NYSE: MTNB

We
remain engaged in an ongoing partnership process for MAT2203, seeking one or more development and/or commercialization partners. We will
require either (i) the consummation of a partnership transaction, or (ii) raising additional capital, prior to commencing the ORALTO
trial. In the event a partnership is consummated, the partner may seek to revise the ORALTO trial or could determine a completely new
development program and pathway for MAT2203. There can be no assurance that we will be successful in consummating a transaction involving
MAT2203.

Corporate
Events

●
In
February 2024, we announced agreement with the FDA on the design of a single Phase 3 registration trial of MAT2203 in patients with
invasive aspergillosis who have limited treatment options, including consensus on all critical elements of the ORALTO trial.

●
In
March 2024, we announced that we would require either (i) the consummation of a partnership transaction, or (ii) raising significant
additional capital, prior to commencing the ORALTO trial. We continued to support (a) the ongoing MAT2203 Compassionate/Expanded
Use Access Program, (b) all MAT2203 regulatory requirements, (c) the prosecution and maintenance of all intellectual property relevant
to MAT2203 and the LNC Platform and (d) the early stage research and development of other applications of the LNC Platform in the
oncology and inflammation spaces.

●
On
April 2, 2024, we announced entry into a securities purchase agreement (the “April 2024 Purchase Agreement”), with certain
institutional investors. The April 2024 Purchase Agreement provided for the sale and issuance by the Company of (i) 666,667 shares
of common stock and warrants (the “April 2024 Warrants”) to purchase up to 666,667 shares of common stock. The offering
price per share and accompanying warrant was $15.00. The April 2024 Warrants have an exercise price of $17.50, were exercisable beginning
October 2, 2024 and expire on the five-and-a-half year anniversary of the date of issuance, or October 5, 2029. The offering resulted
in gross proceeds to the Company of approximately $10 million before deducting placement agent’s fees and related offering
expenses.

2

●
On
August 20, 2024, pursuant to the NYSE American’s Compliance Guidance Memo which requires ten calendar days public notice for
certain corporate actions, we announced that our Board of Directors (the “Board”) approved a reduction in the total number
of authorized shares of our common stock from 500,000,000 to 250,000,000 (the “Authorized Share Reduction”) and a reverse
stock split of the common stock at a ratio of one-for-fifty (1:50) (the “Reverse Stock Split”), which would become effective
at 5:00PM (EST) on August 30, 2024.

●
On
August 27, 2024, we received notice that trading of our shares of common stock had been halted by the NYSE American due to its low
trading price. The trading halt remained in effect until after we consummated the communicated reverse stock split of the common
stock and the market opened on September 3, 2024.

●
On
August 30, 2024, the Authorized Share Reduction and the Reverse Stock Split became effective at 5:00 P.M. (EST) and the shares of
our common stock began trading on the split-adjusted basis under the Company’s existing trading symbol, “MTNB,”
when the market opened on September 3, 2024.

●
On
October 31, 2024, we announced that negotiations under a non-binding term sheet with a single partner for global licensing rights
to develop, manufacture and commercialize MAT2203 for all future treatment indications (the “MAT2203 Term Sheet”), including
the intended initial indication of treatment for patients with invasive aspergillosis with limited or no other treatment options,
were terminated following notification from the perspective partner for reasons unrelated to MAT2203. As a result, we implemented
an immediate 80% workforce reduction, eliminating 15 positions, including three members of senior management, and ceased certain
product development activities to preserve cash while we evaluated a potential sale of MAT2203 and/or other strategic alternatives,
including a potential winddown or dissolution of the Company.

●
On
January 10, 2025, we announced that we received a deficiency letter (the “January 2025 NYSE Notice”) from the NYSE American
stating that the Company failed to hold an annual meeting of stockholders during the fiscal year ended December 31, 2024, as required
by Section 704 of the NYSE American Company Guide. The January 2025 NYSE Notice had no immediate impact on the listing of our common
stock, which continued to be listed and traded on the NYSE American during the applicable cure period but was assigned a “.BC”
indicator by the NYSE American to indicate that the Company was below compliance. We received a letter from the NYSE American on
June 23, 2025 that we had resolved the deficiency set forth in the January 2025 NYSE Notice by virtue of holding our Annual Meeting
for the fiscal year ended December 31, 2023 on June 23, 2025. As a result, the BC indicator was removed from our stock symbol.

●
On
February 13, 2025, we entered into a securities purchase agreement (the “February 2025 Agreement”) with a certain group
of investors (the “February 2025 Investors”), pursuant to which they agreed to purchase from the Company 3,300 shares
of our Series C Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), and warrants to purchase
up to 11,262,808 shares of common stock (the “2025 Warrants”) at a purchase price of $1,000 per share of Preferred Stock
and accompanying 2025 Warrants, for aggregate gross proceeds of $3.3 million before deducting offering expenses payable by the Company.
The February 2025 Investors purchased 1,650 shares of Preferred Stock and accompanying 2025 Warrants to purchase up to 5,631,404
shares of common stock for gross proceeds to the Company of $1.65 million at an initial closing on February 13, 2025. Subject to
the satisfaction of certain closing conditions, the February 2025 Investors purchased an additional 1,650 shares of Preferred Stock
and accompanying 2025 Warrants to purchase up to 5,631,404 shares of common stock for gross proceeds to the Company of $1.65 million
at a second closing on April 8, 2025. The shares of Preferred Stock are convertible into common stock at a conversion price of $0.586,
and each share of Preferred Stock is initially convertible into 1,706 shares of common stock. The 2025 Warrants have an exercise
price of $0.6446 per share. The 2025 Warrants purchased in the initial closing became exercisable on April 4, 2025, the effective
date of the approval by our stockholders of the Stock Issuance Proposal (as defined below) (the “Shareholder Approval”)
and will expire five years from the effective date of the Shareholder Approval, or April 4, 2030. The 2025 Warrants purchased in
the second closing were immediately exercisable and will expire on April 8, 2030. In connection with the February 2025 Agreement,
Dr. Robin L. Smith, MD, MBA was appointed to the Board.

3

●
On
March 3, 2025, we filed a Notice of Special Meeting of Stockholders to be held on April 4, 2025 (the “Special Meeting). At
the Special Meeting, stockholders approved: (1) for purposes of complying with the applicable provisions of Section 713 of the NYSE
American Company Guide (a) the issuance of up to an aggregate of 16,894,212 shares of common stock upon the conversion of the Preferred
Stock and the exercise of the 2025 Warrants (the “Stock Issuance Proposal”), and (b) the terms thereof, which may constitute
a “Change of Control” as defined in the NYSE American Company Guide; and (2) ratified the appointment of EisnerAmper
LLP as our independent registered public accounting firm for the year ended December 31, 2025.

●
On
April 30, 2025, we amended our bylaws to reduce the quorum requirement for stockholders meetings from a majority to one-third of
the voting power of the outstanding shares of capital stock entitled to vote at such meeting.

●
On
June 23, 2025, at our annual meeting of stockholders, our stockholders approved (i) an amendment to our Certificate of Incorporation,
as amended (the “Certificate of Incorporation”), to effect up to two reverse stock splits of our common stock having
an aggregate ratio in the range of 1-for-2 to 1-for-199 over a period of two years, with such reverse stock splits to be effected
at such ratios, times and dates, if at all, as determined by the Board in its sole discretion, (ii) an amendment to our Certificate
of Incorporation to increase the number of our authorized shares of common stock from 250,000,000 shares to 500,000,000 and to make
a corresponding change to the number of authorized shares of capital stock and (iii) our 2025 Equity Incentive Plan.

