424B4 1 g084065_424b4.htm 424B4

Filed Pursuant to Rule 424(b)(4)

Registration No. 333-269188

PROSPECTUS

CHROMOCELL THERAPEUTICS CORPORATION

1,100,000 SHARES OF COMMON STOCK

55,000 SHARES OF COMMON STOCK UNDERLYING THE REPRESENTATIVE’S WARRANTS

This is the initial public offering by Chromocell Therapeutics Corporation (“Chromocell”, the “Company”, “we”, “us” or “our”). We have registered on the registration statement of which this prospectus forms a part a total of 4,069,823 shares of our common stock, par value $0.0001 per share (“Common Stock”), consisting of: (i) 1,100,000 shares (the “IPO Shares”) for sale by the Company (the “IPO”) through the underwriters named on the cover page of this prospectus (the “IPO Prospectus”) and (ii) 2,969,823 shares (the “Selling Stockholder Shares”) of Common Stock on behalf of certain selling stockholders (the “Selling Stockholders”) identified in a separate prospectus (the “Resale Prospectus”), which Selling Stockholder Shares may be resold by such Selling Stockholders from time to time. In addition, we have also registered shares of Common Stock underlying the Representative’s Warrants (discussed below).

The offering of the IPO Shares is being made on a firm commitment basis with the initial public offering price of $6.00 per share. On February 15, 2024, in connection with the IPO and the listing of our Common Stock on the NYSE American LLC (“NYSE American”), we effected a 1-for-9 reverse stock split (the “Reverse Stock Split”) of our outstanding shares of Common Stock. Unless specifically provided otherwise herein, share numbers and prices above and used elsewhere reflect the effectiveness of the Reverse Stock Split. The number of shares of Common Stock offered pursuant to this prospectus and all other applicable information, other than in the historical financial statements and related notes included elsewhere in this prospectus, or as otherwise noted, has been determined based on the initial public offering price. The initial public offering price of the IPO Shares offered hereby has been determined between the underwriters and us, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business. See “Underwriting — Determination of Public Offering Price”.

Our Common Stock is listed on NYSE American under the symbol “CHRO”. As noted above, the registration statement of which this prospectus forms a part also registered on behalf of certain Selling Stockholders an aggregate of 2,969,823 Selling Stockholder Shares to be resold from time to time. The offering of Selling Stockholder Shares by the Selling Stockholders is conditioned on the closing of the IPO. The Selling Stockholder Shares may be sold at prevailing market prices, prices related to prevailing market prices or at privately negotiated prices.

We will not receive any proceeds from the sale of any of the Selling Stockholder Shares sold by the Selling Stockholders. The offering of the Selling Stockholder Shares by the Selling Stockholders will terminate at the earlier of such time as all of the Selling Stockholder Shares have been sold pursuant to this registration statement and the date on which it is no longer necessary to maintain the registration of the Selling Stockholder Shares as a result of such securities being permitted to be offered and resold without restriction pursuant to the provisions of Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”).

We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 10 of this prospectus and under similar headings in any amendments or supplements to this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per IPO Share		Total⁽¹⁾
Initial public offering price	$	6.00	$	6,600,000.00
Underwriting discounts and commissions⁽²⁾	$	0.42	$	462,000.00
Non-accountable expense allowance⁽³⁾	$	0.06	$	66,000.00
Proceeds, before expenses, to us	$	5.52	$	6,072,000.00

(1)	Assumes no exercise of the over-allotment option by the underwriters.

(2)	See “Underwriting” for a description of the compensation payable to the underwriters.

(3)	Represents a non-accountable expense allowance equal to 1% of the gross proceeds of this offering, payable to the underwriters.

We have granted the underwriters an option to purchase from us up to an additional 165,000 IPO Shares within 45 days from the date of the IPO Prospectus solely to cover over-allotments, if any, at the initial public offering price per IPO Share, less underwriting discounts and commissions.

We have agreed to issue to A.G.P./Alliance Global Partners, as representative of the underwriters or its designees, at the closing of the IPO, warrants to purchase a number of shares of Common Stock equal to five percent (5%) of the IPO Shares (the “Representative’s Warrants”). The Representative’s Warrants will be exercisable beginning six months from the commencement of sales of IPO Shares registered on the registration statement of which the IPO prospectus is a part and will expire five years following the commencement of sales in the IPO. The exercise price of the Representative’s Warrants will equal 125% of the initial public offering price per IPO Share. See “Underwriting.” The IPO Prospectus also relates to the Common Stock issuable upon exercise of the Representative’s Warrants.

The underwriters expect to deliver the IPO Shares to purchasers in New York, New York on February 21, 2024.

A.G.P.

The date of this prospectus is February 15, 2024

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	1
RISK FACTORS	10
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	41
USE OF PROCEEDS	43
DIVIDEND POLICY	44
CAPITALIZATION	45
DILUTION	46
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
BUSINESS	55
MANAGEMENT	79
EXECUTIVE COMPENSATION	83
CERTAIN RELATIONSHIPS AND RELATED PARTY AND OTHER TRANSACTIONS	87
PRINCIPAL STOCKHOLDERS	88
DESCRIPTION OF CAPITAL STOCK	89
SHARES ELIGIBLE FOR FUTURE SALE	94
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	96
UNDERWRITING	102
LEGAL MATTERS	108
EXPERTS	108
WHERE YOU CAN FIND MORE INFORMATION	108
INDEX TO FINANCIAL STATEMENTS	F-1

ABOUT THIS PROSPECTUS

Neither we, the Selling Stockholders nor the underwriters have authorized anyone to provide you with information or make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We, the Selling Stockholders and the underwriters take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: we, the Selling Stockholders 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 the shares of common stock and the distribution of this prospectus outside the United States.

Solely for convenience, our trademarks and tradenames referred to in this prospectus and the registration statement of which it forms a part may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.

Information contained in, and that can be accessed through our website, www.chromocell.com, does not constitute part of this prospectus or the registration statement of which it forms a part.

INDUSTRY AND MARKET DATA

We obtained the industry, statistical and market data in this prospectus from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. In presenting this information, we have made assumptions based on such data and other similar sources, and on our knowledge of, and our experience to date in, the potential markets for our compounds. Although we believe the data from these third-party sources is reliable, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.

BASIS OF PRESENTATION

We were incorporated in Delaware on March 19, 2021. On August 10, 2022, we entered into that certain Contribution Agreement (the “Contribution Agreement”) with Chromocell Corporation, a Delaware corporation (“Chromocell Holdings”). Pursuant to the Contribution Agreement, effective July 12, 2022 (the “Contribution Date”), Chromocell Holdings contributed all assets, liabilities and results of operations related to Chromocell Holdings’ therapeutic business, including all patents, pre-clinical and Phase I study results and data, and trade secrets related to the CC8464 compound, in exchange for the issuance by us of 10,000,000 shares of Common Stock and (ii) 600,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Prior to the Contribution Date, we had only nominal assets and liabilities. Accordingly, the financial statements presented in this prospectus for periods prior to the Contribution Date have been prepared on a “carve-out” basis from the financial statements of Chromocell Holdings to represent our financial position and performance as if it had existed on a stand-alone basis. The financial statements presented in this prospectus for periods from and after the Contribution Date reflect our financial position and performance as a stand-alone entity.

All of the assets, liabilities and results of operations of the Company as of and for the periods prior to the Contribution Date were identified based on the assets contributed to the Company from Chromocell Holdings. Management believes the assumptions underlying the Company’s carve-out financial statements are reasonable. Nevertheless, the financial statements may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during the periods presented, and may not reflect the Company’s results of operations, financial position and cash flows had the Company operated as a standalone company during the periods presented. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

On August 2, 2023, we entered into a Side Letter to the Contribution Agreement with Chromocell Holdings (the “Holdings Side Letter”). Pursuant to the Holdings Side Letter, upon closing of the IPO: (a) Chromocell Holdings will re-assume all $1.6 million in direct liabilities previously assumed by the Company in accordance with the Contribution Agreement, (b) Chromocell Holdings will waive the Company’s obligations to make a cash payment in the amount of $0.6 million to Chromocell Holdings, and (c) in consideration thereof, the Company will issue to Chromocell Holdings 2,600 shares of Series C Convertible Redeemable Preferred Stock of the Company, par value of $0.0001 per share (the “Series C Preferred Stock”).

In connection with the completion of the IPO: (A) we have effected a 1-for-9 Reverse Stock Split, (B) all 600,000 issued and outstanding shares of our Series A Preferred Stock will automatically convert into 499,429 shares of Common Stock, (C) $389,757 and accrued interest of approximately $28,336 as of February 21, 2024 outstanding under our senior secured convertible notes issued in the April Bridge Financing (as defined below) after giving effect to the Representative Affiliate Transactions (as defined below), will automatically convert into approximately 87,109 shares of Common Stock, (D) $197,421 and accrued interest of $8,169 as of February 21, 2024 outstanding under our senior secured convertible notes issued in the September Bridge Financing (as defined below) after giving effect to the Representative Affiliate Transactions, will automatically convert into approximately 43,385 shares of Common Stock, which includes an additional 549 shares of Common Stock issuable as consideration for the September Bridge Financing (the “Bonus Shares”), (E) we will issue 37,500 shares of Common Stock to an investor as consideration for its previous agreement to provide funding that is no longer necessary in connection with the IPO, (F) we will effect the Representative Affiliate Transactions, (G) we will effect the transactions contemplated by the Holdings Side Letter, and issue an aggregate of 2,600 shares of Series C Preferred Stock to Chromocell Holdings pursuant thereto, and (H) we will issue (i) 93,823 shares to a lender holding a promissory note in the aggregate principal amount of $450,000 and accrued interest of approximately $113,243 (the “Investor Note”) and (ii) 29,167 shares to one of our directors holding a promissory note in the aggregate principal amount of $175,000 (the “Director Note”) in full satisfaction of our obligations thereunder (in the case of (A) through (D) and (H) above, based on the initial public offering price of $6.00 per IPO Share). We refer to these actions as the “IPO Transactions.” In this prospectus, we include certain metrics on an “as adjusted” basis to give effect to the IPO Transactions.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. It may not contain all the information that may be important to you. You should read the entire prospectus carefully, including the section entitled “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus before making an investment decision to purchase our securities.

In this prospectus, unless we indicate otherwise or the context requires, references to the “Company,” “Chromocell,” “we,” “our,” “ours,” and “us” refer to Chromocell Therapeutics Corporation. The following summary is qualified in its entirety by the more detailed information and financial statements and notes thereto included elsewhere in this prospectus.

Our Business

Overview

According to Mordor Intelligence, the global pain management market was valued at approximately $67 billion in 2021, and it is expected to have revenues of $89 billion in 2027, with a compound annual growth rate (“CAGR”) of 4.65% over the forecast period. Also, according to Mordor Intelligence, the United States has the largest market for pain management pharmaceuticals and Asia-Pacific is the region showing the strongest growth. North America holds the largest share in the pain management market, with the United States being the most significant contributor to its revenue. According to data published by the Centers for Disease Control and Prevention (“CDC”), in 2019, 20.4% of adults had chronic pain, and 7.4% of adults had chronic pain that had limited work and daily activities frequently. Additionally, according to the CDC, chronic pain increased with age, and the highest level was reported in patients aged 65 years and above. The prescription pain management market in the United States is still largely dominated by opioid analgesics. Opioid analgesics decrease the perception of pain by stimulating a range of opioid receptors that modulate pain signals. The most widely used opioid analgesics, including morphine, fentanyl and hydromorphone, act primarily through the activation of mu opioid receptors in the CNS. However, because of the wide distribution of mu opioid receptors throughout the brain, morphine and other mu opioid analgesics also trigger a characteristic pattern of adverse side effects, in particular severe abuse and addiction.

The global pain market reflects total revenues of drugs mitigating different types of pain, such as backpain, osteoarthritis, post-operative pain and various orphan diseases with pain symptoms. Our current research is focused on EM; correspondingly, our commercial efforts are targeting the potential for EM therapeutics within the overall pain market. According to studies quoted by The Erythromelalgia Association, estimates of the incidence rate for EM vary from 1.3 to 15 per 100,000 persons, reflecting a potential EM patient population up to 5,000 to 50,000 in the U.S. Our lead compound, CC8464, could possibly have applications in pain mitigation outside of EM, but neither biological nor clinical studies have provided sufficient data to enable meaningful predictions on the probability of an expanded range of indications.

CC8464 is designed to address both the underlying condition and mitigate the burning pain symptoms that EM patients experience by blocking the NaV1.7 sodium channel. Genetic studies presented in the Journal of Clinical Investigation have established a correlation between particular mutation in the NaV1.7 gene and the occurrence of EM. Based on the correlation between the mutations and frequency of EM occurrence, we believe CC8464 has the potential to address the underlying condition and mitigate the burning pain symptoms that patients experience. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 receptors in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other receptors in the CNS can result in side effects, including addiction and other psychiatric disorders. Since CC8464 is designed to modulate pain signals without activation of receptors in the CNS, it is not expected to produce psychiatric side effects. Based on its characteristics, preclinical studies and the Phase 1 study we have completed to date, we believe that our lead compound CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in EM.

We observed certain incidents of rashes during the trial for which we developed a mitigation strategy that involves slower dose escalation, hospitalization and frequent physical examinations. We have developed a dose escalation study design and expect to launch patient procurement in early 2024 with expected first patient dosing in the third quarter of 2024. The dose escalation trial will enroll approximately 32 healthy volunteers who will receive CC8464 over a period of several weeks, with the dose escalation study expected to take approximately nine months. We anticipate that the slower dose escalation will decrease the likelihood of drug-related skin reactions. The primary endpoint of the dose escalation trail will be safety and tolerability of the slower dose titration; however, we will also be measuring blood concentrations of CC8464, which will allow us to better understand the pharmacokinetics of CC8464.

We are currently working on the development of the Phase 2a proof-of-concept plan and expect to launch the Phase 2a proof-of-concept study in 2024 to assess the potential efficacy of CC8464 in genetically validated EM patients. Though the Phase 2a proof-of-concept study design has not yet been completed, we expect to launch the study during the second half of 2025 and expect that the study will take approximately twelve months after it is initiated. We are anticipating dosing approximately 20 patients diagnosed with genetically validated EM. We will be using a cross-over design which has the advantage of increasing the study power while keeping the number of patients relatively low. Each patient will be exposed to both placebo and CC8464 during the two cross-over phases of the trial but neither the investigators nor the patients will know when they are receiving active drug or placebo. During each dosing period we will induce an EM flare. The primary endpoint will be the amount of pain experienced during the flare with secondary endpoints including other measurements like pain relief, time to onset of the flare and neuropathy scores. The final design may change based on feedback from the U.S. Food and Drug Administration (“FDA”) or information learned during the dose escalation trial.

We are evaluating whether to conduct the dose escalation and proof-of-concept studies outside of the U.S. to take advantage of certain beneficial tax credits or lower costs. One example is Australia, which has a 43.5% tax credit for clinical expenses incurred in Australia. Data from clinical trials conducted in Australia is accepted by the FDA.

If approved, we believe that CC8464 could provide pain and symptom relief for EM patients. CC8464 is currently the only compound that we have advanced into clinical development.

In addition, there is scientific evidence that the NaV1.7 receptor is present on the cornea and may be a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anaesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CC8464 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CC8464 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CC8464 that would initially be utilized for toxicology and in vivo studies and then followed by a proof-of-concept trial in patients suffering from various conditions, including severe dry eye disease, trauma and surgery. We expect the trials for this ophthalmic formulation of CC8464 to start in the third quarter of 2024.

We may further expand our pipeline with other internal or external compounds in the future, but all other internally discovered compounds are pre-clinical and no commercial discussions about in-licensing have been initiated to date, other than as disclosed herein with respect to the licensing of the Diclofenac Spray Formulation, Rizatriptan Spray Formulation and Ondansetron Spray Formulation (collectively, as defined below, the “Spray Formulations”).

Recent Developments

Side Letter Terminating Series B Convertible Preferred Stock Purchase Agreement

On October 11, 2023, we entered into a securities purchase agreement with an institutional investor (the “Standby Investor”), pursuant to which (i) the Standby Investor agreed to purchase, upon close of the IPO and at our election, an aggregate of up to 750 shares of Series B Convertible Preferred Stock, par value of $0.0001 per share (the “Series B Preferred Stock”) for a purchase price of $1,000 per share, and (ii) in consideration therefor, we would issue upon close of the IPO, and regardless of whether we would have issued any shares of Series B Preferred Stock, an aggregate of 37,500 shares (such shares, the “Standby Shares”) of Common Stock to the Standby Investor (such agreement, the “Series B Securities Purchase Agreement”). In addition, pursuant to the Series B Securities Purchase Agreement, we were required to file a registration statement within 180 calendar days after consummation of the IPO, providing for the resale of the Standby Shares and shares of Common Stock issuable upon conversion of the Series B Preferred Stock, if issued.

Effective November 13, 2023, we entered into a side letter with the Standby Investor (the “Standby Investor Side Letter”), pursuant to which we (i) waived in full the Standby Investor’s obligation to fund the aggregate amount to be paid for the Series B Preferred Stock to be purchased under the Series B Securities Purchase Agreement and (ii) agreed to continue to have the obligation to issue the full amount of the Standby Shares upon the closing of the IPO. We and the Standby Investor also agreed to terminate each of our obligations solely with respect to the Series B Preferred Stock under the Series B Securities Purchase Agreement and that certain Registration Rights Agreement between us and the Standby Investor, which was required to be delivered pursuant to the Series B Securities Purchase Agreement. For more information regarding the Series B Securities Purchase Agreement and the Standby Investor Side Letter, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Investor Note Side Letters

Effective October 10, 2023, we entered into a side letter (the “October Investor Note Side Letter” and, collectively, with the June Investor Note Side Letter, the August Investor Note Side Letter, the November Investor Note Side Letter and January Investor Note Side Letter (each, as defined herein), the “Investor Note Side Letters”) with the holder of the Investor Note (the “Holder of the Investor Note”), pursuant to which we (i) amended and restated the Investor Note to extend the maturity date to November 14, 2023 and (ii) in consideration therefor, issued to such Holder of the Investor Note 30,000 shares of Common Stock (3,334 shares, after giving effect to the Reverse Stock Split). The Investor Note provides for the accrual of interest equal to 2% of the face amount of $450,000 per month ($9,000 per month). In addition, pursuant to the October Investor Note Side Letter, we agreed to register the 30,000 shares of Common Stock (3,334 shares after giving effect to the Reverse Stock Split), for resale, subject to the terms of the lock-up agreement that the holder of the Investor Note entered into with the underwriters.

Effective November 13, 2023, we entered into a side letter with the Holder of the Investor Note (the “November Investor Note Side Letter”, pursuant to which we (i) amended and restated the Investor Note to extend the maturity date to January 31, 2024, and (ii) in consideration therefor, agreed to issue to such Holder of the Investor Note 30,000 shares of Common Stock (3,334 shares, after giving effect to the Reverse Stock Split) on each of November 29, 2023, December 29, 2023 and January 29, 2024 (collectively, the “November Leak-Out Shares”), provided the Investor Note remained outstanding as of such date. In addition, pursuant to the November Investor Note Side Letter, we agreed to register the November Leak-Out Shares for resale.

Effective January 30, 2024, we entered into a side letter with the Holder of the Investor Note (the “January Investor Note Side Letter”), pursuant to which we (i) amended and restated the Investor Note to extend the maturity date to February 29, 2024, and (ii) in consideration therefor, agreed to issue to such Holder of the Investor Note 700,000 shares of Common Stock (77,778 shares, after giving effect to the Reverse Stock Split) on the earlier to occur of the IPO or February 29, 2024 (the “January Leak-Out Shares” and, together with the November Leak-Out Shares, the “Leak-Out Shares”). In addition, pursuant to the January Investor Note Side Letter, we agreed to register the January Leak-Out Shares for resale.

Pursuant to the Investor Note Side Letters, we have issued to the Holder of the Investor Note an aggregate of 80,000 shares of Common Stock (8,889 shares, after giving effect to the Reverse Stock Split) prior to September 30, 2023 and an aggregate of 820,000 shares of Common Stock (91,111 shares, after giving effect to the Reverse Stock Split) subsequent to September 30, 2023, all of which are subject to the terms of the lock-up agreement that the Holder of the Investor Note entered into with the underwriters. For more information regarding the Investor Note Side Letters, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

October Promissory Notes

On October 12, 2023, we and four existing investors entered into promissory notes (the “October Promissory Notes”) with an aggregate face amount of $210,000 and an aggregate purchase price of $175,000. The October Promissory Notes mature on November 12, 2023 or, if earlier to occur, upon the closing of this IPO. The October Promissory Notes bear no interest except in the case of certain events of default. On November 7, 2023, we amended and restated the October Promissory Notes to extend the maturity dates of the October Promissory Notes to November 17, 2023. On November 13, 2023, we amended and restated the October Promissory Notes to further extend the maturity dates of the October Promissory Notes to February 29, 2024. For more information regarding the October Promissory Notes, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

April Promissory Notes

On April 17, 2023, we entered into a bridge loan for working capital purposes, with various accredited investors, all of whom are pre-existing stockholders, in the aggregate principal amount of $389,757 (the “April Bridge Financing”), after giving effect to the Representative Affiliate Transactions. We received an aggregate of $166,903 in advances (the “Advances”) prior to the close of the Bridge Financing from certain of the participating investors. The April Bridge Financing consists of senior secured convertible notes that had a maturity date of October 17, 2023. Such notes accrue interest on the unpaid principal amount at a rate of eight percent (8%) per annum and will automatically convert into 87,109 shares of Common Stock at the initial public offering of shares of Common Stock at a twenty percent (20%) discount to the price per IPO Share (based on the initial public offering price of $6.00 per IPO Share). On October 12, 2023, we entered into a first amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 1, 2023. On October 24, 2023, we entered into a second amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 14, 2023. On November 13, 2023, we entered into a third amendment to the senior secured convertible notes in the April Bridge Financing, which further extended the maturity of the notes to February 29, 2024. For more information regarding the April Promissory Notes, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Rights Offering

On November 22, 2023, we commenced a rights offering (the “Rights Offering”) pursuant to which we distributed non-transferable subscription rights (“Subscription Rights”) to each holder of our Common Stock held as of 5:00 p.m. Eastern Standard Time on November 22, 2023, the record date for the Rights Offering (the “Rights Offering Record Date”). The Subscription Rights could be exercised at any time during the subscription period, which commenced on November 22, 2023 and expired at 5:00 p.m., Eastern Standard Time, on December 1, 2023. Each Subscription Right entitled the eligible holder to purchase up to three shares of our Common Stock at a price per whole share of Common Stock of $0.0112 (the “Subscription Price”). Holders who fully exercised their rights could also subscribe for additional shares of Common Stock not subscribed for by other holders on a pro rata basis. In addition, we could distribute to one or more additional persons, at no charge to such person, additional non-transferable subscription rights to purchase shares of our Common Stock in the Rights Offering at the same Subscription Price, without notice to the holders of our Common Stock. Upon the closing of the Rights Offering, we issued an aggregate of 21,982,216 shares of our Common Stock (2,442,468 shares, after giving effect to the Reverse Stock Split) and received aggregate net proceeds of $246,201, after giving effect to the Representative Affiliate Transactions, which we intend to use primarily for general corporate purposes and expenses associated with our initial public offering. For more information regarding the Rights Offering, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Benuvia License Agreement

On December 23, 2023, we entered into an exclusive licensing agreement (the “Benuvia License Agreement”) with Benuvia Operations, LLC (“Benuvia”) for a sublingual formulation of a Diclofenac spray for the treatment of acute pain (the “Diclofenac Spray Formulation”), a Rizatriptan sublingual spray formulation (the “Rizatriptan Spray Formulation”) and an Ondansetron sublingual spray formulation (the “Ondansetron Spray Formulation”), diversifying our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions. The Diclofenac Spray Formulation is patented and has started clinical development in human volunteers. Preliminary pharmacokinetics suggest that this formulation may have a faster onset of action than oral Diclofenac tablets. Diclofenac is a non-steroidal anti-inflammatory drug (an “NSAID”) that is also marketed under additional brand names including Voltaren and Cataflam in its pill form. Rizatriptan, whose brand name is Maxalt, is used for the acute treatment of Migraines as a pill. By a number of clinical measures, it is thought to be superior to Sumatriptan. A sublingual formulation of Rizatriptan may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea as a result of the migraine headache. Ondansetron is an anti-emetic that is available in oral and intravenous form. An Ondansetron sublingual spray formulation may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea. Under the terms of the Benuvia License Agreement, Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, but we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.

