10-K
1
amar_10k.htm
ANNUAL REPORT
amar_10k
U.S.
Securities and Exchange Commission
Washington, D.C.
20549
FORM 10-K
(Mark
One)
Commission File Number 0-20791
AMARILLO
BIOSCIENCES, INC.
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) Zip Code
Issuer’s
telephone number, including area code:
(806) 376-1741
Securities
registered under Section 12(b) of the Exchange Act.
None.
Securities
registered under Section 12(g) of the Exchange Act.
Common
Stock, Par Value $.01
Indicate by check mark whether the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. [
]Yes [√ ]No
Indicate by check mark whether the issuer is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]Yes
[√ ]No
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange
Act of 1934 during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
[√]Yes [ ]No
Indicate by check mark if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-K (Sec. 229.405 of
this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
[√]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule
12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [√]
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.[ ]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [√]
No
As of
December 31, 2020, there were issued and outstanding 42,066,172
shares of the registrant’s common stock, par value $0.01,
which is the only class of common or voting stock of the
registrant. As of that date, the aggregate market value of
22,305,240 shares of common stock held by non-affiliates of the
registrant was approximately $3,791,891 (based on the closing price
of $0.17 for the common stock on the OTC BB.AMAR December 31,
2020). Shares of common stock held by officers, directors and each
shareholder owning ten percent or more of the outstanding common
stock have been excluded in that such persons may be deemed to be
affiliates.
The
number of shares of the Registrant’s common stock issued and
outstanding as of March 30, 2021 was 42,066,172.
PART
I
The following contains forward-looking statements that involve
risks and uncertainties. The Company’s actual results could
differ materially from those discussed in the forward-looking
statements as a result of certain factors, including those set
forth in “Management’s 2021 Plan of Operations”
as well as those discussed elsewhere in this Form 10-K. The
following discussion should be read in conjunction with the
Financial Statements and the Notes thereto included elsewhere in
this Form 10-K.
ITEM
1.
BUSINESS.
Overview
Amarillo
Biosciences, Inc. (the "Company” or “the
Company”) is a Texas corporation formed in 1984 engaged in
developing biologics for the treatment of human and animal
diseases. Our current focus is research aimed at the treatment of
human disease indications, particularly influenza, hepatitis C,
thrombocytopenia, and other indications using interferon (IFN)
alpha that is administered in a proprietary low-dose non-injectable
form. In addition to its core technology the Company is working to
expand the Company’s current focus into a diversified
healthcare business portfolio in order to generate new revenue
streams.
The
Company presently owns eight issued patents with two
patents pending. This collection consists of patents with claims
that encompass method of use or treatment, and/or composition of
matter and manufacturing as well as design utility and/or
invention. Of the eight issued patents, four patents are related to
the low-dose oral delivery of interferon, one patent is for a
product promoting oral health, and three patents are associated
with treatment of metabolic disorders.
The
Company primarily operates three business units: the Medical,
Pharmaceutical, and Consumer Product Divisions. Historically, the
Company has focused on R&D involving low-dose, orally
administered lozenges containing the natural immune system
activator interferon-alpha as a treatment for a variety of disease
indications. The Company owns a proprietary library of over thirty
years of scientific and clinical data on the human and animal
applications of low-dose oral interferon. Through the
Pharmaceutical Division, the Company seeks to out-license or
leverage in other ways its core technology by forming partnerships
to develop current and new discoveries and commercialize the
resulting products.
An
integral part of the company’s operating strategy is to
create multiple revenue streams through the implementation of
programs (including but not limited to in-licensing) of medical and
healthcare products and therapeutics. The Medical Division and
Consumer Products Division facilitate the enhancement of these
revenue streams. These programs will be the catalysts that allow
the Company to enter markets in Taiwan, Hong Kong, China, and other
Asian countries for the distribution of new medical and healthcare
products.