●
On
August 6, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State
of Delaware to increase the number of authorized shares of common stock from 250,000,000 shares to 500,000,000 shares. The Certificate
of Amendment was approved by the Company’s stockholders at the annual meeting on June 23, 2025 and became effective upon filing.

●
On
August 15, 2025, we entered into Warrant Exchange Agreements (the “Exchange Agreements”) with certain holders (the “Exchanging
Holders”) of April 2024 Warrants to purchase an aggregate of 466,666 shares of common stock. Pursuant to the Exchange Agreements,
on August 15, 2025, the Company issued to the Exchanging Holders one share of common stock for each April 2024 Warrant, for an aggregate
of 466,666 shares of common stock.

MAT2203

Our
lead drug candidate based on the LNC Platform is MAT2203, an oral formulation of amphotericin B, a well-known and highly effective antifungal
drug. Amphotericin B is currently only available in IV formulations which are associated with significant renal toxicity and have labeled
restrictions on their use for up to 2 weeks in the United States and only 1 week in most parts of the world due to toxicities, the most
prevalent of which is severe nephrotoxicity. Despite these limitations, amphotericin B is currently used and approved to treat a variety
of invasive, and potentially deadly, fungal infections due to its potency. MAT2203, which is formulated using our LNC Platform, has the
potential to preserve or even increase the efficacy of amphotericin B, while eliminating the risk of nephrotoxicity and providing more
convenient and cost-effective oral administration. MAT2203’s product profile has allowed physicians and patients to use MAT2203
for longer periods of time and more broadly than amphotericin B has ever have been used previously and in an outpatient setting.

MAT2203
has been developed to date with the assistance and financial support of the National Institutes of Allergy and Infectious Diseases (NIAID)
of the National Institutes of Health (NIH). MAT2203 has been designated as a Qualified Infectious Disease Product (QIDP) with Fast Track
Status for the treatment of invasive candidiasis, the treatment of aspergillosis, the prevention of invasive fungal infections, or IFIs,
in patients who are on immunosuppressive therapy, and, most recently with an Orphan Designation for the treatment of cryptococcosis.
We believe that it is possible to pursue additional orphan designations for the treatment of aspergillosis, the treatment of invasive
candidiasis and the treatment of certain endemic mycoses. Upon approval, MAT2203 could be eligible for up to 12 years of regulatory or
marketing exclusivity in the United States.

4

The
initial planned indication for MAT2203 is early step-down therapy from IV amphotericin B for the treatment of invasive aspergillosis
in patients with limited treatment options. Invasive aspergillosis is a serious and life-threatening invasive fungal infection that occurs
primarily in severely immunocompromised patients with hematological malignancies and in transplant recipients. This initial step-down
indication is a gateway indication, as we believe that a partner could expand the utilization of MAT2203 into the treatment of other
IFIs and potentially even for prophylaxis against IFIs in immunocompromised patients, such as transplant patients.

The
EnACT (Encochleated Oral Amphotericin for Cryptococcal Meningitis Trial) Phase 2 study was a Phase 2 prospective, randomized,
open-label, sequential cohort study, financially supported by the NIH, evaluating the safety, tolerability, and efficacy of MAT2203 in
100 HIV-positive persons with cryptococcal meningitis. The EnACT trial included a total of four cohorts of patients, with the first two
cohorts testing MAT2203 as early step-down therapy following initial treatment with IV amphotericin B during the induction period, and
the second two cohorts testing MAT2203 as potentially all oral therapy. The induction period for all patients in each cohort (active
or control) is 14 days, followed by an additional four weeks of treatment (active or control) during a consolidation/maintenance period.
Cohorts 1 and 3 were safety lead-ins to Cohorts 2 and 4, respectively, which were the key efficacy cohorts for EnACT.

The
primary endpoint in EnACT was Early Fungicidal Activity (EFA), a measurement of cerebrospinal fluid fungal clearance. EFA is a well-validated
quantitative measure of the efficacy of antifungal agents and is a key surrogate marker for survival. EFAs of less than 0.20 log10
Cryptococcus colony forming units (CFUs) per mL CSF per day are associated with significantly higher mortality and worse clinical
outcomes1. EFA measured above this threshold is clinically meaningful and represents robust fungal clearance. In the second
cohort of EnACT, the mean EFA achieved with patients treated with MAT2203 was 0.38 log10 CFU/mL/day, with 95% confidence intervals
(0.30 to 0.46) significantly higher than the prespecified primary endpoint threshold of >0.20. All patients treated with MAT2203 who
completed the induction phase achieved sterile CSF cultures during treatment (either during induction or early consolidation phases).
There was no evidence of breakthrough or relapsed cryptococcal infections observed in any of the patients during treatment with MAT2203
through 10 weeks. In Cohort 2, the secondary endpoint of overall survival was 90% after 18 weeks in 40 patients randomized to receive
MAT2203.

Interim
data from Cohort 4 of the Phase 2 EnACT study of MAT2203 (oral amphotericin B) for the treatment of cryptococcal meningitis (CM) were
presented at IDWeek in October 2022. As part of IDWeek, the EnACT abstract was the recipient of the Outstanding Abstract and IDSA Awardee
by the Infectious Diseases Society of America. In the EnACT trial, MAT2203 exceeded the primary endpoint threshold for early fungicidal
activity (EFA) of 0.20 log10 CFU/mL/day, with a mean EFA achieved of 0.30 log10 CFU/mL/day with 95% confidence
intervals from 0.22 – 0.38.

Cohort
4 also yielded key secondary endpoints, including overall survival and safety. For 40 patients receiving MAT2203 treatment, overall survival
remained at 90% through 18 weeks, while the survival rate at Week 2 was 95%. Importantly, the incidence of adverse events relating to
kidney function and anemia were significantly lower for MAT2203 compared to the conventional IV amphotericin B standard of care treatment
across the entirety of the EnACT trial, with no evidence of kidney toxicity even with up to 6 weeks of oral MAT2203 treatment.

In
February 2024, we announced agreement with the FDA on the design of a single Phase 3 registration trial of MAT2203 in patients with invasive
aspergillosis who have limited treatment options, including consensus on all critical elements of the ORALTO trial. In its correspondence,
FDA agreed that the ORALTO trial would potentially be sufficient to support the registration of MAT2203 for an initial indication for
the treatment of invasive aspergillosis in patients with limited treatment options, when and if conducted. Approval would be subject
to normal FDA review of all aspects of this clinical trial.

ORALTO
is planned to be a Phase 3, randomized, multicenter, open-label, adjudicator-blinded study to evaluate the efficacy and safety of MAT2203
as an oral step-down treatment following treatment with AmBisome® (liposomal IV-amphotericin B) compared with the standard of care
in patients with invasive aspergillosis who have limited treatment options. The primary efficacy endpoint would be all-cause mortality
at study day 42.

5

Key
secondary objectives would include:

1*Clin
Infect Dis. 2020;71(5):e45-49

(a)
demonstration
of superiority of oral-step down treatment with MAT2203 compared with AmBisome for treatment-related toxicities leading to changes
in treatment (i.e., dose adjustment/discontinuations or changes to treatment regimens);

(b)
long-term
survival benefit of MAT2203 using all-cause mortality at study day 84;

(c)
evaluation
of the impact of MAT2203 on healthcare resource utilization and quality of life impact.

Enrollment
was been planned to include approximately 216 adults with recently diagnosed probable or proven invasive aspergillosis who are being
treated with AmBisome due to their inability to receive an IV mold-active azole and with limited alternative treatment options. Following
up to two days of initial treatment with AmBisome, eligible study participants would be entered into the study and randomized in a 2:1
ratio to receive either oral MAT2203 or continued AmBisome treatment followed by standard of care.

All
study participants would receive up to 12 weeks of treatment starting from the first day of treatment with AmBisome. It is anticipated
that all study participants would be hospitalized during the initial AmBisome treatment period. After step-down to oral MAT2203, study
participants may be discharged from the hospital to continue treatment on an outpatient basis, as clinically appropriate.

An
independent Data Review Committee, who will be blinded to treatment, would adjudicate primary and secondary endpoints, including clinical,
radiological, and mycological responses. Once approximately 75% of participants are enrolled, an independent Data Safety Monitoring Board
would review the overall pooled all-cause mortality rate in a blinded fashion to ensure that the sample size assumptions are reasonable
and that the study is adequately powered. Should the pooled event differ substantially from expected levels, a sample size adjustment
can be made to the trial.

ORALTO
was planned to be conducted at approximately 65 investigator sites in the U.S., Europe, South America, Middle East, and Asia Pacific.
Enrollment is expected to require approximately 24 months, if commenced.

We
remain engaged in an ongoing partnership process for MAT2203, seeking one or more development and/or commercialization partners. We will
require either (i) the consummation of a partnership transaction, or (ii) raising additional capital, prior to commencing the ORALTO
trial. In the event a partnership is consummated, the partner may seek to revise the ORALTO trial or could determine a completely new
development program and pathway for MAT2203. There can be no assurance that we will be successful in consummating a transaction involving
MAT2203.

In
addition to conducting the EnACT trial, a MAT2203 Compassionate/Expanded Use Access Program was established to provide MAT2203 on a compassionate
use basis. Enrollment into the Program requires that patient applicants meet certain criteria for eligibility, including:

●
the
patient has no other treatment options.

●
the
invasive fungal infection is serious and/or life-threatening.

●
the
patient is expected to benefit from oral MAT2203 treatment and can tolerate oral medication; and

●
the
patient has a reasonable life expectancy, and their underlying conditions are under control.

A
total of 37 patients to date have been enrolled in the Program at multiple healthcare institutions, including the University of Michigan,
Johns Hopkins, Nationwide Children’s Hospital, City of Hope, Vanderbilt University Medical Center, the National Institutes of Health,
Children’s Hospital of Philadelphia, Memorial Sloan Kettering Cancer Center, and the University of California, San Diego School
of Medicine. The majority of enrolled patients are post-transplant or are undergoing treatment for underlying malignancies. 7 of the
patients have been treated for invasive aspergillosis, each with positive results. The infections being treated with MAT2203 include
a variety of micro-organisms (including Aspergillus, Mucorales species, Candidiasis, Fusarium and suspected
Coccidioides) occurring at multiple sites of infection, including brain, bladder/colon, bone, lung, sinus, and skin. Most patients
were receiving AmBisome® prior to enrollment but developed treatment-limiting nephrotoxicity and most also required treatment for
either azole-resistant organisms or had clinically failed azole therapy and had no other treatment options.

6

Of
the 15 patients enrolled in the Program who completed treatment with MAT2203 (median treatment of 16 weeks with a range of 2 to 49 weeks),
8 had a complete response and 7 were improved. Response to treatment was assessed by the treating physician. Nine additional patients
continued to receive longer-term treatment with positive ongoing effects and 5 initiated treatment in the third and fourth quarter of
2024. To date, only 2 patients have discontinued MAT2203, both occurring during the first week of treatment, with one due to an intolerance
and the other due to a terminal condition not otherwise related to the underlying fungal infection.

Importantly,
all patients who experienced renal toxicity following treatment with AmBisome saw their renal function return to baseline after transitioning
to MAT2203 therapy and suffered no further renal side effects over the course of extended treatment with MAT2203. While we have temporarily
suspended the availability of MAT2203 under this program, we continue to monitor patients and provide ongoing support through external
clinical medical consultants.

Strategy

We
had been focused on redefining the intracellular delivery of nucleic acids and small molecules through our LNC Platform and its application
to overcome current challenges in safely and effectively delivering small molecules, nucleic acids, gene therapies, proteins/peptides,
and vaccines.

Key
elements of our strategy now include:

●
Securing
one or more partners to monetize the value of MAT2203 and raising additional non-dilutive capital through the licensing or sale of
our lead LNC Platform product candidate. A partnership, whether through a license, sale or other transaction, would likely seek to
advance MAT2203 into Phase 3 development as quickly as possible, which could position a partner to commercialize MAT2203 upon approval.

●
Conserving
our cash resources while identifying and evaluating other strategic options for the Company, which could include the in-licensing
of one or more assets or seeking a merger partner for the Company.

MAT2203
Regulatory Designations

The
FDA has granted MAT2203 designations for Qualified Infectious Disease Product, or QIDP, and Fast Track for the treatment of invasive
candidiasis and aspergillosis, for the prevention of IFIs in patients on immunosuppressive therapy, and the treatment of cryptococcosis.
We recently also received Orphan Drug Designation for MAT2203 for the treatment of cryptococcosis and associated (CM) from the FDA and
the European Medicines Agency (the “EMA”). The FDA may designate a product candidate 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. The orphan drug designation provides eligibility for orphan
drug exclusivity in the United States upon FDA approval if a product that has orphan drug designation subsequently receives the first
FDA approval for a particular active ingredient for the disease for which it has such designation. For a product that obtains orphan
drug designation based on a plausible hypothesis that it is clinically superior to the same drug that is already approved for the same
indication, to obtain orphan drug exclusivity upon approval, clinical superiority of such product to this same drug that is already approved
for the same orphan indication must be demonstrated. Orphan drug exclusivity means that the FDA may not approve any other applications,
including a NDA, to market the same drug for the same indication for seven years, except in limited circumstances such as if the FDA
finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the
orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Similarly, the FDA can subsequently
approve a drug with the same active moiety for the same condition during the exclusivity period if the FDA concludes that the later drug
is clinically superior, meaning the later drug is safer, more effective or makes a major contribution to patient care. Orphan drug designation
also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, a waiver from payment
of user fees, an exemption from performing clinical studies in pediatric patients unless the FDA requires otherwise by regulation, and
tax credits for the cost of the clinical research.

7

The
QIDP designation, provided under the Generating Antibiotic Incentives Now Act, or the GAIN Act, offers certain incentives for the development
of new antibacterial or antifungal drugs, including eligibility for Fast Track designation, priority review and, if approved by the FDA,
eligibility for an additional five years of marketing exclusivity. Fast Track designation enables more frequent interactions with FDA
to expedite drug development and review. Fast Track designation does not change the standards for approval, and we can provide no assurances
that we can maintain Fast Track designation for MAT2203 or that such designation will result in faster regulatory review. The seven-year
period of marketing exclusivity provided through orphan designation, if granted, combined with an additional five years of marketing
exclusivity provided by the QIDP designation positions MAT2203 with a potential for a total of 12 years of marketing exclusivity in the
United States to be granted at the time of FDA approval.

Antifungal
Market Opportunity

The
overall global antifungal market was valued at approximately $15.8 billion in 2023 and is expected to reach approximately $20.5 billion
by 2030. In 2021, the global invasive fungal infection market was valued at more than $7.2 billion and is expected to reach $10.4 billion
in 2030. This includes therapies used as active treatment or prophylaxis (preventative) in the inpatient and outpatient setting, therapies
used for the treatment of hospitalized patients and therapies used for the treatment of patients who are being discharged from the hospital.
Importantly, private insurance costs per visit range from approximately $40k to $150K per patient (2019 Benedict) mostly due to extended
length of stay. We estimate that, each year, there are over 1.5 million cases of IFIs caused by various species of Candida, Aspergillus
and Cryptococcus, the three most common invasive fungal pathogens, globally. The estimated incidence in the U.S. for these
conditions is approximately 46,000 for invasive candidiasis, 15,000 for invasive aspergillosis, and 4,900 for CM. For example, aspergillosis-associated
hospitalizations in the U.S. alone came at an estimated treatment cost of more than $1.3 billion, with indirect costs amounting to an
additional $485 million. The rapid progression of disease and high mortality rates (20% - 50%) associated with documented IFIs often
result in antifungal therapy being administered in suspected (unconfirmed) cases or as a preventative measure in patients at high risk.
Also, the increasingly widespread use of immune suppressive drugs as cancer chemotherapy or for organ transplantation or treatment of
autoimmune disease has resulted in an increasing population of patients at risk for IFIs. Furthermore, the limited number of systemic
antifungal drug classes, consisting of azoles, echinocandins and polyenes, and their extensive use, has led to increased numbers of infections
with drug-resistant strains. The Centers for Disease Control and Prevention (“CDC”) has listed fluconazole-resistant Candida
as a serious threat requiring prompt and sustained action and has also identified a rise in echinocandin resistance, especially among
Candida glabrata. In 2022, the World Health Organization issued a fungal priority pathogens list including cryptococcal neoformans,
aspergillus fumigatus and c. auris and c. albicans as critical priority for antifungal development due to the high unmet need. We believe
this underscores the urgent need for new agents with demonstrated activity against resistant strains and that can be administered with
significantly less toxicity and the potential to discharge patients earlier to reduce hospital stays and associated costs.

Exclusive
License Agreement with Rutgers University

Through
our acquisition of Aquarius Biotechnologies Inc., we acquired a license from Rutgers University (“Rutgers”) for certain patents
related to the LNC Platform. We subsequently changed the name of Aquarius Biotechnologies Inc. to Matinas BioPharma Nanotechnologies,
Inc., and in February of 2022, the parties agreed to a Second Amended and Restated Exclusive License Agreement. The agreement provides
for (1) royalties on a tiered basis between low single digits and the mid-single digits of net sales of products using such licensed
technology, (2) a one-time sales milestone fee of $100,000 when and if sales of products using the licensed technology reach the specified
sales threshold and (3) an annual license fee of $50,000 over the term of the license agreement. There was also a reduction in the consideration
paid to Rutgers in the event of a sublicense to a third party of the exclusive patent rights granted pursuant to the Agreement. In consideration
of the concessions made by Rutgers in the amended license agreement, the Company issued Rutgers 400,000 shares of common stock in February
2022. We also agreed to continue to assume the responsibility to pay required patent prosecution and maintenance fees covering the technology.

Unless
otherwise terminated by either party, the term of the license, on a country-by-country basis, shall be the longer of 8-1/2 years from
the date of first commercial sale of a product in a country using the licensed technology or until the expiration of the last-to-expire
patent rights licensed under the agreement, whichever is longer. Rutgers has the right to terminate the license agreement if we have
not commenced commercial sales of at least one product using the licensed technology within eight years of the effective date of the
Second Amended and Restated License Agreement. We have discussed the elimination of this termination right with Rutgers through an amendment
to the license agreement while we seek a partner for MAT2203.

8

Intellectual
Property

The
proprietary nature of, and protection for, our product candidates and our discovery programs, processes and know-how are important to
our business. We will seek to protect our products and associated technologies for their manufacturing and development through a combination
of patents, trade secrets, proprietary know-how, FDA exclusivity and contractual restrictions on disclosure. Our policy is to pursue,
maintain and defend patent rights and to protect the technology, inventions and improvements that are commercially important to the development
of our business. Our success will significantly depend on our ability to obtain and maintain patent and other proprietary protection
for commercially important technology and inventions and know-how related to our business, defend and enforce our patents, preserve the
confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third
parties. We also rely heavily on know-how and continuing technological innovation to develop and maintain our proprietary position.

Exclusively
Licensed and Matinas-Owned Intellectual Property Relating to Our Proprietary LNC Platform and MAT2203

The
patents and patent applications that we exclusively license from Rutgers provide some patent protection for the proprietary chemistry
technology used in certain of our processes to make our lipid nanocrystal and geodate cochleates and formulate the active pharmaceutical
ingredients delivered inside this delivery technology, as in MAT2203, our lead product utilizing the LNC Platform. Pursuant to our license
agreement, we acquired rights to a portfolio that as of January 31, 2026 included 1 pending U.S. non-provisional patent application,
6 U.S. patents, and 34 granted foreign patents, which extends patent protection until at least 2033, excluding patent term adjustments
or extensions. The in-licensed patents have been granted in countries including Europe, China, India, Brazil, Russia, Canada, Japan,
Korea, Australia and Mexico.

The
Matinas-owned patent portfolio covers our LNC Platform and users. As of January 31, 2026, this patent portfolio includes 1 U.S. patent,
3 pending U.S. non-provisional applications, 10 pending foreign applications, and 19 granted foreign patents. The foreign pending applications
and granted patents are in countries including Europe, China, Brazil, Canada, Japan, Korea, Australia and Mexico

As
of January 31, 2026, we owned one issued U.S. patent, and 7 issued foreign patents in Australia, Canada, Europe, and Japan, directed
to compositions and methods for enhancing tissue penetration of an active agent in an LNC. The patents are expected to expire in 2036,
and patents issuing from or claiming priority to the pending application are also expected to expire in 2036, excluding patent term adjustments
or extensions.

As
of January 31, 2026, we owned 9 issued foreign patents in Australia, Europe, and Japan, directed to LNC compositions and methods for
treating mycobacteria infection. The patents are expected to expire in 2036, excluding patent term adjustments or extensions.

As
of January 31, 2026, we owned one U.S. issued patent, one pending non-provisional U.S. patent application, 2 issued foreign patents in
Japan and Australia, and 3 pending applications in China, Canada, and Europe, directed to LNC compositions and methods for treating cryptococcus
infections. The patents are expected to expire in 2037, and patents issuing from or claiming priority to the pending application are
also expected to expire in 2037, excluding patent term adjustments or extensions.

As
of January 31, 2026, we owned one pending non-provisional U.S. patent application, and 6 pending applications in Australia, Brazil, Canada,
China, Europe, Hong Kong, Japan, and Mexico, directed to LNC compositions and methods for treating cryptococcus infections. Patents issuing
from or claiming priority to the pending applications are also expected to expire in 2040, excluding patent term adjustments or extensions.

As
of January 31, 2026, we owned one pending non-provisional U.S. patent application and one pending application in Europe directed to LNC
compositions and methods for treating mucormycosis. Patents issuing from or claiming priority to the pending applications are also expected
to expire in 2043, excluding patent term adjustments or extensions.

We
cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications
we may own or license in the future, nor can we be sure that any of our existing patents or any patents we may own or license in the
future will be useful in protecting our technology. For this and more comprehensive risks related to our intellectual property, please
see “Risk Factors—Risks Relating to Our Intellectual Property and Regulatory Exclusivity.”

9

In
addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant
aspects of our proprietary LNC Platform are based on unpatented trade secrets and know-how. Trade secrets and know-how can be difficult
to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and invention assignment
agreements with our employees, consultants, scientific advisors, contractors and commercial partners. These agreements are designed to
protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that
are developed through a relationship with a third party. We also seek to preserve the integrity and confidentiality of our data and trade
secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may
not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by
competitors. To the extent that our contractors use intellectual property owned by others in their work for us, disputes may arise as
to the rights in related or resulting know-how and inventions.

We
also plan to seek trademark protection in the United States and outside of the United States where available and when appropriate. We
intend to use these registered marks in connection with our pharmaceutical research and development as well as our product candidates.

Competition

The
biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis
on proprietary products. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises,
academic institutions, government agencies and private and public research institutions. Many of these companies have far greater human
and financial resources and may have product candidates in more advanced stages of development and many will reach the market before
our product candidates. Competitors may also develop products that are more effective, safer or less expensive or that have better tolerability
or convenience.

Although
we believe that our proprietary LNC Platform, experience, and knowledge in our areas of focus provide us with competitive advantages,
potential competitors could reduce our commercial opportunities. For many of our product candidates, we anticipate facing competition
from other products that are available on a generic basis and offered at low prices. Many of these generic products have been marketed
by third parties for many years and are well accepted by physicians, patients, and payers.

We
believe that MAT2203 provides us with competitive advantages over our peers. However, we face potential competition from various sources,
including larger and better-funded pharmaceutical, specialty pharmaceutical, and biotechnology companies, as well as from generic drug
manufacturers, academic institutions, governmental agencies, and public and private research institutions.

MAT2203,
if approved by FDA, will primarily compete with antifungal classes approved for the treatment of fungal and mold infections, which include
polyenes, azoles and echinocandins. The approved branded therapies for these indications include Cancidas (caspofungin, marketed by Merck
& Co.), Eraxis (anidulafungin, marketed by Pfizer, Inc.), Mycamine (micafungin, marketed by Astellas Pharma US, Inc.), Diflucan (fluconazole,
marketed by Pfizer, Inc.), Noxafil (posaconazole, marketed by Merck & Co.), Vfend (voriconazole, marketed by Pfizer, Inc.), Sporanox
(itraconazole, marketed by Jansen Pharmaceuticals, Inc.), Cresemba (isavuconazole, marketed by Astellas Pharma US, Inc.), Ambisome (liposomal
amphotericin B, marketed by Astellas Pharma US, Inc.), Abelcet (lipid complex amphotericin B, marketed by Leadiant Biosciences), Rezzayo
(rezafungin, marketed byCorMedix Therapeutics), Brexafemme (Ibrexafungerp marketed by GlaxoSmithKline) and amphotericin B deoxycholate
(marketed by X-Gen Pharmaceuticals, Inc.). There currently are and may be more generic versions of these products available at the time
of MAT2203 market approval, which will create added competition. In addition to approved therapies, we expect that MAT2203 may compete
with product candidates that we are aware of in clinical development by third parties, such olorofim (being developed by F2G, Ltd), fosmanogepix
(being developed by Basilea), and EL219, a derivative of amphotericin B being developed by Elion Therapeutics.

10

Manufacturing

We
currently lease in-house manufacturing capabilities for our lead LNC Platform product candidate, MAT2203. However, following our reduction
in force in October 2024, we no longer produce MAT2203 or any other clinical trial material at this facility. We are currently searching
for a partner to takeover development of MAT2203 and this partner will be required to identify and secure one or more third-party contract
manufacturers for the formulation and manufacture of MAT2203. As part of any partnership, a transfer of our manufacturing technology
and any associated information to our partner or to a third-party manufacturer would be required in order to manufacture the drug necessary
for additional clinical work and any supplies required for the commercialization of MAT2203, if approved.

There
are several potential third-party suppliers for amphotericin B, the generic active pharmaceutical ingredient in our lead clinical stage
product candidate – MAT2203. Although to date we have not entered into formal supply agreements to secure sufficient supply of
amphotericin B to support our clinical programs for MAT2203, we believe we will be able to secure supply of amphotericin B to support
our clinical programs for MAT2203 from one or more third-party suppliers.

Sales
and Marketing

We
currently do not have any sales and marketing infrastructure and do not plan to develop this infrastructure in the future.

Review
and Approval of Drugs in the United States

In
the United States, FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. The process
of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations
requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any
time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety
of administrative or judicial sanctions, including refusal by FDA to approve pending applications, withdrawal of an approval, imposition
of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension
of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or
criminal investigations and penalties brought by FDA and the Department of Justice (DOJ) or other governmental entities.

Our
product candidates must be approved by FDA through the NDA or biologics license application (BLA), in the case of biologic product candidates,
process before they may be legally marketed in the United States. An applicant seeking approval to market and distribute a new drug product
in the United States must typically undertake the following:

●
completion
of nonclinical laboratory tests, animal studies and formulation studies in compliance with FDA’s good laboratory practice (cGLP),
regulations;

●
submission
to FDA of an investigational new drug applications (IND), which must take effect before human clinical trials may begin;

●
approval
by an independent institutional review board (IRB) representing each clinical site before each clinical trial may be initiated;

●
performance
of adequate and well-controlled human clinical trials in accordance with current good clinical practices (GCP), to establish the
safety and efficacy of the proposed drug product for each indication;

●
preparation
and submission to FDA of an NDA or BLA;

11

●
review
of the product by an FDA advisory committee, where appropriate or if applicable;

●
satisfactory
completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof,
are produced to assess compliance with current Good Manufacturing Practices (cGMP), requirements and to assure that the facilities,
methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

●
payment
of user fees and securing FDA approval of the NDA or BLA; and

●
compliance
with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), and post-approval studies required
by FDA.

Nonclinical
Studies

Nonclinical
studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient
and the formulated drug or drug product, as well as in vitro and animal studies to assess the safety and activity of the drug
for initial testing in humans and to establish a rationale for therapeutic use. The conduct of nonclinical studies is subject to federal
regulations and requirements, including cGLP regulations. The results of the nonclinical tests, together with manufacturing information,
analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to FDA as
part of an IND.

Companies
usually must complete some long-term nonclinical testing, such as animal tests of reproductive AEs and carcinogenicity, and must also
develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing
the drug in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing
quality batches of the drug candidate and, among other things, the manufacturer must develop 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 drug candidate does not undergo unacceptable deterioration over its shelf life.

Human
Clinical Trials in Support of a Regulatory Approval

Clinical
trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in
accordance with Good Clinical Practice, or GCP, requirements, which include, among other things, the requirement that all research subjects
provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written
study protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness
criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to FDA as part
of the Investigational New Drug application, or IND. An IND automatically becomes effective 30 days after receipt by FDA, unless before
that time FDA raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold. In such a case,
the IND sponsor and FDA must resolve any outstanding concerns before the clinical trial can begin. Accordingly, submission of an IND
may or may not result in FDA allowing clinical trials to commence.

In
addition, an Institutional Review Board, or IRB, representing each institution participating in the clinical trial must review and approve
the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the
study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to
be provided to study subjects. An IRB must operate in compliance with FDA regulations. Information about certain clinical trials must
be submitted within specific timeframes to the National Institutes of Health for public dissemination on their ClinicalTrials.gov website.

A
sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical
trial under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. If a
foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to FDA in support of an NDA
or IND so long as the clinical trial is conducted in accordance with GCP and if FDA is able to validate the data from the clinical trial
through an on-site inspection if FDA deems it necessary.

12

Human
clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

Phase
1: The drug is initially introduced into a small number of healthy human subjects or patients with the target disease (e.g. cancer)
or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early
indication of its effectiveness and to determine optimal dosage.