In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%) royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of the Spray Formulations. In addition, on December 23, 2023, we entered into a stock issuance agreement with Benuvia (the “Benuvia Stock Issuance Agreement”), pursuant to which we issued to Benuvia 3,458,033 shares (384,226 shares, after giving effect to the Reverse Stock Split) of our Common Stock, which may be offered and sold pursuant to the Resale Prospectus.

While we currently do not have strategy and development plans for the Spray Formulations licensed from Benuvia, beginning in the third quarter of 2024, we plan to develop clinical programs for each of the Spray Formulations, determine the labelling strategy that would be obtained from completion of these programs and discuss with the FDA the requirements for bringing each of the Spray Formulations to market. We anticipate bringing the Spray Formulations to market through the FDA 505(b)(2) regulatory pathway for new drug applications; however, the exact details will require further consultation with the FDA. For more information regarding the Benuvia License Agreement and the Benuvia Stock Issuance Agreement, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business—Benuvia Spray Formulations”.

Amendment to Director Note

On December 28, 2023, we entered into an amendment to the Director Note, which extended the maturity date to February 29, 2024. For more information regarding the Director Note, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Equity Line of Credit

We are negotiating an arrangement with the Holder of the Investor Note to enter into an Equity Line of Credit (the “ELOC”) subsequent to the IPO, pursuant to which we will have the right, but not the obligation, to sell to the Holder of the Investor Note up to $20,000,000 in newly issued shares of our Common Stock, subject to certain limitations. Pursuant to the terms of the proposed arrangement, we will pay the Holder of the Investor Note a commitment fee of $1,000,000, which may be paid at our election, in cash or shares of Common Stock, upon entry into the ELOC. In addition, we will agree to certain registration rights pursuant to which we will register the securities issuable under the ELOC subsequent to the expiration of the lock-up agreement we enter into with the Representative in connection with the IPO. We also intend to agree, during the proposed two-year term of the ELOC, to not enter into any variable, reset, or otherwise adjustable equity or equity-linked transactions. In the event we do not close the ELOC within forty-five (45) days of the consummation of this IPO and have the registration statement referred to above effective within ninety (90) days of the expiration of any IPO standstill period, we expect to be obligated to pay to the holder a break-up fee in the amount of $1,000,000 and will not be able to raise capital for sixty (60) days thereafter; provided that, we and the Holder of the Investor Note may agree to enter into other form of investments, such as a private investment in public equity transaction.

We anticipate that we will enter into a purchase agreement to issue the shares of Common Stock issuable pursuant to the ELOC subsequent to the closing of the IPO; however, as of the date hereof, an agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described above. For more information regarding the ELOC, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Bridge Financing Note Amendments and Recission Agreement

On February 8, 2024, we and certain affiliates of the Representative entered into amendments to the senior secured convertible notes issued to such affiliates of the Representative in the April Bridge Financing and September Bridge Financing to remove the automatic conversion features from such notes (the “Bridge Financing Note Amendments”). Under the Bridge Financing Note Amendments, both notes issued in the April Bridge Financing and the September Bridge Financing have a maturity date of March 1, 2024, and the full principal amount of both notes and any accrued interest thereon shall be payable solely in cash upon the consummation of this IPO. Both notes have an annual interest rate of eight percent (8%), which accrues daily, and is calculated on the basis of a 360-day year (consisting of twelve 30 calendar day periods).

On February 10, 2024, we entered into a Stock Rescission Agreement with certain affiliates of the Representative (the “Stock Rescission Agreement” and, together with the Bridge Financing Note Amendments, the “Representative Affiliate Transactions”), pursuant to which we rescinded 111,129 shares of our Common Stock (after giving effect to the Reverse Stock Split) held by such affiliates of the Representative and agreed to refund an aggregate of $91,512.53 paid by such affiliates of the Representative in consideration therefor within 30 days of the effective date of the Stock Rescission Agreement.

For more information regarding the Representative Affiliate Transactions, including the Bridge Financing Note Amendments and the Rescission Agreement, please refer to “Underwriting”.

Attorney’s Letter

On February 14, 2024, our board of directors received a demand letter from an attorney representing Chromocell Holdings and our former Chief Executive Officer and former Chief Strategy Officer, Mr. Christian Kopfli, who was released for “cause” as disclosed elsewhere in this prospectus. Mr. Kopfli alleges an improper termination for “cause” and seeks monetary damages in connection therewith in the amount of $479,168.50. Of the $479,168.50 asserted by Mr. Kopfli, as of September 30, 2023, the Company has accrued $319,281 in compensation expenses associated with Mr. Kopfli’s prior employment with the Company. To the extent Mr. Kopfli is successful in his assertions, we will pay any amounts owed thereunder from future working capital reserves; however, we believe the assertions made by Mr. Kopfli are without merit and intend to vigorously defend the matter.

Please refer to “Risk Factors—Risks Related to Our Business—We may be subject to litigation for a variety of claims, which could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business”.

Corporate Information

Chromocell Holdings, our predecessor, was founded in 2002 to commercialize “Chromovert Technology,” a proprietary discovery technology with a potential broad range of applications in the biomedical field, including the potential capability to create complex targets (cell-lines) needed for effective high-throughput screening that is commonly used both in therapeutics and flavors discovery. Initially, Chromocell Holdings focused on applications in the food and flavors space.

In 2012, Chromocell Holdings started applying the technology in the therapeutics area. Chromocell Holdings focused its efforts on projects where it believed that the discovery of novel medications was largely held back by difficulties creating complex targets (cell lines) needed for effective high-throughput screening. The NaV1.7 ion-channel is a complex target with a well-established role in pain modulation and management believed it presented an opportunity to apply the technology in an area of unmet medical need. Upon creating the necessary NaV1.7 assays and conducting a large high-throughput campaign, Chromocell Holdings’ research team discovered CC8464. After pre-clinical studies and assessments, an IND was filed and CC8464 was evaluated in a Phase 1 study with more than 100 subjects. In 2015, Chromocell Holdings signed an agreement with Astellas Pharma Inc. (“Astellas”) for the joint development and commercialization of CC8464. Astellas terminated such agreement in 2018 and returned all rights, including all intellectual property rights on CC8464, to Chromocell Holding.

As both the flavors and the therapeutics businesses grew and increasingly required different expertise, capital and business concepts, Chromocell Holdings made the strategic decision to separate the two businesses.

Chromocell Therapeutics Corporation (the “Company,” “we,” “us” and “our”) was incorporated in Delaware on March 19, 2021. Our principal executive offices are located at 4400 Route 9 South, Suite 1000, Freehold, NJ 07728, and our telephone number is (732) 514-2636. Our website is www.chromocell.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

Implications of Being an Emerging Growth Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of relief from certain reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions include:

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reduced obligations with respect to financial data, including presenting only two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations in this prospectus;

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an exception from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

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reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and

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exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements.

We may take advantage of these provisions for up to five years or such earlier time that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company upon the earliest of:

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the last day of the fiscal year on which we have $1.235 billion or more in annual revenue,

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the date on which we become a “large accelerated filer” (i.e., as of our fiscal year end, the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30),

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the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period, or

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the last day of our fiscal year following the fifth anniversary of the date of the completion of the offering of IPO Shares pursuant to the IPO Prospectus.

We have elected to take advantage of certain of the reduced disclosure obligations regarding financial statements (such as not being required to provide audited financial statements for the fiscal year ended December 31, 2020) in this prospectus and executive compensation in this prospectus and expect to elect to take advantage of other reduced burdens in future filings.

In addition, under the JOBS Act, emerging growth companies can take advantage of an extended transition period and delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies. If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act.

Also, we are a “smaller reporting company” (and may continue to qualify as such even after we no longer qualify as an emerging growth company). For as long as we qualify as a “smaller reporting company,” we may provide reduced disclosure in the public filings that we make with the SEC than larger public companies, such as the inclusion of only two years of audited financial statements and only two years of management’s discussion and analysis of financial condition and results of operations disclosure.

As a result of qualifying as an emerging growth company and a smaller reporting company, to the extent we take advantage of the allowable reduced reporting burdens, the information that we provide to our stockholders may be different than what you might receive from other public reporting companies in which you hold equity interests.

Summary of Risks Associated with Our Business

Our business is subject to a number of risks that you should be aware of before making an investment decision to purchase our securities. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled “Risk Factors” in deciding whether to invest in our securities. Among these important risks are the following:

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there is substantial doubt about our ability to continue as a going concern.

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we have a limited operating history, have incurred losses since inception and expect to incur losses for the foreseeable future and may never achieve or maintain profitability;

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we have identified material weaknesses in our internal control over financial reporting arising from inadequate segregation of duties, ineffective information technology controls and lack of certain financial reporting and transaction processing controls;

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we will need to raise additional funding in order to receive approval for CC8464 or any other compounds that we may develop;

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we are early in our efforts to develop CC8464, which is the only compound that we have advanced into clinical development, and if we are unable to advance development through clinical trials, obtain regulatory approval in the United States or abroad and ultimately commercialize CC8464, or if we experience significant delays in doing so, our business will be materially harmed;

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there is no guarantee that the results from prior clinical and preclinical studies will be indicative of our ability to complete studies or the results to be obtained in the current or future studies and clinical trials;

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CC8464 may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval;

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we plan to apply for orphan drug designation for CC8464; however, it may not effectively protect us from competition, and we may be unable to obtain similar designations for future lead compounds. Even if such designation is granted for CC8464 or if Breakthrough Therapy designation, and/or Fast Track designation is granted for CC8464, this may not lead to a faster development, regulatory review or approval process and may not increase the likelihood that any future lead compound will receive approval in the United States;

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we may expend our limited resources to pursue a compound or indication and fail to capitalize on different compounds or indications that may be more profitable or for which there is a greater likelihood of success, and we may not be successful in discovering, developing and commercializing additional compounds;

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we need to establish our market development capabilities to commercialize our products and failure to do so may result in an inability to generate any revenue. Our revenue depends on what we can charge for our product, and government pricing controls and regulations, along with insurance coverage and reimbursement approval, could decrease our ability to generate revenue;

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we face significant competition and our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition;

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we may face risks to our manufacturing process, including potential disruptions to supply chain and delays in obtaining regulatory approvals of the processes and facilities needed to manufacture future lead compounds, including CC8464. As we may need to utilize third parties to conduct our manufacturing, we could experience delays in our development and commercialization efforts;

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if we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer;

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we face risks regarding our ability to retain key employees and scientific advisors, and to attract, retain and motivate qualified personnel;

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we are subject to a range of laws and regulations, including federal and state healthcare fraud and abuse laws, false claims laws, health information and privacy and security laws, and environmental, health, and safety laws. Failure to comply with these laws and associated regulations could result in substantial penalties and liabilities;

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an outbreak of an infectious disease, including COVID-19, or other unfavorable global economic conditions may materially and adversely affect our business and our financial results and could cause a disruption to the development of future compounds;

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we carry risks related to our intellectual property. If we are unable to obtain and maintain adequate U.S. and foreign patent protection for our compounds, if we face litigation or administrative proceedings by a third-party over our patents, if there is a change in U.S. or foreign patent law or interpretation thereof diminishing the value of our patents, or if we are unable to protect the confidentiality of our trade secrets, our business may be materially harmed;

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we carry risks related to third party intellectual property. If a third-party institutes patent litigation against us in the U.S. or a foreign jurisdiction asserting that CC8464 and/or additional lead compounds infringe its patent rights the outcome of which would be uncertain and could have a material adverse effect on the success of our business;

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failure to maintain the listing of our Common Stock on NYSE American could materially adversely affect the value of our Common Stock;

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we cannot assure you that we will be able to continue to comply with NYSE American’s listing standards. Further, potential investors may not have an opportunity to check the actual post-split market price of our Common Stock prior to confirming their purchases in the IPO;

	●	if you receive IPO Shares pursuant to the IPO Prospectus, you will suffer immediate dilution of your investment, and a significant portion of our shares of Common Stock are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our Common Stock to drop significantly, even if our business is performing well. There may also be substantial sales of our Common Stock by the Selling Stockholders after the effective date of the registration statement of which this prospectus forms a part, which could have a material adverse effect on the price of our Common Stock;

	●	The Series C Preferred Stock to be issued upon close of the IPO will have a liquidation preference over our Common Stock, which could result in holders of our Common Stock not receiving any proceeds in the event of our liquidation;

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the price of our securities may be volatile and fluctuate substantially, which could result in substantial losses for purchasers;

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we will incur increased costs as a result of operating as a smaller reporting public company, and our management will be required to devote substantial time to new compliance efforts;

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we have broad discretion in the use of our cash, including the net proceeds from the offering of IPO Shares, and may not use them effectively;

	●	there is no current public market for our Common Stock;

	●	there is no assurance that we will enter into our proposed ELOC or that the terms thereof will be consistent with or as favorable as those described in this registration statement of which this prospectus forms a part;

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the issuance of our Common Stock under our proposed ELOC may cause substantial dilution to our existing stockholders and the price of our Common Stock to decline;

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we may not have access to the full amount available under our proposed ELOC; and

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the other factors set forth under “Risk Factors.”

These and other risks are more fully described in the section entitled “Risk Factors” in this prospectus. If any of these risks actually occurs, our business, financial condition, results of operations, cash flows, and prospects could be materially and adversely affected. As a result, you could lose all or part of your investment in our securities.

THE OFFERING

Shares of Common Stock offered by us	1,100,000 IPO Shares (1,265,000 IPO Shares if the underwriters exercise their over-allotment option in full), based on the initial public offering price of $6.00 per IPO Share.

Underwriters’ over-allotment option	We have granted the underwriters an option to purchase from us up to an additional 165,000 IPO Shares within 45 days from the date of this prospectus solely to cover over-allotments, if any, at the initial public offering price per IPO Share, less underwriting discounts and commissions.

Common Stock to be outstanding immediately following the IPO

5,767,525 shares (or 5,932,525 shares if the underwriters’ exercise their over-allotment option in full), based on the initial public offering price of $6.00 per IPO Share.

Use of proceeds

We estimate that the net proceeds from the sale of IPO Shares pursuant to the IPO Prospectus will be approximately $5.7 million (or approximately $6.6 million if the underwriters’ option to purchase additional IPO Shares is exercised in full), based on the initial public offering price of $6.00 per IPO Share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use (i) approximately $2.0 million of the net proceeds to prepare and conduct a dose escalation study for CC8464 in an effort to establish a safe dose escalation regime which will be designed to avoid a high incidence rate of rashes; (ii) approximately $0.3 million for in vivo and toxicology studies of CC8464 for the treatment of eye pain; (iii) approximately $0.25 million for neuropathic studies of CC8464 for the treatment of neuropathic pain; (iv) approximately $0.25 million to prepare and begin conducting a Phase 2a proof-of-concept study of CC8464 for EM; (v) approximately $0.1 million to determine market strategy and develop clinical programs for the Spray Formulations licensed from Benuvia; and (vi) approximately $0.3 million to repay amounts outstanding under the October Promissory Notes and amounts payable in connection with the Representative Affiliate Transactions. We intend to use the remaining net proceeds, if any, for general corporate purposes.

We will not receive any proceeds from the sale of the Selling Stockholder Shares by the Selling Stockholders pursuant to the Resale Prospectus. See “Use of Proceeds.”

Lock-Up Restrictions

In connection with the IPO, we, our directors, executive officers and holders of 5% or more of our capital stock prior to the IPO, have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities for a period of six (6) months following the closing of the IPO, subject to certain exceptions. In addition, we have agreed not to enter into any Variable Rate Transaction for a period of one year following the closing of the IPO. For the avoidance of doubt, the foregoing shall not prevent the Company from entering into or drawing down on the proposed ELOC or issuing shares of Common Stock thereunder. See “Underwriting.”

Representative’s Warrants

We will issue to A.G.P./Alliance Global Partners, as representative of the underwriters or its designees, at the closing of the IPO, warrants to purchase a number of shares of Common Stock equal to five percent (5%) of the aggregate number of IPO Shares sold pursuant to the IPO Prospectus. The Representative’s Warrants will be exercisable beginning six months from the commencement of sales of IPO Shares registered on the registration statement of which the IPO Prospectus is a part and will expire five years following the commencement of sales in the IPO. The exercise price of the Representative’s Warrants will equal 125% of the public offering price per IPO Share. See “Underwriting.” The IPO Prospectus also relates to the Common Stock issuable upon exercise of the Representative’s Warrants.

Risk factors

See “Risk Factors” and other information included in this prospectus for a discussion of factors you should consider carefully before deciding to invest in our securities.

Transfer agent and registrar

Our transfer agent and registrar for our Common Stock is Nevada Agency and Transfer Company, located at 50 W. Liberty Street, Suite 880, Reno, NV 89501.

Proposed NYSE American symbol

We have applied to list our Common Stock on NYSE American under the symbol “CHRO”.

Unless we specifically state otherwise or the context otherwise requires, the share information in this prospectus is based on 3,876,285 shares of Common Stock outstanding as of February 21, 2024 (after giving effect to the Reverse Stock Split) and:

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gives effect to the IPO Transactions, which include, among other items: (i) a 1-for-9 Reverse Stock Split, (ii) the issuance of 499,429 shares of Common Stock upon conversion of all issued and outstanding shares of Series A Preferred Stock, (iii) the issuance of 130,494 shares of Common Stock upon conversion of the senior secured convertible notes issued in connection with the Bridge Financings (as defined below), which includes an additional 549 Bonus Shares and includes interests calculated to and through February 21, 2024, (iv) the issuance of 37,500 shares of Common Stock to the Standby Investor, (v) the Representative Affiliate Transactions, (vi) the close of the transactions contemplated by the Holdings Side Letter, and the issuance of an aggregate of 2,600 shares of Series C Preferred Stock to Chromocell Holdings pursuant thereto, and (vii) the issuances of (x) 93,823 shares to the holder of the Investor Note and (y) 29,167 shares to the holder of the Director Note in full satisfaction of our obligations thereunder (in the case of each of (i) through (iii) and (vii) above, based on the initial public offering price of $6.00 per IPO Share, and in the case of each of (ii) through (v) and (vii) above, after giving effect to the Reverse Stock Split);

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gives effect to the issuance of 1,100,000 IPO Shares in the IPO;

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assumes issuance of the Leak-Out Shares issuable on February 29, 2024 pursuant to the January Investor Note Side Letter;

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assumes no exercise of the underwriters’ option to purchase additional IPO Shares from us in the IPO;

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assumes no exercise of the Representative’s Warrants;

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assumes no conversion of the Series C Preferred Stock to be issued at the close of the IPO; and

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does not reflect 444,444 shares of Common Stock that are reserved for future grants or sale under our omnibus equity incentive plan, as amended, which amount includes 208,667 shares underlying currently outstanding stock options with a weighted average exercise price of $22.68 (all after giving effect to the Reverse Stock Split).

SUMMARY HISTORICAL FINANCIAL DATA

The following tables summarize our financial data as of and for the periods indicated. The balance sheet data as of December 31, 2022, and the statements of operations data for the years ended December 31, 2022 and 2021, are derived from the audited financial statements included elsewhere in this prospectus. The balance sheet data as of September 30, 2023, and the statements of operations data for the nine months ended September 30, 2023 and 2022, are derived from the unaudited interim financial statements included elsewhere in this prospectus. These historical results have been prepared on a carve-out basis and are not necessarily indicative of results that may be expected in the future. Please see “Basis of Presentation” in the forepart of this prospectus for more information.

The following summary financial data should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included elsewhere in this prospectus.

	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022			For the Year Ended December 31, 2022			For the Year Ended December 31, 2021
Statements of Operations Data:	(Unaudited)			(Unaudited)			(Audited)			(Audited)

REVENUE
Grant revenue	$	-		$	-		$	-		$	-
Total revenue		-			-			-			-

OPERATING EXPENSES
General and administrative expenses		1,677,078			371,283			1,098,848			496,667
Research and development		285,204			97,147			391,730			209,047
Professional fees		1,021,187			634,913			827,581			133,282
Total operating expenses		2,983,469			1,103,343			2,318,159			838,996

NET LOSS FROM OPERATIONS		(2,983,469	)		(1,103,343	)		(2,318,159	)		(838,996	)

OTHER INCOME (EXPENSE)
Interest expenses		(358,171	)		(97,818	)		(140,430	)		(253	)
Gain on forgiveness of PPP loan								-			243,862
Total other expense		(358,171	)		(97,818	)		(140,430	)		243,609

Net loss before provision for income taxes		(3,341,640	)		(1,201,161	)		(2,458,589	)		(595,387	)

Provision for income taxes		-			-			-			-

NET LOSS	$	(3,341,640	)	$	(1,201,161	)	$	(2,458,589	)	$	(595,387	)

Pro forma net (loss) income per common share, basic and diluted⁽¹⁾	$	(0.36	)	$	(0.64	)	$	(0.25	)	$	(0.06	)
Weighted-average shares used to compute pro forma net (loss) income per common share, basic and diluted⁽¹⁾		9,286,928			1,868,132			10,000,000			10,000,000

	September 30, 2023			December 31, 2022
Balance Sheet Data:	(Unaudited)			(Audited)
Total assets	$	22,786		$	55,074
Total liabilities		5,927,374			3,761,611
Stockholders’ / parent’s net deficit		(5,904,588	)		(3,706,537	)
Total liabilities and stockholders’ / parent’s net deficit		22,786			55,074

(1)	Gives effect to (i) the transactions contemplated by the Contribution Agreement and (ii) the IPO Transactions, in each case, as if each had occurred on January 1, 2022.

RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the following risks and all other information contained in this prospectus, including our financial statements and the related notes, before investing in our securities. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In these circumstances, the market price of our Common Stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business

The report of the independent registered public accounting firm on our 2022 and 2021 financial statements contains a going concern qualification.

The report of the independent registered public accounting firm covering our financial statements for the years ended December 31, 2022 and 2021 stated that certain factors, including that we have suffered recurring losses from operations and have an accumulated deficit at December 31, 2022, raised substantial doubt as to our ability to continue as a going concern. Because we are not yet producing sufficient revenue to sustain our operating costs, we are dependent upon raising capital to continue our business. If we are unable to raise capital, we may be unable to continue as a going concern.

We are a clinical stage biopharmaceutical company with a limited operating history.

The operations of our company, contributed to us by Chromocell Holdings, to date have been limited to financing and staffing our Company, developing and licensing compounds, conducting preclinical and clinical studies of CC8464 for EM and other pain indications. We have not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products.

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development, especially early-stage clinical pharmaceutical companies such as ours. Potential investors should carefully consider the risks and uncertainties that a company with a limited operating history will face. In particular, potential investors should consider that we cannot assure you that we will be able to, among other things:

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successfully implement or execute our current business plan, and we cannot assure you that our business plan will lead to an approval or successful commercialization;

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successfully manufacture our clinical lead compound and establish commercial supply;

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successfully complete the clinical trials necessary to obtain regulatory approval for the marketing of our lead compound;

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secure market exclusivity and/or adequate intellectual property rights for our lead compound in each jurisdiction in which we do or plan to commercialize our lead compound or where our competitors are organized or may engage in competitive activity;

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attract and retain an experienced management and advisory team;

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secure acceptance of our lead compound in the medical community and with third-party payors and consumers;

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raise sufficient funds in the capital markets or otherwise to effectuate our business plan; and

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utilize the funds that we do have and/or raise in this offering or in the future to efficiently execute our business strategy.

If we cannot successfully execute any one of the foregoing, our business may fail and your investment will be adversely affected.

We have incurred net losses since inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

There are numerous risks and uncertainties associated with pharmaceutical product and biological development, and we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.

We have had net losses since inception, and we had an accumulated deficit of approximately $9.5 million and $6.1 million as of September 30, 2023 and December 31, 2022, respectively, which includes a net loss of approximately $3.3 million and $1.2 million for the nine months ended September 30, 2023 and 2022, and approximately $2.5 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively. Overall, these conditions have raised substantial doubt regarding our ability to continue as a going concern beyond one year of the filing of our financial statements. Our ability to continue as a going concern is dependent upon the ability to complete clinical studies and implement our business plan, raise capital, generate sufficient revenues and to control operating expenses.

We have primarily financed our operations through a combination of a series of cash advances, equity raises, bridge and promissory note issuances, licensing arrangements and government grants. Our ability to achieve significant profitability depends on our ability to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, CC8464 and/or additional lead compounds. We expect that it will take several years, if ever, before we have a commercialized lead compound. The net losses we incur may fluctuate significantly from quarter to quarter.

If we are required by the FDA, the European Medicines Agency (“EMA”), or other international regulatory authorities to which we may be subject, to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of CC8464 and/or other lead compounds, our expenses could increase and revenue could be further delayed. We anticipate that our expenses will increase substantially if, and as, we:

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continue our research and the clinical development of CC8464;

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launch in vivo and toxicology studies of CC8464 for the treatment of eye pain;

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initiate additional clinical trials and preclinical studies for any additional lead compounds that we may pursue in the future;

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prepare a U.S. New Drug Application (“NDA”) for filing with the FDA, a marketing authorization application, and approvals in certain other countries;

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oversee the manufacturing of material for clinical trials or potential commercial sales;

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develop a lead compound portfolio;

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establish a business development operation to in- our out-license certain assets;

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establish a sales, marketing and distribution infrastructure to commercialize any lead compound for which we may obtain marketing approval;

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develop, maintain, expand, protect and enforce our intellectual property rights portfolio; and/or

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acquire or in-license other compounds and technologies.

To become and remain profitable, we must develop and eventually commercialize one or more lead compounds with significant market potential. This will require us to be successful in a range of challenging activities, including completing the clinical trials, developing and validating commercial scale manufacturing processes, obtaining marketing approval for this lead compound, manufacturing, marketing. Licensing and selling any future lead compounds for which we may obtain marketing approval and satisfying any post-marketing requirements. If we were required to discontinue development of CC8464, if CC8464 does not receive regulatory approval, if we do not obtain our targeted indication(s) for CC8464, or if CC8464 fails to achieve sufficient market acceptance for any indication, we could be delayed by many years in our ability to achieve profitability. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause you to lose all or part of your investment.

We have identified material weaknesses in our internal control over financial reporting.

Prior to our initial public offering, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. In connection with the audit and review, as applicable, of our financial statements for the years ended December 31, 2022 and 2021 and the nine months ended September 30, 2023 and 2022, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in our case arose from inadequate segregation of duties, ineffective information technology controls and lack of certain financial reporting and transaction processing controls. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.

We will need to raise additional funding to receive approval for CC8464 or any other lead compound. Such funding may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit, sell or terminate certain of our product development efforts or other operations.

To complete the process of obtaining regulatory approval for CC8464 and to build the sales, marketing, licensing and distribution infrastructure that we believe will be necessary to commercialize CC8464, if approved, we will require substantial additional funding. In addition, if we obtain marketing approval for CC8464, we expect to incur significant expenses related to product sales, medical affairs, marketing, manufacturing and distribution.

Our future capital requirements will depend on many factors, including:

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the progress, timing, results and costs of our phase 2a clinical trial for CC8464;

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the progress, timing and costs of manufacturing clinical trial for our planned pivotal clinical trials;

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the potential development and the filing on an IND application for other lead compounds;

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the initiation, scope, progress, timing, costs and results of drug discovery, laboratory testing, manufacturing, preclinical studies and clinical trials for any other lead compounds that we may pursue in the future, if any;

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the outcome, timing and costs of seeking regulatory approvals;

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the costs associated with the manufacturing process development and evaluation of third-party manufacturers;

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the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, in the event we receive marketing approval for CC8464 or any other lead compounds we may develop;

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the extent to which the costs of future lead compounds, if approved, will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors;

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the costs of commercialization activities for CC8464 and other future lead compounds if we receive marketing approval for CC8464 or any other lead compounds we may develop, including the costs and timing of establishing product sales, medical affairs, marketing, distribution and manufacturing capabilities;

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subject to receipt of marketing approval, if any, revenue received from commercial sale of CC8464 or any of our other lead compounds;

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the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish;

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the amount and timing of any payments we may be required or decide to make, or that we may receive, in connection with the licensing, filing, prosecution, maintenance, and enforcement of any patents or other intellectual property rights and defense against third party intellectual property infringement claims, including milestone and royalty payments and patent prosecution fees that we are obligated to pay pursuant to our license agreements, if any;

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the development of alternative treatments for EM or other pain indications;

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our ability to establish and maintain collaborations and licenses on favorable terms, if at all; and

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the extent to which we acquire or in-license other compounds and technologies.

Identifying potential lead compounds and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. Our lead compounds, if approved, may not achieve commercial success. Our future lead compound’s revenues, if any, will be derived from or based on sales of lead compounds that may not be commercially available for many years, if at all. Accordingly, it is unlikely that we will generate product or licensing revenue during the next twelve months and will need to continue to rely on additional financing to achieve our business objectives. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize future lead compounds. 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 our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and a portion of our operating cash flows, if any, being dedicated to the payment of principal and interest on such indebtedness, 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. Furthermore, existing securityholders may not agree with our financing plans or the terms of such financings. Adequate additional financing may not be available to us on acceptable terms, or at all. The terms of additional financing may be impacted by, among other things, general market conditions, and the market’s perception of future lead compounds. If adequate funds are not available, we may be required to curtail our operations or other business activities or obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain technologies or potential markets.

We may be subject to litigation for a variety of claims, which could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business.

We may be subject to litigation for a variety of claims arising from our normal business activities. These may include claims, suits, and proceedings involving labor and employment, wage and hour, commercial and other matters. The outcome of any litigation, regardless of its merits, is inherently uncertain. Any claims and lawsuits, and the disposition of such claims and lawsuits, could be time-consuming and expensive to resolve, divert management attention and resources, and lead to attempts on the part of other parties to pursue similar claims. Any adverse determination related to litigation could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business. In addition, depending on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our cash flows or both.

Risks Related to Development, Clinical Testing, and Regulatory Approval

We are early in our efforts to develop CC8464, which is the only compound that we have advanced into clinical development. If we are unable to advance CC8464 through clinical trials, obtain regulatory approval and ultimately commercialize CC8464, or if we experience significant delays in doing so, our business will be materially harmed.

We are early in our development of CC8464. The development and commercialization of CC8464 (or any other compound that we may advance towards clinical development in the future) is subject to many uncertainties, including the following:

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successful enrollment and completion of the two studies we are planning to conduct in the next phase of our clinical trials (Phase 2);

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positive results from our current and planned future clinical trials;

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receipt of regulatory approvals from applicable regulatory authorities;

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successful development of our internal manufacturing processes on an ongoing basis and maintenance of our potential future arrangements with third-party manufacturers for clinical supply;

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commercial launch of CC8464, if and when approved, whether alone or in collaboration with others; and

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acceptance of CC8464, if and when approved, by patients, the medical community and third-party payors.

If we fail in one or more of these factors, we could experience significant delays or an inability to successfully commercialize CC8464, which would materially harm our business. If we do not receive regulatory approvals for CC8464, our business, financial condition, results of operations and prospects could be materially and adversely affected. Advancing a different compound than CC8464 towards clinical development would take substantial time and resources and be subject to the same risks as described here for CC8464.

Our lead compound, CC8464, is in early-stage development, and there is no guarantee that the results from prior clinical and preclinical studies will be indicative of our ability to complete or the results to be obtained in the current or future studies and clinical trials. CC8464 is our only compound in clinical development and advancing a different compound would require substantial time and resources as well as being subject to the same risks and uncertainties as described here for CC8464.

There is no guarantee that results of our potential future clinical trials will be positive or that we will be able to complete this or any potential future clinical trials on the anticipated timelines or at all. Furthermore, research and discoveries by us or others may identify serious adverse events, undesirable side effects or other unexpected properties of our current and future lead compounds, including CC8464, that could delay, prevent or cause the withdrawal of regulatory approval, limit the commercial potential, or result in significant negative consequences following marketing approval.

The regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process.

Regulatory authorities also may approve a future lead compound for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or post-approval safety monitoring program. These regulatory authorities may require precautions or contra-indications with respect to conditions of use or they may grant approval subject to the performance of costly post-marketing clinical trials. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of CC8464. Any of the foregoing scenarios could materially harm the commercial prospects for CC8464 and materially and adversely affect our business, financial condition, results of operations and prospects.

We may encounter substantial delays in our clinical trials, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

Before obtaining marketing approval from regulatory authorities for the sale of our drug candidates, CC8464 included, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the drug candidate for its intended indications. Clinical trials are expensive, time consuming and uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. As CC8464 is our only compound in clinical development, any setback may have a significant negative effect on our business. Events that may prevent successful or timely completion of clinical development include:

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delays in reaching a consensus with regulatory authorities on trial design;

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delays in opening sites and recruiting suitable patients to participate in our clinical trials;

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imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or concerns with a class of drug candidates, or after an inspection of our clinical trial operations or trial sites;

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delays in having patients complete participation in a trial or return for post-treatment follow-up;

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occurrence of serious adverse events associated with the drug candidate that are viewed to outweigh its potential benefits; or

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changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.

In addition, if we had to make manufacturing or formulation changes to CC8464, we would need to conduct additional studies to bridge our modified lead compound to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize CC8464 or allow our competitors to bring products to market before we do, which could limit our potential revenue or impair our ability to successfully commercialize CC8464and may harm our business, financial condition, results of operations and prospects. Any delays, setbacks or failures in our clinical trials could materially and adversely affect our business, financial condition, results of operations and prospects.

Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our drug candidates, we may:

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be delayed in obtaining marketing approval, if at all, or be required to conduct additional confirmatory safety and/or efficacy studies causing additional expenses;

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obtain approval for indications or patient populations that are not as broad as intended or desired;

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obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

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be subject to additional post-marketing testing requirements;

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be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

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have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution;

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be subject to the addition of labeling statements, such as warnings or contraindications;

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be sued; or

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experience damage to our reputation.

As CC8464 is our only compound in clinical development, any setback may have a significant negative effect on our business.

Our drug development costs will increase if we experience delays in testing or obtaining marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all.

We, the FDA or an Institutional Review Board may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (“GCP”), regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our IND applications or the conduct of these trials. Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials. If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of our drug candidates could be negatively impacted, and our ability to generate revenues from our drug candidates may be delayed. As CC8464 is our only compound in clinical development, any setback may have a significant negative effect on our business.

Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize CC8464 and the approval may be for a narrower indication than we seek.

We cannot commercialize a lead compound until the appropriate regulatory authorities have reviewed and approved the lead compound. Even if CC8464 meets its safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process.

Regulatory authorities also may approve a lead compound for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a post-approval safety monitoring program. These regulatory authorities may require precautions or contra-indications with respect to conditions of use or they may grant approval subject to the performance of costly post-marketing clinical trials. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of CC8464. Any of the foregoing scenarios could materially harm the commercial prospects for CC8464 and materially and adversely affect our business, financial condition, results of operations and prospects as CC8464 is our only compound in clinical development.

Our Phase 1 clinical trials have shown that CC8464 can lead to rashes. In addition to this side effect and possibly others caused by the lead compound, the administration process or related procedures also can cause adverse side effects. If any such adverse events occur, our clinical trials could be suspended or terminated. If in the future we are unable to demonstrate that such adverse events were caused by the administration process or related procedures, the FDA, the European Commission, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, CC8464 for any or all targeted indications. Even if we can demonstrate that any serious adverse events are not product- related, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the trial. Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trial of CC8464, the commercial prospects of such lead compound may be harmed and our ability to generate revenues from this lead compound may be delayed or eliminated. Any of these occurrences may harm our ability to develop other product candidates, and may harm our business, financial condition and prospects significantly. As CC8464 is our only compound in clinical development, any setback may have a significant negative effect on our business.

Additionally, if CC8464 receives marketing approval, the FDA could require us to adopt a post-approval safety monitoring program to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients and a communication plan to health care practitioners. Furthermore, if we or others later identify undesirable side effects caused by CC8464, several potentially significant negative consequences could result, including:

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regulatory authorities may suspend or withdraw approvals of such lead compound;

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regulatory authorities may require additional warnings on the label;

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we may be required to change the way a lead compound is administered or conduct additional clinical trials;

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we could be sued and held liable for harm caused to patients; and

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our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of CC8464 and could significantly harm our business, financial condition, results of operations and prospects.

Additionally, other regulatory regimes in other geographies, such as the European Union (“EU”), India and Japan, where we are initially targeting our products, may impose similar conditions or post-monitoring requirements as a result of such findings.

CC8464 is based on a specific mode of administration (dose escalation regime), which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval.

The clinical trial requirements of the FDA, EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a compound vary substantially according to the type, complexity, novelty and intended use and market of such compounds. The regulatory approval process for novel compounds such as ours can be more expensive and take longer than for other, better known or more extensively studied compounds.

Regulatory requirements governing pain medication products have been changing as side effects and the addictive nature of opioids became more apparent. The regulatory framework for pain medications has been tightened and these changes may affect our programs and its commercial potential despite our expectations that CC8464 will not show addictive features. While we are subject to the FDA and EMA regulatory regimes, these are not the only regulatory regimes to which we may be subject in the event we are able to execute on our objectives.

These regulatory review committees and advisory groups and the new guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of CC8464 or future lead compounds or lead to significant post-approval limitations or restrictions. As we advance CC8464, we will be required to consult with these regulatory and advisory groups and comply with applicable guidelines. If we fail to do so, we may be required to delay or discontinue development of CC8464. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be materially and adversely affected.

Even if we obtain regulatory approval for CC8464, our only compound in clinical development will remain subject to regulatory oversight.

Even if we obtain any regulatory approval for CC8464, our lead compound, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for CC8464 may also be subject to a post-approval safety monitoring program, limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product. For example, the holder of an approved NDA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the NDA. The holder of an approved NDA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of that product, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements following approval of CC8464 or any future lead compound, a regulatory authority may:

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issue a warning letter asserting that we are in violation of the law;

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seek an injunction or impose administrative, civil or criminal penalties or monetary fines;

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suspend or withdraw regulatory approval;

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suspend any ongoing clinical trials;

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refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;

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restrict the marketing or manufacturing of the product;

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seize or detain the product or otherwise require the withdrawal of the product from the market;

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refuse to permit the import or export of compounds; or

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refuse to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize CC8464 and adversely affect our business, financial condition, results of operations and prospects.

The FDA’s policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of CC8464. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would materially and adversely affect our business, financial condition, results of operations and prospects.

Even if we obtain and maintain approval for our lead compound CC8464 from the FDA, we may never obtain approval for them outside of the United States, which would limit our market opportunities and adversely affect our business.

Approval of a compound in the United States by the FDA does not ensure approval of such compound by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Sales of CC8464 or other future lead compounds outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a compound, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the compound in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a compound must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for our compounds, if approved, is also subject to approval. We intend to submit a marketing authorization application to the EMA for approval of CC8464 in the European Union, but obtaining such approval from the European Commission following the opinion of the EMA is a lengthy and expensive process. Even if a compound is approved, the FDA or the European Commission, as the case may be, may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of compounds with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our compounds in certain countries.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for any of our compounds may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of CC8464 or our future compounds will be harmed and our business, financial condition, results of operations and prospects will be adversely affected.

While we plan to apply for orphan drug designation for CC8464 in the future, it may not effectively protect us from competition, and we may be unable to obtain similar designations for our future lead compounds. For instance, if our competitors are able to obtain orphan drug exclusivity for products that constitute the same drug and treat the same indications as our lead compounds before us, we may not be able to have competing products approved by the applicable regulatory authority for a significant period of time. To date, we have not submitted an application for orphan drug designation.

In connection with the application for our lead compound, CC8464, for the treatment of EM, we also plan to seek orphan drug designation from the FDA. As of the date of this prospectus, we have not submitted an application for orphan drug designation for CC8464. Under the Orphan Drug Act of 1983, the FDA may designate a lead compound as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.

Generally, if a compound with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for a product that constitutes the same drug treating the same indication for that marketing exclusivity period, except in limited circumstances. If another sponsor receives such approval before we do (regardless of our orphan drug designation), we will be precluded from receiving marketing approval for our product for the applicable exclusivity period. The applicable period is seven years in the United States.

Even though we may obtain orphan drug exclusivity for CC8464, that exclusivity may not effectively protect the compound from competition because different drugs can be approved for the same condition. In the United States, even after an orphan drug is approved, the FDA may subsequently approve another drug for the same condition if the FDA concludes that the latter drug is not the same drug or is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In the EU, marketing authorization may be granted to a similar medicinal product for the same orphan indication if:

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the second applicant can establish in its application that its medicinal product, although like the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior;

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the holder of the marketing authorization for the original orphan medicinal product consents to a second orphan medicinal product application; or

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the holder of the marketing authorization for the original orphan medicinal product cannot supply enough quantities of orphan medicinal product.

If we are not able to secure an orphan drug designation, or if the exclusivity associated with such designation does not effectively protect us from competition, our business, financial condition, results of operations and prospects will be adversely affected.

FDA designations to expedite drug development and review, including “orphan drug” designation, Breakthrough Therapy designation, and/or Fast Track designation, even if granted for any of our lead compounds, may not lead to a faster development, regulatory review or approval process and do not increase the likelihood that any of our lead compounds will receive marketing approval in the United States.

As with any future application for “orphan drug” designation for CC8464 from the FDA, there is no assurance that any of our other compounds that we may develop in the future will receive a similar designation from the FDA or that we will receive Breakthrough Therapy or Fast Track designations lead compound. Further, even if we do receive favorable designations from the FDA, the receipt of any of these designations may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

We may expend our limited resources to pursue a compound or indication and fail to capitalize on lead compounds or indications that may be more profitable or for which there is a greater likelihood of success.

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

If we are not successful in discovering, developing and commercializing additional lead compounds, our ability to expand our business and achieve our strategic objectives would be impaired.

Although a substantial amount of our effort initially focuses on developing CC8464 towards approval in the US and other countries, an additional component of our strategy is to discover, develop and potentially commercialize a portfolio of lead compounds to treat orphan diseases and potentially, non-orphan diseases. Identifying new lead compounds requires substantial technical, financial and human resources, whether any lead compounds are ultimately identified. We may not be able to identify new molecules with the potential for clinical development and ultimate approval. Even if we identify lead compounds that initially show promise, we may fail to successfully develop and commercialize such lead compounds for many reasons, including the following:

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the research methodology used may not be successful in identifying potential lead compounds;

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competitors may develop alternatives that render our lead compounds obsolete;

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lead compounds we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

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a lead compound may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

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a lead compound may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

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a lead compound may not be accepted as safe and effective by patients, the medical community or third-party payors.

If we are unsuccessful in identifying and developing additional lead compounds, our potential for growth may be impaired.

We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully market or commercialize our lead compound, CC8464.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any compound that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly or earlier than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render CC8464 uneconomical or obsolete, and we may not be successful in marketing CC8464 against competitors.

In addition, as a result of the expiration or successful challenge of our patent rights, we could face more litigation with respect to the validity and/or scope of patents relating to our competitors’ products. The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any compound that we may develop and commercialize.

On December 23, 2023, we entered into the Benuvia License Agreement. We are dependent on the Benuvia License Agreement, and the termination of the Benuvia License Agreement could have an adverse effect on our business.

On December 23, 2023, we entered into the Benuvia License Agreement for the Diclofenac Spray Formulation, the Rizatriptan Spray Formulation and the Ondansetron Spray Formulation, diversifying our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions. The Diclofenac Spray Formulation is patented and has started clinical development in human volunteers. Preliminary pharmacokinetics suggest that this formulation may have a faster onset of action than oral Diclofenac tablets. Diclofenac is an NSAID that is also marketed under additional brand names including Voltaren and Cataflam in its pill form. Rizatriptan, whose brand name is Maxalt, is used for the acute treatment of Migraines as a pill. Ondansetron is an anti-emetic that is available in oral and intravenous form. Under the terms of the Benuvia License Agreement, Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, but we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations. If we breach the Benuvia License Agreement, Benuvia may be able to terminate it, and as a result of this termination, our business could be negatively impacted.

If Benuvia does not properly maintain or enforce the intellectual property underlying the Benuvia License Agreement, our competitive position and business prospects could be harmed. Benuvia may also seek to terminate our license.

We are a party to the Benuvia License Agreement. To this end, we are dependent on our license with Benuvia. Our success will depend in part on the ability of Benuvia to obtain, maintain and enforce its licensed intellectual property. Benuvia may not successfully prosecute any applications for or maintain intellectual property to which we have licenses, may determine not to pursue litigation against other companies that are infringing such intellectual property, or may pursue such litigation less aggressively than we would. Without protection for the intellectual property we license, other companies might be able to offer similar products for sale, which could adversely affect our competitive business position and harm our business prospects. If we lose any of our right to use third-party intellectual property, it could adversely affect our ability to commercialize our technologies, products or services, as well as harm our competitive business position and our business prospects.

Rizatriptan is an off-patent branded generic that can be manufactured and sold by other pharmaceutical manufacturers, which may increase the competition we face and reduce our ability to diversify our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions under the Benuvia License Agreement.

Benuvia is an off-patent branded generic pharmaceutical and is currently not protected by intellectual property rights. As a result, other pharmaceutical companies may sell products similar to the Rizatriptan Spray Formulation at a lower cost, and this might result in a commensurate loss in expected sales or require us to lower our prices to compete. If other pharmaceutical companies sell products that are similar to the Rizatriptan Spray Formulation, we may face additional competition and our business and profitability may be adversely affected, and our ability diversifying our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions under the Benuvia License Agreement may be reduced.

Risks Related to Manufacturing

Delays in obtaining regulatory approvals of the process and facilities needed to manufacture CC8464 or any of our lead compounds or disruptions in our manufacturing process may delay or disrupt our product development and commercialization efforts.

Before we can begin to commercially manufacture CC8464 or any of our lead compounds, whether in a third-party facility or in our own facility, if established, we must pass a pre-approval inspection of our manufacturing facility by the FDA. A manufacturing authorization must also be obtained from the appropriate regulatory authorities. The timeframe required for us to obtain such approvals is uncertain. To obtain approval, we will need to ensure that all our processes, methods and equipment are compliant with cGMP, and perform extensive audits of vendors, contract laboratories and suppliers. If any of our vendors, contract laboratories or suppliers is found to be out of compliance with cGMP, we may experience delays or disruptions in manufacturing while we work with these third parties to remedy the violation or while we work to identify suitable replacement vendors. The cGMP requirements govern quality control of the manufacturing process and documentation policies and procedures. In complying with cGMP, we will be obligated to expend time, money and effort in production, record keeping and quality control to assure that the product meets applicable specifications and other requirements. If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be permitted to sell any compound that we may develop.

In addition, the manufacturing process used to produce our lead compounds is complex, novel and has not been validated for commercial use. To produce enough quantities of our lead compounds for future clinical trials and initial US commercial demand, we will need to increase the scale of our manufacturing process. We employ multiple steps to control our manufacturing process to assure that the process works and that CC8464 is made strictly and consistently in compliance with the process. Problems with, or deviations from, the manufacturing process, even if minor, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.

Any contamination in our manufacturing process, shortages of raw materials or failure of any of our key suppliers to deliver necessary components could result in delays in our clinical development or marketing schedules.

Given the nature of sterile product manufacturing, there is a risk of contamination. Any contamination could materially adversely affect our ability to produce CC8464 on schedule and could, therefore, harm our results of operations and cause reputational damage.

Some of the raw materials required in our manufacturing process may be derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of CC8464 could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could materially and adversely affect our development timelines and our business, financial condition, results of operations and prospects.

Risks Related to Commercialization of Our Lead Compounds

If we are unable to expand our market development capabilities or enter into agreements with third parties to market and sell our lead compounds, we may be unable to generate any revenue.

We currently do not have a market development organization. To successfully commercialize CC8464, if approved, we will need to expand our capabilities to promote market access and build awareness. To successfully commercialize any other products that may result from our development programs, we will need to further expand our market development organization, either on our own or with a third party. The development of our own market development team will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We may enter into collaboration agreements regarding any of our lead compounds with third parties to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any future collaborators do not commit sufficient resources to commercialize our products, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We compete with many companies that currently have extensive, experienced and well-funded medical affairs, marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our lead compounds. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

Our efforts to educate the medical community and third-party payors on the benefits of our lead compounds may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our potential products. If any of our lead compounds is approved but fails to achieve market acceptance among physicians, patients or third-party payors, we will not be able to generate significant revenues from such product, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If the market opportunities for CC8464 or our future lead compounds are smaller than we believe they are, our revenues may be adversely impacted, and our business may suffer.

We are currently focusing our research and product development efforts on CC8464 for the management of EM and, potentially, other fields of neuropathic pain. Our understanding of both the number of people who have EM, as well as the subset of people with this disease who have the potential to benefit from treatment with CC8464, are based on estimates in published literature. These estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of this disease. The number of patients in the United States, the EU and elsewhere may turn out to be lower than expected or these patients may not be otherwise amenable to treatment with CC8464 or may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.

Further, there are several factors that could contribute to making the actual number of patients who receive CC8464 less than the potentially addressable market. These include the increased use of currently available medication for mild cases as physicians gain a better understanding diagnosis and treatment of EM, the discovery of novel medications for EM and the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets.

Government price controls or other changes in pricing regulation could restrict the amount that we are able to charge for CC8464, if approved, or any of our other lead compounds that may be approved in the future, which would adversely affect our revenue and results of operations.

We expect that coverage and reimbursement of pharmaceutical costs may be increasingly restricted both in the U.S. and internationally. The escalating cost of health care has led to increased pressure on the health care industry to reduce costs. Drug pricing by pharmaceutical companies recently has come under increased scrutiny and continues to be subject to intense political and public debate in the U.S. and abroad. Government and private third-party payors have proposed health care reforms and cost reductions. A number of federal and state proposals to control the cost of health care, including the cost of drug treatments, have been made in the US. Specifically, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs. In some international markets, the government controls the pricing, which can affect the profitability of drugs. Current government regulations and possible future legislation regarding health care may affect coverage and reimbursement for medical treatment by third-party payors, which may render our lead compounds, if approved, not commercially viable or may adversely affect our anticipated future revenues and gross margins.

We cannot predict the extent to which our business may be affected by these or other potential future legislative or regulatory developments. However, future price controls or other changes in pricing regulation or negative publicity related to the pricing of pharmaceutical drugs generally could restrict the amount that we are able to charge for our future products, which would adversely affect our anticipated revenue and results of operations.

The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our products, if approved, could limit our ability to market those products and decrease our ability to generate product revenue.

We expect that coverage and reimbursement by government and private payors will be essential for most patients to be able to afford these treatments. Accordingly, sales of our lead compounds will depend substantially, both domestically and abroad, on the extent to which the costs of our lead compounds will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors. Coverage and reimbursement by a third- party payor may depend upon several factors, including the third-party payor’s determination that use of a product is:

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a covered benefit under its health plan;

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safe, effective and medically necessary;

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appropriate for the specific patient;

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cost-effective; and

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neither experimental nor investigational.

Obtaining coverage and reimbursement for a product from third-party payors is a time-consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data. We may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. If coverage and reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our lead compounds. Even if coverage is provided, the approved reimbursement amount may not be adequate to realize a sufficient return on our investment.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved products. In the United States, third-party payors, including government payors such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs and biologics will be covered and reimbursed. The Medicare and Medicaid programs increasingly are used as models for how private payors and government payors develop their coverage and reimbursement policies.

Outside the United States, international operations generally are subject to extensive government price controls and other market regulations and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries may put pricing pressure on us. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. It also can take a significant amount of time after approval of a product to secure pricing and reimbursement for such product in many counties outside the United States. In general, the prices of medicines under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our lead compounds. Accordingly, in markets outside the United States, the reimbursement for our products will be reduced compared with the United States and may be insufficient to generate commercially reasonable product revenues.

Moreover, increasing efforts by government and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our lead compounds. Payors increasingly are considering new metrics as the basis for reimbursement rates, such as average sales price, average manufacturer price, and Actual Acquisition Cost. The existing data for reimbursement based on some of these metrics is relatively limited, although certain states have begun to survey acquisition cost data for the purpose of setting Medicaid reimbursement rates, and CMS has begun making pharmacy National Average Drug Acquisition Cost and National Average Retail Price data publicly available on at least a monthly basis. Therefore, it may be difficult to project the impact of these evolving reimbursement metrics on the willingness of payors to cover candidate products that we or our partners are able to commercialize. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become intense. As a result, increasingly high barriers are being erected to the entry of new products such as ours.

Risks Related to Our Business Operations

We may not be successful in our efforts to identify or discover additional compounds and may fail to capitalize on programs or compounds that may be a greater commercial opportunity or for which there is a greater likelihood of success.

Beyond the development and commercialization of CC8464, the future success of our business depends upon our ability to identify, develop and commercialize compounds based on the platform technology. CC8464 was discovered in our labs using our technologies. Research programs to identify new compounds will require to invest substantial technical, financial and human resources. We may fail to identify other potential compounds for clinical development for several reasons. For example, our research may be unsuccessful in identifying potential compounds or our potential compounds may be shown to have harmful side effects, may be commercially impracticable to manufacture or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval.

Additionally, because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or compounds or for indications that later prove to have greater commercial potential. Our spending on current and future research and development programs may not yield any commercially viable products. If we do not accurately evaluate the commercial potential for a particular compound, we may relinquish valuable rights to that compound through strategic collaboration, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such compound. Alternatively, we may allocate internal resources to a compound in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

If any of these events occur, we may be forced to abandon our development efforts with respect to a particular compound or fail to develop a potentially successful compound, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer.

If we are successful in executing our business strategy, we will need to expand our managerial, operational, financial and other systems and resources to manage our operations, continue our research and development activities and, in the longer term, build a commercial infrastructure to support commercialization of any of our lead compounds that are approved for sale. Future growth would impose significant added responsibilities on members of management. It is likely that our management, finance, development personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively manage our operations, growth and lead compounds requires that we continue to develop more robust business processes and improve our systems and procedures in each of these areas and to attract and retain enough numbers of talented employees. We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals.

Our future success depends on our ability to retain key employees and scientific advisors and to attract, retain and motivate qualified personnel.

Our success is dependent upon certain key management and technical personnel, the loss of whose services may adversely impact the achievement of our objectives. Our Interim Chief Executive Officer, Chief Financial Officer, Chief Medical Officer, Treasurer and Corporate Secretary have played key roles in the founding, management, technology development and/or promotion of the Company. We currently do not hold key man insurance on our executives. Even if we do seek to obtain such insurance, we cannot assure you that such insurance will be available on acceptable terms or at all. The loss of the services of either our Interim Chief Executive Officer, Chief Financial Officer, Chief Medical Officer, Treasurer or Corporate Secretary could have a material adverse effect on our business, financial condition, and results of operations.

We employ additional staff that are critical to implementing our clinical development and business strategy, and further development of our products will require that we recruit additional employees or consultants, particularly qualified scientific and technical personnel. Any inability to retrain and attract key employees or advisors may impede the progress of our research, development and commercialization objectives which could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, failure to succeed in preclinical or clinical trials or applications for marketing approval may make it more challenging to recruit and retain qualified personnel.

Our employees, principal investigators and advisors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators and advisors. Misconduct by these parties could include intentional failures to comply with FDA regulations or the regulations applicable in the EU and other jurisdictions, provide accurate information to the FDA, the EMA and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. Sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of information obtained during clinical trials or interactions with the FDA or other regulatory authorities, which could result in criminal and civil penalties or sanctions and cause serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition, results of operations and prospects, including the imposition of significant fines, criminal penalties, or other sanctions.

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 current and future drug candidates.

We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

If we obtain FDA approval for CC8464 and begin commercializing it in the United States, our operations will be directly, or indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and abuse laws and regulations, including, without limitation, the federal Anti-Kickback Statute, federal civil and criminal false claims laws and the Physician Payments Sunshine Act and regulations. These laws will impact, among other things, our proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct our business as well as other jurisdictions. The laws that will affect our operations include, but are not limited to:

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the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The PPACA amended the intent requirement of the federal Anti-Kickback Statute to clarify that a person or entity does not have to have actual knowledge of this statute or specific intent to violate it;

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federal civil and criminal false claims laws and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent. The PPACA provides that a claim for items or services resulting from an Anti-Kickback Statute violation is a false claim under the federal False Claims Act (the “FCA”). Cases against pharmaceutical manufacturers support the view that certain marketing practices, including off-label promotion, may implicate the FCA;

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the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or from making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private);

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules under HITECH and the Genetic Information Nondiscrimination Act;

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other modifications to HIPAA, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses and health care providers;

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federal transparency laws, including the federal Physician Payment Sunshine Act, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to: (i) payments or other “transfers of value” made to physicians and teaching hospitals and (ii) ownership and investment interests held by physicians and their immediate family members;

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state and foreign law equivalents of each of the above federal laws, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts in certain circumstances, such as specific disease states; and

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state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Efforts to ensure that our 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 may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations.

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain a robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

If we 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 generation, handling, use, storage, treatment, manufacture, transportation and disposal of, and exposure to, hazardous materials and wastes, as well as laws and regulations relating to occupational health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biologic materials. Our operations also 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. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended.

Although we maintain workers’ compensation insurance for certain 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 maintain insurance for toxic tort claims that may be asserted against us in connection with our storage or disposal of biologic, hazardous or radioactive materials.

We also may incur substantial costs to comply with current or future environmental, health and safety laws and regulations, which have tended to become more stringent over time. 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 or liabilities, which could materially adversely affect our business, financial condition, results of operations and prospects.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control, such as the impact of health and safety concerns, including SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2) (“COVID-19”) and the Omicron COVID-19 variant, as well as the recent inflation in the United States, foreign and domestic government sanctions imposed on Russia as a result of its recent invasion of Ukraine, and other disruptions to global supply chains. Each of these events has caused or may continue to result in extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, whether due to inflationary pressures or otherwise, could result in a variety of risks to our business, including weakened demand for our lead compounds and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could strain our suppliers, possibly resulting in supply disruption, or cause delays in payments for our services by third-party payors or our collaborators. Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations.

Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. Most recently, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although a statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature Bank or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder.

Although we regularly assess our banking relationships and the location of the assets held in the company’s account as we believe necessary or appropriate, our access to funding sources and other credit arrangements could be significantly impaired by factors that affect the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry.

A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our compounds.

Public health crises such as pandemics or similar outbreaks could adversely impact our business. In December 2019, COVID-19 surfaced in Wuhan, China and has since spread worldwide, including to New Jersey where our primary office and laboratory space is located. In response to the COVID-19 pandemic, we reduced staff and slowed down development activities as capital and testing options available to us were more limited. The extent to which COVID-19 will impact our future operations or those of our third-party partners, including our clinical trial operations, will also depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, adverse impacts of the Omicron COVID-19 variant or other COVID-19 variants, new information that will emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

The continued spread of COVID-19 globally could adversely impact our preclinical or clinical trial operations, including our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19. COVID-19 may also affect employees of third-party CROs located in affected geographies that we rely upon to carry out our clinical trials.

In addition, the patient populations that our lead and other compounds target may be particularly susceptible to COVID-19, which may make it more difficult for us to identify patients able to enroll in our future clinical trials and may impact the ability of enrolled patients to complete any such trials. Any negative impact COVID-19 has to patient enrollment or treatment, or the execution of our lead compounds could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our lead compounds, increase our operating expenses, and have a material adverse effect on our financial results.

On May 11, 2023, the United States government declared an end to the COVID-19 pandemic, but the negative effects from COVID-19 described above may still be present for the foreseeable future.

Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed, and the further development and commercialization of our compounds could be delayed.

Cyber-security incidents, including data security breaches or computer viruses, could harm our business by disrupting our delivery of services, damaging our reputation or exposing us to liability.

We receive, process, store and transmit, often electronically, confidential data of others. Unauthorized access to our computer systems or stored data could result in the theft or improper disclosure of confidential information, the deletion or modification of records, or could cause interruptions in our operations. These cyber-security risks increase when we transmit information from one location to another, including transmissions over the Internet or other electronic networks. Despite implemented security measures, our facilities, systems, and procedures, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, software viruses, misplaced or lost data, programming and/or human errors, or other similar events which may disrupt our delivery of services or expose the confidential information of our customers and others. Any security breach involving the misappropriation, loss or other unauthorized disclosure or use of confidential information of others, whether by us or a third party, could: (i) subject us to civil and criminal penalties; (ii) have a negative impact on our reputation; or (iii) expose us to liability to our customers, third parties or government authorities.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

Our business exposes us to significant potential product liability risks that are inherent in the development, manufacturing, marketing and sale of human device and drug products. Product liability claims could delay or prevent completion of its development programs, clinical or otherwise. If we succeed in marketing and selling products, such claims could result in a recall of any products or a limitation or other change in the indications for which they may be used. If we cannot successfully defend ourselves against claims that our compounds or drugs caused injuries, we will incur substantial liabilities. Depending on their merit or eventual outcome, liability claims may result in:

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decreased demand for any product candidates or drugs that we may develop;

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injury to our reputation and significant negative media attention;

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withdrawal of clinical trial participants;

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significant costs to defend the related litigation;

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substantial monetary awards paid to trial participants or patients;

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loss of revenue;

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reduced resources of our management to pursue our business strategy; and

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the inability to commercialize any products that we may develop.

In addition, we currently do not have product liability insurance, but plan to obtain such insurance at appropriate levels prior to initiating studies in humans or clinical trials and prior to marketing and selling any drug or device products. Any insurance we obtain may not provide sufficient coverage against potential liabilities. These liabilities could prevent or interfere with our product development and commercialization efforts. Furthermore, if we were unable or otherwise failed to obtain and maintain sufficient insurance at a reasonable cost to protect it against any such liabilities, that inability could have a material adverse effect on its business.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain adequate U.S. and foreign patent protection for our lead compounds, including CC8464, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technologies similar or identical to ours, and our ability to successfully commercialize CC8464 and any of our other current or future lead compounds may be adversely affected.

Our success depends, in large part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to CC8464, additional lead compounds in our product pipeline, and our institutional knowledge. The patent prosecution process is expensive, time- consuming and complex. In particular, we may not be able to file, prosecute, maintain, and/or enforce all necessary or desirable patent applications and issued patents at a reasonable cost or in a timely manner.

We have secured U.S. Patent No. 9,458,118 (the “CC8464 Patent”), covering the chemical composition and use of our clinical-stage NaV1.7 blocker. Apart from the CC8464 Patent, we have filed multiple patent applications in foreign jurisdictions, including Canada, France, India and Japan. It is possible that some of our pending patent applications in foreign jurisdictions will not result in issued patents in a timely fashion or at all, and even if we are granted the patents we are currently pursuing in foreign jurisdictions, the patents may not be issued in a form that will provide us with the full scope of protection that we desire, they may not prevent competitors or other third parties from competing with us, and/or they may not otherwise provide us with a competitive advantage. Our competitors, or other third parties, may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. For example, there is no assurance that the CC8464 Patent, or any other patent that we may be granted, will prevent third parties from developing competing technologies. Moreover, our patent estate, including the CC8464 Patent, does not preclude third parties from obtaining intellectual property rights that could interfere with our freedom to use our platform for other indications. Even assuming patents issue from our pending and future patent applications, changes in either the patent laws or interpretation of the patent laws in the United States and foreign jurisdictions may diminish the value of our patents or narrow their scope of protection.

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

Filing and prosecuting patent applications on CC8464 and future lead compounds, current and future innovations related to our technology, and our institutional knowledge in all countries throughout the world would be prohibitively expensive, and intellectual property protections available in some countries outside the United States, and the enforceability thereof, may differ in scope from those in the United States. Thus, in some cases, we will not seek to obtain patent protection for certain technologies in some jurisdictions outside the United States. In addition, the laws of some foreign countries do not protect intellectual property to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions in all countries outside the United States, even in jurisdictions where we do pursue patent protection. Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our lead compounds, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting intellectual property and enforcing intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protections, particularly those relating to biotechnology products and those of foreign entities. Such challenges in enforcing rights in these countries could make it difficult for us to stop the infringement of our patents, if pursued and obtained, or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our current and future patent rights in foreign jurisdictions could result in substantial costs and may divert our efforts and attention from other aspects of our business; could put our asserted patents at risk of being invalidated or interpreted narrowly; could put any future patent applications, including continuation and divisional applications, at risk of not issuing; and could provoke third parties to assert their own patent claims against us or to attack the validity of our other patents. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce any intellectual property rights around the world stemming from intellectual property that we develop may be inadequate to obtain a significant commercial advantage in these foreign jurisdictions.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability (and the ability of any potential future collaborators) to develop, manufacture, market and sell CC8464 and future lead compounds, and to freely use our proprietary technologies (e.g., without infringing the intellectual property rights of others). Many companies and institutions have filed, and continue to file, patent applications related to various aspects of pain management and opioid sparing technology. Because patent applications can take many years to issue, may be confidential for 18 months or more after filing, and can be revised before and after issuance, there may be issued patents and patent applications now pending which may later result in issued patents that a third party asserts are infringed by the manufacture, use, sale, or importation of our products. The biotechnology and pharmaceutical industries are characterized by extensive and complex litigation regarding patents and other intellectual property rights. Our competitors or other third parties may assert infringement claims against us, alleging that our therapeutics, manufacturing methods, formulations or administration methods are covered by their patents. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant product revenue, and against whom our patent portfolio may therefore have no deterrent effect.

Third parties may initiate legal or administrative proceedings attacking the validity of our patents protecting CC8464 and future lead compounds the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to CC8464 or any other lead compound, or related technologies, including, for example, interference proceedings, post grant review challenges, and inter partes review before the United States Patent and Trademark Office (“USPTO”). For example, a third party may bring an inter partes review challenging our patents and any future patent that may be granted to us. Such proceedings often are used as a tactic by defendants in a patent litigation suit to threaten a patentee’s patents, both asserted in the litigation and unasserted. Thus, a competitor, either in response to litigation initiated by us or in the ordinary course, may threaten the validity, enforceability, and breadth of our patents which could have a negative impact on our business and render our patents or other intellectual property rights ineffective or insufficient to prevent competition.

Instituting and defending against patent and other types of intellectual property litigation and administrative proceedings could cause us to spend substantial resources, distract our personnel from their normal responsibilities, and have uncertain outcomes.

Patent and other types of intellectual property litigation and administrative proceedings can involve complex factual and legal questions, and their outcomes are uncertain. A finding of infringement could prevent us from manufacturing and commercializing our technologies, including CC8464, or force us to cease some or all our business operations. If we are found or believe there is a risk that we may be found, to infringe a third party’s valid and enforceable intellectual property rights, we could be required (or may choose) to obtain a license from such a third party to continue developing, manufacturing and marketing our technologies. However, we may not be able to obtain any required license on commercially reasonable terms, if at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and further, it could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technologies, including CC8464. We also could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent or other intellectual property right. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.

Litigation or other legal or administrative proceedings relating to intellectual property claims, with or without merit, is unpredictable and generally expensive and time consuming. Competitors may infringe our current or future patents, should such patents issue, or we may be required to defend against claims of infringement or other unauthorized use of third-party intellectual property or third-party attacks against our intellectual property rights. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property may cause us to incur significant expenses and could distract our scientific and management personnel from their normal responsibilities. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation and administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation despite our attempts to prevent such disclosure. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and, if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Common Stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities.

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating, or successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

Changes in United States patent law and its administrative and judicial interpretation could diminish the value of patents in general, thereby impairing our ability to protect our lead compounds.

Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. As patent reform legislation can inject serious uncertainty into the patent prosecution and litigation processes, it is not clear what impact future patent reform legislation will have on the operation of our business. However, such future legislation, and its implementation, could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Moreover, the patent positions of companies engaged in the development and commercialization of pharmaceuticals are particularly uncertain. We cannot assure you that our efforts to seek patent protection for CC8464 and future lead compounds will not be negatively impacted by the future court decisions or changes in guidance or procedures issued by the USPTO. These decisions, and any guidance issued by the USPTO (or changes thereto), could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property rights in the future.

Intellectual property rights and regulatory exclusivity rights do not necessarily address all potential threats.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

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others may be able to make products that are similar to our current and future lead compound but that are not covered by the claims of our current patents or of patents that we may own or license in the future;

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we, or any future license partners or collaborators, might not have been the first to file patent applications covering certain aspects of the concerned technologies;

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others may independently develop similar or alternative technologies, or duplicate any of our technologies, potentially without falling within the scope of our current or future issued claims, thus not infringing our intellectual property rights;

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it is possible that our filed or future patent applications will not lead to issued patents;

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issued patents to which we currently hold rights or to which we may hold rights in the future may be held invalid or unenforceable, including as a result of legal challenges by our competitors;

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others may have access to any future intellectual property rights licensed to us on a non-exclusive basis;

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our competitors might conduct research and development activities in countries where we have or intend to pursue patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets where we do not have patent rights;

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we may not develop additional proprietary technologies that are patentable;

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the patents or other intellectual property rights of others may have an adverse effect on our business; and

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we may choose not to file a patent application covering certain of our trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

Should any of these events occur, they could significantly harm our business, financial condition, results of operations and prospects.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

In addition to patent protection, we also rely on the protection of trade secrets, know-how and confidential and proprietary information. The disclosure of our trade secrets would impair our competitive position and could harm our business. However, trade secrets are difficult to protect. To maintain the confidentiality of trade secrets and proprietary information, we rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and/or other advisors, and inventions agreements with employees, consultants, and advisors, to protect our trade secrets and other proprietary information. These agreements require that all confidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties. Our agreements with employees and consultants also provide that inventions conceived by the individual in the course of rendering services to us will be our exclusive property. Despite these efforts, we cannot provide any assurances that these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information.

In the event of unauthorized use or disclosure of trade secrets or proprietary information, these agreements, even if obtained, may not provide sufficient protection for our trade secrets or other confidential information. Further, to the extent that our employees, consultants or contractors use technology or know-how owned by others in their work for the Company, disputes may arise as to the rights in related inventions. This can be of particular concern with respect to university collaborators with us, who typically have pre-existing obligations to their universities to assign intellectual property rights, which university rights generally are superior to assignment rights that we might receive from such individuals.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us. Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or academic to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors, and/or consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position. Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trade secrets with them. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position would be harmed. If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.

Risks Related to this Offering and Ownership of our Common Stock

The market prices and trading volume of our shares of Common Stock may experience rapid and substantial price volatility, which could cause purchasers of our Common Stock to incur substantial losses.

Recently, the market prices and trading volume of shares of Common Stock of other small publicly traded companies with a limited number of shares available to purchasers, have experienced rapid and substantial price volatility unrelated to the financial performance of those companies. Similarly, subsequent to the offering of IPO Shares pursuant to the IPO Prospectus, shares of our Common Stock may experience similar rapid and substantial price volatility unrelated to our financial performance, which could cause purchasers of our Common Stock to incur substantial losses, which may be unpredictable and not bear any relationship to our business and financial performance. Extreme fluctuations in the market price of our Common Stock may occur in response to strong and atypical retail investor interest, including on social media and online forums, the direct access by retail investors to broadly available trading platforms, the amount and status of short interest in our Common Stock and our other securities, access to margin debt, trading in options and other derivatives on our shares of Common Stock and any related hedging and other trading factors.

If there is extreme market volatility and trading patterns in our Common Stock, it may create several risks for investors, including the following:

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the market price of our Common Stock may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals;

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if our future market capitalization reflects trading dynamics unrelated to our financial performance or prospects, purchasers of our Common Stock could incur substantial losses as prices decline once the level of market volatility has abated;

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if the future market price of our Common Stock declines, purchasers of shares of Common Stock may be unable to resell such shares at or above the price at which they acquired them. We cannot assure such purchasers that the market of our Common Stock will not fluctuate or decline significantly in the future, in which case investors could incur substantial losses.

Further, we may incur rapid and substantial increases or decreases in our Common Stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our Common Stock may fluctuate dramatically, and may decline rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our Common Stock or result in fluctuations in the price or trading volume of our Common Stock, including:

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actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings;

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our current inability to pay dividends or other distributions;

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publication of research reports by analysts or others about us or the industry in which we operate, including the pharmaceutical or biotechnology industry which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis;

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changes in market valuations of similar companies;

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market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders;

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additions or departures of key personnel;

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actions by institutional or significant stockholders;

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short interest in our Common Stock or our other securities and the market response to such short interest;

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the dramatic increase in the number of individual holders of our Common Stock and their participation in social media platforms targeted at speculative investing;

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speculation in the press or investment community about our company or industries in which we operate;

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strategic actions by us or our competitors, such as acquisitions or other investments;

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legislative, administrative, regulatory or other actions affecting our business, our industry, including positions taken by the FDA;

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investigations, proceedings, or litigation that involve or affect us;

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the occurrence of any of the other risk factors included in this registration statement of which this prospectus forms a part; and

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general market and economic conditions.

NYSE American may delist our Common Stock from trading, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Should we fail to satisfy the continued listing requirements for remaining listed on NYSE American, such as the corporate governance requirements or the minimum closing bid price requirement, NYSE American may take steps to delist our Common Stock. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with NYSE American’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below NYSE American’s minimum bid price requirement or prevent future non-compliance with such listing requirements.

If we cannot maintain the listing of our Common Stock for trading on NYSE American, we could face significant material adverse consequences, including:

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a limited availability of market quotations for our Common Stock;

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reduced liquidity for our Common Stock;

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a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Stock;

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a limited amount of news and analyst coverage; and

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a decreased ability to issue additional Common Stock or obtain additional financing in the future.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

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allow the authorized number of our directors to be changed only by resolution of our board of directors;

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limit the manner in which stockholders can remove directors from the board;

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establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

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require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

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limit who may call stockholder meetings;

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authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

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authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Our amended and restated certificate of incorporation (which, as so amended and restated, we refer to as our “certificate of incorporation”) and our bylaws, as amended (which we refer to as our “bylaws”) provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all 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 certificate of incorporation and our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Notwithstanding the foregoing, the exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive or concurrent jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act of the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, and notwithstanding the provisions of our Certificate of Incorporation and our Bylaws, compliance with the federal securities laws and the rules and regulations thereunder may not be waived by our investors. The choice of forum provision 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, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition, and results of operation.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our Common Stock to drop significantly, even if our business is performing well.

Sales of substantial amounts of our shares of Common Stock in the public market following the IPO, or the perception that these sales could occur, could cause the market price of our securities to decline. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

After giving effect to the IPO Transactions, the issuance of the Leak-Out Shares not yet issued as of the date of this prospectus and sale of the IPO Shares pursuant to the IPO Prospectus, we will have 5,767,525 outstanding shares of Common Stock. All of the IPO Shares sold pursuant to the IPO Prospectus will be immediately tradable without restriction under the Securities Act of 1933, as amended, or the Securities Act, except for any securities held by “affiliates,” as that term is defined in Rule 144 under the Securities Act, or Rule 144.

The remaining shares of Common Stock, other than the Selling Stockholder Shares, will be restricted securities within the meaning of Rule 144 under the Securities Act but will be eligible for resale subject to applicable volume, means of sale, holding period and other limitations of Rule 144 under the Securities Act or pursuant to an exception from registration under Rule 701 under the Securities Act, subject to the lock-up agreements executed in conjunction with the IPO. See “Shares Eligible for Future Sale” for more information.

In addition, we have registered the Selling Stockholder Shares pursuant to the Resale Prospectus and, as a result, all of the Selling Stockholder Shares are freely tradable under the Securities Act, subject to the terms of the lock up agreements.

Upon completion of the IPO, we intend to file one or more registration statements on Form S-8 under the Securities Act to register the shares of Common Stock to be issued under our equity compensation plans and, as a result, all shares of Common Stock acquired under our plans will also be freely tradable under the Securities Act, subject to the terms of the lock-up agreements, unless purchased by our affiliates. In addition, 444,444 shares of our Common Stock will be reserved for future issuances under the equity incentive plan that we have adopted.

In connection with the Bridge Financings, we are required to file a registration statement within 180 calendar days after the consummation of the IPO, providing for the resale of Common Stock, which includes 549 Bonus Shares, received by holders of the senior secured convertible notes upon conversion of such notes.

In connection with our proposed ELOC, we intend to file a registration statement subsequent to the expiration of the lock-up agreement we enter into with the Representative in connection with the IPO, providing for the resale of the shares of Common Stock issuable pursuant to the proposed ELOC, if issued. An agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described in the registration statement of which this prospectus forms a part.

In the future, we may issue additional shares of Common Stock or other equity or debt securities convertible into Common Stock in connection with draw-downs under our proposed ELOC, a financing, acquisition, litigation settlement or employee arrangement or otherwise. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our securities to decline.

If you purchase IPO Shares in the offering pursuant to the IPO Prospectus, you will suffer immediate dilution of your investment.

The public offering price of the IPO Shares will be substantially higher than the pro forma net tangible book value per share of our Common Stock. Therefore, if you purchase IPO Shares pursuant to the IPO Prospectus, you will pay a price per IPO Share that substantially exceeds our pro forma net tangible book value per share of Common Stock after the offering of IPO Shares. To the extent outstanding warrants, options or other convertible securities may be exercised or converted, you will incur further dilution. Based on the public offering price of $6.00 per IPO Share, you will experience immediate dilution of $5.43 per share, representing the difference between the initial public offering price per IPO Share and our pro forma as adjusted net tangible book value per share of $0.57. See “Dilution.”

The Series C Preferred Stock to be issued upon the close of the IPO, will have a liquidation preference over our Common Stock.

The Series C Preferred Stock to be issued upon close of the IPO, will have a liquidation preference that gets paid prior to any payment on our Common Stock. As a result, if we were to liquidate, dissolve or wind-up, each holder of our Series C Preferred Stock would have the right to receive payment out of our assets available for distribution, before any amount is paid to the holders of our Common Stock, in an amount in cash equal to the aggregate liquidation value of all of the shares of preferred stock held by such holder. Holders of the Series C Preferred Stock will not be entitled to dividends. The payment of the liquidation preferences on the Series C Preferred Stock could result in holders of our Common Stock not receiving any proceeds if we were to liquidate, dissolve or wind up, either voluntarily or involuntarily.

The existence of the liquidation preferences may reduce the value of our Common Stock, make it harder for us to sell shares of Common Stock in offerings in the future, or prevent or delay a change of control.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our Common Stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. If securities analysts do not commence coverage of us, the trading price of our stock could decrease. Additionally, if one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

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

The offering price for our securities may not reflect the market price of our securities following this offering. In addition, the market price of our securities is likely to be highly volatile due to many factors, including:

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our ability to successfully proceed to and conduct clinical trials;

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results of clinical trials of our lead compound or those of our competitors;

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the success of competitive products or technologies;

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commencement or termination of collaborations;

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regulatory or legal developments in the United States and other countries;

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developments or disputes concerning patent applications, issued patents or other proprietary rights;

●

the recruitment or departure of key personnel;

●

the level of expenses related to any of our current or future lead compounds or clinical development programs;

●

the results of our efforts to discover, develop, acquire or in-license additional lead compounds;

●

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

●

our inability to obtain or delays in obtaining adequate product supply for any approved product or inability to do so at acceptable prices;

●

disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

●

significant lawsuits, including patent or stockholder litigation;

●

variations in our financial results or those of companies that are perceived to be similar to us;

●

changes in the structure of healthcare payment systems;

●

market conditions in the pharmaceutical and biotechnology sectors;

●

general economic, industry and market conditions; and

●

the other factors described in this “Risk Factors” section.

In particular, we cannot assure you that you will be able to resell your securities at or above your purchase price. The stock markets have experienced extreme volatility in recent years that has been unrelated to operating performance. These broad market fluctuations may adversely affect the trading price of our securities. In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been instituted against the affected company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which would harm our business, results of operations, financial condition and cash flows.

No public market for our Common Stock currently exists, and an active trading market may not develop or be sustained.

Prior to the IPO, there has been no public market for our Common Stock. Although our Common Stock is listed on NYSE American, an active trading market may not develop following the closing of the offering of IPO Shares pursuant to the IPO Prospectus or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares of Common Stock at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares of Common Stock. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration. The initial public offering price for IPO Shares was determined by negotiations between us and the underwriters and may not be indicative of the future prices of our Common Stock.

We have broad discretion in the use of our cash, including the net proceeds from the offering of IPO Shares, and may not use them effectively.

Our management will have broad discretion in the application of our cash, including the net proceeds from the offering of IPO Shares, and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our Common Stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our Common Stock to decline and delay the development of CC8464 and any other lead compounds that we may develop. Pending their use, we may invest our cash, including the net proceeds from the IPO, in a manner that does not produce income or that loses value. See “Use of Proceeds.”

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or CC8464.

We may seek additional capital through a combination of draw-downs under our proposed ELOC, public and private equity offerings, debt financings, collaborations and licensing arrangements. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or CC8464 or grant licenses on terms unfavorable to us.

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company: (i) we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; (ii) we will be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor’s report on financial statements; (iii) we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and (iv) we will not be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved. Investors may find our Common Stock less attractive if we rely on the exemptions and relief granted by the JOBS Act. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may decline or become more volatile.

We have taken advantage of reduced reporting burdens in this prospectus. In particular, we 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 Common Stock less attractive if we rely on certain or all of these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company may 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 irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will incur increased costs as a result of operating as a smaller reporting public company, and our management will be required to devote substantial time to new compliance initiatives.

As a smaller reporting public company, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and NYSE American have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

Pursuant to Section 404, we will be required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our Common Stock will be your sole source of gain for the foreseeable future.

Risks Related to our Proposed ELOC

There is no assurance that we will enter into our proposed ELOC or that the terms thereof will be consistent with or as favorable as those described in this registration statement of which this prospectus forms a part.

We anticipate that we will enter into a purchase agreement to issue the shares of Common Stock issuable pursuant to the ELOC subsequent to the closing of the IPO; however, as of the date hereof, an agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described in the registration statement of which this prospectus forms a part.

Issuances of our Common Stock to the Holder of the Investor Note under our proposed ELOC may have a significant dilutive effect.

We are negotiating an arrangement with the Holder of the Investor Note to enter into a proposed ELOC subsequent to the IPO, pursuant to which we will have the right, but not the obligation, to sell to the Holder of the Investor Note up to $20,000,000 in newly issued shares of our Common Stock, subject to certain limitations. Depending on the number of shares of Common Stock we issue to the Holder of the Investor Note pursuant to the proposed ELOC, it could have a significant dilutive effect upon our existing stockholders. Although the number of shares of Common Stock that we may issue pursuant to the proposed ELOC will vary based on our stock price (the higher our stock price, the fewer shares of our Common Stock we have to issue), there may be a potential dilutive effect to our stockholders, based on different potential future stock prices, if the full amount of the proposed ELOC is realized. Dilution is based upon shares of Common Stock “put” to the Holder of the Investor Note and the stock price discounted to the Holder of the Investor’s purchase price of 95% of the lowest volume-weighted average price during the three (3) consecutive trading days immediately following our notice to the Holder of the Investor Note of our exercise of our “put” right, with the lesser of (i) one hundred percent (100%) of the average daily trading volume over the five days before our notice to the Holder of the Investor Note, (ii) forty percent (40%) of the daily trading volume on the date of our notice to the Holder of the Investor Note or (iii) $2,000,000, delivered in shares of our Common Stock for each particular “put”.

Our existing stockholders may experience significant dilution from the sale of our shares of Common Stock pursuant to our proposed ELOC.

The sale of our Common Stock to the Holder of the Investor Note in accordance with the proposed ELOC may have a dilutive impact on our stockholders. As a result, the market price of our Common Stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our Common Stock we will have to issue to the Holder of the Investor Note in order to exercise a put under the proposed ELOC. If our stock price decreases, then our existing stockholders would experience greater dilution for any given dollar amount raised through the proposed ELOC.

The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our Common Stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our Common Stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our Common Stock.

We may not have access to the full amount available under our proposed ELOC.

Under our proposed ELOC, we will have the right to direct the Holder of the Investor Note to purchase shares of our Common Stock from time to time by presenting the Holder of the Investor Note with a purchase notice directing it to purchase shares according to the terms of the related purchase agreement.

Although, pursuant to our proposed ELOC, we may sell up to $20,000,000 in shares of our Common Stock to the Holder of the Investor Note, depending on the market prices of our Common Stock, we may not be able to nor desire to sell all of the shares of Common Stock contemplated by our proposed ELOC. In addition, we will be required to file one or more additional registration statements to register any shares issued under our proposed ELOC.

The extent to which we rely on the Holder of the Investor Note as a source of funding will depend on a number of factors, including the prevailing market price of our Common Stock and the extent to which we are able to secure working capital from other sources. Even if we sell a significant amount of shares under our proposed ELOC to the Holder of the Investor Note, we may still need additional capital to fully implement our business, operating and development plans. Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, the consequences could be a material adverse effect on our business, operating results, liquidity, financial condition and prospects.

The Holder of the Investor Note will pay less than the then-prevailing market price for shares of our Common Stock, which could cause the price of our Common Stock to decline.

The purchase price of Common Stock sold to the Holder of the Investor Note under our proposed ELOC will be 95% of the lowest volume-weighted average price during the three (3) consecutive trading days immediately following our notice to the Holder of the Investor Note of our exercise of our “put” right. Therefore, shares of Common Stock to be sold to the Holder of the Investor Note pursuant to our proposed ELOC will be purchased at a discounted price as described above. As a result of this pricing structure, the Holder of the Investor Note has a financial incentive to sell our shares of Common Stock immediately upon receiving them to realize the profit between the discounted price and the market price, subject to certain limitations. If the Holder of the Investor Note sells our shares of Common Stock, the price of our Common Stock may decrease. If our Common Stock price decreases, the Holder of the Investor Note may have further incentive to sell such shares. Accordingly, the discounted sales price in our proposed ELOC may cause the price of our Common Stock to decline.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Forward-looking statements include information concerning our strategy, future operations, future financial position, future revenue, projected expenses, prospects and plans and objectives of management. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict, “project,” “seek,” “should,” “target,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements contained in this prospectus include, but are not limited to, statements about the following:

●

the initiation, timing, progress and results of preclinical and clinical trials for CC8464 and any other lead compounds, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

●

the timing, scope or results of regulatory filings and approvals, including timing of final FDA marketing and other regulatory approval of CC8464;

●

our ability to achieve certain accelerated or orphan drug designations from the FDA;

●

our estimates regarding the potential market opportunity for CC8464;

●

our research and development programs for our lead compound;

●

our plans and ability to successfully develop and commercialize future lead compounds, including CC8464;

●

our ability to identify and develop new lead compounds;

●

our ability to identify, recruit and retain key personnel;

●

our commercialization, marketing and manufacturing capabilities and strategy;

●

the implementation of our business model, strategic plans for our business, lead compounds and technology;

●

the scalability and commercial viability of our proprietary manufacturing methods and processes;

●

the rate and degree of market acceptance and clinical utility of lead compounds;

●

our competitive position;

●

our intellectual property position and our ability to protect our intellectual property and enforce our intellectual property rights;

●

our financial performance;

●

developments and projections relating to our competitors and our industry;

●

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

●

our expectations related to the use of proceeds from the offering of the IPO Shares;

●

our estimates regarding expenses, future revenue, capital requirements and needs for or ability to obtain additional financing;

●

the impact of laws and regulations; and

●

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.

Forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of the IPO Shares pursuant to the IPO Prospectus will be approximately $5.7 million (or $6.6 million if the underwriters exercise in full their option to purchase additional IPO Shares), based on the initial public offering price of $6.00 per IPO Share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds from the offering of IPO Shares as follows:

●

approximately $2.0 million to prepare and conduct a dose escalation study for CC8464 in an effort to establish a safe dose escalation regime which will be designed to avoid a high incidence rate of rashes;

●

approximately $0.3 million for in vivo and toxicology studies of CC8464 for the treatment of eye pain;

●

approximately $0.25 million for neuropathic studies of CC8464 for the treatment of neuropathic pain;

●

approximately $0.25 million to prepare and begin conducting a Phase 2a proof-of-concept study of CC8464 for EM;

●

approximately $0.1 million to determine market strategy and develop clinical programs for the Spray Formulations licensed from Benuvia; and

●

approximately $0.3 million to repay amounts outstanding under the October Promissory Notes and amounts payable in connection with the Representative Affiliate Transactions.

We intend to use the remaining net proceeds from the IPO, if any, for general corporate purposes.

The expected net proceeds of the offering of IPO Shares will not be sufficient for us to fund any of our future lead compounds, including CC8464, through regulatory approval, and we will need to raise substantial additional capital to complete the development and potential commercialization of our current and any future lead compounds, as well as to establish commercial supply and a sales organization.

The amounts and timing of our actual expenditures will depend on numerous factors, including the progress of our preclinical and clinical trials and other development and potential commercialization efforts for CC8464 and any future lead compounds, as well as the amount of cash used in our operations. Although we have no present intention or commitment to do so, we may use a portion of the net proceeds for the acquisition of, or investment in, technologies, intellectual property or businesses that complement our business.

Our expected use of net proceeds from the IPO represents our current intentions based upon our present plans and business condition. As of the date of the IPO Prospectus, we cannot predict with complete certainty all of the particular uses for the net proceeds to be received upon the completion of the IPO or the actual amounts that we will spend on the uses set forth above. We may find it necessary or advisable to use the net proceeds for other purposes, and our management will retain broad discretion over the allocation of the net proceeds from the IPO. Pending the uses described above, we plan to invest the net proceeds from the IPO in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

Each of the October Promissory Notes has a maturity date of February 29, 2024 and accrues no interest (except in the case of certain events of default). The proceeds received from the October Promissory Notes were used for working capital purposes.

We will not receive any proceeds from the sale of the Stockholder Shares by the Selling Stockholders pursuant to the Resale Prospectus.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our Common Stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

CAPITALIZATION

The following table sets forth our cash and our capitalization as of September 30, 2023:

●

on an actual basis;

●

on an as adjusted basis, after giving effect to: (A) the Rights Offering; (B) the issuance of 30,000 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to the Holder of the Investor Note pursuant to the October Investor Note Side Letter; (C) the issuance of 790,000 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to the Holder of the Investor Note pursuant to the November Investor Note Side Letter and January Investor Note Side Letter; (D) the issuance of 3,458,033 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to Benuvia in connection with the Benuvia Stock Issuance Agreement; (E) the issuance of the October Promissory Notes; and (F) the IPO Transactions, which include: (i) the 1-for-9 Reverse Stock Split; (ii) the issuance of 499,429 IPO Shares upon conversion of all issued and outstanding shares of Series A Preferred Stock (after giving effect to the Reverse Stock Split); (iii) the issuance of 130,494 shares of Common Stock upon the conversion of the senior convertible notes issued in the Bridge Financings, which includes an additional 549 Bonus Shares and includes interests calculated to and through February 21, 2024 (after giving effect to the Reverse Stock Split and the Representative Affiliate Transactions); (iv) the issuance of an aggregate of 37,500 Standby Shares to the Standby Investor upon close of the IPO (after giving effect to the Reverse Stock Split); (v) the Representative Affiliate Transactions; (vi) the close of the transactions contemplated by the Holdings Side Letter, including the re-assumption of liabilities by Chromocell Holdings previously assumed by the Company, the waiver by Chromocell Holdings of the Company’s obligation to make a cash payment in respect of certain expenses upon close of the IPO, and the issuance of an aggregate of 2,600 shares of Series C Preferred Stock upon close of the IPO, and (vii) the issuance of (x) 93,823 shares to the holder of the Investor Note and (y) 29,167 shares to the holder of the Director Note in full satisfaction of our obligations thereunder, in the case of each IPO Transaction referred to in (F)(i)-(iii) and (vii) above, based on the initial public offering price of $6.00 per IPO Share; and

●

on a further as adjusted basis, after giving effect to the transactions described above, the sale of 1,100,000 IPO Shares in the IPO at the initial public offering price of $6.00 per IPO Share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us (a portion of which were paid prior to September 30, 2023).

You should read this table together with the sections of this prospectus captioned “Use of Proceeds,” “Summary Historical Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Capital Stock” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	As of September 30, 2023⁽¹⁾
	Actual (Unaudited)			As Adjusted			As Further Adjusted

Cash	$	22,786		$	443,987		$	6,096,043
Debt
Investor Note, net of debt discount⁽²⁾		450,000			—			—
Director Note, net of debt discount⁽³⁾		157,216			—			—
Loan Payable – Related Party⁽⁴⁾		591,936			766,936			—
Stockholders’ equity:
Series A Preferred Stock; $0.0001 par value per share; 700,000 shares authorized, 600,000 shares issued and outstanding, actual; 700,000 shares authorized and zero shares issued and outstanding, as adjusted; and 700,000 shares authorized and zero shares issued and outstanding, as further adjusted		60			—			—
Series C Preferred Stock; $0.0001 par value per share; zero shares authorized, zero shares issued and outstanding, actual; 5,000 shares authorized and 2,600 shares issued and outstanding, as adjusted; and 5,000 shares authorized and 2,600 shares issued and outstanding, as further adjusted		—			—			—
Common Stock; $0.0001 par value per share; 100,000,000 shares authorized, 8,876,296 shares issued and outstanding, actual; 200,000,000 shares authorized and 4,667,525 shares issued and outstanding, as adjusted; and 200,000,000 shares authorized and 5,767,525 shares issued and outstanding, as further adjusted		888			467			577
Additional paid-in capital		3,574,960			10,090,249			15,742,305
Accumulated deficit		(9,480,496	)		(9,480,496	)		(9,480,496	)
Total stockholders’ (deficit) equity		(5,904,588	)		610,220			6,262,385
Total capitalization	$	(4,705,436	)	$	1,377,156		$	6,262,386

(1)	On an actual, as adjusted basis and as further adjusted basis, reflects approximately $869,433 in offering expenses paid on or prior to September 30, 2023.

(2)	Represents the aggregate principal amount of $450,000 of the Investor Note.

(3)	Represents the aggregate principal amount and interest of the Director Note.

(4)	Represents (i) the aggregate principal amount and interest of the notes outstanding issued in connection with the Bridge Financings held by related parties and (ii) the aggregate principal amount of $210,000 of the October Promissory Notes.

DILUTION

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

Pro forma net tangible book value per share represents the amount of our total tangible assets as adjusted to take into account: (A) the Rights Offering; (B) the issuance of 30,000 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to the Holder of the Investor Note pursuant to the October Investor Note Side Letter; (C) the issuance of the 790,000 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to the Holder of the Investor Note pursuant to the November Investor Note Side Letter and January Investor Note Side Letter; (D) the issuance of 3,458,033 shares of Common Stock (prior to giving effect to the Reverse Stock Split) to Benuvia in connection with the Benuvia Stock Issuance Agreement; (E) the issuance of the October Promissory Notes; and (F) the IPO Transactions, which include: (i) the 1-for-9 Reverse Stock Split; (ii) the issuance of 499,429 IPO Shares upon conversion of all issued and outstanding shares of Series A Preferred Stock (after giving effect to the Reverse Stock Split); (iii) the issuance of 130,494 shares of Common Stock upon the conversion of the senior convertible notes issued in the Bridge Financings, which includes an additional 549 Bonus Shares and includes interests calculated to and through February 21, 2024 (after giving effect to the Reverse Stock Split and the Representative Affiliate Transactions); (iv) the issuance of an aggregate of 37,500 Standby Shares to the Standby Investor upon close of the IPO (after giving effect to the Reverse Stock Split); (v) the Representative Affiliate Transactions; and (vi) the close of the transactions contemplated by the Holdings Side Letter, including the re-assumption of liabilities by Chromocell Holdings previously assumed by the Company, the waiver by Chromocell Holdings of the Company’s obligation to make a cash payment in respect of certain expenses upon close of the IPO, and the issuance of an aggregate of 2,600 shares of Series C Preferred Stock upon close of the IPO, and (vii) the issuance of (x) 93,823 shares to the holder of the Investor Note and (y) 29,167 shares to the holder of the Director Note in full satisfaction of our obligations thereunder, in the case of each IPO Transaction referred to in (F)(i)-(iii) and (vii) above, based on the initial public offering price of $6.00 per IPO Share. After giving effect to such transactions, our pro forma net tangible book value per share as of September 30, 2023 would have been approximately $(0.50) per share.

After giving effect to the transactions referred to above and the sale of 1,100,000 IPO Shares in the IPO at the initial public offering price of $6.00 per IPO Share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2023 would have been $3,311,183, or $0.57 per share. This represents an immediate increase in as adjusted net tangible book value of $1.08 per share to our existing stockholders and an immediate dilution of $5.43 per share to new investors participating in the IPO.

Initial public offering price per share				$	6.00
Pro forma net tangible book value per share as of September 30, 2023	$	(0.50	)
Increase in pro forma net tangible book value per share attributed to the investors in the offering of IPO Shares	$	5.14
Pro forma as adjusted net tangible book value per share after giving effect to the offering of IPO Shares				$	0.57
Dilution to net tangible book value per share to new investors purchasing shares of Common Stock in the offering of IPO Shares				$	5.43

If the underwriters exercise in full their option to purchase up to 165,000 IPO Shares to cover over-allotments, if any, the pro forma as adjusted net tangible book value per share after giving effect to the IPO would be $0.71 per share, representing an immediate increase (decrease) to existing stockholders of $1.21 per share and immediate dilution to new investors participating in the IPO of $5.29 per share, assuming that the initial public offering price remains the same, after deducting underwriting discounts and estimated offering expenses payable by us.

The following table summarizes, on a pro forma as adjusted basis as of September 30, 2023, the differences between the number of IPO Shares purchased from us, the total cash consideration and the average price per share paid to us by existing stockholders and by new investors purchasing IPO Shares in the IPO at the public offering price of $6.00 per IPO Share, before deducting estimated underwriting discounts and estimated offering expenses payable by us:

	Shares Purchased					Total Consideration					Average Price Per Share
	Number		Percent			Amount		Percent

Existing stockholders		4,667,525		80.9	%	$	8,203,630		55.4	%	$	1.76

New public investors		1,100,000		19.1	%	$	6,600,000		44.6	%	$	6.00

Total		5,767,525		100	%	$	14,803,630		100	%	$	2.57

If the underwriters exercise their option to purchase additional IPO Shares in full, the number of shares of Common Stock held by existing stockholders will be reduced to 78.7% of the total number of shares of Common Stock to be outstanding after the IPO, and the number of shares of Common Stock held by investors participating in the IPO will be further increased to 21.3% of the total number of shares of Common Stock to be outstanding after the IPO, based on all of the assumptions described above in this section.

To the extent any outstanding securities are exercised or converted or to the extent that we issue new securities which result in the issuance of additional shares of Common Stock, new investors would experience further dilution.

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

You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled “Summary Historical Financial Data” and our financial statements and related notes appearing in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are currently working on the development of the Phase 2a proof-of-concept plan and expect to launch the Phase 2a proof-of-concept study in 2024 to assess the potential efficacy of CC8464 in genetically validated EM patients. Though the Phase 2a proof-of-concept study design has not yet been completed, we expect to launch the study during the second half of 2025 and expect that the study will take approximately twelve months after it is initiated. We are anticipating dosing approximately 20 patients diagnosed with genetically validated EM. We will be using a cross-over design which has the advantage of increasing the study power while keeping the number of patients relatively low. Each patient will be exposed to both placebo and CC8464 during the two cross-over phases of the trial but neither the investigators nor the patients will know when they are receiving active drug or placebo. During each dosing period we will induce an EM flare. The primary endpoint will be the amount of pain experienced during the flare with secondary endpoints including other measurements like pain relief, time to onset of the flare and neuropathy scores. The final design may change based on feedback from the FDA or information learned during the dose escalation trial.

We were incorporated in Delaware on March 19, 2021. On August 10, 2022, we entered into the Contribution Agreement with Chromocell Holdings. Pursuant to the Contribution Agreement, as of the Contribution Date, we acquired from Chromocell Holdings all assets, liabilities and results of operations related to Chromocell Holdings’ therapeutic business, including all patents, pre-clinical and Phase I study results and data, and trade secrets related to the CC8464 compound, in exchange for the issuance by us of 10,000,000 shares of Common Stock and (ii) 600,000 shares of Series A Preferred Stock.

Prior to the Contribution Date, we had only nominal assets and liabilities. Accordingly, the financial statements presented in this prospectus for periods prior to the Contribution Date have been prepared on a “carve-out” basis from the financial statements of Chromocell Holdings to represent our financial position and performance as if it had existed on a stand-alone basis. The financial statements presented in this prospectus for periods from and after the Contribution Date reflect our financial position and performance as a stand- alone entity.

All of the assets, liabilities and results of operations of the Company as of and for the periods prior to the Contribution Date were identified based on the assets acquired by the Company from Chromocell Holdings. Management believes the assumptions underlying the Company’s carve-out financial statements are reasonable. Nevertheless, the financial statements may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during the periods presented, and may not reflect the Company’s results of operations, financial position and cash flows had the Company operated as a standalone company during the periods presented. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

On August 2, 2023, we entered into the Holdings Side Letter to the Contribution Agreement. Pursuant to the Holdings Side Letter, upon closing of the IPO: (a) Chromocell Holdings will re-assume all $1.6 million in direct liabilities previously assumed by the Company in accordance with the Contribution Agreement, (b) Chromocell Holdings will waive the Company’s obligations to make a cash payment in the amount of $0.6 million to Chromocell Holdings, and (c) in consideration thereof, we will issue to Chromocell Holdings 2,600 shares of Series C Preferred Stock.

Trends and Other Factors Affecting Our Business

In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%) royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of any of the Spray Formulations. In addition, on December 23, 2023, we entered into the Benuvia Stock Issuance Agreement pursuant to which we issued to Benuvia 3,458,033 shares (384,226 shares, after giving effect to the Reverse Stock Split) of our Common Stock, which may be offered and sold pursuant to the Resale Prospectus.

As a result, our results of operations and balance sheets may not be indicative of future operating results or of our future financial condition.

Going Concern

For the nine months ended September 30, 2023 and 2022 and years ended December 31, 2022 and 2021, respectively, we had a net loss of $3.3 million, $1.2 million, $2.5 million, and $0.6 million, respectively, and will require significant additional capital in order to operate in the normal course of business and fund clinical studies. As a result, these conditions have raised substantial doubt regarding our ability to continue as a going concern beyond one year of the filing of our financial statements. While we believe in the viability of management’s strategy to raise funds and control costs during the development stage, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon the ability to complete clinical studies and implement our business plan, raise capital, generate sufficient revenues and to control operating expenses.

Results of Operations

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022:

	For the Nine Months Ended			For the Nine Months Ended
	September 30, 2023			September 30, 2022			$ Change			% Change
	(Unaudited)			(Unaudited)

OPERATING EXPENSES
General and administrative expenses	$	1,677,078		$	371,283		$	1,305,795			352	%
Research and development		285,204			97,147			188,057			194	%
Professional fees		1,021,187			634,913			386,274			61	%
Total operating expenses		2,983,469			1,103,343			1,880,126			170	%
Loss from operations		(2,983,469	)		(1,103,343	)		(1,880,126	)		(170	)%
Other expense		(358,171	)		(97,818	)		(260,353	)		(266	)%
Net loss before provision for income taxes		(3,341,640	)		(1,201,161	)		(2,140,479	)		(178	)%
Provision for income taxes		-			-			-			NA
Net loss	$	(3,341,640	)	$	(1,201,161	)	$	(2,140,479	)		(178	)%

Operating Expenses

Our operating expenses consist of general and administrative expenses, research and development expenses and professional fees.

General and Administrative Expenses

We incurred general and administrative expenses for the nine months ended September 30, 2023 and 2022 of $1,677,078 and $371,283, respectively. For the nine months ended September 30, 2023, compared to the same period in 2022, this represented an increase of $1,305,795, or 352%, primarily as a result of increases of $941,989 in stock-based compensation.

Research and Development Expenses

We incurred research and development expenses for the nine months ended September 30, 2023 and 2022 of $285,204, and $97,147, respectively. For the nine months ended September 30, 2023, compared to the same period in 2022, this represented an increase of $188,057, or 194%, with the details set forth in the table below:

	For the Nine Months Ended		For the Nine Months Ended
	September 30, 2023		September 30, 2022		$ Change			% Change
	(Unaudited)		(Unaudited)
Consultant	$	36,200	$	42,850	$	(6,650	)		(16	)%
Lab Gas		-		5,731		(5,731	)		(100	)%
Lab Cell Storage		33,000		31,904		1,096			3	%
IP Services		216,004		16,662		199,342			1,196	%
Total	$	285,204	$	97,147	$	188,057			194	%

The Company incurred higher research and development expenses for the nine months ended September 30, 2023, versus the corresponding period in 2022 primarily as a result of intellectual property services in support of the patent portfolio and development of CC8464.

Professional Fees

We incurred professional expenses for the nine months ended September 30, 2023 and 2022 of $1,021,187 and $634,913, respectively. For the nine months ended September 30, 2023, compared to the same period in 2022, this represented an increase of $386,274, or 61%, as a result of higher auditing and legal expenses associated with IPO readiness activities.

Other (Expense) Income

We incurred other expense for the nine months ended September 30, 2023 of $358,171 as compared to other expense for the nine months ended September 30, 2022 of $97,818. For the nine months ended September 30, 2023, compared to the same period in 2022, this represented an increase of $260,353, or 266%. The other expense for the nine months ended September 30, 2023 was the result of interest expense and the other expense for the nine months ended September 30, 2022 was the result of the amortization of a debt discount for debt incurred in 2022 and costs incurred related to our current period debt extensions.

Comparison of the Years Ended December 31, 2022 and 2021

The following table summarizes our results of operations for the years ended December 31, 2022 and 2021:

	December 31,						$			%
	2022			2021			Change			Change
Revenue	$	-		$	-		$	-			0	%
General and administrative expenses		1,098,848			496,667			602,181			121	%
Research and development		391,730			209,047			182,683			87	%
Professional fees		827,581			133,282			694,299			521	%
Total operating expenses		2,318,159			838,996			1,479,163			176	%
Loss from operations		(2,318,159	)		(838,996	)		(1,479,163	)		176	%
Total other (expense) income		(140,430	)		243,609			(384,039	)		(158	%)
Net income (loss) loss before provision for income taxes		(2,458,589	)		(595,387	)		(1,863,202	)		313	%
Provision for income taxes		-			-			-			NA
Net loss	$	(2,458,589	)	$	(595,387	)	$	(1,863,202	)		313	%

Operating Expenses

Our operating expenses consist of general and administrative expenses, research and development expenses and professional fees. Our research and development expenses primarily consist of consultants in regulatory, clinical development and CMC matters to prepare for the Phase 2 trials as well as maintenance fees for our patent portfolio plus lab material costs in connection with work for an NIH grant.

General and Administrative Expenses

Our general and administrative expenses for the years ended December 31, 2022 and 2021 were $1,098,848 and $496,667, respectively, representing an increase of $602,181, or 121%. The increase is primarily comprised of an increase of $0.1 million in stock-based compensation expenses and an increase of $0.3 million increase in payroll expenses.

Research and Development Expenses

For the years ended December 31, 2022 and 2021, we incurred research and development expenses of $391,730 and $209,047, respectively, representing an increase of $182,683 or 87%. Details of the research and development expenses are set forth in the table below:

	December 31				$			%
	2022		2021		Change			Change
Consultant	$	86,802	$	120,480	$	(33,678	)		(28	%)
Lab gas		13,871	$	8,628		5,243			61	%
Lab cell storage		62,197	$	65,260		(3,063	)		(5	%)
CSC		3,800	$	-		3,800			100	%
IP services		225,060	$	14,679		210,381			1,433	%
Total	$	391,730	$	209,047	$	182,683			87	%

The increase in research and development expenses is primarily due to an increase of $0.2 million in legal fees and maintenance costs related to the Company’s patent portfolio.

Professional Fees

Professional fees for the years ended December 31, 2022 and 2021 were $827,581 and $133,282, respectively, representing an increase of $694,299, or 521%. The increase is primarily due to a greater accounting and legal services expenses in preparation for the initial public offering.

Other Income

For the years ended December 31, 2022 and 2021, we recognized $140,430 in other expense and $243,609 in other income, respectively. The other expense for the year ended December 31, 2022 was due to interest expense in the amount of $140,430 and other income for the year ended December 31, 2021 was due to gain on forgiveness of a PPP loan in the amount of $243,862, offset by interest expense of $253.

Liquidity

Sources of Liquidity and Capital

We are in our early stages of development and growth, without established records of sales or earnings. We will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or emerging growth companies. We have not yet commercialized any products, and we do not expect to generate revenue from sales of any lead candidates for several years.

Cash totaled $0.0 million and $0.1 million as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, we had an accumulated deficit of approximately $9.5 million and $6.1 million, respectively, and had a working capital deficit of $5.9 million and $3.7 million, respectively.

Historically, we have funded our operations from a series of cash advances from Chromocell Holdings, licensing arrangements, bridge and note issuances and grants from the National Institutes of Health.

Starting in May 2021, we received a series of advances from Chromocell Holdings that were subsequently codified in the Contribution Agreement as an equity investment, pursuant to which, the Company issued 10,000,000 shares of Common Stock and 600,000 shares of Series A Preferred Stock to Chromocell Holdings in exchange for the assets contributed by Chromocell Holdings to the Company.

On February 4, 2022, the Company entered into the Investor Note, as amended from time to time, for $450,000. The Investor Note has an original issuance discount of $150,000, a maturity date of February 3, 2023, and accrues no interest. As of September 30, 2023, the debt discount was fully amortized. On February 27, 2023, the maturity date of the Investor Note was extended to May 15, 2023, in return for the payment of monthly interest of 2% on the full value, which shall accrue, and the Holder of the Investor Note agreeing to settle the Investor Note in IPO Shares. On June 23, 2023, we entered into a side letter with the Holder of the Investor Note (the “June Investor Note Side Letter”), pursuant to which the Investor Note was further amended to extend the maturity date to August 15, 2023 and we issued to the Holder 50,000 shares of Common Stock. On August 17, 2023, we entered into a side letter with the Holder of the Investor Note (the “August Investor Note Side Letter”), which extended the maturity date to September 30, 2023 and we issued to the Holder of the Investor Note 30,000 shares of Common Stock. On September 24, 2023, we entered into an amendment to the Investor Note, which extended the maturity date to October 10, 2023. Effective October 10, 2023, we entered into a side letter with the Holder of the Investor Note (the “October Investor Note Side Letter”), which extended the maturity date to November 14, 2023 and we issued to the Holder of the Investor Note 30,000 shares of Common Stock. Effective November 13, 2023, we entered into the November Investor Note Side Letter, which further extended the maturity date to January 31, 2024 and we issued to the Holder of the Investor Note the November Leak-Out Shares. Effective January 30, 2024, we entered into the January Investor Note Side Letter, which further extended the maturity date to February 29, 2024 and we issued to the Holder of the Investor Note the January Leak-Out Shares.

On December 6, 2022, the Company and Mr. Todd Davis, one of our directors, entered into the Director Note for $175,000. The Director Note has an original issuance discount of $75,000, and matures on December 31, 2023, or, if earlier to occur, upon the closing of an underwritten offering of securities resulting in at least $15 million in gross proceeds. Mr. Davis, as lender, has the right but not the obligation to subscribe to the underwritten offering by presenting the Director Note in whole or in part to purchase such securities as legal tender therefor, on a dollar-for-dollar basis based upon the offering price of such securities to the public. The Director Note bears no interest except in the case of certain events of default. As of September 30, 2023, there was an unamortized debt discount of $17,784. On December 28, 2023, we entered into an amendment to the Director Note, which extended the maturity date to February 29, 2024.

On April 17, 2023, we entered into the April Bridge Financing for working capital purposes, with various accredited investors, all of whom are pre-existing stockholders, in the aggregate principal amount of $389,757 (together with the September Bridge Financing, the “Bridge Financings”), after giving effect to the Representative Affiliate Transactions. During the nine months ended September 30, 2023, the Company received Advances in the amount of $166,903 prior to the close of the April Bridge Financing from certain of the participating investors. Such Advances accrued interest at a rate of eight percent (8%) per annum until close of the April Bridge Financing on April 17, 2023, for a total of $1,870 in aggregate interest on all Advances. The April Bridge Financing consists of senior secured convertible notes that had a maturity date of October 17, 2023. On October 12, 2023, we entered into a first amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 1, 2023. On October 24, 2023, we entered into a second amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 14, 2023. On November 13, 2023, we entered into a third amendment to the senior secured convertible notes in the April Bridge Financing, which further extended the maturity of the notes to February 29, 2024. Such notes accrue interest on the unpaid principal amount at a rate of eight percent (8%) per annum and will automatically convert into 87,109 shares of Common Stock in connection with the IPO at a twenty percent (20%) discount to the price per IPO Share (based on the initial public offering price of $6.00 per IPO Share). The senior secured convertible notes issued in the April Bridge Financing are secured by a security interest in all of our assets (including our patents and intellectual property licenses). In connection with the April Bridge Financing, on April 17, 2023, we also entered into a securities purchase agreement with holders of the notes, pursuant to which we are required to file a registration statement within 180 calendar days after consummation of the IPO, providing for the resale of Common Stock received by holders of the notes upon conversion of such notes.

The Series C Preferred Stock will have a liquidation preference of $1,000 per share. Holders of the Series C Preferred Stock will not be entitled to dividends, will have no voting rights other than as required by law, will be convertible into shares of Common Stock following the IPO at the holder’s option, will convert into shares of Common Stock automatically if, following the IPO, the trading price of the Common Stock exceeds certain thresholds, and will be redeemable by the Company for cash. For more information, see “Description of Capital Stock–Series C Preferred Stock.”

On September 1, 2023, we entered into a bridge loan for working capital purposes, with various accredited investors, all of whom are pre-existing stockholders, in the aggregate principal amount of $197,421 (the “September Bridge Financing”), after giving effect to the Representative Affiliate Transactions. The September Bridge Financing consists of senior secured convertible notes that have a maturity date of March 1, 2024. Such notes accrue interest on the unpaid principal amount at a rate of eight percent (8%) per annum and will automatically convert into shares of Common Stock in connection with the IPO at a twenty percent (20%) discount to the price per IPO Share plus 549 Bonus Shares (43,385 shares, based on the initial public offering price of $6.00 per IPO Share). The senior secured convertible notes issued in the September Bridge Financing are secured by a security interest in all of our assets (including our patents and intellectual property licenses). In connection with the September Bridge Financing, on March 1, 2023, we also entered into a securities purchase agreement with holders of the notes, pursuant to which we are required to file a registration statement within 180 calendar days after consummation of the IPO, providing for the resale of Common Stock received by holders of the notes upon conversion of such notes. Additionally, we entered into a subordination and intercreditor agreement, effective September 1, 2023, with the holders of the senior secured convertible notes issued in the April Bridge Financing, pursuant to which those notes and certain liens of the Company will be subordinated to the rights of the holders of the notes issued in the September Bridge Financing.

In connection with the September Bridge Financing, the Company and certain holders of the senior secured convertible notes issued in the April Bridge Financing and the September Bridge Financing agreed to waive certain prohibitions in order to permit the issuance of Series C Preferred Stock and the shares of Common Stock issuable in connection with this IPO.

On October 11, 2023, we entered into a securities purchase agreement with the Standby Investor pursuant to which (i) the Standby Investor agreed to purchase, upon close of the IPO and at our election, an aggregate of up to 750 shares of Series B Preferred Stock for a purchase price of $1,000 per share, and (ii) in consideration therefor, we would issue upon close of the IPO, and regardless of whether we would have issued any shares of Series B Preferred Stock, an aggregate of 37,500 Standby Shares to the Standby Investor. In addition, pursuant to the Series B Securities Purchase Agreement, we were required to file a registration statement within 180 calendar days after consummation of the IPO, providing for the resale of the Standby Shares and shares of Common Stock issuable upon conversion of the Series B Preferred Stock, if issued. Effective November 13, 2023, we entered into the Standby Investor Side Letter, pursuant to which we (i) waived in full the Standby Investor’s obligation to fund the aggregate amount to be paid for the Series B Preferred Stock to be purchased under the Series B Securities Purchase Agreement and (ii) agreed to continue to have the obligation to issue the full amount of the Standby Shares upon the closing of the IPO. We and the Standby Investor also agreed to terminate each of our obligations solely with respect to the Series B Preferred Stock under the Series B Securities Purchase Agreement and that certain Registration Rights Agreement between us and the Standby Investor, which was required to be delivered pursuant to the Series B Securities Purchase Agreement.

On October 12, 2023, we and four existing investors entered into the October Promissory Notes with an aggregate face amount of $210,000 and an aggregate purchase price of $175,000. The October Promissory Notes mature on November 12, 2023 or, if earlier to occur, upon the closing of this IPO. The October Promissory Notes bear no interest except in the case of certain events of default. On November 7, 2023, we amended and restated the October Promissory Notes to extend the maturity dates of the October Promissory Notes to November 17, 2023. On November 13, 2023, we amended and restated the October Promissory Notes to further extend the maturity dates of the Promissory Notes to February 29, 2024.

On November 22, 2023, we commenced the Rights Offering pursuant to which we distributed Subscription Rights to each holder of our Common Stock held as of the Rights Offering Record Date. The Subscription Rights could be exercised at any time during the subscription period, which commenced on November 22, 2023 and expired at 5:00 p.m., Eastern Standard Time, on December 1, 2023. Each Subscription Right entitled the eligible holder to purchase up to three shares of our Common Stock at a price per whole share of Common Stock of $0.0112. Holders who fully exercised their rights could also subscribe for additional shares of Common Stock not subscribed for by other holders on a pro rata basis. In addition, we could distribute to one or more additional persons, at no charge to such person, additional non-transferable subscription rights to purchase shares of our Common Stock in the Rights Offering at the same Subscription Price, without notice to the holders of our Common Stock. Upon the closing of the Rights Offering, we issued an aggregate of 21,982,216 shares of our Common Stock and received aggregate net proceeds of $246,201, after giving effect to the Representative Affiliate Transactions, which we intend to use primarily for general corporate purposes and expenses associated with our initial public offering.

We are negotiating an arrangement with the Holder of the Investor Note to enter into an ELOC subsequent to the IPO, pursuant to which we will have the right, but not the obligation, to sell to the Holder of the Investor Note up to $20,000,000 in newly issued shares of our Common Stock, subject to certain limitations. Pursuant to the terms of the proposed arrangement, we will pay the holder a commitment fee of $1,000,000, which may be paid at our election, in cash or shares of Common Stock, upon entry into the ELOC. In addition, we will agree to certain registration rights pursuant to which we will register the securities issuable under the ELOC subsequent to the expiration of the lock-up agreement we enter into with the Representative in connection with the IPO. We also intend to agree, during the proposed two-year term of the ELOC, to not enter into any variable, reset, or otherwise adjustable equity or equity-linked transactions. In the event we do not close the ELOC within forty-five (45) days of the consummation of this IPO and have the registration statement referred to above effective within ninety (90) days of the expiration of any IPO standstill period, we expect to be obligated to pay to the holder a break-up fee in the amount of $1,000,000 and will not be able to raise capital for sixty (60) days thereafter; provided that, we and the Holder of the Investor Note may agree to enter into other form of investments, such as a private investment in public equity transaction.

We anticipate that we will enter into a purchase agreement to issue the shares of Common Stock issuable pursuant to the ELOC subsequent to the closing of the IPO; however, as of the date hereof, an agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described in the registration statement of which this prospectus forms a part.

On February 8, 2024, we and certain affiliates of the Representative entered into the Bridge Financing Note Amendments. Under the Bridge Financing Note Amendments, both notes issued in the April Bridge Financing and the September Bridge Financing have a maturity date of March 1, 2024, and the full principal amount of both notes and any accrued interest thereon shall be payable solely in cash upon the consummation of this IPO. Both notes have an annual interest rate of eight percent (8%), which accrues daily, and is calculated on the basis of a 360-day year (consisting of twelve 30 calendar day periods).

On February 10, 2024, we entered into the Stock Rescission Agreement with certain affiliates of the Representative, pursuant to which we rescinded 111,129 shares of our Common Stock (after giving effect to the Reverse Stock Split) held by such affiliates of the Representative and agreed to refund an aggregate of $91,512.53 paid by such affiliates of the Representative in consideration therefor within 30 days of the effective date of the Stock Rescission Agreement.

Future Funding Requirements

Our primary use of cash is to fund clinical development, operating expenses and repay accrued liabilities associated with our initial public offering.

With respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development and management overhead, including costs of being a public company. Of these, it is expected that research and development will be the largest expense and comprise approximately $3.0 million in the twelve months following the offering of IPO Shares pursuant to the IPO Prospectus, which will be utilized for the Company’s escalation study and Phase II drug trial costs. We have based the research and development costs on current trial parameters and expectations on certain existing tax credits, and there is no certainty that the trial parameters or tax credits available to the Company will remain as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

We expect to continue to incur significant and increasing expenses and operating losses in connection with our ongoing research and development activities. In addition, upon the closing of the IPO, we expect to incur additional costs associated with operating as a public company. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Based on our current operating plan, we believe that the net proceeds from the IPO pursuant to the IPO Prospectus, together with our existing cash, will be sufficient to fund our operations and capital expenses through the end of 2024. However, we have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our capital resources sooner than we expect.

We may also raise additional funding through strategic relationships, public or private equity or debt financings, credit facilities, grants or other arrangements. If such funding is not available or not available on terms acceptable to us, our current development plan and plans for expansion of our general and administrative infrastructure may be curtailed. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that restrict our operations. Any other third- party funding arrangement could require us to relinquish valuable rights.

The source, timing and availability of any future financing will depend principally upon market conditions. Funding may not be available when needed, at all, or on terms acceptable to us. Lack of necessary funds may require us to, among other things, delay, scale back or eliminate expenses including some or all of our planned development. There is substantial doubt about our ability to continue as a going concern.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2023 and 2022:

	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022			$ Change			% Change
	(Unaudited)			(Unaudited)
Net cash used in operating activities	$	(624,224	)	$	(900,531	)	$	276,307			(31	)%
Net cash used in investing activities		-			-			-			-
Net cash provided by financing activities		591,936			1,073,771			(481,835	)		(45	)%
Net (decrease) increase in cash	$	(32,288	)	$	173,240		$	(205,528	)		(119	)%

The following table summarizes our cash flows for the year ended December 31, 2022 and 2021:

	December 31, 2022			December 31, 2021			$ Change		% Change
Net cash used in operating activities		(1,567,149	)		(1,593,011	)		25,862		(2	%)
Net cash used in investing activities		-			-			-		-
Net cash provided by financing activities		1,622,223			1,593,011			29,212		2	%
Net increase in cash		55,074			-			55,074		100	%

Net Cash Used in Operating Activities

For the nine months ended September 30, 2023, we incurred a net loss of $3,341,640, and net cash flows used in operating activities was $624,224. The cash flow used in operating activities was primarily due to a net loss of $3,341,640, offset by stock-based compensation expense of $941,989, a change in account payable and accrued expense of $1,166,880, share issuance cost associated with the extension of the bridge loan in the amount of $201,600 and an increase in accrued compensation in the amount of $340,161.

For the nine months ended September 30, 2022, we incurred a net loss of $1,201,161, and net cash flows used in operating activities was $900,531. The cash flow used in operating activities was due to a net loss of $1,201,161, offset by a change in amortization of debt discount of $97,818 and an increase in accrued compensation in the amount of $120,481.

For the year ended December 31, 2022, we incurred a net loss of $2,458,589, and net cash flows used in operating activities was $1,567,149. The cash flow used in operating activities resulted from the net loss of $2,458,589, primarily offset by $110,146 in stock-based compensation expenses, $140,430 of debt discount amortization, an increase in accounts payable and accrued expenses of $413,603 and an increase in accrued compensation of $221,875.

For the year ended December 31, 2021, we incurred a net loss of $595,387, and net cash flows used in operating activities was $1,593,011. The cash flow used in operating activities was primarily due to a change in account payable and accrued expense of $827,703 and the forgiveness of the PPP loan in the amount of $241,793.

Net Cash (Used in) Provided by Investing Activities

The Company neither received nor used cash in investing activities during the nine months ended September 30, 2023 and 2022, and for the years ended December 31, 2022 and 2021.

Net Cash Provided by Financing Activities

For the nine months ended September 30, 2023, net cash flows provided by financing activities were $591,936 resulting from proceeds from loans, with $410,928 of that amount derived from related parties.

For the nine months ended September 30, 2022, net cash flows provided by financing activities were $1,073,771, primarily consisting of cash received from a bridge loan in the amount of $300,000 and an advance from Chromocell Holdings, net of contribution, in the amount of $773,771.

For the year ended December 31, 2022, net cash flows provided by financing activities were $1,622,223, consisting of cash received from an advance by Chromocell Holdings in the amount of $800,050, cash transfers from Chromocell Holdings to the Company in the amount of $422,173 and total net proceeds from the issuance of two notes in the amount of $400,000.

For the year ended December 31, 2021, net cash flows provided by financing activities were $1,593,011, consisting of cash received from an advance by Chromocell Holdings in the amount of $1,099,950 and cash transfers from Chromocell Holdings to the Company in the amount of $493,061.

Off-Balance Sheet Arrangements

During the nine months ended September 30, 2023 and 2022 and the years ended December 31, 2022 and 2021, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Critical Accounting Estimates

The following discussions are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. We continually evaluate the accounting policies and estimates used to prepare the financial statements. We base our estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.

See Note 3 – Summary of Significant Accounting Policies to the accompanying financial statements for a detailed description of our significant accounting policies.

Income Taxes

We are subject to income taxes in the U.S. Significant judgment is required in determining income tax expense, deferred taxes and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred tax assets will be realized. The ultimate realization of deferred taxes assets is dependent upon generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxable income in carryback years and tax-planning strategies when making this assessment. There is currently significant negative evidence which contributes to our recording a valuation allowance against our deferred tax assets due to cumulative losses since inception.

Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. Adjustments to income tax expense, to the extent we establish a valuation allowance or adjust the allowance in a future period, could have a material impact on our financial condition and results of operations.

The critical accounting estimates below do not represent a material estimate in the preparation of our financial statements.

Recently Issued and Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, or ASU, No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, or ASU 2019-12, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of ASU 2019-12 did not have a material effect on the Company’s financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires an entity to utilize a new impairment model known as the current expected credit loss (CECL) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial assets and certain other instruments. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies that are not smaller reporting companies. ASU 2016-13 became effective for the Company beginning January 1, 2023. The adoption of this ASU did not have a material effect on the Company’s financial statements.

In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2022, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company does not intend to early adopt, and continues to evaluate the impact of the provisions of ASU 2020-06 on its consolidated financial statements.

The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our financial statements.

Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.

BUSINESS

Overview

We are a clinical-stage biotech company focused on developing and commercializing new therapeutics to alleviate pain. Our clinical focus is to selectively target the sodium ion-channel known as “NaV1.7”, as well as other receptors in the NaV family. NaV1.7 has been genetically validated as a pain receptor in human physiology. Genetic studies have shown that families with a certain inherited NaV1.7 modulation consistently show a pathology of not feeling pain. A strong correlation between such inherited NaV1.7 modulation and EM patients who suffer from burning pain in their hand and feet was confirmed in a separate study that was reported in the Journal of Clinical Investigation. The study assessed the pattern of pain, natural history, somatosensory profile, psychosocial status and olfactory testing in patients with primary inherited erythromelalgia with mutations of SCN9A, the gene encoding Na(v)1.7. All subjects reported pain and heat in the extremities (usually feet and/or hands), with pain attacks triggered by heat or exercise and relieved mainly by non-pharmacological maneuvers such as cooling. A NaV1.7 blocker is a chemical entity that modulates the structure of the sodium-channel in a way to prevent the transmission of pain perception to the CNS. Our goal is to develop a novel and proprietary class of NaV blockers that target the body’s peripheral nervous system, initially EM, a rare condition that primarily affects the feet and, less commonly, the hands (extremities). It is characterized by intense, burning pain of affected extremities, severe redness (erythema), and increased skin temperature that may be episodic or almost continuous in nature.

According to Mordor Intelligence, the global pain management market was valued at approximately $67 billion in 2021, and it is expected to have revenues of $89 billion in 2027, with a CAGR of 4.65% over the forecast period. Also, according to Mordor Intelligence, the United States has the largest market for pain management pharmaceuticals and Asia-Pacific is the region showing the strongest growth. North America holds the largest share in the pain management market, with the United States being the most significant contributor to its revenue. According to data published by the Centers for Disease Control and Prevention (“CDC”), in 2019, 20.4% of adults had chronic pain, and 7.4% of adults had chronic pain that had limited work and daily activities frequently. Additionally, according to the CDC, chronic pain increased with age, and the highest level was reported in patients aged 65 years and above. The prescription pain management market in the United States is still largely dominated by opioid analgesics. Opioid analgesics decrease the perception of pain by stimulating a range of opioid receptors that modulate pain signals. The most widely used opioid analgesics, including morphine, fentanyl and hydromorphone, act primarily through the activation of mu opioid receptors in the CNS. However, because of the wide distribution of mu opioid receptors throughout the brain, morphine and other mu opioid analgesics also trigger a characteristic pattern of adverse side effects, in particular severe abuse and addiction.

The global pain market reflects total revenues of drugs mitigating different types of pain, such as backpain, osteoarthritis, post-operative pain and various orphan diseases with pain symptoms. Our current research is focused on EM; correspondingly, our commercial efforts are targeting the potential for EM therapeutics within the overall pain market. According to studies quoted by The Erythromelalgia Association, estimates of the incidence rate for EM vary from 1.3 to 15 per 100,000 persons, reflecting a potential EM patient population from 5,000 to 50,000 in the U.S. Our lead compound, CC8464, could possibly have applications in pain mitigation outside of EM, but neither biological nor clinical studies have provided sufficient data to enable meaningful predictions on the probability of an expanded range of indications.

CC8464 is designed to address both the underlying condition and mitigate the burning pain symptoms that EM patients experience by blocking the NaV1.7 sodium channel. Genetic studies presented in the Journal of Clinical Investigation have established a correlation between particular mutation in the NaV1.7 gene and the occurrence of EM where patients suffer from burning pain in their hand and feet. The study assessed the pattern of pain, and other criteria in patients with primary inherited erythromelalgia with mutations of SCN9A, the gene encoding Na(v)1.7. All subjects reported pain and heat in the extremities (usually feet and/or hands), with pain attacks triggered by heat or exercise and relieved mainly by non-pharmacological maneuvers such as cooling. Based on the correlation between the mutations and frequency of EM occurrence, we believe CC8464 has the potential to address the underlying condition and mitigate the burning pain symptoms that patients experience. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 receptors in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other receptors in the CNS can result in side effects, including addiction and other psychiatric disorders. Since CC8464 is designed to modulate pain signals without activation of receptors in the CNS, it is not expected to produce psychiatric side effects. Based on its characteristics, preclinical studies (described below) and the Phase 1 study we have completed to date, we believe that our lead compound CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in EM.

We are currently working on the development of the Phase 2a proof-of-concept plan and expect to launch the Phase 2a proof-of-concept study in 2024 to assess the potential efficacy of CC8464 in genetically validated EM patients. Though the Phase 2a proof-of-concept study design has not yet been completed, we expect to launch the study during the second half of 2025 and expect that the study will take approximately twelve months after it is initiated. We are anticipating dosing approximately 20 patients diagnosed with genetically validated EM. We will be using a cross-over design which has the advantage of increasing the study power while keeping the number of patients relatively low. Each patient will be exposed to both placebo and CC8464 during the two cross-over phases of the trial but neither the investigators nor the patients will know when they are receiving active drug or placebo. During each dosing period we will induce an EM flare. The primary endpoint will be the amount of pain experienced during the flare with secondary endpoints including other measurements like pain relief, time to onset of the flare and neuropathy scores. The final design may change based on feedback from the FDA or information learned during the dose escalation trial.

We are evaluating whether to conduct the dose escalation and proof-of-concept studies outside of the U.S. to take advantage of beneficial tax credits or lower costs. One example is Australia, which has a 43.5% tax credit for clinical expenses incurred in Australia. Data from clinical trials conducted in Australia is accepted by the FDA.

If approved, we believe that CC8464 could provide pain and symptom relief for EM patients. CC8464 is currently the only compound that we have advanced into clinical development.

In addition, there is scientific evidence that the NaV1.7 receptor is present on the cornea and may be a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CC8464 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CC8464 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CC8464 that would initially be utilized for toxicology and in vivo studies and then followed by a proof-of-concept trial in patients suffering from various conditions, including severe dry eye disease, trauma and surgery. We expect the trials for this ophthalmic formulation of CC8464 to start in the third quarter of 2024.

On December 23, 2023, we entered into the Benuvia License Agreement for the Spray Formulations, diversifying our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions. The Diclofenac Spray Formulation is patented and has started clinical development in human volunteers. Preliminary pharmacokinetics suggest that this formulation may have a faster onset of action than oral Diclofenac tablets. Diclofenac is an NSAID that is also marketed under additional brand names including Voltaren and Cataflam in its pill form. Rizatriptan, whose brand name is Maxalt, is used for the acute treatment of Migraines as a pill. By a number of clinical measures it is thought to be superior to Sumatriptan. A sublingual formulation of Rizatriptan may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea as a result of the migraine headache. Ondansetron is an anti-emetic that is available in oral and intravenous form. An Ondansetron sublingual spray formulation may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea. Under the terms of the Benuvia License Agreement, Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, but we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations and we will purchase the Spray Formulations exclusively from Benuvia, pursuant to a marketing and supply agreement to be negotiated in the future (the “Benuvia Supply Agreement”). The initial sale price per unit for each Spray Formulation payable by us to Benuvia pursuant to the Benuvia Supply Agreement shall be subject to good faith negotiations; provided that the initial price for each Spray Formulation and the price for each Spray Formulation during the term of the Benuvia License Agreement in no event shall be less than Benuvia’s cost of manufacturing the respective Spray Formulation plus a gross margin to Benuvia. The price for each Spray Formulation shall be subject to an annual increase in amounts equal to the percentage change in the Producer Price Index, Pharmaceutical Preparations as published by the U.S. Department of Labor, Bureau of Labor Statistics.

In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%) royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of any of the Spray Formulations. To date, we have paid $0 to Benuvia as royalty on net sales of the Spray Formulations. In addition, on December 23, 2023, we entered into the Benuvia Stock Issuance Agreement pursuant to which we issued to Benuvia 3,458,033 shares (384,226 shares, after giving effect to the Reverse Stock Split) of our Common Stock, which may be offered and sold pursuant to the Resale Prospectus.

Our Strategy

We are a clinical-stage pharmaceutical company focused on non-opioid pain blockers in the NaV space. Our development programs are initially designed to address the underlying condition and mitigate the burning pain symptoms in EM. Based on genetic studies, several academic and clinical scientists have suggested that NaV1.7 could be a promising target to address EM. Studies presented in the Journal of Clinical Investigation show a correlation between a genetic mutation (SCN9A) and the expression of the disease phenotype in EM patients. The study assessed the pattern of pain, natural history, somatosensory profile, psychosocial status and olfactory testing of 13 subjects with primary inherited erythromelalgia with mutations of SCN9A, the gene encoding Na(v)1.7. All subjects reported pain and heat in the extremities (usually feet and/or hands), with pain attacks triggered by heat or exercise and relieved mainly by non-pharmacological maneuvers such as cooling. Quantitative sensory testing revealed significantly increased detection thresholds for cold and warm stimuli at affected, compared to unaffected sites of the body. By contrast, significantly decreased cold and heat pain thresholds were found at unaffected sites of the body. The NIH database of rare diseases specifically mentions the genetic causation of EM in patients with the SCN9A gene, which encodes for the NaV1.7 sodium channel. Our first aim is to assess CC8464’s potential as a drug for EM patients that have a genetic disposition to develop the phenotype.

The therapeutic benefit of CC8464 will, among other factors, be determined by its potency and selectivity. The potency reflects the compound’s effect in blocking the NaV1.7 channel. The selectivity is the absence of effects in blocking other, similar channels (e.g. NaV1.5) that could cause undesirable side effects. We conducted in vitro and in vivo studies described in more detail below that showed both a high potency and selectivity of CC8464. While positive results of in vitro and in vivo studies do not necessarily translate into human studies, we believe that the consistency of results in various in vivo models (rat, mouse, mini-pig) supports the projection of a potential positive outcome in clinical studies.

CC8464 is a potent inhibitor of the inactivated state of the human NaV1.7. We measured with our electrophysiology equipment the difference in affinity between cells with and without CC8464 added in vitro. The results showed that the compound preferentially inhibits the inactivated state of the channel with 1000-fold higher affinity as compared to the resting state. Injury or chronic inflammation is associated with persistent neuronal depolarization that shifts hNaV1.7 channels to the inactivated state. Therefore, CC8464 may preferentially affect injured or inflamed tissues while having minimal effect on the hNaV1.7 channels in uninjured/healthy tissues. CC8464 displays high target selectivity and a favorable in vitro cardiac safety profile (in vitro electrophysiology experiments where we measured differences between cells with and without CC8464 added showed a>1,000-fold selectivity for human NaV1.7 over human NaV1.5, hERG and human CaV1.2 ion channel receptors). Further, a canine cardiovascular and respiratory in vivo study where vital signs of canines were monitored after administering CC8464 showed no adverse findings. CC8464 demonstrated minimal activity against a broad array of potential targets and off-targets with only one confirmed IC50 less than 10 μM (κ-opioid receptor agonist). At predicted therapeutic doses, there is >100-fold selectivity for hNaV1.7 over the κ-opioid receptor. In vivo, CC8464 selectivity may be augmented by a lack of exposure in the central nervous system. In an in vivo tissue distribution study in rats all of the tissues in the central nervous system did not have measurable concentrations of CC8464-derived radioactivity at any time point post-dose. Behavioral effects potentially attributable to the CNS have not been observed in animals. There were no CC8464 related effects on any parameter in the functional observational battery evaluation conducted as a part of the 28-day repeat dose study in rats. In a streptozotocin-induced diabetic neuropathy model, wherein rats self-administered CC8464, there was no increase in intake in up to 8 weeks of dosing. There was no evidence of motor/balance impairments on observational measurements in the foot-fault test, where motoric/balance impairments are monitored in vivo after administering CC8464. Also, no immobility or lethargy observations were reported in cage side observations in any of the nonclinical efficacy studies performed. CC8464 has shown statistically significant efficacy in reversing pain in several nonclinical neuropathic and inflammation induced pain models, where motoric/balance impairments were monitored in vivo by comparing results from animal cohorts and preventing the emergence of neuropathic pain in neuropathic pain models. CC8464 has been shown to reverse thermal and mechanical hyperalgesia, spontaneous pain and tactile allodynia in these models. The reversal of hyperalgesia endpoints follows the pharmacokinetics of CC8464 in plasma. The reversal of tactile allodynia in rats was more gradual and disassociated from the pharmacokinetics, but the therapeutic effect is comparable to the effect on hyperalgesia endpoints and is sustained for some time after the cessation of treatment. There was no tachyphylaxis observed on efficacy parameters after repeated dose administration in the partial sciatic nerve ligation (“PSNL”) and streptozotocin-induced diabetic neuropathy models.

The Phase 2a results will have significance beyond EM and provide important insights about NaV1.7 as a potential target to find novel pain medications as an alternative to opioids, the continuing primary standard of care in analgesics. Despite the societal cost of opioids, no fundamental commercially available breakthroughs have been achieved in pain management over the past decades. We believe that positive results from the Phase 2a study could not only act as support for CC8464’s potential in EM but may also provide guidance of its potential for other indications of peripheral neuropathic pain. The key elements of our strategy to achieve our mission are:

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Advance the development of our lead candidate, CC8464, towards FDA approval for treating EM. Based on its pre-clinical profile, the target validation and trends seen with other NaV1.7 blockers in clinical studies, if approved by the FDA, we believe that CC8464 has the potential to become a drug for treatment of EM patients, potentially delivering meaningful clinical benefits over the currently available standard of care.

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Conduct in vivo and toxicology studies of CC8464 for the treatment of eye pain. According to a presentation at the Association for Research in Vision and Ophthalmology, with the abstract published in the publication, Investigative Ophthalmology and Visual Science in June 2020, there is evidence that the NaV1.7 receptor is present on the cornea and may be a viable biological target for treating eye pain. As such, we intend to conduct in vivo and toxicology studies on the treatment of eye pain with CC8464 as a topical agent. We have commenced development of a topical ophthalmic formulation of CC8464 that would initially be utilized for toxicology and in vivo studies and then followed by a proof-of-concept trial in patients suffering from various conditions including severe dry eye disease, trauma and surgery. We expect the trials for this ophthalmic formulation of CC8464 to start in the third quarter of 2024.

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Leverage our differentiated research and discovery approach to expand our pipeline. We plan to build a pipeline of potential pain blockers acting against sodium-channels related to NaV1.7. Pain modulation is complex, and a multitude of physiological mechanisms are involved in transmitting pain signals. Other than NaV1.7, we believe that several related sodium channels, e.g., NaV1.8 or NaV1.6, may be involved in pain sensation. While NaV1.7 is the most validated pain receptor, we believe that blockers against other sodium channels may complement CC8464 as our primary pain blocking candidate.

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Build a leading, fully integrated pharmaceutical company to maximize the clinical impact and value of our pipeline and deliver value to stockholders. We plan to build an experienced team to rapidly advance compounds in a capital-efficient manner. We intend to retain the commercialization rights to lead compounds; however, we may opportunistically enter into strategic collaborations in certain geographic or clinical settings to maximize the value of our pipeline.

We believe our strategy will allow us to minimize risk and expenses by maintaining an initial focus on CC8464 and EM.

Our Lead compound: CC8464 for the Treatment of EM

CC8464 is our lead compound for the treatment of EM.

Background on EM

EM is a condition characterized by episodes of pain, redness, and swelling in various parts of the body, particularly the hands and feet. These episodes are usually triggered by increased body temperature, which may be caused by exercise or entering a warm room. Ingesting alcohol or spicy foods may also trigger an episode. Wearing warm socks, tight shoes, or gloves can cause a pain episode so debilitating that it can impede everyday activities such as wearing shoes and walking. Pain episodes can prevent an affected person from going to school or work regularly. Strong cases are debilitating for patients and suicidal tendencies in these patients emphasize the urgent medical need in this field.

The signs and symptoms of EM typically begin in childhood, although mildly affected individuals may have their first pain episode later in life. As individuals with EM get older and the disease progresses, the hands and feet may be constantly red, and the affected areas can extend from the hands to the arms, shoulders and face, and from the feet to the entire legs.

EM is often considered a form of peripheral neuropathy because it affects the peripheral nervous system, which connects the brain and spinal cord to muscles and to cells that detect sensations such as touch, smell and pain.

Prevalence

According to Transparency Market Research:

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EM is a rare condition that primarily affects feet and hands. It is characterized by intense, burning pain of affected extremities, severe redness (erythema), and increased skin temperature that may be episodic or almost continuous in nature.

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The specific cause of EM remains unknown. EM is caused by a mutation of the NaV1.7 gene and may also result of vasomotor abnormalities or dysfunction in the normal narrowing and widening of the diameter of certain blood vessels, leading to abnormalities of blood flow to the extremities.

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Females are more affected than males. Disorder onset occurs most commonly in middle age; however, associated symptoms may develop at any age. Terminology is not uniform in EM, but certain terms have gained a certain level of general acceptance. With this caveat, EM is of two types: primary EM and secondary EM. Primary EM is caused by a genetic mutation, while secondary EM is likely caused by another disease, such as diabetes or myelodysplasia. Also relevant is the difference between EM cases where a known genetic variation has at least partially caused the illness and cases where it is unknown what underlying genetic variation, if any, caused EM.

Existing Treatment Options

The current standard-of-care for patients with EM is limited to symptom management. However, according to a case report published in the Journal of Pain Medicine, more than 50% of EM patients report that over-the-counter medications did not effectively address the symptoms. In severe cases, opioids may be the only available treatment option and are accompanied by well-known risks and liabilities. Further, there is a lack of guidelines available on how it should be optimally managed. Current EM treatments are regarded as ineffective, risky, or both.

CC8464’s Unknown Mechanism of Action

The mechanism of action for EM is unknown. According to the National Institutes of Health, mutations of NaV1.7 are a leading cause for EM but it remains unclear why this defect leads to the observed phenotype. It is also unclear whether other sodium-channels or causes other than genetic mutations influence the development of EM.

Our initial focus for CC8464 is evaluating its potential therapeutic benefit to treat EM patients. While we do not know the mechanism of action, we believe the empirical correlation between the SCN9A genetic mutation and disease is a hypothesis to develop CC8464 as a potential drug to mitigate EM for patients with a genetic disposition, however, we will also evaluate CC8464 for secondary EM patients as part of our study.

CC8464 Current Study Results

CC8464 has undergone a Phase 1 study. The study was not powered for statistical significance and no p-values are available. The result showed that CC8464 has a good overall tolerability but may cause rashes in certain patients. The occurrence of rashes is not uncommon in the class of molecules to which CC8464 belongs. A dose-escalation-regime is a standard method used in pharmaceutical drug development to mitigate rashes as a side effect. We believe that a dose-escalation-regime could reduce the occurrence of rashes to a tolerable level for CC8464. We plan to conduct a dose-escalation-study to potentially validate the concept and establish a prescription regime for patients that minimizes the risk of rashes. Even though the FDA has in the past approved drugs that listed rashes as a potential side effect, we do not know if CC8464 will be approved by the FDA (or any foreign authority) in view of its potential to cause rashes.

Currently a total of 207 healthy subjects have been dosed in four Phase 1 studies (CC8464-1001, CC8464-1002, CC8464-1003, and 1807-CL-0102) with study treatment. The studies were sponsored by Chromocell Holdings. A Phase 1 study investigating safety, tolerability and pharmacokinetics of single and multiple ascending doses of CC8464 in healthy volunteers has been conducted and the data base has been locked (Study Protocol CC8464-1001). CC8464-1002 and CC8464-1003 were relative bioavailability studies in healthy volunteers to support new formulations. CC8464 was, in general, well tolerated in these Phase 1 studies (CC8464-1001, CC8464-1002, CC8464-1003) when administered to healthy volunteers as a single dose up to 1800 mg or over 14 days of once a day dosing up to 1200 mg. Skin rash, the only clinically relevant safety finding, was seen in a total of six (6) out of the 159 subjects dosed with CC8464 in these Phase 1 studies (CC8464-1001, CC8464-1002, CC8464-1003).

Following clinical completion of the studies CC8464-1001, CC8464-1002, and CC8464-1003, the drug-drug interaction (DDI) study 1807-CL-0102 was initiated to examine the effect of CC8464 on the PK and Pharmacodynamics (PD) of warfarin, a CYP2C9 substrate. This was the first study with a BID dosing regimen (CC8464 400 mg BID daily for two weeks) which had greater accumulation than expected. Thirteen out of eighteen (13/18) subjects dosed with CC8464 reported rash in this open label drug-drug interaction study. Clinical presentation and resolution of the rashes reported in study 1807-CL-0102 were consistent with the rash cases from CC8464-1001 except for a single case of a severe skin reaction requiring IV corticosteroid therapy (SAE). All reported skin rashes in study 1807-CL-0102 resolved within days of treatment discontinuation without sequalae.

Overview of Studies – CC8464

Study ID/ Location	Study Title	Study Design	Dosing Regimen	Study Population	FPFV^*	Planned Enrollment	Subject exposure
CC8464-1001 (USA)	A Randomized, Double Blind, Placebo Controlled, Single Ascending Dose and Multiple Ascending Dose Study to Evaluate the Safety, Tolerability, and Pharmacokinetics of Oral Doses of CC8464 in Normal Healthy Subjects with Food Effect Assessment	SAD/MAD	SAD: 30, 120, 300, 600, 1200, 1800, or 2400 mg QD on Day 1. MAD: 120, 300, 600, 1200, 1800 or 2400 mg QD on Days 1-14.	Healthy Volunteers	September 13, 2016	206	125
CC8464-1002 (USA)	A Phase 1 Crossover Study to Assess the Relative Bioavailability of CC8464 following a Single Dose of Melt Granulation Capsule Compared to a Single Dose of Encapsulated Suspension in Normal Healthy Subjects with a Food Effect Assessment	Cross-over	200 mg Melt Granulation Capsule (fed and fasted) vs 200 mg Suspension Capsule (fasted)	Healthy Volunteers	July 31, 2017	24	24
CC8464-1003 (USA)	A Single-Dose, Open-Label, Five-Period, Randomized, Crossover Study to Compare the Relative Bioavailability and Dose Proportionality Between Two Formulations and 3 Dosage Strengths of CC8464 in Healthy Volunteers	Cross-over	50 mg, 100 mg and 400 mg of CC8464 Melt Granulation Tablet (Fed and Fasted) vs 2x200 mg of Melt Granulation Capsules	Healthy Volunteers	February 5, 2018	40	40
1807-CL-0102 (USA)	A Phase 1 Study to Evaluate the Effect of Multiple Doses of CC8464 (ASP1807) on the Pharmacokinetics and Pharmacodynamics of Warfarin in Healthy Subjects	Drug-Drug Interaction	Single doses of 5mg Warfarin tablets will be taken on days 1 and 15. 400mg of CC8464 BID will begin on Day 8 and continue until 6 days after the second dose of Warfarin is taken, for a total of 14 days	Healthy Volunteers	May 16, 2018	18	18

FPFV = first patient first visit

CC8464 Phase 2a Trials

Genetic studies have established a correlation between a mutation in the SCN9A gene and the expression of the EM phenotype in EM patients. Our initial focus in the development plan for CC8464 is assessing its therapeutic use for EM patients with such genetic disposition. We plan to conduct two key studies as part of our Phase 2a clinical trials. First, we will conduct a dose escalation study (“DES”) with healthy volunteers, where we determine the maximum tolerated dose (“MTD”) for CC8464 and the pace of increasing the dosage towards MTD and minimal risk of rashes. Second, we will conduct a proof of concept (“POC”) study, where we induce mild to moderate flares by exposing patients’ hands to cold water and record the self-assessment of patients regarding perception of pain on the 1-10 pain scale. The POC will be conducted as a double-blinded, placebo-controlled study with 20 patients.

Our Addressable Market

Based on a study published in the International Journal of Vascular Medicine, our lead product for the treatment of EM, CC8464, may be relevant for approximately 50,000 patients in the US today. Similarly, according to studies quoted by the Erythromelalgia Association, estimates of the incidence rate for EM vary from 1.3 to 15 per 100,000 persons, reflecting a potential EM patient population up to 50,000 in the U.S.

According to Transparency Market Research, Key Drivers of Global Erythromelalgia Treatment Market include:

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Increase in number of patients with EM, strong product pipeline, and increasing research and development activity for developing new innovative drugs for treatment of EM are likely to drive the EM market during the forecasted period. In addition, high demand for disease specific novel treatment to the patients as quickly as possible is enhancing the growth of the market.

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According to the National Organization for Rare Disorders, the prevalence rate of EM is approximately 1.3 people in every 100,000 people in the U.S.

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On the other hand, limited treatment options and low healthcare budget in some developing countries are likely to restrain the growth of the market.

While we have not conducted an analysis nor can we point to studies which indicate the incidence of EM in other countries, we have issued patents (as set forth in greater detail below) in countries representing an additional population of approximately 2.0 billion people.

The three Spray Formulations licensed from Benuvia are currently indicated for acute pain, migraine and the prevention of nausea and vomiting associated with chemotherapy or surgical anesthesia. All three of these conditions have a relatively high number of potential patients who may be candidates for the medication; however, we have performed no further market assessment and the performance of any such market assessment would be pre-mature. We plan to assess the addressable markets for the three Spray Formulations after we have collected further pharmacokinetic data and we have developed a strategy and development plan for the Spray Formulations in connection with our discussions with the FDA.

Our Lead Drug Candidate and Pipeline

We intend to focus our efforts on the development of CC8464, our lead compound, towards approval in the United States and other jurisdictions. While CC8464 is the focus of our efforts, we may also allocate future resources towards the discovery and development of other compounds that could potentially modulate NaV1.7 or related sodium-channels. We believe that these molecules could represent alternatives in case we encounter challenges in the further development of CC8464 or, in particular, if blocking channels other than NaV1.7 (e.g., NaV1.8) become a complementary therapeutic to CC8464. Pain perception is complex and, given its essential function for human physiology, modulated through a variety of receptors. Hence, we believe that different NaV blockers may provide an additive or even synergistic effect on patients with neuropathic pain.

CC8464’s FDA Orphan Drug Designation

We are considering submitting a request to the FDA for Orphan Drug Designation, which could lead to approval for such designation. Orphan Drug Designation provides for a seven-year window of exclusivity and potential 25% tax credit on qualified clinical trials, as well as reduced FDA review periods and regulatory fees. We may apply for similar orphan drug designations in additional jurisdictions, including India, Japan and Mexico, as well as additional regulatory classifications, such as FDA Breakthrough Therapy Designation, that confer an advantage during development. As of the date of this prospectus, we have not submitted an application for orphan drug designation for CC8464.

CC8464 Manufacturing

We plan to manufacture the clinical and eventual commercial supply through CROs in the U.S. and potentially other jurisdictions. We have rights to two proprietary methods to produce CC8464. We have not yet decided which production process we will use for subsequent clinical trials and eventual commercial supply, but both appear suitable for further use and optimization.

Both manufacturing processes employ common methods of organic synthesis used in the production drug substance. We do not intend to file patents for these processes but will keep the detailed protocols (e.g. the selected crystallization solvent or the particular salt) as trade secrets.

We do not produce drug substance in house. External CROs have produced enough drug substance (based on both processes) to conduct the planned Phase 2a trials.

Benuvia Spray Formulations

Rizatriptan, whose brand name is Maxalt, is used for the acute treatment of Migraines as a pill. By a number of clinical measures it is thought to be superior to Sumatriptan. Both Rizatriptan and Sumatriptan belong to a family of tryptamine-based medications named “triptans” that work as serotonin 1A receptor (or 5-HT1A-receptor) agonists and are indicated for the treatment of migraine. A sublingual formulation of Rizatriptan may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea as a result of the migraine headache. According to a study that was reported in 2001, Rizatriptan has a higher bioavailability and a more rapid onset of action which may be responsible for better results in resolving migraines as well as better results in patients reporting that they are “pain free” after 2 hours. We believe both Sumatriptan and Rizatriptan are competitors for the same indication, though neither are widely marketed because they are generic drugs.

Ondansetron is an anti-emetic that is available in oral and intravenous form. An Ondansetron sublingual spray formulation may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea. Under the terms of the Benuvia License Agreement, Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, but we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.

Intellectual Property

Protection of our intellectual property is an important part of our business. We seek patent protection in the United States and in other countries for our inventions and discoveries, and we develop and protect our key know-how and trade secrets relating to our platform technology and the products we are developing using our platform.

We have adopted a strategy of seeking patent protection in the United States and in other jurisdictions globally that we deem appropriate with respect to certain of our technologies relating to our products and process. As of February 21, 2024, we have received an issued patent from the USPTO directed to the composition of matter and use of CC8464. We have also obtained patents in France, Japan, India and other smaller markets (Mexico, Israel and South Korea). Our U.S. patent for CC8464 will expire in 2035. The Company owns the patent and has not licensed any portion to third parties. In addition, we have an additional pending patent application in India. While the eventual issuance of a patent in India cannot be guaranteed, we believe that we have a good chance to obtain comprehensive composition of matter protection for CC8464 during 2024.

The Diclofenac Spray Formulation is covered by U.S. Patent 9,855,234. The patent was issued in January 2018 to Benuvia and is a composition-of-matter patent that will expire, barring a patent term adjustment, in April 2036. The patent coverage applies to the United States. The Ondansetron Spray Formulation is covered by U.S. Patent 9,566,233 and U.S. Patent 10,172,833. Both patents are composition-of-matter patents that will expire, barring a patent term adjustment, in May 2034 and August 2036, respectively. The patent coverages apply to the United States. The U.S. and international patents relating to the Rizatriptan Spray Formulation have either expired or have been abandoned.

In addition to patents and licenses, we rely on trade secrets and know-how to develop and maintain technologies and methods that provide us a meaningful competitive advantage. However, trade secrets can be difficult to defend and maintain. We seek to protect our proprietary technology and processes, and maintain ownership of certain technologies, in part, through confidentiality agreements and invention assignment agreements with our employees, consultants and commercial partners.

Our Competition

The biotechnology and pharmaceutical industries are highly competitive. Several pharmaceutical companies that are developing either topical applications for EM or other molecules that modulate NaV1.7 and therefore have the potential to mitigate EM. These companies and new entrants may potentially compete with our products in the future with novel delivery technologies. To the best of our knowledge, CC8464 is currently the most advanced NaV1.7 blocker in clinical development because other programs that modulate NaV1.7 are in pre-clinical development, which makes CC8464 more advanced in comparison as CC8464 has entered clinical trials and completed a Phase 1 study. However, we may be unaware of unpublished development efforts in the NaV1.7 space. The market exclusivity associated with a potential future Orphan Drug Designation plus the CC8464 market exclusivity associated with our issued patent are key elements of our commercialization strategy; however, we have not currently applied and may not receive orphan drug designation for CC8464. Competition in this space will remain strong and we do not know if we will be successful to obtain orphan designation from the FDA, encounter challenges to our issued patents and continue to advance CC8464 throughout clinical development towards approval.

In connection with this offering, we have entered into a side letter with Chromocell Holdings, pursuant to which Chromocell Holdings agreed not to (i) directly or indirectly engage in the business of owning, licensing, developing, marketing, manufacturing, producing, selling or distributing products, technologies, therapies, or services in any way related to our business, including all patents, pre-clinical and Phase I study results and data, and trade secrets related to the CC8464 compound, transferred by Chromocell Holdings to us further to the Contribution Agreement, (ii) directly or indirectly, hire, engage or employ (as an employee, consultant or otherwise) any of our employees; provided that Chromocell Holdings shall not, directly or indirectly, prevent any of our employees from serving on the board of directors of Chromocell Holdings, and (iii) through any director or officer of Chromocell Holdings, directly or indirectly, solicit for employment or the engagement of services of any of our employees or induce or attempt to induce any of our employees to leave his or her employment with us, or in any way intentionally interfere with the employment relationship between any of our employees and us, for the purpose of employing or engaging the services of such employee or soliciting such employee to become an employee or consultant of Chromocell Holdings or any other person.

Our Facilities

Our office is located at 4400 Route 9 South, Suite 1000, Freehold, NJ 07728. We are considering lab options commensurate with the start of the Phase II trials and dose escalation study.

Employees and Human Capital Resources

As of January 1, 2024, we had three full-time employees and four consultants on a part-time basis. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union. We consider our relationship with our employees to be good.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.

In addition, we have a three person Scientific Advisory Board (“SAB”) led by Dr. Stephen Waxman, who is the Bridget M. Flaherty Professor of Neurology and of Neuroscience and the Director of the Center For Neuroscience and Regeneration Medicine at Yale University School of Medicine.

Legal Proceedings

From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of management, would have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputation harm, and other factors.

Government Regulation

The FDA and other regulatory authorities at federal, state and local levels, as well as outside the United States, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, recordkeeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs and biologics. We, along with our vendors, CROs, clinical investigators, clinical trial sites and CMOs, will be required to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek marketing approval of compounds. The process of obtaining regulatory approvals of drugs and biologics and ensuring subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

In the United States where we are initially focusing our drug commercialization, we believe compounds, as small molecule drugs, would be regulated as new drugs rather than biologics. The FDA regulates new drug products under the Federal Food, Drug, and Cosmetic Act, as amended (the “FDCA”) and its implementing regulations. New drug products are also subject to other federal, state and local statutes and regulations. If we fail to comply with applicable FDA or other requirements at any time with respect to product development, clinical testing, approval or any other regulatory requirements relating to product manufacture, processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution, or sale, we may become subject to administrative or judicial sanctions or other legal consequences. These sanctions or consequences could include, among other things, the FDA’s refusal to approve pending applications, issuance of clinical holds for proposed or ongoing studies, suspension or revocation of approvals, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.

Compounds must be approved for therapeutic indications by the FDA before they may be marketed in the United States. For new drug products regulated under the FDCA such as our lead compound, a sponsor must submit an NDA to the FDA for review and approval. The NDA review and approval process may take multiple years and involves the following steps:

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completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements;

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completion of the manufacture, under cGMP conditions of the drug substance, drug product, and labeling and packaging that the sponsor intends to use in human clinical trials along with required analytical and stability testing;

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submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually and amended when certain changes are made;

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approval by an institutional review board (“IRB”) or independent ethics committee (“IEC”) at each clinical trial site before each trial may be initiated;

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performance of adequate and well-controlled clinical trials in accordance with applicable IND regulations, GCP requirements, including informed consent, financial disclosure by investigators and other clinical trial-related regulations, to establish maximum tolerable dose and efficacy of the investigational product for each proposed indication and other condition of use;

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preparation and submission to the FDA of an NDA;

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a determination by the FDA within 60 days of its receipt of an NDA to file the application for review;

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satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug product’s identity, strength, quality and purity;

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satisfactory completion of FDA inspection of select clinical trial sites involved in conducting pivotal studies that generated the data in support of the NDA;

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payment of user fees for FDA review of the NDA; and

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FDA review and approval of the NDA, including of the proposed prescribing information and, where applicable, consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the United States.

Preclinical Studies and Clinical Trials for Drugs

Before testing any drug in humans, compound must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of product chemistry, formulation and stability, as well as in vitro and animal studies to assess maximum tolerable dose and in some cases to establish the rationale for therapeutic use. The conduct of preclinical studies is subject to federal and state regulation and requirements, including GLP requirements under 21 C.F.R. Part 58 and animal testing requirements under the Animal Welfare Act Amendments of 1976 (7 U.S.C. 2131 et seq.). The results of the preclinical studies, together with manufacturing information and analytical data, must be submitted to the FDA as part of an IND.

An IND is a submission to the FDA under which a sponsor proposes to administer an investigational product to humans. An IND must become effective before the proposed clinical trials may begin. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes the results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. Some long-term preclinical testing may continue after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks, refuses to allow the IND to take effect until the FDA’s concerns and questions have been addressed and/or imposes a full or partial clinical hold. The FDA must notify the sponsor of the grounds for the hold, and any identified deficiencies must be resolved before the clinical trial can begin. Submission of an IND may result in the FDA not allowing clinical trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND. A clinical hold can also be imposed once a trial has already begun, thereby halting the trial until the deficiencies articulated by FDA are corrected.

The clinical stage of development involves the administration of the compounds to healthy volunteers or patients under the supervision of qualified investigators, who generally are physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters and criteria to be used in monitoring safety and evaluating effectiveness. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND.

Furthermore, each clinical trial must be reviewed and approved by an IRB or IEC for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable compared to the anticipated benefits. The IRB or IEC also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. The FDA, the IRB or IEC, or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries. Information about clinical trials, including results for clinical trials other than phase 1 investigations, must be submitted within specific timeframes for publication on www.ClinicalTrials.gov, a clinical trials database maintained by the National Institutes of Health.

A sponsor who wishes to conduct a clinical trial outside of the United States are subject to the requirements of the applicable jurisdiction and may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the FDA will nevertheless accept the results of the study in support of an NDA if the study was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary.

Clinical trials to evaluate therapeutic indications to support NDAs for marketing approval are typically conducted in three sequential phases, which may overlap.

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Phase 1 — Phase 1 clinical trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or patients with the target disease or condition. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, evaluate the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.

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Phase 2 — Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition to evaluate the drug’s potential efficacy, to determine the optimal dosages and dosing schedule, and to identify possible adverse side effects and safety risks.

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Phase 3 — Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy, and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended, with the other available evidence, to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval and physician labeling. Generally, two adequate and well-controlled phase 3 trials are required by the FDA for approval of an NDA. Under certain circumstances, FDA can conclude that one adequate and well-controlled clinical investigation plus confirmatory evidence is sufficient to establish effectiveness.

Post-approval trials, sometimes referred to as phase 4 clinical trials or post-marketing studies, may be conducted after initial marketing approval. These trials are used to gain additional evidence from the treatment of study subjects in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting, or in some cases to confirm clinical benefit. In certain instances, the FDA may mandate the performance of phase 4 clinical trials as a condition of NDA approval.

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA. Written IND safety reports must be submitted to the FDA and the investigators fifteen days after the trial sponsor determines the information qualifies for reporting for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk for human volunteers, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must also notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor’s initial receipt of the information.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the compound and finalize a process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the compound and manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the compound does not undergo unacceptable deterioration over its shelf life.

Expanded Access

Expanded access, sometimes called “compassionate use,” is the use of investigational products outside of controlled clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. FDA regulations allow access to investigational products under an IND by the sponsor or the treating physician for treatment purposes on a case-by-case basis for the following groups: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the investigational product under a treatment protocol or treatment IND.

A clinical trial sponsor is not obligated under the law to provide expanded access to its investigational product. However, if a sponsor decides to make its investigational product available for expanded access, FDA reviews each request for expanded access and determines if treatment may proceed. Expanded access may be appropriate when all of the following criteria apply: the patient has a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context of the disease or condition to be treated; and providing the investigational product for the requested use will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the expanded access use or otherwise compromise the potential development of the expanded access use.

In addition, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides an additional mechanism for patients with a life-threatening condition who have exhausted approved treatments and are unable to participate in clinical trials to access certain investigational products that have completed a phase 1 clinical trial, are the subject of an active IND, and are undergoing investigation in a clinical trial that is intended to form the primary basis of a claim of effectiveness in support of FDA approval. Unlike the expanded access framework described above, the Right to Try Act does not require FDA to review or approve requests for use of the investigational product, although the law requires sponsors to report annually to the FDA on use of the pathway and require the FDA to post certain annual summaries. There is no obligation for a sponsor to make its investigational products available to eligible patients under the Right to Try Act.

Under the 21st Century Cures Act, the manufacturer or distributor of one or more investigational products for the diagnosis, monitoring and treatment of a serious disease or condition must make publicly available their policy for evaluating and responding to requests for expanded access for individual patients. The manufacturer or distributor is required to make such policies publicly available upon the earlier of initiation of a phase 2 or phase 3 study, or as applicable, 15 days after the investigational drug receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy. The posting of the expanded access policies by manufacturers and distributors does not serve as a guarantee of access to any specific investigational drug by any individual patient, but the sponsor must develop a policy and respond to patient requests according to that policy.

U.S. Marketing Approval for Drugs

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA package requesting approval to market the drug product for one or more indications. An NDA is an application to FDA for approval to market a new drug for one or more specified indications and must contain proof of the drug’s maximum tolerable dose and efficacy for the requested indication(s). An NDA is required to include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data may come from company-sponsored clinical trials intended to test the maximum tolerable dose and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the maximum tolerable dose and efficacy of the investigational drug, to the satisfaction of the FDA. The FDA must approve an NDA before a drug may be marketed in the United States.

The FDA reviews all submitted NDAs to ensure they are sufficiently complete to permit substantive review before it accepts them for filing and may request additional information rather than accepting the NDA for filing. The FDA must make a decision on accepting an NDA for filing within 60 days of receipt, and such decision could include a “refuse-to-file” decision by the FDA. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NDA. The FDA reviews an NDA to determine, among other things, whether the product is safe and effective for the indications sought and whether the facility in which it is manufactured, processed, packaged or held meets standards designed, including cGMP requirements, designed to assure and preserve the product’s continued identity, strength, quality and purity. Under the goals and polices agreed to by the FDA under the Prescription Drug User Fee Act, as amended (the “PDUFA”), the FDA targets ten months, from the filing date, in which to complete its initial review of a new molecular entity NDA and respond to the applicant, and six months from the filing date of a new molecular entity NDA for priority review. The FDA does not always meet its PDUFA goal dates for standard or priority NDAs, and the review process is often extended by FDA requests for additional information or clarification.

Further, under PDUFA, each NDA must be accompanied by a substantial user fee. For fiscal year 2023, the application fee for each application containing clinical data is $3,242,026. PDUFA also imposes an annual program fee for each approved prescription drug, which has been set at $393,933 for fiscal year 2023. The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on applications for products designated as orphan drugs, unless the product also includes a non-orphan indication.

The FDA also may require submission of a Risk Evaluation and Mitigation Strategy (“REMS”) if it believes that a risk evaluation and mitigation strategy is necessary to ensure that the benefits of the drug outweigh its risks. A REMS can include use of risk evaluation and mitigation strategies like medication guides, physician communication plans, assessment plans, and/or elements to assure safe use (“ETASU”) such as restricted distribution methods, patient registries, special monitoring or other risk-minimization tools.

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which reviews, evaluates and provides advice and recommendations to FDA as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee,