ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion may contain forward-looking
statements that involve risks and uncertainties. As described under the caption “Cautionary Note Regarding Forward-Looking Statements,”
our actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences include,
but are not limited to, any factors discussed in this section as well as factors described in Part II, Item 1A. “Risk Factors”
and under the caption “Cautionary Note Regarding Forward-Looking Statements.”
Overview
We are a biotechnology company focused on developing
and preparing to commercialize cellular therapies for cancer, diabetes and malignant ascites based upon our proprietary cellulose-based
live cell encapsulation technology we refer to as Cell-in-a-Box®. We are working to advance clinical research and development
of new cellular-based therapies in oncology and diabetes.
We are actively engaged preparing for a Phase
2b clinical trial in LAPC using encapsulated live cells like those used in the previous Phase 1/2 and Phase 2 clinical trials discussed
above.
On September 1, 2020, we submitted an IND to the
FDA for our planned Phase 2b clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on
clinical hold. On October 30, 2020, the FDA sent a letter to us setting forth the reasons for the clinical hold and specific guidance
on what we must do to have the clinical hold lifted.
For the purpose of addressing the clinical hold,
we assembled a team of regulatory and scientific experts to respond to the items requested by the FDA. That team has been working to complete
the list of items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to
lift the clinical hold, see Item 1. Business under the Section entitled, “Clinical Hold” of this Report.
We are also developing a way to delay the production and accumulation
of malignant ascites that results from many types of abdominal cancerous tumors. Our therapy for malignant ascites involves using the
same encapsulated cells we employ for pancreatic cancer but placing the encapsulated cells in the peritoneal cavity of a patient and administering
ifosfamide intravenously.
In addition to these cancer programs, we have
also been considering ways to exploit the benefits of the Cell-in-a-Box® technology to develop therapies for cancer that
involve prodrugs based upon certain constituents of the Cannabis plant. However, until the FDA allows us to commence our clinical
trial in LAPC and we are able to validate our Cell-in-a-Box® encapsulation technology in a clinical trial, we are not spending
any further resources developing our Cannabis Program.
Finally, we have been developing a potential therapy
for Type 1 diabetes and insulin-dependent Type 2 diabetes Our product candidate for the treatment of diabetes consists of encapsulated
genetically modified insulin-producing cells. The encapsulation will be done using the Cell-in-a-Box® technology. Implanting
these encapsulated cells in the body is designed to function as a bio-artificial pancreas for purposes of insulin production.
Reverse Stock Split
Effective July 12, 2021, we filed a Certificate
of Change with the Nevada Secretary of State that authorized a 1:1500 reverse stock split of our common stock. The reverse stock split
resulted in reducing the authorized number of shares of our common stock from 50 billion to thirty-three million three hundred thirty-three
thousand three hundred thirty-four with a par value of $0.0001 per share. Any fractional shares resulting from the reverse stock split
were rounded up to the next whole share. All warrants, option, share and per share information in this Report gives retroactive effect
to such 1:1500 reverse stock split.
COVID-19 Impact on Our Financial Condition
and Results of Operations
COVID-19 continues to cause uncertainty and significant,
industry-wide delays in clinical trials. The availability of vaccines holds promise for the future; however, new variants of the virus
and potential waning immunity from vaccines may result in continued impact from COVID-19 in the future, which could adversely impact our
operations. Although we are not yet in a clinical trial, we have filed an IND with the FDA to commence a clinical trial in LAPC. While
the IND has been placed on clinical hold by the FDA, we have assessed the impact of COVID-19 on our operations and that impact is increasing.
The impact relates to delays in: (i) completing studies required by the FDA; (ii) manufacturing a new batch of CypCapTM for our planned
clinical trial in LAPC; (iii) manufacturing syringes of CypCapsTM for some of the preclinical studies to be completed and use in
our Malignant Ascites Program; and (iv) securing third party contractors to conduct various R&D projects. As a result, there may be
delays in generating responses to the requests from the FDA related to the clinical hold. Many of these potential delays are also due
to the impact of COVID-19 in foreign countries where we are conducting these preclinical studies, including India, Europe, Singapore and
Thailand. There have also been supply chain interruptions
due to COVID-19.
As a result of COVID-19 and the mitigation efforts
to address it, we may experience additional disruptions that could adversely impact our business and clinical trial, if allowed to proceed,
including: (i) delays or difficulties in enrolling patients in our Phase 2b clinical trial if the FDA allows us to go forward with the
trial; (ii) delays or difficulties in clinical site activation, including difficulties in recruiting clinical site investigators and clinical
site personnel; (iii) delays in clinical sites receiving the supplies and materials needed to conduct our clinical trial, including interruption
in global shipping that may affect the transport of our clinical trial product; (iv) changes in local regulations as part of a response
to COVID-19 which may require us to change the ways in which our clinical trial is to be conducted, which may result in unexpected costs,
or to discontinue the clinical trial altogether; (v) diversion of healthcare resources away from the conduct of clinical trials, including
the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trial; (vi) interruption
of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal
or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which
could affect the integrity of clinical trial data; (vii) risk that participants enrolled in our clinical trials will acquire COVID-19
while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed
adverse events; (viii) delays in necessary interactions with local regulators, ethics committees, and other important agencies and contractors
due to limitations in employee resources or forced furlough of government employees; (ix) limitations in employee resources that would
otherwise be focused on the conduct of our clinical trial because of sickness of employees or their families or the desire of employees
to avoid contact with large groups of people; (x) refusal of the FDA to accept data from clinical trials in affected geographies; and
(xi) interruption or delays to our clinical trial activities.
As a result of COVID-19, commencement of our planned
clinical trial to treat LAPC may be delayed beyond the lifting of the clinical hold by the FDA should that occur. Also, enrollment may
be difficult for the reasons discussed above. In addition, after enrollment in the trial, if patients contract COVID-19 during their participation
in the trial or are subject to isolation or shelter in place restrictions, this may cause them to drop out of our clinical trial, miss
scheduled therapy appointments or follow-up visits or otherwise fail to follow the clinical trial protocol. If patients are unable to
follow the clinical trial protocol or if the trial results are otherwise affected by the consequences of COVID-19 on patient participation
or actions taken to mitigate COVID-19 spread, the integrity of data from the clinical trial may be compromised or not be accepted by the
FDA. This could further adversely impact or delay our clinical development program if the FDA allows it to proceed.
Clinical trials in the biopharma industry may
be delayed due to COVID-19. There are numerous reasons for these potential delays. For example, patients have shown a reluctance to enroll
or continue in a clinical trial due to fear of exposure to COVID-19 when they are in a hospital or doctor’s office. There are local,
regional and state-wide orders and regulations restricting usual normal activity by people. These discourage and interfere with patient
visits to a doctor’s office if the visit is not COVID-19 related. Healthcare providers and health systems have shifted their resources
away from clinical trials toward the care of COVID-19 patients. The FDA and other healthcare providers are making product candidates for
the treatment of COVID-19 a priority over product candidates unrelated to COVID-19.
It is highly speculative in projecting the effects
of COVID-19 on our proposed clinical development program and the Company generally. Moreover, the various precautionary measures taken
by many governmental authorities around the world in order to limit the spread of COVID-19 has had and may continue to have an adverse
effect on the global markets and global economy, including on the availability and pricing of employees, resources, materials, manufacturing
and delivery efforts and other aspects of the global economy. The continuation of the COVID-19 pandemic could materially disrupt our business
and operations, hamper our ability to raise additional funds or sell or securities, continue to slow down the overall economy, curtail
consumer spending, interrupt our sources of supply, and make it hard to adequately staff our operations. The effects of COVID-19 quickly
and dramatically change over time. Its evolution is difficult to predict, and no one is able to say with certainty when the pandemic will
fully cease to have an impact on our operations.
Performance Indicators
Non-financial performance indicators used by management
to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding
for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically
modified human cells and having them encapsulated for our preclinical studies and the planned Phase 2b clinical trial in LAPC; (iv) have
regulatory work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies
on the cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated
cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order
to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our
planned Phase 2b clinical trial in LAPC.
There are numerous items required to be completed
successfully to ensure our final product candidate is ready for use in our planned clinical trial in LAPC. The effects of material transactions
with related parties, and certain other parties to the extent necessary for such an undertaking, may have substantial effects on both
the timeliness and success of our current and prospective financial position and operating results. Nonetheless, we are actively working
to ensure strong ties and interactions to minimize the inherent risks regarding success. We do not believe there are factors which will
cause materially different amounts to be reported than those presented in this Report. We aim to assess this regularly to provide accurate
information to our shareholders.
Liquidity and Capital Resources
As of April 30, 2022, our cash and cash equivalents
totaled approximately $85.4 million, compared to approximately $2.2 million as of April 30, 2021. Working capital was approximately $84.8
million as of April 30, 2022, and approximately $1.6 million as of April 30, 2021. The increase in cash is attributable to proceeds from
the sale of our common stock net of an increase in our operating expenses.
On August 9, 2021, the Company entered into an
underwriting agreement to offer and sell shares of common stock, pre-funded warrants to purchase common stock and warrants to purchase
common stock in a public offering (“First Offering”). The gross proceeds of the First Offering were $15 million, before deduction
of underwriting discounts, commissions, and estimated offering expenses.
In August 2021, the Company received twenty-seven
(27) cash exercise notices relating to the common warrants with respect to the First Offering totaling 2,522,387 warrant shares (“Warrant
Exercises”). The Company received approximately $10,720,000 and issued 2,522,387 shares of common stock as a result of the exercise
notices.
On August 19, 2021, the Company entered into a
securities purchase agreement (“Securities Purchase Agreement”) with certain institutional investors (“Purchasers”)
pursuant to which the Company agreed to sell in a registered direct offering (“Registered Direct Offering”), shares of the
Company’s common stock and pre-funded warrants to purchase shares of common stock. Further, pursuant to the Securities Purchase
Agreement, in a concurrent private placement (together with the Registered Direct Offering, “Second Offering”), the Company
also agreed to issue to the Purchasers unregistered warrants (“Series A Warrants”) to purchase shares of common stock. The
Company received gross proceeds from the Second Offering, before deducting placement agent fees and other estimated offering expenses
payable by the Company, of approximately $70 million. On November 17, 2021, the Company’s Registration Statement on Form S-3 registering
the resale of the common stock underlying the Series A Warrants was declared effective by the U.S. Securities and Exchange Commission
(“Commission”).