2
Over
the past several years the Company has focused its research efforts
towards the development of a novel pulsatile insulin pump infusion
therapy in Taiwan that consists of delivering insulin intravenously
in pulses, as opposed to the typical subcutaneous route of
administration, in order to more closely imitate how the pancreas
secretes insulin in healthy non-diabetics. The Company plans to
offer an innovative and comprehensive diabetes treatment that
provides solutions to all stages of diabetes from pre-diabetes
through late-stage diabetes with advanced complications. The
Company intends to target Taiwan first as an R&D base and
demonstration platform in Greater China, and subsequently establish
a licensing platform for clinics in Greater China. The Consumer
Product Division is presently focused on sales of liposomal
nutraceuticals and food supplements that include Vitamin C,
Glutathione, CoQ10, Curcumin/Resveratrol, DHA, and a
Multi-Vitamin.
The
Company maintains a representative branch office in Taiwan –
Amarillo Biosciences, Inc. (the “Taiwan Branch”) to
increase the Company's presence in Taiwan and to serve as an
operational hub to access growing Asian markets.
Injectable
high-dose interferon is FDA-approved to treat some neoplastic,
viral and autoimmune diseases. Many patients experience
moderate to severe side-effects causing them to discontinue
injectable interferon therapy. Our core technology is primarily
based on low-dose non-injectable interferon-alpha that is delivered
into the oral cavity as a lozenge in low doses. The lozenge
dissolves in the mouth where interferon binds to surface (mucosal)
cells in the mouth and throat, resulting in activation of hundreds
of genes in the peripheral blood that stimulate the immune
system. Human studies have shown that oral interferon is
safe and effective against viral and neoplastic diseases. Oral
interferon is given in concentrations 10,000 times less than that
usually given by injection. The Company’s low-dose
formulation results in almost no side effects, in contrast to high
dose injectable interferon, which causes adverse effects in at
least 50% of recipients.
Governmental
or FDA approval is required for low-dose oral interferon. We
believe that our technology is sound and can be commercialized for
various indications. Due to lack of appropriate interferon supply
in the market over the past several years, we have been
unsuccessful at such commercialization to date. However, as a
result of Covid-19, Chinese government health authorities have
recommended use of anti-AIDS drugs and interferon. The Company
believes this has brought renewed attention in the importance of
incorporating low-dose interferon as a treatment to help stem the
pandemic. In light of these circumstances, the Company is uniquely
positioned to potentially develop safe, low-dose
interferon.
While
the pharmaceutical industry is creating and marketing new and
effective anti-viral medications, there still exists opportunities
to develop and commercialize low-dose interferon as a safer
anti-viral treatment for influenza, hepatitis, and other conditions
caused by viruses such as genital warts and canker sores.
Interferon also has powerful cytotoxic effects which in combination
with its immune stimulating activities could play a role in the
rapidly expanding field of cancer immunotherapy. Other demonstrated
effects of interferon offer opportunities to commercialize low-dose
interferon for the treatment of Thrombocytopenia and chronic cough
in lung diseases such as COPD and Idiopathic Pulmonary Fibrosis
(IPF). The Company has the opportunity to capitalize on its
relationship channels in the Asian markets to explore sources of
raw materials, capital, production facilities, and to target a
significant and growing sales market.
Recent Business Expansion Opportunity
On
December 24, 2020, the Company entered into a Securities Purchase
Agreement (“Ainos Agreement”) with Ainos, Inc., a
Cayman Islands corporation (“Purchaser”) and certain
principal shareholders of the Company including (i) Stephen T.
Chen, individually and as Trustee of the Stephen T. Chen and
Virginia M. Chen Living Trust, dated April 12, 2018, (ii) Virginia
M. Chen, individually and as Trustee of the Stephen T. Chen and
Virginia M. Chen Living Trust, dated April 12, 2018, and (iii) Hung
Lan Lee (collectively, “Principal
Shareholders”).