Phase
2: The drug is administered to a larger number of trial participants, up to several hundred, who usually have the disease or condition
that the experimental drug is intended to treat, to identify possible adverse effects and safety risks, to preliminarily evaluate the
efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase
3: These clinical trials are commonly referred to as “pivotal” studies, which typically denotes a study which presents
the data that FDA or another relevant regulatory agency will use to determine whether or not to approve a drug. In Phase 3 clinical trials,
the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled
clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the
overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Progress
reports detailing the results of the clinical trials must be submitted at least annually to FDA and more frequently if serious Adverse
Events, or AEs, occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or
at all. Furthermore, FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding
that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a
clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the
IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. FDA will typically inspect one
or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Submission
of an NDA to FDA

Regulatory
approval for most new drug or biologic products is based on two adequate and well-controlled Phase 3 clinical trials that provide evidence
of the safety and efficacy of the proposed new product. Assuming successful completion of required clinical testing and other requirements,
the results of the nonclinical and clinical trials, together with detailed information relating to the product’s chemistry, manufacture,
controls, and proposed labeling, among other things, are submitted to FDA as part of an NDA requesting approval to market the drug product
for one or more indications. Under federal law, the submission of most NDAs is additionally subject to an application user fee and the
sponsor of an approved NDA is also subject to annual prescription drug program fees and establishment user fees. These fees are typically
increased annually.

FDA
conducts a preliminary review of an NDA within 60 days of its receipt and informs the sponsor by the 74th day after FDA’s receipt
of the submission whether the application is sufficiently complete to permit substantive review. FDA may request additional information
rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted
application is also subject to review before FDA accepts it for filing. Once the submission is accepted for filing, FDA begins an in-depth
substantive review. FDA has agreed to specified performance goals in the review process of NDAs. Most such applications are meant to
be reviewed within ten months from the date of filing, and most applications for “priority review” products are meant to
be reviewed within six months of filing. The review process may be extended by FDA for various reasons, and for various time periods,
including for three additional months to consider new information or clarification provided by the applicant to address an outstanding
deficiency identified by FDA following the original submission.

Before
approving an NDA, FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval
inspections cover all facilities associated with an NDA submission, including drug component manufacturing (such as Active Pharmaceutical
Ingredients), finished drug product manufacturing and control testing laboratories. FDA will not approve an application unless it determines
that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production
of the product within required specifications. Additionally, before approving an NDA, FDA will typically inspect one or more clinical
sites to assure compliance with GCP.

13

The
FDA is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made. Typically,
an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and
provides a recommendation as to whether the application should be approved and under what conditions. FDA is not bound by the recommendations
of an advisory committee, but it considers such recommendations carefully when making decisions.

Fast
Track, Breakthrough Therapy and Priority Review Designations

FDA
is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment
of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation and
priority review designation.

Specifically,
FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other drugs, for
the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs
for such a disease or condition. For Fast Track products, sponsors may have greater interactions with FDA and FDA may initiate review
of sections of a fast-track product’s NDA before the application is complete. This rolling review may be available if FDA determines,
after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. The sponsor must
also provide, and FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user
fees. However, FDA’s time goal for reviewing a Fast Track application does not begin until the last section of the NDA is submitted.
In addition, the Fast Track designation may be withdrawn by FDA if FDA believes that the designation is no longer supported by data emerging
in the clinical trial process.

Second,
in 2012, Congress enacted the Food and Drug Administration Safety and Improvement Act, or FDASIA. This law established a new regulatory
scheme allowing for expedited review of products designated as “breakthrough therapies.” A product may be designated as a
breakthrough therapy if it is intended, either alone or in combination with one or more other drugs, to treat a serious or life-threatening
disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing
therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development
process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review
process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an
efficient manner.

Third,
FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant
improvement in safety or effectiveness. FDA determines, on a case-by-case basis, whether the proposed drug represents a significant improvement
when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the
treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient
compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority
designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten FDA’s
goal for taking action on a marketing application from ten months to six months.

Under
Section 524 of the FDCA, the FDA is authorized to award a priority review voucher to sponsors of certain tropical disease product applications
that meet the criteria specified in the Act. A priority review voucher may be used by the sponsor who obtains it, or it may be transferred
to another sponsor who may use it to obtain priority review for a different application. Priority review vouchers can result in the acceleration
of review and approval of a product candidate by up to four months. In order to be eligible for a tropical disease priority review voucher,
the application must be: for a listed tropical disease; submitted under Section 505(b)(1) of the FDCA or Section 351 of the Public Health
Service Act; for a product that contains no active ingredient that has been approved in any other application under those statutory provisions;
and must qualify for priority review. FDA has identified in guidance those product applications for the prevention or treatment of tropical
diseases that may qualify for a priority review voucher.

14

Accelerated
Approval Pathway

FDA
may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to
patients over existing treatments based upon a determination that the drug has an effect on a surrogate endpoint that is reasonably likely
to predict clinical benefit. FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate
clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably
likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity,
or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the
same statutory standards for safety and effectiveness as those granted traditional approval.

For
the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical
sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints
can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic
effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. FDA has limited experience
with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated
approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if
there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

The
accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time
is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint
occurs rapidly. The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner,
additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a product candidate
approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval
clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical
benefit during post-marketing studies, would allow FDA to withdraw the drug from the market on an expedited basis. All promotional materials
for product candidates approved under accelerated regulations are subject to prior review by FDA.

FDA’s
Decision on an NDA

Based
on FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities,
FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with
specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission
and may require substantial additional testing or information for FDA to reconsider the application. When those deficiencies have been
addressed to FDA’s satisfaction in a resubmission of the NDA, FDA will issue an approval letter. The FDA has committed to reviewing
such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information,
FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If
FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions
be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess
the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or
impose other conditions which can materially affect the potential market and profitability of the product. In addition, as a condition
of approval, FDA may require an applicant to develop a REMS. REMS use risk minimization strategies beyond the professional labeling to
ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, FDA will consider the size
of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment,
seriousness of known or potential AEs and whether the product is a new molecular entity. REMS can include medication guides, physician
communication plans for healthcare professionals and elements to assure safe use, which may include, but are not limited to, special
training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use
of patient registries. FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with
use of the product. The requirement for a REMS can materially affect the potential market and profitability of a product.

15

FDA
may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval,
many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims,
are subject to further testing requirements and FDA review and approval.

Post-Approval
Requirements

Drugs
manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by FDA, including, among other
things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and
reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications
or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any
marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications
with clinical data.

In
addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register
their establishments with FDA and state agencies and are subject to periodic unannounced inspections by FDA and these state agencies
for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval
before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting
and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers
must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once
an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained
or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including AEs
of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result
in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new
safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other
things:

●
restrictions
on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

●
fines,
warning or untitled letters or holds on post-approval clinical trials;

●
refusal
of FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

●
product
seizure or detention, or refusal to permit the import or export of products; or

●
injunctions
or the imposition of civil or criminal penalties.

FDA
strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only
for the approved indications and in accordance with the provisions of the approved label. FDA and other agencies actively enforce the
laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses
may be subject to significant liability.

In
addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which
regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation
of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples
and impose requirements to ensure accountability in distribution.

16

Abbreviated
New Drug Applications for Generic Drugs

In
1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized FDA to approve generic drugs that are the same as
drugs previously approved by the FDA under the NDA provisions of the statute. To obtain approval of a generic drug, an applicant must
submit an abbreviated new drug application (“ANDA”), to the agency. In support of such applications, a generic manufacturer
may rely on the nonclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the
reference listed drug (“RLD”).

Specifically,
for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients,
the route of administration, the dosage form and the strength of the drug. At the same time, the FDA must also determine that the generic
drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is bioequivalent to a RLD if the rate and
extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.

Upon
approval of an ANDA, the FDA indicates whether the generic product is therapeutically equivalent to the RLD in its publication “Approved
Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists
consider a therapeutically equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain state
laws and numerous health insurance programs, FDA’s designation of therapeutic equivalence often results in automatic substitution
of the generic drug by the pharmacist without the knowledge or consent of either the prescribing physician or patient.

