties could materially disrupt our development timelines and increase our costs.
The scope, duration, and impact of any future health-related disruptions are uncertain and could materially and adversely affect our business,
financial condition, and results of operations.

We are exposed to risks related to currency
exchange rates.

We conduct a significant portion
of our operations outside of the United States. Because our financial statements are presented in U.S. dollars, changes in currency exchange
rates have had and could have in the future a significant effect on our operating results when our operating results are translated into
U.S. dollars.

Our employees, principal investigators, consultants, and collaborators
may engage in misconduct or fail to comply with regulatory requirements, which could result in liability and harm our reputation.

We are exposed to the risk
that these parties may engage in improper or illegal activities, including violations of FDA or other regulatory standards, healthcare
fraud and abuse laws, manufacturing procedures, clinical trial protocols, or financial reporting requirements. Misconduct could also involve
the improper use or disclosure of confidential or proprietary information.

Although we maintain policies
and controls designed to prevent and detect misconduct, it is not always possible to identify or deter all improper activities. Any such
misconduct could result in regulatory sanctions, fines, civil or criminal liability, or damage to our reputation, and could materially
and adversely affect our business, financial condition, and results of operations.

Cybersecurity Incidents and Other Technological Disruptions Could
Negatively Affect Our Business and Customer Relationships

We rely on technology in substantially all aspects
of our business operations. The widespread use of technology, including mobile devices, cloud computing, and the internet, exposes us
to cybersecurity risks, such as security breaches, espionage, system disruptions, theft, and inadvertent disclosure of information.

Our business involves the storage and transmission
of sensitive and/or confidential information and intellectual property, including data relating to suppliers, private employee information,
and financial and strategic information about us and our business partners. If we fail to adequately assess and manage cybersecurity risks,
we may become increasingly vulnerable to such threats.

Although we have implemented measures to prevent
security breaches and cyber incidents, these measures and our incident response efforts may not be entirely effective. Theft, destruction,
loss, misappropriation, or unauthorized disclosure of sensitive or confidential information, or interference with our information technology
systems—or the systems of third parties on which we rely—could result in business disruption, negative publicity, reputational
harm, violations of privacy laws, loss of customers, potential liability, and competitive disadvantage.

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Use of Social Media Platforms Presents New Risks

We believe that our potential patient population
is active on social media. Social media practices in the pharmaceutical and biotechnology industries are evolving, creating uncertainty
and risks of noncompliance with applicable regulations. For example, patients may post comments regarding the effectiveness of, or adverse
experiences with, a product candidate, which could trigger reporting obligations.

There is also a risk that sensitive information
could be disclosed inappropriately, or that negative or inaccurate posts about us or our product candidates may appear on social media.
In addition, our employees or third parties with whom we contract, including contract research organizations (“CROs”) or contract
manufacturing organizations (“CMOs”), could knowingly or inadvertently use social media in a manner that exposes us to liability,
compromises trade secrets or other intellectual property, or publicly discloses personal information of employees, clinical trial patients,
customers, or information regarding our product candidates or clinical trials.

Any of these events could materially harm our business,
prospects, operating results, and financial condition, and could adversely affect the price of our common shares.

The use or anticipated use of artificial
intelligence, or AI, technologies, including generative AI, by us or third parties, may increase or create new operational risks.

AI technologies offer numerous potential benefits, such as creating or increasing operational efficiencies, and
we expect the use of AI and generative AI by us, third parties on our behalf, and other market actors, including our competitors, to increase.
However, the deployment of such technologies also poses certain risks, including that the models may be flawed, misused or otherwise function
in an unexpected manner; the data sets on which the models are trained may be insufficient, of poor quality, lack transparency, or
contain biased information; and inappropriate or controversial data practices by data scientists, engineers, and end-users could
impair results. The use of AI could also present risks and challenges related to cybersecurity, data privacy, IT, confidentiality, regulatory,
legal, operational, competitive, reputational and intellectual property risks. The speed at which the technology is being adopted, and
the uncertainty regarding the scope and details of laws, regulations or standards governing its use, and in particular the scope and form
of risk assessments that must be undertaken by developers or deployers of AI systems deemed to represent a high-risk to human safety,
combined with the growing interest by various legislatures and regulators to address the development and deployment of AI technologies
in a manner which may not be consistent across jurisdictions, increases these risks. If AI-based outputs are deficient or inaccurate,
or if AI technologies are otherwise misused, we could be subjected to potential legal liability and brand or reputational harm. Our competitors
may also adopt AI or generative AI more quickly or more effectively than we do, which could affect our market position. Furthermore, use
of AI-based software may lead to the release of confidential information which may impact our ability to realize the benefits of our intellectual
property.