3
Pursuant
to the Ainos Agreement, upon the closing of the transactions
contemplated thereby (the “Closing”), the Company will
acquire certain patent assets (the “Patent Assets”) by
issuing 100,000,000 shares of common stock (the
“Shares”) valued at $0.20 to Purchaser. The
Patent Assets encompass technologies relating to development and
manufacturing of point-of-care testing rapid test kit products that
include diagnostics for COVID-19 (SARS CoV2 Antigen Rapid Test),
pneumonia, vaginal infection and helicobacter pylori (H. pylori)
bacterial infection. The Company anticipates that the Shares
issued to the Purchaser will represent approximately 70.39% of the
issued and outstanding shares of common stock of the Company and
effect a change of control in the Company at the Closing. The
Ainos Agreement provides for certain registration rights to the
Purchaser regarding the Shares.
The
Closing is conditioned on the Company (1) obtaining shareholder
approval for, among other things: (i) the adoption of the Ainos
Agreement and approval of the transactions contemplated by the
Agreement; (ii) the amendment of the Company’s charter
documents to (A) increase the number of authorized shares of common
stock to 300,000,000 shares, and (B) rename the Company to
“Ainos, Inc.” or any other corporate name designated by
Purchaser and (iii) the expansion of the number of directors on the
Company’s Board of Directors (“Company Board”)
and the election of directors as designated by the Purchaser
(collectively, the “Company Actions Required for
Closing”); and (2) file with the Securities and Exchange
Commission (the “SEC”)_a proxy statement or information
statement, which shall include the recommendation of the Company
Board that the Company’s shareholders approve the Ainos
Agreement and authorize the transactions contemplated thereby (the
“Company Board Recommendation”).
The
Ainos Agreement contains certain customary termination rights that
are (i) in favor of each of the Company and Purchaser, including by
mutual agreement or for uncured breach by the other party and (ii)
in favor of Purchaser, including if there is a change of the
Company Board Recommendation or, if the Closing has not been
consummated by the end of day on the forty-fifty day after the date
of the Ainos Agreement, subject to certain limitations. The Ainos
Agreement contains customary representations, warranties and
covenants, including covenants obligating the Company to continue
to conduct its business in the ordinary course and to cooperate in
seeking regulatory approvals, as needed.
Under
the Ainos Agreement, the Principal Shareholders agree to be
responsible jointly and severally with the Company for the
Company’s indemnification obligations provided in the Ainos
Agreement and to cause their controlled entities to enter into
joinder agreements to be bound by the terms and conditions of the
Agreement as a Principal Shareholder prior to the
Closing.
The
foregoing description of the Ainos Agreement is not complete and is
qualified in its entirety by the text of the agreement, which is
included as Exhibit 2.1 to the Form 8-K filed by the Company with
the SEC on December 30, 2020.
On
December 18, 2020, the Company Board, and on January 25,
2021,the
holders owning a majority of the shares of common stock of the
Company as of the record date of January 22, 2021 approved the
Company Actions Required for Closing. The Company filed a
definitive information statement regarding the majority stockholder
approval of the Company Actions Required for Closing on March 19,
2021 and completed mailing of the information statements to its
shareholders on March 26, 2021. The Company expects the Closing to
occur on or after April 15, 2021, subject to the terms and
conditions of the Ainos Agreement.
4
Patents and Proprietary Rights
Since
inception, the Company has worked to build an extensive patent
portfolio for low-dose orally administered interferon. This
portfolio consists of patents with claims that encompass method of
use or treatment, and/or composition of matter and manufacturing.
As listed below, the Company presently owns eight issued
patents with two patents pending.
ACTIVE PATENTS:
"TREATMENT
OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as
described and claimed in U.S. Patent No. 9,526,694 B2 issued
December 27, 2016, Owned. Expiration: April 2033.
“TREATMENT
OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as
described and claimed in U.S. Patent No. 9,750,786 B2 issued
September 5, 2017, Owned. Expiration: April 2033.
“TREATMENT
OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as
described and claimed in U.S. Patent No. 9,839,672 B2 issued
December 12, 2017, Owned. Expiration: April 2033.
"TREATMENT
OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as
described and claimed in TAIWAN Patent No. I592165 issued July 21,
2017, Owned. Expiration: May 2033.