Under
the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired.
The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity. In cases where
such exclusivity has been granted, an ANDA may not be submitted to FDA until the expiration of five years unless the submission is accompanied
by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.
The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations,
other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of
the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage
form, route of administration, combination or indication.

Hatch-Waxman
Patent Certification and the 30 Month Stay

Upon
approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s
product or an approved method of using the product. Each of the patents listed by the NDA sponsor is published in the Orange Book. When
an ANDA applicant submits its application to the FDA, the applicant is required to certify to FDA concerning any patents listed for the
reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval.
Specifically, the applicant must certify with respect to each patent that:

●
the
required patent information has not been filed;

●
the
listed patent has expired;

●
the
listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or

●
the
listed patent is invalid, unenforceable or will not be infringed by the new product.

A
certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid
or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicate that it is
not seeking approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the
referenced product have expired.

17

If
the ANDA applicant has provided a Paragraph IV certification to FDA, the applicant must also send notice of the Paragraph IV certification
to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within
45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of
30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable
to the ANDA applicant.

Pediatric
Studies and Exclusivity

Under
the Pediatric Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and
effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration
for each pediatric subpopulation for which the product is safe and effective. With enactment of the Food and Drug Administration Safety
and Innovation Act, or FDASIA, in 2012, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must
contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design,
any deferral or waiver requests, and other information required by regulation. The applicant, the FDA and the FDA’s internal review
committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant
may request an amendment to the plan at any time.

The
FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until
after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements
and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA.

Pediatric
exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of
an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent exclusivity.
This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the
FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical
trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric
studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity
or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the
regulatory period during which the FDA cannot approve another application.

Orphan
Designation and Exclusivity

Under
the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or
condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is
no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease
or condition will be recovered from sales of the product). A company must request orphan product designation before submitting a NDA.
If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation
does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If
a product with orphan status receives the first the FDA approval for the disease or condition for which it has such designation, the
product will be entitled to orphan product exclusivity. Orphan product exclusivity means that the FDA may not approve any other applications
for the same product for the same indication for seven years, except in certain limited circumstances. Competitors may receive approval
of different products for the indication for which the orphan product has exclusivity and may obtain approval for the same product but
for a different indication. If a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication
broader than what was designated in its orphan product application, it may not be entitled to exclusivity.

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Other
Health Care Regulations

Health
Privacy Laws

We
are subject to data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the U.S.,
numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws,
and federal and state consumer protection laws (e.g., Section 5 of the FTC Act), govern the collection, use, disclosure, and protection
of health-related and other personal information. Failure to comply with data protection laws and regulations could result in government
enforcement actions and create liability for us (which could include civil and/or criminal penalties), private litigation and/or adverse
publicity that could negatively affect our operating results and business. In addition, we may obtain health information from third parties
(e.g., principal investigators involved in our clinical trials) that are subject to privacy and security requirements under the Health
Insurance Portability and Accountability Act of 1996, or HIPPA, as amended by the Health Information Technology for Economic and Clinical
Health Act, or HITECH. HIPAA generally requires that covered entities (healthcare providers, health plans and healthcare clearinghouses)
obtain written authorizations from patients prior to disclosing protected health information of the patient (unless an exception to the
authorization requirement applies). If authorization is required and the patient fails to execute an authorization or the authorization
fails to contain all required provisions, then we may not be allowed access to and use of the patient’s information and our research
efforts could be impaired or delayed. Furthermore, use of protected health information that is provided to us pursuant to a valid patient
authorization is subject to the limits set forth in the authorization (e.g., for use in research and in submissions to regulatory authorities
for product approvals). Among other things, HITECH makes HIPAA’s privacy and security standards, as well as the various penalties
or failure to comply, directly applicable to “business associates”—independent contractors or agents of covered entities
performing certain functions involving the creation or use of protected health information on behalf of a covered entity or providing
services to a covered entity. While we do not believe we are a “business associate” under HIPAA, regulatory agencies may
disagree.

The
General Data Protection Regulation, or GDPR, adopted in 2016, establishes a regulatory framework designed to protect the security of
personal data collected about residents of the EU and the movement of such personal data across the national borders of the EU Member
States, including, but not limited to, requirements to obtaining consent of the individuals to whom the personal data relates, the nature
and scope of notifications provided to the individuals, the security and confidentiality of the personal data, data breach notification
and using third party processors in connection with the processing of the personal data. Failure to comply with the EU Directive and
the GDPR could subject us to regulatory sanctions, delays in clinical trials, criminal prosecution and/or civil fines or penalties. Additionally,
GDPR creates a direct cause of action by individual data subjects.

Fraud
and Abuse Laws

In
addition to the FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws have been applied
to restrict certain marketing practices in the pharmaceutical industry in recent years. These laws include anti-kickback statutes and
false claims statutes. The federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering,
paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase,
lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare 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. Violations of the anti-kickback statute are punishable by imprisonment, criminal prosecution, civil
monetary penalties and exclusion from participation in federal healthcare programs. Although there are a number of statutory exemptions
and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exemptions and safe
harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may
be subject to scrutiny if they do not qualify for an exemption or safe harbor.

Federal
false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal
government, or knowingly making, or causing to be made, a false statement to have a false claim paid. Recently, several pharmaceutical
and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing services,
which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product
to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices,
including off-label promotion, may also violate false claims laws. The majority of states also have statutes or regulations similar to
the federal anti-kickback statute and false claims laws, which apply to items and services reimbursed under Medicaid and other state
programs, or, in several states, apply regardless of the payor.

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Affordable
Care Act

The
Affordable Care Act (“ACA”) among other things, imposes individual and employer health insurance requirements, provides certain
insurance subsidies (e.g., premiums and cost sharing), mandates extensive insurance market reforms, creates new health insurance access
points (e.g., State and federal-based health insurance exchanges), expands the Medicaid program, promotes research on comparative clinical
effectiveness of different technologies and procedures, and makes a number of changes to how products and services will be reimbursed
by the Medicare program. Amendments to the Federal False Claims Act under the ACA have made it easier for private parties to bring “qui
tam” (whistleblower) lawsuits against companies, under which the whistleblower may be entitled to receive a percentage of any money
paid to the government.

Since
its enactment, there have been judicial and Congressional challenges and amendments to certain aspects of the ACA. There is continued
uncertainty about the implementation of the ACA, including the potential for further amendments to the ACA and legal challenges to or
efforts to repeal the ACA. If the ACA is repealed or further modified, or if implementation of certain aspects of the ACA are delayed,
such repeal, modification or delay may materially adversely impact our business, strategies, prospects, operating results or financial
condition. We are unable to predict the full impact of any repeal, modification or delay in the implementation of the ACA on us at this
time. Due to the substantial regulatory changes that will need to be implemented by CMS and others, and the numerous processes required
to implement these reforms, we cannot predict which healthcare initiatives will be implemented at the federal or state level, the timing
of any such reforms, or the effect such reforms or any other future legislation or regulation will have on our business.

Designation
of and Exclusivity for Qualified Infectious Disease Products

In
2012, Congress passed legislation known as the Generating Antibiotic Incentives Now Act, or GAIN Act. This legislation is designed to
encourage the development of antibacterial and antifungal drug products that treat pathogens that cause serious and life-threatening
infections. To that end, the law grants an additional five years of marketing exclusivity upon the approval of an NDA for a drug product
designated by FDA as a Qualified Infectious Disease Product, or QIDP. Thus, for a QIDP, the periods of five-year new chemical entity
exclusivity, three-year new clinical investigation exclusivity and seven-year orphan drug exclusivity, would become 10 years, eight years,
and 12 years, respectively.