Additionally, government and supranational regulation related to AI is evolving and could increase the burden
and cost of compliance, including through requirements related to transparency, accountability, risk management, human oversight, and
data governance. The EU’s Artificial Intelligence Act, or AI Act, started coming into force in August 2024, with important parts
of the new law scheduled to come into effect in August 2026. In the United States, the regulatory environment is complex and uncertain.
Over the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI governance and regulation, including
deployment of AI in healthcare settings. At the federal level, the current administration endorsed a federal moratorium on the enforcement
of state AI laws. So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated
legislative patchwork. In addition, there is continued uncertainty regarding the application of existing federal and state legal frameworks
to uses and development of AI, and legal norms and market standards regarding AI continue to evolve. For example, the FDA issued guidance
on the use of AI in medical devices, requiring detailed risk management and review processes to obtain approvals. If we develop or use
AI systems that are governed by the these laws or regulations, we will need to meet higher standards of data quality, transparency, and
human oversight, and we would need to adhere to specific and potentially burdensome and costly ethical, accountability, and administrative
requirements. The rapid evolution of AI will require the application of significant resources to help ensure that AI is implemented in
accordance with applicable law and regulation and in a socially responsible manner. The use of certain AI technologies can also give rise
to intellectual property risks. The use of AI tools by our vendors also exposes us to risk.

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The U.S. Congress,
the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely
affect our business.

In
2017, the U.S. Congress and the Trump administration made substantial changes to U.S. policies, which included comprehensive corporate
and individual tax reform. In addition, the Trump administration called for significant changes to U.S. trade, healthcare, immigration
and government regulatory policy. With the transition to the Biden administration in early 2021, changes to U.S. policy occurred and since
the start of the Trump Administration in 2025, U.S. policy changes have been implemented at a rapid pace and additional changes are likely.
Changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the
future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare,
taxation, the U.S. regulatory environment, inflation and other areas. For example, in September 2025, President Trump announced plans
to impose 100% tariffs on imported branded or patented pharmaceuticals, unless the importing company is building U.S. manufacturing capacity.
It is not yet clear whether these tariffs would apply to the importation of active pharmaceutical ingredients and possibly bulk drug products
that are intended for use in clinical trials and not for commercial sale, which could increase the costs of materials for our clinical
trials. Any direct tariffs, if imposed on pharmaceutical products, may result in increased costs for raw materials and contract manufacturing
services, reduced ability to source critical contract manufacturing organizations, and a delay in our development timelines. Although
we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. Until we know what policy
changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact
our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively
affected by them.

Disruptions at the FDA, the SEC and other government agencies
could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed
or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions, which could negatively
impact our business and our timelines.

The ability of the FDA to review and approve
new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel
and accept the payment of user fees, shifting policy priorities as a result of changes in the presidential administration and political
appointees tasked to oversee the agency, and statutory, regulatory, leadership, and policy changes. Average review times at the agency
have fluctuated in recent years as a result. In addition, government funding of the SEC, and other government agencies on which our operations
may rely is subject to the impacts of political events, which are inherently fluid and unpredictable.

Disruptions at the FDA and other federal agencies,
including substantial leadership departures, personnel cuts, and policy changes, may also slow the time necessary for new drugs to be
reviewed and/or approved, which would harm our business. Changes and cuts in FDA staffing also could result in delays in the FDA’s
responsiveness or in its ability to review IND submissions or applications, issue regulations or guidance, or implement or enforce regulatory
requirements in a timely fashion or at all.

For example, over the last several years, the
U.S. government has shut down several times, including from October 1, 2025 through November 12, 2025, and from January 31, 2025 through
February 3, 2026. In some circumstances, certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA,
SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact
the ability of the FDA and the SEC to timely review and process our submissions, which could have a material adverse effect on our business
and our timelines.

Since the change in the U.S. presidential administration
in 2025, there is uncertainty as to how and to what extent the current administration will continue to seek to modify or revise the requirements
and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates and any products for which we obtain
approval. This uncertainty could present new challenges and/or opportunities as we navigate development and approval of our product candidates.
Additionally, the current administration could issue or promulgate executive orders, regulations, policies or guidance that adversely
affect us or create a more challenging or costly environment to pursue the development of new therapeutic candidates.

Risks Related to our Intellectual Property

We depend on obtaining certain patents and protecting our proprietary
rights.