"COMPOSITION
AND METHOD FOR PROMOTING ORAL HEALTH" as described and claimed in
U.S. Patent No. 6,656,920 B2 issued December 2003, Owned.
Expiration: April 2021.
“SMART DRUG INJECTION DEVICE” as described and claimed
in TAIWAN invention patent application number 108137797, Owned,
Issued: November 27, 2020, Expiration: October 18,
2039
“SMART DRUG INJECTION DEVICE” as described and claimed
in TAIWAN design utility model patent application number 108213819,
Owned, Issued: December 12, 2019, Expiration: November 11,
2038.
“SMART DRUG INJECTION DEVICE” as described and claimed
in CHINA design utility model patent application number
201921808292.6, Owned, Issued: July 28, 2020, Expiration: June 27,
2039.
“SMART DRUG INJECTION DEVICE” as described and claimed
in CHINA invention patent application number 201911024619.5,
Pending.
“SMART DRUG INJECTION DEVICE” as described and claimed
in US invention patent application number 17/069,418,
Pending.
There
are no current patent litigation proceedings involving the
Company.
Cost of Compliance with Environmental Regulations
The
Company incurred no costs to comply with environment regulations in
2020.
United States Regulation
Before
products with health claims can be marketed in the United States,
they must receive approval from the U.S. Food and Drug
Administration (“FDA”). To receive this approval, any
drug must undergo rigorous preclinical testing and clinical trials
that demonstrate the product candidate’s safety and
effectiveness for each indicated use. This extensive regulatory
process controls, among other things, the development, testing,
manufacture, safety, efficacy, record keeping, labeling, storage,
approval, advertising, promotion, sale, and distribution of
pharmaceutical products.
5
In
general, before any ethical pharmaceutical product can be marketed
in the United States, the FDA will require the following
process:
● Preclinical laboratory and animal tests;
● Submission of a New Drug Application (NDA) to the FDA; and
Substantial
financial resources are necessary to fund the research, clinical
trials, and related activities necessary to satisfy FDA
requirements or similar requirements of state, local, and foreign
regulatory agencies. At such time as the Company undertakes to
commercialize any of its products, all necessary preclinical
testing, clinical trials, data review, and approval steps will be
judiciously executed to insure that the product satisfies all
regulatory requirements at all levels.
505(b)(2)
The
Company has historically followed and will continue to follow the
traditional approval process for New Drugs as set out in Section
505(b)(1) of the Federal Food, Drug, and Cosmetic Act. If an
alternative path to FDA approval for new or improved formulations
of previously approved products is scientifically and economically
feasible and beneficial to the Company and the public, the Company
may choose to follow this alternative path as established by
section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. This
section of the Act permits the applicant to rely on certain
preclinical or clinical studies conducted for an approved product
as some of the information required for approval and for which the
applicant has not obtained a right of reference. The process of
approval under 505(b)(2) will be followed as judiciously as
505(b)(1) or any regulation.
Orphan Drug Designation
Under
the Orphan Drug Act, the FDA may grant orphan drug designation to
drugs intended to treat a rare disease or condition, which is
generally a disease or condition that affects fewer than 200,000
individuals in the United States. The Company may choose to seek
approval for a product satisfying the definition of an Orphan Drug
if that product can be used to treat such an indication. Orphan
drug designation does not convey any advantage in or shorten the
duration or rigidity of the regulatory review and approval process.
Similarly,
substantial financial resources are necessary to fund the research,
design, testing, fabrication and related activities necessary to
satisfy FDA requirements or similar requirements of state, local,
and foreign regulatory agencies for medical devices. The Company
may seek to obtain FDA clearance for the sales, marketing, and use
of its novel pulsatile insulin pump for the U.S. market after
obtaining FDA approvals under one of the following regulatory
approvals:
Premarket Notification 510(k)
Each person who intends to market in the U.S., a Class I, II, and
III device intended for human use, for which a Premarket Approval
application (“PMA”) is not required, must submit a
510(k) to FDA unless the device is exempt from 510(k) requirements
of the Federal Food, Drug, and Cosmetic Act (the “FD&C
Act”) and does not exceed the limitations of exemptions in .9
of the device classification regulation chapters (e.g., 21 CFR
862.9, 21 CFR 864.9).