A
QIDP is defined in the GAIN Act to mean “an antibacterial or antifungal drug for human use intended to treat serious or life-threatening
infections, including those caused by—(1) an antibacterial or antifungal resistant pathogen, including novel or emerging infectious
pathogens;” or (2) certain “qualifying pathogens.” A “qualifying pathogen” is a pathogen that has the potential
to pose a serious threat to public health (e.g., resistant gram-positive pathogens, multi-drug resistant gram-negative bacteria, multi-drug
resistant tuberculosis and Clostridium difficile) and that is included in a list established and maintained by FDA. A drug sponsor
may request FDA to designate its product as a QIDP any time before the submission of an NDA. FDA must make a QIDP determination within
60 days of the designation request. A product designated as a QIDP will be granted priority review by FDA and can qualify for “fast
track” status.

The
additional five years of market exclusivity under the GAIN Act for drug products designated by FDA as QIDPs applies only to a drug that
is first approved on or after July 9, 2012. Additionally, the five-year exclusivity extension does not apply to: a supplement to an application
under Section 505(b) of the FDCA for any QIDP for which an extension is in effect or has expired; a subsequent application submitted
with respect to a product approved by FDA for a change that results in a new indication, route of administration, dosing schedule, dosage
form, delivery system, delivery device or strength; or a product that does not meet the definition of a QIDP under Section 505(g) based
upon its approved uses.

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Patent
Term Restoration and Extension

A
patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent
restoration of up to five years for patent term lost during product development and FDA regulatory review. The restoration period granted
is typically one-half the time between the effective date of an IND and the submission date of a NDA, plus the time between the submission
date of a NDA and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a
total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the
extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers
multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves
the application for any patent term extension or restoration in consultation with FDA.

Review
and Approval of Drug Products in the European Union

To
market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other
countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization,
commercial sales and distribution of drug products. Whether or not it obtains FDA approval for a product, the company would need to obtain
the necessary approvals by the comparable non-U.S. regulatory authorities before it can commence clinical trials or marketing of the
product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve
additional product testing and additional administrative review periods. The time required to obtain approval in other countries and
jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction
does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction
may negatively impact the regulatory process in others.

Pursuant
to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through
national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority
of a European Union member state in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical
trial after a competent ethics committee has issued a favorable opinion. Clinical trial application must be accompanied by an investigational
medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national
laws of the member states and further detailed in applicable guidance documents.

To
obtain marketing approval of a drug under European Union regulatory systems, an applicant must submit a marketing authorization application,
or MAA, either under a centralized or decentralized procedure.

The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European
Union member states. The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological
processes, products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated
for the treatment of certain diseases. For products with a new active substance indicated for the treatment of other diseases and products
that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

Under
the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established at the EMA is responsible for
conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities,
such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure in the
European Union, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or
written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated evaluation might be
granted by the CHMP in exceptional cases when a medicinal product is of major interest from the point of view of public health and in
particular from the viewpoint of therapeutic innovation. In this circumstance, the EMA ensures that the opinion of the CHMP is given
within 150 days.

The
decentralized procedure is available to applicants who wish to market a product in various European Union member states where such product
has not received marketing approval in any European Union member states before. The decentralized procedure provides for approval by
one or more other, or concerned, member states of an assessment of an application performed by one-member state designated by the applicant,
known as the reference member state. Under this procedure, an applicant applies based on identical dossiers and related materials, including
a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member
states. The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt
of a valid application. Within 90 days of receiving the reference member state’s assessment report and related materials, each
concerned member state must decide whether to approve the assessment report and related materials.

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If
a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health,
the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision
is binding on all member states.

Pharmaceutical
Coverage, Pricing and Reimbursement

Significant
uncertainty exists as to the coverage and reimbursement status of products approved by FDA and other government authorities. Sales of
products will depend, in part, on the extent to which the costs of the products will be covered by third party payors, including government
health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations. The process
for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement
rate that the payor will pay for the product once coverage is approved. Third party payors may limit coverage to specific products on
an approved list, or formulary, which might not include all of the approved products for a particular indication. Additionally, the containment
of healthcare costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort.
The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs,
including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls
and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could
further limit our net revenue and results.

In
order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic
studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain
FDA or other comparable regulatory approvals. A payor’s decision to provide coverage for a product does not imply that an adequate
reimbursement rate will be approved. Third party reimbursement may not be sufficient to maintain price levels high enough to realize
an appropriate return on investment in product development.

In
the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products
may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that
compare the cost-effectiveness of a particular product candidate to currently available therapies. For example, the European Union provides
options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement
and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a drug product,
or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market.
Other member states allow companies to fix their own prices for drug products but monitor and control company profits. The downward pressure
on health care costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being
erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive
pressure that may reduce pricing within a country. Any country that has price controls or reimbursement limitations for drug products
may not allow favorable reimbursement and pricing arrangements.

Healthcare
Law and Regulation

Healthcare
providers, physicians and third-party payors play a primary role in the recommendation and prescription of drug products that are granted
marketing approval. Arrangements with third party payors and customers are subject to broadly applicable fraud and abuse and other healthcare
laws and regulations. Such restrictions under applicable federal and state healthcare laws and regulations, include the following:

●
the
federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering,
receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual
for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under
a federal healthcare program such as Medicare and Medicaid;

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●
the
federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or
entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent
or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

●
the
HIPPA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements
relating to healthcare matters;

●
HIPAA,
as amended by the HITECH and its implementing regulations, also imposes obligations, including mandatory contractual terms, with
respect to safeguarding the privacy, security and transmission of individually identifiable health information;

●
the
federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making
any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

●
the
federal transparency requirements under the ACA requires manufacturers of drugs to report to the Department of Health and Human Services
information related to payments and other transfers of value to physicians and teaching hospitals and physician ownership and investment
interests and the reported information will be made publicly available on a searchable website; and

●
analogous
state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements
and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.

Some
state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the
relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information
related to payments to physicians and other health care providers or marketing expenditures. State and foreign laws also 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.

Employees

As
of March 31, 2026, we had two full time employees and retained the services of two independent contractors/consultants.

Research
and Development

For
the years ended December 31, 2025 and 2024, we incurred $85 and $11,433, respectively, on research and development activities. These
expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical programs, including our anti-infective
product candidates, MAT2203 as well as support and enhancement of our LNC Platform.

Corporate
and Available Information

We
were incorporated in Delaware under the name Matinas BioPharma Holdings, Inc. in May 2013. We have two operating subsidiaries: Matinas
BioPharma, Inc., a Delaware corporation originally formed on August 12, 2011 as Nereus BioPharma LLC, and Matinas BioPharma Nanotechnologies,
Inc., a Delaware corporation originally formed on January 29, 2015 as Aquarius Biotechnologies, Inc.

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Our
principal executive offices are located at 1545 Route 206 South, Suite 203A, Bedminster, New Jersey 07921, and our telephone number is
(908) 484-8805. Our website address is www.matinasbiopharma.com. Our website and the information contained on, or that can be accessed
through, our website will not be deemed to be incorporated by reference into this Annual Report on Form 10-K or any other report we file
with or furnish to the SEC.

We
make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act, as soon
as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our SEC reports can be accessed
through the Investors section of our internet website. Further, a copy of this Annual Report on Form 10-K is located at the SEC’s
Public Reference Rooms at 100 F Street, N.E., Washington, D. C. 20549. Information on the operation of the Public Reference Room can
be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information statements
and other information regarding our filings at http://www.sec.gov.