Our success depends in part on our ability to obtain
and maintain patents, protect trade secrets, and operate without infringing the proprietary rights of others. We have filed and are actively
pursuing patent applications for our product candidates, but the patent positions of biotechnology, biopharmaceutical, and pharmaceutical
companies are inherently uncertain and involve complex legal and factual questions. There can be no assurance that any patent application
will result in the issuance of a patent, that patents issued to us will provide a competitive advantage, that patents issued to others
will not impede our business, or that third parties will not circumvent any patents we obtain. Others may independently develop similar
products or duplicate products not under patent protection, or design around our patents.

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We may need to obtain licenses from third parties
to avoid infringing their patents or proprietary rights. There can be no assurance that such licenses would be available on acceptable
terms, or at all. Failure to obtain necessary licenses could delay or prevent the development, manufacture, or commercialization of our
product candidates.

A number of companies, academic institutions, and
research organizations have filed patents or developed technologies that may relate to or affect our business. Conflicts with these existing
or future patents could limit the scope of patents we may obtain or result in the denial of our patent applications. If we cannot obtain
required licenses or develop alternative technologies, product development or commercialization may be delayed or prohibited. We may also
incur substantial costs defending against patent infringement claims or in challenging the validity of patents held by others.

Much of our proprietary know-how and technology
may not be patentable. To protect our rights, we require employees, consultants, advisors, and collaborators to enter into confidentiality
and nondisclosure agreements. However, these agreements may not provide meaningful protection in the event of unauthorized use or disclosure.
Competitors may independently develop competing technologies, particularly if patent protection is narrow or unavailable, which could
erode our competitive advantage and harm our business prospects.

If we fail to protect our intellectual property rights, our ability
to pursue the development of our technologies and products would be negatively affected.

Our success depends in part on our ability to obtain
and maintain adequate protection of our technologies and products. If we fail to adequately protect our intellectual property, competitors
may be able to use our technologies to develop and market products that compete directly with us, eroding our competitive advantage. Some
foreign countries lack robust rules or enforcement mechanisms for intellectual property, which may make it difficult to protect our proprietary
rights internationally.

We have received, and are seeking, patent protection
for numerous compounds and methods of treating diseases. However, the patent process involves substantial risks and uncertainties. Patents
that are issued or licensed may be challenged, invalidated, circumvented, or otherwise fail to provide a meaningful competitive advantage.
Competitors—many with greater resources—may obtain patents that limit or block our ability to make, use, or sell our products,
both domestically and abroad. Additionally, governments may impose limits on patent scope for successful treatments as a matter of public
policy.

Even if patents are granted, they may be narrower
than expected due to limitations imposed by the United States Patent and Trademark Office or foreign patent offices. Third parties may
independently develop similar products, duplicate unpatented aspects of our technologies, or design around our patents. Regulatory delays
may shorten the effective period of patent protection, reducing any competitive advantage. Furthermore, we may not be aware of all existing
patents, published applications, or literature that could prevent the patentability of our products or limit the scope of our patent claims.

Beyond patents, we rely on trade secrets, confidentiality
agreements, nondisclosure provisions, and other contractual and security measures to protect proprietary information. These measures may
not fully prevent unauthorized use of our technology or disclosure of our proprietary information. Others may independently develop similar
technologies or gain access to our trade secrets, which could diminish our competitive advantage.

There can be no assurance that our patents, licenses,
or other intellectual property protections will provide meaningful protection, and failure to adequately protect our intellectual property
could materially harm our business, prospects, and competitive position.

By working
with research collaborators patent rights may be jointly owned by different parties.

Some of our in-licensed patents may be jointly
owned by multiple parties, including licensors, collaborators, or third-party consultants. If a third party holds ownership rights in
patents we have licensed, the validity of our license could be uncertain. Absent an agreement among all joint owners, each owner may independently
sell, license, or exploit the patent without the consent of the others, and without accounting for revenues. Moreover, an enforcement
action cannot proceed unless all joint owners participate in the lawsuit.

Certain patents we license from Xencor, Inc. are
jointly owned with third parties. Xencor has provided representations and warranties regarding its rights to grant licenses and is required
to indemnify us against breaches of these representations, warranties, and covenants.

Our rights to current and future in-licensed patents
may also depend on inter-institutional or operating agreements among joint owners. If any joint owner breaches such agreements, our rights
to these patents and patent applications could be adversely affected. Any of these events could materially harm our competitive position,
business, financial condition, results of operations, and prospects.

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Risks related to government-funded intellectual property.