During the year ended April 30, 2022, funding
in the amount of approximately $87.4 million was provided by investors to maintain and expand our operations and R&D through the First
Offering and the Second Offering and the Warrant Exercises. Sales of our common stock, pre-funded warrants and exercise of Common Warrants
occurred in the First Offering, Second Offering, and the Warrant Exercises.
During the year ended April 30, 2021, the Company
sold and issued approximately 462,000 shares of common stock, pursuant to an effective S-3 registration statement, at prices ranging from
approximately $15 to $45 per share. Net of underwriting discounts, legal, accounting, and other offering expenses, the Company received
proceeds of approximately $4.7 million from the sale of these shares for the year ended April 30, 2021.
On May 14, 2018, we entered into amendments to
all of the material agreements with SG Austria and Austrianova. See Section entitled, History of the Business” in Item 1. Business.
above for a description of these amendments. We have no other off-balance sheet arrangements that could have a material current effect
or that are reasonably likely to have a material adverse effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital resources.
Year ended April 30, 2022, compared to year
ended April 30, 2021
Revenue
We had no revenues in the fiscal years ended April
30, 2022, and 2021.
Operating Expenses
The total operating expenses during the year ended
April 30, 2022, increased by $769,033 to $4,392,014 from $3,622,981 in the year ended April 30, 2021. The increase is mainly attributable
to increases in compensation expense, legal and professional expense, and consulting expense in 2022 from 2021, net of decreases in R&D
costs and director fees.
Loss from Operations
Loss from operations during the year ended April
30, 2022, increased by $769,033 to $4,392,014 from $3,622,981 in the year ended April 30, 2021. The increase is mainly attributable to
increases in compensation expense, legal and professional expense, and consulting expense in 2022 from 2021, net of decreases in R&D
costs and director fees.
Other Income (Expenses), Net
Other income, net for the year ended April 30,
2022, was $152,853 as compared to other expense, net of $71,745 in the year ended April 30, 2021. Other income, net for the year ended
April 30, 2022, is attributable to interest income of $157,645 net of interest expense and other expenses of $4,792. Other income, net
for the year ended April 30, 2021, is attributable to the forgiveness of the Paycheck Protection Program loan and accrued interest of
$75,979 net of interest and other expenses of $4,234.
Discussion of Operating, Investing and Financing
Activities
The following table presents a summary of our
sources and uses of cash for the years ended April 30, 2022, and 2021.
Net cash used in investing activities: $ – $ –
Effect of currency rate exchange $ 4,625 $ 1,327
Operating Activities:
The cash used in operating activities for the
years ended April 30, 2022, and 2021, is a result of our net losses offset by securities issued for services and compensation, changes
to prepaid expenses, accounts payable and accrued expenses.
Investing Activities: We had no investing
activities for the years ended April 30, 2022, and 2021.
Financing Activities:
The cash provided from financing activities for
the years ended April 30, 2022, and 2021, is mainly attributable to the proceeds from the sale of our common stock.
Critical Accounting Estimates and Policies
Our Consolidated Financial Statements are prepared
in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We are required to make assumptions and estimates
about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related
disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management
believes to be relevant at the time our Consolidated Financial Statements are prepared. On a regular basis, management reviews the accounting
policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance
with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from
our assumptions and estimates, and such differences could be material.
Our significant accounting policies are discussed
in Note 2 of the Notes to our Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data”
of this Report. Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating
our reported financial results and require management’s most difficult, subjective or complex judgments resulting from the need
to make estimates about the effects of matters that are inherently uncertain. Management has reviewed these critical accounting estimates
and related disclosures with our Board.
Research and Development Expenses
R&D expenses consist of costs incurred for
direct and overhead-related research expenses and are expensed as incurred. Costs to acquire technologies, including licenses, which are
utilized in R&D and that have no alternative future use are expensed when incurred. Technology developed for use in our product candidates
is expensed as incurred until technological feasibility has been established.
Stock-Based Compensation
Our stock-based compensation plans are described
in Note 4 and 5 of the Notes of the Consolidated Financial Statements to this Report. We follow the provisions of ASC 718, Compensation
- Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based
awards made to employees.
Net Income (Loss) Per Share
Basic net income (loss) per share of common stock
is computed using the weighted-average number of shares of common stock outstanding. Diluted net income (loss) per share of common stock
is computed using the weighted-average number of shares of common stock and shares of common stock equivalents outstanding. Potentially
dilutive stock options and warrants to purchase 10,813,635 and 44,314 post reverse stock split shares of common stock at April 30, 2022,
and 2021, respectively, were excluded from the computation of diluted net income (loss) per share because the effect would be anti-dilutive.
New Accounting Pronouncements
For a discussion of all recently adopted and recently
issued but not yet adopted accounting pronouncements, see “Recent Accounting Pronouncements” in Note 2 of our Notes to our
Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
We are a smaller reporting company and are not
required to include information called for by this Item 7A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Our Consolidated Balance Sheets, as of April 30,
2022, and 2021, and our Consolidated Statements of Operations, Comprehensive Loss, Stockholders Equity and Cash Flows for each of the
two years in the period ended April 30, 2022, and associated Notes and Schedules, together with the reports thereon of our independent
registered public accounting firm, are set forth on pages F-1 to F-27 of this Report and are incorporated by reference herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
Our principal independent public accountant is
Armanino LLP (“Armanino”). During our fiscal years ended April 30, 2022, and 2021, there have been no disagreements with Armanino
on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved
to Armanino’s satisfaction, would have caused Armanino to refer to the subject matter in its report on our Consolidated Financial
Statements for such periods.
