424B4 1 f424b40223_intensitythera.htm PROSPECTUS

Filed pursuant to Rule 424(b)(4)

Registration No. 333-260565

PROSPECTUS

3,900,000 Shares of Common Stock

This is our initial public offering. We are offering 3,900,000 shares of our common stock, par value $0.0001 per share (“Common Stock”). Prior to this offering, there has been no public market for our Common Stock. The initial public offering price for our Common Stock is $5.00 per share.

We have listed our Common Stock on the Nasdaq Capital Market (“Nasdaq”) under the symbol “INTS,” which listing is a condition to this offering.

This prospectus gives effect to a 1 – 2 consolidation (the “Reverse Split”) of our issued and outstanding Common Stock, which was effected on April 27, 2023. Except where otherwise indicated, all share and per share data in this prospectus have been retroactively restated to reflect the Reverse Split.

Unless otherwise indicated or the context otherwise requires, references in this prospectus to the “Company”, “we”, “us” and “our” refer to Intensity Therapeutics, Inc.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, may elect to comply with certain reduced public company reporting requirements. See the section entitled “Prospectus Summary — Implications of Being an Emerging Growth Company” in this prospectus.

Investing in our securities involves a high degree of risk. Before buying any of our securities, you should carefully read the discussion of the material risks of investing in our securities under the heading “Risk Factors” beginning on page 9 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

Per Share

 

Total

Initial public offering price

 

$

5.00 

 

$

19,500,000 

Underwriting discounts and commissions(1)

 

$

0.35 

 

$

1,365,000 

Proceeds, before expenses, to us

 

$

4.65 

 

$

18,135,000 

____________

(1)      See “Underwriting” beginning on page 132 of this prospectus for additional information regarding the compensation and reimbursement of expenses payable to the underwriters. We have also agreed to issue to the underwriters warrants to purchase up to 7% of the shares of Common Stock sold in this offering.

The underwriters have an option to purchase up to 585,000 additional shares of Common Stock from us at the initial public offering price less the underwriting discounts and commissions. The underwriters can exercise this option at any time and from time to time within 45 days from the date of this prospectus.

Certain of our existing stockholders agreed to purchase an aggregate of up to $1,975,000 of Common Stock in this offering at the initial public offering price per share of Common Stock and on the same terms as other purchasers in this offering. The underwriters will receive the same underwriting discount on the shares of Common Stock purchased by these stockholders as they will on any other securities sold to the public in this offering.

Delivery of the shares of our Common Stock will be made on or about July 5, 2023.

Joint Book Running Managers

The Benchmark Company

 

Freedom Capital Markets

The date of this Prospectus is June 29, 2023.

 

Table of Contents

TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

Risk Factors

 

9

Cautionary Note Regarding Forward-Looking Statements

 

37

Use of Proceeds

 

38

Dividend Policy

 

39

Capitalization

 

40

Dilution

 

42

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

45

Business

 

53

Management

 

105

Executive Compensation

 

110

Certain Relationships and Related Party Transactions

 

117

Principal Stockholders

 

120

Description of Securities

 

122

Shares Eligible for Future Sale

 

125

Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of Common Stock

 

127

Underwriting

 

132

Legal Matters

 

139

Experts

 

139

Where You Can Find More Information

 

139

Index to Consolidated Financial Statements

 

F-1

You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities and the distribution of this prospectus outside the United States.

Market and Other Industry Data

Unless otherwise indicated, market data and certain industry forecasts used throughout this prospectus were obtained from various sources, including internal surveys, market research, consultant surveys, publicly available information and industry publications and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Such data and industry forecasts involve a number of assumptions and limitations and they are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in these publications and reports.

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Trademarks and Other Intellectual Property Rights

We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, tag-lines, logos and website names. In addition, we own or have the rights to patents, copyrights, trade secrets and other proprietary rights that protect our service offerings. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this prospectus are listed without their ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks.

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PROSPECTUS SUMMARY

The following summary highlights information appearing elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. You should read this entire prospectus carefully, and in particular, the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes relating to those statements included elsewhere in this prospectus. All share and per share data in this prospectus reflects the Reverse Split of our Common Stock issued and outstanding (including adjustments for fractional shares). Some of the statements in this prospectus constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements”.

We have listed our Common Stock on Nasdaq under the symbol “INTS,” which listing is a condition to this offering.

Our Company

Intensity Therapeutics, Inc. is a clinical-stage biotechnology company passionately committed to applying scientific leadership in the field of localized cancer reduction leading to anti-cancer immune activation. Our new approach involves the direct injection into tumors of a unique product created from our DfuseRx discovery platform.

One challenge that we have identified with current intratumoral (IT) treatment approaches is that a tumor’s lipophilic, high fat and pressurized microenvironment does not effectively absorb water-based products. We believe that this drug delivery challenge limits the effectiveness of prior and current IT treatments that formulate their product candidates by injecting aqueous products (regardless of the mechanism or approach, i.e. the stimulation of an inflammatory response or efforts to attract immune cells into a hostile live tumor). Accordingly, there remains a continued unmet need for the development of direct IT therapies for solid tumors that provide high local killing efficacy coupled with nontoxic systemic anti-cancer effects. We believe we have created a product candidate with the necessary chemistry to overcome this local delivery challenge. Evidence shows the mechanism of tumor killing achieved by our drug candidate also leads to systemic immune activation in certain cancers.

Our platform creates patented anti-cancer product candidates comprising active anti-cancer agents and amphiphilic molecules. Amphiphilic molecules have two distinct components: one part is soluble in water and the other is soluble in fat or oils. When an amphiphilic compound is mixed with therapeutic agents, such as chemotherapies, the agents also become soluble in both fat and water. Our product candidates include novel formulations consisting of potent anti-cancer drugs mixed together with these amphiphilic agents.

Our lead product candidate, INT230-6, consists of two proven anti-cancer cytotoxic agents, cisplatin and vinblastine sulfate, mixed with the amphiphilic molecule (SHAO) — all in one vial. The anti-cancer agents, cisplatin and vinblastine sulfate, used in our product candidate are both generic. These agents are available to purchase in bulk supply commercially. The United States Food & Drug Administration (the “FDA”) has approved both drugs as intravenous agents for several types of cancers. Cisplatin was first approved in 1978 for testicular cancer. Per the product labeling, cisplatin’s approved indications include treatment of testicular, ovarian and bladder cancer. The drug is also used widely in several other cancers including pancreatic and bile duct cancer. Vinblastine sulfate was first approved in 1965. Per the product labeling, vinblastine sulfate’s approved indications include treatment of generalized Hodgkin’s disease, lymphocytic lymphoma, advanced carcinoma of the testis, and Kaposi’s sarcoma. The drug is also used in breast and lung cancer. In 2017, we initiated a Phase 1/2 dose escalation study using INT230-6 in the United States under an investigational new drug application (“IND”) authorized by the FDA and in Canada following receipt of a no objection letter from Health Canada. The study, IT-01, is exploring the safety and efficacy of INT230-6 in patients with refractory or metastatic cancers. We completed the Phase 1 dose escalation portion of this study. We completed enrollment of study IT-01 in June 2022 and are closing sites and finalizing the data to prepare the study report. We locked the IT-01 database in February 2023.

The Company has annually submitted safety data from all clinical trials to the FDA and Health Canada. Both regulatory agencies have reviewed the data and have permitted the Company to continue all clinical development programs without comment. The majority of drug related adverse events have been low grade (grade 1 or 2). As of December 31, 2022, a total of 15 patients out of 110 (13.6%) have had a grade 3 treatment related adverse event in study IT-01. The main grade 3 events have been, pain, fatigue, vomiting, dehydration and dizziness. There has been one related grade 4 event (a decrease in the number of neutrophils, the most common type of white blood cell that contributes toward the healing of damaged tissues and resolving infections) and no grade 5 treatment related adverse

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events reported. We are currently conducting close out activities of the trial for all cohorts. For a complete list of all treatment related adverse events and serious adverse events please see the Tables 1 and 2 in the “Results from IT-01 Phase 1/2 Clinical Trial” portion of our “Business” section on page 68 of this prospectus.

We are also evaluating INT230-6 in a randomized Phase 2 study (the INVINCIBLE study) in Canada as a treatment prior to surgery in early stage breast cancer. As of December 31, 2022, we have enrolled 91 patients and enrollment is complete.

Based on the broad range of data that we have generated from our preclinical experiments and clinical trials, we have observed that INT230-6 disperses widely throughout injected tumors, is absorbed well, delivers the potent agents into tumor cells to kill them and activates a systemic immune response to fight the cancer. Our treatment approach utilizes intratumoral administration of INT230-6. Following injection of our product candidate, the tumors become highly necrotic, meaning that cancer cells die and become more amenable to immune cell infiltration. The tumor-killing process creates antigens, which are substances from the patient’s tumor that improve the recognition of the cancer by immune cells. We have also observed in our preclinical studies and in our clinical trials that injections of INT230-6 can lead to a systemic immune response that attacks distal, uninjected tumors, a result known as an “abscopal” effect. Data generated in our trials show that our patented and patent pending drugs can extend life with less toxicity.

Between the metastatic study IT-01 and the INVINCIBLE study, we have enrolled over 200 patients as of December 31, 2022. Enrollment is now finished in our first two studies.

Our Strengths

        Deep, Experienced Pharmaceutical Development, Finance and Accounting Management Team.

        Proprietary Drug Discovery platform, DfuseRxSM with Product Patent Protection in 38 Countries.

        Partnerships with World Leading Oncology Research Organizations and Major Pharmaceutical Companies.

        Clinical Data Demonstrates the Anti-cancer Activity in Humans in Multiple Cancers of Our Lead Product Candidate.

        Increased Survival observed in Metastatic Disease.

        Favorable safety profile observed to date of the new drug/treatment approach.

        Fast Track Designation from FDA for INT230-6 in Triple Negative Breast Cancer.

        The FDA designated the drug agents of INT230-6 for orphan drug status in sarcoma.

        Phase 3 Programs Designed, Discussed with FDA, and Planned to Begin in the fourth quarter of 2023 or the first quarter of 2024, pending funding.

        A Results-Oriented Organization.

        A Company Focused on Reaching the Market with its Lead Product Candidate.

Our Strategy

We seek to build a multi-product company that discovers, develops and commercializes tumor killing medicines that use novel diffusion mechanisms to penetrate cancer cells ushering in a fundamentally different methodology to treat cancer.

Key elements of our strategy include:

        Focus our resources to aggressively pursue the research and development of our novel medicine to transform patient lives.

        To always remember that taking care of and benefiting the patient is the most important element to being successful.

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        Manage costs well by outsourcing research and development to qualified, academic, private or government laboratories to leverage the expertise while always maintaining our know-how, expertise and intellectual property.

        Build an internal team of experienced industry veterans that can work independently and who know how to get the product development job done.

        Create a large body of rigorous data, publications, presentations, collaborations and training materials about the new product candidates.

        Continuously find better methods to communicate to the medical community and patients of the power of our new approach.

        Continue our commitment to precision medicine and personalized care for each and every patient.

        Assure that our technology is fully understood, explored, and used as designed.

Summary of Risk Factors

Investing in our securities involves significant risks. Any of the factors set forth in the section entitled “Risk Factors” may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and, in particular, you should evaluate the specific factors set forth in the section entitled “Risk Factors” in deciding whether to invest in our securities. Some of the principal risks we face include:

        The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment.

        We are an early-stage clinical biotechnology company with a limited operating history and have not generated any revenue to date from product sales.

        Since our inception, we have incurred, and for the foreseeable future anticipate that we will continue to incur, significant operating losses.

        The report of our independent registered public accounting firm for the year ended December 31, 2022 contains a statement with respect to substantial doubt as to our ability to continue as a going concern as a result of recurring losses from operations and negative cash flows.

        Even if we consummate this offering, we will need to raise substantial additional funding or we will be forced to delay, reduce or eliminate some of our product-development programs or commercialization efforts.

        We are largely dependent upon the success of our new intratumoral technology, which requires additional development and may never receive regulatory approval or be successfully commercialized.

        We have not completed clinical trials on any forms of cancer.

        Our prospects for obtaining additional financing are uncertain.

        The COVID-19 pandemic may affect our ability to initiate and complete current or future preclinical studies or clinical trials, disrupt regulatory activities or have other adverse effects on our business and operations.

        We have yet to obtain regulatory approval from the FDA, and therefore we are not currently permitted to market products made using our technology in the United States.

        Delays in FDA approval could be costly to us and prevent us from commercializing our product candidates effectively.

        Even if product candidates using our technology obtain approval, we will be subject to additional ongoing regulatory obligations and oversight.

        The FDA approval process is long, expensive and uncertain.

        Our ability to market a product may be limited by the uses that are approved for that product.

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        We may be unable to export or sell products in foreign markets, which will limit our sales opportunities.

        We will rely on third parties to conduct preclinical research and any clinical trials.

        Third-party payors may not reimburse for the use of our product candidates or such reimbursement may be inadequate.

        We are dependent on third parties to manufacture components of the final drug products made using our technology.

        We purchase components for our product candidates from third parties, some of which may be sole-source suppliers.

        We have not entered into long term manufacturing and supply agreements with any producers.

        We have limited experience and may not be successful in commercializing products that use the Technology.

        Our plan to use collaborative arrangements with third parties to help finance and to market and sell products using our technology may not be successful.

        We will be dependent on healthcare professionals’ efforts to learn about our product candidates.

        We may need to establish clinical training and centers of excellence to educate and train physicians and healthcare payors, but the key opinion thought leadership required for initial market acceptance within the healthcare arena may take time to develop.

        Rapid technological developments in treatment methods for cancer and competition with other forms of cancer treatments could affect our ability to achieve meaningful revenues or profit.