Some of our in-licensed patents, including certain
rights from the University of Pittsburgh, were developed with U.S. government funding and are therefore subject to federal regulations
under the Bayh-Dole Act of 1980. These regulations grant the U.S. government certain rights, including a non-exclusive, irrevocable license
to use the inventions for governmental purposes, and the ability, under specific circumstances, to require us to grant licenses to third
parties (referred to as “march-in rights”) if:

The U.S. government may also take title to inventions
if disclosure or patent filing requirements are not met. If the government exercised its march-in rights, we could be required to license
or sublicense such intellectual property on terms unfavorable to us, without assurance of compensation.

Additionally, government-funded inventions are
generally required to be manufactured substantially in the United States. While waivers are possible under limited circumstances, this
“U.S. manufacturing preference” could limit our ability to contract with non-U.S. manufacturers for products covered by these
inventions. Compliance with these regulations may also require substantial administrative effort and resources.

We license our patents from others. If such owners do not properly
maintain or enforce the intellectual property underlying such licenses, our competitive position and business prospects could be harmed.
Our licensors may also seek to terminate our license.

We rely on licenses from third parties for certain
intellectual property that is necessary or useful to our business. Our licensors include Xencor, Inc., Immune Ventures, LLC, the University
of Pittsburgh, and GOSH.

Our business depends, in part, on the ability of
these licensors to obtain, maintain, and enforce the intellectual property underlying our licenses. If a licensor fails to adequately
prosecute, maintain, or enforce its intellectual property, or decides not to pursue litigation against infringers—or does so less
aggressively than we would—our competitive position could be harmed.

Additionally, if any licensor terminates a license
or otherwise limits our rights, we could lose the ability to use important technologies or products, which could adversely affect our
commercialization efforts, competitiveness, and overall business prospects.

We are dependent on our licensing agreement
with Xencor, and the termination of this agreement would harm our business.

On October 3, 2017, the Company
entered into a license agreement with Xencor, Inc., which has discovered and developed a proprietary biological molecule that inhibits
soluble tumor necrosis factor. Pursuant to the license agreement, Xencor granted the Company an exclusive worldwide, royalty-bearing license
in licensed patent rights, licensed know-how and licensed materials to make, develop, use, sell and import any pharmaceutical product
that comprises, contains, or incorporates Xencor’s proprietary protein known as XPro that inhibits soluble tumor necrosis factor
(or all modifications, formulations and variants of the licensed protein that specifically bind soluble tumor necrosis factor) alone or
in combination with one or more active ingredients, in any dosage or formulation. If we breach this Agreement, Xencor may be able to terminate
it, which would harm our business.

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Potential conflict of interest with our INKmune license.

On October 29, 2015, we entered into an exclusive
license agreement with Immune Ventures, LLC (“Immune Ventures”) for our natural killer cell program, INKmune. Immune Ventures
is owned by our Chief Executive Officer and Treasurer, David Moss, our Chief Scientific Officer, Mark Lowdell, and our former CEO and
former Chairman of the Board, RJ Tesi.

Because our officers and former officers also own
Immune Ventures, this relationship creates a potential conflict of interest. Such a conflict could result in decisions or actions that
are not fully aligned with the interests of our company or stockholders and could adversely affect us.

Changes in patent laws could diminish the value of our intellectual
property and impair our ability to protect our products.

Our success depends heavily on intellectual property,
particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry is costly, complex, time-consuming, and uncertain.

In the U.S., the Leahy-Smith America Invents Act
(2011) transitioned the U.S. to a “first-to-file” system, allowing third parties to submit prior art and participate in post-grant
proceedings, including oppositions, inter partes reviews, and reexaminations. Adverse outcomes in any such proceedings could reduce the
scope, enforceability, or validity of our patents. Additionally, U.S. Supreme Court decisions in recent years have narrowed patent protections
or weakened patent owner rights, creating further uncertainty regarding the value and enforceability of patents.

Changes in patent laws or enforcement in other
countries could similarly weaken our patent protection. In Europe, the unitary patent system introduced in June 2023 allows patent holders
to obtain a single European patent with unitary effect under the Unitary Patent Court (UPC). As the UPC is a new court system with no
established precedent, patents under its jurisdiction could be challenged and potentially invalidated across multiple countries. Patents
can opt out to remain national patents, but the long-term effects of the new system remain uncertain.

Any of these changes could impair our ability to
obtain, maintain, or enforce patents, reduce the value of our intellectual property, and adversely affect our competitive position.

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Risks Related to our Common Stock

We may fail to qualify
for continued listing on The NASDAQ Capital Market which could make it more difficult for investors to sell their shares.

Our common stock is listed
on The NASDAQ Global Market (“NASDAQ”). As a NASDAQ listed company, we are required to satisfy the continued listing requirements
of NASDAQ for inclusion in the Capital Market to maintain such listing, including, among other things, the maintenance of a minimum closing
bid price of $1.00 per share and stockholders’ equity of at least $2.5 million. There can be no assurance that we will be able to maintain
compliance with the continued listing requirements or that our
common stock will not be delisted from NASDAQ in the future. If our common stock is delisted by NASDAQ, we could face significant material
adverse consequences, including:

We
do not intend to pay dividends in the foreseeable future.

We have not paid dividends on our common stock
to date and do not expect to do so in the foreseeable future. Any future dividend decisions will depend on our operating results, financial
condition, and capital requirements. We currently intend to retain any earnings to fund business growth and implement our strategic plan.
As a result, investors should be aware that the absence of dividends may affect the market value of our common stock and the overall return
on any investment in the Company.

Compliance with federal securities laws and reporting requirements
is costly and may divert resources from growth initiatives.

As a public company, we are subject to the reporting
and disclosure obligations of the Securities Exchange Act of 1934 (the “Exchange Act”) and other federal securities laws,
including the Sarbanes-Oxley Act of 2002. Preparing and filing annual and quarterly reports, proxy statements, and other required disclosures
with the SEC, as well as providing audited financial statements to stockholders, increases our operating expenses compared to private
companies.

Developing, implementing, and maintaining the internal
controls and reporting procedures required under the Sarbanes-Oxley Act may be time-consuming, complex, and costly. We may also need to
hire additional personnel with expertise in financial reporting and internal controls to ensure compliance, which could further divert
resources from other growth initiatives.

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Our stock price may be volatile.

The market price of our common
stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our
control, including the following:

In addition, the securities
markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance
of particular companies. These market fluctuations may also materially and adversely affect the market price of our Common Stock.

You may have difficulty trading and obtaining quotations for
our common stock.

Our securities are not actively traded, and the
bid and asked prices for our common stock may fluctuate significantly. As a result, investors may experience difficulty selling their
shares or obtaining accurate quotations for the price of our securities. This limited trading activity reduces liquidity, may adversely
affect the market price of our common stock, and could hamper our ability to raise additional capital. Given the limited market for our
securities, investors may bear the economic risk of an investment in our shares for an indefinite period of time.

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Additional stock offerings in the future may dilute your ownership
interest in our company.

To support our growth plans and capital requirements,
we may need to issue additional shares of common stock or securities convertible or exercisable for common stock, including convertible
preferred stock, convertible notes, stock options, or warrants. Any future issuance of such securities would dilute the ownership percentage
of current stockholders.

Our internal control over financial reporting may not meet the
standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve or maintain effective internal controls could adversely
affect our business and stock price.

Management is required to assess and report on
the effectiveness of our internal control over financial reporting. As a smaller reporting company and a non-accelerated filer, our independent
registered public accounting firm is not required to attest to the effectiveness of our internal controls under Section 404 for as long
as we do not qualify as an “accelerated filer” or “large accelerated filer.” The standards for assessing internal
controls are complex and require substantial documentation, testing, and, if necessary, remediation.

In implementing the necessary procedures, we may
identify deficiencies or material weaknesses that we cannot remediate in time to meet Section 404 deadlines. We may also face delays in
completing improvements or obtaining a favorable attestation from our independent registered public accounting firm. Failure to establish
and maintain effective internal controls could materially harm our business, financial condition, and results of operations, and could
impair our ability to report financial results accurately and on a timely basis.

Anti-takeover provisions in our stockholder rights plan could
make a third-party acquisition more difficult.

We have a stockholder rights plan designed to discourage
unsolicited takeover proposals. The rights issued under this plan could result in significant dilution to any person or group attempting
to acquire the Company on terms not pre-approved by our board of directors.

The plan is not intended to prevent a takeover
outright. We believe it helps stockholders realize the full potential value of their investment and protects the Company and its stockholders
from attempts to gain control in ways inconsistent with their best interests.

The rights under the plan are set to expire on
December 30, 2026, unless extended or otherwise modified as permitted under the terms of the plan.

Sales of our common stock by employees,
including executive officers, could cause the trading price of our common stock to decline and may be viewed negatively by investors.

Some of our employees, including executive officers, may adopt trading
plans under Rule 10b5-1 of the Exchange Act, equivalent laws in other jurisdictions, or our internal equity policies, allowing them to
sell common stock at predetermined times. Sales of common stock, including under these plans, generally require public filings.

Such sales could increase the number of shares available in the public
market, which may cause the trading price of our common stock to decline or prevent it from rising. In addition, sales by employees, executive
officers, or directors could be perceived negatively by existing or potential investors, potentially affecting the market price of our
common stock.

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