During our fiscal years ended April 30, 2022,
and 2021, there were no “reportable events” requiring disclosure pursuant to Item 304(a)(1)(v) of Regulation S-K. As used
herein, the term “reportable event” means any of the items listed in paragraphs (a)(1)(v)(A) - (D) of Item 304 of Regulation
S-K.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer, President and General
Counsel, as our principal executive officer (“Chief Executive Officer”), and our Chief Financial Officer, as our principal
financial officer (“Chief Financial Officer”), evaluated the effectiveness of our “disclosure controls and procedures,”
as such term is defined in Rule 13a-15(e) promulgated under the Exchange Act. Disclosure controls and procedures are designed to ensure
that the information required to be disclosed in the reports that we file or submit to the Commission pursuant to the Exchange Act are
recorded, processed, summarized and reported within the period specified by the Commission’s rules and forms and are accumulated
and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required
disclosures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of April
30, 2022, that certain of our disclosure controls and procedures were not effective due to the material weaknesses in internal control
over financial reporting. This is described below in Management’s Report on Internal Control over Financial Reporting.
A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Also, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The
design of any system of controls is also based in part upon certain assumptions about the likelihood of future events. There can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Controls
over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal controls over financial reporting as that term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).
Our internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
A material weakness is a deficiency, or a combination
of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected in a timely basis.
Under the supervision and with the participation
of our Chief Executive Officer and our Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal
controls over financial reporting as of April 30, 2022, based on the criteria outlined in Internal Control-Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and identified the following material
weaknesses in internal controls over financial reporting:
Because of this material weakness, our Chief Executive
Officer and our Chief Financial Officer concluded that, as of April 30, 2022, our internal controls over financial reporting were not
effective based on the COSO criteria.
We plan to make changes to our procedures and
controls that we believe are reasonably likely to strengthen and materially affect our internal controls over financial reporting. The
one material weakness should be eliminated during fiscal year 2023.
Prior to the remediation of our material weakness,
there remains risk that the processes and procedures on which we currently rely will fail to be sufficiently effective, which could result
in material misstatement of our financial position or results of operations and require a restatement. Because of the inherent limitations
in all control systems, no evaluation of controls - even where we conclude the controls are operating effectively - can provide absolute
assurance that all control issues, including instances of fraud, if any, have been detected. These inherent limitations include the realities
that judgments in decision making can be faulty, and breakdowns can occur because of simple error or mistake. Additionally, controls can
be circumvented by the individual acts of a person, by collusion of two or more people, or by management override of the controls. The
design of any system of controls also is based in part upon certain assumptions about the likelihood of future events; accordingly, there
can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, our control
systems, as we develop them, may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures
may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur
and not be detected and could be material to our financial statements.
Remediation of a Material Weakness
Throughout the year ended April 30, 2022, we undertook
remediation measures related to a previously reported material weakness in internal control over financial reporting. The previously reported
material weakness related to insufficient information technology controls and documentation. We completed the remediation measures during
the year ended April 30, 2022, including testing of the design and implementation of the related controls. We acquired and installed an
accounting software package to record our transactions to provide the level of controls required by COSO. Based on these procedures, we
believe that this previously reported material weakness has been remediated.
Changes in Internal Controls over Financial
Reporting
Other than described above in this Item 9A, there
were no changes to our internal control over financial reporting during the fiscal year ended April 30, 2022, that have materially affected,
or are reasonably likely to materially affect, our internal controls over financial reporting.
The Certifications of our Principal Executive
and Principal Financial Officer required in accordance with Rule 13a-14(a) under the Exchange Act and Section 302 of the Sarbanes-Oxley
Act of 2002 (“Certifications”) are attached to this Report. The disclosures set forth in this Item 9A contain information
concerning: (i) the evaluation of our disclosure controls and procedures, and changes in internal control over financial reporting, referred
to in paragraph 4 of the Certifications; and (ii) material weaknesses in the design or operation of our internal control over financial
reporting, referred to in paragraph 5 of the Certifications. The Certifications should be read in conjunction with this Item 9A for a
more complete understanding of the matters covered by the Certifications.