6
If the
Company’s novel pulsatile insulin pump is determined to be
similar to one already cleared for the U.S. market, the Company
will seek FDA clearance under 510(k) at least 90 days before the
device is marketed. A
510(k) application requires demonstration of substantial
equivalence to another legally U.S. marketed device. Substantial
equivalence means that the new device is as safe and effective as
the predicate. Documented laboratory testing among other
submissions will be required and if the Company’s device
features significant alterations from predecessor devices the
Company may be required to present results from clinical
trials.
Premarket Approval (PMA)
Alternatively,
if the Company’s device is deemed to be completely new to the
U.S. market or classifiedas aClass
III device,the
Company will be required to apply for PMA approval. The Medical Device Amendments of 1976
to the FD&C Act established three regulatory classes for
medical devices. The three classes are based on the degree of
control necessary to assure that the various types of devices are
safe and effective. The most regulated devices are in Class III.
The amendments define a Class III device as one that supports or
sustains human life or is of substantial importance in preventing
impairment of human health or presents a potential, unreasonable
risk of illness or injury
Under Section 515 of the FD&C Act, all devices placed into
Class III are subject to premarket approval requirements. Premarket
approval by FDA is the required process of scientific review to
ensure the safety and effectiveness of Class III
devices.
Foreign Regulation
In
addition to regulations in the United States, a variety of foreign
regulations govern clinical trials and commercial sales and
distribution of products in foreign countries. Whether or not the
Company obtains FDA approval for a product, the Company must obtain
approval of a product by the comparable regulatory authorities of
foreign countries before the Company can commence clinical trials
or market the product in those countries. The approval process
varies from country to country, and the time may be longer or
shorter than that required for FDA approval. The requirements
governing the conduct of clinical trials, product licensing,
pricing and reimbursement vary greatly from country to
country.
The
policies of the FDA and foreign regulatory authorities may change
and additional government regulations may be enacted which could
prevent or delay regulatory approval of investigational drugs or
approval of new diseases for existing products and could also
increase the cost of regulatory compliance. It is not possible to
predict the likelihood, nature or extent of adverse governmental
regulation that might arise from future legislative or
administrative action, either in the United States or
abroad.
Research and Development
During
the year ended December 31, 2020, the Company incurred $40,389 of
which $40,000 was paid in stock and $389 in cash, towards research,
development and IP protection related activities associated
entirely with the development of a proprietary pulsatile insulin
treatment. Other than corporate administrative and professional
accounting fees related to maintaining public listing requirements,
a significant portion, if not all, of the Company’s Selling,
General & Administrative expenses were also allocated towards
the research and development of the Company’s pulsatile
insulin treatment pump.
7
The
better focus the Company’s research and development efforts,
the Company elected to terminate or not extend the following
licensing agreements and transactions:
●
A License Agreement
by and between the Company and The Texas A&M University System,
dated as of March 22, 1998 and amended by that certain Amendment
No. 1, dated as of September 28, 1998. The Licensor licensed to the
Company certain intellectual property rights under U.S. Patent
Number 4,497,795 entitled “Appetite and Feed/Gain”,
Continuation-in-Part Patent Application filed January 4, 1985
entitled “Method of Using Interferon in Low Dosage to
Regulate Appetite and Efficiency of Food Utilization”, U.S.
Patent Application Serial Number 814,317 filed December 30, 1985
entitled “Low Dosage of Interferon to Enhance Vaccine
Efficiency”, U.S. Patent Application Serial Number 044,317
filed April 30, 1987 entitled “Improved Method of
Administering Interferon”, and U.S. Patent Application Serial
Number 927,834 filed November 6, 1986 entitled “Treatment of
Immune-Resistant Disease” (the “Texas A&M
University Patent License Agreement”). The subject license
expired in 2019 and the Company elected not to extend or renew the
license.