        Our success depends in part on our ability to obtain patents, maintain trade secret protection, operate without infringing on the proprietary rights of third parties, and commercialize our technology prior to the expiration of our patent protection.

        We may be unable to protect our intellectual property rights because of our limited resources.

        We may be the subject of product liability claims or product recalls.

        If you purchase our Common Stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

        Participation in this offering by certain of our existing stockholders would reduce the available public float for our shares.

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Corporate Information

Intensity Therapeutics, Inc., a Delaware corporation, was incorporated on November 30, 2012, upon the conversion of its predecessor Intensity Therapeutics LLC. Our principal executive offices are located at 61 Wilton Road, 3rd Floor, Westport, CT 06880. Our telephone number at that location is (203) 221-7381. Our corporate website address is www.intensitytherapeutics.com. Information contained on, or that may be accessed through, our website is not incorporated by reference into this prospectus and should not be considered a part of this prospectus.

Implications of Being an Emerging Growth Company and Smaller Reporting Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (JOBS Act), enacted in April 2012, and we may remain an emerging growth company for up to five years following the completion of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and therefore we will be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies.

We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.07 billion or more in annual revenue; (ii) the date on which we first qualify as a large accelerated filer under the rules of the Securities and Exchange Commission (SEC); (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some but not all of these reduced reporting burdens.

We are also a “smaller reporting company” as defined in the Securities and Exchange Act of 1934, as amended (Exchange Act). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Recent Developments

On April 24, 2023 our stockholders and our board of directors approved the Reverse Split. On April 27, 2023 we filed a Certificate of Amendment to our Fifth Amended and Restated Certificate of Incorporation to effect the Reverse Split, such that every holder of Common Stock of the Company received one share of Common Stock for every two shares held. The Conversion Price of Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock will reflect the Reverse Split. Any future redemption of stock options or warrants for options or warrants that were granted prior to April 28, 2023 will also reflect the Reverse Split. Fractional shares will be paid out at a price of $4.00 per share. There is no change in the number of shares authorized under the 2021 Stock Option Plan.

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The Offering

Common Stock offered by us

 

3,900,000 shares.

Option to purchase additional shares of Common Stock

 


We have granted to the underwriters the option, exercisable for 45 days from the date of this prospectus, to purchase up to 585,000 additional shares of Common Stock from us at the initial public offering price less estimated underwriting discounts and commissions.

Common Stock to be outstanding immediately
after completion of this offering(1)

 


13,099,377 shares. If the underwriters’ over-allotment option is exercised in full, the total number of shares of Common Stock outstanding immediately after this offering would be 13,684,377 (as adjusted for the Reverse Split).

Use of proceeds

 

We estimate that the net proceeds from this offering will be approximately $16.2 million (or $18.9 million if the underwriters exercise in full their option to purchase additional shares of Common Stock), based on an offering price of $5.00 per share. “Net Proceeds” means net of commissions and the estimated costs related to this offering. The $16.2 million of Net Proceeds is net of $1.4 million of offering expenses that were previously paid and expensed by the Company.

   

We anticipate that we will use the net proceeds of this offering to advance and expand our clinical and preclinical development programs and for working capital and other general corporate purposes. For a more complete description of our intended use of the proceeds from this offering, see “Use of Proceeds.”

Underwriter Warrants

 

We will issue to the underwriters, upon closing of this offering, warrants (the “Underwriter Warrants”) to purchase 7% of the aggregate number of shares of Common Stock issued in this offering, including shares issued pursuant to the exercise of the underwriters’ over-allotment option. See “Underwriting — Underwriter Warrants” for more information.

Lock-Up agreements

 

We and our directors, officers, and shareholders owning approximately 94.5% of our outstanding shares of Common Stock have agreed, subject to certain exceptions, not to sell, transfer or dispose of any shares of our Common Stock, or securities convertible into, exchangeable or exercisable for any shares of our Common Stock for a period of one hundred eighty (180) days after the completion of this offering.

Dividend policy

 

We have no current plans to pay dividends on our Common Stock. See the section entitled “Dividend Policy” in this prospectus.

Trading Symbol

 

We have listed our Common Stock on Nasdaq under the symbol “INTS,” which listing is a condition to this offering.

Risk factors

 

You should read carefully the “Risk Factors” section of this prospectus for a discussion of factors that you should consider before deciding to invest in shares of our Common Stock.

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Indications of Interest

 

Certain of our existing stockholders have agreed to purchase an aggregate of up to $1,975,000 of shares of Common Stock in this offering at the initial public offering price and on the same terms as other purchasers in this offering. The underwriters will receive the same underwriting discount on the shares of Common Stock purchased by these stockholders as they will on any other securities sold to the public in this offering.

____________

(1)      The number of shares of our Common Stock to be outstanding after this offering is based on 13,099,377 shares of Common Stock (as adjusted for the Reverse Split), which includes 3,410,103 shares of our Common Stock outstanding as of June 29, 2023, plus 4,124,851 shares of our Common Stock issued upon the conversion of our preferred stock, plus shares of Series B stock converted into 100,189 shares of our Common Stock since the price of shares of Common Stock being offered hereby is less than the issuance price of Series B, plus additional shares of Series C stock converted into 164,518 shares of our Common Stock since the price of shares of Common Stock being offered hereby is less than the issuance price of Series C, and 1,399,716 shares of our Common Stock that will be issued on the convertible notes and an amount of accrued interest at conversion prices of $3.50 per share (for 751,607 shares) and $3.25 per share (for 648,109 shares), and excludes:

        1,044,250 shares of our Common Stock issuable upon the exercise of stock options outstanding as of June 29, 2023 under the 2013 Plan and the 2021 Plan at a weighted average exercise price of $8.48 per share (as adjusted for the Reverse Split). Of these, 711,875 shares are exercisable at June 29, 2023 at a weighted average exercise price of $7.63 per share (as adjusted for the Reverse Split);

        3,648,750 shares of our Common Stock which were reserved for future issuance under the 2013 Plan; however, these shares are no longer available for issuance since the 2021 Plan became effective;

        387,750 shares of our Common Stock reserved and available for future issuance upon exercise of the outstanding warrants, as of June 29, 2023 at a weighted average exercise price of $6.51 per share (as adjusted for the Reverse Split). Of these, 344,875 shares are exercisable at June 29, 2023 at a weighted average price of $6.13 per share (as adjusted for the Reverse Split);

        up to 313,950 shares of Common Stock underlying the Underwriter Warrants; and

        3,045,700 shares of our Common Stock available for future issuance under the 2021 Plan. This includes the original 3,000,000 authorized shares plus an additional 238,700 shares authorized effective January 1, 2023.

The conversion of the 8,249,719 shares of preferred stock into 4,124,851 shares of Common Stock occurred at the time of this initial public offering. The convertible notes and accrued interest will be converted upon completion of this initial public offering.

Unless otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares of Common Stock and no exercise of any other options or warrants.

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Summary Financial Data

The following table sets forth a summary of our statement of comprehensive loss and summary of our balance sheet data for the periods indicated. Our historical results are not necessarily indicative of results that may be expected in the future. We have derived the selected statements of operations for the years ended December 31, 2021 and 2022 (as adjusted for the Reverse Split) and the selected balance sheet data as of December 31, 2021 and 2022 from our audited financial statements included elsewhere in this prospectus. The tables below show the selected statements of operations for the three months ended March 31, 2022 and 2023 (as adjusted for the Reverse Split) and the selected balance sheet data as of March 31, 2022 and 2023 from our unaudited financial statements and related notes appearing elsewhere in this prospectus. You should read the following summary financial data together with our financial statements and the related notes appearing elsewhere in this prospectus and the information in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

For the three months ended
March 31,

 

For the years ended
December 31,

Statement of Operations Data:
(in thousands, except share and per share information)

 

2023

 

2022

 

2022

 

2021

   

(Unaudited)

 

(Unaudited)

 

(Audited)

 

(Audited)

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development costs

 

$

774

 

 

$

1,695

 

 

$

5,132

 

 

$

5,857

 

General and administrative costs

 

 

480

 

 

 

684

 

 

 

2,419

*

 

 

2,140

*

Total operating costs

 

 

1,254

 

 

 

2,379

 

 

 

7,551

*

 

 

7,997

*

Loss from operations

 

 

(1,254

)

 

 

(2,379

)

 

 

(7,551

)*

 

 

(7,997

)*

Other income (expense)

 

 

(82

)

 

 

10

 

 

 

(31

)*

 

 

101

*

Net loss

 

$

(1,336

)

 

$

(2,369

)

 

$

(7,582

)

 

$

(7,896

)

Loss per share, basic and diluted common

 

$

(0.39

)

 

$

(0.69

)

 

$

(2.22

)

 

$

(2.32

)

Weighted average number of common stock, basic and diluted

 

 

3,410,103

 

 

 

3,410,103

 

 

 

3,410,103

 

 

 

3,410,103

 

____________

*        There is a reclassification of $81,781 and $16,767 of interest expense in the years ended December 31, 2022 and 2021, respectively, from General and administrative costs to Other income (expense) to agree with the March 31, 2023 and 2022 presentation.

Balance Sheet Data:
(in thousands)

 

As of March 31,

 

As of December 31,

2023

 

2022

 

2022

 

2021

   

(Unaudited)

 

(Unaudited)

 

(Audited)

 

(Audited)

Cash and cash equivalents

 

$

617

 

 

$

3,042

 

 

$

1,312

 

 

$

4,539

 

Total current assets

 

 

745

 

 

 

3,269

 

 

 

1,450

 

 

 

4,730

 

Total assets

 

 

951

 

 

 

3,725

 

 

 

1,757

 

 

 

5,216

 

Total liabilities

 

 

6,913

 

 

 

4,501

 

 

 

6,854

 

 

 

3,900

 

Redeemable convertible preferred stock

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

Total stockholders’ deficiency

 

$

(15,962

)

 

$

(10,776

)

 

$

(15,097

)

 

$

(8,684

)

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RISK FACTORS

You should carefully consider the risks described below before buying shares in Intensity Therapeutics, Inc. These are risks and uncertainties that management believes are most likely to be material and therefore are important for an investor to consider. Our business operations and results may also be adversely affected by additional risks and uncertainties not presently known to us, or which are currently deemed immaterial, or which are similar to those faced by other companies in the pharmaceutical industry or business in general. If any of the following risks or uncertainties actually occurs, our business, financial condition, results of operations, or cash flows would likely suffer. In that event, the value of our stock could decline, perhaps significantly.

Risks Related to Our Business, Financial, and Investment Conditions

The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment.

The trading price of our Common Stock is likely to be volatile. Upon the consummation of this offering, we will have a relatively small public float due to the relatively small size of this offering, the ownership percentage of our executive officers and directors, and greater than 5% stockholders. As a result of our small public float, our Common Stock may be less liquid and have greater stock price volatility than the common stock of companies with broader public ownership.

Our stock price could be subject to wide fluctuations in response to a variety of other factors, which include:

        whether we achieve our anticipated corporate objectives;

        changes in financial or operational estimates or projections;

        termination of the lock-up agreement or other restrictions on the ability of our stockholders and other security holders to sell shares after this offering; and

        general economic or political conditions in the United States or elsewhere.

In addition, the stock market in general, and the stock of clinical-stage biotechnology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Such rapid and substantial price volatility, including any stock run-up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our stock. This volatility may prevent you from being able to sell your securities at or above the price you paid for your securities. If the market price of our Common Stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

We are a clinical-stage biotechnology company with a limited operating history and have not generated any revenue to date from product sales.

We are a clinical-stage, pre-commercial company with only a limited operating history upon which to base an evaluation of our current business and future prospects and how we will respond to competitive, financial or technological challenges. Biotechnology product development is a highly speculative undertaking and involves a substantial degree of risk. We were incorporated under the laws of the State of Delaware in November 2012. Since inception, we have focused substantially all of our efforts and financial resources on raising capital and developing our initial product candidates. We have no products approved for commercial sale and therefore have never generated any revenue from product sales, and we do not expect to do so in the foreseeable future. We have not obtained regulatory approvals for any of our product candidates. Consequently, the revenue-generating potential of our business is unproven and uncertain. Even if our product candidates receive regulatory approval, we may be unable to successfully introduce and market them at prices that would permit us to operate profitably.

We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.

To date, we have financed our operations primarily through an initial investment from our founder and the issuance and sale of Common Stock, our convertible preferred stock and convertible debt notes, to outside investors in private equity financings. From our inception through March 31, 2023, we raised an aggregate of $34.6 million of

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gross proceeds from such transactions. As of March 31, 2023, our cash and cash equivalents were $0.6 million. We have incurred net losses in each year since our inception, and we had an accumulated deficit of $40.0 million as of March 31, 2023. For the three months ended March 31, 2023 and 2022, and for the years ended December 31, 2022 and December 31, 2021, we reported net losses of $1.3 million, $2.4 million, $7.6 million, and $7.9 million, respectively. The report of our independent registered public accounting firm for the year ended December 31, 2022 included herein contains an explanatory paragraph indicating that there is substantial doubt as to our ability to continue as a going concern as a result of recurring losses from operations and negative cash flows.

We expect to continue to incur significant expenses and operating losses over the next several years and for the foreseeable future. Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect our research and development expenses to significantly increase in connection with the commencement and continuation of clinical trials of our product candidates. In addition, if we obtain marketing approval for our product candidates, we will incur significant sales, marketing and manufacturing expenses. Once we are a public company, we will incur additional costs associated with operating as a public company. As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future. Because of the numerous risks and uncertainties associated with developing biotechnology products, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital.