ITEM 9B. OTHER INFORMATION
On May 8, 2022, we entered into amendments to
the employment agreements with each of Kenneth L. Waggoner, our Chief Executive Officer and President, and Carlos A. Trujillo, our Chief
Financial Officer. The terms of such amended employment agreements are summarized in Part III, Item 11. “Executive Compensation—Employment
Arrangements” of this Report, which summaries are qualified in their entirety by reference to the full text of such amended employment
agreements filed herewith as Exhibits 10.40 and 10.41.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
As of July 15, 2022, our directors and executive
officers are:
Age Position
Gerald W. Crabtree 81 Director and Chief Scientific Officer
Carlos A. Trujillo 64 Director and Chief Financial Officer
Thomas Liquard 49 Director
Michael M. Abecassis 64 Director
Raymond C.F. Tong 63 Director
Matthias Löhr 63 Director
Kenneth L. Waggoner
Kenneth L. Waggoner became our Chief Executive
Officer and President in November 2013. Shortly thereafter, Mr. Waggoner assumed the additional position of General Counsel. In April
2014, Mr. Waggoner became a full-time employee as the Chief Executive Officer, President and General Counsel of both PharmaCyte and Viridis
Biotech, a wholly owned subsidiary of PharmaCyte. Mr. Waggoner has been a member of the Board since September 2014. Mr. Waggoner has over
forty-five years of experience in management, business, operations and the practice of law. It was his education, training, experience
and leadership skills that led us to elect him to the Board and appoint him Chairman.
Mr. Waggoner began his professional career as
an attorney in private practice. From 1986 to 2003, he was a senior partner with the international law firm Brobeck, Phleger and Harrison
(“Brobeck”). He was the Managing Partner of Brobeck’s Los Angeles office. While at Brobeck, Mr. Waggoner served as a
member of the Executive Committee and Policy Committee. Mr. Waggoner was the co-Chairman of Brobeck’s worldwide Environmental Law
Group.
Mr. Waggoner’s career included leadership
and legal positions with Fortune 100 companies most of his professional career. From 2003 to 2005, Mr. Waggoner served as the Vice President
and General Counsel of Chevron’s global downstream operations where he was responsible for the overall management of legal services
to the North American, Latin American, European and Asian Products Companies. While at Chevron, Mr. Waggoner led the restructuring of
Chevron’s global Legal Department following Chevron’s acquisition of Texaco.
From 2005 until September 2013, Mr. Waggoner was
the principal of the Law Offices of Kenneth L. Waggoner & Associates. During that time, he held leadership and legal positions with
several start-up companies and provided legal counsel and business advice to his clients.
Mr. Waggoner received his Juris Doctorate with
honors from Loyola University School of Law in Los Angeles in 1973.
Gerald W. Crabtree
Gerald W. Crabtree is our Chief Scientific Officer
and has been a member of the Board since February 2013. He has served as Chief Scientific Officer since October 14, 2020. Prior to that,
Dr. Crabtree was our Chief Operating Officer. Given the major importance to developing treatments for cancer and diabetes coupled with
Dr. Crabtree’s education, training and experience, Dr. Crabtree was appointed to the Board.
Dr. Crabtree’s background in the biomedical
sciences has been substantial, having been involved with various biopharmaceutical companies where he has alternatively supervised and
coordinated the development of multiple drug candidates, prepared clinical protocols, investigator brochures, monographs, and research
and review articles.
Dr. Crabtree has over 50 years of experience in
the biomedical sciences sector with the majority of that being in the cancer area. Dr. Crabtree served as the Director of Project Planning
and Management (Oncology and Immunology) at Bristol-Myers Squibb (“BMS”) from 1990 to 1997. While at BMS, Dr. Crabtree established
and directed the department that coordinated the development of all oncologic and immunologic drugs from initial discovery through regulatory
approval. He also served as Project Manager for the development of the major anticancer agent, Taxol. Taxol ultimately became a multi-billion-dollar
drug for BMS and is still widely used to treat a variety of cancers. From 1985 to 1990, Dr. Crabtree was the Director of Pharmacology
at Viratek, a subsidiary of ICN Pharmaceuticals, in Costa Mesa, California, where he worked on the development of anticancer drugs first
developed at the Nucleic Acid Research Institute, a joint venture between Eastman Kodak and ICN Pharmaceuticals. He also helped coordinate
the development of ribavirin, Viratek's landmark antiviral drug. From 1970 through 1985, Dr. Crabtree was a member of the faculty of Brown
University where he was involved in both basic and clinical cancer research.
Dr. Crabtree received his Ph.D. in Biochemistry
from the University of Alberta, Edmonton, Alberta, Canada, and has published over 80 articles in peer-reviewed journals. He was a National
Cancer Institute of Canada Research Fellow, is currently a member of the American Society of Clinical Oncology and was a member of the
American Association for Cancer Research from the early 1990s until recently and has served on research grant review committees for the
National Institutes of Health and the American Cancer Society.
Carlos A. Trujillo
Carlos A. Trujillo has been our Chief Financial
Officer and a member of the Board since March 2017. He began working for us as an independent contractor in September 2014. In January
2015, Mr. Trujillo became a full-time employee as the Vice President of Finance of both us and Viridis Biotech, and in March 2017, Mr.
Trujillo was appointed as our Chief Financial Officer. Mr. Trujillo has over three decades of experience in management, business, operations
and financial accounting. It was his education, experience and leadership skills that led us to elect him to the Board.
Mr. Trujillo is a Certified Public Accountant
with an active license from the State of California. He has more than three decades of experience in finance, accounting and management.
Mr. Trujillo started his career in public accounting and was the manager of an audit department a large regional public accounting firm.
Mr. Trujillo then established a consulting and accounting practice which he operated for ten years and provided services as the Chief
Financial Accountant to numerous organizations in several different industries. His experience has extended to companies in the biotechnology,
telecommunications, manufacturing, construction and real estate development sectors.
For the last fourteen years, Mr. Trujillo has
been the Chief Financial Officer for both privately held and publicly traded and multinational companies. From June 2008 through September
2014, Mr. Trujillo was the Chief Financial Officer of VelaTel Global Communications, Inc. As a result, he brings experience to us in preparing
and filing periodic reports with the Commission, in mergers and acquisitions and in the filing of comprehensive financial statements.
Mr. Trujillo received his Bachelor of Accounting
degree from California State University, Fullerton in 1982.
Thomas Liquard
Thomas Liquard has been a member of the Board
since April 2015. Mr. Liquard has more than 15 years of experience in the pharmaceutical industry, having held various commercialization,
product development and leadership roles with large pharmaceutical and biotechnology companies.
Mr. Liquard currently serves as the Senior Vice
President of Product Development at Neurelis, Inc., a San Diego based biotechnology company. He joined Neurelis in late 2017. He From
August 2015 to August 2017, Mr. Liquard was the Chief Executive Officer of Immuron, a Melbourne, Australia-based pharmaceutical company.
Prior to Immuron, Mr. Liquard served as the Chief Executive Officer and Chief Operating Officer of Alchemia, a major Australian pharmaceutical
company. Mr. Liquard worked for Alchemia from October 2013 to November 2014. Mr. Liquard spent the previous seven years with Pfizer, Inc.
based in New York, where he held various senior commercial positions. His last was as Senior Director, Portfolio Development Leader and
Emerging Markets for the Established Products portfolio. In that role, Mr. Liquard drove business development (M&A, licensing, partnerships)
and internal product development initiatives.
Mr. Liquard was appointed to the Board because
of his experience and expertise in leading positions with life science-based biotech and pharmaceutical companies. We believed that his
seven-year tenure with Pfizer, one of the world’s leading pharmaceutical companies, where he played leading roles in the development
of that company’s portfolio development, was a needed asset to us. Mr. Liquard received his Master of Business Administration in
Finance and Strategy from the Columbia Business School and a Bachelor of Science degree from the University of Southern California.
Michael M. Abecassis
Michael M. Abecassis, MD was appointed to the
Board in July 2017. Since November 2019, Dr. Abecassis has been Dean of the University of Arizona College of Medicine – Tucson.
Prior to that and since 1992, Dr. Abecassis was a transplantation surgeon at the Northwestern University Feinberg School of Medicine.
Dr. Abecassis was appointed to the Board because of his demonstrated leadership qualities in academia, in the clinic and throughout his
career in medicine. These attributes and his experience in the medical field translate directly to the work being undertaken by us in
the cancer arena and have led us to elect him to the Board.
Dr. Abecassis was the Director of the Comprehensive
Transplant Center of the Feinberg School of Medicine. He was also the Chief of Transplant Surgery in the Department of Surgery at Feinberg
and a James Roscoe Miller Distinguished Professor of Medicine at Feinberg.
Dr. Abecassis received his Medical Degree from
the University of Toronto in 1983 and was awarded a Master of Business Administration degree from the Kellogg School of Management at
Northwestern University in 2000. After his postgraduate tenure in Toronto, Dr. Abecassis began his clinical career as Assistant Professor
of Surgery and Director of Liver Transplantation and Hepatobiliary Surgery at the University of Iowa. In 1993, Dr. Abecassis became Northwestern
University’s Director of Liver Transplantation, where he initiated Northwestern’s liver transplant program. In 2004, Dr. Abecassis
was named Chief of the Division of Transplantation at the Feinberg School of Medicine. He became Founding Director of the Comprehensive
Transplant Center at Northwestern in 2009 and was appointed Dean for Clinical Affairs at the Feinberg School of Medicine in 2008, serving
until 2011.
Dr. Abecassis has received continuous funding
from the National Institutes of Health (“NIH”) for the past 17 years. He is the principal investigator in research that includes
both laboratory and clinical studies. He is also the principal investigator of the clinical core of the NIH Genomics of Transplantation
Cooperative Research Program. Dr. Abecassis has trained numerous clinical and research fellows.
Dr. Abecassis is a member of the Society of University
Surgeons and the American Surgical Association and was President of the American Society of Transplant Surgeons 2010-2011. He has served
and continues to serve on the Editorial Boards of major scientific journals (Hepatology, Surgery, Transplantation and Liver Transplantation)
and is a reviewer for all major journals related to surgery and transplantation. He has served as a member of NIH grant study sections
and special emphasis panels relating to both transplantation and virology. He is a permanent member of the National Institute of Allergy
and Infectious Diseases study section for career development and training grants.
Dr. Abecassis has been a course director for the
American Society of Transplant Surgeons Leadership Development Program since 2010 and was course director for the Advanced Leader Development
Program in 2013 at Northwestern’s Kellogg School of Management. He was a voting member of the Medicare Coverage Advisory Committee
and served on the United HealthCare Group Physician Advisory Board on Healthcare Performance and Quality. Dr. Abecassis has been a member
of various local, regional and national regulatory committees and has published seminal papers on both the regulatory and financial aspects
of transplantation, including the Healthcare Reform and the Affordable Care Act.