●
Term Sheet for
Cooperative Development and Licensing Venture between the Company
and Xiamen Weiyang Pharmaceutical Co., Ltd. dated July 19, 2019
(“Xiamen Term Sheet”). The Xiamen Term Sheet expired as
of October 19, 2019 and ABI has issued a notification of expiration
dated December 22, 2020.
●
Memorandum of
Understanding between the Company and Leadtek Research, Inc. dated
June 30, 2020 (“Leadtech MOU”). The Term Sheet expires
as of December 31, 2020 and ABI has issued a notification of
expiration dated December 22, 2020.
Employees
The
Company currently has two full-time employees and two part-time
employees. Of these four employees, two are executive officers and
two work in administrative capacities.
Stephen T. Chen: Chairman, Chief Executive Officer (CEO), President
and Chief Operating Officer (COO), and Chief Financial Officer
(CFO). Dr. Chen was named Chairman of the Board in February 2012,
and he has been a director of the Company since February 1996. He
currently executes the management functions as not only Chairman,
but as CEO, President, COO, and CFO.
Bernard Cohen: Vice President - Administration (VP-Admin). Mr.
Cohen holds BBA and MPA degrees from West Texas A&M University.
He is a long time Amarillo resident with over thirty years of
management experience. Mr. Cohen has been with the Company since
October 2009. Mr. Cohen works with Ms. Shelton, providing the
reporting necessary for the Company’s various SEC filings,
and ordinary-course internal bookkeeping and accounting
services.
Chrystal Shelton: Office Manager & Administration. Ms. Shelton
has been with the Company since 1987. In addition to handling
routine office administration, Ms. Shelton is responsible for
accounting, form, and formatting of SEC filings. She is an integral
part of the reporting process and interacts with outside
professionals who assist the Company in its various compliance
measures.
Maggie Wang: Director of Business Development. Ms. Wang has an
extensive background in business development and marketing of
consumer products in Asian countries. Ms. Wang is also the branch
manager for the Taiwan Branch.
Consultants
From time to time, the Company engages consultants as needed for
specific areas of responsibility. Presently, the Company has
engaged the following consultants: John Junyong Lee, Esq. - Chief
Legal Counsel, Dr. Yung-Hsiang Hung - Director-Medical Division;
Jenny Chiu- Legal and Regulatory Consultant; and Mr. Lawrence Lin-
Executive Advisor. On December 18, 2020, the Board of Directors
nominated and approved the appointment of Mr. John Junyong Lee as
the Company corporate secretary, filling the position vacated by
the former secretary, Mr. Edward L. Morris, Esq. upon his
retirement.
8
ITEM
1A.
RISK
FACTORS.
Please
carefully consider the following discussion of significant factors,
events, and uncertainties that make an investment in our securities
risky. The events and consequences discussed in these risk factors
could, in circumstances we may or may not be able to accurately
predict, recognize, or control, have a material adverse effect on
our business, growth, reputation, prospects, financial condition,
operating results (including components of our financial results),
cash flows, liquidity, and stock price. These risk factors do not
identify all risks that we face; our operations could also be
affected by factors, events, or uncertainties that are not
presently known to us or that we currently do not consider to
present significant risks to our operations. In addition, the
global economic climate amplifies many of these risks.
We Face Intense Competition
The
pharmaceutical industry is an expanding and rapidly changing
industry characterized by intense competition. The Company believes
that our ability to compete will be dependent in large part upon
our ability to successfully operate business lines, continue
recapitalization, and steadily enhance and improve our core
technology products. In order to do so, we must effectively utilize
and expand our research and development capabilities and, once
developed, quickly convert new technology into products and
processes, which can then be commercialized. Competition is based
primarily on scientific and technological superiority, technical
support, availability of patent protection, access to adequate
capital, the ability to develop, acquire and market products and
processes successfully, the ability to obtain governmental