If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the future trading price of our securities.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. However, because of our limited resources, there are limited controls over information processing. We have material weaknesses due to (1) a lack of segregation of duties, since we have a limited administrative staff, and (2) Information Technology matters regarding user access that aggregate to a material weakness. Our management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. We have focused our segregation of duties to ensure that the actual payments are performed separately from the accounting staff, and the Chief Executive Officer performs a robust review of the financial statements on a monthly basis. All accounting entries and the creation of financial statements, however, are performed by a single person. To remedy this situation, we would need to hire additional staff. In August 2021, we hired a Chief Financial Officer to add a layer of supervision and control through a consulting agreement with Danforth Advisors LLC, a company that provides strategic and operational finance and accounting services to life sciences companies. In June 2023, our Principal Accounting Officer and Controller, John Wesolowski, became our full-time Interim Chief Financial Officer. Currently, we are unable to hire additional staff to facilitate greater segregation of duties but will reassess its capabilities after completion of the Offering. We are also working to institute policies and procedures that would eliminate our Information Technology weaknesses related to user access. These procedures include the recent implementation of a Virtual Private Network (VPN) and Multi-Factor Authentication (MFA) on all computers involved with financial transactions.

Our small size and internal control deficiencies may adversely affect our financial condition, results of operation and access to capital. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.

The report by our auditors includes a paragraph that states that substantial doubt exists about the Company’s ability to continue as a going concern.

The report of our independent registered public accounting firm for the year ended December 31, 2022 included herein contains an explanatory paragraph indicating that there is substantial doubt as to our ability to continue as a going concern as a result of recurring losses from operations and negative cash flows. We do not have a history of earnings and, as a result, substantial doubt exists about our ability to continue as a going concern. Further, without the proceeds of this offering, we do not have sufficient cash to continue with our business plan for the next 12 months. Also, at any time on or after May 18, 2022, the holders of at least two-thirds of the then outstanding shares of Series A Preferred Stock may elect to cause the Company to redeem all, but not less than all, of the shares of Series A Preferred Stock at a redemption price per share of $2.00, or $10,000,000 in total. Through the date of this filing, these shareholders have not exercised this option.

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Our continued operations are dependent on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to obtain adequate funding from this offering or in the future, or if we are unable to generate revenue to achieve and sustain profitability, we may not be able to continue as a going concern. We believe that there is substantial doubt as to whether we can raise sufficient funding in order for us to continue operations.

Even if we consummate this offering, we will need to raise substantial additional funding. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate some or all of our product development programs or commercialization efforts.

The development of biotechnology products is capital-intensive and we expect our expenses to significantly increase in connection with our ongoing activities, particularly as we continue our ongoing clinical trials or initiate future trials and pursue the research and development of, and seek marketing approval for, our product candidates. Our future capital requirements will depend on and could increase significantly as a result of many factors, including:

        our research and product development programs, including clinical studies;

        the timing and costs of our various U.S. and foreign regulatory filings, obtaining approvals, and complying with regulations;

        the timing and costs associated with developing manufacturing operations;

        the timing of product commercialization activities, including marketing and distribution arrangements;

        the timing and costs involved in preparing, filing, prosecuting, defending, and enforcing intellectual property rights; and

        the impact of competing technological and market developments.

We expect that the net proceeds from this offering, together with our existing cash and cash equivalents and investments will be sufficient to fund our operations and capital expenditure requirements through September 30, 2024. Accordingly, we will need to obtain substantial additional funding to continue our operations. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Any additional fundraising efforts may also divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.

If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate certain of our research and development programs or future commercialization efforts, and may be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

We are largely dependent upon the success of our new intratumoral technology, which will require additional development before we may be able to seek regulatory approval and may never receive regulatory approval or be successfully commercialized.

The Intensity Therapeutics Technology, a platform for the creation of products to improve treatment of cancer patients, is our only technology. Our entire focus has been on developing, commercializing, and ultimately obtaining regulatory authorizations and approvals of product candidates using this technology. We have invested, and we expect to continue to invest, significant efforts and financial resources in its development. Our ability to generate meaningful revenue, which may not occur for the foreseeable future, if ever, will depend heavily on the successful development,

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regulatory approval and commercialization of our technology. If we are unable to develop the Intensity Therapeutics Technology, obtain regulatory approval, and sell products using the technology, we will not generate operating revenue or become profitable, and we may be forced to terminate or cease operations.

We have not completed clinical trials on any forms of cancer, and we are subject to risks and challenges that may prevent or delay the completion of our clinical trials.

We have only two clinical trials with enrollment completed. One study is a multi-cohort clinical trial testing our product candidate alone or combined with Keytruda® or with Yervoy®. The other study is a randomized Phase 2 study in presurgical breast cancer. Our program is in the early stage. Approximately 200 patients have been enrolled in our clinical trials as of December 31, 2022. There will not be any additional enrollment in the first two studies. We have not demonstrated any survival benefit compared to an active control group in a statistically significant and meaningful manner. We have not demonstrated sufficient safety of any product candidate for FDA approval for a given cancer type. Our largest dose on any given day so far has been 244mL containing 122 mg of cisplatin and 24.4 mg of vinblastine sulfate. We have no indication that higher doses or any dose will be safe or effective.

We intend to conduct clinical trials for multiple indications, and it may take several years to complete the testing of our product candidates and technology for the indications for which we wish to obtain approval. Failure or delay can occur at any stage of development, for many reasons, including:

        any pre-clinical or clinical test may fail to produce results satisfactory to the FDA or foreign regulatory authorities and preclude us from testing in humans;

        pre-clinical or clinical data can be interpreted in different ways, which could delay, limit, or prevent regulatory approval;

        negative or inconclusive results from a pre-clinical study or clinical trial or adverse medical events during a clinical trial could cause a pre-clinical study or clinical trial to be repeated or a program to be terminated, even if other studies or trials relating to the program are successful;

        the FDA or foreign regulatory authorities can place a clinical hold on a trial if, among other reasons, it finds that patients enrolled in the trial are or would be exposed to an unreasonable and significant risk of illness or injury;

        changes in regulatory agency policies during the period in which we are developing a system, or the period required for review of any application for regulatory agency approval;

        our clinical trials may not demonstrate the safety and efficacy of any system or result in marketable products;

        the FDA or foreign regulatory authorities may request additional clinical trials, including more than one Phase 3 trial, relating to any potential NDA submissions;

        the FDA or foreign regulatory authorities may change their approval policies or adopt new regulations that may negatively affect or delay our ability to bring a system to market or require additional clinical trials; and

        a system may not be approved for all the requested indications.

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

The biopharmaceutical industry is characterized by intense competition and rapid innovation. We face competition from major pharmaceutical, specialty pharmaceutical and biotechnology companies among others with respect to INT230-6 and will face similar competition with respect to any product candidates that we may seek to develop or commercialize in the future. We compete in pharmaceutical, biotechnology and other related markets that develop immune-oncology therapies for the treatment of cancer. There are other companies working to develop new drugs, immunotherapies and other approaches for the treatment of cancer including divisions of large pharmaceutical and biotechnology companies of various sizes. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly as they develop

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novel approaches to treating disease indications that our product candidates are also focused on treating. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel therapeutics or to in-license novel therapeutics that could make the product candidates that we develop obsolete. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products. We believe the key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability, reliability, convenience of use, price and reimbursement.

There are a number of companies trying to develop intratumoral therapies. However, most of our competitors are currently focused on intratumoral treatment approaches that stimulate immune cells to achieve inflammation rather than directly killing a tumor. This shift to a pure immune-oncology (IO) treatment has reopened the investigations into intratumoral approaches focusing on activating local immune response. Amgen markets a novel genetically modified oncolytic viral-based immunotherapeutic, talimogene laherparepvec (T-Vec), that has been approved for IT use in cutaneous melanoma. While T-Vec is approved solely for local treatment of localized cutaneous melanoma, the drug has not been shown to improve overall survival or have any effect on distal metastases, which will be a critical factor to broader use. Another viral based system is being developed by Replimune. RP1 is Replimune’s genetically modified herpes simplex type 1 virus that is designed to directly destroy tumors and to generate an anti-tumor immune response. This product is being evaluated in a Phase 1/2, open label, multicenter, dose escalation and expansion, first-in-human (FIH) clinical study to evaluate the safety and tolerability, biodistribution, shedding, and preliminary efficacy of RP1 alone and in combination with nivolumab in adult subjects with advanced and/or refractory solid tumors. The IGNYTE Study, which started in 2017, includes a dose escalation phase for single agent RP1, an expansion phase with a combination of RP1 and nivolumab and a Phase 2 portion in specified tumor types for the combination therapy. Dose escalation of RP1 by intratumoral injection in superficial tumors and in visceral tumors. The objective of this viral approach is to transfect the granulocyte-macrophage colony-stimulating factor gene into the tumor microenvironment to recruit a local inflammatory response that would promote a systemic immune response.

Oncosec Immunotherapies Inc. is developing cytokine-based intratumoral immunotherapies to stimulate the body’s immune system to target and attack cancer. The Company built a clinical pipeline utilizing their primary technology, TAVO™ (tavokinogene telseplasmid), as a potential treatment for multiple cancer indications either as a monotherapy or in combination with leading checkpoint inhibitors. TAVO is DNA-based interleukin-12 (IL-12), a naturally occurring protein in the body with immune-stimulating functions. TAVO is administered directly into the tumor using the Company’s proprietary electroporation (EP) gene delivery system, which employs a series of momentary energy pulses. Those pulses are designed to increase the permeability of the cell membrane and facilitate uptake of IL-12 coded DNA into cells.

Other local treatment approaches being explored by companies such as Merck also attempt to recruit the immune system cells into the local tumor microenvironment with intratumoral delivery of other agents. Data on several other intratumorally-delivered agents such as STING agonists, RIG-1, and TLR9 have been presented at major cancer conferences.

Our belief is that our competitors have formulated their products without consideration of the inability of water-based products to be well absorbed into a tumor’s lipophilic, high-pressure microenvironment. Attempts at the stimulation of an inflammatory response or efforts to attract immune cells into a hostile live, rapidly growing tumor still pose a number of challenges. Accordingly, there remains a continued unmet need for the development of direct IT therapies for solid tumors that provide high local killing efficacy coupled with nontoxic systemic anti-cancer effects. We believe we have created a product candidate having the necessary physical and chemical properties to overcome the local delivery challenges. Evidence shows the mechanism of tumor killing achieved by our drug candidate also leads to systemic immune activation in certain cancers.

We anticipate competing with other companies that are focused on treating disease indications that our product candidates are also focused on treating. A competitor may develop technologies focused on the same disease pathway as our technology or may focus on treating the targeted disease in a completely different manner. To the extent a new drug is developed that is more efficacious than any product candidate developed by us, this could reduce or negate the need for our product candidate. In addition, while we believe our product candidates may be used in conjunction with

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existing or emerging standard of care (SOC) in certain disease indications, as companies continue to improve upon existing standard of care, more efficacious drug therapies could become available, reducing or completely negating the benefit of our product candidates. Our competitors may also include companies that are or will be developing therapies for the same therapeutic areas that we are targeting within our early pipeline.

Even if we are successful in achieving regulatory approval to commercialize a product candidate ahead of our competitors, our future pharmaceutical products may face direct competition from generic and other follow-on drug products. Any of our product candidates that may achieve regulatory approval in the future may face competition from generic products earlier or more aggressively than anticipated, depending upon how well such approved products perform in the U.S. prescription drug market. Our ability to compete also may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products. Generic products are expected to become available over the coming years. Even if our product candidates achieve marketing approval, they may be priced at a significant premium over competitive generic products, if any have been approved by then.

In addition to creating the 505(b)(2) NDA pathway, the Hatch-Waxman Amendments to the federal Food, Drug, and Cosmetic Act (FDCA) authorized the FDA to approve generic drugs that are the same as drugs previously approved for marketing under the NDA provisions of the statute pursuant to ANDAs. An ANDA relies on the preclinical and clinical testing conducted for a previously approved reference listed drug (“RLD”), and must demonstrate to the FDA that the generic drug product is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug and also that it is “bioequivalent” to the RLD. The FDA is prohibited by statute from approving an ANDA when certain marketing or data exclusivity protections apply to the RLD. If any such competitor or third party is able to demonstrate bioequivalence without infringing our patents, then this competitor or third party may then be able to introduce a competing generic product onto the market.

We cannot predict the interest of potential follow-on competitors or how quickly others may seek to come to market with competing products, whether approved as a direct ANDA competitor or as a 505(b)(2) NDA referencing one of our future drug products. If the FDA approves generic versions of our drug candidates in the future, should they be approved for commercial marketing, such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval, which could negatively impact our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on our investments in those product candidates.

Even if we obtain regulatory approval of our product candidates, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances. For additional information regarding our competition, see “Business — Competition.”

The COVID-19 pandemic has spread worldwide and may affect our ability to initiate and complete current or future preclinical studies or clinical trials, disrupt regulatory activities or have other adverse effects on our business and operations. In addition, this pandemic has caused substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse effects on our business and operations.

The COVID-19 pandemic, which began in December 2019 and has spread worldwide, has caused many governments to implement measures to slow the spread of the outbreak through quarantines, travel restrictions, heightened border scrutiny, and other measures. The outbreak and government measures taken in response have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. The future progression of the outbreak and its effects on our business and operations are uncertain. We and our contract manufacturing organizations or clinical sites, or CMOs, and contract research organizations, or CROs, may face disruptions that may affect our ability to initiate and complete preclinical studies or clinical trials or raise capital to finance our business.

Our prospects for obtaining additional financing, as needed, are uncertain and our failure to obtain needed financing could affect our ability to pursue future growth.