Raymond C.K Tong
Raymond C.K. Tong, MD serves as Chief Executive
Officer of Harmony Medical Inc., an Asian investment group active in the introduction and distribution of medical and healthcare products
and services in China and throughout Asia. He is also Chairman of the Business Development Committee of Shanghai Kedu Healthcare Group,
the largest medical equipment third-party service provider in China, representing products from GE, Philips, Siemens, Kodak and other
multi-nationals as well as local companies. He was appointed to the Board in October 2017. It was his stellar career in the medical field,
as well as his significant connections to the investment community throughout Asia, leadership skills and business acumen and experience
that caused us to elect him to the Board.
Dr. Tong has been a Director of Medifocus Inc.
since January 27, 2015. He was also a Director of Shanghai CP Guojian Pharmaceutical, one of the first and largest bio-pharmaceutical
manufacturers in China. In addition, Dr. Tong is the founding Director and Chief Executive Officer of VetCell Therapeutics Asia, a cell
therapy company focused on providing cell-based treatments for use in veterinary medicine in Asia.
Dr. Tong’s earlier career includes senior
management positions in China with Pfizer and Ball Corporation. He was also responsible for the Healthcare Investment Division of CITIC
in Hong Kong. CITIC is the largest conglomerate in China and an established global player, with businesses covering healthcare, financial
services, resources, energy, manufacturing, engineering and many others.
Dr. Tong received his medical degree from the
University of Toronto in Ontario, Canada in 1983. He also received a Ph.D. degree in neurophysiology and an M.B.A. degree. After receiving
his medical degree, Dr. Tong founded a chain of medical clinics in the Province of Ontario where he served as Medical Director and Chief
Physician. During this period, he also served as a consultant and an investigator in several clinical trials. In 1989, Dr. Tong returned
to Hong Kong, where he was born and resided before medical school, and spent the next 19 years in prominent corporate appointments with
several multinational medical and pharmaceutical companies discussed above.
Matthias Löhr
Matthias Löhr, MD was appointed to the Board
in March 2022. Dr. Löhr is a licensed physician, board-certified internist and Professor of Gastroenterology and Hepatology at the
Karolinska Institute of Stockholm, Sweden. He leads the pancreatic team at Karolinska University Hospital. He has served as Professor
of Molecular Gastroenterology at the University of Heidelberg with a same-named unit at the German Cancer Research Center in Heidelberg
Germany. He has worked as a translational scientist and principal investigator in clinical studies in gastrointestinal oncology for many
years. In addition to being highly published, he has extensive scientific and grant review experience, and has received multiple awards
and distinctions. These attributes and his experience in the medical field translate directly to the work being undertaken by us in the
cancer arena have led us to elect him to the Board.
Dr. Löhr served as the Principal Investigator
for the Phase 1/2 and Phase 2 clinical trials of the PharmaCyte’s pancreatic cancer therapy that were completed in the early 2000s.
He is familiar with the Cell-in-a-Box® live-cell encapsulation technology that forms the core of our pancreatic cancer
therapy. He also administered our therapy for pancreatic cancer in clinical trials in patients with advanced, inoperable pancreatic cancer.
Dr. Löhr has also previously served as a
consultant to us in connection with our development of treatments for pancreatic cancer and diabetes using the Cell-in-a-Box®
technology. He has expertise in both diseases and has a thorough understanding of our technology and its use in a clinical setting.
In 2000, Dr. Löhr was appointed Professor
of Molecular Gastroenterology at the University of Heidelberg and became Head of the Division at the German Cancer Research Center, which
he led until 2010. Dr. Löhr has authored more than 340 original peer-reviewed scientific papers and more than 50 reviews. He has
authored six books. He has been granted six patents and is an Editor Board Member of the Journal of Clinical Medicine, Pancreatology,
Scientific Reports, and the World Journal of Gastroenterology.
Dr. Löhr holds MD and PhD degrees from the
Universities of Hamburg and Rostock. Following receipt of his medical degree, he served a residency in pathology in Hamburg, Germany,
and residencies in internal medicine and gastroenterology, where he became chief resident and later attending physician and assistant
professor at the University of Rostock.
Family Relationships
There are no family relationships among our executive
officers, directors and significant employees.
Legal Proceedings
As of April 30, 2022, our personnel do not have
any involvement in legal proceedings requiring disclosure pursuant to the rules and regulations of the Commission.
Code of Ethics
Our Board has adopted a written Code of Business
Conduct and Ethics, an Insider Trading Policy and Software Policies that apply to our directors, officers, employees and contractors.
These documents can be viewed and downloaded from the “Governance” dropdown menu of our website under the “Company”
tab. The content of these documents is not incorporated into this Form 10-K.
Corporate Governance and Committees
Board Leadership and Structure
The Chairman of the Board presides at all meetings
of the Board. Mr. Waggoner serves as the Chairman of the Board and as our Chief Executive Officer, President and General Counsel.
The Board does not have a policy on whether or
not the roles of Chief Executive Officer and Chairman of the Board should be separate. The Board believes that it should be free to make
a choice from time to time in any manner that is in the best interests of the Company and our stockholders.
Audit Committee
The Audit Committee is currently comprised of
Dr. Michael Abecassis, Dr. Tong, and Mr. Liquard. The Chairman of the Audit Committee is Mr. Liquard. The primary purposes of our Audit
Committee are to assist the Board in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting,
auditing, financial reporting, internal control, legal compliance and risk management functions of the Company, including, assisting the
Board’s oversight of: (i) the integrity of our financial statements; (ii) the effectiveness of our internal control over financial
reporting; (iii) our compliance with legal and regulatory requirements; (iv) the qualifications and independence of our independent registered
public accounting firm; and (v) the performance of our internal audit function and independent registered public accounting firm.
Our Board has determined that each member of our
Audit Committee is independent within the meaning of the rules of Nasdaq. Our Board has determined that the Chairman of the Audit Committee,
Mr. Liquard, is an “audit committee financial expert,” as that term is defined in Item 407(d) of Regulation S-K under the
Exchange Act.
Our Audit Committee charter can be viewed and
downloaded from the “Governance” dropdown menu of our website under the “Company” tab.
Compensation Committee
The Compensation Committee is currently comprised
of Mr. Liquard, Dr. Tong and Dr. Löhr. The Chairperson of the Compensation Committee is Dr. Tong. The primary purposes of our Compensation
Committee are: (i) to establish and maintain our executive compensation policies and compensation consistent with corporate objectives
and stockholder interests; (ii) to oversee the competency and qualifications of our senior management personnel and the provisions of
senior management succession planning; and (iii) to advise the Board with respect to director compensation issues.
The Compensation Committee, which is composed
of independent directors, provides overall guidance for our executive compensation policies and determines the value and elements of compensation
for our executive officers.
Our Compensation Committee charter can be viewed
and downloaded from the “Governance” dropdown menu of our website under the “Company” tab.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee
is currently comprised of Dr. Abecassis and Dr. Tong. The Chairperson of the Nominating and Corporate Governance Committee is Dr. Abecassis.
The primary purposes of the Nominating Committee
are: (i) to recommend to the Board the nomination of individuals who are qualified to serve as our directors and on committees of the
Board; (ii) to advise the Board with respect to the composition, size, structure and procedures of the Board; (iii) to advise the Board
with respect to the composition, size and membership of the Board’s committees; (iv) to advise the Board with respect to corporate
governance principles applicable to the Company; and (v) to oversee the evaluation of the Board as a whole and the evaluation of its individual
members standing for re-election. The Nominating Committee also has responsibility for reviewing and approving all transactions that are
“related party” transactions under the Commission’s rules.
The Nominating Committee does not set specific,
minimum qualifications that nominees for director must meet in order for the Nominating Committee to recommend them to the Board, but
rather believes that each nominee should be evaluated based on his or her individual merits, considering our needs and the composition
of the Board. Members of the Nominating Committee discuss and evaluate possible candidates in detail and suggest individuals to explore
in more depth. Once a candidate is identified whom the Nominating Committee wants to seriously consider and move toward nomination, the
Chairman of the Nominating Committee enters into a discussion with that nominee candidate. Subsequently, the Chairperson will discuss
the qualifications of the candidate with the other members of the Nominating Committee, and the Nominating Committee will then make a
final recommendation with respect to that candidate to the Board.
Board Practices
Our business and affairs are managed under the
direction of our Board. The primary responsibilities of our Board are to provide oversight, strategic guidance, counseling and direction
to our senior management.
Policy Regarding Board Attendance
Our directors are expected to attend meetings
of the Board as frequently as necessary to properly discharge their responsibilities and to spend the time needed to prepare for each
such meeting. If an annual meeting of stockholders is held, our directors are expected to attend that meeting, but we do not have a formal
policy requiring them to do so.
Shareholder Communications
We have a process for shareholders who wish to
communicate with our Board. Shareholders who wish to communicate with our Board may write to the Board at our address set forth at the
beginning of this Report. These communications will be reviewed by our Chief Executive Officer and Chief Financial Officer. They will
determine whether the communications should be presented to our Board. The purpose of this screening is to allow the Board to avoid having
to consider irrelevant or inappropriate communications.
ITEM 11. EXECUTIVE COMPENSATION
This section discusses the material components
of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below (each
a “Named Executive Officer”), as well as the director compensation program for our directors. As a smaller reporting company,
we are not required to include a Compensation Discussion and Analysis and have elected to comply with the scaled disclosure requirements
applicable to smaller reporting companies.
For our fiscal year ended April 30, 2022, our
Named Executive Officers and their positions were as follows:
· Gerald W. Crabtree, Chief Scientific Officer and Director; and
· Carlos A. Trujillo, Chief Financial Officer and Director.
The following tables provide information about
compensation earned during our fiscal years ended April 30, 2022, and 2021, by our Named Executive Officers.
Summary Compensation Table
General Counsel
(1) The amounts in the columns titled “Stock
Awards” and “Option Awards” reflect the grant date fair values of awards made during the identified fiscal year, as
computed in accordance with FASB ASC Topic 718 and the assumptions stated in Note 4 and Note 5 of the Consolidated Financial Statements
to this Report.
(2) We did not pay or accrue any other compensation,
in the form of bonuses, incentive plan compensation or nonqualified deferred compensation earnings to any Named Executive officer for
services as an executive officer during the fiscal years ended April 30, 2022, and 2021; neither were there any perquisites or other personal
benefits payable to our Named Executive Officers.
Outstanding Equity Awards at Fiscal Year End
Option Awards Stock Awards
Kenneth L. Waggoner