Even if this offering is successful, we will need to raise additional funds in the future to develop or enhance our product candidates, to fund expansion, to conduct additional clinical trials and to fund general operating expenses. For example, with regard to our Phase 3 sarcoma study (IT-03) and Phase 2/3 early-stage breast cancer study (IT-04), we

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expect that the proceeds from this offering will be sufficient to allow us to obtain regulatory authorizations to proceed for these trials. However, the proceeds from this offering will be insufficient to enable us to finish these trials, and we will need to raise additional funding in order to complete these trials. There is no assurance that additional financing will be available on terms favorable to us, or at all. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these securities might have rights, preferences, or privileges senior to those of our current stockholders. If adequate funds are not available on acceptable terms, our ability to fund our expansion, take advantage of unanticipated opportunities, develop or enhance services or products, or otherwise respond to competitive pressures would be significantly limited.

Inadequate funding for 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 on which the operation of our business may rely, which could negatively impact our business.

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, and statutory, regulatory, 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, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.

Separately, the FDA has announced its commitment to achieving timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals; however, the FDA may not be able to continue its current pace and review timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the COVID-19 pandemic and travel restrictions FDA is unable to complete such required inspections during the review period. On March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities, and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. Additionally, on April 15, 2021, the FDA issued a guidance document in which the FDA described its plans to conduct voluntary remote interactive evaluations of certain drug manufacturing facilities and clinical research sites. According to the guidance, the FDA intends to request such remote interactive evaluations in situations where an in-person inspection would not be prioritized or deemed mission-critical, or where direct inspection is otherwise limited by travel restrictions, but where the FDA determines that remote evaluation would still be appropriate. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, upon completion of this offering and in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Risks Related to FDA and Foreign Regulatory Approval

Clinical development involves a lengthy, complex and expensive process, with an uncertain outcome, and the results of preclinical studies and early-stage clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.

The development and approval process in the United States may take many years, require substantial resources, and may never lead to the approval of any of our product candidates by the FDA for use in the United States. To obtain the requisite regulatory approvals to commercialize any product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our product candidates are safe and effective in humans. Clinical testing is expensive and can

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take many years to complete, and its outcome is inherently uncertain. In particular, the general approach for FDA approval of a new drug is dispositive data from one or two adequate and well-controlled, Phase 3 clinical trials of the relevant drug in the relevant patient population. Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete. A product candidate can fail at any stage of testing, even after observing promising signals of activity in earlier preclinical studies or clinical trials. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the biotechnology and biopharmaceutical industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence clinical trials are never approved as therapeutic products, and there can be no assurance that any of our future clinical trials will ultimately be successful or support further clinical development of INT230-6 or any of our other product candidates. Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including:

        preclinical studies or clinical trials may show the product candidates to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities;

        failure to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful;

        failure to receive the necessary regulatory approvals;

        manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make a product candidate uneconomical; and

        the proprietary rights of others and their competing products and technologies that may prevent one of our product candidates from being commercialized.

In addition, differences in trial design between early-stage clinical trials and later-stage clinical trials make it difficult to extrapolate the results of earlier clinical trials to later clinical trials. Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in clinical trials have nonetheless failed to obtain marketing approval of their products.

Additionally, we expect that some of our trials will be open-label studies, where both the patient and investigator know whether the patient is receiving the investigational product candidate as a monotherapy or in combination with an existing approved drug. Most typically, open-label clinical trials test only the investigational product candidate and sometimes do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. Therefore, it is possible that positive results observed in open-label trials will not be replicated in later placebo-controlled trials.

In addition, the standards that the FDA and comparable foreign regulatory authorities use when regulating our product candidates require judgment and can change, which makes it difficult to predict with certainty how they will be applied. Although we are initially focusing our efforts on development of small-molecule drug products, we may in the future pursue development of biological products, which could make us subject to additional regulatory requirements. Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval. We may also encounter unexpected delays or increased costs due to new government regulations. Examples of such regulations include future legislation or administrative action, or changes in FDA policy during the period of product development and FDA regulatory review. We cannot predict whether legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or what the impact of such changes, if any, may be. The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain approval of any product candidates that we develop.

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We may seek to conduct clinical trials in foreign countries, as well as in the United States. If we continue to seek to conduct clinical trials in foreign countries or pursue marketing approvals in foreign jurisdictions, we must comply with numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. The foreign regulatory approval process varies among countries and may include all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. Moreover, the time required to obtain approval from foreign regulatory agencies may differ from that required to obtain FDA approval. Approval by the FDA does not ensure approval by regulatory authorities outside the United States and vice versa.

Successful completion of clinical trials is a prerequisite to submitting a marketing application to the FDA and similar marketing applications to comparable foreign regulatory authorities, for each product candidate and, consequently, the ultimate approval and commercial marketing of any product candidates. We may experience negative or inconclusive results, which may result in our deciding, or our being required by regulators, to conduct additional clinical studies or trials or abandon some or all of our product development programs, which could have a material adverse effect on our business.

We will likely need separate regulatory approvals for every therapeutic agent or combination of compounds that we intend to develop and market using our technology.

Although many drugs have been approved by the FDA for use as therapeutic agents, regulatory approval is likely required in the United States for the combined enhancer component with the drug component(s) and the specific indication, dose, and route of administration of the therapeutic agent or agents used in our system.

We will likely need to obtain separate regulatory approvals for products using our technology with every therapeutic agent or combination of compounds used with our system that we intend to market. All the manufacturing facilities used to manufacture components or assemble our system must be inspected and meet legal requirements. Securing regulatory approval requires the submission of extensive pre-clinical and clinical data and other supporting information for each proposed therapeutic indication to establish to the FDA’s satisfaction the product’s safety, efficacy, potency, and purity for each intended use. The pre-clinical testing and clinical trials of any products using our technology with any therapeutic agent or compound we use must comply with the regulations of the FDA and other federal, state, and local government authorities in the United States. Clinical development is a long, expensive, and uncertain process and is subject to delays. We may encounter delays or rejections for various reasons, including our inability to enroll enough patients to complete our clinical trials. Moreover, approval policies or regulations may change. If we do not obtain and maintain regulatory approval for our system and our use of therapeutic agents, our results of operations will be harmed.

Failure to obtain, or delay in obtaining, regulatory approvals would likely have a material adverse effect on our business, financial condition and results of operations.

During its development, our product candidates and technology will be subject to extensive and rigorous government regulation by the U.S. Food and Drug Administration (FDA) and possibly other foreign regulatory agencies. The FDA regulates the research, development, pre-clinical and clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion, sale, distribution, import, and export of pharmaceutical and medical device products. Failure to comply with FDA and other applicable regulatory requirements, either before or after product approval, may subject us to administrative or judicially imposed sanctions.

We are not permitted to market products made using our technology in the United States unless and until we obtain regulatory approval from the FDA.

To market the product candidate in the United States, we must submit to the FDA and obtain FDA approval of a New Drug Application (NDA). An investigational new drug (IND) application is the first step in the regulatory process. Under an IND, a Company develops a drug in the hopes of someday submitting to FDA the NDA to permit marketing of the drug. An NDA must be supported by extensive clinical and preclinical data, as well as extensive information regarding chemistry, manufacturing, and controls (CMC) to demonstrate the safety and effectiveness of the applicable product candidate. Regulatory approval of an NDA is not guaranteed. The number and types of preclinical studies and clinical trials that will be required varies depending on the product candidate, the disease or condition that the product candidate is designed to target, and the regulations applicable to any product candidate. Despite the time and expense

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associated with preclinical and clinical studies, failure can occur at any stage and we could encounter problems that cause us to repeat or perform additional preclinical studies, CMC studies or clinical trials. The FDA and similar foreign authorities could delay, limit or deny approval of a product candidate for many reasons, including because they:

        may not deem a product candidate to be adequately safe and effective;

        may not find the data from preclinical studies, CMC studies, and clinical trials to be sufficient to support a claim of safety and efficacy;

        may interpret data from preclinical studies, CMC studies, and clinical trials significantly differently than we do;

        may not approve the manufacturing processes or facilities associated with our product candidates;

        may change approval policies (including with respect to our product candidates’ class of drugs) or adopt new regulations; or

        may not accept a submission due to, among other reasons, the content or formatting of the submission.

Delays in FDA approval could be costly to us and prevent us from commercializing our product candidates effectively.

The regulatory review and approval process is lengthy, expensive, and inherently uncertain. As part of the U.S. Prescription Drug User Fee Act, the FDA has a goal to review and act on a percentage of all submissions in a given time frame. The general review goal for a drug application is ten to twelve months for a standard application and six months for a priority review application. The FDA’s review goals are subject to change and it is unknown whether the review of an NDA filing for any of our product candidates will be completed within the FDA’s review goals or will be delayed. Moreover, the duration of the FDA’s review may depend on the number and types of other NDAs that are submitted to the FDA around the same time. The development and approval process may take many years, require substantial resources, and may never lead to the approval of a product. Failure to obtain or delays in obtaining regulatory approvals may:

        adversely affect the commercialization of our current technology or any products that we develop in the future;

        impose additional costs on us;

        diminish any competitive advantages that may be attained; and

        adversely affect our ability to generate revenues.

We have received one Fast Track Designation, and may continue to seek Breakthrough Therapy Designations or other Fast Track Designations from the FDA, for certain of our product candidates in certain indications, but receipt of either such designation may not actually lead to a faster development or regulatory review or approval process.

In 2018, we received Fast Track Designation by the FDA to use INT230-6 in metastatic triple negative breast cancer for patients whose cancer has progressed following one or two prior drug treatments. We may continue to seek Breakthrough Therapy Designation or Fast Track Designation for our product candidates or for other indications.

A breakthrough therapy is defined as a product that is intended, alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For products that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Products designated as breakthrough therapies by the FDA can also be eligible for accelerated approval.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to products considered

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for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the products no longer meet the conditions for qualification and rescind the breakthrough designation.

If a product is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical needs for this condition, the product sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even though we have received Fast Track Designation to use INT230-6 in certain indications, or if we receive Fast Track Designation for other drug products or indications, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. The enrollment of patients depends on many factors, including:

        the patient eligibility and exclusion criteria defined in the protocol;

        the size of the patient population required for analysis of the trial’s primary endpoints;

        the proximity of patients to trial sites;

        the design of the trial;

        our ability to recruit clinical trial investigators with the appropriate competencies and experience;

        our ability to obtain and maintain patient consents; and

        the risk that patients enrolled in clinical trials will drop out of the trials before completion.

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our future clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

We will rely on third parties to conduct certain of the preclinical research and any clinical trials for products using our technology, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We do not currently have the ability to independently conduct any clinical trials. We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance. We rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies. We expect to control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with the good laboratory practices, or GLPs, and GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development. The regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal

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investigators and clinical trial sites. Although we rely on CROs to conduct GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations. If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.

Our reliance on third parties to conduct clinical trials will result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Communicating with CROs and other third parties can be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Such parties may:

        have staffing difficulties;

        fail to comply with contractual obligations;

        experience regulatory compliance issues; or

        undergo changes in priorities or become financially distressed.

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

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

In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of our product candidates.

Even if products using our technology are approved by the FDA or any other regulatory agency, we will be subject to additional ongoing regulatory obligations and oversight in the U.S. and other countries where we obtain approval.

For example, we may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate. In addition, if the FDA approves a product candidate, the manufacturing processes, labeling, packaging, distribution, adverse event

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reporting, storage, advertising, promotion, and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, and continued compliance with FDA Current Good Manufacturing Processes (CGMPs), good clinical practices (GCPs), and good laboratory practices, which are regulations and guidelines enforced by the FDA for all products in clinical development and for any clinical trials that we conduct post-approval. In addition, post-marketing requirements for our product candidates may include implementation of a Risk Evaluation and Mitigation Strategies (REMS) to ensure that the benefits of the product outweigh its risks. A REMS may include a Medication Guide, a patient package insert, a communication plan to healthcare professionals, and/or other elements to assure safe use of the product. Compliance with all these requirements, and any other requirements imposed upon us by U.S. or overseas regulators, could be costly to us, and failure to comply with these requirements could cause us to lose any marketing approval that we may have obtained, subject us to sanctions and jeopardize our ability to commercialize our product candidates.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with any third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

        refusals or delays in the approval of applications or supplements to approved applications;

        refusal of a regulatory authority to review pending market approval applications or supplements to approved applications;

        restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls or seizures;

        fines, warning letters, or holds on clinical trials;

        import or export restrictions;

        injunctions or the imposition of civil or criminal penalties;

        restrictions on product administration, requirements for additional clinical trials, or changes to product labeling, or REMS programs; or

        recommendations by regulatory authorities against entering into governmental contracts with us.

Even if we obtain regulatory approval for our product candidates using our technology in the United States, our ability to market a product would be limited to those uses that are approved for that product.

The FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, dissemination of off-label information, industry-sponsored scientific and educational activities, and promotional activities involving the Internet. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved label. In the United States, we intend to seek approval for products for various types of cancer. If the FDA approves any drug application, our ability to market and promote a product would be limited to the indication tested for a specific disease, so even with FDA approval, products using our technology may only be promoted in this limited market. Physicians may prescribe legally available drugs for uses that are not described in the product’s labeling, and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties, including oncology. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, impose stringent restrictions on manufacturers’ communications regarding promotion of approved drug products for off-label use, and FDA approval may otherwise limit our sales practices and our ability to promote, sell, and distribute a product. Thus, we may only market products using our technology, if approved by the FDA, for its approved indication and we could be subject to enforcement action for off-label marketing.

Further, if there are any modifications to an approved product, including changes in indications, labeling, or manufacturing processes or facilities, we may be required to submit and obtain FDA approval of a new or supplemental NDA, which may require us to develop additional data or conduct additional preclinical studies and clinical trials. Failure to comply with these requirements can result in regulatory enforcement actions and adverse publicity.

If future clinical trials are unsuccessful, significantly delayed or not completed, we may not be able to market products for other indications or our technology.

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If we do not obtain required approvals in other countries in which we aim to market our product candidates, we will not be able to export or sell the products in those markets, which will limit our sales opportunities.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, similar foreign regulatory authorities must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval and licensure procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

Our lack of experience conducting clinical trials outside the United States and Canada may negatively impact the approval process in foreign countries where we intend to seek approval for the products using our technology. We have not previously conducted multi-national clinical trials.

If we are unable to obtain and maintain required approval from one or more foreign jurisdictions where we would like to sell products using our technology, we will be unable to market products as intended, our international market opportunity will be limited, and our results of operations will be harmed.

If no product candidates using our technology are approved by the FDA or other regulatory body, third-party payors in the United States or anywhere will not reimburse the use of our product candidates. Even if approval is obtained, inadequate reimbursement may harm results of operations.

Following regulatory approval, we intend to seek reimbursement by third-party payors for the products created by our technology. There are no assurances that third-party payors in the United States or other countries will agree to cover the cost of products using our technology at all or at rates that are adequate to cover actual costs. Further, third-party payors may deny reimbursement if they determine that our product candidates are not used in accordance with established payor protocols regarding cost effective treatment methods or are used outside their approved indication or for forms of cancer not specifically approved by the FDA or other foreign regulatory bodies in the future. Without reimbursement, physicians, hospitals, and other healthcare providers may be less likely to prescribe our product candidates thereby harming our results of operations. Without adequate reimbursement, we may not be able to successfully commercialize systems.

Risks Related to Manufacturing, Commercialization, and Market Acceptance of Products made using our Technology

We intend to rely on third parties to produce clinical and commercial supplies of our product candidates.

We do not own or operate facilities for drug manufacturing, storage and distribution, or testing. We are dependent on third parties to manufacture the clinical supplies of our current and any future product candidates. The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the cGMP requirements, for manufacture of both active drug substance and finished drug product. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we will not be able to secure and/or maintain regulatory approval for our product candidates. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates.

We also intend to rely on third-party manufacturers to supply us with sufficient quantities of our product candidates to be used, if approved, for commercialization. We do not yet have a commercial supply agreement for commercial quantities of drug substance or drug product. If we are not able to meet market demand for any approved product, it would negatively impact our ability to generate revenue, harm our reputation, and could have an adverse effect on our business and financial condition.

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Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including:

        inability to meet our product specifications and quality requirements consistently;

        delay or inability to procure or expand sufficient manufacturing capacity;

        issues related to scale-up of manufacturing;

        costs and validation of new equipment and facilities required for scale-up;

        our third-party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately;

        our third-party manufacturers may fail to comply with cGMP requirements and other inspections by the FDA or other comparable regulatory authorities;

        our inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all;

        breach, termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

        reliance on single sources for drug components;

        lack of qualified backup suppliers for those components that are currently purchased from a sole or single-source supplier;

        our third-party manufacturers may not devote sufficient resources to our product candidates;

        we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates;

        operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and

        carrier disruptions or increased costs that are beyond our control.

In addition, if we enter into a strategic collaboration with a third party for the commercialization of our current or any future product candidates, we will not be able to control the amount of time or resources that they devote to such efforts. If any strategic collaborator does not commit adequate resources to the marketing and distribution of our product candidates, it could limit our potential revenues.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize our current or any future product candidates once approved. Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production.

We purchase components for our product candidates from third parties, some of which may be sole-source suppliers.

Our product candidate is comprised of three key ingredients, the excipient (referred to as SHAO) and two active, commercially available pharmaceutical ingredients cisplatin and vinblastine sulphate. Currently each of the three ingredients and our product candidate are single sourced. While we are aware of other suppliers for the two active ingredients, those suppliers have not been qualified as yet. We also have identified other producers of both the SHAO excipient and the product candidate. We manufacture SHAO using Curia in Albany, New York and INT230-6 at Curia in Glasgow, Scotland. We have only qualified Curia to produce SHAO and INT230-6 at this time. We control the manufacturing processes for SHAO and INT230-6, and we have all information on the production of the molecule and product candidate; however, it would take several months to qualify a new supplier or suppliers. We purchase the cisplatin from Johnson Matthey in West Deptford, New Jersey. Johnson Matthey is the developer of cisplatin and one of the world’s largest producer of cisplatin. We have only qualified Johnson Matthey. We purchase vinblastine sulphate from Minakem located in Mont-Saint-Guibert, Belgium. We have only qualified Minakem as a supplier of our vinblastine sulphate. It would take several months to quality new vendors for cisplatin and vinblastine sulfate.

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We rely and expect to continue to rely completely on third parties to manufacture key components of our preclinical, clinical trial and commercial product candidate supplies. The development and commercialization of any of our product candidates could be stopped, delayed or made less profitable if those third parties fail to provide us with sufficient quantities of such product supplies or fail to do so at acceptable quality levels, including in accordance with applicable regulatory requirements or contractual obligations, and our operations could be harmed as a result. The components of our product candidates, including enhancers, drugs, and excipients, must be manufactured and assembled in accordance with approved manufacturing and predetermined performance specifications and must meet CGMP and quality systems requirements. Some states also have similar regulations. Many of the other components of our product candidates may be manufactured by sole-source suppliers that may have proprietary manufacturing processes. If we need to find a new source of supply, we may face long interruptions in obtaining necessary components for our product candidates, in obtaining FDA or foreign regulatory agency approval of these components and in establishing the manufacturing process, which could jeopardize our ability to supply products using our technology to the market.

We have not entered into long term manufacturing and supply agreements with any producers.

We intend to pursue agreements with contract manufacturers to produce the components and drug products that we will use in the future for the commercialization of products that make using of our technology, as well as for labeling and finishing services. We may not be able to enter into such arrangements on acceptable terms or at all. Components of our product candidates are currently manufactured for us in small quantities for use in our preclinical and clinical studies. We will require significantly greater quantities to commercialize any given product. We may not be able to find alternate sources of comparable components. If we are unable to obtain adequate supplies of components from our existing suppliers or need to switch to an alternate supplier and obtain FDA or other regulatory agency approval of that supplier, commercialization of our product candidates may be delayed. If we are unable to obtain sufficient compounds and labeling services on acceptable terms, or if we should encounter delays or difficulties in our relationships with our current and future suppliers or if our current and future suppliers of each component do not comply with applicable regulations for the manufacturing and production of drugs, our business, financial condition, and results of operations may be materially harmed.

If we cannot successfully purchase or produce the drugs used in the manufacture of our product candidates, our ability to develop and commercialize products using our technology would be impaired.

To manufacture the therapeutic agents on our own, we would first have to develop a manufacturing facility that complies with FDA requirements and regulations to produce each therapeutic agent we choose to manufacture. Developing these resources would be an expensive and lengthy process and would have a material adverse effect on our revenues and profitability. We have no manufacturing history and we may not be able to scale up or demonstrate manufacture of commercial quantities, in a cost-effective manner, or in compliance with the regulatory requirements applicable to such manufacturing. Additionally, we may have difficulty obtaining other components for the system from our third-party suppliers in a timely manner or at all which may adversely affect our ability to conduct timely clinical trials in the United States and elsewhere to obtain regulatory approval, and our ability to deliver our product candidates to purchasers.

Our current and future relationships with investigators, health care professionals, consultants, third-party payors, and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient support, charitable organizations and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws regulate the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell, and distribute our product candidates for which we obtain marketing approval. Such laws include, among others: he federal Anti-Kickback Statute, the federal false claims laws, including the False Claims Act, the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, the federal Physician Payments Sunshine Act, federal consumer protection and unfair competition laws and analogous state and foreign laws and regulations, such as state antikickback and false claims laws, which may apply to our business practices. For additional information regarding the regulatory regime under which we operate, see “Business — Government Regulation.”

Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law

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involving applicable healthcare laws. If our operations are found to be in violation of any of these or any other health regulatory laws that may apply to us, we may be subject to significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs or similar programs in other countries or jurisdictions, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. Even the mere issuance of a subpoena or the fact of an investigation alone, regardless of the merit, may result in negative publicity, a drop in our share price and other harm to our business, financial condition and results of operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our research and development activities involve the use of biological and hazardous materials and produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities. We do not carry specific biological waste or hazardous waste insurance coverage, workers compensation or property and casualty and general liability insurance policies that include coverage for damages and fines arising from biological or hazardous waste exposure or contamination.

We have limited experience in marketing and commercializing products and, as a result, we may not be successful in commercializing products made using our technology.

If we are unable to find a development or marketing partner, we may have to directly and indirectly market our product candidates. To pursue a direct marketing strategy in any country may require the engagement of a contract sales organization to provide medical science liaisons to educate the medical oncologists, and we may need to utilize a direct sales force to sell our product candidates to interventional radiologists and hospitals. However, we have not previously sold, marketed, or distributed any products and have limited experience in building a sales and marketing organization and in entering and managing relationships with third-party distributors. To pursue such a potential strategy, we must acquire or internally develop a sales, marketing, and distribution infrastructure and/or enter into strategic alliances to perform these services. The development of sales, marketing and distribution infrastructure is difficult and time consuming and would require substantial financial and other resources. If we cannot successfully partner the products for marketing or develop the infrastructure to market and commercialize the products ourselves, our ability to generate revenues may be harmed, and we may be required to enter strategic alliances to have such activities carried out on our behalf, which may not be on favorable terms.

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Even if we are successful in commercializing products using our technology in the United States, we may not be successful in other foreign countries.

Each country requires a different commercialization strategy, so our U.S. strategy may not translate to other markets. Without a successful commercialization strategy tailored for each market, our efforts to promote and market the products in each of our target markets may fail in any or all those markets.

Our plan to use collaborative arrangements with third parties to help finance and to market and sell products using our technology may not be successful.

Our efforts may never result in the successful development or commercialization of products using our technology. The success of any development program will depend upon our ability to perform our obligations under any agreements as well as factors beyond our control, such as the commitment of our vendor collaborators and the timely performance of their obligations. The terms of any such collaboration may permit our collaborators to abandon the alliance at any time for any reason or prevent us from terminating arrangements with vendors or collaborators who do not perform in accordance with our expectations or our collaborators may breach their agreements with us. In addition, any third parties with which we collaborate may have significant control over important aspects of the development and commercialization of our product candidates, including research and development, market identification, marketing methods, pricing, composition of sales force, and promotional activities. We are not able to control or influence the amount and timing of resources that any vendor or collaborator may devote to our research and development programs or the commercialization, marketing, or distribution of our product candidates. We may not be able to prevent any collaborators from pursuing alternative technologies or products that could result in the development of products that compete with our technology or the withdrawal of their support for our product candidates. The failure of any such collaboration could have a material adverse effect on our business.

We will be dependent on healthcare professionals’ efforts to learn about our product candidates.

As a result, the products being developed may not gain significant market acceptance among physicians, hospitals, patients and healthcare payors until healthcare professionals are properly educated about the procedures involved in using the products. Market acceptance of our product candidates and technology will depend upon a variety of factors including:

        whether our future clinical trials demonstrate significantly improved patient outcomes;

        our ability to educate and train physicians to perform the image guided injection procedures and drive acceptance of the use of products;

        our ability to convince healthcare payors that use of the technology results in reduced treatment costs and improved outcomes for patients;

        whether our system replaces and/or complements treatment methods in which many hospitals have made a significant investment; and

        whether doctors and hospitals are willing to replace their existing technology with a new medical technology until the new technology’s value has been demonstrated.

We may need to establish clinical training and centers of excellence to educate and train physicians and healthcare payors, but the key opinion thought leadership required for initial market acceptance within the healthcare arena may take time to develop.

Without effort from key opinion healthcare professionals to become educated about our product candidates, and guide physicians, the market may not accept our approach and our efforts to commercialize our product candidates may be unsuccessful. Similar considerations apply in any other market where we receive approval. Successful commercialization of the methodology in many markets will depend on market acceptance by thought leading healthcare professionals.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system directed at broadening the availability of healthcare, improving the quality of healthcare, and containing or lowering the cost of healthcare.

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For example, in March 2010, the United States Congress enacted the ACA, which, among other things, includes changes to the coverage and payment for products under government health care programs. And since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA.

Other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2029 unless additional Congressional action is taken. The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which was signed into law on March 27, 2020, designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended these reductions from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. In addition, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single-source and innovator multiple-source drugs, beginning January 1, 2024. These laws may result in additional reductions in Medicare, Medicaid and other healthcare funding.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products, which has resulted in several Congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products. For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing and importation. As a result, the FDA also released a final rule in September 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada. Further, in November 2020, the U.S. Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until January 1, 2023. The CMS also issued an interim final rule that establishes a Most Favored Nation, or MFN, Model for Medicare Part B drug payments. This regulation would substantially change the reimbursement landscape as it bases Medicare Part B payment for 50 selected drugs on prices in foreign countries instead of average sales prices (ASP) and establishes a fixed add-on payment in place of the current 6 percent (4.3 percent after sequestration) of ASP. The MFN drug payment amount is expected to be lower than the current ASP-based limit because U.S. drug prices are generally the highest in the world. On December 28, 2020, the U.S. District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. On January 13, 2021, in a separate lawsuit brought by industry groups in the U.S. District Court for the District of Maryland, the government defendants entered a joint motion to stay litigation on the condition that the government would not appeal the preliminary injunction granted in the U.S. District Court for the Northern District of California and that performance for any final regulation stemming from the MFN Model interim final rule shall not commence earlier than sixty (60) days after publication of that regulation in the Federal Register. In December 2020, CMS issued a final rule implementing significant manufacturer price reporting changes under the Medicaid Drug Rebate Program, including regulations that affect manufacturer-sponsored patient assistance programs subject to pharmacy benefit manager accumulator programs and Best Price reporting related to certain value-based purchasing arrangements. On May 21, 2021, an industry group sued CMS, claiming that the change to the Best Price rule exceeds CMS’s statutory authority and is contrary to the Medicaid Rebate statute. This litigation is ongoing. It is unclear to what extent these new regulations will be implemented and to what extent these regulations or any future legislation or regulations by the Biden administration will have on our business, including our ability to generate revenue and achieve profitability.

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Outside the United States, ensuring coverage and adequate payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to government control in many countries. Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization.

In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval. For example, the European Union provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a product or they may instead adopt a system of direct or indirect controls on our profitability for placing the product on the market. Other member states allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European Union have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union.

We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug, which could have an adverse effect on demand for our product candidates. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates. For additional information on healthcare reform, see “Business — Government Regulation — Healthcare reform.”

Rapid technological developments in treatment methods for cancer and competition with other forms of cancer treatments could affect our ability to achieve meaningful revenues or profit.

Competition in the cancer treatment industry is intense. Products made using our technology will compete with all forms of cancer treatments that are alternatives to the “gold standard” treatment of surgical resection. Many of our competitors have substantially greater resources and considerable experience in conducting clinical trials and obtaining regulatory approvals. If these competitors develop more effective, more affordable products, or if treatment methods achieve earlier product development, our revenues or profitability will be substantially reduced.

The loss of key personnel could adversely affect our business.

The loss of any of our key members could delay our ability to develop the technology, conduct preclinical research, conduct clinical research, obtain FDA approval, or introduce products using our technology commercially and, ultimately, our ability to generate revenues and profits. Competition for experienced personnel is intense. If we cannot retain our current personnel or attract additional experienced personnel, our ability to compete could be adversely affected.

We are dependent on the services of our Chief Executive Officer, Lewis H. Bender, for the future success of our business. The loss of the services of Mr. Bender could have an adverse effect on our business, financial condition and results of operations. If that should occur, until we find another person to act as our chief executive officer, our operations could be suspended. In that event it is possible you could lose your entire investment.

Two of our key consultants are engaged in other business activities and have a conflict in determining how much time to devote to our affairs. Their failure to devote sufficient time to our business could have a negative impact on our operations.

Two of our former executive officers, Rebecca Drain and Dr. Ian B. Walters, had their employment agreements terminated during fiscal year 2022. Ms. Drain signed a consulting agreement, pursuant to which she is obligated to spend no more than four hours per week working for us. We are currently negotiating a services agreement pursuant to which we anticipate Dr. Walters will dedicate up to three hours of his time per week to providing services to the Company. Neither Ms. Drain nor Dr. Walters are required to, and will not, commit full time to our affairs.

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Ms. Drain and Dr. Walters are engaged in several other business endeavors. These other engagements result in a conflict of interest in allocating their time between our operations and the other businesses in which they are engaged. Their failure to devote time to our business could have an adverse impact on our business, results of operations and financial condition. It is possible that the demands on Ms. Drain and Dr. Walters from other obligations could increase with the result that they would no longer be able to devote sufficient time to the management of our business. In addition, Ms. Drain and Dr. Walters may not be able to allocate sufficient time for conducting our business if the demands of managing our business increase substantially beyond current levels. In addition, Ms. Drain’s and Dr. Walters’ engagements may result in other conflicts of interest between their obligations to the Company and our shareholders and their other obligations. Should such conflicts arise, there can be no assurance that Ms. Drain or Dr. Walters would act in the best interest of the Company, or that any of these conflicts would be resolved in a manner favorable to the Company and our shareholders.

Risks Related to Patents, Trade Secrets, and Proprietary Rights

Our success depends in part on our ability to obtain patents, maintain trade secret protection, operate without infringing on the proprietary rights of third parties, and commercialize our technology prior to the expiration of our patent protection.

We have three U.S. patents and one pending U.S. patent application. We have 12 foreign patents, including one European patent, validated in 27 countries. We have four pending foreign patent applications. We have registered trademarks and know-how. While we have patents and filed patent applications covering composition of matter, use and methods, only 15 patents have issued. Due to the uncertainty of the patent prosecution process, there are no guarantees that our pending patent applications or any future applications will result in the issuance of a patent. Even if we are successful in obtaining more U.S. patents and new patents in other countries, there is no assurance that our patents will be upheld if later challenged or will provide significant protection or commercial advantage. For example, given the uncertain situation in Eastern Europe, we cannot assure that our Russian patent will not be lost, given that payments necessary to maintain the patent may be unavailable in future years without the risk of international sanctions. Because of the length of time and expense associated with bringing new medical drugs and devices to the market, the healthcare industry has traditionally placed considerable emphasis on patent and trade secret protection for significant new technologies. Other parties may challenge our patents, patent claims or patent applications licensed or issued to us or may design around technologies we have patented, licensed or developed.

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

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions such as patent term adjustments and/or extensions, may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including biosimilars. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed.

Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates we may develop, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of

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relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations, and prospects could be materially harmed.

Companies in the medical drug/device industry may use intellectual property infringement litigation to gain a competitive advantage.

In the United States, patent applications filed in recent years are confidential for 18 months, while older applications are not publicly available until the patent issues. As a result, even after the products using our technology are introduced to the market, there is no guarantee that we will be able to avoid patent infringement claims, whether such claims are ultimately held to have merit. Litigation may be necessary to enforce any patents issued or assigned to us or to determine the scope and validity of third-party proprietary rights. Litigation could be costly and could divert our attention from our business. There are no guarantees that we will receive a favorable outcome in any such litigation. If a third-party claims that we infringed its patents, any of the following may occur:

        we may become liable for substantial damages for past infringement if a court decides that our product candidates infringe upon a competitor’s patent;

        a court may prohibit us from selling or licensing our product candidates without a license from the patent holder, which may not be available on commercially acceptable terms or at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and

        we may have to redesign our product candidate so that it does not infringe upon others’ patent rights, which may not be possible or could require substantial funds or time.

If a third party violates our intellectual property rights, we may be unable to enforce our rights because of our limited resources.

Use of our limited funds to enforce or to defend our intellectual property rights or to defend against legal proceedings alleging infringement of third party proprietary rights may also affect our financial condition adversely. If others file patent applications with respect to inventions for which we already have applications pending, we may be forced to participate in interference proceedings declared by the U.S. Patent and Trademark Office to determine priority of invention, which could also be costly and could divert our attention from our business. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before the any product can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantages of the patent. Not all our U.S. patent rights will have corresponding patent rights effective in Europe or other foreign jurisdictions.

Similar considerations will apply in any other country where we may prosecute patent applications, may be issued patents, or may decide not to pursue patent protection relating to our technology. The laws of foreign countries may not protect our intellectual property rights to the same extent as do laws of the United States.

We protect our trade secrets and proprietary knowledge in part through confidentiality agreements with employees, consultants, and other parties. However, certain consultants, advisors and third parties with whom we have business relationships, and to whom in some cases we have disclosed or will disclose trade secrets and other proprietary knowledge, may also provide services to other parties in the medical device industry, including companies, universities, and research organizations that are developing competing products.

In addition, some employees may eventually seek employment with, and become employed by, our competitors. We cannot be assured that consultants, employees, and other third parties with whom we have entered into confidentiality agreements will not breach the terms of such agreements by improperly using or disclosing our trade secrets or other proprietary knowledge or that we will have adequate remedies for any such breach.

Trade secret protection does not prevent independent discovery of the technology or proprietary information or use of the same.

Competitors may independently duplicate or exceed our technology in whole or in part. If we are not successful in maintaining the confidentiality of our technology, the loss of trade secret protection or know-how relating to our technology will significantly impair our ability to commercialize our product candidates, and our value and results

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of operations will be harmed. Similar considerations apply in any other foreign country where we receive approval. Since we do not yet have valid issued patents for the products using our technology in some countries, our ability to successfully commercialize our technology in those countries may be harmed.

Risks Related to Products Liability

We may be the subject of product liability claims or product recalls, and we may be unable to maintain insurance adequate to cover potential liabilities.

Our business exposes us or may in the future expose us to potential liability risks that may arise from the testing, manufacture, marketing, sale and use of products using our technology. In addition, because certain products using the new technology are intended for use in patients with cancer, there is an increased risk of death among the patients treated with our system which may increase the risk of product liability lawsuits. We may be subject to claims against us even if the injury is due to the actions of others. For example, if the medical personnel that use our product candidates on patients are not properly trained or are negligent in the use of our product candidates, the patient may be injured through the use of our product candidates, which may subject us to claims. Were such a claim asserted we would likely incur substantial legal and related expenses even if we prevail on the merits. Claims for damages, whether or not successful, could cause delays in clinical trials and result in the loss of physician endorsement, adverse publicity and/or limit our ability to market and sell the system, resulting in loss of revenue. In addition, it may be necessary for us to recall products that do not meet approved specifications, which would also result in adverse publicity, as well as resulting in costs connected to the recall and loss of revenue. A successful products liability claim, or product recall would have a material adverse effect on our business, financial condition and results of operations. We currently carry product liability and clinical trial insurance coverage, but it may be insufficient to cover one or more large claims.

Risks Related to Our Securities and This Offering

We are an “emerging growth company” as defined in the JOBS Act and a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies, which could make our securities less attractive to investors and adversely affect the market price of our securities.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

        not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404;

        not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

        providing only two years of audited financial statements in addition to any required unaudited interim financial statements and a correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

        reduced disclosure obligations regarding executive compensation; and

        exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In this prospectus, we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company.

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We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of reduced reporting burdens in this prospectus. In particular, we have provided only two years of audited financial statements and have not included all of the executive compensation information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our securities less attractive if we rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an emerging growth company; however, we may adopt certain new or revised accounting standards early.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we no longer qualify as an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting Common Stock held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and our voting and non-voting Common Stock held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

So long as we qualify as an “emerging growth company” or a “smaller reporting company,” we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. Further, as mentioned above, so long as we qualify as an “emerging growth company” our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting, which may increase the risk that material weaknesses or significant deficiencies in our internal control over financial reporting go undetected. We cannot predict if investors will find our securities less attractive because we may rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities, and the price of our securities may be more volatile and may decline.

Substantial influence will remain with our management and major stockholder, which could delay or prevent a change of control or cause us to take actions in conflict with the intent of our stockholders.

Immediately following the completion of this offering, and disregarding any shares of Common Stock that they purchase in this offering, the existing holdings of our executive officers, directors, principal stockholders and their affiliates will represent beneficial ownership, in the aggregate, of up to approximately 49% of our outstanding Common Stock. We anticipate that our President and CEO will be our largest overall shareholder following the completion of this offering, beneficially owning up to approximately 19% of our outstanding Common Stock. These stockholders, if they act together, will be able to influence our management and affairs and the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. These stockholders acquired their shares of Common Stock for substantially less than the price of the shares of Common Stock being acquired in this offering, and these stockholders may have interests with respect to their Common Stock that are different from those of investors in this offering. The concentration of voting power among these stockholders may have an adverse effect on the price of our Common Stock.

An active trading market for our securities may not develop, and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for shares of our Common Stock. Although our Common Stock has been approved for listing on Nasdaq, an active trading market for our shares may never develop or be sustained following this offering. The initial public offering price of our Common Stock was determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our Common Stock after this offering. In the absence of an active trading market for our Common Stock, investors may not be able to sell their Common Stock at or above the initial public offering price or at the time that they would like to sell.

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The price of our Common Stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock in this offering.

Our stock price is likely to be volatile. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility. Due to our history of losses as well as a variety of factors, many of which are outside of our control and may be difficult to predict, our quarterly and annual operating results may fluctuate significantly in the future. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our Common Stock could decline substantially.

Further, investors in our Common Stock may experience a decrease, which could be substantial, in the value of their stock for reasons unrelated to our operating performance or prospects, and could lose part or all of their investment. The price of our Common Stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this prospectus and others such as:

        variations in our operating performance and the performance of our competitors;

        actual or anticipated fluctuations in our quarterly or annual operating results;

        publication of research reports by securities analysts about us or our competitors or our industry;

        announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments;

        our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;

        additions and departures of key personnel;

        strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;

        the passage of legislation or other regulatory developments affecting us or our industry;

        speculation in the press or investment community;

        changes in accounting principles;

        terrorist acts, acts of war or periods of widespread civil unrest;

        natural disasters and other calamities; and

        changes in general market and economic conditions.

As a result of this volatility, you may not be able to sell your Common Stock at or above the initial public offering price.

If you purchase our Common Stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

You will suffer immediate and substantial dilution in the net tangible book value of the Common Stock you purchase in this offering. Based on the initial public offering price of $5.00 per share, purchasers of Common Stock in this offering will experience immediate dilution of $3.75 per share in net tangible book value of the Common Stock, assuming the conversion of all preferred shares. In addition, investors purchasing Common Stock in this offering will contribute 39.3% of the total amount invested by stockholders since inception but will only own 29.8% of the shares of Common Stock outstanding. In the past, we issued options and other securities to acquire Common Stock at prices significantly below the initial public offering price. To the extent these outstanding securities are ultimately exercised, investors purchasing Common Stock in this offering will sustain further dilution. See “Dilution” for a more detailed description of the dilution to new investors in the offering.

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Participation in this offering by certain of our existing stockholders will reduce the available public float for our shares.

Certain of our existing stockholders agreed to purchase an aggregate of up to $1,975,000 of shares of Common Stock in this offering at the initial public offering price and on the same terms as other purchasers in this offering. If certain of our existing stockholders are allocated all or a portion of the shares which they have agreed to purchase, such purchases would reduce the available public float for our shares because such stockholders would be restricted from selling the shares by a lock-up agreement entered into with us or our underwriters and/or by restrictions under applicable securities laws. As a result, any purchase of shares by such stockholders in this offering may reduce the liquidity of our Common Stock relative to what it would have been had these shares been purchased by investors that were not previously associated with us.

Sales of a substantial number of shares of our Common Stock by our existing stockholders in the public market could cause our stock price to fall.

Upon the closing of this offering and conversion of preferred shares, we will have outstanding a total of 13,099,377 shares of Common Stock (or 13,684,377 shares if the underwriters exercise in full their over-allotment option with respect to the Common Stock). All the Common Stock sold in this offering will be freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). In addition, each of our directors, officers and shareholders owning approximately 94.5% of our outstanding shares of Common Stock have entered into a lock-up agreement with The Benchmark Company, LLC as representative on behalf of the underwriters, which regulates their sales of our Common Stock for a period of 180 days after the date of this prospectus, subject to certain exceptions and automatic extensions in certain circumstances. See the section entitled “Shares Eligible for Future Sale — Lock-Up Agreements” in this prospectus.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our Common Stock in the public market after the lockup and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our Common Stock could decline.

Our management will have broad discretion in using the proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.

We will have considerable discretion in the application of the net proceeds of this offering. We intend to use the net proceeds from this offering to fund discovery and clinical development efforts as well as to further expand our manufacturing platform and capabilities, to grow our infrastructure to support our pipeline, and to fund new and ongoing research activities, working capital and other general corporate purposes, which may include funding for the hiring of additional personnel, capital expenditures and the costs of operating as a public company. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We do not anticipate paying dividends in the foreseeable future.

We do not anticipate paying dividends on our Common Stock in the foreseeable future. Therefore, in the absence of an acquisition transaction, the only way to realize a return on investment might be for investors to sell the stock, but it is unknown when, if ever, investors will be able to do so.

Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value.

Our certificate of incorporation and by-laws and Delaware law contain provisions that could make it harder for a third party to acquire us, even if doing so might be beneficial to our stockholders. These provisions include a classified board of directors and limitations on actions by our stockholders. In addition, our board of directors has the right to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror. Our certificate of incorporation also imposes some restrictions on mergers and other business combinations between us and any holder of 15.0% or more of our outstanding Common Stock. As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change our direction or management may be unsuccessful. See the section entitled “Description of Securities” in this prospectus.

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Our amended and restated certificate of incorporation that will be in effect at the closing of this offering will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation that will be in effect immediately prior to the closing of this offering will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

        any derivative claim or cause of action brought on our behalf;

        any claim or cause of action for a breach of fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders;

        any claim or cause of action against us or any of our current or former directors, officers or other employees arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our bylaws (as each may be amended from time to time);

        any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time, including any right, obligation or remedy thereunder);

        any claim or cause of action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and

        any claim or cause of action against us or any of our current or former directors, officers or other employees governed by the internal-affairs doctrine.

This provision would not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. In addition, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.

For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. However, these choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. Further, these choice of forum provisions may increase the costs for a stockholder to bring such a claim and may discourage them from doing so.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. For example, the Court of Chancery of the State of Delaware recently determined that the exclusive forum provisions of federal district courts of the United States of America for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

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Our board of directors could issue additional shares of Common Stock or a new class of preferred stock and dilute the equity positions of current stockholders without consent of the investors.

We are issuing new shares of common stock as part of this offering. In the future, we expect to need additional funding, which it may obtain through the authorization and issuance of additional common or preferred equity securities. The authorization of additional shares of stock under our certificate of incorporation may be made without the affirmative vote of all the investors in this offering. Any issuance of additional shares of stock could dilute the equity position of our current stockholders. A future issuance of shares of preferred stock will result in the shares of our Common Stock being subject to certain preferential rights of such preferred stock, including a right to participate in the proceeds of any sale or liquidation of the Company ahead of the shares of Common Stock.

THE SELECTED LIST OF RISK FACTORS ABOVE DOES NOT PURPORT TO BE A COMPLETE LIST OF ALL MATERIAL RISKS INHERENT WITH AN INVESTMENT IN THIS OFFERING. WE URGE YOU TO CAREFULLY CONSIDER THESE RISKS AS WELL AS OTHERS COMMON TO EARLY STAGE VENTURES AND OTHER INVESTMENTS OF SIMILAR NATURE.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “will,” “project,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

        the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs;

        our need to raise additional funding before we can expect to generate any revenues from product sales;

        our plans to develop and commercialize our product candidates;

        the timing or likelihood of regulatory filings and approvals;

        the ability of our research to generate and advance additional product candidates;

        the implementation of our business model, strategic plans for our business, product candidates and technology;

        our commercialization, marketing and manufacturing capabilities and strategy;

        the rate and degree of market acceptance and clinical utility of our system;

        our competitive position;

        our intellectual property position;

        developments and projections relating to our competitors and our industry;

        our ability to maintain and establish collaborations or obtain additional funding;

        our expectations related to the use of proceeds from this offering; and

        our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. You should read this prospectus completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this prospectus and the documents that we have filed with the SEC as exhibits to the registration statement, of which this prospectus is a part, with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

We estimate that the net proceeds from the sale of our Common Stock in this offering will be approximately $16.2 million, based upon an initial public offering price of $5.00 per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The $16.2 million of Net Proceeds is net of $1.4 million of offering expenses that were previously paid and expensed by the Company. If the underwriters’ option to purchase additional shares of our Common Stock is exercised in full, we estimate that the net proceeds from the offering will be approximately $18.9 million.

We intend to use the net proceeds from this offering for the following purposes:

        approximately 35% toward initiating/conducting a Phase 3 sarcoma study (IT-03);

        approximately 15% toward initiating/conducting a Phase 2/3 early-stage breast cancer studies (IT-04);

        approximately 20% toward our current clinical trials and related operations, including costs associated with the manufacturing of SHAO and INT230-6 for our clinical trials, conducting/completing our existing clinical programs, and maintaining our IND with the FDA, CTA with Health Canada as well as other regulatory filings with other countries;

        approximately 5% toward development of our second product candidate, INT33X; and

        approximately 25% toward general corporate purposes and working capital.

With regard to our Phase 3 sarcoma study (IT-03) and Phase 2/3 early-stage breast cancer study (IT-04), we expect that the proceeds from this offering will be sufficient to allow us to obtain regulatory authorizations to proceed for these trials. However, the proceeds from this offering will be insufficient to enable us to finish these trials, and we will need to raise additional funding in order to complete these trials. Based on our current plans, we believe that our existing cash and cash equivalents, together with the anticipated net proceeds to us from this offering, will enable us to fund our operations and capital expenditure requirements through December 31, 2024.

We will have broad discretion over how to use the net proceeds we receive from this offering. The expected uses of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from preclinical and clinical trials, and any unforeseen cash needs.

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DIVIDEND POLICY

We have not declared or paid any cash dividends on our capital stock since our inception. In the near term we intend to retain future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends to holders of Common Stock in the foreseeable future.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and consolidated capitalization as of March 31, 2023:

        on an actual basis;

        on a pro forma basis to give effect to:

        the automatic conversion of 8,249,719 outstanding shares of our preferred stock into an aggregate of 4,124,851 shares (as adjusted for the Reverse Split) of our Common Stock upon the closing of this offering. The Series A, Series B, and Series C shareholders have consented to the conversion of the preferred shares into common shares following an IPO raising gross proceeds of at least $7.0 million in the aggregate. The Company does not intend to proceed with the offering unless the preferred stock is converted into Common Stock upon completion of the offering;

        additional shares of Series B Preferred Stock that are issued as a result of the offering price of shares of Common Stock being offered hereby being below the $9.00 issuance price of the Series B Preferred Stock. These shares will be converted into 100,452 shares of our Common Stock upon the closing of this offering;

        additional shares of Series C Preferred Stock that are issued as a result of the offering price of shares of Common Stock being offered hereby being below the $11.50 issuance price of the Series C Preferred Stock. These shares will be converted into 164,966 shares of our Common Stock upon the closing of this offering;

        the conversion of convertible notes into an aggregate of 1,367,011 shares of our Common Stock upon the closing of this offering, which is based on unpaid principal and accrued but unpaid interest as of March 31, 2023 at conversion prices of $3.50 per share (for 723,454 shares) and $3.25 per share (for 643,557 shares). The convertible notes and accrued interest are converted upon completion of an IPO of at least $7.0 million; and

        the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the consummation of this offering; and

        and on a pro forma as adjusted basis, giving effect to our issuance and sale of shares of Common Stock in this offering at an initial public offering price of $5.00 per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the proceeds as described under the section entitled “Use of Proceeds”. The $16.2 million of Net Proceeds is net of $1.4 million of offering expenses that were previously paid and expensed by the Company. The pro forma as adjusted cash and cash equivalents of approximately $18.3 million includes the gross proceeds of the IPO, less commissions, less the cash needed for the remaining expenses related to the issuance of the IPO shares.

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This table should be read in conjunction with the other information contained in this prospectus, including “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

 

At March 31, 2023

   

ACTUAL

 

PRO FORMA

 

PRO FORMA AS ADJUSTED

   

(in thousands, except share and per share data)

Cash and cash equivalents

 

$

617

 

 

$

617

 

 

$

18,303

 

Series A redeemable convertible preferred stock, par value $0.0001, 5,000,000 shares authorized, issued and outstanding, actual; no shares issued or outstanding, pro forma and pro forma as adjusted

 

 

10,000

 

 

 

 

 

 

 

Stockholders’ equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

Series B convertible preferred stock, par value $0.0001, 1,449,113 shares authorized, issued and outstanding, actual; no shares
issued or outstanding, pro forma and pro forma as adjusted

 

 

 

 

 

 

 

 

 

Series C convertible preferred stock, par value $0.0001, 1,800,606 shares authorized, issued and outstanding, actual; no shares
issued or outstanding, pro forma and pro forma as adjusted.

 

 

 

 

 

 

 

 

 

Common Stock, par value $0.0001, 50,000,000 shares authorized, 3,410,103 shares issued and outstanding, actual; 135,000,000 shares authorized, 9,167,383 shares issued and outstanding, pro forma; 135,000,000 shares authorized, 13,067,383 shares issued and outstanding, pro forma as adjusted.

 

 

1

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

24,026

 

 

 

43,273

 

 

 

60,959

 

Accumulated deficit

 

 

(39,989

)

 

 

(44,613

 

 

(44,613

)

   

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity (deficit)

 

 

(15,962

)

 

 

(1,338

)

 

 

16,348

 

   

 

 

 

 

 

 

 

 

 

 

 

Total capitalization

 

$

(5,962

)

 

$

(1,338

)

 

$

16,348

 

The information set forth in the table excludes:

        1,044,250 shares of our Common Stock issuable upon the exercise of stock options outstanding as of March 31, 2023 under our 2013 Stock and Option Plan, or the 2013 Plan, and our 2021 Stock Incentive Plan, or the 2021 Plan, at a weighted average exercise price of $8.48 per share (as adjusted for the Reverse Split); these were exercisable and convertible into 711,875 Common Stock shares at a weighted average exercise price of $7.63 per share (as adjusted for the Reverse Split);

        3,648,750 shares of our Common Stock were reserved for future issuance under the 2013 Plan; however, these shares are no longer available for issuance since the 2021 Plan became effective;

        387,750 shares of our Common Stock reserved and available for future issuance upon exercise of the Company’s outstanding warrants, as of March 31, 2023 at a weighted average exercise price of $6.51 per share (as adjusted for the Reverse Split); these were exercisable and convertible into 339,875 Common Stock shares at a weighted average exercise price of $6.09 per share (as adjusted for the Reverse Split);

        up to 313,950 shares of Common Stock underlying the Underwriter Warrants; and

        3,045,700 shares of our Common Stock available for future issuance under the 2021 Plan. This includes the original 3,000,000 authorized shares plus an additional 238,700 shares authorized effective January 1, 2023.

Unless otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares and no exercise of any other options or warrants.

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DILUTION

If you invest in our Common Stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our Common Stock and the pro forma as adjusted net tangible book value per share of our Common Stock after this offering.

Our historical net tangible book value (deficit) as of March 31, 2023 was ($16.0 million), or ($4.68) per share of our Common Stock (as adjusted for the Reverse Split). Our historical net tangible book value (deficit) is the amount of our total tangible assets less our total liabilities and preferred stock, which is not included within our stockholders’ (deficit) equity. Historical net tangible book value per share represents historical net tangible book value (deficit) divided by the 3,410,103 shares of our Common Stock outstanding as of March 31, 2023 (as adjusted for the Reverse Split). This calculation of historical net tangible book value (deficit) includes $4.6 million in convertible notes and $10.0 million in Series A preferred stock, both of which convert into Common Stock following an initial public offering (IPO) with gross proceeds of at least $7.0 million. Pursuant to the Certificate of Incorporation, the Series A, Series B, and Series C preferred shares will convert into common shares following an IPO with gross proceeds of at least $7.0 million in the aggregate. The Company does not intend to proceed with the offering unless the preferred stock is converted into Common Stock upon completion of the offering.

The pro forma data in the table below is derived from our balance sheet as of March 31, 2023 and is presented on a pro forma basis after giving effect to the conversion of 8,249,719 shares of our preferred stock into 4,124,851 shares of our Common Stock, the issuance and conversion to shares of Common Stock of additional shares of Series C Preferred Stock converted into 164,966 shares of Common stock as a result of the offering price of shares of Common Stock being offered hereby being below $11.50 per share, the issuance and conversion to shares of Common Stock or additional shares of Series B Preferred Stock converted into 100,452 shares of Common Stock as a result of the offering price of shares of Common Stock being offered hereby being below the $9.00 per share, and the issuance of 1,367,011 shares of our Common Stock upon the conversion of convertible notes and accrued interest as of March 31, 2023 at conversion prices of $3.25 per share (for 643,557 shares) and $3.50 per share (for 723,454 shares), each of which is expected to occur at the closing of this offering. Our pro forma net tangible book value (deficit) as of March 31, 2023 was $(1.3) million, or $(0.15) per share of our Common Stock. Our pro forma net tangible book value (deficit) is the amount of our total tangible assets less our total liabilities. Pro forma net tangible book value per share represents pro forma net tangible book value (deficit) divided by the 9,167,383 shares of our Common Stock outstanding as of March 31, 2023 after giving effect to these pro forma adjustments.

After giving effect to the receipt of the estimated net proceeds from our sale of Common Stock in this offering, with an initial public offering price of $5.00 per share, after deducting the underwriting discount and other estimated offering expenses payable by us, our pro forma as-adjusted net tangible book value as of March 31, 2023 would have been approximately $16.3 million, or $1.25 per share. This represents an immediate increase in pro forma as adjusted net tangible book value per share of $1.40 to existing stockholders and immediate dilution to new investors in this offering of $3.75 per share. The following table illustrates this dilution per share. Dilution represents the difference between the amount per share paid by investors in this offering and the pro forma as-adjusted net tangible book value per share of our Common Stock immediately after this offering.

Initial public offering price per share

 

 

 

 

 

$

5.00

Historical net tangible book value (deficit) per share as of March 31, 2023

 

$

(4.68

)

 

 

 

Increase per share attributable to the pro forma adjustment described above

 

 

4.53

 

 

 

 

Pro forma net tangible book value per share as of March 31, 2023

 

 

(0.15

)

 

 

 

Increase in net tangible book value per share attributable to new investors in this offering

 

 

1.40

 

 

 

 

Pro forma as-adjusted net tangible book value per share after this offering

 

 

 

 

 

 

1.25

Dilution per share to new investors

 

 

 

 

 

$

3.75

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If the underwriters fully exercise their option to purchase additional shares of Common Stock, pro forma as-adjusted net tangible book value after this offering would increase by approximately $0.15 per share, and there would be an immediate dilution of approximately $3.60 per share to new investors based on the initial public offering price of $5.00 per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If any shares are issued upon exercise of outstanding options or warrants, you will experience further dilution.

The following table presents, on a pro forma as-adjusted basis, as described above, the differences between the existing stockholders on a pro forma basis and the purchasers of shares of Common Stock in this offering with respect to the number of shares of Common Stock purchased from us, the total consideration paid, and the average price paid per share at an initial public offering price of $5.00 per share:

 

Shares Purchased

 

Total Consideration

 

Average
Price Per Share

   

Number

 

Percent

 

Amount

 

Percent

 

Existing stockholders

 

9,167,383

 

70.2

%

 

$

30,119,927

 

60.7

%

 

$

3.29

New investors

 

3,900,000

 

29.8

%

 

 

19,500,000

 

39.3

%

 

$

5.00

Total

 

13,067,383

 

100.0

%

 

$

49,619,927

 

100.0

%

 

$

3.80

____________

*        Certain of our existing stockholders agreed to purchase an aggregate of up to $1,975,000 of shares of Common Stock in this offering at the initial public offering price and on the same terms as other purchasers in this offering. The presentation in this table regarding ownership by existing stockholders does not give effect to any purchases in this offering by such stockholders.

The table above assumes no exercise of the underwriters’ option to purchase additional shares in this offering. If the underwriters’ option to purchase additional shares is exercised in full with respect to the Common Stock, the number of shares of our Common Stock held by existing stockholders would be reduced to 67.1% of the total number of shares of our Common Stock outstanding after this offering, and the number of shares of Common Stock held by new investors participating in this offering would be increased to 32.9% of the total number of shares of our Common Stock outstanding after this offering.

The number of shares of our Common Stock to be outstanding after this offering is based on 13,099,377 shares of Common Stock, which includes 3,410,103 shares of our Common Stock outstanding as of June 29, 2023 (as adjusted for the Reverse Split), plus 4,124,851 shares of our Common Stock issued upon the conversion of 8,249,719 shares of our preferred stock, plus additional shares of Series B Preferred Stock issued and converted into 100,189 shares of Common Stock as a result of the offering price of shares of Common Stock being offered hereby being below $9.00 per share, plus additional shares of Series C Preferred Stock issued and converted into 164,518 shares of Common Stock as a result of the offering price of shares of Common Stock being offered hereby being below $11.50 per share, and 1,399,716 shares of our Common Stock that would be issued on the convertible notes and an amount of accrued interest at a conversion prices of $3.50 per share and $3.25 per share, plus 3,900,000 shares of our common stock offered in this offering and excludes:

        1,044,250 shares of our Common Stock issuable upon the exercise of stock options outstanding as of June 29, 2023 under the 2013 Plan and the 2021 Plan at a weighted average exercise price of $8.48 per share (as adjusted for the Reverse Split). Of these, 711,875 shares are exercisable at June 29, 2023 at a weighted average exercise price of $7.63 per share (as adjusted for the Reverse Split);

        3,648,750 shares of our Common Stock were reserved for future issuance under the 2013 Plan; however, these shares are no longer available for issuance since the 2021 Plan became effective;

        387,750 shares of our Common Stock reserved and available for future issuance upon exercise of the outstanding warrants, as of June 29, 2023 at a weighted average exercise price of $6.51 per share (as adjusted for the Reverse Split). Of these, 344,875 shares are exercisable at June 29, 2023 at a weighted average exercise price of $6.13 per share (as adjusted for the Reverse Split);

        up to 313,950 shares of Common Stock underlying the Underwriter Warrants; and

        3,045,700 shares of our Common Stock that became available for future issuance under the 2021 Plan, effective November 12, 2021. This includes the original 3,000,000 authorized shares plus an additional 238,700 shares authorized effective January 1, 2023.

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Unless otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares and no exercise of any other options or warrants.

To the extent that outstanding options are exercised or shares are issued under our 2021 Plan, you will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our stockholders.

The conversion of the 8,249,719 shares of preferred stock into 4,124,851 shares of Common Stock and the conversion of the convertible notes into 1,399,716 shares is contingent upon this IPO being at least $7.0 million in aggregate. The Company does not intend to proceed with the offering unless the preferred stock and convertible note is converted into Common Stock upon completion of this offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes and other financial information appearing elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this prospectus. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and elsewhere in this prospectus.

Unless otherwise indicated or the context otherwise requires, references in this prospectus to the “Company”, “we”, “us” and “our” refer to Intensity Therapeutics, Inc.

Overview

We are a clinical-stage biotechnology company whose treatment approach addresses both the regional and systemic nature of a patient’s cancer. We are currently completing Phase 2 clinical trials with one study using our lead product candidate in late-stage disease and another study in early stage breast cancer. Our first clinical trial dosed 110 patients and locked our data base in February 2023. This clinical trial used our lead product candidate INT230-6 alone; in combination with Merck’s Keytruda (pembrolizumab) for patients with advanced solid malignancies including pancreatic, bile duct, squamous cell, and non-MSI high colon cancers; and in combination with Bristol Myers Squibb’s Yervoy (ipilimumab) for patients with breast cancer, liver cancer, and advanced sarcoma.

Our second clinical trial (the INVINCIBLE Study or IT-02) tested INT230-6 in early stage breast cancer for patients not suitable for presurgical chemotherapy. The study enrolled 91 subjects; enrollment is now complete. This clinical trial is a Phase 2 randomized, window of opportunity for patients who are ineligible or chose not to have presurgical chemotherapy. The key endpoint is to understand whether INT230-6 can reduce the patient’s cancer by 50% to 100% defined as a major pathological response compared to no treatment (the current standard of care) or a saline injection. Reduction of cancer presurgically in some aggressive forms of cancer has been shown to correlate with delaying disease recurrence. Another endpoint will be to understand the percentage of necrosis that can be achieved in tumors ranging from 1.5 to 5 cm in longest diameter following treatment with one dose of INT230-6, which set by the tumor’s diameter.

Since our inception in 2012, our operations have included business planning, hiring personnel, raising capital, building our intellectual property portfolio, and performing both research and development on our product candidates. We currently have incurred net losses since inception and expect to incur net losses in the future as we continue our research and development activities. To date, we have funded our operations primarily through approximately $34.6 million of sales of our common stock, preferred stock and convertible notes. As of March 31, 2023, we had approximately $0.6 million of cash and cash equivalents. Since our inception we have incurred significant operating losses. We incurred net losses of $7.6 million and $7.9 million for the years ended December 31, 2022 and 2021, respectively, and net losses of $1.3 million and $2.4 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, December 31, 2022, March 31, 2022, and December 31, 2021, we had an accumulated deficit of approximately $40.0 million, $38.7 million, $33.4 million and $31.1 million, respectively. We expect to incur significant expenses and operating losses for the next several years. See “Funding Requirements” below.

We expect our expenses to increase as we continue to:

        Initiate Phase 3 programs in sarcoma and/or breast cancer;

        Complete our current Phase 2 programs;

        Advance our preclinical research and bring new product into clinical development;

        Incur manufacturing costs for additional GMP batches of our product candidates and enhancer molecules;

        Seek regulatory approvals for any of our product candidates that successfully complete clinical trials;

        Hire additional personnel;

        Expand our operational, financial, and management systems;

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        Invest in measures to protect our existing and new intellectual property;

        Establish a sales, marketing, medical affairs, and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize; and

        Operate as a public company.

Due to numerous risks and uncertainties associated with biopharmaceutical product development and the economic and developmental uncertainty arising from the COVID-19 pandemic, we may be unable to accurately predict the timing or magnitude of all expenses. Our ability to ultimately generate revenue to achieve profitability will depend heavily on the development, approval, and subsequent commercialization of our product candidates. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financing, or other capital sources, which may include collaborations with other companies or other strategic transactions. We may not be able to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we would have to significantly delay, reduce, or eliminate the development and commercialization of one or more of our product candidates.

Components of Results of Operations

Revenue

To date, we have not generated any revenue from product sales and we do not expect any revenue from the sale of product in the foreseeable future. If our development efforts for any of our product candidates are successful and result in regulatory approval, then we may generate revenue in the future from product sales. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of any of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.

Research and Development Costs

Salaries and Payroll Taxes

Salaries and payroll taxes include Company employees involved in our pre-clinical research and clinical trials. This includes medical officers, project management, manufacturing staff and research scientists. The payroll taxes include all government required payments such as social security and unemployment taxes.

Fringe Benefits

We offer a partially funded health insurance and dental insurance plan. We maintain a defined contribution plan for all employees age 21 and older who have completed one year of service. This 401K plan makes a matching contribution equal to 100% of an employee’s contribution, up to 3% of an employee’s eligible earnings.

Research Costs

Research costs include:

        Pre-clinical research

        Manufacture of new enhancer compounds,

        Manufacture and labelling of GMP product candidate

        Product candidate stability testing of GMP batches

        Costs due to clinical trial sites for patient care

        Other clinical trial costs such as shipping, storage, and analytical testing

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Scientific Consulting

Scientific consulting are costs related to non-employees involved in research. This category includes: statistical analysis, clinical trial operations, development of product manufacturing techniques, and internet research related to oncology and chemistry issues that may impact our preclinical or clinical research.

Stock-Based Compensation

Stock-based compensation is the expense related to stock options granted to our employees and warrants granted to our independent consultants who work in the research aspects.

General and Administrative Costs

Salaries and Payroll Taxes

Salaries and payroll taxes includes Company employees who are involved in fund raising, management, and our financial administration. The payroll taxes include all government required payments such as social security and unemployment taxes.

Fringe Benefits

We offer a partially funded health insurance and dental insurance plan. We maintain a defined contribution plan for all employees age 21 and older who have completed one year of service. This 401K plan makes a matching contribution equal to 100% of an employee’s contribution, up to 3% of an employee’s eligible earnings.

Legal

Legal costs relate primarily to our corporate administration. All legal costs relate to expenses for our outside corporate law firm.

Patent and Trademark

Patent and Trademark are the legal costs and filing costs to establish and maintain patents in 38 countries.

Insurance

Insurance includes: directors and officers insurance, workers compensation insurance, product liability insurance, business insurance, employee and cyber liability insurance.

Facilities and Rent

Facilities and rent is the cost of maintaining our office facility in Westport, Connecticut. We plan to move into new facilities closer to New Haven, Connecticut beginning July 1, 2023 to improve recruiting of staff.

Investor Relations

Investor relations are costs paid to outside consultants to develop the materials to present to prospective investors, and to arrange meetings with potential investors.

Accounting Services

Accounting services include the cost of our independent auditors for our annual audit, quarterly reviews, and services related to the filing of our registration statement on Form S-1. This category also includes costs related to the preparation of income tax returns, and the cost of maintain our accounting system.

Other

Other general and administrative costs include such items as office supplies, computer related costs, bank fees, public relations costs, recruiting costs and conferences.

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Stock-Based Compensation

Stock-based compensation is the expense related to stock options granted to our employees and warrants granted to our independent consultants who work in the general and administrative aspects.

Other income

We earned interest income on our cash balances.

We incur interest expense on our convertible notes. Accrued interest expense will be converted into common stock upon completion of the offering.

We received a refundable Connecticut Research and Development tax credit and a Federal Research and Development tax credit that is recoverable through a refund of Social Security taxes paid by us.

Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2022 and 2021 and the three months ended March 31, 2023 and 2022 (in thousands):

 

Years Ended
December 31,

 

Increase (Decrease)

 

Three Months Ended
March 31,

 

Increase (Decrease)

   

2022

 

2021

 

2023

 

2022

 

Operating expenses: