UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

For the fiscal year ended May 31, ~~2016~~2017

Commission file number: 000-28385

PROTALEX, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		91-~~20033490~~2003490
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

131 Columbia Turnpike, Suite 1,

Florham Park NJ 07932

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (215) 862-9720

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $.00001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ~~Yes ¨ Noþ~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.~~ Yes ¨ ~~Noþ~~No þ

Indicate by check mark ~~whether~~if the registrant is ~~(1) has~~not ~~filed all reports~~ required to befile ~~filed~~reports bypursuant to Section 13 or Section 15(d) of the ~~Securities~~ Exchange Act ~~of 1934 during the preceding 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~~. ~~Yesþ~~Yes ¨ No¨ þ

Indicate by check mark whether the registrant (1) has ~~submitted~~filed ~~electronically~~all ~~and~~reports ~~posted on its corporate Web site, if any, every Interactive Data File~~ required to be ~~submitted and~~filed ~~posted~~by ~~pursuant~~Section 13 toor ~~Rule~~15(d) ~~405~~ of ~~Regulation~~the ~~S-T~~Securities ~~(§232.405~~Exchange Act of ~~this~~1934 ~~chapter)~~ during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit~~file such reports) and ~~post~~(2) has been subject to such ~~files)~~filing requirements for the past 90 days. ~~Yesþ~~Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated orfiler, a smaller reporting company, ~~filer.~~or an emerging growth company. See ~~definition~~definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~Check one:~~

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting ~~Companyþ~~Company þ Emerging growth company ¨

The approximate aggregate market value of ~~Common~~ Common Stock held by non-affiliates of the registrant was approximately $329.32 million as of November 30, ~~2015~~2016, the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares of the registrant’s Common Stock outstanding as of ~~July~~August 1522, ~~2016~~2017 was 28,767,582.

DOCUMENTS INCORPORATED BY REFERENCE

None.

PROTALEX, INC.

FORM 10-K

May 31, ~~2016~~2017

TABLE OF CONTENTS

PART I	~~PART I~~
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	19
ITEM 1B.	UNRESOLVED STAFF COMMENTS	3233
ITEM 2.	PROPERTIES	3233
ITEM 3.	LEGAL PROCEEDINGS	3233
ITEM 4.	MINE SAFETY DISCLOSURE	3233
PART II	~~PART II~~
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	3334
ITEM 6.	SELECTED FINANCIAL DATA	3334
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3334
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4142
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	4142
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	4143
ITEM 9A.	CONTROLS AND PROCEDURES	4143
ITEM 9B.	OTHER INFORMATION	4243
PART III	~~PART III~~
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	4243
ITEM 11.	EXECUTIVE COMPENSATION	4547
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	4950
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	5051
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	5152
PART IV	~~PART IV~~
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	5153
EXHIBIT INDEX		5253
SIGNATURES		5557

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Various statements made in this Annual Report on Form 10-K are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those which express plan, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. We have based these forward-looking statements on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown which could cause actual results and developments to differ materially from those expressed or implied in such statements. These forward-looking statements include statements about the following:

•

the status and anticipated timing of regulatory review and approval, if any, for our products; candidates;

•

our product development efforts, including results from clinical trials;

•

anticipated dates of clinical trial initiation, completion and announcement of trial results by us;

•

anticipated clinical trial results and regulatory submission dates for our product candidates;

•

analysis and interpretation of data by regulatory authorities;

•

anticipated operating losses and capital expenditures;

•

estimates of the market opportunity and the commercialization plans for our product candidates;

•

our intention to rely on third parties for manufacturing;

•

the scope and duration of intellectual property protection for our products;

•

our ability to raise additional capital; and

•

our ability to acquire or in-license products or product candidates.

In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “target”, “goal”, “continue”, or the negative of such terms or other similar expressions. Factors that might cause or contribute to differences include, but are not limited to, those discussed in Item 1A. Risk Factors of this Annual Report and discussed in our other Securities and Exchange Commission (“SEC”) filings, which discloses all material factors known to us that we believe could cause actual results to differ materially from those expressed or implied by forward-looking statements.

We urge you to carefully review and consider the disclosures found in these filings, all of which are available in the SEC EDGAR database at www.sec.gov. Given the uncertainties affecting biotechnology companies which are still conducting phase 1 clinical studies, you are cautioned not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, unknown risks, uncertainties or other factors. We undertake no obligation to (and expressly disclaim any such obligation to) publicly update or revise the statements made herein or the risk factors that may relate thereto whether as a result of new information, future events or otherwise.

The following discussions should be read in conjunction with our audited Financial Statements and related notes thereto, and the Risk Factors in Item 1A included elsewhere in this Annual Report.

PART I

ITEM 1.

BUSINESS

We are focused on the development of a class of biopharmaceutical drugs for treating autoimmune and inflammatory diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP). Our lead product candidate, PRTX-100, a new generation immunomodulatory therapy, is a highly-purified form of Staphylococcal protein A, which is a bacterial protein known to modify aspects of the human immune system. PRTX-100 has demonstrated effectiveness in animal models of autoimmune diseases and has demonstrated activity on cultured human immune cells at very low concentrations, although the effectiveness of PRTX-100 shown in pre-clinical studies using animal models may not be predictive of the results ~~that~~ that we would see in future human clinical trials. The safety, tolerability and pharmacokinetics (PK) of PTRX-100 in humans have now been characterized in six clinical studies and was granted Orphan Drug Designation (ODD) in the United States and Europe for the treatment of ITP.

In March 2015, the FDA accepted ~~our~~ our Investigational New Drug (IND) application for a Phase I/II open-label, dose-escalating study of PRTX-100 in adults ~~with~~ with persistent/chronic ITP (the “PRTX-100-202 Study”). In June 2015, the U.S. Food and Drug Administration (FDA) granted ODD to PRTX-100 for the treatment of ITP. In July 2015, the European Medicines Agency (EMA) granted approval for a Phase 1b open-label, dose-escalating study of PRTX-100 in adult patients with persistent/chronic ITP (the “PRTX-100-203 Study”). In September 2015, the EMA Committee for Orphan Medicinal Products (COMP) issued a positive opinion recommending PRTX-100 for designation as an orphan medicinal product for the treatment of ITP. In November 2015, we enrolled our first patient in the PRTX-100-202 Study in the United States and in January 2016 we enrolled our first patient in the PRTX-100-203 Study in Europe. Enrollment is currently continuing in both studies. In August 2017, the FDA’s Office of Orphan Products Development (OOPD) awarded us a grant of $403,000 to support the future clinical development of PRTX-100 as a treatment for ITP. We do not anticipate generating operating revenue for the foreseeable future and do not currently have any products that are marketable.

In August 2010, we commenced a multi-center Phase 1b clinical trial of PRTX-100 in South Africa in adult patients with active RA on methotrexate or leflunomide (the “PRTX-100-103 Study”). In January 2012, we completed patient dosing in the PRTX-100-103 Study with a total of 37 patients enrolled in ~~four~~ four cohorts ranging from 0.15 micrograms/kg to 1.50 micrograms/kg of PRTX-100 or placebo, administered weekly for four weeks. ~~Measures~~ Measures of safety, PK and disease activity were evaluated over 16 weeks following the first dose. The PRTX-100-103 Study results ~~demonstrated~~ demonstrated that PRTX-100 was generally safe and well-tolerated in patients with active RA at all tested dose levels.

In November 2012, we commenced enrollment in in the United States for a new multicenter Phase 1b randomized, multiple-dose, dose-escalation study (the “PRTX-100-104 Study”) of PRTX-100 in combination with methotrexate or leflunomide in adult patients with active RA. The sequential dose-escalation ~~phase~~ phase of this study was expected to enroll patients into five cohorts ranging from 1.50 micrograms/kg up to 18.0 micrograms/kg of PRTX-100 or placebo. At each dose, one quarter of patients would receive a placebo treatment. Similar to the PRTX-100-103 Study, the primary objective of the PRTX-100-104 Study was to assess the safety and tolerability of intravenous PRTX-100 administered weekly over five weeks in patients with active RA on methotrexate or leflunomide therapy. The secondary objectives included determining ~~the~~ the effects of PRTX-100 on measures of disease activity, assessing the immunogenicity and evaluating the PK parameters after repeated doses, and determining possible relationships between the immunogenicity of PRTX-100 and safety and PK.

In August 2013, upon completion of the fourth cohort, we expanded the 3.0 microgram, 6.0 microgram, and 12.0 micrograms/kg dose cohorts of the PRTX-100-104 Study. An additional nine patients were enrolled in the expansion cohort that was completed in October 2013. In total, the first four dose-escalating cohorts of the PRTX-100-104 Study, which included these three expanded cohorts, enrolled 41 patients with doses ranging from 1.5 micrograms/kg up to 12.0 micrograms/kg.

In November 2013, we initiated enrollment of of the fifth and final cohort (Cohort 5) in the PRTX 100-104 Study. The Cohort 5 sub-study enrolled 20 patients who received five weekly fixed-weight doses of PRTX-100 followed by up to four additional monthly maintenance doses of PRTX-100 in weeks 8, 12, 16, and 20. The primary objective of the Cohort 5 sub-study was to assess safety and tolerability of these doses administered on a modified schedule. In total, 11 out of 20 patients in Cohort 5 completed all study visits by August 2014 per protocol.

In the Cohort 5 sub-study, the amount of PRTX-100 administered and its dosing frequency were varied from Cohorts 1 through 4 to explore effects on safety, tolerability and measures of disease activity. The addition of four monthly maintenance doses after the five weekly doses did not increase the rate or type of Adverse ~~Events~~Event (AE), even in those patients who developed anti-drug antibodies (ADAs), nor indicate any apparent correlation between the development of ADAs and effects on measures of RA disease activity. In addition, Cohort 5 patients showed improvement in measures of disease activity, including ACR20 scores, compared to Cohort 1 through 4 patients who did not receive any monthly maintenance doses, suggesting that the addition of monthly maintenance administration of PRTX-100 and weight-based dosing were an important aspect of the dosing protocol and should be considered in future trials of PRTX-100.

A total of 61 patients enrolled across five cohorts in the PRTX 100-104 Study at nine study sites in the United States. For patients in all five cohorts, PRTX-100 appeared safe and well tolerated in all individuals, including those who developed ADAs, and the AE profile was consistent with our prior clinical trial results.

In February 2015, we commenced enrollment, at a single U.S. site, of a Phase I/II open-label, multiple, fixed-dose study (the “PRTX-100-105 Study”) which was open only to PRTX-100-104 Study patients who indicated their desire for additional treatment. The PRTX-100-105 Study was an open-label, single group study with former participants from the 104 Study who were eligible to receive a fixed dose of PRTX-100 over a 6-month period. The primary study endpoint of the 105 Study was the safety and tolerability of a fixed dose of PRTX-100 administered over an extended period. The secondary endpoints included immunogenicity, effects on measures of RA disease activity, evaluation of anti-PRTX-100 antibody presence, and feasibility of joint evaluations with ultrasound and biomarkers as disease markers. A total of eight patients completed all 105 Study visits per protocol.

In the PRTX-100-105 Study, a preliminary interim analysis indicated that for patients who completed per protocol, PRTX-100 exhibited an acceptable safety profile and RA disease activity was improved in a majority of patients at the end of the study as compared to baseline. No serious adverse events (SAEs) were reported. At study day 196, one month after the final dose, patients who completed the study per protocol demonstrated a ~~mean~~ mean reduction of the DAS28CRP score from 5.25 to 2.52, suggesting a clinically meaningful improvement in disease activity. Additionally, clinical assessment by Ultrasound Power Doppler Joint Counts (UPD), also revealed a reduction in average disease severity by day 196, and the correlation between the UPD and the DAS28CRP was r=0.624 (p<.0005).

In November 2015, we commenced enrollment ~~and~~ and enrolled our first patient in the PRTX-100-202 Study. The PRTX-100-202 Study may enroll up to 36 patients in as many as six cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoint of the PRTX-100-202 Study is a platelet response to PRTX-100. Secondary endpoints include safety, immunogenicity, and pharmacokinetics. InOne ~~February~~patient ~~2016,~~in ~~following~~each aof ~~planned~~the ~~interim~~two ~~data~~completed ~~review~~cohorts byof anthe ~~Independent~~PRTX-100-202 ~~Data~~Study ~~Safety~~had ~~Monitoring~~a ~~Committee (the~~platelet ~~“SMC”),~~response ~~enrollment~~per protocol. Enrollment is continuing for patients in the third cohort in the PRTX-100-202 Study at an increased dose.

In January 2016, we commenced enrollment of our first patient in the European based PRTX-100-203 Study. The PRTX-100-203 Study may enroll up to 30 patients in as many as ~~five~~ five cohorts ~~at sites in France~~. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoints of the PRTX-100-203 Study include safety, immunogenicity and pharmacokinetics. Secondary endpoints include platelet response and duration. InOne ~~May~~patient ~~2016,~~in ~~following~~the afirst ~~planned~~cohort ~~interim~~of ~~data~~the ~~review~~PRTX-100-203 byStudy ~~the~~had ~~SMC,~~a ~~enrollment~~platelet response per protocol. Enrollment is continuing for patients in the third cohort in the PRTX-100-203 Study at an increased dose.

We maintain an administrative office in Florham Park, New Jersey and currently outsource all of our product development and regulatory activities, including clinical trial activities, manufacturing and laboratory operations, to third-party contract research organizations, consultants and facilities.

In April 2009, under prior management, we ceased all operations and terminated all employees in light of insufficient funds to continue our clinical trials and related ~~product~~ product development. Our business was dormant until current management took control of our operations in November 2009 following the change in control transaction more fully described below. ~~We are currently actively pursuing the commercial development of PRTX-100 for the treatment of RA and ITP.~~

Change in Control and Incremental Financing Transactions

On November 11, 2009 (the “Effective Date”), we consummated a financing transaction (the “Financing”) in which we raised $3,000,000 of working capital pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Niobe Ventures, LLC, a Delaware limited liability company (“Niobe”). Pursuant to the Purchase Agreement, we issued to Niobe (i) 8,695,652 restricted shares of our common stock at a purchase price of $0.23 per share (or $2 million in the aggregate) and (ii) a senior secured convertible promissory note in the principal amount of $1 million convertible into shares of our common stock at an initial conversion price equal to $0.23 per share (the “$1 Million Secured Note”). On February 11, 2011, Niobe converted the $1 Million Secured Note, including $37,500 of accrued interest thereon, into 4,510,870 shares of common stock.

As contemplated by the Purchase Agreement, all of our executive officers and all of the members of our Board of Directors (the “Board”) prior to the closing of of the Financing, with the exception of Frank M. Dougherty, resigned effective concurrently with the closing of the Financing. Mr. Dougherty resigned effective upon the expiration of the 10-day notice period required by Rule 14f-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, effective upon the closing of the Financing, our Board appointed Arnold P. Kling as a director and then elected him as our president and elected Kirk M. Warshaw as our chief ~~financial~~ financial officer and secretary.

On February 11, 2011, for the purpose of providing us with additional working capital, pursuant to an existing Credit Facility Agreement dated as of December 2, 2009 (the “Facility”) with Niobe, we issued to Niobe a senior secured convertible promissory note in the principal amount of $2 million (the “$2 Million Secured Convertible Note”). The $2 Million Secured Convertible Note provided for conversion into shares of our common stock at a conversion price of $0.23 per share, for an aggregate of 8,695,652 shares of our common stock (net of accrued interest thereon), bore interest at a rate of 3% per annum and matured on December 31, 2013. The original maturity was December 31, 2012 but in December 2012 Niobe agreed, for no consideration, to extend the maturity date to December 31, 2013.

The $2 Million Secured Convertible Note was convertible at any time, by the holder, subject only to the requirement that we have sufficient authorized shares of common stock after taking into account all outstanding shares of common stock and the maximum number of shares issuable under all issued and outstanding convertible securities. In addition, the $2 Million Secured Convertible Note would automatically be converted if we undertake certain Fundamental Transactions, as defined in the $2 Million Secured Convertible Note, (such as a merger, sale of of all of our assets, exchange or tender offer, or reclassification of our stock or compulsory exchange). The $2 Million ~~Secured~~ Secured Convertible Note also provided for the adjustment of the conversion price in the event of stock dividends and stock splits, ~~and~~ and provides for acceleration of maturity, at the holder’s option, upon an event of default, as defined in the $2 Million ~~Secured~~ Secured Convertible Note. On August 27, 2013, Niobe elected to convert the principal and accrued interest of $2,155,000 under the $2 Million Secured Convertible Note into 9,369,565 shares of common stock.

On February 1, 2012, we raised $1,000,000 of of working capital pursuant to a loan from Niobe. We issued to Niobe a secured promissory note in the principal amount of $1,000,000 (the “February 2012 Secured Note”). The February 2012 Secured Note bore interest at a rate of 3% per annum and had a maturity date of February 1, 2014.

On June 5, 2012, we raised an additional $1,000,000 of working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $1,000,000, which bore interest at a rate of 3% per annum and had a maturity date of May 31, 2014 (the “June 2012 Secured Note”).

On October 1, 2012, we raised $800,000 of ~~additional~~ additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal ~~amount~~ amount of $800,000, which bore interest at a rate of 3% per annum and had a maturity date of October 1, 2014 (the “October ~~2012~~ 2012 Secured Note”).

On December 3, 2012, we raised $700,000 of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $700,000, which bore interest at a rate of 3% per annum and had a maturity date of October 1, 2014 (the “December 2012 Secured Note”).

Collectively, the February 2012 Secured Note, the June 2012 Secured Note, the October 2012 Secured Note and the December 2012 Secured Note are hereinafter referred to as the “2012 Secured Notes.”

On January 18, 2013, we raised $2,500,000 of of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the ~~principal~~ principal amount of $2,500,000, which bore interest at a rate of 3% per annum and had a maturity date of January 15, 2015 (the “January 2013 Secured Note”).

On May 13, 2013, we raised $2,000,000 of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $2,000,000, which bore interest at a rate of 3% per annum and had a maturity date of May 13, 2015 (the “May 2013 Secured Note”).

On August 27, 2013, we raised $1,000,000 of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $1,000,000, which bears interest at a rate of 3% per annum and matures on August 27, 2015 (the “August 2013 Secured Note”).

Collectively, the January 2013 Secured Note, the May 2013 Secured Note, and the August 2013 Secured Note are hereinafter referred to as the “2013 Secured Notes.”

Collectively, the 2012 Secured Notes and the 2013 Secured Notes represent a total of $9,000,000 in principal amount of loans from Niobe and are hereinafter referred to as ~~the~~ the “Secured Notes.”

On October 11, 2013, we issued a Consolidated, Amended and Restated Promissory Note to Niobe in the principal amount of $9,219,366 (the “Consolidated Note”). ~~The~~ The face amount of the Consolidated Note reflects the $9.0 million aggregate principal amount of the Secured Notes plus interest ~~accrued~~ accrued at 3% per annum on each note from its respective date of issuance. The terms of the Consolidated Note were identical to the Secured Notes except that: (a) the maturity date was September 1, 2015, which is after the latest maturity date of any of the Secured Notes; and (b) it provided for partial mandatory repayment in the event that the Company received aggregate gross proceeds in in excess of $7.5 million from a single or multiple “Liquidity Events” in an amount equal to twenty-five (25%) percent of such gross proceeds (the “Mandatory Repayment”). A “Liquidity Event” means (a) the sale of any of our equity, or equity-linked, securities, and (b) the receipt of proceeds, directly or indirectly related to a development and/or commercialization relationship entered into with an unaffiliated third party. In the Secured Notes, the entire principal amount of each note was due, at Niobe’s election, upon the consummation of an equity financing of $7.5 million or greater. ~~Consistent~~ Consistent with the terms of the Secured Notes and related security agreements entered into, our obligations under the Consolidated ~~Note~~ Note are secured by a first priority perfected security interest in all of our assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013. Effective as of October 1, 2014, the maturity date of the Consolidated Note was extended until September 1, 2016. All other terms and provisions of the Consolidated Note remained unchanged and in full force and effect.

On January 23, 2014, we consummated a private placement financing to accredited investors of 471,334 shares of common stock at $6.00 per share, yielding gross proceeds of $2,828,000. No commissions were payable in connection with the financing transaction. Proceeds of the financing have been, and will continue to be, used for working capital purposes, principally to fund ongoing clinical trials and studies and related activities. ~~The~~ The investors in the offering were granted piggy-back registration rights in connection with certain registration statements filed by us, subject to certain exceptions, including a registration statement filed in connection with a primary offering.

On November 4, 2014, we entered into a new Credit Facility Agreement (the “2014 Credit Facility Agreement”) pursuant to which we may borrow up to an additional $5.0 ~~million~~Million from Niobe, in the form of secured loans, ofin upaccordance towith ~~$300,000 on~~ the ~~last~~2014 ~~day~~Credit ofFacility ~~each~~Agreement ~~calendar month, subject to certain conditions which may be waived by Niobe,~~ at any time prior to the December 31, 2015 expiration date (the “2014 Credit Facility”). Each loan made under the 2014 Credit Facility Agreement ~~will~~has bebeen represented by a senior secured promissory note bearing interest at a rate of 3% per annum ~~and~~ ~~maturing~~which onmatures on September 1, 2016 (each aan “Original Note”). Our obligations under each Original Note ~~will~~have bebeen secured by a first ~~priority~~ priority perfected security interest in all of our assets pursuant to the Second Consolidated, Amended and Restated Security Agreement between us and Niobe, entered into at the same time as the 2014 Credit Facility Agreement (the “Security Agreement”).

In addition, on November 4, 2014, we entered into a Note Modification Agreement (the “Note Modification Agreement”) with Niobe pursuant to which the Consolidated Note, as modified in October 2014, was further amended to increase the threshold amount requiring a Mandatory Prepayment from $7.5 Million to more than $10 Million. As a result, partial prepayment will now be triggered in the event of a Liquidity Event in which we receive gross proceeds in excess of $10 million. All other terms and provisions of the Consolidated Note remained ~~unchanged~~ unchanged and in full force and effect.

On December 1, 2015, the 2014 Credit Facility was amended to increase the funds available for loans to us to $7.5 million and to extend the expiration date of such credit facility to December 31, 2016 pursuant to which we entered into and an Amended and Restated 2014 Credit Facility Agreement (the “Amended and Restated Agreement”). Each loan under the Amended and Restated Agreement has been and will be represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on September 1, 2017 (each a “New Note”). ~~Collectively, the Note and the New Note are hereinafter referred to as the “Notes”.~~ In addition, the Security Agreement was also amended and restated to secure our obligations under all the Original Notes and all the New Notes.

AsOn ofJune ~~May 31~~30, 2016, the ~~outstanding principal~~ ~~balance under the~~ 2014 Credit Facility ~~totaled~~was ~~$7,100,000.~~again ~~During~~amended ~~the~~to ~~fiscal~~increase ~~year~~the ~~ended~~funds ~~May~~available ~~31,~~for ~~2016,~~loans weto ~~borrowed~~us anto ~~aggregate of~~ $~~3,795,000,~~9.0 ~~$345,000~~million on(the ~~each~~“Second ofAmended and ~~July~~Restated 1,Agreement”). ~~2015,~~Each ~~July~~loan ~~31,~~under ~~2015,~~the ~~August~~Second ~~31,~~Amended ~~2015,~~and ~~October~~Restated 6,Agreement ~~2015,~~has ~~November~~been ~~10,~~represented ~~2015,~~by ~~December 1,~~a ~~2015,~~New ~~January~~Note. 4In addition, ~~2016,~~the ~~February~~Security 1,Agreement ~~2016,~~was ~~March~~also 4,amended ~~2016,~~and ~~April~~restated 1,to ~~2016~~secure ~~and~~our ~~May~~obligations 3,under ~~2016.~~all ~~Payment of~~ the ~~principal~~notes ~~and~~issued ~~accrued interest~~under on the ~~Notes will, at Niobe’s election, automatically become immediately due and payable if we undertake certain~~2014 ~~Fundamental~~Credit ~~Transactions~~Facility oras ~~upon an Event~~ of ~~Default~~June 30, ~~both~~2016 asand ~~defined~~all in the New Notes. ~~Our~~issued ~~obligations~~pursuant ~~under~~to the ~~Notes~~Second ~~are~~Amended ~~secured by~~and ~~the~~Restated ~~Security~~ Agreement~~, as amended~~.

~~All~~On ofAugust ~~the~~31, ~~securities~~2016, ~~issued in the aforementioned~~we ~~financings~~and ~~were~~Niobe ~~issued~~agreed into ~~reliance~~extend ~~upon~~ the ~~exemption~~maturity ~~from~~date of the ~~registration~~Consolidated ~~requirements~~Note ofand the ~~Securities~~maturity ~~Act~~dates of ~~1933,~~all asthirteen ~~amended~~outstanding Original ~~(the~~Notes ~~“Act”)~~with ~~pursuant~~an toaggregate ~~Section~~principal ~~4(a)(5)~~amount ~~and Rule 506~~ of ~~Regulation~~$5,030,000, Dfrom ~~thereof.~~September ~~The offer~~1, ~~sale~~2016 ~~and~~to ~~issuance~~September of1, ~~such securities were made without general solicitation or advertising~~2017. ~~The~~All ~~securities~~other ~~were~~terms ~~offered~~ and ~~issued~~provisions of ~~only~~the toConsolidated ~~“accredited investors”~~Note asand ~~such~~Original ~~term~~Notes isremained ~~defined~~unchanged and in ~~Rule~~full ~~501~~force ~~under~~and ~~the Act~~effect.

~~About~~On ~~PRTX-100~~October 31, 2016, the 2014 Credit Facility was amended to increase the funds available for loans to us to $11.25 million and to extend the expiration date of the facility to June 15, 2017 (the “Third Amended and Restated Agreement”). Each loan under the Third Amended and Restated Agreement will be represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on March 31, 2018 (each a “2018 Note”). The Security Agreement was also amended and restated to secure our obligations under all the notes issued under the 2014 Credit Facility as of October 31, 2016 and all the 2018 Notes. In addition, we and Niobe also agreed to extend to March 31, 2018, the maturity dates of the Consolidated Note and all the notes issued and outstanding under the 2014 Credit Facility as of October 31, 2016.

~~PRTX-100~~As isof aMay ~~proprietary~~31, ~~highly~~2017, ~~purified~~the ~~form~~outstanding ofprincipal ~~the~~balance ~~Staphylococcal~~under ~~bacterial~~the ~~protein~~2014 ~~known~~Credit asFacility ~~Protein~~totaled A$11,080,000. ~~which~~During isthe ayear ~~bacterial~~ended ~~protein~~May ~~known~~31, to2017, ~~modify~~we ~~aspects~~borrowed an aggregate of ~~the~~$3,980,000 ~~human immune~~including ~~system.~~$345,000 ~~PRTX-100~~on ~~has~~June ~~the~~1, ~~ability~~2016, at$375,000 ~~very~~on ~~low~~June ~~concentrations~~30, to2016, ~~bind~~$375,000 toon ~~human~~August ~~B-lymphocytes~~1, ~~and~~2016, ~~macrophages~~$345,000 on ~~and~~September to9, ~~modulate immune~~2016, ~~processes.~~$345,000 ~~Pre-clinical~~on ~~studies~~October ~~also~~3, ~~demonstrate~~2016, ~~that~~$345,000 ~~low~~on ~~doses~~November of1, ~~PRTX-100~~2016, ~~have~~$345,000 ~~potent~~on ~~therapeutic~~December ~~effects~~9, in2016, ~~certain~~$345,000 on January ~~models~~3, of2017, ~~immune-mediated~~$290,000 ~~inflammatory~~on ~~diseases.~~February ~~Both~~2, ~~the~~2017, ~~PRTX-100-103~~$290,000 on March 3, 2017, $290,000 on April 5, 2017, and ~~the~~$290,000 ~~PRTX-100-104~~on ~~studies~~May ~~demonstrated~~11, ~~that~~2017. ~~PRTX-100~~Payment ~~was~~of ~~generally~~the ~~safe~~principal and ~~well~~accrued ~~tolerated~~interest aton all ~~dose~~outstanding ~~levels~~notes issued under the 2014 Credit Facility will, at Niobe’s election, automatically become immediately due and atpayable if we undertake certain ~~higher~~Fundamental ~~doses,~~Transactions ~~more~~or ~~patients~~upon ~~showed~~an ~~improvement~~Event inof ~~measures~~Default, ofboth ~~disease~~as ~~activity~~defined ~~than~~in ~~did~~such ~~patients~~notes. atOur ~~the~~obligations ~~lower~~under ~~dose~~all orsuch ~~placebo~~notes ~~cohorts~~are secured by the Security Agreement, as amended.

~~Animal~~All ~~Studies~~of the securities issued in the aforementioned financings were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”) pursuant to Section 4(a)(5) and Rule 506 of Regulation D thereof. The offer, sale and issuance of such securities were made without general solicitation or advertising. The securities were offered and issued only to “accredited investors” as such term is defined in Rule 501 under the Act.

~~Protalex’s~~About ~~lead product candidate,~~ PRTX-100~~, has~~ ~~demonstrated positive results in several standard mouse models of autoimmunity, including the following:~~

~~Collagen-Induced Arthritis -~~ PRTX-100 ~~has~~is ~~demonstrated~~a ~~reproducible~~proprietary, ~~efficacy~~highly inpurified form ~~this well-established animal model~~ of ~~RA.~~the ~~Mice~~Staphylococcal ~~received~~bacterial ~~two~~protein ~~injections~~known ofas ~~collagen in~~Protein ~~order~~A towhich ~~stimulate~~is ana ~~inflammatory~~bacterial ~~response.~~protein ~~One~~known ~~group~~to ~~was~~modify ~~treated~~aspects ~~with~~of ~~various~~the ~~doses~~human immune ofsystem. PRTX-100, ahas ~~second~~the ~~group received Enbrel®~~ability, aat ~~leading~~very ~~commercially~~low ~~available treatment for RA~~concentrations, ~~and~~to ~~the~~bind ~~control~~to ~~group~~human ~~was~~B-lymphocytes ~~injected~~and ~~with~~macrophages ~~vehicle~~and ~~saline~~to ~~solution.~~modulate ~~The~~immune ~~mice~~processes. ~~were observed for~~ Pre-clinical ~~symptoms,~~studies ~~joint~~also ~~size~~demonstrate ~~and loss of function. The results showed~~ that low doses of PRTX-100 ~~and standard~~have ~~doses~~potent oftherapeutic ~~Enbrel®~~effects ~~suppressed~~in ~~clinical~~certain ~~symptoms~~models of ~~including~~immune-mediated ~~joint~~inflammatory ~~swelling~~diseases. ~~over~~Both the ~~first~~PRTX-100-103 ~~two to three weeks of treatment,~~ and ~~slowed disease progression as compared with~~ the ~~control group. Thereafter, the~~ PRTX-100-~~treated~~104 ~~mice~~studies ~~continued~~demonstrated tothat ~~remain disease~~PRTX-~~free whereas~~100 ~~the~~was ~~mice~~generally safe ~~treated~~and ~~with~~well ~~Enbrel®~~tolerated ~~showed~~at aall ~~resumption~~dose oflevels, ~~joint inflammation~~ and ~~tissue~~at ~~damage.~~certain ~~This~~higher ~~response to Enbrel® was expected because the mice developed immune response to it because it is a foreign protein. Overall~~doses, ~~these~~more ~~results~~patients ~~indicate that~~showed ~~PRTX-100~~improvement ~~is a potential treatment for RA~~ in ~~humans.~~measures ~~The~~of ~~data~~disease activity ~~from~~than ~~these~~did ~~studies~~patients ~~has~~at ~~served~~the aslower adose ~~rationale~~or ~~for~~placebo ~~conducting clinical trials in human patients~~cohorts.

~~BXSB~~Animal ~~Mice~~Studies - These animals are genetically predisposed to autoimmune diseases. This model is used to evaluate drugs for autoimmune diseases such as Lupus and other autoimmune diseases. This genetic model more closely approximates the human condition in that it is complex, multi-factorial and usually treated by multiple drug regimens. In these studies, mice were treated with PRTX-100 and sacrificed at regular intervals. Their organs were weighed and sectioned for histological analysis and their spleens were used for immunological assays. Spleen enlargement, or splenomegaly, was significantly reduced in treated animals compared with the controls at almost every time point, demonstrating the ability of PRTX-100 to delay the onset and severity of this disease.

~~Completed~~Protalex’s ~~pre-clinical~~lead ~~safety~~product studies in animals showed no drug-related toxicity at doses up to 5-fold the highest currently planned clinical trial dose. These studies were conducted on New Zealand white rabbits and on cynomolgus monkeys. No differences were observed in body weight gain or food consumptioncandidate, ~~nor~~ ~~in hematology, clinical chemistry, urinalysis, or organ weight data in animals treated with~~ PRTX-100 ~~compared with controls~~, ~~treated~~has ~~with~~demonstrated ~~vehicle.~~positive ~~These study~~ results ~~represent~~in aseveral ~~necessary~~standard ~~component~~mouse models of ~~our~~autoimmunity, ~~IND~~including ~~application with~~ the ~~FDA.~~following:

~~Additional~~Collagen-Induced ~~studies~~Arthritis - PRTX-100 has demonstrated reproducible efficacy in ~~monkeys~~this ~~have~~well-established ~~further~~animal model of RA. Mice received two injections of collagen ~~characterized~~in ~~the~~order PKto stimulate an inflammatory response. One group was treated with various doses of PRTX-100, ~~toxicity~~a second group received Enbrel®, a leading commercially available treatment for RA, and ~~pharmacodynamics~~the control group was injected with vehicle saline solution. The mice were observed for clinical symptoms, joint size and loss of function. The results showed that low doses of PRTX-100 and standard doses of Enbrel® suppressed clinical symptoms including joint swelling over the first two to three weeks of treatment, and slowed disease progression as compared with upthe control group. Thereafter, the PRTX-100-treated mice continued to 12remain ~~weekly~~disease-free whereas ~~doses~~the mice treated with Enbrel® showed a resumption of joint inflammation and tissue damage. This response to Enbrel® was expected because the mice developed immune response to it because it is a foreign protein. Overall, these results indicate that PRTX-100 is a potential treatment for RA in humans. The data from these studies has served as a rationale for conducting clinical trials in human patients.

~~Clinical~~BXSB ~~Trials~~Mice - These animals are genetically predisposed to autoimmune diseases. This model is used to evaluate drugs for autoimmune diseases such as Lupus and other autoimmune diseases. This genetic model more closely approximates the human condition in that it is complex, multi-factorial and usually treated by multiple drug regimens. In these studies, mice were treated with PRTX-100 and sacrificed at regular intervals. Their organs were weighed and sectioned for histological analysis and their spleens were used for immunological assays. Spleen enlargement, or splenomegaly, was significantly reduced in treated animals compared with the controls at almost every time point, demonstrating the ability of PRTX-100 to delay the onset and severity of this disease.

~~Favorable~~Completed pre-clinical safety ~~and efficacy~~ studies ~~for~~in ~~our~~animals showed ~~lead~~no ~~compound, PRTX~~drug-~~100,~~related ~~laid~~toxicity ~~the~~at ~~foundation~~doses ~~for~~up ~~the IND for treating RA. We submitted the IND~~ to ~~the~~5-fold ~~FDA in March 2005 and later in March 2005~~ the ~~FDA~~highest ~~verbally~~currently ~~disclosed~~planned ~~to us that it had placed our IND on~~ clinical ~~hold,~~trial ~~pending additional product characterization~~dose. InThese ~~August~~studies ~~2005,~~were weconducted on ~~formally~~New ~~replied~~Zealand towhite ~~the~~rabbits ~~FDA~~ and ~~in September 2005, the FDA notified us that it had lifted the clinical hold~~ on ~~our~~cynomolgus ~~IND~~monkeys. ~~and~~No ~~that~~differences ~~our~~were ~~proposed~~observed ~~study~~in ~~could~~body ~~proceed.~~weight Wegain ~~have~~or ~~completed~~food ~~four~~consumption, ~~clinical trials and are~~nor in ~~the~~hematology, ~~process of completing a fifth~~ clinical ~~trial~~chemistry, ~~under~~urinalysis, ~~this~~or ~~IND.~~organ ~~Our~~weight ~~first~~data ~~Phase I single-dose clinical trial commenced~~ in ~~December~~ ~~2005~~animals ~~and~~treated ~~was~~with ~~completed in March 2006. This trial was performed in healthy volunteers and was designed primarily to assess the safety and tolerability of a single intravenous dose of~~ PRTX-100. ~~This~~compared ~~study~~with ~~demonstrated~~controls ~~that PRTX-100 appears safe and well-tolerated~~treated atwith ~~the doses administered~~vehicle. ~~There~~These ~~were~~study noresults ~~deaths~~represent ora ~~serious~~necessary ~~adverse~~component ~~events.~~of ~~The~~our PKIND ~~profile~~application ~~was determined and found consistent~~ with ~~that~~the ~~projected from pre-clinical models~~FDA.

InAdditional ~~May~~studies ~~2007,~~in wemonkeys ~~filed~~have an amendment to the IND with the FDA. This amendment included the final Phase I safety study report from the 2006 trial, changes to our techniques for purification and characterization of PRTX-100, a Chemistry, Manufacturing and Controls update, and a protocol for a second single-dose Phase I clinical trial. In July and August 2007 a second Phase I study was performed under the IND, to further ~~characterize~~characterized the ~~safety,~~ PK, and pharmacodynamic profile of a single-dose of PRTX-100 in healthy volunteers at doses in the projected therapeutic range. Final results indicated that the drug appears safe and well-tolerated. In August 2009toxicity, ~~a Phase 1b randomized, double-blind, placebo-controlled, multiple dose, dose-escalation~~ and ~~tolerability~~pharmacodynamics ~~study~~ of PRTX-100 ~~in combination~~ with ~~methotrexate or~~up ~~leflunomide~~to in12 ~~patients~~weekly ~~with active RA, (the “PRTX 100-103 Study”) was approved by the South African Medicines Control Agency~~doses. ~~The PRTX-100-103 Study commenced in August 2010 at three sites in South Africa and was completed in January 2012 as detailed below.~~

InClinical November 2012, we commenced enrollment and dosing of patients at a total of nine sites in the United States for the PRTX-100-104 Study, a second multicenter Phase 1b randomized, multiple-dose, dose-escalation study of PRTX-100 in combination with methotrexate or leflunomide in adults with active RA which is still in progress as detailed below. The PRTX-100-104 Study sequentially escalated the weekly dose of PRTX-100 from 1.5 micrograms/kg, the highest dose in the prior RA patient study, to doses of 3.0, 6.0, and 12.0 micrograms/kg. of PRTX-100. In July 2014, the last patient in the PRTX-100-104 Study received their last dose in the fifth and final cohort.Trials

InFavorable ~~February~~pre-clinical ~~2015,~~safety weand ~~commenced enrollment,~~efficacy atstudies afor ~~single~~our ~~U.S.~~lead ~~site~~compound, ofPRTX-100, alaid ~~Phase~~the ~~I/II~~foundation ~~open-label,~~for ~~multiple,~~the ~~fixed-dose~~IND ~~study~~for (treating RA. We submitted the ~~“PRTX-100-105~~IND ~~Study”)~~to ~~which~~the ~~was~~FDA in March ~~open~~2005 ~~only~~and later in March 2005 the FDA verbally disclosed to ~~PRTX-100-104~~us ~~Study~~that ~~patients~~it ~~who~~had ~~indicated~~placed ~~their~~our ~~desire~~IND ~~for~~on clinical hold, pending additional ~~treatment~~product characterization. ~~The~~In ~~PRTX-100-105~~August ~~Study~~2005, ~~was~~we anformally ~~open-label, single~~replied ~~group~~to ~~study~~the ~~with~~FDA ~~former~~and ~~participants~~in ~~from~~September 2005, the ~~104~~FDA ~~Study~~notified ~~who~~us ~~were~~that ~~eligible~~it tohad ~~receive~~lifted the aclinical ~~fixed~~hold ~~dose~~on ofour ~~PRTX-100~~IND ~~over~~and athat ~~6-month period~~our proposed study could proceed. ~~The~~We ~~primary~~have ~~study~~completed ~~endpoint~~five ofclinical ~~the~~trials ~~105~~under ~~Study~~this ~~was~~IND. Our ~~the~~first ~~safety~~Phase I single-dose clinical trial commenced in December 2005 and ~~tolerability~~was ofcompleted ain ~~fixed~~March ~~dose~~2006. ofThis ~~PRTX-100~~trial ~~administered~~was ~~over~~performed anin ~~extended~~healthy ~~period.~~volunteers ~~The~~and ~~secondary~~was ~~endpoints~~designed ~~included~~primarily ~~immunogenicity,~~to ~~effects~~assess onthe ~~measures~~safety and tolerability of RAa ~~disease~~single ~~activity,~~intravenous ~~evaluation~~dose of ~~anti~~ PRTX-100. This study demonstrated that PRTX-100 ~~antibody~~appears ~~presence,~~safe and ~~feasibility~~well-tolerated ofat ~~joint~~the ~~evaluations~~doses ~~with~~administered. ~~ultrasound~~There ~~and~~were ~~biomarkers~~no asdeaths ~~disease~~or ~~markers~~serious adverse events. AThe ~~total of~~PK ~~eight~~profile ~~patients~~was ~~completed~~determined ~~all~~and ~~105~~found ~~Study~~consistent ~~visits~~with ~~per~~that ~~protocol~~projected from pre-clinical models.

~~Immune~~In ~~Thrombocytopenia~~May ~~(ITP) -~~2007, ~~ITP~~we isfiled an ~~uncommon~~amendment ~~autoimmune~~to ~~bleeding~~the ~~disorder~~IND with ~~characterized~~the byFDA. ~~insufficient~~This ~~platelets~~amendment inincluded the ~~blood.~~final ~~The~~Phase ~~affected~~I ~~individuals make~~safety ~~antibodies~~study ~~against~~report ~~their~~from ~~own~~the ~~platelets~~2006 ~~leading~~trial, changes to ~~the~~our ~~platelets'~~techniques ~~destruction,~~for purification ~~which~~and incharacterization ~~turn~~of ~~leads~~PRTX-100, toa ~~the~~Chemistry, ~~abnormal~~Manufacturing ~~bleeding. A~~and ~~small~~Controls ~~clinical~~update, ~~trial~~and ina ~~adult~~protocol ~~patients~~for ~~with~~a ~~chronic~~second ~~ITP~~single-dose Phase ~~was~~I ~~designed~~clinical totrial. ~~provide~~In ~~safety~~July ~~data~~and onAugust ~~repeated~~2007 ~~weekly~~a ~~dosing~~second ~~with~~Phase ~~PRTX-100 (the~~I ~~“PRTX-100b-103~~study ~~Study”).~~was ~~This~~performed ~~clinical~~under ~~study~~the ~~was~~IND, to befurther ~~conducted~~characterize ~~under~~ the safety, ~~Australian~~PK, and ~~New~~pharmacodynamic ~~Zealand~~profile ~~Clinical Trial~~of ~~Notification~~a ~~procedure,~~single-dose ~~not~~of ~~under~~PRTX-100 ain ~~U.S.~~healthy ~~IND,~~volunteers ~~and~~at ~~was~~doses ~~initiated,~~in ~~but~~the ~~not~~projected ~~completed~~therapeutic range. AFinal ~~leading~~results ~~Australian~~indicated ~~clinical~~that ~~research organization~~the ~~was~~drug ~~contracted~~appears tosafe ~~manage~~ and ~~monitor~~well-tolerated. ~~this~~In ~~clinical~~August ~~trial.~~2009, ~~After~~a ~~the~~Phase ~~approval~~1b ofrandomized, ~~the~~double-blind, placebo-controlled, ~~clinical~~multiple ~~protocol~~dose, bydose-escalation ~~ethics~~and ~~committees at~~tolerability ~~six~~study ~~sites~~of PRTX-100 in ~~Australia~~combination ~~and~~with ~~one~~methotrexate or leflunomide in ~~New~~patients ~~Zealand~~with active RA, (the “PRTX 100-~~100b-~~103 Study”) ~~began~~was ~~enrolling~~approved ~~patients~~by in the ~~second~~South ~~quarter~~African ofMedicines ~~2008~~Control Agency. The PRTX-~~100b~~100-103 Study ~~was~~commenced ~~designed~~in toAugust ~~evaluate~~2010 ~~the~~at ~~safety~~three ~~and~~sites PKin ofSouth upAfrica ~~to four doses of PRTX-100, starting at the lowest dose,~~ and ~~escalating~~was ~~upwards~~completed ~~after~~in ~~safety~~January ~~review~~2012 ofas ~~the~~detailed ~~prior dose~~below.

~~The~~In ~~PRTX-100b-103~~November ~~Study~~2012, ~~proved~~we ~~difficult~~commenced toenrollment and ~~enroll~~dosing ~~due~~of topatients ~~other~~at ~~on-going~~a ~~ITP~~total ~~Phase III studies and subsequent availability~~ of ~~two~~nine ~~new~~sites ~~and~~in ~~effective~~the ~~medicines~~United States for ~~ITP.~~the ~~Nine patients~~PRTX-100-104 ~~were~~Study, ~~dosed~~a atsecond ~~the~~multicenter ~~first~~Phase ~~two~~1b randomized, multiple-dose, ~~levels~~dose-escalation bystudy ~~the~~of ~~end~~PRTX-100 ofin ~~the~~combination ~~first~~with ~~quarter~~methotrexate ofor ~~2009.~~leflunomide Atin ~~this~~adults ~~point~~with ~~further~~active ~~recruitment~~RA ofwhich ~~patients~~is ~~was~~still ~~suspended.~~in Noprogress ~~side~~as ~~effects~~detailed orbelow. ~~toxicities~~The ~~were~~PRTX-100-104 ~~noted~~Study ~~with~~sequentially ~~repeated~~escalated the weekly ~~doses~~dose of PRTX-100 atfrom ~~doses of 0~~1.~~075~~5 ~~and~~micrograms/kg, ~~0.15~~the ~~micrograms~~highest ~~per~~dose kgin ~~that~~the ~~were~~prior ~~not~~RA ~~seen~~patient ~~with~~study, ~~single~~to doses inof ~~healthy~~3.0, ~~volunteer trials~~6.0, ~~This~~and ~~repeated-dose~~12.0 ~~safety~~micrograms/kg. ~~data~~of ~~from the~~ PRTX-~~100b-103~~100. ~~Study~~In ~~was~~July ~~included~~2014, the last patient in the ~~clinical~~PRTX-100-104 ~~trial~~Study ~~application~~received totheir ~~evaluate~~last ~~PRTX-100~~dose in ~~patients~~the ~~with~~fifth RAand final cohort.

8In February 2015, we commenced enrollment, at a single U.S. site, of a Phase I/II open-label, multiple, fixed-dose study (the “PRTX-100-105 Study”) which was open only to PRTX-100-104 Study patients who indicated their desire for additional treatment. The PRTX-100-105 Study was an open-label, single group study with former participants from the 104 Study who were eligible to receive a fixed dose of PRTX-100 over a 6-month period. The primary study endpoint of the 105 Study was the safety and tolerability of a fixed dose of PRTX-100 administered over an extended period. The secondary endpoints included immunogenicity, effects on measures of RA disease activity, evaluation of anti-PRTX-100 antibody presence, and feasibility of joint evaluations with ultrasound and biomarkers as disease markers. A total of eight patients completed all 105 Study visits per protocol.

In March 2015, the FDA accepted our IND application for a Phase I/II open-label, dose-escalating study of PRTX-100 in adults with persistent/chronic ITP (the “PRTX-100-202 Study”). In June 2015, the FDA granted ODD to PRTX-100 for the treatment of ITP. In July 2015, the EMA granted approval for a Phase 1b open-label, dose-escalating study of PRTX-100 in adult patients with persistent/chronic ITP (the “PRTX-100-203 Study”). In September 2015, COMP issued a positive opinion recommending PRTX-100 for designation as an orphan medicinal product for the treatment of ITP. In November 2015, we enrolled our first patient in the PRTX-100-202 Study in the United States and in January 2016 enrolled our first patient in the PRTX 100-203 Study in Europe.8

~~Rheumatoid~~Immune ~~arthritis~~Thrombocytopenia (ITP) - RA ITP is aan ~~highly~~uncommon ~~inflammatory~~autoimmune ~~polyarthritis~~bleeding ~~often~~disorder characterized by insufficient platelets in the blood. The affected individuals make antibodies against their own platelets leading to ~~joint~~the platelets' destruction, ~~deformity~~which ~~and~~in ~~loss~~turn ofleads ~~function~~to the abnormal bleeding. A Insmall ~~addition~~clinical trial in adult patients with chronic ITP was designed to ~~characteristic symmetric~~provide ~~swelling~~safety ofdata ~~peripheral~~on ~~joints,~~repeated ~~systemic~~weekly ~~symptoms~~dosing ~~related~~with PRTX-100 (the “PRTX-100b-103 Study”). This clinical study was to ~~chronic~~be ~~inflammation~~conducted ~~can~~under ~~commonly~~the ~~occur~~Australian and New Zealand Clinical Trial Notification procedure, not under a U.S. ~~Chronic~~IND, ~~pain~~and was initiated, ~~disability~~but not completed. A leading Australian clinical research ~~and~~organization ~~excess~~was ~~mortality~~contracted ~~are~~to ~~unfortunate~~manage ~~sequelae~~and monitor this clinical trial. RAAfter isthe approval of the ~~most~~clinical ~~common~~protocol ~~autoimmune~~by ~~disease~~ethics committees at six sites in Australia and one in New Zealand, ~~affecting~~the 1%PRTX-100b-103 toStudy 2%began ofenrolling patients in the ~~world’s~~second quarter of 2008. ~~population,~~The ~~with~~PRTX-100b-103 ~~prevalence~~Study ~~rising~~was ~~with~~designed ~~age~~to evaluate the safety and PK of up to ~~about~~four 5%doses inof ~~women~~PRTX-100, ~~over~~starting 55at the lowest dose, and escalating upwards after safety review of the prior dose.

The PRTX-~~100 shows~~100b-103 ~~measurable~~Study ~~activity~~proved indifficult ato enroll ~~standard~~due ~~mouse~~to ~~model~~other ofon-going ~~autoimmune~~ITP ~~arthritis.~~Phase AIII ~~substantial~~studies ~~body~~and subsequent availability of ~~published~~two ~~literature~~new and ~~proprietary~~effective medicines for ITP. Nine ~~data~~patients ~~delineate~~were dosed at the ~~immunomodulatory~~first ~~activities~~two ofdose ~~PRTX-100,~~levels ~~which~~by ~~are~~the ~~distinct~~end ~~from~~of ~~those~~the first quarter of ~~current~~2009. ~~major~~At ~~biologic~~this ~~treatments~~point further recruitment of ~~for~~patients ~~rheumatoid~~was ~~arthritis~~suspended. ~~Accordingly,~~No weside ~~believe~~effects ~~that~~or RAtoxicities ~~represents~~were anoted ~~potentially~~with ~~important~~repeated ~~clinical~~weekly ~~indication~~doses ~~for~~of ~~treatment with~~ PRTX-100. ~~While~~at ~~recent~~doses ~~advances~~of in0.075 ~~biologic~~and ~~treatments~~0.15 micrograms ~~for~~per RAkg ~~have~~that ~~improved~~were ~~the~~not ~~prognosis~~seen ~~for~~with ~~many~~single ~~patients,~~doses ~~many~~in ~~others continue~~healthy tovolunteer ~~live~~trials. ~~with~~This ~~debilitating~~repeated-dose RAsafety ~~disease~~data ~~activity~~from ~~due~~the ~~either~~PRTX-100b-103 Study towas included in the ~~cost,~~clinical ~~side-effects,~~trial orapplication ~~limited~~to ~~effectiveness~~evaluate ofPRTX-100 ~~these newer~~in ~~therapies~~patients with RA.

~~The~~In March 2015, the FDA accepted our IND application for a Phase I/II open-label, dose-escalating study of PRTX-100 in adults with persistent/chronic ITP (the “PRTX-~~103~~100-202 Study”). In June 2015, the FDA granted ODD to PRTX-100 for the treatment of ITP. In July 2015, the EMA granted approval for a Phase 1b open-label, dose-escalating study of PRTX-100 in adult patients with persistent/chronic ITP (the “PRTX-100-203 Study”). In September 2015, COMP issued a positive opinion recommending PRTX-100 for designation as an orphan medicinal product for the treatment of ITP. In November 2015, we enrolled our first patient in the PRTX-100-202 Study in the United States and in January 2016 enrolled our first patient in the PRTX 100-203 Study in Europe. Enrollment is continuing in both studies in the third cohorts at an increased dose. In August 2017, OOPD awarded us a grant of $403,000 to support future clinical development of PRTX-100 as a treatment for ITP.

InRheumatoid ~~August~~arthritis ~~2010, we commenced a multi~~-~~center Phase~~ ~~1b clinical trial of PRTX-100 in South Africa on adult patients with active~~ RA is ona ~~methotrexate~~highly orinflammatory ~~leflunomide.~~polyarthritis ~~The~~often ~~PRTX-100-103 Study~~leading ~~served~~ to ~~evaluate~~joint ~~safety~~destruction, deformity and ~~potential~~loss ~~efficacy~~ of ~~PRTX-100 in patients with active RA and was approved to enroll up to 40 patients in four dose-escalating cohorts~~function. In ~~January~~addition ~~2012,~~to ~~we completed patient dosing in the fourth cohort of the PRTX-100-103~~characteristic ~~Study.~~symmetric Aswelling ~~total~~ of 37peripheral ~~patients~~joints, ~~were~~systemic ~~enrolled~~symptoms inrelated ~~four cohorts ranging from 0.15 micrograms/kg~~ to ~~1.50~~chronic ~~micrograms/kg~~inflammation ofcan ~~PRTX-100 or~~commonly ~~placebo, administered weekly for four weeks~~occur. ~~Measures~~Chronic ~~of safety~~pain, ~~PK,~~ disability and ~~disease~~excess ~~activity~~mortality ~~were~~are ~~evaluated~~unfortunate ~~over~~sequelae. 16RA ~~weeks~~is ~~following~~ the ~~first~~most ~~dose.~~common ~~The~~autoimmune ~~PRTX-100-103~~disease, ~~Study~~affecting ~~results~~1% ~~demonstrated~~to ~~that~~2% ~~PRTX-100~~of ~~was~~the ~~generally~~world’s population, ~~safe~~with ~~and~~prevalence ~~well-tolerated~~rising ~~in patients~~ with ~~active~~ RAage atto ~~all~~about ~~tested~~5% ~~dose~~in ~~levels~~women ~~and~~over ~~at the higher doses, decreased RA activity as scored by the CDAI~~55.

~~The~~PRTX-100 ~~number~~shows ofmeasurable ~~patients~~activity ~~with~~in a ~~DAS28-CRP <~~standard 3mouse model of autoimmune arthritis.2 ~~(Disease~~A ~~Activity~~substantial ~~Score)~~body atof ~~six~~published ~~weeks~~literature ~~was~~and proprietary data delineate the ~~predefined~~immunomodulatory activities ~~disease~~of ~~activity~~PRTX-100, ~~endpoint~~which are distinct from those of ~~the~~current ~~study.~~major ~~The~~biologic ~~results~~treatments ~~showed~~for ~~that~~rheumatoid ~~the~~arthritis. Accordingly, ~~patients~~we ~~receiving~~believe ~~PRTX-100~~that ~~were~~RA ~~more~~represents ~~likely~~a topotentially ~~respond~~important ~~than~~clinical ~~those~~indication ~~receiving~~for ~~placebo~~treatment atwith ~~all~~PRTX-100. ~~times,~~While ~~the~~recent ~~number~~advances ofin biologic ~~responders~~treatments ~~increased over~~for ~~time~~RA ~~during~~have improved the 16prognosis ~~week~~for ~~study~~many ~~evaluation period~~patients, ~~and~~many ~~that~~others ~~the~~continue ~~maximum~~to ~~tolerated~~live ~~dose~~with ~~was~~debilitating ~~not~~RA ~~reached~~disease activity atdue either to the ~~highest~~cost, ~~dose level~~side-effects, or limited effectiveness of these newer therapies.

~~Additionally,~~The ~~the results indicate that~~ PRTX-100 ~~did not change CRP (C~~-~~Reactive~~103 Protein) levels, even in those patients whose swollen and tender joint count and global VAS (Visual Analogue Scale) scores had decreased to low levels after treatment. Because of the influence of the CRP component on the DAS28-CRP score, a post-hoc analysis was performed examining changes in the CDAI scores in all patients. The CDAI score does not evaluate CRP as a component, but instead comprises physician and patient-assessed chemical markers of disease activity. In the placebo, 0.15 micrograms/kg, and 0.45 micrograms/kg dose groups, one out of eight patients in each group attained low disease activity (CDAI ≤ 10) on two or more consecutive visits. In the 0.90 micrograms/kg and 1.50 micrograms/kg dose groups, two of eight and two of five patients, respectively, attained this same endpoint, and maintained a CDAI < 10 until the week 16 final visit. Of the four apparent responders in the 1.50 micrograms/kg group, two attained a CDAI ≤ 6 (remission), one attained a CDAI ≤ 10 (low activity), and one achieved a CDAI of 10.1 at one or more visits. The mean time to peak response in this group occurred six weeks after their last dose.Study

~~The~~In ~~disease~~August ~~activity~~2010, ~~results~~we ~~from~~commenced ~~the~~a multi-center Phase 1b clinical trial of PRTX-100 in South Africa on adult patients with active RA on methotrexate or leflunomide. The PRTX-100-103 Study ~~demonstrated~~served anto ~~acceptable~~evaluate safety ~~profile,~~ and ~~suggested~~potential ~~treatment~~efficacy ~~with~~of PRTX-100 ~~could~~in ~~affect~~patients ~~disease~~with ~~activity,~~active ~~although~~RA and was approved to enroll up to ~~these~~40 ~~effects~~patients ~~were~~in ~~not~~four ~~statistically~~dose-escalating ~~significant~~cohorts. In ~~November~~January 2012, we ~~commenced~~completed patient dosing in the fourth cohort of the PRTX-100-~~104~~ 103 Study. A total of 37 patients were enrolled in four cohorts ranging from 0.15 micrograms/kg to ~~provide~~1.50 amicrograms/kg ~~better~~of ~~understanding~~PRTX-100 or placebo, administered weekly for four weeks. Measures of safety, PK, and ~~potential~~disease ~~treatment~~activity ~~effect~~were onevaluated RAover ~~disease~~16 ~~activity~~weeks ~~measurements~~following the asfirst dose. The PRTX-100-103 Study results demonstrated that PRTX-100 was generally safe and well-tolerated asin topatients ~~help~~with active ~~define~~RA ~~the~~at ~~optimal~~all tested dose levels and at the higher doses, decreased RA activity as scored by the CDAI.

9The number of patients with a DAS28-CRP < 3.2 (Disease Activity Score) at six weeks was the predefined disease activity endpoint of the study. The results showed that the patients receiving PRTX-100 were more likely to respond than those receiving placebo at all times, the number of responders increased over time during the 16 week study evaluation period, and that the maximum tolerated dose was not reached at the highest dose level.

~~The PRTX-100-104 Study~~9

InAdditionally, ~~November~~the ~~2012,~~results weindicate ~~commenced~~that ~~enrollment~~PRTX-100 indid ~~the~~not ~~United~~change ~~States~~CRP ~~for~~(C-Reactive aProtein) ~~new~~levels, ~~multicenter~~even ~~Phase~~in 1bthose ~~randomized,~~patients ~~multiple-dose,~~whose ~~dose-escalation~~swollen ~~study~~and ~~(the~~tender ~~“PRTX-100-104~~joint count and global VAS (Visual ~~Study”~~Analogue Scale) scores had decreased to low levels after treatment. Because of ~~PRTX~~the influence of the CRP component on the DAS28-~~100~~CRP score, ina ~~combination~~post-hoc ~~with~~analysis ~~methotrexate~~was orperformed ~~leflunomide~~examining changes in ~~adult~~the ~~patients~~CDAI ~~with~~scores ~~active~~in RAall patients. The ~~sequential~~CDAI ~~dose-escalation~~score does not evaluate ~~phase~~CRP ofas ~~this~~a ~~study~~component, ~~was~~but ~~expected~~instead tocomprises ~~enroll~~physician upand topatient-assessed 40chemical ~~patients~~markers ~~into~~of ~~five~~disease ~~cohorts~~activity. ~~ranging~~In ~~from~~the 1placebo, 0.5015 micrograms/kg, upand ~~to 18.~~0.45 micrograms/kg of ~~PRTX-100~~dose orgroups, ~~placebo.~~one Atout of eight patients in each ~~dose,~~group ~~one~~attained ~~quarter~~low ofdisease ~~patients~~activity ~~would~~(CDAI ≤ ~~receive~~10) aon ~~placebo~~two ~~treatment.~~or ~~Similar~~more toconsecutive ~~the~~visits. ~~PRTX-100-103~~In ~~Study,~~ the ~~primary~~0.90 ~~objective~~micrograms/kg and 1.50 micrograms/kg dose groups, two of ~~the~~eight ~~PRTX-100-104~~and ~~Study~~two of ~~was~~five topatients, ~~assess~~respectively, ~~the~~attained ~~safety~~this same endpoint, and ~~tolerability~~maintained ofa ~~intravenous~~CDAI ~~PRTX-100~~< ~~administered weekly~~10 ~~over~~until ~~five~~the ~~weeks~~week in16 ~~patients~~final ~~with~~visit. ~~active~~Of RAthe four onapparent ~~methotrexate~~responders orin ~~leflunomide~~the ~~therapy~~1.50 ~~The~~micrograms/kg ~~secondary~~group, ~~objectives~~two ~~included~~attained ~~determining the~~a ~~effects~~CDAI of≤ ~~PRTX-100~~6 on(remission), ~~measures~~one ofattained ~~disease~~a CDAI ≤ 10 (low activity), ~~assessing~~and ~~the~~one ~~immunogenicity~~achieved ~~and~~a ~~evaluating~~CDAI ~~the~~of PK10.1 ~~parameters~~at ~~after~~one ~~repeated doses,~~or ~~and~~more ~~determining~~visits. ~~possible~~The ~~relationships~~mean ~~between~~time ~~the~~to ~~immunogenicity~~peak ofresponse ~~PRTX-100~~in ~~and~~this ~~safety~~group ~~and~~occurred PKsix weeks after their last dose.

InThe ~~August~~disease ~~2013,~~activity ~~following~~results afrom ~~planned~~the ~~interim~~PRTX-100-103 ~~safety~~Study ~~review~~demonstrated byan ~~our~~acceptable ~~SMC~~safety ~~and upon completion of the fourth cohort~~profile, ~~we expanded the 3.0 microgram, 6.0 microgram,~~ and ~~12.0~~suggested ~~micrograms/kg~~treatment ~~dose~~with ~~cohorts of the~~ PRTX-100~~-104~~ ~~Study.~~could Anaffect ~~additional~~disease ~~nine~~activity, ~~patients were~~although ~~enrolled~~these ineffects ~~the~~were ~~expansion~~not ~~cohort~~statistically ~~that was completed in October 2013~~significant. In ~~total,~~November ~~the~~2012 ~~first~~we ~~four~~commenced ~~dose-escalating cohorts of~~ the PRTX-100-104 Study, ~~which~~to ~~included~~provide ~~these~~a ~~three~~better ~~expanded~~understanding of ~~cohorts,~~safety ~~enrolled~~and 41potential ~~patients~~treatment ateffect ~~five~~on ~~U.S.~~RA ~~clinical~~disease ~~centers~~activity ~~with~~measurements ~~doses~~as ~~ranging~~well ~~from 1.5~~as ~~micrograms/kg up~~ to ~~12.0~~help ~~micrograms/kg.~~define ~~Five patients withdrew from~~ the ~~study~~optimal ~~prior to their day 85 visit~~dose.

~~In November 2013, following completion of the Cohort 4 expansion cohorts, we initiated enrollment of the fifth and final cohort (Cohort 5) in the PRTX 100-104 Study.~~ The ~~Cohort~~ ~~5 sub-study enrolled 20 patients who received five weekly fixed-weight doses of~~ PRTX-100 ~~followed by up to four additional monthly maintenance doses of PRTX~~-~~100~~104 in weeks 8, 12, 16, and 20. The primary objective of the Cohort 5 sub-study was to assess safety and tolerability of these doses administered on a modified schedule. Secondary objectives included determining the effects of PRTX-100 on measures of disease activity, assessing the immunogenicity and evaluating the PK parameters after repeated doses, and determining possible relationships between the immunogenicity of PRTX-100 and safety, PK and efficacy parameters. In total, 11 out of 20 patients in Cohort 5 completed all study visits by August 2014 per protocol.Study

In November ~~2014~~2012, we ~~announced~~commenced ~~final~~enrollment ~~data~~in ~~from~~the ~~Cohorts~~United 1States ~~through~~for 4a ~~and~~new anmulticenter ~~interim~~Phase ~~analysis~~1b ofrandomized, ~~pooled~~multiple-dose, ~~data~~dose-escalation ~~from~~study ~~Cohort~~(the 5“PRTX-100-104 Study”) of ~~the~~PRTX-100 ~~104~~in ~~Study.~~combination ~~For~~with ~~patients~~methotrexate or leflunomide in ~~all~~adult patients with active RA. The sequential dose-escalation phase of this study was expected to enroll up to 40 patients into five cohorts ranging from 1.50 micrograms/kg up to 18.0 micrograms/kg of PRTX-100 or placebo. At each dose, one quarter of patients would receive a placebo treatment. Similar to the ~~104~~PRTX-100-103 Study, the primary objective of the PRTX-100-104 ~~appeared~~Study ~~safe~~was to assess the safety and ~~well~~tolerability ~~tolerated~~of intravenous PRTX-100 administered weekly over five weeks in ~~all~~patients ~~individuals,~~with ~~including~~active ~~those~~RA ~~who~~on ~~developed~~methotrexate ~~ADAs~~or leflunomide therapy. The secondary objectives included determining the effects of PRTX-100 on measures of disease activity, assessing the immunogenicity and evaluating the AEPK ~~profile~~parameters ~~was~~after ~~consistent~~repeated doses, ~~with~~and ~~our~~determining ~~prior~~possible ~~clinical~~relationships ~~trial~~between ~~results~~the immunogenicity of PRTX-100 and safety and PK.

In ~~the~~August ~~Cohort 5 sub-study~~2013, ~~the~~following ~~amount~~a ofplanned ~~PRTX-100~~interim ~~administered~~safety ~~and~~review ~~its~~by ~~dosing~~our ~~frequency~~Independent ~~were~~Data ~~varied~~Safety ~~from~~Monitoring ~~Cohorts~~Committee 1and ~~through~~upon 4completion toof ~~explore~~the ~~effects~~fourth ~~on safety~~cohort, ~~tolerability~~we ~~and~~expanded ~~measures~~the 3.0 ofmicrogram, ~~disease activity~~6.0 ~~In total~~microgram, ~~twenty~~and ~~patients~~12.0 ~~were~~micrograms/kg ~~randomized~~dose tocohorts ~~420~~of µgthe PRTX-100-104 ~~(12~~Study. ~~patients),~~An ~~240~~additional µgnine ~~PRTX-100 (3~~ patients) orwere ~~placebo~~enrolled in (5the ~~patients).~~expansion ~~The~~cohort ~~addition~~that ofwas ~~four~~completed ~~monthly~~in ~~maintenance~~October ~~doses~~2013. ~~after~~In total, the ~~five~~first ~~weekly~~four ~~doses~~dose-escalating ~~did~~cohorts ~~not~~of ~~increase~~ the ~~rate~~PRTX-100-104 Study, orwhich ~~type~~included ofthese ~~AEs,~~three ~~even~~expanded incohorts, ~~those~~enrolled 41 patients ~~who~~at ~~developed~~five ~~ADAs~~U.S. ~~nor~~clinical ~~indicate~~centers ~~any~~with ~~apparent~~doses ~~correlation~~ranging ~~between~~from 1.5 ~~the~~micrograms/kg ~~development of~~up ~~ADAs~~to ~~and~~12.0 ~~effects~~micrograms/kg. onFive ~~measures~~patients ofwithdrew RAfrom ~~disease~~the ~~activity~~study prior to their day 85 visit.

In ~~addition~~November 2013, following completion of the Cohort 54 ~~patients~~expansion ~~showed~~cohorts, ~~improvement in~~we ~~measures~~initiated enrollment of ~~disease~~the ~~activity,~~fifth ~~including~~and ~~ACR20~~final ~~scores,~~cohort ~~compared~~(Cohort to5) in the PRTX 100-104 Study. The Cohort 5 1sub-study ~~through~~enrolled 420 patients who ~~did~~received ~~not~~five ~~receive~~weekly ~~any~~fixed-weight doses of PRTX-100 followed by up to four additional monthly maintenance doses of PRTX-100 in weeks 8, ~~suggesting~~12, ~~that~~16, and 20. The primary objective of the ~~addition~~Cohort 5 sub-study was to assess safety and tolerability of ~~monthly~~these ~~maintenance~~doses ~~administration~~administered on a modified schedule. Secondary objectives included determining the effects of PRTX-100 ~~and~~on ~~weight-based~~measures ~~dosing~~of ~~were an~~disease ~~important~~activity, ~~aspect~~assessing ofthe immunogenicity and evaluating the ~~dosing~~PK ~~protocol~~parameters after repeated doses, and ~~should~~determining bepossible ~~considered~~relationships inbetween ~~future~~the ~~trials~~immunogenicity of PRTX-100. Aand ~~total~~safety, ofPK 61and ~~patients~~efficacy ~~enrolled across~~parameters. ~~the~~In ~~five~~total, 11 ~~cohorts~~out inof ~~the~~20 ~~PRTX~~patients ~~100-104~~in ~~Study~~Cohort at5 ~~nine~~completed all study ~~sites~~visits inby ~~the~~August ~~United~~2014 ~~States~~per protocol.

~~The~~In November 2014, we announced final data from Cohorts 1 through 4 and an interim analysis of pooled data from Cohort 5 of the 104 Study. For patients in all five cohorts of the 104 Study, PRTX-100~~-105~~ ~~Study~~appeared safe and well tolerated in all individuals, including those who developed ADAs, and the AE profile was consistent with our prior clinical trial results.

In ~~February~~the ~~2015,~~Cohort we5 ~~commenced enrollment~~sub-study, at athe ~~single~~amount ~~U.S. site,~~ of ~~a Phase I/II open-label, multiple, fixed-dose study (the “~~PRTX-100~~-105 Study”) which was~~ ~~open~~administered ~~only~~and toits ~~PRTX-100-104~~dosing ~~Study~~frequency ~~patients~~were ~~who~~varied ~~indicated~~from ~~their~~Cohorts ~~desire~~1 ~~for~~through ~~additional~~4 ~~treatment.~~to ~~The~~explore ~~PRTX-100-105~~effects ~~Study~~on ~~was an open-label~~safety, ~~single~~ ~~group~~tolerability ~~study~~and ~~with~~measures of ~~former~~disease ~~participants~~activity. ~~from~~In ~~the~~total, ~~104~~twenty ~~Study~~patients ~~who~~ were ~~eligible~~randomized to ~~receive~~420 aµg ~~fixed dose of~~ PRTX-100 ~~over~~(12 apatients), ~~6-month period.~~240 ~~The~~µg ~~primary~~PRTX-100 ~~study~~(3 patients) ~~endpoint~~or ofplacebo ~~the~~(5 ~~105~~patients). ~~Study~~The ~~was~~addition ~~the safety and tolerability~~ of afour ~~fixed~~monthly ~~dose~~maintenance ofdoses ~~PRTX-100~~after ~~administered~~the ~~over an~~five ~~extended~~weekly ~~period.~~doses ~~The~~did ~~secondary~~not ~~endpoints~~increase the ~~included~~rate ~~immunogenicity,~~or ~~effects~~type ~~on measures~~ of ~~RA disease activity~~AEs, ~~evaluation~~even ~~of anti-PRTX-100~~in ~~antibody~~those ~~presence,~~patients ~~and~~who ~~feasibility~~developed ofADAs ~~joint~~nor ~~evaluations~~indicate ~~with~~any ~~ultrasound~~apparent ~~and~~correlation ~~biomarkers~~between asthe ~~disease markers. A total~~development of ~~eight~~ADAs ~~patients~~and ~~completed~~effects ~~all~~on ~~105~~measures ~~Study~~of ~~visits~~RA ~~per~~disease ~~protocol~~activity.

In ~~the PRTX-100-105 Study~~addition, aCohort ~~preliminary~~5 ~~interim analysis indicated that for~~ patients ~~who~~showed ~~completed per protocol, PRTX-100 exhibited an acceptable safety profile and RA disease~~improvement ~~activity was improved~~ in ameasures ~~majority~~ of ~~patients~~disease atactivity, ~~the~~including ~~end~~ACR20 ofscores, ~~the~~compared ~~study~~to asCohort ~~compared~~1 tothrough ~~baseline.~~4 Nopatients ~~SAEs were~~who ~~reported.~~did Atnot ~~study~~receive ~~day~~any ~~196~~monthly maintenance doses, ~~one~~suggesting ~~month~~that ~~after~~ the ~~final~~addition ~~dose,~~of ~~patients~~monthly ~~who~~maintenance ~~completed~~administration ~~the~~of ~~study~~PRTX-100 ~~per~~and ~~protocol~~weight-based ~~demonstrated~~dosing awere ~~mean~~an ~~reduction~~important aspect of the ~~DAS28CRP~~dosing ~~score~~protocol ~~from~~and ~~5.25~~should tobe ~~2.52,~~considered ~~suggesting~~in afuture ~~clinically~~trials ~~meaningful~~of ~~improvement in disease activity~~PRTX-100. ~~Additionally, clinical~~A ~~assessment~~total byof ~~UPD,~~61 ~~also~~patients ~~revealed~~enrolled across athe ~~reduction~~five cohorts in ~~average~~the ~~disease~~PRTX ~~severity~~100-104 byStudy ~~day 196,~~at ~~and~~nine ~~the~~study ~~correlation~~sites ~~between~~in the ~~UPD~~United ~~and the DAS28CRP was r=0~~States.~~624 (p<.0005).~~

The PRTX-100-~~202~~105 Study

In ~~November~~February 2015, we commenced enrollment, ~~and~~at ~~enrolled~~a ~~our~~single ~~first~~U.S. ~~patient~~site, inof a Phase I/II open-label, multiple, fixed-dose study (the “PRTX-100-~~202~~105 Study.”) ~~The~~which was open only to PRTX-100-~~202~~104 Study ~~may~~patients ~~enroll~~who upindicated totheir 36desire ~~patients~~for inadditional astreatment. ~~many~~The asPRTX-100-105 Study was an open-label, ~~six~~single ~~cohorts.~~group ~~Each~~study ~~patient~~with ~~will~~former ~~receive~~participants ~~four~~from ~~weekly~~the ~~intravenous~~104 ~~doses~~Study ofwho ~~PRTX-100~~were ~~and~~eligible ~~will~~to bereceive ~~monitored~~a ~~for~~fixed updose toof 48PRTX-100 ~~weeks~~over a 6-month ~~thereafter~~period. The primary study endpoint of the ~~PRTX-100-202~~105 Study iswas the safety and tolerability of a ~~platelet~~fixed ~~response~~dose toof PRTX-100 administered over an extended period. ~~Secondary~~The secondary endpoints ~~include~~ ~~safety,~~included immunogenicity, ~~and~~effects ~~pharmacokinetics.~~on Inmeasures ~~February~~of ~~2016~~RA disease activity, ~~following~~evaluation aof anti-PRTX-100 ~~planned~~antibody ~~interim~~presence, ~~data~~and ~~review~~feasibility byof ~~the SMC, enrollment~~joint isevaluations ~~continuing~~with ~~for~~ultrasound and biomarkers as disease markers. A total of eight patients incompleted ~~the~~all ~~PRTX-100-202~~105 Study atvisits anper ~~increased dose~~protocol.

~~The~~In the PRTX-100-~~203~~105 Study, a preliminary interim analysis indicated that for patients who completed per protocol, PRTX-100 exhibited an acceptable safety profile and RA disease activity was improved in a majority of patients at the end of the study as compared to baseline. No SAEs were reported. At study day 196, one month after the final dose, patients who completed the study per protocol demonstrated a mean reduction of the DAS28CRP score from 5.25 to 2.52, suggesting a clinically meaningful improvement in disease activity. Additionally, clinical assessment by UPD, also revealed a reduction in average disease severity by day 196, and the correlation between the UPD and the DAS28CRP was r=0.624 (p<.0005).

~~In January 2016, we commenced enrollment of our first patient in the European based PRTX-100-203 Study.~~ The PRTX-100-~~203~~202 Study may enroll up to 30 patients in as many as five cohorts at sites in France. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoints of the PRTX-100-203 Study include safety, immunogenicity and pharmacokinetics. Secondary endpoints include platelet response and duration. In May 2016, following a planned interim data review by the SMC, enrollment is continuing for patients in the PRTX-100-203 study at an increased dose.

~~Manufacturing~~In November 2015, we commenced enrollment and enrolled our first patient in the PRTX-100-202 Study. The PRTX-100-202 Study may enroll up to 36 patients in as many as six cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoint of the PRTX-100-202 Study is a platelet response to PRTX-100. Secondary endpoints include safety, immunogenicity, and pharmacokinetics. One patient in each of the two completed cohorts of the PRTX-100-202 Study had a platelet response per protocol. Enrollment is continuing for patients in the third cohort in the PRTX-100-202 Study at an increased dose.

We currently contract the manufacturing of our lead drug substance PRTX-100 to Eurogentec S.A. in Belgium where it is produced under Current Good Manufacturing Practice, or cGMP, conditions. In July 2014, we contracted with Eurogentec for the manufacture of additional bulk drug substance (our “active pharmaceutical ingredients”) (“API”), which we believe will be sufficient supply for completion of our current clinical studies. The stability testing and packaging of the final drug product for clinical supplies is performed by Eurogentec. The packaging of the final drug product is conducted at separate FDA-approved facilities. These companies, in the aggregate, have provided the drug product for both toxicological testing and clinical supplies. We believe that this entire process is scaleable to commercial production but will require additional manufacturing resources. The original three clinical trials of PRTX-100 ~~were conducted with a liquid formulation and all subsequent studies have utilized a newer lyophilized formulation designed to achieve better stability and longer product shelf~~-~~life.~~203 Compared to therapeutic doses of other biologic products used to treat RA and ITP, we believe the overall costs for these proposed therapeutic doses of PRTX-100 are significantly less due to the low dose and the simplicity of drug substance manufacture.Study

~~Markets~~In January 2016, we commenced enrollment of our first patient in the European based PRTX-100-203 Study. The PRTX-100-203 Study may enroll up to 30 patients in as many as five cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoints of the PRTX-100-203 Study include safety, immunogenicity and pharmacokinetics. Secondary endpoints include platelet response and duration. One patient in the first cohort of the PRTX-100-203 Study had a platelet response per protocol. In addition, we recently opened seven new clinical study sites in the United Kingdom and dosed the first patient. Enrollment is continuing for patients in the third cohort in the PRTX-100-203 Study at an increased dose.

RA is our most advanced primary indication. RA is a serious autoimmune disorder that causes the body’s immune system to produce antibodies that attack the lining of the joints, resulting in inflammation and pain. RA can lead to joint deformity or destruction, organ damage, disability and premature death. According to both the Arthritis Foundation and the American College of Rheumatology websites, approximately 1.5 million people in the United States have RA, which is approximately 1% of the nation’s adult population. There are nearly three times as many women as men with the disease. The disease occurs in all ethnic groups and in every part of the world.11

RAManufacturing was chosen as a target disease because it represents a well-defined, rapidly growing market for which there is no current uniformly effective treatment. Sixty percent of people with inadequately treated RA are unable to work 10 years after onset. It is estimated that despite treatment with current approved RA therapeutics, at least one-third of patients continue to have significant disability and limitations due to their disease. Current treatments are costly, some are associated with increased risk of cancer and opportunistic infections, and in most cases must be continued for decades. The market for the existing biologic RA drugs is primarily limited to those countries that have a high per capita income because treatment can cost tens of thousands of dollars per patient per year. Thus, a large portion of the world’s patient population cannot afford the existing biologic RA drugs. In contrast, we believe that PRTX-100 could potentially provide patients with a therapy that is efficacious, cost-effective, and has a highly favorable benefit-risk ratio.

11We currently contract the manufacturing of our lead drug substance PRTX-100 to Eurogentec S.A. in Belgium where it is produced under Current Good Manufacturing Practice, or cGMP, conditions. Specifically we contract with Eurogentec for the manufacture of additional bulk drug substance (our “active pharmaceutical ingredients”) (“API”), which we believe is in sufficient supply for completion of our current clinical studies. The stability testing and packaging of the final drug product for clinical supplies is performed by Eurogentec. The packaging of the final drug product is conducted at separate FDA-approved facilities. These companies, in the aggregate, have provided the drug product for both toxicological testing and clinical supplies. We believe that this entire process is scaleable to commercial production but will require additional manufacturing resources. The original three clinical trials of PRTX-100 were conducted with a liquid formulation and all subsequent studies have utilized a newer lyophilized formulation designed to achieve better stability and longer product shelf-life. Compared to therapeutic doses of other biologic products used to treat RA and ITP, we believe the overall costs for these proposed therapeutic doses of PRTX-100 are significantly less due to the low dose and the simplicity of drug substance manufacture.

~~Once~~Markets further developed and approved, we believe that PRTX-100 could be used to treat patients with moderate to severe cases of RA, and particularly those individuals for whom other treatments failed. Given the differences in the regulatory approval process in different parts of the world, it is reasonable to believe that PRTX-100 might first be used in the developing world and then in Europe and North America.

InRA ~~addition,~~is weour ~~believe~~most ~~ITP~~advanced ~~also~~primary ~~represents~~indication. RA is a ~~potential~~serious ~~indication~~autoimmune ~~for~~disorder ~~PRTX-100.~~that ~~ITP~~causes orthe ~~Immune~~body’s ~~thrombocytopenia~~immune issystem ato ~~bleeding~~produce ~~disorder~~antibodies inthat ~~which~~attack the ~~immune~~lining ~~system destroys~~of ~~platelets~~the joints, ~~which~~resulting ~~are~~in ~~necessary~~inflammation ~~for~~and ~~normal~~pain. ~~blood~~RA ~~clotting.~~can ~~Persons~~lead ~~with~~to ~~the~~joint ~~disease~~deformity ~~have~~or ~~too~~destruction, ~~few~~organ ~~platelets~~damage, indisability ~~the~~and ~~blood~~premature death. ~~ITP~~According ~~affects women~~to ~~more~~both ~~often~~the ~~than~~Arthritis ~~men,~~Foundation and itthe isAmerican ~~more~~College ~~common~~of inRheumatology ~~children~~websites, ~~than~~approximately ~~in adults~~1.5 Inmillion people ~~children,~~in the ~~disease~~United ~~usually~~States ~~resolves~~have ~~without treatment.~~RA, ~~Adults~~which ~~are~~is ~~usually~~approximately ~~treated~~1% ~~with~~of anthe ~~anti-inflammatory~~nation’s ~~steroid~~adult ~~medicine (prednisone)~~population. InThere ~~some~~are ~~cases,~~nearly ~~surgery~~three ~~to remove~~times as many women as men with the ~~spleen~~disease. ~~(splenectomy)~~The isdisease ~~recommended~~occurs ~~which~~in ~~increases~~all ~~the~~ethnic ~~platelet~~groups ~~count~~and in ~~about~~every ~~half~~part of ~~patients~~the world.

~~ITP~~RA ~~has~~was nochosen ~~known~~as ~~cure,~~a ~~and~~target ~~relapses~~disease ~~may~~because ~~occur~~it ~~years~~represents ~~after~~a ~~seemingly~~well-defined, ~~successful~~rapidly ~~medical~~growing ormarket ~~surgical~~for ~~management.~~which Ifthere ~~the~~is ~~patient’s~~no ~~condition~~current ~~does~~uniformly ~~not~~effective ~~improve~~treatment. ~~with~~Sixty ~~the~~percent ~~use~~ of people ~~prednisone,~~with ainadequately ~~corticosteroid~~treated ~~drug~~RA ~~that~~are isunable ~~the~~to ~~first~~work ~~line~~10 ~~therapy~~years ~~for~~after ~~ITP,~~onset. ~~other~~It ~~treatments~~is ~~may~~estimated ~~include:~~that ~~danazol~~despite ~~(Danocrine), a~~treatment ~~drug~~with ~~taken~~current approved byRA ~~mouth;~~therapeutics, ~~infusions~~at ofleast ~~high~~one-~~dose~~third ~~gamma~~of ~~globulin~~patients ~~(an~~continue ~~immune~~to ~~factor);~~have ~~drugs~~significant ~~that~~disability ~~suppress~~and ~~the~~limitations ~~immune~~due ~~system;~~to ~~anti-RhD~~their disease. ~~therapy~~Current ~~for~~treatments ~~people~~are ~~with~~costly, ~~certain~~some ~~blood~~are ~~types;~~associated ~~and~~with ~~newer~~increased ~~agents~~risk ~~like~~of ~~romiplostim~~cancer ~~(Nplate)~~ and ~~eltrombopag~~opportunistic ~~(Promacta)~~infections, ~~that~~and ~~stimulate the~~in ~~bone~~most ~~marrow~~cases must tobe ~~make~~continued ~~more~~for ~~platelets~~decades. ~~Global~~The ~~sales~~market offor ~~Nplate~~the ~~and~~existing ~~Promacta~~biologic ~~were~~RA ~~approximately~~drugs ~~$525~~is ~~million~~primarily ~~and~~limited ~~$400~~to ~~million,~~those countries that have ~~respectively,~~a inhigh ~~2015.~~per ~~Neither~~capita ~~romiplostim~~income ~~nor~~because ~~eltrombopag~~treatment ~~impact~~can ~~the~~cost ~~principal~~tens ~~pathological~~of ~~mechanism~~thousands of ~~ITP,~~dollars ~~namely~~per ~~immune-mediated plated~~patient ~~destruction,~~per ~~and~~year. weThus, ~~believe~~a ~~that~~large ~~PRTX-100~~portion ~~may~~of the ~~have~~world’s apatient ~~more~~population ~~direct~~cannot ~~impact~~afford onthe ~~ITP~~existing ~~disease~~biologic ~~processes~~RA drugs. ~~Thus~~In contrast, we believe that PRTX-100 ~~may~~could potentially ~~complement~~provide orpatients ~~reduce~~with ~~the~~a ~~use~~therapy ofthat ~~thrombopoeitic~~is ~~agents~~efficacious, incost-effective, ~~adult~~and ~~patients~~has ~~with~~a ~~ITP~~highly favorable benefit-risk ratio.

~~Preliminary~~Once ~~information~~further ~~gained~~developed inand ~~the~~approved, ~~laboratory~~we believe onthat ~~the~~PRTX-100 ~~mechanism~~could ofbe ~~action~~used to treat patients with moderate to severe cases of ~~PRTX-100~~RA, ~~also~~and ~~suggests~~particularly ~~potential~~those ~~efficacy~~individuals for whom other treatments failed. Given the differences in athe ~~range~~regulatory ofapproval ~~autoimmune~~process ~~and~~in ~~inflammatory~~different ~~diseases,~~parts ~~including~~of the world, ~~but~~ ~~not~~it ~~limited~~is reasonable to ~~psoriasis,~~believe ~~myasthenia~~that ~~gravis,~~PRTX-100 ~~chronic~~might ~~idiopathic~~first ~~demyelinating~~be ~~polyneuropathy,~~used in the developing world and ~~pemphigus~~then in Europe and North America.

~~Our~~In ~~long-term~~addition, ~~strategy~~we ~~contemplates the~~believe ~~pursuit~~ITP ofalso ~~FDA~~represents a ~~approval~~potential ofindication for PRTX-100. toITP ~~treat~~or ~~other~~Immune ~~autoimmune~~thrombocytopenia is a bleeding disorder in which the immune system destroys platelets, which are necessary for normal blood clotting. Persons with the disease have too few platelets in the blood. ITP affects women more often than men, and ~~inflammatory~~it ~~diseases~~is more common in ~~addition~~children than in adults. In children, the disease usually resolves without treatment. Adults are usually treated with an anti-inflammatory steroid medicine (prednisone). In some cases, surgery to RAremove the ~~and~~spleen ~~ITP~~(splenectomy) is recommended which increases the platelet count in about half of patients.

~~Competition~~ITP has no known cure, and relapses may occur years after seemingly successful medical or surgical management. If the patient’s condition does not improve with the use of prednisone, a corticosteroid drug that is the first line therapy for ITP, other treatments may include: danazol (Danocrine), a drug taken by mouth; infusions of high-dose gamma globulin (an immune factor); drugs that suppress the immune system; anti-RhD therapy for people with certain blood types; and newer agents like romiplostim (Nplate) and eltrombopag (Promacta) that stimulate the bone marrow to make more platelets. Global sales of Nplate and Promacta were approximately $584 million and $635 million, respectively, in 2016. Neither romiplostim nor eltrombopag impact the principal pathological mechanism of ITP, namely immune-mediated plated destruction, and we believe that PRTX-100 may have a more direct impact on ITP disease processes. Thus, we believe that PRTX-100 may complement or reduce the use of thrombopoeitic agents in adult patients with ITP.

We believe, based on the pre-clinical trials and the results to date of our five Phase I RA clinical studies, that PRTX-100 has a potential competitive advantage as it may be safer and more efficacious than existing RA therapies, and may cost less to manufacture than competing biologic-based therapies. Current RA treatments are characterized by complex manufacturing methods and, in 2015, resulted in an average annual retail cost of approximately $13,000 to $30,000 per patient, if the newer disease-modifying anti-rheumatic drugs approved in the last 20 years were used. The cost can increase according to the size/weight of a patient and the number of doses required. Additionally, patients are faced with the cost of the infusion itself and blood tests which are often not included in those cost estimates. A number of pharmaceutical agents are currently being used, with varying degrees of success, to control the signs and symptoms of RA and slow its progression. Available treatment options include:12

·Preliminary ~~Analgesic/anti~~information gained in the laboratory on the mechanism of action of PRTX-100 also suggests potential efficacy in a range of autoimmune and inflammatory ~~preparations~~diseases, ~~ranging~~including, but ~~from~~not ~~simple~~limited ~~aspirin~~to psoriasis, myasthenia gravis (MG), chronic idiopathic demyelinating polyneuropathy, and pemphigus. We recently initiated a study of PRTX-100 in an animal model of MG and expect to have top-line results in the ~~COX~~4th quarter of 2017. MG is an autoimmune disorder caused by anti-2self ~~inhibitors;~~antibodies that react with the neuromuscular junction causing muscle weakness and fatigability.

·Our ~~Immunosuppressive/antineoplastic~~long-term ~~drugs,~~strategy ~~including~~contemplates ~~azathioprine~~the pursuit of FDA approval of PRTX-100 to treat other autoimmune and ~~methotrexate;~~inflammatory diseases in addition to RA and ITP.

· TNF (Tumor Necrosis Factor) inhibitors, also known as anti-TNF therapy, currently represented by etanercept (Enbrel®), infliximab (Remicade®), and adalimumab (Humira®) and the newer entries, certolizumab (Cimzia®) and golimumab (Simponi®);Competition

·We ~~Soluble~~believe, ~~Interleukin-l~~based ~~(IL~~on the pre-clinical trials and the results to date of our five Phase I) ~~Receptor~~RA ~~Therapy~~clinical studies, ~~Anakinra~~that ~~(Kineret®)~~PRTX-100 has a potential competitive advantage as it may be safer and ~~(Il~~more efficacious than existing RA therapies, and may cost less to manufacture than competing biologic-6)based ~~tocilizumab~~therapies. Current ~~(Actemra®);~~RA treatments are characterized by complex manufacturing methods and, in 2016, resulted in an average annual retail cost of approximately $13,000 to $30,000 per patient, if the newer disease-modifying anti-rheumatic drugs approved in the last 20 years were used. The cost can increase according to the size/weight of a patient and the number of doses required. Additionally, patients are faced with the cost of the infusion itself and blood tests which are often not included in those cost estimates. Several pharmaceutical agents are currently being used, with varying degrees of success, to control the signs and symptoms of RA and slow its progression. Available treatment options include:

· ~~Costimulatory~~Analgesic/anti-inflammatory ~~molecule~~preparations, ~~inhibitor~~ranging ~~abatacept~~from ~~(Orencia®)~~simple aspirin to the COX-2 inhibitors;

· ~~Anti~~Immunosuppressive/antineoplastic ~~CD20 B-cell-directed therapy~~drugs, ~~rituximab~~including ~~(Rituxan®);~~azathioprine and methotrexate;

· ~~Janus~~TNF ~~Kinase~~(Tumor Necrosis Factor) inhibitors, also known as anti-TNF therapy, currently represented by etanercept (~~JAK~~Enbrel®), ~~inhibitor~~infliximab (Remicade®), ~~tofacitinib~~and ~~citrate~~adalimumab (~~Xeljanz~~Humira®). and the newer entries, certolizumab (Cimzia®) and golimumab (Simponi®);

12· Soluble Interleukin-l (IL-I) Receptor Therapy, Anakinra (Kineret®) and (Il-6) tocilizumab (Actemra®);

~~Many~~· ~~large~~Costimulatory ~~and~~molecule ~~small~~inhibitor ~~pharmaceutical~~abatacept ~~companies are active in this market, with Amgen Corporation~~ (~~with Pfizer), Johnson & Johnson, Inc. (with Merck) and Abbott Laboratories dominating the market for biologic therapies with their respective products, Enbrel~~Orencia®, Remicade® and Humira®. According to each company’s 2015 annual reports, Enbrel generated revenues of approximately $8.7 billion combined for Amgen and Pfizer, Remicade generated revenues of more than $9.3 billion combined for Johnson & Johnson and Merck, and AbbVie reported generated revenues of $14 billion for Humira. For other TNF inhibitors, Cimzia generated revenues of $1.2 billion for UCB); Simponi generated revenues of $2 billion for Johnson & Johnson and Merck; and Orencia generated revenues of $1.9 billion for Bristol Myers Squibb. Kineret generated revenues of $94 million in sales for SOBI, which acquired from Amgen the rights to develop and commercialize Kineret in 2014. Actemra generated revenues of $1.5 billion and Rituxan $5.6 billion, respectively, for Roche. Xeljanz earned $523 million for Pfizer in 2015. Revenue figures above reflect the use of these drugs for RA, other indications and off label uses.

~~Post–marketing~~· ~~experience~~Anti has indicated that current and newly-marketed disease modifying anti-rheumatic drugs (DMARDs) subject patients to an increased risk of certain SAEs. Products which inhibit the action of TNF-alpha, being the longest on the market and the most studied, have demonstrated an increased incidence of certain SAEs. Due to suppression of the immune system by these products, these SAEs include serious and opportunistic infections such as tuberculosis, fungal infections, and listeria infection, and increased risk of lymphomas. Transient neutropenia and other blood dyscrasias have been reported. TNF inhibitors are also not recommended in patients with demyelinating disease or with congestive heart failure. Rituxan (anti-CD20) ~~use increases the potential for Hep~~ B ~~reactivation and multifocal leukoencephalopathy, a fatal viral disease. Kineret (IL~~-~~1) also shows an increased the risk of infection. Actemra (IL~~cell-6)directed ~~use has led to increased liver enzyme levels~~therapy, ~~hypertension,~~rituximab ~~transient neutropenia, and an increase in cholesterol levels. Orencia~~ (~~T cell inhibition~~Rituxan®); ~~also works by weakening the immune system, therefore can increase the risk of infections. Patients using Orencia have developed lymphoma~~ and lung cancer. Xeljanz (JAK) is the newest RA treatment to enter the market. It has demonstrated similar side effects to TNF inhibitors, including invasive and opportunistic infections and the reactivation of tuberculosis. Lymphomas and other malignancies have been observed in patients treated with Xeljanz. In a study by a Swedish research group published in November 2012 by the American College of Rheumatology entitled, “Mortality Rates in Patients with Rheumatoid Arthritis Treated with Tumor Necrosis Factor Inhibitors”, following treatment of RA with either of the TNF inhibitors Enbrel, Humira or Remicade, mortality rates were on average approximately one death per 30 patients treated in the first three years of treatment. Findings such as these and the long list of serious adverse events for all of the currently marketed treatments indicate that new and safer treatments for autoimmune diseases such as RA are needed.

~~Government~~· ~~Regulation and~~Janus ~~Product~~Kinase ~~Approval~~(JAK) inhibitor, tofacitinib citrate (Xeljanz).

~~The~~Many ~~FDA~~large and ~~comparable~~small ~~regulatory~~pharmaceutical ~~agencies~~companies inare ~~state~~active ~~and~~in ~~local~~this ~~jurisdictions~~market, ~~and~~with inAmgen ~~foreign~~Corporation ~~countries~~(with ~~impose~~Pfizer), ~~substantial~~Johnson ~~requirements~~& ~~upon~~Johnson, ~~the~~Inc. ~~testing~~ (~~preclinical~~with Merck) and ~~clinical),~~Abbott Laboratories ~~manufacturing,~~dominating ~~labeling,~~the ~~storage,~~market ~~recordkeeping,~~for ~~advertising~~biologic therapies with their respective products, ~~promotion~~Enbrel®, ~~import~~Remicade® and Humira®. According to each company’s 2016 annual reports, ~~export~~Enbrel generated revenues of approximately $8.9 billion combined for Amgen and Pfizer, ~~marketing~~Remicade generated revenues of more than $8.2 billion combined for Johnson & Johnson and ~~distribution~~Merck, ~~among~~and ~~other~~AbbVie reported ~~things~~generated revenues of over $16 billion for Humira. For other TNF inhibitors, Cimzia generated revenues of ~~drugs~~$1.4 billion for UCB; Simponi generated revenues of $2.5 billion for Johnson & Johnson and ~~drug~~Merck; ~~product~~and ~~candidates~~Orencia generated revenues of $2.3 Ifbillion for weBristol doMyers ~~not~~Squibb. Kineret ~~comply~~generated ~~with~~revenues ~~applicable~~of ~~requirements,~~$114 wemillion ~~may~~in besales ~~fined~~for SOBI, which acquired from Amgen the ~~government~~rights ~~may~~to ~~refuse~~develop toand ~~approve~~commercialize ~~our~~Kineret ~~marketing~~in ~~applications~~2014. Actemra orgenerated ~~allow~~revenues usof to$1.7 ~~manufacture~~billion orfor ~~market~~Roche. Also ~~our~~for ~~products~~Roche, Rituxan earned $1.5 billion for the treatment of RA alone, and webillions ~~may~~more befor ~~criminally~~other ~~prosecuted~~indications. Xeljanz Wenearly ~~and~~doubled ~~our~~its ~~manufacturers~~earnings ~~may~~for ~~also~~Pfizer befrom ~~subject~~$523 million in 2015 to ~~regulations~~$927 ~~under~~million ~~other~~in U2016.S. ~~federal,~~Revenue ~~state~~figures above reflect the use of these drugs for RA, ~~local~~other indications and ~~foreign~~off ~~laws~~label uses.

InPost–marketing experience has indicated that current and newly-marketed disease modifying anti-rheumatic drugs (DMARDs) subject patients to an increased risk of certain SAEs. Products which inhibit the ~~United~~action ~~States~~of TNF-alpha, being the ~~FDA~~longest ~~regulates~~on ~~drugs~~the market and the most studied, have demonstrated ~~under~~an increased incidence of certain SAEs. Due to suppression of the ~~Food~~immune ~~Drug~~system by these products, these SAEs include serious and ~~Cosmetic~~opportunistic ~~Act~~infections such as tuberculosis, orfungal ~~FDCA~~infections, and ~~implementing~~listeria ~~regulations~~infection, and increased risk of lymphomas. Transient ~~The~~neutropenia ~~process~~and ~~required~~other byblood dyscrasias have been reported. TNF inhibitors are also not recommended in patients with demyelinating disease or with congestive heart failure. Rituxan (anti-CD20) use increases the ~~FDA~~potential ~~before~~for ~~our~~Hep ~~drug~~B ~~candidates~~reactivation ~~may~~and bemultifocal ~~marketed~~leukoencephalopathy, a fatal viral disease. Kineret (IL-1) also shows an increased the risk of infection. Actemra (IL-6) use has led to increased liver enzyme levels, hypertension, transient neutropenia, and an increase in cholesterol levels. Orencia (T cell inhibition) also works by weakening the ~~United~~immune ~~States~~system, ~~generally~~therefore ~~involves~~can increase the ~~following~~risk of infections. Patients using Orencia have developed lymphoma and lung cancer. Xeljanz (~~although~~JAK) is the ~~FDA~~newest isRA ~~given~~treatment ~~wide~~to ~~discretion~~enter the market. It has demonstrated similar side effects to ~~impose~~TNF ~~different~~inhibitors, including invasive and opportunistic infections and the reactivation orof ~~more~~tuberculosis. Lymphomas ~~stringent~~and ~~requirements~~other onmalignancies have been observed in patients treated with Xeljanz. In a ~~case-~~study by~~-case~~ a ~~basis):~~Swedish research group published in November 2012 by the American College of Rheumatology entitled, “Mortality Rates in Patients with Rheumatoid Arthritis Treated with Tumor Necrosis Factor Inhibitors”, following treatment of RA with either of the TNF inhibitors Enbrel, Humira or Remicade, mortality rates were on average approximately one death per 30 patients treated in the first three years of treatment. Findings such as these and the long list of serious adverse events for all of the currently marketed treatments indicate that new and safer treatments for autoimmune diseases such as RA are needed.

· completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice or GLP regulations and other regulations;13

·Government ~~submission~~Regulation and toProduct ~~the FDA of an IND application which must become effective before clinical trials may begin;~~Approval

·The ~~performance~~FDA ofand ~~multiple~~comparable ~~adequate~~regulatory agencies in state and ~~well-controlled~~local ~~clinical~~jurisdictions ~~trials~~and ~~meeting~~in ~~FDA~~foreign ~~requirements~~countries toimpose ~~establish~~substantial requirements upon the ~~safety~~testing (preclinical and ~~efficacy~~clinical), manufacturing, labeling, storage, recordkeeping, advertising, promotion, import, export, marketing and distribution, among other things, of ~~the~~drugs and drug product ~~candidate~~candidates. ~~for~~If ~~each~~we ~~proposed~~do ~~indication;~~not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing applications or allow us to manufacture or market our products, and we may be criminally prosecuted. We and our manufacturers may also be subject to regulations under other U.S. federal, state, local and foreign laws.

·In ~~submission~~the ofUnited aStates, ~~Biological~~the ~~License~~FDA ~~Application~~regulates drugs under the Food Drug and Cosmetic Act, or ~~BLA~~FDCA, toand implementing regulations. The process required by the FDA; before our drug candidates may be marketed in the United States generally involves the following (although the FDA is given wide discretion to impose different or more stringent requirements on a case-by-case basis):

13· completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice or GLP regulations and other regulations;

· ~~satisfactory~~submission ~~completion~~to ofthe an FDA ~~pre-approval inspection~~ of ~~the~~an ~~manufacturing~~IND ~~facilities~~application at which ~~the~~must ~~product~~become ~~candidate~~effective isbefore ~~produced,~~clinical ~~and~~trials ~~potentially~~may ~~other involved facilities as well, to assess compliance with cGMP, regulations and other applicable regulations~~begin; ~~and~~

· ~~the~~performance ~~FDA~~of ~~review~~multiple adequate and ~~approval~~well-controlled ofclinical ~~the~~trials ~~BLA~~meeting ~~prior~~FDA requirements to ~~any~~establish ~~commercial~~the ~~marketing,~~safety ~~sale~~and orefficacy ~~shipment~~ of the ~~drug.~~product candidate for each proposed indication;

~~The~~· ~~testing~~submission ~~and~~of ~~approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our drug candidates will be granted on~~ a ~~timely~~Biological ~~basis,~~License ifApplication ator ~~all.~~BLA ~~Risks~~ to ~~us related to these regulations are described in~~ the ~~Risk Factors in Item 1A of this Annual Report.~~FDA;

A· ~~separate~~satisfactory ~~submission~~completion toof ~~the FDA, under~~ an ~~existing~~ ~~IND must also be made for each successive clinical trial conducted during product development. The~~ FDA ~~must~~pre-approval ~~also~~inspection ~~approve changes~~of ~~to an existing IND. Further, an independent institutional review board, or IRB, for each medical center proposing to conduct~~ the ~~clinical~~manufacturing ~~trial~~facilities ~~must review and approve the plan for any clinical trial before it commences~~ at ~~that~~which ~~center and it must monitor~~ the ~~study~~product ~~until~~candidate ~~completed.~~is ~~The FDA~~produced, ~~the~~and ~~IRB~~potentially orother ~~the~~involved ~~sponsor~~facilities ~~may~~as ~~suspend a clinical trial at any time on various grounds~~well, ~~including a finding that the subjects or patients are being exposed~~ to anassess ~~unacceptable~~compliance ~~health~~with ~~risk.~~cGMP, ~~Clinical~~regulations ~~testing~~and ~~also~~other ~~must~~applicable ~~satisfy extensive Good Clinical Practice or GCP requirements and~~ regulations; ~~for informed consent.~~and

~~Clinical~~· ~~Trials~~the FDA review and approval of the BLA prior to any commercial marketing, sale or shipment of the drug.

~~For~~The ~~purposes~~testing ofand ~~BLA~~approval ~~submission~~process requires substantial time, effort and ~~approval~~financial resources, ~~clinical~~ ~~trials~~and ~~are~~we ~~typically~~cannot ~~conducted~~be incertain ~~the~~that ~~following~~any ~~three~~approvals ~~sequential~~for ~~phases,~~our ~~which~~drug ~~may~~candidates ~~overlap~~will ~~(although~~be ~~additional~~granted oron ~~different~~a ~~trials~~timely ~~may~~basis, beif ~~required~~at byall. Risks to us related to these regulations are described in the ~~FDA~~Risk asFactors ~~well):~~in Item 1A of this Annual Report.

·A ~~Phase~~separate Isubmission ~~clinical~~to ~~trials~~the ~~are~~FDA, ~~initially~~under an existing IND must also be made for each successive clinical trial conducted induring aproduct ~~limited~~development. ~~population~~The toFDA ~~test~~must ~~the~~also ~~drug~~approve changes ~~candidate~~to ~~for~~an ~~safety,~~existing ~~dose~~IND. ~~tolerance~~Further, ~~absorption~~an independent institutional review board, ~~metabolism~~or IRB, ~~distribution~~for each medical center proposing to conduct the clinical trial must review and ~~excretion~~approve inthe ~~healthy~~plan ~~humans~~for ~~or,~~any onclinical ~~occasion,~~trial inbefore ~~patients,~~it ~~such~~commences asat ~~cancer~~that ~~patients.~~center Inand ~~some~~it ~~cases,~~must ~~particularly~~monitor the instudy ~~cancer~~until ~~trials~~completed. The FDA, athe IRB or the sponsor may ~~decide~~suspend toa ~~conduct~~clinical ~~what~~trial isat ~~referred~~any totime ason various grounds, including a ~~“Phase~~finding ~~1b”~~that ~~evaluation,~~the ~~which~~subjects isor apatients ~~second~~are ~~safety-focused~~being ~~Phase~~exposed Ito ~~clinical~~an ~~trial~~unacceptable ~~typically~~health ~~designed~~risk. toClinical ~~evaluate~~testing ~~the~~also ~~impact~~must ofsatisfy ~~the~~extensive Good ~~drug~~Clinical ~~candidate~~Practice inor ~~combination~~GCP ~~with~~requirements ~~currently~~and ~~FDA-approved~~regulations ~~drugs~~for informed consent.

· Phase II clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, to determine the efficacy of the drug candidate for specific targeted indications and to determine an optimal dosage. Multiple Phase II clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more expensive Phase III clinical trials. In some cases, a sponsor may decide to conduct what is referred to as a “Phase IIb” evaluation, which is a second, confirmatory Phase II clinical trial that could, if positive and accepted by the FDA, serve as a pivotal clinical trial in the approval of a drug candidate.14

·Clinical Phase III clinical trials are commonly referred to as pivotal trials. When Phase II clinical trials demonstrate that a dose range of the drug candidate is effective and has an acceptable safety profile, Phase III clinical trials are undertaken in large patient populations to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.Trials

InFor ~~some~~purposes ~~cases, the FDA may condition continued approval~~ of a BLA onsubmission ~~the~~and ~~sponsor’s agreement to conduct additional~~ approval, clinical trials ~~with~~are ~~due~~typically ~~diligence.~~conducted Inin ~~other~~the ~~cases,~~following ~~the sponsor~~three ~~and~~sequential ~~the~~phases, ~~FDA~~which may ~~agree~~overlap ~~that~~(although additional ~~safety and/~~or ~~efficacy~~different trials ~~data~~may ~~should~~ be ~~provided;~~required ~~however,~~by ~~continued approval of~~ the ~~BLA~~ ~~may~~FDA ~~not always depend on timely submission of such information. Such post-approval studies are typically referred to~~ as ~~Phase IV studies.~~well):

~~Biological~~· ~~License~~Phase ~~Application~~I clinical trials are initially conducted in a limited population to test the drug candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy humans or, on occasion, in patients, such as cancer patients. In some cases, particularly in cancer trials, a sponsor may decide to conduct what is referred to as a “Phase 1b” evaluation, which is a second safety-focused Phase I clinical trial typically designed to evaluate the impact of the drug candidate in combination with currently FDA-approved drugs.

~~The~~· ~~results~~Phase ofII ~~drug~~clinical ~~candidate~~trials ~~development, preclinical~~are ~~testing~~generally ~~and~~conducted ~~clinical~~in ~~trials,~~a ~~together~~limited ~~with,~~patient ~~among~~population ~~other~~to ~~things,~~identify ~~detailed~~possible ~~information~~adverse oneffects ~~the~~and ~~manufacture~~safety ~~and~~risks, ~~composition~~ to determine the efficacy of the ~~product~~drug ~~and~~candidate ~~proposed~~for ~~labeling,~~specific targeted indications and ~~the~~to ~~payment~~determine ofan aoptimal ~~user~~dosage. ~~fee,~~Multiple ~~are~~Phase ~~submitted~~II toclinical trials may be conducted by the ~~FDA~~sponsor asto ~~part~~obtain ofinformation aprior ~~BLA.~~to ~~The~~beginning ~~FDA~~larger ~~reviews all~~and ~~BLAs~~more ~~submitted~~expensive ~~before~~Phase itIII ~~accepts~~clinical ~~them~~trials. ~~for~~In ~~filing~~some ~~and~~cases, a sponsor may ~~request~~decide ~~additional~~to ~~information~~conduct ~~rather~~what ~~than~~is ~~accepting~~referred to as a ~~BLA~~“Phase ~~for~~IIb” ~~filing. Once~~evaluation, which is a ~~BLA~~second, isconfirmatory ~~accepted~~Phase ~~for~~II ~~filing~~clinical trial that could, if positive and accepted by the FDA, ~~begins~~serve anas a pivotal clinical trial in~~-depth~~ ~~review~~the approval of ~~the~~a ~~application~~drug candidate.

14· Phase III clinical trials are commonly referred to as pivotal trials. When Phase II clinical trials demonstrate that a dose range of the drug candidate is effective and has an acceptable safety profile, Phase III clinical trials are undertaken in large patient populations to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

~~During~~In ~~its~~some ~~review of a BLA~~cases, the FDA may ~~refer the~~condition ~~application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved.~~continued ~~The~~approval ~~FDA~~of ~~may refuse to approve~~ a BLA ~~and~~on ~~issue a not approvable letter if~~ the ~~applicable~~sponsor’s ~~regulatory~~agreement ~~criteria~~to ~~are~~conduct ~~not satisfied, or it may require~~ additional clinical ortrials ~~other~~with ~~data,~~due ~~including one or more additional pivotal Phase III clinical trials~~diligence. ~~Even~~ ifIn ~~such~~other ~~data are submitted~~cases, the ~~FDA may ultimately decide that the BLA does not satisfy the criteria for approval. Data from~~ ~~clinical~~sponsor ~~trials are not always conclusive~~ and the FDA may ~~interpret~~agree ~~data~~that ~~differently~~additional ~~than~~safety we and/or ~~our~~efficacy ~~collaboration partners interpret~~ data. Ifshould ~~the~~be ~~FDA’s~~provided; ~~evaluations of the BLA and the clinical and manufacturing procedures and facilities are favorable~~however, ~~the FDA~~continued ~~may issue either an~~ approval ~~letter or an approvable letter, which contains the conditions that must be met in order to secure final approval~~ of the BLA. ~~If and when those conditions have been met to the FDA’s satisfaction, the FDA will issue an approval letter, authorizing commercial marketing of the drug for certain indications. The FDA~~ may ~~withdraw drug approval if ongoing regulatory requirements are~~ not ~~met~~always ordepend if safety problems occur after the drug reaches the market. In addition, the FDA may require testing, including Phase IV clinical trials, and surveillance programs to monitor the effect of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a drug based on ~~the~~timely ~~results~~submission of ~~these~~such ~~post-marketing programs~~information. ~~Drugs~~ ~~may~~Such ~~be marketed only for the FDA~~post-~~approved~~approval ~~indications~~studies ~~and in accordance with the FDA-approved label. Further, if there~~ are ~~any~~ ~~modifications~~typically toreferred ~~the drug, including changes in indications, other labeling changes, or manufacturing processes or facilities, we may be required~~ to ~~submit~~as ~~and obtain FDA approval of a new BLA or BLA supplement, which may require us to develop additional~~Phase IV ~~data or conduct additional preclinical~~ studies ~~and clinical trials~~.

~~Fast~~Biological ~~Track~~License ~~Designation~~Application

The ~~FDA’s~~results ~~fast~~of ~~track~~drug ~~program~~candidate ~~is intended~~development, topreclinical ~~facilitate~~testing ~~the development~~ and toclinical ~~expedite~~trials, ~~the~~together ~~review~~with, ofamong ~~drugs~~other ~~that~~things, ~~are~~detailed ~~intended~~information ~~for~~on the ~~treatment~~manufacture ofand ~~a serious or life-threatening~~composition ~~condition~~of ~~and that demonstrate~~ the ~~potential~~product toand ~~address~~proposed ~~unmet~~labeling, ~~medical~~and ~~needs. Under~~ the ~~fast~~payment ~~track~~of ~~program, applicants may seek traditional approval for~~ a ~~product~~user ~~based~~fee, onare ~~data~~submitted ~~demonstrating~~to anthe ~~effect~~FDA onas apart ~~clinically~~of ~~meaningful endpoint, or approval based on~~ a ~~well-established surrogate endpoint~~BLA. The ~~sponsor of a new drug candidate may request the~~ FDA ~~to designate the drug candidate~~reviews ~~for~~all aBLAs ~~specific~~submitted ~~indication~~before asit aaccepts ~~fast~~them ~~track~~for ~~drug~~filing atand ~~the~~may ~~time~~request ofadditional ~~original~~information ~~submission~~rather ofthan ~~its~~accepting ~~IND,~~a orBLA atfor ~~any time thereafter prior~~filing. toOnce ~~receiving marketing approval of~~ a ~~marketing~~BLA ~~application.~~is ~~The~~accepted ~~FDA~~for ~~will~~filing, ~~determine if~~ the ~~drug~~FDA ~~candidate~~begins ~~qualifies~~an ~~for~~in-depth ~~fast~~review ~~track designation within 60 days~~ of ~~receipt of~~ the ~~sponsor’s request~~application.

IfDuring its review of a BLA, the FDA ~~grants~~may ~~fast~~refer the ~~track~~application ~~designation, it~~to ~~may~~an ~~initiate~~advisory committee for review, ofevaluation ~~sections~~and ofrecommendation aas ~~BLA~~to ~~before~~whether the application isshould ~~complete~~be approved. The ~~This~~FDA ~~so-called~~may ~~“rolling~~refuse ~~review”~~to isapprove a BLA and issue a not approvable letter if the applicable regulatory criteria are not satisfied, ~~available~~or it may require additional clinical or other data, including one or more additional pivotal Phase III clinical trials. Even if such data are submitted, the ~~applicant~~FDA ~~provides~~may ultimately decide that the BLA does not satisfy the criteria for approval. Data from clinical trials are not always conclusive and the FDA ~~approves~~may ainterpret ~~schedule~~data ~~for~~differently than we or our collaboration partners interpret data. If the ~~submission~~FDA’s evaluations of the ~~remaining~~BLA ~~information~~and the clinical and manufacturing procedures and facilities are favorable, the ~~applicant~~FDA may ~~has~~issue ~~paid~~either ~~applicable~~an ~~user~~approval ~~fees~~letter or an approvable letter, which contains the conditions that must be met in order to secure final approval of the BLA. ~~The~~If and when those conditions have been met to the FDA’s ~~Prescription~~satisfaction, ~~Drug~~the ~~User~~FDA ~~Fee~~will ~~Act~~issue oran ~~PDUFA~~approval letter, ~~review~~authorizing ~~clock~~commercial marketing of the drug for ~~both~~certain aindications. ~~standard~~The ~~and~~FDA ~~priority BLA~~may ~~for~~withdraw adrug ~~fast~~approval ~~track~~if ~~product~~ongoing ~~does~~regulatory requirements are not ~~begin~~met ~~until~~or if safety problems occur after the ~~complete~~drug ~~application~~reaches isthe ~~submitted~~market. ~~Additionally~~In addition, ~~fast~~the ~~track~~FDA ~~designation~~may require testing, including Phase IV clinical trials, and surveillance programs to monitor the effect of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a drug based on the results of these post-marketing programs. Drugs may be ~~withdrawn~~marketed byonly for the FDA-approved indications and in accordance with the FDA-approved label. Further, if itthere ~~believes~~are any ~~that~~modifications to the ~~designation~~drug, isincluding nochanges ~~longer~~in ~~supported~~indications, byother ~~emerging~~labeling ~~data~~changes, or ifmanufacturing ~~the~~processes ~~designated~~or facilities, ~~drug~~we ~~development~~may ~~program~~be isrequired noto ~~longer~~submit ~~being~~and ~~pursued~~obtain FDA approval of a new BLA or BLA supplement, which may require us to develop additional data or conduct additional preclinical studies and clinical trials.

InFast ~~some~~Track ~~cases, a fast track designated drug candidate may also qualify for one or more of the following programs:~~Designation

·The ~~Priority~~FDA’s ~~Review.~~fast Astrack ~~explained~~program ~~above,~~is aintended to ~~drug~~facilitate ~~candidate~~the ~~may~~development beand ~~eligible~~to expedite the review of drugs that are intended for athe ~~six-month~~treatment ~~priority~~of ~~review.~~a ~~The~~serious ~~FDA~~or ~~assigns~~life-threatening condition ~~priority~~and ~~review~~that ~~status~~demonstrate the potential to anaddress ~~application~~unmet ifmedical needs. Under the ~~drug~~fast ~~candidate~~track ~~provides~~program, applicants may seek traditional approval for a ~~significant~~product ~~improvement~~based ~~compared~~on todata ~~marketed~~demonstrating ~~drugs~~an ineffect ~~the~~on ~~treatment,~~a ~~diagnosis~~clinically meaningful endpoint, or ~~prevention~~approval ofbased on a ~~disease~~well-established surrogate endpoint. The Asponsor ~~fast~~of ~~track~~a new drug ~~would~~candidate ~~ordinarily~~may ~~meet~~request the FDA’s ~~criteria~~to ~~for~~designate ~~priority~~the ~~review,~~drug ~~but~~candidate for ~~may~~a ~~also~~specific beindication ~~assigned~~as a ~~standard~~fast ~~review.~~track Wedrug doat ~~not~~the ~~know~~time ~~whether any~~ of ~~our~~original ~~drug~~submission ~~candidates~~of ~~will~~its beIND, ~~assigned~~or ~~priority~~at ~~review~~any ~~status~~time ~~or,~~thereafter ifprior ~~priority~~to receiving ~~review~~marketing ~~status~~approval isof ~~assigned,~~a ~~whether~~marketing ~~that~~application. ~~review~~The orFDA ~~approval~~ will bedetermine ~~faster~~if ~~than~~the ~~conventional~~drug ~~FDA~~candidate ~~procedures,~~qualifies orfor ~~that~~fast ~~the~~track designation ~~FDA~~within ~~will~~60 days ~~ultimately~~of ~~approve~~receipt of the ~~drug~~sponsor’s request.

· Accelerated Approval. Under the FDA’s accelerated approval regulations, the FDA is authorized to approve drug candidates that have been studied for their safety and efficacy in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit to patients over existing treatments based upon either a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than patient survival or irreversible morbidity. In clinical trials, surrogate endpoints are alternative measurements of the symptoms of a disease or condition that are substituted for measurements of observable clinical symptoms. A drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase IV or post-approval clinical trials to validate the surrogate endpoint or confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies with due diligence, or to validate a surrogate endpoint or confirm a clinical benefit during post-marketing studies, may cause the FDA to seek to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.15

15If the FDA grants fast track designation, it may initiate review of sections of a BLA before the application is complete. This so-called “rolling review” is available if the applicant provides and the FDA approves a schedule for the submission of the remaining information and the applicant has paid applicable user fees. The FDA’s Prescription Drug User Fee Act or PDUFA review clock for both a standard and priority BLA for a fast track product does not begin until the complete application is submitted. Additionally, fast track designation may be withdrawn by the FDA if it believes that the designation is no longer supported by emerging data, or if the designated drug development program is no longer being pursued.

~~When~~In ~~appropriate~~some cases, wea ~~intend to seek~~ fast track ~~designation,~~ ~~accelerated~~designated ~~approval or priority review for our~~ drug ~~candidates. We cannot predict whether any of our drug candidates~~ ~~will~~candidate ~~obtain~~may ~~fast~~also ~~track,~~qualify ~~accelerated~~for ~~approval,~~one or ~~priority~~more ~~review designation, or the ultimate impact, if any,~~ of ~~these expedited review mechanisms on~~ the ~~timing~~following ~~or likelihood of the FDA approval of any of our drug candidates.~~programs:

~~Satisfaction~~· ofPriority ~~the~~Review. ~~FDA~~As ~~regulations~~explained ~~and approval requirements or similar requirements of foreign regulatory agencies typically takes several years~~above, ~~and~~a ~~the~~drug ~~actual~~candidate ~~time required~~ may ~~vary~~be ~~substantially~~eligible ~~based~~for ~~upon~~a ~~the~~six-month ~~type,~~priority ~~complexity~~review. ~~and~~The ~~novelty~~FDA ofassigns ~~the~~priority ~~product~~review orstatus ~~disease.~~to ~~Typically,~~an application if athe drug candidate ~~is intended~~provides ~~to treat~~ a ~~chronic~~significant ~~disease,~~improvement ascompared isto ~~the~~marketed ~~case~~drugs ~~with~~in the ~~drug candidate we are developing~~treatment, ~~safety~~diagnosis ~~and~~or ~~efficacy~~prevention ~~data must be gathered over an extended period~~ of ~~time~~a disease. ~~Government~~A ~~regulation~~fast ~~may~~track ~~delay~~drug orwould ~~prevent~~ordinarily ~~marketing~~meet ofthe ~~drug~~FDA’s ~~candidates~~criteria for apriority ~~considerable period~~review, ofbut ~~time~~may ~~and~~also ~~impose~~be ~~costly~~assigned ~~procedures~~a ~~upon~~standard ~~our activities~~review. ~~The~~We ~~FDA~~do ~~or any other regulatory agency may~~ not ~~grant~~know ~~approvals for~~whether ~~changes~~any inof ~~dosage form or new indications for~~ our drug candidates onwill ~~a timely basis, or at all. Even if a drug candidate receives regulatory approval, the approval may~~ be ~~significantly~~assigned ~~limited~~priority toreview ~~specific~~status ~~disease states~~or, ~~patient~~if ~~populations~~priority ~~and~~review ~~dosages.~~status ~~Further, even after regulatory approval~~ is ~~obtained~~assigned, ~~later~~whether ~~discovery~~that ofreview ~~previously unknown problems with a drug may result in restrictions on the drug~~ or ~~even~~approval ~~complete~~will ~~withdrawal~~be offaster ~~the~~than ~~drug~~conventional ~~from~~FDA ~~the market. Delays in obtaining~~procedures, or ~~failures~~that tothe ~~obtain,~~FDA ~~regulatory~~will ~~approvals for~~ultimately ~~our~~approve ~~drug~~the ~~candidate would harm our business~~drug. ~~In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action.~~

~~Regulatory~~· ~~Requirements~~Accelerated Approval. Under the FDA’s accelerated approval regulations, the FDA is authorized to approve drug candidates that have been studied for their safety and efficacy in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit to patients over existing treatments based upon either a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than patient survival or irreversible morbidity. In clinical trials, surrogate endpoints are alternative measurements of the symptoms of a disease or condition that are substituted for measurements of observable clinical symptoms. A drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase IV or post-approval clinical trials to validate the surrogate endpoint or confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies with due diligence, or to validate a surrogate endpoint or confirm a clinical benefit during post-marketing studies, may cause the FDA to seek to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

~~Any~~When ~~drugs manufactured or distributed by us or any potential collaboration partners pursuant to future FDA approvals are subject to continuing regulation by the FDA~~appropriate, ~~including recordkeeping~~we ~~requirements~~intend ~~and reporting of adverse experiences associated with the drug. Drug manufacturers and their subcontractors are required~~ to ~~register~~seek ~~with~~fast ~~the FDA and certain state agencies~~track designation, ~~and~~accelerated ~~are~~approval ~~subject~~or topriority ~~periodic~~review ~~unannounced inspections by the FDA and certain state agencies~~ for ~~compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and~~ our ~~third-party~~drug ~~manufacturers~~candidates. ~~Failure~~We tocannot ~~comply~~predict ~~with~~whether ~~the~~any ~~statutory~~of ~~and~~our ~~regulatory~~drug candidates ~~requirements~~will ~~can~~obtain ~~subject~~fast ~~a manufacturer to possible legal or regulatory action~~track, ~~such~~accelerated ~~as warning letters~~approval, ~~suspension of manufacturing, sales~~ or ~~use,~~priority ~~seizure~~review ~~of product~~designation, ~~injunctive action~~ or ~~possible~~the ~~civil~~ultimate ~~penalties.~~impact, Weif ~~cannot~~any, beof ~~certain~~these ~~that we or our present or~~expedited ~~future~~review ~~third-party~~mechanisms ~~manufacturers~~on ~~or suppliers will be able to comply with~~ the ~~cGMP~~timing ~~regulations and other ongoing FDA regulatory requirements. If our present~~ or ~~future~~likelihood ~~third-party~~of ~~manufacturers or suppliers are not able to comply with these requirements,~~ the FDA ~~may halt our clinical trials, require us to recall a drug from distribution, or withdraw~~ approval of ~~the~~any ~~BLA~~of ~~for~~our ~~that~~ drug candidates.

~~The~~Satisfaction of the FDA ~~closely~~regulations ~~regulates~~and approval requirements or similar requirements of foreign regulatory agencies typically takes several years, and the ~~post-approval~~actual time required ~~marketing~~may vary substantially based upon the type, complexity and ~~promotion~~novelty of ~~drugs~~the product or disease. Typically, ~~including~~if ~~standards~~a ~~and~~drug ~~regulations~~candidate ~~for~~is intended ~~direct-~~to~~-consumer~~ ~~advertising~~treat a chronic disease, ~~off-label~~as ~~promotion~~is the case with the drug candidate we are developing, ~~industry-sponsored~~ ~~scientific~~safety and ~~educational~~efficacy ~~activities~~data must be gathered over an extended period of time. Government regulation may delay or prevent marketing of drug candidates for a considerable period of time and ~~promotional~~impose costly procedures upon our activities. ~~involving~~The ~~the~~FDA ~~Internet~~or any other regulatory agency may not grant approvals for changes in dosage form or new indications for our drug candidates on a timely basis, or at all. AEven ~~company~~if ~~can~~a ~~make~~drug candidate receives ~~only~~regulatory ~~those~~approval, ~~claims~~the ~~relating~~approval may be significantly limited to ~~safety~~specific disease states, patient populations and ~~efficacy~~dosages. ~~that~~Further, even ~~are~~after ~~approved~~regulatory byapproval ~~the~~is ~~FDA.~~obtained, ~~Failure~~later todiscovery ~~comply~~of previously unknown problems with ~~these~~a ~~requirements~~drug ~~can~~ may result in ~~adverse~~restrictions on ~~publicity,~~the ~~warning~~drug ~~and/~~or ~~untitled~~even ~~letters~~complete withdrawal of the drug from the market. Delays in obtaining, ~~corrective~~or ~~advertising~~failures ~~and~~to ~~potential~~obtain, ~~civil~~regulatory ~~and~~approvals for ~~criminal~~our ~~penalties~~drug candidate would harm our business. In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action.

~~Orphan Drug Designation in the United States, the European Union and other foreign jurisdictions~~16

InRegulatory ~~June~~Requirements 2015, the FDA granted Orphan Drug Designation to PRTX-100 in the treatment for ITP. In September 2015, COMP issued a positive opinion recommending PRTX-100 for designation as an orphan medicinal product for ITP. Based upon study data to date, we believe that PRTX-100 may be effective in the treatment of ITP, as well as other orphan immunological diseases.

~~Under~~Any ~~the~~drugs ~~U.S.~~manufactured ~~Orphan~~or ~~Drug~~distributed ~~Act~~by us or any potential collaboration partners pursuant to future FDA approvals are subject to continuing regulation by the FDA, ~~Orphan~~including recordkeeping requirements and reporting of adverse experiences associated with the drug. Drug manufacturers and their subcontractors ~~Designation~~are isrequired ~~granted~~to byregister with the FDA toand ~~drugs~~certain ~~intended~~state agencies, and are subject to ~~treat~~periodic aunannounced ~~rare~~inspections ~~disease~~by orthe ~~condition~~FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which ~~for~~impose ~~this~~certain ~~program~~procedural and isdocumentation ~~defined~~requirements asupon us and our third-party manufacturers. Failure to comply with the statutory and regulatory requirements ~~having~~can subject a ~~prevalence~~manufacturer to possible legal or regulatory action, such as warning letters, suspension of ~~fewer~~manufacturing, ~~than~~sales or ~~200~~use,~~000~~ ~~individuals~~seizure inof ~~the~~product, ~~United~~injunctive ~~States.~~action ~~Orphan~~or ~~Drug~~possible ~~Designation~~civil ~~must~~penalties. We cannot be ~~requested~~certain ~~before~~that ~~submitting a~~we ~~marketing~~or ~~application.~~our ~~After~~present ~~the~~or ~~FDA~~future third-party ~~grants~~manufacturers anor ~~Orphan~~suppliers ~~Drug~~will ~~Designation,~~be ~~the~~able ~~generic~~to ~~identity~~comply ofwith the ~~therapeutic~~cGMP ~~agent~~regulations and ~~its~~other ongoing FDA regulatory requirements. ~~potential~~If ~~orphan~~our ~~use~~present or future third-party manufacturers or suppliers are ~~disclosed~~not ~~publicly~~able byto comply with these requirements, the FDA may halt our clinical trials, require us to recall a drug from distribution, or withdraw approval of the BLA for that drug.

~~Orphan~~The ~~Drug~~FDA ~~Designation~~closely ~~does~~regulates ~~not shorten~~ the post-approval ~~regulatory~~marketing ~~review~~ and ~~approval~~promotion ~~process~~of drugs, ~~nor~~including ~~does~~standards itand ~~provide~~regulations ~~any~~for ~~advantage~~direct-to-consumer inadvertising, ~~the~~off-label ~~regulatory review and approval process. However~~promotion, ifindustry-sponsored ascientific ~~product~~and ~~which~~educational ~~has~~activities anand ~~Orphan~~promotional ~~Drug~~activities ~~Designation~~involving ~~subsequently receives~~ the ~~first~~Internet. ~~FDA~~A ~~approval~~company ~~for~~can ~~the indication for which it~~make ~~has~~only ~~such~~those ~~designation,~~claims ~~the~~relating ~~product is entitled~~ to ansafety ~~orphan~~and ~~exclusivity~~efficacy ~~period,~~that inare ~~which~~approved by the FDA. ~~may~~Failure ~~not approve any other applications~~ to ~~market~~comply ~~the~~with ~~same~~these ~~drug~~requirements ~~for~~can ~~the~~result in ~~same~~adverse ~~indication~~publicity, ~~for~~warning ~~seven~~and/or ~~years~~untitled inletters, ~~the~~corrective ~~United~~advertising ~~States,~~and ~~except~~potential incivil ~~limited~~and ~~circumstances~~criminal penalties.

16Orphan Drug Designation in the United States, the European Union and other foreign jurisdictions

In ~~addition~~June 2015, ~~outside of~~ the ~~U.S.~~FDA ~~medicinal products~~granted ~~used~~Orphan toDrug ~~treat life-threatening or chronically debilitating conditions that affect no more than five in 10,000 people~~Designation ~~in European Union and medicinal products which, for economic reasons, would be unlikely~~ to bePRTX-100 ~~developed without incentives may be granted orphan designation~~ in the ~~European~~treatment ~~Union. The application~~ for ~~orphan designation is submitted to the EMA before an application is made for marketing authorization~~ITP. ~~Once~~In ~~authorized~~September 2015, ~~orphan~~COMP ~~medicinal~~issued ~~products~~a ~~are~~positive ~~entitled~~opinion torecommending ~~ten years of market exclusivity. During this ten~~PRTX-~~year~~100 ~~period, with a limited number of exceptions, neither the competent authorities of the European Union member states nor the EMA are permitted to accept applications or grant marketing authorization~~ for ~~other~~designation ~~similar medicinal~~as ~~products~~an ~~with the same~~ orphan ~~indication. However, marketing authorization may be granted to a similar~~ medicinal product ~~with the same orphan indication during the ten-year period with the consent of the marketing authorization holder~~ for ~~the~~ITP. ~~original orphan~~Based ~~medicinal~~upon ~~product~~study ordata ~~if the manufacturer of the original orphan medicinal product is unable~~ to ~~supply~~date, ~~sufficient~~we ~~quantities. Marketing~~believe ~~authorization~~that PRTX-100 may ~~also~~ be ~~granted~~effective toin ~~a similar medicinal product with~~ the ~~same orphan indication if this product is~~treatment ~~safer~~of ITP, ~~more~~as ~~effective~~well oras ~~otherwise~~other ~~clinically superior to the original~~ orphan ~~medicinal~~immunological ~~product~~diseases.

WeUnder ~~retained~~ the ~~consulting~~U.S. ~~services of Coté~~ Orphan ~~Consulting~~Drug Act, ~~LLC (Coté) to submit the application for~~ Orphan Drug Designation inis ~~the~~granted EUby ~~for~~the ~~PRTX-100~~FDA asto ~~Protalex, Inc.~~drugs ~~does~~intended ~~not~~to ~~maintain~~treat a ~~European~~rare ~~subsidiary.~~disease Onor ~~October 9~~condition, ~~2015,~~which ~~PRTX-100~~for ~~was~~this ~~granted~~program ~~Orphan~~is ~~Drug~~defined ~~Designation~~as having ina EUprevalence asof ~~EU/3/15/1562 (EMA/OD/111/15)~~fewer ~~for~~than ~~the~~200,000 ~~treatment~~individuals ofin ~~Immune~~the ~~Thrombocytopenia~~United States. ~~Coté~~ Orphan ~~Consulting~~Drug UKDesignation ~~Limited,~~must abe ~~subsidiary~~requested ofbefore ~~Coté~~submitting ~~Orphan~~a ~~Consulting,~~marketing ~~LLC,~~application. isAfter ~~identified as~~ the ~~sponsor~~FDA ofgrants ~~the~~an ~~designation~~Orphan ~~for~~Drug ~~PRTX-100~~Designation, in the ~~EU.~~generic ~~Under~~identity ~~our~~of ~~agreement~~the ~~with~~therapeutic ~~Coté, we~~agent ~~retain~~and ~~all~~its potential ~~ownership~~orphan inuse ~~the~~are ~~Orphan~~disclosed ~~Drug~~publicly ~~Designation~~by ~~for PRTX-100 in~~ the EUFDA.

~~Foreign~~Orphan ~~Regulation~~Drug Designation does not shorten the regulatory review and approval process, nor does it provide any advantage in the regulatory review and approval process. However, if a product which has an Orphan Drug Designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to an orphan exclusivity period, in which the FDA may not approve any other applications to market the same drug for the same indication for seven years in the United States, except in limited circumstances.

In addition, outside of the U.S. medicinal products used to ~~regulations~~treat inlife-threatening ~~the~~or ~~United~~chronically ~~States~~debilitating conditions that affect no more than five in 10,000 people in weEuropean ~~will~~Union and medicinal products which, for economic reasons, would be ~~subject~~unlikely to abe ~~variety~~developed ofwithout ~~foreign~~incentives ~~regulations~~may ~~governing~~be granted ~~clinical~~orphan ~~trials~~designation ~~and~~in ~~commercial~~the ~~sales~~European ~~and~~Union. ~~distribution~~The ofapplication ~~our future~~for ~~products.~~orphan ~~Whether~~designation oris ~~not~~submitted weto ~~obtain~~the ~~FDA~~EMA ~~approval~~before an application is made for amarketing ~~product~~authorization. Once authorized, weorphan ~~must~~medicinal ~~obtain~~products ~~approval~~are entitled to ten years of market exclusivity. During this ten-year period, with a ~~product~~limited bynumber of exceptions, neither the ~~comparable~~competent ~~regulatory~~ authorities of ~~foreign~~the ~~countries~~European ~~before~~Union wemember states ~~can~~nor ~~commence~~the ~~clinical~~EMA ~~trials~~are permitted to accept applications or grant marketing ofauthorization ~~the~~for ~~product~~other insimilar ~~those~~medicinal ~~countries~~products with the same orphan indication. ~~The~~However, ~~approval process~~marketing ~~varies~~authorization ~~from~~may ~~country~~be granted to ~~country,~~a ~~and~~similar medicinal product with the ~~time~~same ~~may~~orphan indication beduring ~~longer~~the orten-year ~~shorter~~period ~~than~~with ~~that~~the ~~required~~consent of the marketing authorization holder for ~~FDA~~the ~~approval.~~original ~~The~~orphan ~~requirements~~medicinal ~~governing~~product or if the ~~conduct~~manufacturer of ~~clinical~~the ~~trials,~~original orphan medicinal product ~~licensing,~~is ~~pricing~~unable ~~and~~to ~~reimbursement~~supply ~~vary~~sufficient ~~greatly~~quantities. ~~from~~Marketing ~~country~~authorization may also be granted to ~~country~~a similar medicinal product with the same orphan indication if this product is safer, more effective or otherwise clinically superior to the original orphan medicinal product.

~~Under~~We ~~European~~retained ~~Union~~the ~~regulatory~~consulting ~~systems,~~services ~~marketing~~of Coté ~~authorizations~~Orphan ~~may~~Consulting, beLLC ~~submitted~~(Coté) ~~either~~to ~~under~~submit athe ~~centralized~~application orfor ~~mutual~~Orphan ~~recognition~~Drug ~~procedure.~~Designation ~~The~~in ~~centralized~~the ~~procedure~~EU ~~provides~~ for ~~the~~PRTX-100 ~~grant~~as ofProtalex, Inc. does not maintain a ~~single~~European ~~marketing~~subsidiary. ~~authorization~~On ~~that~~October is9, ~~valid~~2015, ~~for~~PRTX-100 ~~all~~was ~~European~~granted ~~Union~~Orphan ~~member~~Drug ~~states.~~Designation ~~The~~in ~~mutual~~EU ~~recognition~~as ~~procedure~~EU/3/15/1562 ~~provides~~(EMA/OD/111/15) for ~~mutual~~the ~~recognition~~treatment of ~~national~~Immune ~~approval decisions~~Thrombocytopenia. ~~Under~~Coté ~~this~~Orphan ~~procedure,~~Consulting ~~the~~UK ~~holder~~Limited, of a ~~national~~subsidiary ~~marketing~~of ~~authorization~~Coté ~~may~~Orphan ~~submit~~Consulting, anLLC, ~~application~~is toidentified as the ~~remaining~~sponsor ~~member~~of ~~states.~~the ~~Within~~designation ~~90 days~~for ofPRTX-100 ~~receiving~~in the ~~applications~~EU. ~~and~~Under ~~assessment~~our ~~report~~agreement with Coté, ~~each~~we ~~member~~retain ~~state~~all ~~must~~ownership ~~decide~~in ~~whether~~the toOrphan ~~recognize~~Drug ~~approval~~Designation for PRTX-100 in the EU.

~~In addition to regulations in Europe and the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial distribution of our future products.~~17

~~Patents~~In August 2017, ~~Trademarks~~the OOPD awarded us a grant of $403,000 ~~and~~to ~~Proprietary~~support future ~~Technology~~clinical development of PRTX-100 as a treatment for ITP.

~~Patents~~Foreign ~~and~~Regulation other proprietary rights are important to our business. Our practice is to file patent applications to protect technology, inventions and improvements to our technologies that are considered important to the development of our business. We have filed several U.S. patent applications and international counterparts of certain of these applications. We also rely upon our trade secrets, know-how, and continuing technological innovations, as well as patents that we may license from other parties, to develop and maintain our competitive position.

~~Our~~In ~~success~~addition to regulations in the United States, we will ~~depend~~be onsubject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our ~~ability~~future products. toWhether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory ~~maintain~~authorities ~~our~~of ~~trade~~foreign ~~secrets~~countries ~~and~~before ~~proprietary~~we ~~technology~~can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the ~~United~~time ~~States~~may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and inreimbursement ~~other~~vary ~~countries~~greatly from country to country.

17Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized or mutual recognition procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The mutual recognition procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval.

~~The~~In ~~table~~addition ~~below~~to ~~provides~~regulations in Europe and the United States, we will be subject to a ~~list~~variety of foreign regulations governing clinical trials and commercial distribution of our ~~issued~~future ~~patents:~~products.

Patent Title	Number	Expiration Date
Protein A Compositions and Methods of Use	U.S. Patent No. 7,211,258	Nov. 6, 2022
Protein A Methods of Use	U.S. Patent No. 7,425,331	Nov. 6, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 7,807,170	April 10, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 8,168,189	June 16, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 8,603,486	April 10, 2022
Protein A Compositions and Methods of Use	European Patent No. 2570136	March 6, 2023
Protein A Composition and Method of Use	Japanese Patent No. 5523796	March 6, 2023
Protein A Compositions and Methods of Use	U.S. Patent No. 9,370,552	April 10, 2022

Patents, Trademarks, and Proprietary Technology

ItPatents isand other proprietary rights are important to our ~~policy~~business. Our practice is to ~~require~~file ~~our~~patent ~~employees~~applications to protect technology, ~~consultants,~~ inventions and ~~parties~~improvements to ~~collaborative~~our ~~agreements~~technologies that toare ~~execute~~considered ~~confidentiality~~important ~~agreements~~to ~~upon~~ the ~~commencement~~development of ~~employment or~~our ~~consulting~~business. ~~relationships~~We orhave ~~collaborations~~filed ~~with~~several usU.S. ~~These~~patent ~~agreements~~applications ~~generally~~and ~~provide~~international counterparts ~~that~~of ~~all~~certain ~~confidential~~of ~~information~~these ~~developed or~~applications. ~~made~~We ~~known~~also ~~during~~rely ~~the~~upon ~~course~~our oftrade ~~the~~secrets, ~~relationship~~know-how, ~~with~~and uscontinuing istechnological toinnovations, as bewell ~~kept~~as ~~confidential~~patents ~~and~~that ~~not~~we tomay belicense ~~disclosed~~from other parties, to ~~third~~develop ~~parties except~~and inmaintain ~~specific~~our ~~circumstances~~competitive position.

~~Employees~~Our success will depend on our ability to maintain our trade secrets and proprietary technology in the United States and in other countries.

InThe ~~addition~~table tobelow ~~our~~provides ~~president and our chief financial officer, we have one part-time employee. We also have~~ a ~~Scientific~~list Advisory Board which is staffed by highly qualified consultants with the background and scientific expertise we need to carry out our long-term business objectives. We believe that our relationship with all of our ~~employees and our Scientific Advisory Board is generally good.~~issued patents:

Properties

Patent Title	Number	Expiration Date
Protein A Compositions and Methods of Use	U.S. Patent No. 7,211,258	Nov. 6, 2022
Protein A Methods of Use	U.S. Patent No. 7,425,331	Nov. 6, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 7,807,170	April 10, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 8,168,189	June 16, 2022
Protein A Compositions and Methods of Use	U.S. Patent No. 8,603,486	April 10, 2022
Protein A Compositions and Methods of Use	European Patent No. 2570136	March 6, 2023
Protein A Composition and Method of Use	Japanese Patent No. 5523796	March 6, 2023
Protein A Compositions and Methods of Use	U.S. Patent No. 9,370,552	November 6, 2022
Protein A Compositions and Methods of Use	European Patent No. 2,206,511	September 13, 2025
Protein A Compositions and Methods of Use	Canadian Patent No. 2,894,098	March 6, 2023
Protein A Compositions and Methods of Use	Canadian Patent No. 2,481,282	March 6, 2023
Protein A Compositions and Methods of Use	European Patent No. 1,499,345	March 6, 2023

Our principal offices are located at 131 Columbia Turnpike, Suite 1, Florham Park, New Jersey in facilities we occupy on a month to month basis. We do not own or intend to invest in any real property. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.18

~~Legal~~We ~~Proceedings~~also have a patent application pending in Hong Kong. It is our policy to require our employees, consultants, and parties to collaborative agreements to execute confidentiality agreements upon the commencement of employment or consulting relationships or collaborations with us. These agreements generally provide that all confidential information developed or made known during the course of the relationship with us is to be kept confidential and not to be disclosed to third parties except in specific circumstances.

~~We are not involved in any pending legal proceedings and are not aware of any threatened legal proceedings against us.~~Employees

18We have two employees, our president and our chief financial officer. We also have a Scientific Advisory Board which is staffed by highly qualified consultants with the background and scientific expertise we need to carry out our long-term business objectives. We believe that our relationship with all of our employees and our Scientific Advisory Board is generally good.

~~ITEM 1A. RISK FACTORS~~Properties

~~You~~Our ~~should~~principal ~~carefully~~offices ~~consider~~are ~~the~~located ~~risks, uncertainties~~at ~~and~~131 ~~other factors described below, in addition to the other information set forth in this Annual Report, because~~Columbia ~~they could materially and adversely affect our business~~Turnpike, ~~operating~~Suite ~~results~~1, ~~financial~~Florham ~~condition~~Park, ~~cash~~New ~~flows~~Jersey ~~and prospects, as well as adversely affect the value of an investment~~ in ~~our~~facilities ~~common~~we ~~stock.~~occupy ~~Also,~~on ~~you~~a ~~should~~month beto ~~aware~~month ~~that the risks and uncertainties described below are not the only ones facing us~~basis. ~~Additional~~We ~~risks and uncertainties that we~~ do not ~~yet~~own ~~know of,~~ or ~~that~~intend weto ~~currently~~invest ~~think~~in ~~are~~any ~~immaterial,~~real ~~may~~property. ~~also~~We ~~impair~~currently ~~our~~have ~~business~~no ~~operations.~~policy ~~You~~with ~~should~~respect ~~also refer~~ to ~~the~~investments ~~other~~or ~~information~~interests ~~contained~~ in ~~and incorporated~~real byestate, ~~reference~~real ~~into~~estate ~~this~~mortgages or ~~Annual~~securities ~~Report~~of, ~~including~~or ~~our~~interests ~~consolidated~~in, ~~financial~~persons ~~statements~~primarily ~~and~~engaged ~~the~~in ~~related~~real ~~notes~~estate activities.

~~There~~Legal are numerous and varied risks that may prevent us from achieving our goals. We believe that the following are the material risks that we face. If any of the following risks actually occurs, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.Proceedings

~~Risks~~We ~~relating~~are tonot ~~our~~involved ~~Business~~in any pending legal proceedings and are not aware of any threatened legal proceedings against us.

IfITEM we1A. ~~are~~RISK unable to enroll enough patients to complete our clinical trials, our applications before regulatory agencies may never be submitted or approved, which may result in increased costs and harm our ability to develop products.FACTORS

IfYou weshould ~~are~~carefully ~~not~~consider ~~able to enroll enough patients to complete~~ the RArisks, uncertainties ~~ITP~~and or other ~~planned~~factors ~~clinical~~described ~~trials for PRTX-100~~below, ~~regulatory~~in ~~agencies~~addition ~~may~~to ~~delay~~the ~~reviewing~~other ~~our~~information ~~applications for~~set ~~approval,~~forth orin ~~may~~this ~~reject~~Annual ~~them~~Report, ~~based~~because they oncould ~~our~~materially ~~inability~~and toadversely ~~enroll~~affect ~~enough patients to complete~~ our ~~clinical~~business, ~~trials.~~operating ~~Patient enrollment depends on many factors~~results, ~~including~~financial ~~the size of the patient population~~condition, ~~the~~cash ~~nature~~flows ofand ~~the protocol~~prospects, ~~the~~as ~~proximity of patients to~~well ~~clinical~~as ~~sites~~adversely ~~and~~affect the ~~eligibility~~value ~~criteria~~of ~~for~~an ~~the~~investment ~~study. Delays~~ in ~~planned~~our ~~patient~~common ~~enrollment~~stock. ~~may result in increased costs and delays~~Also, ~~which~~you ~~could~~should ~~have~~be aaware ~~harmful~~that ~~effect~~the onrisks ~~our~~and ~~ability to develop products. We may also encounter delays or rejections based~~uncertainties ondescribed ~~changes~~below inare ~~regulatory~~not ~~agency policies during~~ the ~~period~~only inones ~~which~~facing weus. ~~develop~~Additional arisks ~~drug~~and oruncertainties ~~the~~that ~~period~~we ~~required~~do ~~for~~not ~~review~~yet ofknow ~~any application for regulatory agency approval~~ of, aor ~~particular~~that ~~compound. We also may encounter delays if~~ we currently think are ~~unable~~immaterial, tomay ~~produce clinical~~also ~~trial~~impair ~~material~~our inbusiness ~~sufficient~~operations. ~~quantities~~You ~~and~~should ofalso ~~sufficient~~refer ~~quality~~ to ~~meet~~ the ~~schedule~~other ~~for~~information ~~our~~contained ~~planned~~in ~~clinical trials.~~and Inincorporated ~~addition,~~by wereference ~~rely~~into onthis aAnnual ~~number of third-parties~~Report, ~~such~~including asour ~~clinical~~consolidated ~~research~~financial ~~organizations,~~statements ~~to help support the clinical trials by performing independent clinical monitoring, data acquisition~~ and ~~data evaluations. Any failure on~~ the ~~part~~related ~~of these third-parties could delay the regulatory approval process~~notes.

~~Clinical~~There ~~trials~~ are ~~expensive,~~numerous ~~time~~and ~~consuming~~varied ~~and~~risks ~~difficult~~that tomay ~~design~~prevent ~~and~~us ~~implement~~from achieving our goals. We believe that the following are the material risks that we face. If any ~~clinical~~of ~~trials~~the ~~for~~following ~~PRTX-100~~risks ~~don’t~~actually ~~provide~~occurs, ~~positive~~our ~~results~~business, wefinancial condition or results of operation may be ~~required~~materially toadversely affected. In ~~abandon~~such orcase, the trading price of our common stock could decline and investors in our common stock could ~~repeat~~lose ~~such~~all ~~clinical~~or ~~trials~~part of their investment.

Human clinical trials are expensive and difficult to design and to implement, in part because they are subject to rigorous requirements. The clinical trial process is also time-consuming. Even with adequate financing, we estimate that our clinical trials for PRTX-100 will take up to several additional years to complete. Furthermore, poor results or failure can occur at any stage of the trials, and we can encounter problems that cause us to abandon or repeat clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including:19

·Risks ~~slow~~relating ~~enrollment~~to ofour ~~qualified~~Business ~~patients;~~

·If ~~unforeseen~~we ~~safety~~are ~~issues;~~unable to enroll enough patients to complete our clinical trials, our applications before regulatory agencies may never be submitted or approved, which may result in increased costs and harm our ability to develop products.

·If ~~determination~~we are not able to enroll enough patients to complete the RA, ITP or other planned clinical trials for PRTX-100, regulatory agencies may delay reviewing our applications for approval, or may reject them, based on our inability to enroll enough patients to complete our clinical trials. Patient enrollment depends on many factors, including the size of ~~dosing~~the ~~issues;~~patient population, the nature of the protocol, the proximity of patients to clinical sites and the eligibility criteria for the study. Delays in planned patient enrollment may result in increased costs and delays, which could have a harmful effect on our ability to develop products. We may also encounter delays or rejections based on changes in regulatory agency policies during the period in which we develop a drug or the period required for review of any application for regulatory agency approval of a particular compound. We also may encounter delays if we are unable to produce clinical trial material in sufficient quantities and of sufficient quality to meet the schedule for our planned clinical trials. In addition, we rely on a number of third-parties, such as clinical research organizations, to help support the clinical trials by performing independent clinical monitoring, data acquisition and data evaluations. Any failure on the part of these third-parties could delay the regulatory approval process.

·Clinical ~~lack~~trials ofare ~~effectiveness~~expensive, ~~during~~time consuming and difficult to design and implement. If clinical trials for PRTX-100 don’t provide positive results, we may be required to abandon or repeat such clinical trials.

·Human ~~slower~~clinical ~~than~~trials ~~expected~~are ~~rates~~expensive and difficult to design and to implement, in part because they are subject to rigorous requirements. The clinical trial process is also time-consuming. Even with adequate financing, we estimate that our clinical trials for PRTX-100 will take up to several additional years to complete. Furthermore, poor results or failure can occur at any stage of ~~patient~~the ~~recruitment~~trials, and we can encounter problems that cause us to abandon or repeat clinical trials. The commencement and completion of clinical trials may be delayed by several factors, including:

· ~~inability~~slow toenrollment ~~monitor~~of ~~patients~~qualified ~~adequately or after treatment~~patients; ~~and~~

· ~~inability~~unforeseen orsafety ~~unwillingness of medical investigators to follow our clinical protocols.~~issues;

In· ~~addition,~~determination we or the FDA and/or foreign regulatory agencies may suspend our clinical trials at any time if it appears that we are exposing participants to unacceptable health risks or if the FDA and/or foreign regulatory agencies find deficiencies in our Investigational New Drug Application (“IND”) and/or country specific regulatory submissions or in the conduct of ~~these~~dosing ~~trials. Therefore, we cannot predict with any certainty the schedule for future clinical trials.~~issues;

19· lack of effectiveness during clinical trials

If· weslower ~~fail~~than toexpected ~~obtain~~rates ~~regulatory approvals for PRTX-100 or any other drug we develop, we will not be able to generate revenues from the commercialization or sale~~ of ~~those drugs.~~ patient recruitment

We· ~~must~~inability receive regulatory approval of each of our drugs before we can commercialize or sell that product. The pre-clinical laboratory testing, formulation development, manufacturing and clinical trials of any product we develop, as well as the distribution and marketing of these products, are regulated by numerous federal, state and local governmental authorities in the United States, principally the FDA, and by similar regulatory authorities in other countries. The development and regulatory approval process takes many years, requires the expenditure of substantial resources, is uncertain and subject to ~~delays,~~monitor ~~and~~patients ~~will~~adequately ~~thus delay our receipt of revenues, if any, from PRTX-100~~ or ~~any~~after ~~other drug~~treatment; ~~we develop. We cannot assure you that our clinical trials will demonstrate the safety~~ and ~~efficacy of PRTX-100 or any other drug we develop or will result in a marketable product.~~

No· ~~product~~inability ~~can~~or ~~receive~~unwillingness ~~FDA approval unless human clinical trials show both safety and efficacy for each target indication in accordance with FDA and foreign country standards. A number~~ of ~~companies~~medical ininvestigators ~~the~~to ~~pharmaceutical~~follow and biotechnology industries have suffered significant setbacks in late stage clinical trials even after achieving promising results in early stage development. We therefore cannot assure you that the results from our clinical ~~trials will be successful or that the results from our pre-clinical trials for PRTX-100 or any other drug we develop will be predictive of results obtained in future clinical trials~~protocols.

~~Further~~In addition, ~~data~~we ~~obtained~~or ~~from~~the ~~pre-clinical~~FDA and/or foreign regulatory agencies may suspend our clinical ~~trial~~trials ~~activities~~at ~~are~~any ~~subject~~time toif ~~varying~~it ~~interpretations~~appears that ~~could~~we ~~delay,~~are ~~limit~~exposing orparticipants ~~prevent~~to ~~regulatory~~unacceptable ~~agency~~health ~~approval.~~risks Weor ~~cannot~~if ~~assure~~the ~~you~~FDA ~~that~~and/or ~~our~~foreign ~~clinical~~regulatory ~~trials~~agencies ~~will~~find ~~establish~~deficiencies ~~the~~in ~~safety~~our IND and/or ~~efficacy~~country ofspecific ~~PRTX-100~~regulatory submissions or in ~~any~~the ~~other~~conduct ~~drug~~of these trials. Therefore, we ~~develop sufficiently~~cannot ~~for~~predict uswith toany ~~obtain~~certainty ~~regulatory~~the ~~approval~~schedule for future clinical trials.

~~Our~~If ~~products,~~we iffail ~~approved,~~to obtain regulatory approvals for PRTX-100 or ~~may~~any ~~fail~~other drug we develop, we will not be able to ~~achieve~~generate ~~market~~revenues ~~acceptance~~from the commercialization or sale of those drugs.

~~There~~We must receive regulatory approval of each of our drugs before we can becommercialize noor ~~assurance~~sell that ~~any~~product. ~~products~~The pre-clinical laboratory testing, formulation development, manufacturing weand ~~successfully~~clinical trials of any product we develop, ifas ~~approved~~well ~~for~~as the distribution and marketing of these products, ~~will~~are ~~achieve~~regulated ~~market~~by ~~acceptance~~numerous federal, orstate ~~generate~~and ~~significant~~local ~~revenues.~~governmental Weauthorities ~~intend for~~in ~~our~~the ~~products~~United States, ~~including~~principally ~~PRTX-100~~the FDA, toand ~~replace~~by orsimilar ~~alter~~regulatory ~~existing~~authorities in ~~therapies~~other orcountries. ~~procedures,~~The development and ~~hospitals~~regulatory approval process takes many years, ~~physicians~~requires orthe ~~patients~~expenditure of substantial resources, ~~may~~is ~~conclude~~uncertain ~~that~~and ~~these~~subject ~~products~~to ~~are~~delays, ~~less~~and ~~safe~~will orthus ~~effective~~delay orour ~~otherwise~~receipt ~~less~~of ~~attractive~~revenues, ~~than~~if ~~existing~~any, ~~therapies~~from PRTX-100 or ~~procedures~~any other drug we develop. IfWe ~~our~~cannot ~~products~~assure doyou ~~not~~that ~~receive~~our ~~market~~clinical ~~acceptance~~trials ~~for~~will ~~any~~demonstrate ~~reason,~~the itsafety ~~would~~and ~~adversely~~efficacy ~~affect~~of ~~our~~PRTX-100 ~~business,~~or ~~financial~~any ~~condition~~other ~~and~~drug we develop ~~results~~or ofwill ~~operations~~result in a marketable product.

~~Further,~~No ~~our~~product ~~competitors~~can ~~may~~receive ~~develop~~FDA ~~new~~approval ~~technologies~~unless orhuman ~~products~~clinical ~~that~~trials ~~are~~show ~~more~~both ~~effective~~safety orand ~~less~~efficacy ~~costly,~~for oreach ~~that~~target ~~seem~~indication ~~more~~in ~~cost-effective,~~accordance ~~than~~with ~~our~~FDA ~~products~~and foreign country standards. A Wenumber ~~can~~of ~~give~~companies noin ~~assurance~~the pharmaceutical and biotechnology industries have suffered significant setbacks in late stage clinical trials even after achieving promising results in early stage development. We therefore cannot assure you that ~~hospitals,~~the ~~physicians,~~results ~~patients~~from our clinical trials will be successful or that the ~~medical~~results ~~community~~from inour ~~general~~pre-clinical ~~will~~trials ~~accept~~for ~~and~~PRTX-100 ~~use~~or any ~~products~~other ~~that~~drug we ~~may~~ develop will be predictive of results obtained in future clinical trials.

WeFurther, data obtained from pre-clinical and clinical trial activities are subject to varying interpretations that could ~~lose~~delay, ~~orphan~~limit ~~market~~or ~~exclusivity~~prevent regulatory agency approval. We cannot assure you that our clinical trials will establish the safety and efficacy of PRTX-100 or any other drug we develop sufficiently for us to obtain regulatory approval.

Orphan drug exclusive marketing rights may be lost if the FDA, EMA or other regulatory body later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug. Although obtaining approval to market a product with orphan drug exclusivity may be advantageous, we cannot be certain that:20

·Our weproducts, ~~will~~if beapproved, ~~the~~may ~~first~~fail to ~~obtain~~achieve ~~approval~~market ~~for any drug for which we obtain Orphan Drug Designation;~~acceptance.

·There ~~Orphan~~can ~~Drug~~be ~~Designation~~no assurance that any products we successfully develop, if approved for marketing, will ~~result~~achieve inmarket ~~any~~acceptance ~~commercial~~or generate significant revenues. We intend for our products, including PRTX-100, to replace or ~~financial~~alter ~~advantage~~existing therapies or procedures, and hospitals, physicians or ~~reduce~~patients may ~~competition;~~conclude that these products are less safe or effective or otherwise less attractive than existing therapies or procedures. If our products do not receive market acceptance for any reason, it would adversely affect our business, financial condition and results of operations.

·Further, ~~limited~~our ~~exceptions~~competitors tomay ~~this~~develop ~~exclusivity~~new ~~will~~technologies or ~~not~~products bethat ~~invoked~~are bymore effective or less costly, or that seem more cost-effective, than our products. We can give no assurance that hospitals, physicians, patients or the ~~relevant~~medical ~~regulatory~~community ~~authority~~in general will accept and use any products that we may develop.

IfWe wecould ~~are~~lose ~~unable~~orphan tomarket ~~obtain, to protect, and to maintain our proprietary rights in intellectual property, we may not be able to compete effectively or operate profitably~~exclusivity.

~~Our~~Orphan ~~commercial~~drug ~~success~~exclusive ~~also~~marketing ~~depends, in~~rights ~~large~~may ~~part, on our ability to obtain and maintain intellectual property protection for our technology covering our product~~be ~~candidates~~lost ~~and~~if ~~avoiding infringement of~~ the ~~proprietary technology of others. Our ability to do so will depend on~~FDA, ~~among~~EMA or other ~~things,~~ ~~complex~~regulatory ~~legal~~body ~~and~~later ~~factual~~determines ~~questions, and it should be noted~~ that the ~~standards~~request ~~regarding~~for ~~intellectual~~designation ~~property~~was ~~rights in~~materially ~~our~~defective ~~industry~~or ~~are~~if the ~~still~~manufacturer ~~evolving.~~is ~~However,~~unable ~~we will be able~~ to ~~protect~~assure ~~our~~sufficient ~~proprietary~~quantity ~~rights~~of ~~from~~the ~~unauthorized~~drug. ~~use~~Although byobtaining ~~third-parties only~~approval to ~~the~~market ~~extent~~a ~~that~~product ~~our~~with ~~proprietary~~orphan drug ~~rights~~exclusivity ~~are~~may ~~covered~~be byadvantageous, ~~valid~~we ~~and~~cannot ~~enforceable~~be ~~patents~~certain ~~or are effectively protected and maintained as trade secrets.~~that:

20· we will be the first to obtain approval for any drug for which we obtain Orphan Drug Designation;

We· ~~have~~Orphan ~~tried~~Drug toDesignation ~~protect~~will ~~our~~result ~~proprietary position by filing U.S. and international patent applications related to PRTX-100~~ in Canada, Japan, Hong Kong and the European Union. Because the patent position of pharmaceutical companies involves complex legal and factual questions, the issuance, scope and enforceability of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated or circumvented. Thus, any ~~patents that~~commercial ~~we own may not provide any protection against competitors. Patents that we may file in the future~~ or ~~those~~financial ~~we may license from third parties~~advantage, ~~may not result in patents being issued. If issued, they may not provide us with proprietary protection~~ or ~~competitive~~ ~~advantages~~reduce ~~against~~competition; ~~competitors with similar technology. Furthermore, others may independently develop similar technologies~~ or duplicate any technology that we have developed, or designed around any patents we may have issued to us. Moreover, the laws of foreign countries do not protect intellectual property rights to the same extent as the laws of the United States.

~~Patent~~· ~~applications~~limited inexceptions ~~the~~to ~~United~~this ~~States are~~exclusivity maintained in secrecy and not published if either: i) the application is a provisional application or, ii) the application is filed and we request no publication, and certify that the invention disclosed “has not and will not” be ~~the~~invoked subject of a published foreign application. Otherwise, U.S. applications or foreign counterparts, if any, publish 18 months after the priority application has been filed. Since publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be certain that we were the first creator of inventions covered by ~~pending patent applications or that we were~~ the ~~first~~relevant toregulatory ~~file patent applications for such inventions~~authority. ~~There can be no assurance that our patents, if issued, would be held valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.~~

~~Moreover,~~If we ~~may~~are beunable ~~subject~~ to ~~third~~obtain, ~~party preissuance submissions of prior art~~ to ~~the USPTO~~protect, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and ~~compete directly with us, without payment~~ to ~~us,~~maintain ~~or result in~~ our ~~inability to manufacture or commercialize~~ ~~products~~proprietary ~~without infringing third party patent~~ rights. ~~Even~~in ifintellectual ~~our patent applications issue as patents~~property, ~~they~~we may not ~~issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us, or otherwise provide us with any competitive advantage. Our competitors may~~ be able to ~~circumvent~~compete ~~our~~effectively ~~patents by developing similar~~ or ~~alternative~~operate ~~technologies or products in a non-infringing manner~~profitably.

~~Further,~~Our ~~patents~~commercial ~~generally~~success ~~expire~~also depends, ~~regardless~~in large ofpart, ~~their~~on ~~date~~our ofability ~~issue,~~to 20obtain ~~years~~and ~~from~~maintain ~~the~~intellectual ~~earliest~~property ~~claimed~~protection ~~nonprovisional~~for ~~filing~~our ~~date.~~technology Ascovering aour ~~result,~~product candidates and avoiding infringement of the ~~time~~proprietary ~~required~~technology toof ~~obtain regulatory~~others. ~~approval~~Our ~~for~~ability ato ~~product~~do ~~candidate~~so ~~may~~will ~~consume~~depend ~~part~~on, oramong ~~all~~other ofthings, ~~the~~complex legal ~~patent~~and ~~term.~~factual ~~Given~~questions, ~~the~~and ~~amount~~it ofshould ~~time~~be ~~required~~noted ~~for~~ that the ~~development,~~standards ~~testing~~regarding ~~and~~intellectual ~~regulatory~~property ~~review~~rights ofin ~~new~~our ~~product~~industry ~~candidates~~are still evolving. However, ~~patents~~we ~~protecting~~will ~~such~~be ~~candidates~~able ~~might~~to ~~expire~~protect ~~before or~~our ~~shortly~~proprietary ~~after~~rights ~~such~~from ~~candidates~~unauthorized ~~are~~use ~~commercialized.~~by Asthird-parties aonly ~~result,~~to ~~our~~the ~~patent~~extent that ~~portfolio~~our ~~may~~proprietary ~~not~~rights ~~provide~~are uscovered ~~with~~by ~~sufficient~~valid ~~rights to~~and ~~exclude~~enforceable ~~others~~patents ~~from~~or ~~commercializing~~are ~~products~~effectively ~~similar~~protected orand ~~identical~~maintained toas ~~ours~~trade secrets.

We ~~also~~have ~~rely~~tried onto ~~trade~~protect ~~secrets,~~our ~~know-how~~proprietary ~~and~~position ~~technology,~~by ~~which~~filing ~~are~~U.S. ~~not~~and ~~protected~~international bypatent ~~patents,~~applications related to ~~maintain~~PRTX-100 ~~our~~in ~~competitive~~Canada, ~~position.~~Japan, WeHong ~~protect~~Kong ~~this~~and ~~information~~the byEuropean ~~entering~~Union. Because ~~into~~the ~~confidentiality~~patent ~~agreements~~position ~~with~~of ~~parties~~pharmaceutical ~~that~~companies ~~have~~involves ~~access~~complex tolegal ~~it,~~and ~~such~~factual asquestions, ~~potential~~the ~~investors~~issuance, ~~advisors,~~scope ~~employees~~ and ~~consultants.~~enforceability ~~Any~~ of ~~these~~patents ~~parties~~cannot ~~may~~be ~~breach~~predicted ~~the~~with ~~agreements~~certainty. ~~and~~Patents, ~~disclose~~if ~~our~~issued, ~~confidential~~may ~~information~~be challenged, invalidated or ~~our~~circumvented. Thus, any patents that we own may not provide any protection against competitors. ~~might~~Patents ~~learn~~that ofwe may file in the future or those we may license ~~information~~from third parties, may not result in ~~some~~patents ~~other~~being ~~way~~issued. If ~~any~~issued, ~~trade~~they ~~secret,~~may ~~know-how~~not provide us with proprietary protection or ~~other~~competitive advantages against competitors with similar technology. ~~not~~Furthermore, ~~protected~~others bymay aindependently ~~patent~~develop ~~was~~similar totechnologies beor ~~disclosed~~duplicate toany ortechnology ~~independently~~that we have developed, byor adesigned ~~competitor~~around any patents we may have issued to us. Moreover, ~~our~~the ~~business~~laws ~~and~~of ~~financial~~foreign ~~condition~~countries do ~~could~~not beprotect ~~adversely~~intellectual ~~affected~~property rights to the same extent as the laws of the United States.

IfPatent ~~other~~applications ~~companies~~in ~~claim~~the ~~that~~United States are maintained in secrecy and not published if either: i) the application is a provisional application or, ii) the application is filed and we ~~infringe~~request ~~their~~no ~~proprietary~~publication, and certify that the invention disclosed “has not and will not” be the subject of a ~~technology~~published foreign application. Otherwise, weU.S. ~~may~~applications ~~incur~~or ~~liability~~foreign ~~for~~counterparts, ~~damages~~if any, publish 18 months after the priority application has been filed. Since publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be ~~forced~~certain that we were the first creator of inventions covered by pending patent applications or that we were the first to ~~stop~~file patent applications for such inventions. There can be no assurance that our ~~development~~patents, ~~and~~if ~~commercialization~~issued, ~~efforts~~would be held valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.

~~Competitors~~Moreover, ~~and~~we ~~other~~may be subject to third~~-parties~~ ~~may~~party preissuance ~~initiate~~submissions of prior art to the USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent ~~litigation~~rights. ~~against~~An usadverse determination in any such submission, proceeding or litigation could reduce the ~~United~~scope ~~States~~of, or ininvalidate, ~~foreign~~our ~~countries~~patent ~~based~~rights, onallow ~~existing~~third ~~patents~~parties to commercialize our technology or ~~patents~~products ~~that~~and ~~may~~compete bedirectly ~~granted~~ with us, without payment to us, or result in ~~the~~our ~~future~~inability to manufacture or commercialize products without infringing third party patent rights. ~~These~~Even ~~lawsuits~~if ~~can~~our bepatent ~~expensive~~applications ~~and~~issue ~~would~~as ~~consume~~patents, ~~time~~they ~~and~~may ~~other~~not ~~resources~~issue ~~even~~in ifa ~~unsuccessful~~form that will provide us with any meaningful protection, prevent competitors from competing with us, or ~~brought~~otherwise ~~without~~provide us with any competitive ~~merit~~advantage. Our competitors may ~~have~~be ~~sought~~able orto ~~may~~circumvent ~~seek~~our patents ~~that~~by ~~cover~~developing ~~aspects~~similar ofor ~~our~~alternative ~~technology~~technologies or products in a non-infringing manner.

Owners or licensees of patents may file one or more infringement actions against us. Any such infringement action could cause us to incur substantial costs defending the lawsuit and could distract our management from our business, even if the allegations of infringement or misappropriation are unwarranted. The defense of multiple claims could have a disproportionately greater impact. Furthermore, an adverse outcome from this type of claim could subject us to a judgment that requires us to pay substantial damages. A judgment could also include an injunction or other court order that could prevent us from making, using, selling, offering for sale or importing our products or prevent our customers from using our products.21

~~Alternatively~~Further, wepatents ~~could~~generally beexpire, ~~required~~regardless of totheir ~~license disputed~~date ~~rights~~of issue, 20 years from the ~~third~~earliest ~~party~~claimed nonprovisional filing date. IfAs a ~~court determines~~result, orthe iftime werequired ~~independently~~to ~~discover,~~obtain regulatory ~~that~~approval ~~any~~for ofa ~~our~~product ~~products~~candidate may consume part or ~~manufacturing processes~~all ~~violates~~of ~~third-party~~the ~~proprietary~~patent ~~rights,~~term. weGiven ~~might~~the ~~not~~amount beof ~~able~~time torequired ~~reengineer~~for the development, ~~product~~testing orand ~~processes~~regulatory toreview ~~avoid~~of ~~those rights~~new product candidates, patents protecting such candidates might expire before or shortly ~~obtain~~after such candidates are commercialized. As a ~~license~~result, ~~under~~our ~~those~~patent portfolio may not provide us with sufficient rights onto exclude ~~commercially~~others ~~reasonable~~from ~~terms,~~commercializing ifproducts atsimilar ~~all~~or identical to ours.

21We also rely on trade secrets, know-how and technology, which are not protected by patents, to maintain our competitive position. We protect this information by entering into confidentiality agreements with parties that have access to it, such as potential investors, advisors, employees and consultants. Any of these parties may breach the agreements and disclose our confidential information, or our competitors might learn of the information in some other way. If any trade secret, know-how or other technology not protected by a patent was to be disclosed to or independently developed by a competitor, our business and financial condition could be adversely affected.

WeIf ~~may~~other ~~become~~companies ~~involved~~claim inthat ~~lawsuits~~we toinfringe ~~protect~~their ~~or enforce~~proprietary ~~our~~technology, ~~patents~~we ~~that~~may ~~would~~incur liability for damages or be ~~expensive~~forced to stop our development and ~~time~~commercialization ~~consuming~~efforts.

InCompetitors ~~order~~and toother ~~protect~~third-parties ~~or enforce our patent rights, we~~ may initiate patent litigation against ~~third-parties.~~us Inin ~~addition,~~the weUnited ~~may~~States ~~become subject to interference~~ or ~~opposition proceedings conducted~~ in ~~patent~~foreign ~~and~~countries ~~trademark~~based ~~offices~~on toexisting ~~determine~~patents ~~the~~or ~~priority~~patents ofthat ~~inventions.~~may ~~The~~be ~~defense of intellectual property~~granted ~~rights,~~in ~~including~~the ~~patent~~future. ~~rights~~These ~~through~~ lawsuits, ~~interference~~can orbe ~~opposition~~expensive ~~proceedings,~~ and ~~other legal and administrative proceedings,~~ would beconsume ~~costly~~time and ~~divert~~other ~~our~~resources ~~technical~~even ~~and~~if ~~management~~unsuccessful ~~personnel~~or ~~from~~brought ~~their normal responsibilities~~without merit. AnOur ~~adverse~~competitors ~~determination of~~may ~~any~~have ~~litigation~~sought or ~~defense~~may ~~proceedings~~seek ~~could~~patents ~~put~~that ~~our~~cover ~~patent~~aspects ~~application at risk~~ of ~~not~~our ~~issuing~~technology.

~~Furthermore,~~Owners ~~because~~or licensees of ~~the~~patents ~~substantial~~may ~~amount~~file one ofor ~~discovery~~more ~~required~~infringement inactions ~~connection~~against ~~with~~us. ~~intellectual~~Any ~~property~~such ~~litigation,~~infringement ~~there~~action iscould acause ~~risk~~us ~~that~~to ~~some~~incur ofsubstantial ~~our~~costs ~~confidential~~defending ~~information~~the lawsuit and could bedistract ~~compromised~~our bymanagement ~~disclosure~~from ~~during~~our ~~this~~business, ~~type~~even if the allegations of ~~litigation~~infringement or misappropriation are unwarranted. The ~~For~~defense ~~example~~of multiple claims could have a disproportionately greater impact. Furthermore, ~~during~~an ~~the~~adverse ~~course~~outcome offrom this ~~kind~~type of ~~litigation,~~ ~~confidential~~claim ~~information~~could ~~may~~subject beus ~~inadvertently~~to ~~disclosed~~a injudgment ~~the~~that ~~form~~requires ofus ~~documents~~to pay substantial damages. A judgment could also include an injunction or other ~~testimony~~court inorder ~~connection~~that ~~with~~could ~~discovery~~prevent ~~requests~~us from making, ~~depositions~~ orusing, ~~trial~~selling, ~~testimony.~~offering ~~This~~for ~~disclosure~~sale ~~could~~or ~~negatively~~importing ~~affect~~our products or prevent our customers ~~business~~from ~~and~~using ~~financial~~our ~~results~~products.

WeAlternatively, ~~may~~we ~~not~~could be ~~able~~required to ~~manufacture~~license disputed rights from the third party. If a court determines, or if we independently discover, that any of our products inor ~~commercial~~manufacturing ~~quantities~~processes violates third-party proprietary rights, ~~which~~we ~~would~~might ~~prevent~~not usbe ~~from~~able ~~marketing~~to ~~our~~reengineer ~~products~~the product or processes to avoid those rights, or obtain a license under those rights on commercially reasonable terms, if at all.

~~If any of our potential products were approved by the FDA or foreign regulatory agencies for commercial sale, we would need to manufacture them in larger quantities.~~ We ~~have no~~may ~~manufacturing~~become ~~facilities~~involved ~~at this time, and we have no experience~~ in ~~the~~lawsuits ~~commercial manufacturing of drugs. Thus, we would need~~ to ~~either~~protect ~~develop the capability of manufacturing on a commercial scale~~ or ~~engage~~enforce ~~third-party manufacturers with this capability.~~our ~~Significant~~patents ~~scale-up~~that ofwould ~~manufacturing~~be ~~may~~expensive ~~require certain additional validation studies, which the FDA must review~~ and ~~approve. Moreover,~~time ~~contract manufacturers often encounter difficulties in achieving volume production, quality control and quality assurance, as well as shortages of qualified personnel~~consuming. For these reasons, a third-party manufacturer might not be able to manufacture sufficient quantities of PRTX-100 to allow us to commercialize it. If we are unable to increase the manufacturing capacity for PRTX-100, or any other product we may develop, we may experience delays in or shortages in supply when launching them commercially.

WeIn ~~have~~order noto ~~experience~~protect ~~selling~~or enforce our patent rights, we ~~marketing~~may initiate patent litigation against third-parties. In addition, we may become subject to interference or ~~distributing~~opposition proceedings conducted in patent and trademark offices to determine the priority of inventions. The defense of intellectual property rights, including patent rights through lawsuits, interference or opposition proceedings, and other legal and administrative proceedings, would be costly and divert our ~~products~~technical and nomanagement ~~internal~~personnel ~~capability~~from totheir donormal soresponsibilities. An adverse determination of any litigation or defense proceedings could put our patent application at risk of not issuing.

IfFurthermore, webecause ~~receive~~of ~~regulatory~~the ~~approval~~substantial ~~to commence~~amount ~~commercial sales~~ of ~~PRTX-100,~~discovery werequired ~~will~~in ~~face~~connection ~~intense competition~~ with ~~respect~~intellectual toproperty ~~commercial sales~~litigation, ~~marketing~~there ~~and~~is ~~distribution.~~a ~~These are~~risk ~~areas~~that insome ~~which~~of weour ~~currently~~confidential ~~have~~information could nobe ~~experience~~compromised ~~due~~by todisclosure aduring ~~lack~~this type of ~~management~~litigation. ToFor ~~market our product directly~~example, weduring ~~must~~the ~~develop a~~course ~~direct~~of ~~marketing~~this ~~and~~kind ~~sales~~of ~~force with technical expertise and supporting distribution capability. Alternatively~~litigation, weconfidential information may ~~engage pharmaceutical or other healthcare companies with an existing distribution system and direct sales force to assist us. There can~~ be noinadvertently ~~assurance~~disclosed ~~that~~in wethe ~~will~~form ~~successfully~~of ~~establish~~documents ~~sales~~or ~~and~~testimony ~~distribution~~in ~~capabilities~~connection ~~either~~with ondiscovery ~~our~~requests, ~~own or in collaboration~~depositions ~~with third-parties~~ or ~~gain~~trial ~~market acceptance for our product~~testimony. ToThis ~~the~~disclosure ~~extent~~could wenegatively ~~enter~~affect ~~co-promotion~~our orbusiness ~~other~~and ~~licensing~~financial ~~arrangements, any revenues we receive will depend on the efforts of third-parties~~results. ~~Those efforts may not succeed.~~

~~Competition~~We inmay ~~the~~not ~~pharmaceutical~~be ~~industry~~able isto ~~intense;~~manufacture ~~if we~~our ~~fail~~products toin ~~compete effectively~~commercial quantities, ~~our~~which ~~financial~~would ~~results~~prevent ~~will~~us ~~suffer~~from marketing our products.

WeIf ~~engage~~any inof aour ~~business~~potential ~~characterized~~products bywere ~~extensive~~approved ~~research~~by ~~efforts~~the FDA or foreign regulatory agencies for commercial sale, ~~rapid~~we ~~developments~~would ~~and~~need ~~intense~~to ~~competition~~manufacture them in larger quantities. We ~~cannot~~have no ~~assure~~manufacturing ~~you~~facilities ~~that~~at ~~our~~this ~~products~~time, ~~will~~and ~~compete~~we ~~successfully or~~have ~~that~~no ~~research~~experience ~~and~~in ~~development~~the bycommercial ~~others~~manufacturing ~~will~~of ~~not~~drugs. ~~render~~Thus, ~~our~~we ~~products~~would ~~obsolete~~need to either develop the capability of manufacturing on a commercial scale or ~~uneconomical.~~engage ~~Our~~third-party ~~failure~~manufacturers towith ~~compete~~this ~~effectively~~capability. ~~would~~Significant ~~negatively~~scale-up ~~affect~~of ~~our~~manufacturing ~~business,~~may ~~financial~~require ~~condition~~certain ~~and~~additional ~~results~~validation ofstudies, ~~operations.~~which Wethe ~~expect~~FDA ~~that~~must ~~successful~~review ~~competition~~and ~~will~~approve. ~~depend~~Moreover, ~~among~~contract ~~other~~manufacturers ~~things,~~often onencounter ~~product~~difficulties ~~efficacy,~~in ~~safety,~~achieving ~~reliability,~~volume ~~availability~~production, ~~timing~~quality control and ~~scope~~quality ofassurance, as ~~regulatory~~well ~~approval~~as ~~and price~~shortages of qualified personnel. ~~Specifically,~~For ~~other~~these ~~factors~~reasons, wea ~~expect~~third-party ~~will~~manufacturer ~~impact~~might ~~our~~not ~~ability~~be able to ~~compete~~manufacture ~~include~~sufficient quantities ~~the~~of ~~relative~~PRTX-100 ~~speed~~to ~~with~~allow ~~which~~us to commercialize it. If we ~~can~~are ~~develop products,~~unable ~~complete~~to increase the ~~clinical~~manufacturing capacity for PRTX-100, ~~development~~or any ~~and~~other ~~laboratory~~product ~~testing~~we ~~and~~may ~~regulatory~~develop, ~~approval~~we ~~processes~~may ~~and~~experience ~~supply~~delays ~~commercial~~in ~~quantities of~~or ~~the~~shortages ~~product~~in tosupply ~~the~~when ~~market~~launching them commercially.

We expect competition to increase as technological advances are made and commercial applications broaden. In commercializing PRTX-100 and any additional products we develop using our technology, we will face substantial competition from large pharmaceutical, biotechnology and other companies, universities and research institutions.22

~~Substantially~~We ~~all of our competitors~~ have ~~substantially~~ ~~greater~~no ~~capital resources, research and development personnel, facilities and~~ experience ~~in conducting clinical trials and obtaining regulatory approvals than us. As well~~selling, ~~most~~marketing ofor ~~our~~distributing ~~competitors have advantages over us in manufacturing and~~our ~~marketing pharmaceutical~~ products. ~~We are thus at a competitive disadvantage to those competitors who have greater capital resources~~ and weno ~~may~~internal ~~not~~capability ~~be able~~ to ~~compete~~do ~~effectively~~so.

22If we receive regulatory approval to commence commercial sales of PRTX-100, we will face intense competition with respect to commercial sales, marketing and distribution. These are areas in which we currently have no experience due to a lack of management. To market our product directly, we must develop a direct marketing and sales force with technical expertise and supporting distribution capability. Alternatively, we may engage pharmaceutical or other healthcare companies with an existing distribution system and direct sales force to assist us. There can be no assurance that we will successfully establish sales and distribution capabilities either on our own or in collaboration with third-parties or gain market acceptance for our product. To the extent we enter co-promotion or other licensing arrangements, any revenues we receive will depend on the efforts of third-parties. Those efforts may not succeed.

IfCompetition wein ~~are~~the ~~unable~~pharmaceutical toindustry ~~hire~~is ~~additional~~intense; ~~qualified scientific,~~if ~~sales~~we ~~and~~fail ~~marketing,~~to ~~and~~compete ~~other personnel~~effectively, weour ~~will~~financial ~~not~~results bewill ~~able to achieve our goals~~suffer.

We ~~depend~~engage onin ~~the~~a ~~members~~business ofcharacterized ~~our~~by ~~management~~extensive ~~staff~~research efforts, ~~Scientific~~rapid ~~Advisory~~developments ~~Board~~ and aintense ~~small~~competition. ~~number~~We ofcannot ~~third-party~~assure ~~consultants~~you tothat ~~provide~~our ~~the~~products ~~expertise~~will ~~needed~~compete ~~to carry out our~~successfully ~~business~~or ~~objectives.~~that ~~The~~research ~~loss~~and ofdevelopment ~~any~~by ofothers ~~these~~will ~~individuals’~~not ~~services~~render ~~may~~our ~~significantly~~products ~~delay~~obsolete or ~~prevent~~uneconomical. ~~the~~Our ~~achievement~~failure ~~of research,~~to ~~development~~compete oreffectively would ~~business objectives and could~~ negatively affect our business, financial condition and results of operations if. ~~their~~We ~~replacements~~expect ~~are~~that ~~not~~successful ~~promptly~~competition ~~retained.~~will depend, Weamong ~~face~~other ~~intense~~things, ~~competition~~on ~~for~~product ~~such~~efficacy, ~~personnel~~safety, reliability, availability, timing and ~~consultants.~~scope ~~Such~~of ~~replacements~~regulatory approval and ~~are~~price. ~~predicated~~Specifically, ~~among~~ other ~~conditions,~~factors onwe expect will impact our ability to ~~raise~~compete ~~additional~~include ~~funding.~~the Werelative ~~cannot~~speed ~~assure~~with ~~you~~which ~~that~~ we ~~will~~can ~~attract~~develop ~~and~~products, ~~retain~~complete ~~qualified management and scientific personnel in~~ the ~~future~~clinical, ~~with~~development orand ~~without~~laboratory ~~adequate~~testing ~~additional~~and ~~financing.~~regulatory Weapproval doprocesses ~~not maintain~~and ~~key~~supply ~~person~~commercial ~~life~~quantities of ~~insurance~~the onproduct ~~any~~to ofthe ~~these individuals~~market.

~~Further,~~We we expect ~~that~~competition ~~our~~to ~~potential~~increase ~~expansion~~as ~~into areas and~~technological ~~activities~~advances ~~requiring~~are ~~additional~~made ~~expertise,~~and ~~such~~commercial asapplications ~~further~~broaden. ~~clinical~~In ~~trials,~~commercializing ~~governmental~~PRTX-100 ~~approvals, contract manufacturing~~ and ~~marketing,~~ ~~will~~any ~~place~~ additional ~~requirements~~products onwe develop using our ~~management~~technology, ~~operational~~we ~~and financial resources. We expect these demands~~ will ~~require~~face ansubstantial ~~increase~~competition infrom ~~management~~large ~~and~~pharmaceutical, ~~scientific~~biotechnology ~~personnel~~ and ~~the~~other ~~development~~companies, ~~of additional expertise. The failure to attract~~universities and ~~retain~~research ~~such personnel or to develop such expertise would impact prospects for our success~~institutions.

~~Even~~Substantially ifall weof ~~obtain~~our ~~marketing~~competitors ~~approval~~have substantially greater capital resources, ~~PRTX-100~~research ~~will~~and bedevelopment ~~subject~~personnel, facilities and experience in conducting clinical trials and obtaining regulatory approvals than us. As well, most of our competitors have advantages over us in manufacturing and marketing pharmaceutical products. We are thus at a competitive disadvantage to ~~ongoing~~those ~~regulatory~~competitors ~~review~~who have greater capital resources and we may not be able to compete effectively.

If ~~regulatory~~we ~~approval~~are ofunable ~~PRTX-100 is granted, that approval may be subject~~ to ~~limitations~~hire onadditional ~~the~~qualified ~~indicated uses for which it may be marketed or contain requirements for costly~~scientific, ~~post-marketing~~sales ~~follow-up~~and ~~studies. As to products for which~~ marketing ~~approval is obtained~~, ~~the manufacturer of the product~~ and ~~the~~ ~~manufacturing facilities will be subject to continual review and periodic inspections by the FDA and~~ other ~~regulatory authorities. In addition~~personnel, ~~the~~we ~~labeling, packaging, adverse event reporting, storage, advertising, promotion and record keeping related to the product~~ will ~~remain~~not subject to extensive regulatory requirements. The subsequent discovery of previously unknown problems with the product, manufacturer or facility may result in restrictions on the product or the manufacturer, including withdrawal of the product from the market. We may be ~~slow~~able to ~~adapt,~~achieve orour ~~we may never adapt, to changes in existing requirements or adoption of new requirements or policies~~goals.

IfWe wedepend ~~fail~~on tothe ~~comply~~members ~~with~~of ~~applicable~~our ~~regulatory~~management ~~requirements~~staff, weScientific ~~may~~Advisory beBoard ~~subject~~and a small number of third-party consultants to ~~fines,~~provide ~~suspension~~the orexpertise ~~withdrawal~~needed to carry out our business objectives. The loss of ~~regulatory~~any ~~approvals~~of these individuals’ services may significantly delay or prevent the achievement of research, ~~product~~development ~~recalls~~or business objectives and could negatively affect our business, ~~seizure~~financial condition and results of ~~products~~operations if their replacements are not promptly retained. We face intense competition for such personnel and consultants. Such replacements are predicated, among other conditions, on our ability to raise additional funding. We cannot assure you that we will attract and ~~operating~~retain ~~restrictions~~qualified management and ~~criminal~~scientific ~~prosecution~~personnel in the future, with or without adequate additional financing. We do not maintain key person life insurance on any of these individuals.

~~Market~~Further, ~~acceptance~~we ofexpect ~~PRTX-100~~that our potential expansion into areas and activities requiring additional expertise, such as further clinical trials, governmental approvals, contract manufacturing and marketing, will beplace ~~limited~~additional ifrequirements ~~users~~on ~~are~~our management, operational and financial resources. We expect these demands ~~unable~~will require an increase in management and scientific personnel and the development of additional expertise. The failure to ~~obtain~~attract and ~~adequate~~retain ~~reimbursement~~such ~~from~~personnel ~~third-party~~or ~~payors~~to develop such expertise would impact prospects for our success.

Government health administration authorities, private health insurers and other organizations generally provide reimbursement for products like PRTX-100, and our commercial success will depend in part on these third-party payors agreeing to reimburse patients for the costs of our product. Even if we ~~succeed~~ inobtain ~~bringing~~marketing ~~our proposed products to market~~approval, ~~we cannot assure you that third~~PRTX-~~party~~100 ~~payors~~ will ~~consider~~be ~~it cost-effective~~subject orto ~~provide~~ongoing ~~reimbursement~~regulatory ~~in whole or in part for its use~~review.

~~Significant~~If ~~uncertainty~~regulatory ~~exists~~approval asof PRTX-100 is granted, that approval may be subject to limitations on the ~~reimbursement status~~indicated ofuses ~~newly~~for ~~approved~~which ~~health~~it ~~care~~may ~~products.~~be ~~PRTX~~marketed or contain requirements for costly post-~~100~~marketing follow-up studies. As to products for which marketing approval is ~~intended~~obtained, the manufacturer of the product and the manufacturing facilities will be subject to ~~replace~~continual orreview ~~alter~~and ~~existing~~periodic ~~therapies~~inspections orby ~~procedures.~~the ~~These~~FDA and other regulatory authorities. ~~third-party~~In ~~payors~~addition, ~~may~~the ~~conclude~~labeling, ~~that~~packaging, ~~our~~adverse event reporting, storage, advertising, promotion and record keeping related to the product iswill ~~less~~remain ~~safe~~subject to extensive regulatory requirements. The subsequent discovery of previously unknown problems with the product, ~~effective~~manufacturer or ~~cost-effective~~facility ~~than~~may ~~existing~~result ~~therapies~~in restrictions on the product or ~~procedures.~~the manufacturer, including withdrawal of the ~~Therefore~~product from the market. We may be slow to adapt, ~~third-party~~or ~~payors~~we may ~~not~~never ~~approve~~adapt, ~~our~~to ~~product~~changes ~~for~~in ~~reimbursement~~existing requirements or adoption of new requirements or policies.

If third-party payors do not approve our product for reimbursement or fail to reimburse them adequately, sales will suffer as some physicians or their patients will opt for a competing product that is approved for reimbursement or is adequately reimbursed. Even if third-party payors make reimbursement available, these payors’ reimbursement policies may adversely affect our ability to sell our product on a profitable basis.23

~~Moreover,~~If ~~legislative~~we ~~proposals~~fail to ~~reform healthcare~~comply ~~and~~with ~~government~~applicable ~~insurance~~regulatory requirements, ~~programs~~we ~~could~~may ~~significantly~~be ~~influence~~subject ~~the~~to ~~purchase of healthcare services and products~~fines, ~~resulting in~~suspension ~~lower~~or ~~prices~~withdrawal ~~and~~of ~~reduced~~regulatory ~~demand~~approvals, ~~for our~~ product recalls, ~~which~~seizure ~~could~~of ~~adversely affect our business~~products, operating ~~financial~~restrictions ~~condition~~ and ~~results of~~criminal ~~operations~~prosecution.

InMarket ~~addition,~~acceptance ~~legislation and regulations affecting the pricing~~ of ~~pharmaceuticals may change in ways adverse to us before or after the FDA or other regulatory agencies approve~~ PRTX-100 ~~for~~ ~~marketing.~~will ~~While~~be welimited ~~cannot predict the likelihood of any of these legislative or regulatory proposals,~~ if ~~any~~users ~~government or~~are ~~regulatory~~unable ~~agencies~~to ~~adopt~~obtain ~~these~~adequate ~~proposals~~reimbursement ~~they~~from ~~could~~third-party ~~negatively affect our business, financial condition and results of operations~~payors.

23Government health administration authorities, private health insurers and other organizations generally provide reimbursement for products like PRTX-100, and our commercial success will depend in part on these third-party payors agreeing to reimburse patients for the costs of our product. Even if we succeed in bringing our proposed products to market, we cannot assure you that third-party payors will consider it cost-effective or provide reimbursement in whole or in part for its use.

WeSignificant ~~may~~uncertainty beexists ~~required~~as to ~~defend~~the ~~lawsuits~~reimbursement status of newly approved health care products. PRTX-100 is intended to replace or ~~pay~~alter ~~damages~~existing intherapies ~~connection~~or procedures. These ~~with~~third-party ~~the~~payors ~~alleged~~may conclude that our product is less safe, effective or ~~actual~~cost-effective ~~harm~~than ~~caused~~existing bytherapies or procedures. Therefore, third-party payors may not approve our ~~products~~product for reimbursement.

WeIf ~~face~~third-party anpayors ~~inherent~~do ~~business~~not ~~risk~~approve ofour ~~exposure~~product tofor ~~product~~reimbursement ~~liability~~or ~~claims~~fail ~~in the event that the use of any of our products is alleged~~ to ~~have~~reimburse ~~resulted~~them inadequately, ~~harm~~sales towill ~~others.~~suffer ~~This risk exists in clinical trials~~ as ~~well~~some asphysicians inor ~~commercial~~their ~~distribution.~~patients Inwill ~~addition,~~opt ~~the~~for ~~pharmaceutical~~a ~~and biotechnology industries~~competing inproduct ~~general~~that ~~have~~is ~~been~~approved ~~subject~~for toreimbursement ~~significant~~or ~~medical~~is ~~malpractice~~adequately ~~litigation~~reimbursed. WeEven ~~may incur significant liability~~ if ~~product~~third-party ~~liability or~~payors ~~malpractice~~make ~~lawsuits~~reimbursement ~~against us are successful. Furthermore~~available, ~~product liabilities claims, regardless of their merits, could~~ bethese ~~costly and divert our management~~payors’s ~~attention~~reimbursement ~~from~~policies ~~other~~may ~~business concerns, or~~ adversely affect our ~~reputation~~ability ~~and~~to ~~the demand~~sell ~~for~~ our product. Weon ~~currently maintain~~ a ~~$2,000,000~~profitable ~~general liability insurance policy, a global $5,000,000 clinical liability insurance policy and as required, country specific clinical liability insurance will be procured~~basis. We intend to expand our liability insurance coverage for any products for which we obtain marketing approval, however, such insurance may be unavailable, prohibitively expensive or may not fully cover our potential liabilities. If we are unable to maintain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims or field actions, we may be unable to continue to market our products and develop new markets.

~~Developments~~Moreover, bylegislative ~~competitors~~proposals ~~may~~to ~~render~~reform ~~our~~healthcare and government insurance programs could significantly influence the purchase of healthcare services and products, orresulting ~~technologies~~in ~~obsolete~~lower orprices ~~non-competitive~~and reduced demand for our product, which could adversely affect our business, financial condition and results of operations.

~~The~~In ~~biotechnology~~addition, legislation and ~~pharmaceutical~~regulations ~~industries~~affecting ~~are~~the ~~intensely~~pricing ~~competitive~~of ~~and~~pharmaceuticals ~~subject~~may ~~to rapid and significant technological~~ change. ~~Should~~in weways ~~obtain~~adverse ~~regulatory approval for PRTX-100, we will have~~ to ~~compete~~us ~~with~~before ~~existing~~or ~~therapies,~~after ~~some~~the ofFDA ~~which~~or ~~have~~other ~~been~~regulatory ~~marketed~~agencies approve PRTX-100 for ~~years~~marketing. InWhile ~~addition,~~we acannot ~~significant number~~predict ~~of companies are pursuing~~ the ~~development~~likelihood of ~~products~~any that target the same indications that we are targeting. We face competition from both domestic and international companies. In addition, companies pursuing different but related fields represent substantial competition. Many of these ~~organizations~~legislative ~~competing~~or ~~with~~regulatory ~~us have substantially greater capital resources~~proposals, ~~larger~~if ~~research~~any ~~and~~government ~~development~~or ~~staffs and facilities, long drug development history in obtaining~~ regulatory ~~approvals~~agencies ~~and~~adopt ~~greater~~these ~~manufacturing~~proposals ~~and~~they ~~marketing capabilities~~could ~~than~~negatively weaffect ~~do.~~our ~~These~~business, ~~organizations~~financial ~~also~~condition ~~compete with us to attract qualified personnel~~ and ~~parties~~results ~~for~~of ~~acquisitions, joint ventures or other strategic collaborations~~operations.

~~The~~We ~~loss~~may ofbe ~~one~~required orto ~~more~~defend ~~key~~lawsuits ~~members~~or ofpay ~~our~~damages ~~management~~in ~~team~~connection orwith ~~Scientific~~the ~~Advisory~~alleged ~~Board~~or ~~could~~actual ~~adversely~~harm ~~affect~~caused by our ~~business~~products.

~~Our~~We ~~performance~~face isan ~~substantially~~inherent ~~dependent~~business risk of exposure onto product liability claims in the ~~continued~~event ~~service~~that ~~and~~the ~~performance~~use of any of our ~~management~~products ~~team,~~is ~~and~~alleged ~~Scientific~~to ~~Advisory~~have ~~Board~~resulted ~~members,~~in ~~who~~harm ~~have~~to ~~experience~~others. ~~and~~This ~~specialized~~risk ~~expertise~~exists in ~~our~~clinical ~~business~~trials as well as in commercial distribution. In ~~particular~~addition, the ~~loss~~pharmaceutical ofand ~~Arnold~~biotechnology Pindustries in general have been subject to significant medical malpractice litigation. ~~Kling~~We may incur significant liability if product liability or malpractice lawsuits against us are successful. Furthermore, ~~our~~product ~~president~~liabilities claims, regardless of their merits, could be costly and divert our management’s attention from other business concerns, or adversely affect our ~~business~~ reputation and ~~operating~~the ~~results~~demand for our product. We docurrently ~~not~~maintain ~~have~~a ~~“key~~$2,000,000 ~~person”~~general ~~life~~liability insurance ~~policies~~policy, a global $5,000,000 clinical liability insurance policy and as required, country specific clinical liability insurance will be procured. We intend to expand our liability insurance coverage for any ~~members~~products offor which we obtain marketing approval, however, such insurance may be unavailable, prohibitively expensive or may not fully cover our ~~management~~potential ~~team~~liabilities. If we are unable to maintain sufficient insurance coverage on reasonable terms or ~~Scientific~~to ~~Advisory~~otherwise ~~Board,~~protect against potential product liability claims or ~~employment~~field ~~agreements~~actions, ~~with~~we ~~any~~may ~~members~~be ofunable to continue to market our ~~management~~products ~~team~~and develop new markets.

~~Many~~Developments ~~of our business practices are subject to scrutiny~~ by ~~regulatory~~ ~~authorities,~~competitors asmay ~~well~~render asour toproducts ~~lawsuits~~or ~~brought by private citizens under federal and state laws. Failure to comply with~~technologies ~~applicable~~obsolete ~~law~~ or ~~an adverse decision in lawsuits may result in adverse consequences to us~~non-competitive.

The ~~laws~~biotechnology ~~governing~~and ~~our~~pharmaceutical ~~conduct in the United~~industries ~~States~~ are ~~enforceable~~intensely bycompetitive ~~criminal,~~and ~~civil~~subject to rapid and ~~administrative~~significant ~~penalties~~technological change. ~~Violations~~Should ofwe ~~laws~~obtain ~~such~~regulatory asapproval ~~the~~for ~~Federal Food~~PRTX-100, we ~~Drug,~~will ~~and Cosmetic~~have ~~Act,~~to ~~the~~compete ~~False~~with ~~Claims~~existing ~~Act~~therapies, ~~and~~some ~~the~~of ~~Anti-Kickback~~which ~~Law~~have ~~and~~been ~~the~~marketed ~~Public~~for ~~Health~~years. ~~Service~~In ~~Act~~addition, ~~and~~a ~~any~~significant ~~regulations promulgated~~number ~~under~~of ~~their~~companies ~~authority,~~are ~~may~~pursuing ~~result~~the indevelopment ~~jail~~of ~~sentences,~~products ~~fines~~that ortarget ~~exclusion~~the ~~from~~same ~~federal~~indications ~~and~~that ~~state~~we ~~programs,~~are astargeting. ~~may~~We beface ~~determined~~competition byfrom ~~Medicare,~~both ~~Medicaid~~domestic and ~~the~~international ~~Department~~companies. ofIn ~~Health~~addition, ~~and~~companies ~~Human~~pursuing ~~Services~~different ~~and~~but ~~other~~related ~~regulatory~~fields ~~authorities~~represent assubstantial competition. ~~well~~Many asof bythese ~~the~~organizations ~~courts. There~~competing ~~can~~with beus nohave ~~assurance~~substantially ~~that~~greater ~~our~~capital ~~activities~~resources, ~~will~~larger ~~not~~research ~~come~~and ~~under~~development staffs ~~the~~and ~~scrutiny~~facilities, oflong ~~regulators~~drug ~~and~~development ~~other~~history ~~government~~in ~~authorities or~~obtaining ~~that~~regulatory ~~our~~approvals ~~practices~~and ~~will~~greater ~~not~~manufacturing beand ~~found~~marketing capabilities tothan ~~violate~~we ~~applicable~~do. ~~laws,~~These ~~rules~~organizations ~~and~~also ~~regulations~~compete orwith ~~prompt~~us ~~lawsuits~~to byattract ~~private~~qualified ~~citizen “relators”~~personnel ~~under~~and ~~federal~~parties orfor ~~state~~acquisitions, joint ~~false~~ventures ~~claims~~or ~~laws~~other strategic collaborations.

For example, under the Anti-Kickback Law, and similar state laws and regulations, even common business arrangements, such as discounted terms and volume incentives for customers in a position to recommend or choose products for patients, such as physicians and hospitals, can result in substantial legal penalties, including, among others, exclusion from the Medicare and Medicaid programs, and arrangements with referral sources must be structured with care to comply with applicable requirements. Also, certain business practices, such as consulting fees to healthcare providers, sponsorship of educational or research grants, charitable donations, interactions with healthcare providers that prescribe products for uses not approved by the FDA and financial support for continuing medical education programs, must be conducted within narrowly prescribed and controlled limits to avoid any possibility of wrongfully influencing healthcare providers to prescribe or purchase particular products or as a reward for past prescribing. Under the Patient Protection and Affordable Care Act and the companion Health Care and Education Reconciliation Act, which together are referred to as the healthcare reform law, such payments by pharmaceutical manufacturers to U.S. healthcare practitioners and academic medical centers must be publicly disclosed. A number of states have similar laws in place. Additional and stricter prohibitions could be implemented by federal and state authorities. Where such practices have been found to be improper incentives to use such products, government investigations and assessments of penalties against manufacturers have resulted in substantial damages and fines. Many manufacturers have been required to enter into consent decrees or orders that prescribe allowable corporate conduct.24

24The loss of one or more key members of our management team or Scientific Advisory Board could adversely affect our business.

~~Failure~~Our toperformance ~~satisfy~~is ~~requirements~~substantially ~~under~~dependent on the ~~Federal~~continued ~~Food,~~service ~~Drug~~and performance of our management team, and ~~Cosmetic~~Scientific ~~Act~~Advisory ~~can~~Board ~~also~~members, ~~result~~who have experience and specialized expertise in ~~penalties~~our business. In particular, asthe ~~well~~loss asof ~~requirements~~Arnold toP. ~~enter~~Kling, ~~into~~our ~~consent~~president, ~~decrees~~could oradversely ~~orders~~affect our ~~that~~business ~~prescribe~~and operating results. We do not have “key person” life insurance policies for any members of our management ~~allowable~~team ~~corporate~~or ~~conduct~~Scientific Advisory Board, or employment agreements with any members of our management team.

InMany ~~addition, while regulatory authorities generally do not regulate physicians’ discretion in their choice~~ of ~~treatments~~our ~~for~~business ~~their~~practices ~~patients,~~are ~~they~~subject doto ~~restrict~~scrutiny ~~communications~~ by ~~manufacturers on unapproved uses of approved products or on the potential safety and efficacy of unapproved products in development.~~ ~~Companies in the United States, Canada and the European Union cannot promote approved products for other indications that are not specifically approved by the competent~~ regulatory authorities ~~(e.g.~~, ~~FDA~~as inwell ~~the~~as ~~United States), nor can companies promote unapproved products. In limited circumstances, companies may disseminate~~ to ~~physicians~~lawsuits ~~information~~brought ~~regarding~~by ~~unapproved~~private ~~uses~~citizens ~~of approved~~under ~~products~~federal orand ~~results~~state ~~of studies involving investigational products~~laws. Failure ~~If such activities fail~~ to comply with applicable ~~regulations~~ ~~and~~law ~~guidelines~~or ofan ~~the~~adverse ~~various~~decision ~~regulatory~~in ~~authorities,~~lawsuits we may beresult ~~subject~~in toadverse ~~warnings~~consequences ~~from,~~to ~~or enforcement action by, these authorities~~us. ~~Furthermore, if such activities are prohibited, it may harm demand for our products.~~

~~Promotion~~The oflaws ~~unapproved~~governing ~~drugs~~our orconduct ~~devices~~in orthe United ~~unapproved~~States ~~indications~~are ~~for~~enforceable aby ~~drug~~criminal, orcivil ~~device~~and isadministrative apenalties. Violations ~~violation~~ of laws such as the Federal Food, Drug, and Cosmetic Act, ~~and~~the ~~subjects~~False usClaims toAct ~~civil~~ and ~~criminal~~the ~~sanctions.~~Anti-Kickback ~~Furthermore,~~Law ~~sanctions~~and ~~under~~ the ~~Federal~~Public ~~False~~Health ~~Claims~~Service Act, ~~have~~and ~~recently~~any ~~been~~regulations ~~brought against companies~~promulgated ~~accused~~under oftheir ~~promoting~~authority, ~~off-label~~may ~~uses~~result ofin ~~drugs~~jail sentences, ~~because~~fines ~~such~~or ~~promotion~~exclusion ~~induces~~from ~~the~~federal ~~use~~ and ~~subsequent~~state ~~claims~~programs, ~~for~~as ~~reimbursement~~may ~~under~~be determined by Medicare, Medicaid and ~~other~~the ~~federal~~Department ~~programs.~~of ~~Similar~~Health ~~actions~~and ~~for~~Human ~~off-label~~Services ~~promotion~~and ~~have~~other ~~been~~regulatory ~~initiated~~authorities byas ~~several~~well ~~states~~as ~~for~~by ~~Medicaid fraud~~the courts. There can ~~The~~be ~~healthcare~~no ~~reform~~assurance ~~law~~that ~~significantly~~our ~~strengthened~~activities ~~provisions~~will ofnot ~~the~~come ~~Federal~~under ~~False~~the ~~Claims~~scrutiny ~~Act,~~of ~~Medicare~~regulators and ~~Medicaid Anti-Kickback provisions, and~~ other ~~health~~government ~~care~~authorities ~~fraud~~or ~~provisions,~~that our ~~leading~~practices towill ~~the~~not ~~possibility~~be offound ~~greatly~~to ~~increased~~violate ~~qui~~applicable ~~tam~~laws, ~~suits by~~rules ~~relators~~and ~~for~~regulations ~~perceived violations. Violations~~ or ~~allegations~~prompt oflawsuits ~~violations~~by ofprivate ~~the~~citizen ~~foregoing~~“relators” under ~~restrictions~~federal ~~could~~or ~~materially~~state ~~and adversely~~false ~~affect~~claims ~~our business~~laws.

WeFor ~~may~~example, beunder ~~required~~the toAnti-Kickback ~~report~~Law, ~~detailed pricing~~and ~~information~~similar state laws and regulations, ~~net~~even ofcommon ~~included~~business ~~discounts~~arrangements, ~~rebates~~such as discounted terms and ~~other~~volume ~~concessions,~~incentives for customers in a position to ~~the~~recommend ~~Centers~~or choose products for patients, such as physicians and hospitals, can result in substantial legal penalties, including, among others, exclusion from the Medicare &and Medicaid ~~Services~~programs, orand arrangements with referral sources must be structured ~~CMS~~with care to comply with applicable requirements. Also, ~~for~~certain ~~the~~business ~~purpose~~practices, such as consulting fees to healthcare providers, sponsorship of ~~calculating~~educational ~~national~~or ~~reimbursement~~research ~~levels~~grants, ~~certain~~charitable ~~federal~~donations, ~~prices~~interactions ~~and~~with ~~certain~~healthcare ~~federal~~providers that prescribe products for uses not approved by the FDA and ~~state~~financial ~~rebate~~support for continuing medical education programs, must be conducted within ~~obligations.~~narrowly Weprescribed ~~will~~and ~~need~~controlled limits to ~~establish~~avoid ~~systems~~any possibility of wrongfully influencing healthcare providers to prescribe or purchase particular products or as a reward for ~~collecting~~past prescribing. Under the Patient Protection and ~~reporting~~Affordable ~~this~~Care Act ~~data~~and ~~accurately~~the tocompanion ~~CMS~~Health Care and ~~institute~~Education aReconciliation ~~compliance program~~Act, towhich ~~assure~~together ~~that~~are referred to as the ~~information~~healthcare ~~collected~~reform islaw, such ~~complete~~payments inby ~~all~~pharmaceutical ~~respects~~manufacturers to U.S. Ifhealthcare wepractitioners ~~report~~and ~~pricing~~academic ~~information~~medical ~~that~~centers ismust ~~not~~be ~~accurate~~publicly disclosed. A tonumber ~~the~~of ~~federal~~states ~~government,~~have wesimilar laws in place. Additional and stricter prohibitions could be ~~subject~~implemented by federal and state authorities. Where such practices have been found to ~~fines~~be improper incentives to use such products, government investigations and ~~other~~assessments ~~sanctions~~of ~~that~~penalties ~~could~~against ~~adversely~~manufacturers ~~affect~~have ~~our~~resulted ~~business~~in substantial damages and fines. Many manufacturers have been required to enter into consent decrees or orders that prescribe allowable corporate conduct.

IfFailure ~~we choose~~ to ~~pursue~~satisfy clinical development and commercialization in the European Union or otherwise market and sell our products outside of the United States, we must obtain and maintain regulatory approvals and comply with regulatory requirements inunder ~~such jurisdictions. The approval procedures vary among countries in complexity and timing. We may not obtain approvals from regulatory authorities outside~~ the ~~United~~Federal ~~States on a timely basis~~Food, ~~if at all~~Drug, ~~which would preclude us from commercializing products in those markets. In addition, some countries,~~ ~~particularly~~and ~~the~~Cosmetic ~~countries~~Act ~~of the European Union, regulate the pricing of prescription pharmaceuticals. In these countries, pricing discussions with governmental authorities~~ can ~~take~~also ~~considerable~~result ~~time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval~~ in ~~some countries~~penalties, weas ~~may~~well beas ~~required~~requirements to ~~conduct~~enter ainto ~~clinical~~consent ~~trial~~decrees that compares the cost-effectiveness of their product candidate to other available therapies. Such trials may be time-consuming and expensive, and may not show an advantage in efficacy for our products. If reimbursement of our products is unavailable or ~~limited~~orders inthat ~~scope~~prescribe ~~or amount, or if pricing~~allowable iscorporate set at unsatisfactory levels, in either the United States or the European Union, we could be adversely affected. Also, under the United States Foreign Corrupt Practices Act, or FCPA, the United States has increasingly focused on regulating the conduct ~~by U~~.~~S. businesses occurring outside of the United States, generally prohibiting remuneration to foreign officials for the purpose of obtaining or retaining business.~~

ToIn ~~enhance~~addition, ~~compliance~~while ~~with~~regulatory ~~applicable~~authorities ~~health~~generally ~~care~~do ~~laws,~~not ~~and~~regulate ~~mitigate~~physicians’ ~~potential~~discretion ~~liability~~ in ~~the~~their ~~event~~choice of ~~noncompliance,~~treatments ~~regulatory~~for ~~authorities~~their patients, ~~such~~they asdo ~~the~~restrict ~~United States Health~~communications ~~and~~by ~~Human~~manufacturers ~~Services~~on ~~Department~~unapproved ~~Office~~uses of ~~Inspector~~approved ~~General,~~products or ~~OIG,~~on ~~have recommended~~ the ~~adoption~~potential safety and ~~implementation~~efficacy of aunapproved ~~comprehensive health~~products ~~care~~in ~~compliance~~development. Companies in ~~program~~the ~~that~~United ~~generally~~States, ~~contains~~Canada and the ~~elements~~European ofUnion ancannot ~~effective~~promote ~~compliance~~approved ~~and~~products ~~ethics~~for ~~program~~other ~~described~~indications ~~in Section~~that ~~8B2.1~~are ofnot ~~the~~specifically approved ~~United~~by ~~States~~the ~~Sentencing~~competent ~~Commission~~regulatory ~~Guidelines~~authorities ~~Manual~~(e.g., ~~Increasing~~FDA ~~numbers~~in ofthe ~~U.S.-based~~United ~~pharmaceutical~~States), nor can companies ~~have~~ ~~such~~promote ~~programs.~~unapproved products. In limited ~~the future~~circumstances, wecompanies may ~~need~~disseminate to ~~adopt~~physicians ~~healthcare~~information ~~compliance~~regarding ~~and~~unapproved ~~ethics~~uses ~~programs~~of ~~that~~approved ~~would~~products ~~incorporate~~or ~~the OIG’s~~results ~~recommendations,~~of ~~and~~studies ~~train~~involving ~~our~~investigational products. If such activities fail to comply with applicable ~~employees~~regulations inand ~~such~~guidelines of ~~compliance.~~the ~~Such~~various aregulatory ~~program~~authorities, we may be ~~expensive~~subject ~~and~~to ~~may~~warnings ~~not~~from, ~~assure~~or ~~that~~enforcement action by, these authorities. Furthermore, weif ~~will~~such ~~avoid~~activities ~~compliance~~are ~~issues~~prohibited, it may harm demand for our products.

25Promotion of unapproved drugs or devices or unapproved indications for a drug or device is a violation of the Federal Food, Drug, and Cosmetic Act and subjects us to civil and criminal sanctions. Furthermore, sanctions under the Federal False Claims Act have recently been brought against companies accused of promoting off-label uses of drugs, because such promotion induces the use and subsequent claims for reimbursement under Medicare and other federal programs. Similar actions for off-label promotion have been initiated by several states for Medicaid fraud. The healthcare reform law significantly strengthened provisions of the Federal False Claims Act, Medicare and Medicaid Anti-Kickback provisions, and other health care fraud provisions, leading to the possibility of greatly increased qui tam suits by relators for perceived violations. Violations or allegations of violations of the foregoing restrictions could materially and adversely affect our business.

~~The implementation of the healthcare reform law in the United States may adversely affect our business.~~25

~~Through~~We ~~the~~may ~~March~~be ~~2010~~required ~~adoption~~to ofreport ~~the~~detailed ~~healthcare~~pricing ~~reform~~information, ~~law~~net inof ~~the~~included ~~United States~~discounts, ~~substantial~~rebates ~~changes~~and ~~were~~other ~~made~~concessions, to the ~~current~~Centers ~~system~~ for ~~paying~~Medicare ~~for~~& ~~healthcare~~Medicaid ~~in the United States~~Services, or ~~including~~CMS, ~~programs~~for tothe ~~extend~~purpose ~~medical~~of ~~benefits~~calculating tonational ~~millions~~reimbursement oflevels, ~~individuals~~certain ~~who~~federal ~~currently~~prices ~~lack~~and ~~insurance~~certain ~~coverage.~~federal ~~The~~and ~~changes~~state ~~contemplated~~rebate byobligations. We ~~the~~will ~~healthcare~~need ~~reform~~to ~~law~~establish ~~are~~systems ~~subject~~for tocollecting ~~rule-making~~ and ~~implementation~~reporting ~~timelines~~this ~~that~~data ~~extend~~accurately ~~for~~to ~~several~~CMS ~~years,~~ and ~~this uncertainty~~institute ~~limits~~a ~~our~~compliance ~~ability~~program to ~~forecast~~assure ~~changes~~ that ~~may~~the ~~occur~~information incollected ~~the~~is ~~future.~~complete ~~However,~~in ~~implementation~~all ~~has~~respects. If ~~already~~we ~~begun~~report ~~with~~pricing ~~respect to~~information ~~certain~~that ~~significant~~is ~~cost-saving~~not ~~measures~~accurate ~~under~~to the ~~healthcare~~federal ~~reform law~~government, ~~for~~we ~~example~~could ~~with~~be ~~respect~~subject to ~~several~~fines ~~government healthcare programs that may cover the cost of our future products, including Medicaid, Medicare Parts B~~ and D,other ~~and~~sanctions ~~these~~that ~~efforts~~ could ~~have a~~adversely ~~materially~~affect ~~adverse impact on~~ our ~~future financial prospects and performance~~ business.

~~The~~If ~~healthcare~~we ~~reform~~choose ~~law~~to ~~also~~pursue ~~introduced~~clinical development aand ~~biosimilar~~commercialization ~~pathway~~in ~~that~~the ~~will~~European ~~permit~~Union ~~companies~~or tootherwise ~~obtain~~market ~~FDA~~and ~~approval~~sell ofour ~~generic~~products ~~versions~~outside of ~~existing~~the ~~biologics~~United ~~based~~States, ~~upon~~we ~~reduced~~must obtain ~~documentation~~and maintain regulatory approvals and ~~data~~comply with regulatory requirements ~~deemed~~in ~~sufficient~~such tojurisdictions. The ~~demonstrate~~approval ~~safety~~procedures vary among countries in complexity and ~~efficacy~~timing. We ~~than~~may ~~are~~not ~~required~~obtain ~~for~~approvals ~~the~~from ~~pioneer~~regulatory ~~biologics. The~~authorities ~~new~~outside ~~law~~the ~~provides~~United States ~~that~~on a ~~biosimilar~~timely ~~application~~basis, ~~may~~if beat ~~submitted~~all, aswhich ~~soon~~would aspreclude ~~four~~us ~~years~~from ~~after~~commercializing ~~the~~products ~~reference~~in ~~product~~those ismarkets. In ~~first~~addition, ~~licensed~~some countries, ~~and~~particularly ~~that~~the countries of the ~~FDA~~European ~~may~~Union, ~~not~~regulate ~~make~~the ~~approval~~pricing of anprescription ~~application~~pharmaceuticals. In these ~~effective~~countries, ~~until~~pricing 12discussions ~~years~~with governmental authorities can take considerable time after the ~~reference~~receipt ~~product~~of ~~was~~marketing ~~first~~approval ~~licensed.~~for ~~With~~a ~~the~~product. To ~~likely~~obtain ~~introduction~~reimbursement ofor ~~biosimilars~~pricing approval in ~~the~~some ~~United States~~countries, we ~~expect~~may inbe required to conduct a clinical trial that compares the ~~future~~cost-effectiveness of their product candidate to ~~face~~other ~~greater~~available ~~competition~~therapies. Such trials may ~~from~~be ~~biosimilar~~time-consuming ~~products~~and expensive, ~~including~~and amay ~~possible~~not ~~increase~~show an advantage in ~~patent~~efficacy ~~challenges.~~for ~~The~~our ~~FDA~~products. If ~~has~~reimbursement ~~reported~~of ~~meeting~~our products ~~with~~is ~~sponsors~~unavailable ~~who~~or ~~are interested~~limited in ~~developing~~scope ~~biosimilar~~or ~~products~~amount, ~~and~~or if pricing is ~~developing~~set ~~regulations~~at unsatisfactory levels, in either the United States or the European Union, we could be adversely affected. Also, under the United States Foreign Corrupt Practices Act, or FCPA, the United States has increasingly focused on regulating the conduct by U.S. businesses occurring outside of the United States, generally prohibiting remuneration to ~~implement~~foreign officials for the ~~abbreviated~~purpose ~~regulatory~~of ~~review~~obtaining ~~pathway~~or retaining business.

~~Regarding~~To ~~access~~enhance tocompliance ~~our~~with ~~products~~applicable health care laws, ~~the~~and ~~healthcare reform~~mitigate ~~law~~potential ~~established~~liability ~~and~~in ~~provided~~the ~~significant~~event ~~funding~~of ~~for~~noncompliance, aregulatory ~~Patient-Centered~~authorities, ~~Outcomes~~such ~~Research~~as ~~Institute~~the toUnited ~~coordinate~~States Health and ~~fund Comparative~~Human ~~Effectiveness~~Services ~~Research~~Department Office of Inspector General, or ~~CER.~~OIG, ~~While~~have recommended the ~~stated~~adoption ~~intent~~and implementation of ~~CER~~a iscomprehensive health tocare ~~develop~~compliance ~~information~~program tothat ~~guide~~generally ~~providers~~contains to the ~~most~~ ~~efficacious~~elements ~~therapies,~~of ~~outcomes~~an ofeffective ~~CER~~compliance ~~could~~and ~~influence~~ethics ~~the~~program ~~reimbursement~~described orin Section ~~coverage~~8B2.1 ~~for~~of ~~therapies~~the ~~that~~United ~~are~~States ~~determined~~Sentencing ~~to be~~Commission ~~less~~Guidelines ~~cost-effective~~Manual. Increasing ~~than~~numbers ~~others~~of U.S.-based ~~Should~~pharmaceutical companies ~~any~~have ofsuch ~~our~~programs. In ~~products~~the befuture, ~~determined~~we tomay beneed ~~less~~to ~~cost-effective~~adopt ~~than~~healthcare ~~alternative~~compliance ~~therapies, the~~and ~~levels~~ethics ofprograms ~~reimbursement~~that ~~for~~would incorporate ~~these~~the ~~products~~OIG’s recommendations, orand ~~the~~train ~~willingness~~our toapplicable ~~reimburse~~employees atin ~~all,~~such ~~could~~compliance. Such a program may be ~~impacted,~~expensive ~~which~~and ~~could~~may ~~materially impact~~not ~~our~~assure ~~future~~that ~~financial~~we ~~prospects~~will ~~and~~avoid ~~results~~compliance issues.

~~Risks~~The ~~Related~~implementation toof ~~Our~~the ~~Dependence~~healthcare onreform ~~Third~~law ~~Parties~~in the United States may adversely affect our business.

IfThrough ~~third-party~~the ~~manufacturers~~March 2010 adoption of ~~our~~the ~~products~~healthcare reform ~~fail~~law in the United States, substantial changes were made to ~~devote~~the current system for paying for healthcare in the United States, ~~sufficient~~including ~~time~~programs ~~and~~to ~~resources~~extend medical benefits to ~~our~~millions ~~concerns,~~of orindividuals ifwho ~~their~~currently ~~performance~~lack isinsurance ~~substandard~~coverage. The changes contemplated by the healthcare reform law are subject to rule-making and implementation timelines that extend for several years, and this uncertainty limits our ~~clinical~~ability ~~trials~~to ~~and~~forecast ~~product~~changes ~~introductions~~that may occur in the future. However, implementation has already begun with respect to certain significant cost-saving measures under the healthcare reform law, for example with respect to several government healthcare programs that may becover ~~delayed~~the cost of our future products, including Medicaid, Medicare Parts B and D, and these efforts could have a materially adverse impact on our ~~costs~~future ~~may~~financial ~~rise~~prospects and performance.

WeThe ~~have~~healthcare ~~relied~~reform ~~on,~~law ~~and~~also ~~intend~~introduced ~~to rely in the~~a ~~future,~~biosimilar onpathway ~~third-party~~that ~~contract~~will ~~manufacturers~~permit companies to ~~supply,~~obtain ~~store,~~FDA ~~test~~approval ~~and~~of ~~distribute~~generic ~~PRTX-100~~versions ~~and~~of ~~other~~existing ~~potential~~biologics ~~products.~~based ~~Any~~upon reduced ~~products~~documentation weand ~~develop~~data ~~may~~requirements bedeemed insufficient ~~competition~~to ~~with~~demonstrate ~~other~~safety ~~product~~and ~~candidates~~efficacy ~~and~~than ~~products~~are required for ~~access~~the topioneer ~~these facilities~~biologics. The new ~~Thus,~~law ~~we may~~provides ~~not~~that bea ~~successful~~biosimilar inapplication ~~contracting~~may ~~with~~be ~~third-party~~submitted ~~manufacturers,~~as orsoon ~~they~~as ~~may~~four ~~not~~years beafter ~~able~~the toreference ~~manufacture~~product ~~these~~is ~~candidates~~first ~~and~~licensed, ~~products~~and inthat athe ~~cost-effective~~FDA ormay ~~timely~~not ~~manner.~~make ~~Additionally,~~approval ~~our~~of ~~reliance~~an onapplication ~~third-party~~effective ~~manufacturers~~until ~~exposes~~12 usyears toafter the ~~following~~reference product was first licensed. With ~~risks,~~the ~~any~~likely introduction of ~~which~~biosimilars ~~could~~in ~~delay~~the orUnited ~~prevent~~States, we expect in the ~~completion~~future ofto ~~(x)~~face ~~our~~greater ~~clinical~~competition ~~trials~~from biosimilar products, ~~(y)~~including ~~the~~a ~~approval~~possible ofincrease ~~our~~in ~~products~~patent bychallenges. The ~~the~~ FDA orhas ~~(z)~~reported ~~the~~meeting ~~commercialization~~with ofsponsors ~~our~~who are interested in developing biosimilar products, ~~resulting~~and inis ~~higher~~developing ~~costs~~regulations orto ~~depriving~~implement usthe ofabbreviated ~~potential~~regulatory ~~product~~review ~~revenues:~~pathway.

· Contract manufacturers are obliged to operate in accordance with FDA-mandated cGMPs. Their failure to establish and follow cGMPs and to document their adherence to such practices may lead to significant delays in the availability of material for clinical study and may delay or prevent filing or approval of marketing applications for our products. Additionally, failure to achieve and maintain high manufacturing standards, including the incidence of manufacturing errors, could result in patient injury or death, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business.26

·Regarding Itaccess ~~may~~to beour ~~difficult~~products, orthe ~~impossible~~healthcare reform ~~for~~law usestablished toand ~~find~~provided ~~replacement~~significant ~~manufacturers~~funding ~~quickly~~for ona ~~acceptable~~Patient-Centered ~~terms,~~Outcomes orResearch atInstitute ~~all.~~to ~~For~~coordinate ~~example,~~and wefund Comparative ~~have~~Effectiveness ~~initially~~Research, ~~relied~~or onCER. While athe ~~single~~stated ~~contract~~intent ~~drug~~of ~~substance~~CER ~~manufacturer,~~is ~~Eurogentec~~to ~~S.A.,~~develop information to ~~produce~~guide ~~PRTX-100.~~providers to ~~Changing~~the ~~this~~most ~~manufacturer~~efficacious therapies, oroutcomes ~~changing~~of CER could influence the ~~manufacturer~~reimbursement ~~for~~or ~~any~~coverage ~~other~~for ~~products~~therapies wethat ~~develop,~~are ~~may~~determined to be ~~difficult,~~less ~~time~~cost-effective ~~consuming~~than ~~and expensive~~others. Should ~~The~~any ~~number~~ of ~~potential~~our ~~manufacturers~~products isbe ~~limited,~~determined ~~and~~to ~~changing~~be ~~manufacturers~~less ~~may~~cost-effective ~~require~~than ~~confirmation~~alternative therapies, of the ~~analytical~~levels ~~methods~~ of ~~the~~reimbursement ~~manufacturing~~for ~~processes~~these ~~and~~products, ~~procedures~~or inthe ~~accordance~~willingness ~~with~~to ~~FDA-mandated~~reimburse ~~cGMPs.~~at ~~Such~~all, ~~confirmation~~could ofbe ~~the~~impacted, ~~analytical~~which ~~methods~~could materially ~~may~~impact beour ~~costly~~future financial prospects and ~~time-consuming~~results.

26Risks Related to Our Dependence on Third Parties

·If ~~Our~~third-party ~~contract~~ manufacturers ~~may~~of ~~not~~our ~~perform~~products asfail ~~agreed~~to ordevote sufficient ~~may~~time ~~not~~and ~~remain~~resources into ~~the~~our ~~contract~~concerns, ~~manufacturing~~or ~~business~~if ~~for~~their ~~the~~performance ~~time~~is ~~required to produce~~substandard, ~~store,~~our ~~test~~clinical trials and ~~distribute~~product introductions may be delayed and our ~~products~~costs ~~successfully~~may rise.

~~Drug~~We ~~manufacturers~~have ~~are~~relied ~~subject~~on, toand ~~ongoing periodic~~intend ~~unannounced~~to ~~inspection~~rely byin the ~~FDA~~ future, ~~the~~on ~~U.S.~~third-party ~~Drug~~contract ~~Enforcement~~manufacturers ~~Agency~~to supply, store, test and ~~corresponding~~distribute ~~state~~PRTX-100 and ~~foreign~~other ~~agencies~~potential toproducts. Any ~~ensure~~products ~~strict~~we ~~compliance~~develop ~~with~~may ~~cGMPs,~~be in competition with other ~~government~~product ~~regulations~~candidates and ~~corresponding~~products ~~foreign~~for ~~standards~~access to these facilities. ~~While~~Thus, we ~~are obligated~~may tonot ~~audit~~be ~~the~~successful ~~performance~~in ofcontracting with third-party ~~contractors~~manufacturers, weor dothey may not ~~have~~be ~~control~~able ~~over~~to ~~our~~manufacture ~~third-party~~these ~~manufacturers’~~candidates ~~compliance~~and products ~~with~~in ~~these~~a ~~regulations~~cost-effective ~~and~~or ~~standards~~timely manner. ~~Failure~~Additionally, by our reliance on third-party manufacturers orexposes us to ~~comply~~the ~~with~~following ~~applicable~~risks, any ~~regulations~~of which could ~~result~~ indelay ~~sanctions~~or ~~being~~prevent ~~imposed~~the oncompletion ~~us,~~of ~~including~~(x) ~~fines,~~our ~~injunctions,~~clinical ~~civil penalties~~trials, ~~failure~~(y) of the ~~government to grant market~~ approval of ~~drugs,~~our ~~delays,~~products ~~suspension~~by orthe ~~withdrawal~~FDA ~~of approvals, seizures~~ or ~~recalls~~(z) the commercialization of ~~product,~~our ~~operating restrictions and criminal prosecutions~~products, ~~any~~resulting ofin ~~which~~higher ~~could~~costs ~~significantly~~or ~~and~~depriving ~~adversely~~us ~~affect~~of ~~our~~potential ~~business.~~product revenues:

We· ~~believe~~Contract ~~Eurogentec~~manufacturers Sare obliged to operate in accordance with FDA-mandated cGMPs.A. ~~has~~Their ~~the~~failure ~~capacity~~ to ~~produce~~establish aand ~~sufficient~~follow ~~inventory~~cGMPs ofand ~~PRTX-100~~to document their adherence to ~~conduct~~such ~~our~~practices ~~currently~~may ~~planned~~lead ~~clinical~~to ~~trials.~~significant Ifdelays ~~these~~in ~~inventories~~the ~~are~~availability ~~lost~~ of material for clinical study and may delay or ~~damaged,~~prevent filing or ifapproval ~~Eurogentec~~of Smarketing applications for our products.A. ~~cannot~~Additionally, orfailure ~~will~~to ~~not~~achieve ~~produce~~and ~~additional~~maintain ~~inventory~~high tomanufacturing ~~complete~~standards, including the ~~remaining~~incidence ~~phases~~ of ~~clinical trials~~manufacturing errors, ~~the~~could ~~clinical~~result ~~development~~in ofpatient ~~our~~injury or death, product ~~candidate~~recalls or ~~its~~withdrawals, ~~submission~~delays ~~for~~or ~~regulatory~~failures ~~approval~~in ~~could~~product betesting ~~significantly~~or ~~delayed and~~delivery, ~~our~~cost ~~ability~~overruns toor ~~commercialize~~other ~~this~~problems ~~product~~that could beseriously ~~impaired~~hurt our business.

If· weIt domay ~~not~~be ~~have~~difficult ~~adequate~~or ~~clinical~~impossible ~~trial~~for ~~material~~us ~~available~~ to ~~complete~~ ~~our~~find ~~clinical~~replacement ~~trials~~manufacturers quickly on acceptable terms, ~~which~~or ~~could~~at ~~also~~all. ~~lead~~For toexample, we have initially relied on a ~~significant~~single ~~delay~~contract indrug ~~continuing~~substance ~~and~~manufacturer, ~~/or~~Eurogentec ~~commencing~~S.A., ~~our~~to ~~clinical~~produce ~~trial programs~~PRTX-100. Changing this manufacturer, or changing the manufacturer for any other products we develop, may be ~~unable~~difficult, totime ~~obtain~~consuming ~~FDA~~and ~~approval~~expensive. The number of potential manufacturers is limited, and ~~our~~changing ~~ability~~manufacturers tomay ~~commercialize~~require ~~this~~confirmation ~~product~~of ~~could~~the analytical methods of the manufacturing processes and procedures in accordance with FDA-mandated cGMPs. Such confirmation of the analytical methods may be ~~impaired~~costly orand ~~precluded~~time-consuming.

We· ~~rely~~Our oncontract ~~third~~manufacturers ~~parties~~may tonot ~~conduct~~perform ~~our~~as ~~PRTX-100~~agreed ~~studies and~~or ~~intend~~may tonot ~~rely~~remain onin ~~third~~the ~~parties~~contract tomanufacturing ~~conduct~~business ~~our clinical trials~~ for ~~other~~the ~~product~~time ~~candidates.~~required ~~Such~~to ~~third~~produce, ~~parties may not perform satisfactorily~~store, ~~including~~test ~~failing~~and todistribute ~~meet~~our ~~deadlines~~products ~~for the completion of such trials~~successfully.

WeDrug ~~rely~~manufacturers ~~and~~are ~~expect~~subject to ~~continue~~ongoing toperiodic unannounced ~~rely~~inspection ~~on third~~by ~~parties~~the FDA, ~~such~~the asU.S. ~~clinical~~Drug ~~research~~Enforcement ~~organizations~~Agency, ~~clinical~~and ~~data~~corresponding ~~management~~state ~~organizations~~and foreign agencies to ensure strict compliance with cGMPs, ~~medical~~other ~~institutions~~government regulations and ~~clinical~~corresponding foreign standards. While we are obligated to audit the performance ~~investigators~~of third-party contractors, towe ~~conduct~~do ~~clinical~~not ~~trials~~have ~~for~~control over our ~~drug~~third-party ~~product~~manufacturers’ ~~candidates~~compliance with these regulations and standards. ~~Relying~~Failure onby ~~these~~our third-party ~~parties~~manufacturers ~~for~~or ~~clinical~~us ~~development~~to comply with applicable regulations could result in sanctions being ~~activities~~imposed ~~will~~on ~~reduce~~us, ~~our~~including ~~control~~fines, ~~over~~injunctions, ~~these~~civil ~~activities~~penalties, failure of the government to grant market approval of drugs, delays, suspension or withdrawal of approvals, seizures or recalls of product, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect our business.

We ~~will~~believe ~~remain~~Eurogentec ~~responsible~~S.A. ~~for~~has ~~ensuring~~the ~~that~~capacity ~~our~~to ~~PRTX-100-202~~produce ~~and~~a ~~203~~sufficient ~~Studies~~inventory ~~and~~of ~~each~~PRTX-100 ofto conduct our ~~future~~currently planned clinical trials. ~~are~~If ~~conducted~~these ininventories ~~accordance~~are ~~with~~lost ~~the general investigational~~or ~~plan~~damaged, ~~and~~or ~~protocols~~if ~~for~~Eurogentec ~~the trial~~S.A. ~~Moreover,~~cannot ~~the~~or ~~FDA~~ will ~~require~~not usproduce toadditional ~~comply~~inventory ~~with~~to ~~cGTPs~~complete ~~with~~the ~~respect~~remaining tophases ~~any~~of clinical trials ~~conducted~~, ~~in connection with a submission to~~ the ~~FDA, including an IND, and will require that we record and report~~ clinical ~~trial~~development ~~results to~~of ~~assure~~our ~~that~~product ~~data~~candidate ~~and~~or ~~reported~~its ~~results~~submission ~~are~~for ~~credible~~regulatory ~~and~~approval ~~accurate~~could ~~and that the rights and safety are protected. We will also~~ be ~~required~~significantly todelayed ~~register ongoing FDA-regulated clinical trials~~ and ~~post the results of completed clinical trials on a government-sponsored~~ ~~database,~~our ~~ClinicalTrials.gov,~~ability ~~within certain timeframes. Failure~~ to docommercialize sothis ~~can~~product ~~result~~could inbe ~~fines, adverse publicity and civil and criminal sanctions~~impaired.

If ~~these~~we ~~third parties~~ do not ~~successfully carry~~have ~~out~~adequate ~~their~~clinical ~~contractual~~trial ~~duties,~~material available ~~meet~~to ~~expected~~complete ~~deadlines or conduct~~ our clinical trials ~~in accordance with regulatory requirements or our stated protocols~~, wewhich ~~will~~could ~~not~~also belead ~~able~~ to ~~obtain,~~a orsignificant ~~may~~delay ~~be delayed~~ in ~~obtaining,~~continuing ~~regulatory~~and ~~approvals~~/or ~~for~~commencing our ~~product candidates~~clinical ~~and~~trial ~~will~~programs, ~~not~~we may be ~~able~~unable to, orobtain ~~may~~FDA beapproval ~~delayed~~and in our ~~efforts~~ability to, ~~successfully~~ commercialize ~~our~~this product ~~candidates.~~could ~~Furthermore, these third parties may also have relationships with other entities, some of which may~~ be ~~our~~impaired ~~competitors,~~or ~~and could devote more of their resources to such other entities at the expense of expending sufficient resources on our clinical development activities~~precluded.

We expect to depend on collaborations with third parties to develop and commercialize our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these drug product candidates.27

We ~~currently~~rely ~~intend~~on ~~to commercialize PRTX-100 and to collaborate with~~ third parties to ~~commercialize~~conduct our PRTX-100 studies and intend ~~any~~to ~~future~~rely ~~product~~on ~~candidates.~~third Inparties ~~addition,~~to weconduct ~~may~~our ~~seek~~clinical ~~partners~~ trials for ~~further development and commercialization of our~~ other product candidates. ~~These~~Such ~~collaborations~~third ~~could~~parties ~~take~~may ~~the~~not ~~form of license,~~perform ~~distribution~~satisfactorily, ~~sales~~including ~~representative,~~failing ~~joint~~to ~~venture,~~meet ~~sponsored~~deadlines ~~research~~for orthe ~~other~~completion ~~arrangements~~of ~~with~~such ~~pharmaceutical and biotechnology companies, other commercial entities and academic and other institutions~~trials.

IfWe werely doand ~~enter~~expect ~~into~~to ~~any~~continue ~~such~~to ~~arrangements with~~rely ~~third~~on third parties, wesuch ~~will~~as ~~likely~~clinical ~~have~~research ~~limited~~organizations, ~~control~~clinical ~~over~~data ~~the~~management ~~amount~~organizations, ~~and~~medical ~~timing~~institutions ofand ~~resources~~clinical ~~that such collaborators dedicate~~investigators, to ~~the~~conduct ~~development~~clinical ortrials ~~commercialization~~for of our ~~product~~drug ~~candidates. Collaboration agreements may not lead to development or commercialization of~~ product candidates ~~in the most efficient manner, or at all~~. ~~Our~~Relying ~~ability~~on tothese ~~generate~~third ~~revenues~~parties ~~from~~for ~~these~~clinical ~~arrangements~~development activities will ~~depend on,~~reduce ~~among other things,~~ our ~~collaborators'~~control ~~successful~~over ~~performance of the functions assigned to them in~~ these ~~arrangements~~activities.

~~Collaborations~~We ~~involving~~will remain responsible for ensuring that our ~~product~~PRTX-100-202 ~~candidates~~and 203 Studies and each of our future clinical trials are conducted in accordance with the general investigational ~~would~~plan ~~pose~~and protocols for the ~~following~~trial. ~~risks~~Moreover, tothe FDA will require us: to comply with cGTPs with respect to any clinical trials conducted in connection with a submission to the FDA, including an IND, and will require that we record and report clinical trial results to assure that data and reported results are credible and accurate and that the rights and safety are protected. We will also be required to register ongoing FDA-regulated clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

27If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors, and could devote more of their resources to such other entities at the expense of expending sufficient resources on our clinical development activities.

·We ~~collaborators~~expect ~~have~~to ~~significant~~depend ~~discretion~~on incollaborations ~~determining~~with ~~the~~third ~~efforts~~parties to develop and ~~resources~~commercialize ~~that~~our ~~they~~product ~~will~~candidates. ~~apply~~If tothose ~~these~~ collaborations ~~and~~are ~~could~~not ~~devote~~successful, ~~fewer~~we ~~resources~~may not be able to ~~our~~capitalize on ~~product~~the ~~candidates~~market ~~than~~potential weof ~~expect~~these ~~them~~drug ~~to;~~product candidates.

·We acurrently ~~collaborator~~intend ~~with~~to ~~marketing~~commercialize PRTX-100 and ~~distribution~~to ~~rights~~collaborate with third parties to ~~one~~commercialize orPRTX-100 ~~more~~and ~~products~~any ~~may~~future ~~not~~product ~~commit~~candidates. ~~sufficient~~In ~~resources~~addition, towe ~~the~~may ~~marketing~~seek partners for further development and ~~distribution~~commercialization of our other product candidates. These collaborations could take the form of license, distribution, sales representative, joint venture, sponsored research or ~~products;~~other arrangements with pharmaceutical and biotechnology companies, other commercial entities and academic and other institutions.

·If ~~collaborators~~we ~~may~~do ~~not~~enter ~~pursue~~into ~~development~~any such arrangements with third parties, we will likely have limited control over the amount and timing of resources that such collaborators dedicate to the development or commercialization of our product candidates. orCollaboration agreements may ~~elect~~ not lead to ~~continue or renew~~ development or commercialization of ~~programs~~product ~~based~~candidates onin ~~clinical~~the ~~trial~~most ~~results~~efficient manner, ~~changes~~or inat ~~the~~all. ~~collaborator's~~Our ~~strategic~~ability ~~focus~~to orgenerate ~~available~~revenues ~~funding~~from these arrangements will depend on, oramong ~~external~~other ~~factors~~things, ~~such~~our ascollaborators' ansuccessful ~~acquisition~~performance ~~that~~of ~~diverts~~the ~~resources~~functions orassigned ~~creates~~to ~~competing~~them ~~priorities;~~in these arrangements.

·Collaborations ~~collaborators~~involving ~~may~~our ~~delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a~~ product ~~candidate~~candidates would orpose ~~repeat~~the orfollowing ~~conduct~~risks ~~new~~to ~~clinical trials;~~us:

· collaborators ~~could~~have ~~independently~~significant ~~develop,~~discretion orin ~~develop~~determining ~~with~~the ~~third~~efforts ~~parties,~~and ~~products~~resources that ~~compete~~they ~~directly~~will orapply ~~indirectly~~to ~~with~~these ~~our~~collaborations ~~products~~and orcould devote fewer resources to our product candidates than we expect them to;

· ~~collaborators~~a ~~may~~collaborator ~~not~~with ~~properly~~marketing ~~maintain~~and ordistribution ~~defend~~rights ~~our~~to ~~intellectual~~one ~~property~~or ~~rights~~more orproducts may ~~use~~not ~~our~~commit ~~proprietary~~sufficient ~~information~~resources ~~in such a way as~~ to ~~invite~~the ~~litigation~~marketing ~~that~~and ~~could~~distribution ~~jeopardize~~of ~~or invalidate~~ our ~~proprietary~~product ~~information~~or products;

· ~~disputes~~collaborators may ~~arise~~not ~~between~~pursue ~~the~~development ~~collaborators~~ and uscommercialization ~~that~~of ~~result~~our inproduct ~~the~~candidates ~~delay~~ or ~~termination~~may ofelect ~~the~~not ~~research,~~to continue or renew development or commercialization ofprograms ~~our~~based ~~product~~on ~~candidates~~clinical ortrial ~~that~~results, ~~result~~changes in ~~costly~~the ~~litigation~~collaborator's strategic focus or ~~arbitration~~available funding, or external factors such as an acquisition that diverts ~~management's~~resources ~~attention~~or ~~and~~creates ~~resources;~~competing ~~and~~priorities;

· ~~collaborations~~collaborators may bedelay ~~terminated~~clinical ~~and~~trials, ifprovide ~~terminated,~~insufficient ~~may~~funding ~~result~~for in a ~~need~~clinical ~~for~~trial ~~additional~~program, ~~capital~~stop toa ~~pursue~~clinical ~~further~~trial ~~development~~or abandon a product candidate or ~~commercialization~~repeat ofor ~~the~~conduct ~~applicable~~new ~~product~~clinical ~~candidates.~~trials;

If· wecollaborators ~~are~~could ~~not~~independently ~~able~~develop, toor ~~establish~~develop ~~collaborations~~with third parties, weproducts ~~may~~that ~~have to~~compete ~~alter~~directly or indirectly with our ~~development~~products ~~and~~or ~~commercialization~~product ~~plans.~~candidates;

~~Our~~· ~~product~~collaborators ~~development~~may ~~programs~~not ~~and~~properly ~~the~~maintain ~~potential commercialization~~or ofdefend our ~~product~~intellectual ~~candidates~~property ~~will~~rights ~~require~~or ~~substantial additional cash to fund expenses. We~~ may ~~collaborate~~use ~~with pharmaceutical and biotechnology companies to develop and commercialize~~ our ~~product~~proprietary ~~candidates.~~information ~~For~~in ~~example,~~such wea ~~currently~~way ~~intend to~~as ~~seek~~ to ~~collaborate~~invite ~~with~~litigation ~~third~~that ~~parties~~could tojeopardize ~~commercialize~~or ~~PRTX-100~~invalidate ~~and~~our ~~other~~proprietary ~~product candidates we successfully develop.~~information;

We· ~~face~~disputes ~~significant~~may ~~competition~~arise inbetween ~~seeking appropriate~~the collaborators. ~~Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator's resources~~ and ~~expertise,~~us ~~the~~that ~~terms~~result ~~and~~in ~~conditions of~~ the ~~proposed~~delay ~~collaboration,~~or ~~and~~termination ~~the proposed collaborator's evaluation~~ of ~~a number of factors. Those factors may include~~ the ~~design or results of our clinical trials~~research, ~~the likelihood~~development ~~of approval by the FDA~~ or ~~similar~~commercialization ~~regulatory authorities outside the United States~~ of our product candidate, the potential market for such product candidate, the costs and complexities of manufacturing and delivering the product candidate to patients, the potential and relative cost of competing products, uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or ~~technologies for similar indications or conditions~~ that ~~may be~~result ~~available~~in tocostly ~~collaborate~~litigation onor ~~and~~arbitration whether such a collaboration could be more attractive than the one with us for our product candidate. We may also be restricted under existing license agreements from entering into agreements on certain terms with potential collaborators. In addition, there have been a significant number of recent business combinations among pharmaceutical and biotechnology companies that ~~have~~diverts ~~resulted~~management's inattention ~~a reduced number of potential future collaborators. Collaborations are complex~~ and ~~time~~resources; ~~consuming to negotiate~~ and ~~document. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.~~

If we cannot find a collaborator for a particular program, we may have to curtail the development of such program or of one or more of our other development programs, delay the potential commercialization of such program or reduce the scope of any sales or marketing activities for the program or increase our expenditures and undertake development or commercialization activities for the program at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring these product candidates to market and generate product revenue.28

28· collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

~~Risks~~If ~~Relating~~we are not able to ~~our~~establish ~~Finances~~collaborations, ~~Capital~~we ~~Requirements~~may have to alter our development and ~~Other Financial~~commercialization ~~Matters~~plans.

~~Auditors~~Our ~~have~~product ~~doubt~~development asprograms and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. We may collaborate with pharmaceutical and biotechnology companies to develop and commercialize our ~~ability~~product candidates. For example, we currently intend to ~~continue~~seek into ~~business~~collaborate with third parties to commercialize PRTX-100 and other product candidates we successfully develop.

InWe ~~their~~face ~~report~~significant oncompetition ~~our~~in ~~May~~seeking appropriate 31collaborators. Whether we reach a definitive agreement for a collaboration will depend, ~~2016~~among ~~financial statements~~other things, upon our assessment ~~auditors~~of ~~expressed~~the ~~substantial~~collaborator's ~~doubt~~resources asand toexpertise, ~~our~~the ~~ability~~terms toand ~~continue~~conditions asof the proposed collaboration, and the proposed collaborator's evaluation of a ~~going~~number ~~concern~~of factors. AThose ~~going~~factors ~~concern~~may ~~qualification could~~include ~~impair~~the ~~our~~design ~~ability~~or toresults ~~finance~~of our ~~operations~~clinical ~~through~~trials, the ~~sale~~ likelihood of ~~debt~~approval by the FDA or ~~equity~~similar ~~securities.~~regulatory ~~Our~~authorities ~~ability~~outside tothe ~~continue~~United asStates ~~a going~~of ~~concern~~our ~~will~~product ~~depend~~candidate, inthe ~~large~~potential ~~part,~~market for onsuch ~~our~~product ~~ability~~candidate, tothe ~~obtain~~costs ~~additional~~and ~~financing~~complexities of manufacturing and ~~generate~~delivering ~~positive~~the ~~cash~~product ~~flow~~candidate ~~from~~to ~~operations~~patients, the potential ~~neither~~and relative cost of competing products, uncertainty with respect to our ownership of technology, which can exist if there is ~~certain.~~a challenge Ifto wesuch ~~are~~ownership ~~unable~~without regard to ~~achieve~~the ~~these~~merits ~~goals~~of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications or conditions that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our ~~business~~product ~~would~~candidate. We may also be ~~jeopardized~~restricted under existing license agreements from entering into agreements on certain terms with potential collaborators. In addition, there have been a significant number of recent business combinations among pharmaceutical and webiotechnology companies that have resulted in a reduced number of potential future collaborators. Collaborations are complex and time consuming to negotiate and document. We may not be able to ~~continue~~negotiate ~~operations~~collaborations on a timely basis, on acceptable terms, or at all.

WeIf ~~are~~we acannot ~~clinical~~find ~~stage~~a ~~company~~collaborator ~~with~~for a ~~history~~particular program, we may have to curtail the development of ~~operating~~such program or of one or more of our other development programs, delay the ~~losses~~potential ~~that~~commercialization ~~are~~of ~~expected~~such toprogram ~~continue~~or reduce the scope of any sales or marketing activities for the program or increase our expenditures and undertake development or commercialization activities for the program at our own expense. If we ~~are~~elect ~~unable~~to increase our expenditures to ~~predict~~fund ~~the~~development ~~extent~~or ofcommercialization ~~future~~activities ~~losses,~~on ~~whether~~our own, we ~~will~~may ~~generate~~need ~~significant~~to obtain additional capital, which ~~revenues~~may not be available to us on acceptable terms or ~~whether~~at all. If we ~~will~~do ~~achieve~~not have sufficient funds, we may not be able to further develop our product candidates or ~~sustain~~bring ~~profitability~~these product candidates to market and generate product revenue.

WeRisks ~~are~~Relating a clinical stage company and our prospects must be considered in light of the uncertainties, risks, expenses and difficulties frequently encountered by similarly situated companies. We have generated net losses in all periods since our inception in September 1999 including losses of approximately $9.4 million and $11.6 million for the years ended May 31, 2016 and 2015, respectively and as of May 31, 2016 we had an accumulated deficit of approximately $94.6 million. We expect to ~~make substantial expenditures and incur increasing operating costs in the future and~~ our ~~accumulated deficit will increase significantly as we expand development and clinical trial activities for our product candidates. Our losses have had~~Finances, ~~and~~Capital ~~are~~Requirements ~~expected to continue to have, an adverse impact on our working capital, total assets~~ and ~~stockholders’ equity. Because of the risks and uncertainties associated with product development,~~Other weFinancial ~~are unable to predict the extent of any future losses, whether we will ever generate significant revenues or if we will ever achieve or sustain profitability.~~Matters

WeAuditors ~~will~~have ~~need~~doubt ~~substantial~~as ~~additional funding and may be unable~~ to ~~raise~~our ~~capital~~ability ~~when needed, which would force us~~ to ~~delay,~~continue ~~curtail~~in ~~or eliminate one or more of our research and development programs or commercialization efforts~~business.

~~Our~~In ~~operations~~their ~~have~~report ~~consumed~~on ~~substantial amounts~~our ~~of cash since inception. During the years ended~~ May 31, ~~2016~~2017 ~~and 2015, we incurred research and development expenses~~financial ~~of approximately $3.1 million and $3.0 million~~statements, ~~respectively.~~our Asauditors ofexpressed ~~May~~substantial ~~31,~~doubt ~~2016,~~as weto ~~had~~our ~~cash~~ability ~~and~~to ~~cash~~continue ~~equivalents~~as ~~of approximately~~a ~~$444,000~~going ~~and negative net working capital of approximately $107,000~~concern. WeA ~~expect~~going toconcern ~~continue to spend substantial~~qualification ~~amounts~~could onimpair ~~product~~our ~~development,~~ability ~~including~~to ~~conducting~~finance ~~clinical trials for~~ our ~~product~~operations ~~candidates~~through ~~and~~the ~~purchasing~~sale ~~clinical~~of ~~trial materials~~debt ~~from~~or ~~our~~equity ~~suppliers~~securities. ~~Until~~Our ~~such~~ability ~~time,~~to ifcontinue ~~ever,~~ as ~~we can generate~~ a going ~~sufficient~~concern ~~amount~~will ofdepend, ~~product~~in ~~revenue~~large ~~and achieve profitability~~part, weon ~~expect~~our toability ~~seek~~ to ~~finance~~obtain ~~future~~additional ~~cash~~financing ~~needs~~and ~~through~~generate ~~equity~~positive orcash ~~debt~~flow ~~financings~~from ~~or corporate collaboration~~operations, ~~and~~neither ~~licensing arrangements. We currently have no agreements relating to any~~ of ~~these~~which ~~types~~is ~~of transactions and we cannot be~~ certain ~~that additional funding will be available on acceptable terms, or at all~~. If we are unable to ~~raise~~achieve ~~additional capital,~~these ~~we will have to delay~~goals, ~~curtail~~our orbusiness ~~eliminate~~would ~~one~~be orjeopardized ~~more~~and ofwe ~~our~~may ~~research~~not ~~and~~be ~~development~~able to ~~programs~~continue operations.

~~Raising~~We ~~additional~~are ~~funds~~a byclinical ~~issuing~~stage ~~securities~~company orwith ~~through~~a history of operating ~~licensing~~losses orthat ~~lending~~are ~~arrangements~~expected ~~may~~to ~~cause~~continue ~~dilution~~and we are unable to ~~our~~predict ~~existing~~the ~~stockholders~~extent of future losses, ~~restrict~~whether ~~our~~we ~~operations~~will generate significant revenues or ~~require~~whether uswe towill ~~relinquish proprietary~~achieve ~~rights~~or sustain profitability.

ToWe ~~the~~are ~~extent~~a ~~that~~clinical westage ~~raise~~company ~~additional~~and ~~capital~~our prospects bymust ~~issuing~~be ~~equity~~considered ~~securities,~~in light of the ~~share~~uncertainties, ~~ownership~~risks, ofexpenses ~~existing~~and ~~stockholders~~difficulties ~~will~~frequently beencountered ~~diluted~~by similarly situated companies. We ~~Any~~have ~~future~~generated ~~debt~~net ~~financing~~losses ~~may~~in ~~involve covenants~~all ~~that~~periods ~~restrict~~since our ~~operations,~~inception in September 1999 including ~~limitations~~losses onof ~~our~~approximately $4.6 ~~ability~~million toand ~~incur~~$9.4 ~~liens~~million orfor ~~additional~~the ~~debt~~years ended May 31, ~~pay~~2017 ~~dividends~~and 2016, ~~redeem~~ ~~our~~respectively ~~stock~~and as of May 31, 2017 we had an accumulated deficit of approximately $99.2 million. We expect to make ~~certain~~substantial ~~investments~~expenditures and incur ~~engage~~increasing operating costs in ~~certain~~the ~~merger,~~future ~~consolidation~~and orour ~~asset~~accumulated ~~sale~~deficit ~~transactions,~~will ~~among~~increase ~~other~~significantly as we expand development ~~restrictions~~and clinical trial activities for our product candidates. Our Inlosses ~~addition~~have had, ifand weare ~~raise~~expected ~~additional~~to ~~funds~~continue ~~through~~to ~~licensing~~have, an ~~arrangements~~adverse impact on our working capital, ittotal ~~may~~assets beand ~~necessary~~stockholders’ toequity. Because ~~relinquish~~of ~~potentially~~the risks and uncertainties ~~valuable~~associated ~~rights~~with product development, we are unable to ~~our~~predict ~~product~~the ~~candidates~~extent of any future losses, orwhether ~~grant~~we ~~licenses~~will onever ~~terms~~generate ~~that~~significant revenues ~~are~~or ~~not~~if ~~favorable~~we towill usever achieve or sustain profitability.

~~Risks Associated with our Capital Stock~~29

~~Our~~We ~~common~~will ~~stock~~need issubstantial ~~quoted~~additional onfunding ~~the~~and ~~OTC~~may ~~Markets,~~be ~~which may~~unable ~~have~~to anraise ~~unfavorable~~capital ~~impact~~when onneeded, ~~our~~which ~~stock~~would ~~price~~force ~~and~~us ~~liquidity.~~to ~~Sales~~delay, ofcurtail aor ~~substantial~~eliminate ~~number~~one ofor ~~shares~~more of our ~~common~~research ~~stock,~~and ordevelopment ~~the~~programs ~~perception~~or ~~that~~commercialization ~~such sales may occur, may adversely impact the price of our common stock~~efforts.

~~Almost~~Our ~~all~~operations ofhave ~~our outstanding~~consumed ~~shares~~substantial amounts of ~~common~~cash ~~stock,~~since ~~subject~~inception. During tothe ~~volume~~years ~~limitations~~ended May 31, ~~are~~2017 ~~available~~and ~~for~~2016, ~~sale~~we inincurred ~~the~~research ~~public~~and ~~market,~~development ~~either~~expenses of ~~pursuant~~approximately to$2.4 ~~Rule~~million ~~144~~and ~~under the~~$3.1 ~~Act~~million, orrespectively. As anof ~~effective~~May ~~registration~~31, ~~statement.~~2017, ~~Sales~~we ofhad acash ~~substantial~~and ~~number~~cash equivalents of approximately ~~shares~~$488,000 ofand ~~our~~net ~~common~~working ~~stock~~capital of approximately $48,000. orWe ~~the~~expect ~~perception that~~to ~~such~~continue ~~sales~~to ~~may~~spend ~~occur,~~substantial ~~may~~amounts ~~adversely~~on product ~~impact~~development, ~~the~~including ~~price~~conducting ofclinical trials for our ~~common~~product ~~stock~~candidates and purchasing clinical trial materials from our suppliers.

29Until such time, if ever, as we can generate a sufficient amount of product revenue and achieve profitability, we expect to seek to finance future cash needs through equity or debt financings or corporate collaboration and licensing arrangements. We currently have no agreements relating to any of these types of transactions and we cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital, we will have to delay, curtail or eliminate one or more of our research and development programs.

WeRaising ~~have~~additional ~~never~~funds ~~paid~~by ~~and~~issuing dosecurities ~~not~~or ~~intend~~through licensing toor ~~pay~~lending ~~cash~~arrangements ~~dividends. As~~may acause ~~result,~~dilution ~~capital~~to ~~appreciation,~~our ifexisting ~~any~~stockholders, ~~will~~restrict beour ~~your~~operations ~~sole~~or ~~source~~require ofus ~~gain~~to relinquish proprietary rights.

WeTo ~~have~~the ~~never~~extent ~~paid~~that ~~cash~~we ~~dividends~~raise onadditional ~~any~~capital by issuing equity securities, the share ownership of existing stockholders will be diluted. Any future debt financing may involve covenants that restrict our ~~capital~~operations, ~~stock~~including ~~and~~limitations weon ~~currently~~our ~~intend~~ability to ~~retain~~incur ~~future~~liens ~~earnings,~~or ifadditional ~~any~~debt, topay dividends, ~~fund~~redeem ~~the~~our ~~development~~stock, ~~and~~make ~~growth~~certain ofinvestments ~~our~~and ~~business. In~~engage ~~addition~~in certain merger, ~~the~~consolidation ~~terms~~or ofasset ~~existing~~sale ~~and~~transactions, ~~future~~among other ~~debt~~restrictions. ~~agreements~~In ~~may~~addition, ~~preclude~~if uswe ~~from~~raise ~~paying~~additional ~~dividends.~~funds Asthrough alicensing ~~result~~arrangements, ~~capital~~it ~~appreciation,~~may be necessary to relinquish ifpotentially ~~any,~~valuable ofrights to our ~~common~~product ~~stock~~candidates, ~~will~~or begrant ~~your~~licenses ~~sole~~on ~~source~~terms ofthat ~~gain~~are ~~for~~not ~~the~~favorable ~~foreseeable~~to ~~future~~us.

~~Our~~Risks ~~affiliates~~Associated ~~control~~with ~~the majority of~~ our ~~shares~~Capital ~~of common stock and one shareholder holds a controlling interest.~~Stock

AsOur ofcommon ~~June~~stock ~~30,~~is ~~2016,~~quoted ~~our~~on ~~directors~~the ~~and~~OTC ~~executive officers~~Markets, ~~and~~which ~~their~~may ~~affiliates~~have an ~~beneficially~~unfavorable ~~own~~impact ~~approximately~~on ~~80% of the outstanding shares of~~ our ~~common~~ stock, ~~with~~price ~~one~~and ~~such affiliate,~~liquidity. ~~Niobe~~Sales ~~Ventures~~of ~~LLC,~~a ~~beneficially~~substantial ~~owns~~number ~~approximately~~of ~~78%~~shares of our ~~outstanding~~ common stock~~. As a result~~, ~~this~~or ~~stockholder~~the perception isthat ~~able~~such tosales ~~exercise~~may ~~control over matters requiring stockholder approval~~occur, ~~including~~may ~~the~~adversely ~~election~~impact ~~of directors, and~~ the ~~approval of~~price ~~mergers, consolidations and sales~~ of ~~all or substantially all of~~ our ~~assets~~common stock.

~~Provisions~~Almost inall of our outstanding ~~certificate~~shares of common ~~incorporation~~stock, ~~our~~subject ~~by-laws and~~to ~~Delaware~~volume ~~law~~limitations, ~~might~~are ~~discourage~~available for sale in the public market, ~~delay~~either pursuant to Rule 144 under the Act or ~~prevent~~an effective registration statement. Sales of a ~~change~~substantial innumber ~~control~~of shares of our ~~company~~common stock, or ~~changes~~the inperception that ~~our~~such ~~management~~sales ~~and,~~may ~~therefore~~occur, ~~depress~~ ~~the~~may ~~trading~~adversely impact the price of our common stock.

~~Provisions~~We ofhave ~~our~~never ~~certificate~~paid ~~of incorporation, our by-laws~~ and ~~Delaware~~do ~~law~~not ~~may~~intend ~~have~~to ~~the~~pay ~~effect~~cash ~~of deterring unsolicited takeovers or delaying or preventing~~ dividends. As a ~~change~~result, incapital ~~control of our company or changes in our management~~appreciation, ~~including~~if ~~transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition~~any, ~~these~~will ~~provisions~~be ~~may~~your ~~limit~~sole ~~the~~source ~~ability~~ of ~~stockholders to approve transactions that they may deem to be in their best interests~~gain. ~~These provisions include:~~

·We ~~the~~have ~~inability~~never paid cash dividends on any of our ~~stockholders~~capital stock and we currently intend to ~~call~~retain ~~special~~future ~~meetings;~~earnings, if any, to fund the development and growth of our business. In addition, the terms of existing and future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

·Our ~~the~~affiliates ~~ability~~control ~~of our Board to designate~~ the ~~terms~~majority of ~~and~~our ~~issue~~shares ~~new series~~ of ~~preferred~~ common stock ~~without~~and ~~stockholder~~one ~~approval,~~shareholder ~~which~~holds ~~could include the right to approve an acquisition or other change in our control or could be used to institute~~ a ~~rights~~controlling ~~plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board~~interest.

~~The~~As ~~classification~~ of ~~our~~July ~~board~~31, of2017, our directors and executive officers and ~~limitation~~their onaffiliates ~~filling~~beneficially own approximately 80% of ~~vacancies~~the ~~could~~outstanding ~~make~~shares itof ~~more~~our ~~difficult~~common ~~for~~stock, awith ~~third~~one ~~party~~such toaffiliate, Niobe ~~acquire~~Ventures LLC, orbeneficially ~~discourage~~owns approximately 78% of our outstanding common stock. As a ~~third~~result, ~~party from~~this ~~seeking~~stockholder is able to ~~acquire,~~exercise control over matters requiring stockholder approval, including the election of directors, and the approval of mergers, consolidations and sales of all or substantially all of our ~~company~~assets.

InProvisions ~~addition,~~in ~~Section~~our ~~203~~certificate of ~~the~~incorporation, ~~Delaware~~our ~~General~~by-laws ~~Corporation~~and ~~Law prohibits a publicly-held~~ Delaware ~~corporation~~law ~~from~~might ~~engaging in a business combination with an interested stockholder~~discourage, ~~generally~~ adelay ~~person which together with its affiliates owns,~~ or ~~within~~prevent ~~the~~a ~~last~~change ~~three~~in ~~years,~~control ~~has owned 15%~~ of our ~~voting~~company ~~stock, for~~or achanges ~~period of three years after the date of the transaction~~ in ~~which~~our ~~the~~management ~~person~~and, ~~became an interested stockholder~~therefore, depress ~~unless~~ the ~~business~~ ~~combination~~trading isprice ~~approved~~of inour acommon ~~prescribed manner~~stock.

~~The~~Provisions ~~existence~~ of ~~the~~our ~~forgoing~~certificate ~~provisions~~of ~~and~~incorporation, ~~anti~~our by-~~takeover~~laws ~~measures~~and ~~could~~Delaware ~~limit~~law may have the ~~price~~effect ~~that~~of ~~investors~~deterring ~~might~~unsolicited betakeovers ~~willing~~or todelaying ~~pay~~or preventing a change in ~~the~~control of ~~future~~our ~~for~~company ~~shares~~or ofchanges in our ~~common~~management, ~~stock.~~including transactions in which our stockholders might otherwise receive a premium ~~They~~for ~~could~~their ~~also~~shares ~~deter~~over ~~potential~~then ~~acquirers~~current ofmarket ~~our~~prices. In ~~company~~addition, ~~thereby~~these ~~reducing~~provisions may limit the ~~likelihood~~ability ~~that~~of ~~you~~stockholders to ~~could~~approve ~~receive~~transactions athat ~~premium~~they ~~for your~~may ~~common~~deem ~~stock~~to be in antheir ~~acquisition~~best interests. These provisions include:

If· ~~our common stock becomes subject to~~ the ~~penny~~inability ~~stock~~of ~~rules, this~~stockholders ~~may make it more difficult~~ to ~~sell~~call ~~our~~special ~~shares.~~meetings; and

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). If the price of our common stock drops below $5.00, our securities will be deemed penny stocks. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore security holders may have difficulty selling their shares.30

30· the ability of our Board to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board.

The ~~price~~classification of our ~~common~~board ~~stock~~of ~~may~~directors and belimitation on filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from ~~volatile~~seeking to acquire, control of our company.

~~The~~In ~~trading~~addition, ~~price~~Section 203 of ~~our~~the ~~common~~Delaware ~~stock may~~General ~~fluctuate~~Corporation ~~substantially.~~Law ~~The~~prohibits ~~price~~a ofpublicly-held ~~our~~Delaware ~~common~~corporation ~~stock~~from ~~that~~engaging ~~will prevail~~ in ~~the~~a ~~market~~business ~~may~~combination bewith ~~higher~~an orinterested ~~lower~~stockholder, generally ~~than~~a ~~the~~person ~~price~~which ~~you have~~together ~~paid,~~with ~~depending~~its onaffiliates ~~many factors~~owns, ~~some~~or ofwithin ~~which~~the ~~are~~last ~~beyond~~three ~~our~~years, ~~control~~has ~~and~~owned ~~may~~15% ~~not~~of ~~be related to~~ our ~~operating~~voting ~~performance.~~stock, ~~These~~for ~~fluctuations~~a ~~could~~period ~~cause~~of ~~you~~three toyears ~~lose~~after ~~part~~the ordate ~~all~~ of ~~your~~the ~~investment~~transaction in ~~our~~which ~~common~~the ~~stock.~~person ~~Those~~became ~~factors~~an ~~that~~interested ~~could~~stockholder, ~~cause~~unless the ~~fluctuations~~business ~~include,~~combination ~~but~~is ~~are~~approved ~~not~~in ~~limited~~a ~~to,~~prescribed ~~the following:~~manner.

•The existence of the ~~actual~~forgoing ~~number~~provisions ofand anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that ~~trade;~~you could receive a premium for your common stock in an acquisition.

•If ~~sales~~our ofcommon ~~potential~~stock ~~sales~~becomes ofsubject ~~large~~to ~~blocks~~the ofpenny stock rules, this may make it more difficult to sell our ~~stock;~~shares.

•The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume ~~fluctuations~~information with respect to transactions in such securities is provided by the ~~overall~~exchange or system). If the price of our common stock ~~market~~drops below $5.00, our securities will be deemed penny stocks. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from ~~time~~those rules, to ~~time~~deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore security holders may have difficulty selling their shares.

•The ~~fluctuations~~price inof ~~stock~~our ~~market~~common ~~prices~~stock ~~and~~may ~~trading~~be ~~volumes of similar companies;~~volatile.

•The ~~actual~~trading orprice ~~anticipated~~of ~~changes~~our incommon stock may fluctuate substantially. The price of our ~~net~~common ~~loss~~stock orthat ~~fluctuations~~will prevail in the market may be higher or lower than the price you have paid, depending on many factors, some of which are beyond our control and may not be related to our operating ~~results~~performance. These fluctuations could cause you to lose part or all of your investment in ~~the~~our ~~expectations~~common ofstock. ~~securities~~Those ~~analysts;~~factors that could cause fluctuations include, but are not limited to, the following:

• the ~~issuance~~actual number of ~~new~~shares ~~equity~~of ~~securities~~our ~~pursuant~~common tostock athat ~~future offering, including issuances of preferred stock~~trade;

• ~~general~~sales ~~economic~~of ~~conditions~~potential ~~and~~sales ~~trends~~of large blocks of our stock;

• ~~positive~~price and ~~negative~~volume ~~events,~~fluctuations ~~conditions~~in ~~or developments relating to healthcare and~~ the overall ~~pharmaceutical~~stock ~~and~~market ~~biotech~~from ~~sector~~time to time;

• ~~major~~fluctuations ~~catastrophic~~in ~~events~~stock market prices and trading volumes of similar companies;

• ~~significant~~actual ~~dilution~~or ~~caused~~anticipated bychanges ~~the~~in ~~anti-dilutive~~our ~~clauses~~net loss or fluctuations in our ~~financial~~operating ~~agreements~~results or in the expectations of securities analysts;

• ~~departures~~the issuance of ~~key~~new ~~personnel~~equity securities pursuant to a future offering, including issuances of preferred stock;

• ~~delay~~general oreconomic ~~failure~~conditions inand ~~initiating or completing preclinical or clinical trials or unsatisfactory results of these trials~~trends;

• ~~changes~~positive inand negative events, conditions or developments relating to healthcare and the ~~regulatory~~overall ~~status~~pharmaceutical ofand ~~our~~biotech ~~immunotherapies~~sector;

~~• litigation and other developments relating to our patents or other proprietary rights or those of our competitors;~~31

• ~~events~~major ~~affecting~~catastrophic ~~existing or future collaborators including licensors and manufacturers~~events;

• ~~announcements~~significant ofdilution ~~new~~caused ~~products~~by orthe ~~technologies,~~anti-dilutive ~~commercial~~clauses ~~relationships,~~in ~~results of clinical trials, regulatory approvals, new product introductions or other relevant events by us or~~ our ~~competitors~~financial agreements;

• ~~legislative~~departures ~~and/or~~of ~~regulatory~~key ~~developments in the United States and other countries~~personnel;

• ~~failure~~delay ofor ~~our~~failure ~~common~~in ~~stock~~initiating or ~~warrants~~completing topreclinical ~~be listed~~ or ~~quoted~~clinical ontrials ~~the NASDAQ Capital Market~~ or ~~other~~unsatisfactory ~~national~~results ~~market~~of ~~systems~~these trials;

• changes in ~~accounting~~the ~~principles;~~regulatory ~~and~~status of our immunotherapies;

• ~~change~~litigation inand ~~securities~~other ~~analysts’~~developments ~~estimates~~relating ofto our ~~performance,~~patents or ~~our~~other ~~failure~~proprietary torights ~~meet~~or ~~analysts’~~those ~~expectations.~~of our competitors;

31• events affecting existing or future collaborators including licensors and manufacturers;

~~Many~~• announcements of ~~these~~new ~~factors~~products ~~are~~or ~~beyond~~technologies, ~~our~~commercial ~~control. The~~relationships, ~~stock~~results ~~markets~~of inclinical ~~general~~trials, ~~and~~regulatory ~~the market for pharmaceutical and biotechnological companies in particular~~approvals, ~~have~~new ~~historically experienced~~product ~~extreme~~introductions ~~price~~or ~~and~~other ~~volume~~relevant ~~fluctuations.~~events ~~These~~by ~~fluctuations~~us ~~often have been unrelated~~ or ~~disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of~~ our ~~common stock, regardless of our actual operating performance.~~competitors;

In• ~~the~~legislative ~~past,~~and/or ~~following~~regulatory ~~periods~~developments ~~of volatility~~ in the ~~market~~United ~~price~~States of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our stock price, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and ~~divert~~other ~~management’s attention and resources from our business.~~countries;

~~Sales~~• failure of ~~additional~~our ~~equity~~common ~~securities may~~stock ~~adversely~~or ~~affect~~warrants ~~the~~to ~~market~~be ~~price~~listed ofor ~~our~~quoted ~~common~~on ~~stock~~the ~~and~~NASDAQ ~~your~~Capital ~~rights~~Market ~~may~~or beother ~~reduced.~~national market systems;

We• ~~expect~~changes to continue to incur drug development and selling, general and administrative costs, and to satisfy our funding requirements, we will need to sell additional equity securities, which may be subject to registration rights and warrants with anti-dilutive protective provisions. The sale or the proposed sale of substantial amounts of our common stock or other equity securities in ~~the~~accounting ~~public~~principles; ~~markets may adversely affect the market price of our common stock~~ and our stock price may decline substantially. Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, new equity securities issued may have greater rights, preferences or privileges than our existing common stock.

~~Additional~~• ~~authorized~~change ~~shares~~in ofsecurities ~~common stock~~analysts’ ~~available~~estimates ~~for~~of ~~issuance~~our ~~may~~performance, ~~adversely~~or ~~affect~~our ~~the~~failure ~~market~~to ~~price~~meet ofanalysts’ ~~our securities~~expectations.

WeMany ~~are~~of ~~currently~~these ~~authorized~~factors toare ~~issue~~beyond ~~100,000,000~~our control. ~~shares~~The ~~of common~~ stock. Asmarkets ofin ~~May 31~~general, ~~2016,~~and wethe ~~had~~market ~~28,767,582~~for ~~shares~~pharmaceutical ofand ~~our~~biotechnological ~~common~~companies ~~stock~~in ~~issued and outstanding~~particular, ~~excluding~~have ~~shares~~historically ~~issuable~~experienced ~~upon~~extreme ~~exercise~~price ofand ~~our~~volume ~~outstanding options~~fluctuations. ToThese ~~the~~fluctuations ~~extent~~often ~~the~~have ~~shares~~been ofunrelated ~~common stock are issued~~ or ~~options~~disproportionate ~~are~~to ~~exercised,~~the operating ~~holders~~performance of ~~our~~these ~~common stock will experience dilution~~companies. InThese ~~addition,~~broad inmarket ~~the~~and ~~event~~industry offactors ~~any~~could ~~future~~reduce ~~financing~~the ofmarket ~~equity~~price ~~securities or securities convertible into or exchangeable for, common stock, holders~~ of our common stock ~~may experience dilution. As of May 31~~, ~~2016, we had outstanding options to purchase 4,582,543 shares~~ regardless of our ~~common~~actual ~~stock~~operating ~~at a weighted average exercise price of approximately $4~~performance.~~22 per share.~~

~~ITEM~~In 1Bthe past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due ~~UNRESOLVED~~to ~~STAFF~~the ~~COMMENTS~~potential volatility of our stock price, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

~~None~~Sales of additional equity securities may adversely affect the market price of our common stock and your rights may be reduced.

~~ITEM~~We 2expect to continue to incur drug development and selling, general and administrative costs, and to satisfy our funding requirements, we will need to sell additional equity securities, which may be subject to registration rights and warrants with anti-dilutive protective provisions. ~~PROPERTIES~~The sale or the proposed sale of substantial amounts of our common stock or other equity securities in the public markets may adversely affect the market price of our common stock and our stock price may decline substantially. Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, new equity securities issued may have greater rights, preferences or privileges than our existing common stock.

~~Our~~Additional ~~principal~~authorized ~~offices~~shares ~~are~~of ~~located at 131 Columbia~~common ~~Turnpike,~~stock ~~Suite~~available 1,for ~~Florham~~issuance ~~Park~~may NJadversely ~~07932.~~affect Wethe ~~occupy~~market ~~our~~price principal offices on a month to month basis. We do not own or intend to invest in any real property. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, orour ~~interests in, persons primarily engaged in real estate activities~~securities.

~~ITEM~~We 3are currently authorized to issue 100,000,000 shares of common stock. ~~LEGAL~~As ~~PROCEEDINGS~~of May 31, 2017, we had 28,767,582 shares of our common stock issued and outstanding, excluding shares issuable upon exercise of our outstanding options. To the extent the shares of common stock are issued or options are exercised, holders of our common stock will experience dilution. In addition, in the event of any future financing of equity securities or securities convertible into or exchangeable for, common stock, holders of our common stock may experience dilution. As of May 31, 2017, we had outstanding options to purchase 4,580,543 shares of our common stock at a weighted average exercise price of approximately $4.22 per share.

~~None.~~32

ITEM 41B. ~~MINE~~UNRESOLVED ~~SAFETY~~STAFF ~~DISCLOSURE~~COMMENTS

~~Not applicable~~None.

32ITEM 2. PROPERTIES

~~PART~~Our IIprincipal offices are located at 131 Columbia Turnpike, Suite 1, Florham Park NJ 07932. We occupy our principal offices on a month to month basis. We do not own or intend to invest in any real property. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

ITEM 53. ~~MARKET~~LEGAL ~~FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~PROCEEDINGS

~~(a) Market Information~~None. Our common stock is traded on the OTC Markets under the symbol “PRTX”. The following table sets forth, for the periods indicated and as reported on the OTC Markets, the high and low bid prices for our common stock. Such quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

	High		Low
2016*
First Quarter	$	5.93	$	4.51
Second Quarter		5.75		3.45
Third Quarter		5.45		3.00
Fourth Quarter		4.80		2.30
2015*
First Quarter	$	9.00	$	5.60
Second Quarter		7.00		3.70
Third Quarter		7.75		4.00
Fourth Quarter		6.00		4.80

ITEM 4.

MINE SAFETY DISCLOSURE

* TheNot ~~prices for the fiscal years ended May 31, 2016 and 2015 are actual sale prices because the bid price information was not available~~applicable.

~~(b) Holders. As of June 30, 2016, there were approximately 252 holders of record, and approximately 800 beneficial holders of our common stock.~~33

~~(c) Dividends. We~~PART have never declared or paid cash dividends on our capital stock, and we do not intend to pay cash dividends in the foreseeable future. We plan to retain any earnings for use in the operation of our business and to fund future growth.II

~~Unregistered~~ITEM ~~Sale~~5. ofMARKET ~~Equity~~FOR ~~Securities~~REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~During~~(a) Market ~~the year ended May 31, 2016 we granted~~Information. Our ~~non-qualified~~common stock ~~options~~is ~~for~~traded anon ~~aggregate~~the ofOTC ~~800,000~~Markets ~~shares~~under ofthe ~~our~~symbol ~~common~~“PRTX”. ~~stock~~The tofollowing ~~four~~table ~~consultants~~sets forth, ~~one~~for ~~officer/director,~~the periods indicated and ~~one~~as ~~director.~~reported ~~All~~on ofthe ~~these~~OTC ~~options~~Markets, ~~have~~the ahigh ~~five-year~~and ~~term~~low ~~with~~bid anprices ~~exercise~~for ~~price~~our ofcommon $5stock.41 ~~per~~Such ~~share,~~quotations ~~and~~reflect ~~were issued in reliance~~inter-dealer ~~upon~~prices, ~~the~~without ~~exemptions~~retail ~~from~~mark-up, ~~the~~markdown ~~registration~~or ~~requirements~~commission ofand ~~the~~may ~~Act~~not ~~pursuant~~necessarily torepresent ~~Sections~~actual ~~4(a)(2) and 4(a)(5) of the Act~~transactions.

ITEM 6. SELECTED FINANCIAL DATA

	High		Low
2017*
First Quarter	$	3.50	$	0.85
Second Quarter		3.00		0.85
Third Quarter		1.50		0.55
Fourth Quarter		1.50		0.60

2016*
First Quarter	$	5.93	$	4.51
Second Quarter		5.75		3.45
Third Quarter		5.45		3.00
Fourth Quarter		4.80		2.30

As* The aprices ~~smaller~~for ~~reporting~~the ~~company,~~fiscal asyears ~~defined in~~ended ~~Rule~~May ~~12b-2 of the Exchange Act~~31, 2017 weand 2016 are ~~not~~actual ~~required~~sale toprices ~~provide~~because the ~~information~~bid ~~required~~price byinformation ~~this~~was ~~item~~not available.

~~ITEM 7~~(b) Holders. As of ~~MANAGEMENT’S~~August ~~DISCUSSION~~22, ~~AND~~2017, ~~ANALYSIS~~there OFwere ~~FINANCIAL~~approximately ~~CONDITION~~252 ~~AND~~holders ~~RESULTS~~of OFrecord, ~~OPERATIONS~~and approximately 800 beneficial holders of our common stock.

~~This discussion, which refers to our historical~~(c) Dividends. We ~~results~~have ofnever ~~operations~~declared ~~and~~or ~~financial~~paid ~~condition,~~cash ~~should~~dividends beon ~~read~~our incapital ~~conjunction with the other sections of this Annual Report~~stock, ~~including “Risk Factors,” “Business”~~ and ~~the~~we ~~consolidated~~do ~~financial~~not ~~statements~~intend ~~and~~to ~~other~~pay ~~consolidated~~cash ~~financial information~~dividends ~~included~~ in ~~this Annual Report. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by~~ the ~~uncertainties and risk factors described throughout~~foreseeable ~~this Annual Report~~future. ~~See~~We ~~“Special~~plan ~~Note~~to ~~Regarding~~retain ~~Forward-Looking~~any ~~Statements.” Our~~earnings ~~actual~~for ~~results~~use ~~may~~in ~~differ materially.~~the ~~You~~operation ~~should read this Management’s Discussion and Analysis~~ of ~~Financial Condition and Results of Operations in conjunction with~~ our ~~2016~~business ~~financial statements~~ and ~~accompanying~~to ~~notes~~fund ~~included~~future ~~elsewhere in this Annual Report~~growth. ~~The matters addressed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain certain forward-looking statements involving risks and uncertainties.~~

33ITEM 6. SELECTED FINANCIAL DATA

~~Overview~~As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.

WeITEM ~~are focused on the development of a class of biopharmaceutical drugs for treating autoimmune and inflammatory diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP)~~7. ~~Our~~MANAGEMENT’S ~~lead~~DISCUSSION ~~product~~AND ~~candidate,~~ANALYSIS ~~PRTX-100,~~OF aFINANCIAL ~~new~~CONDITION ~~generation~~AND ~~immunomodulatory~~RESULTS ~~therapy,~~OF is a highly-purified form of Staphylococcal protein A, which is a bacterial protein known to modify aspects of the human immune system. PRTX-100 has demonstrated effectiveness in animal models of autoimmune diseases and has demonstrated activity on cultured human immune cells at very low concentrations, although the effectiveness of PRTX-100 shown in pre-clinical studies using animal models may not be predictive of the results that we would see in future human clinical trials. The safety, tolerability and pharmacokinetics (PK) of PTRX-100 in humans have now been characterized in six clinical studies and was granted Orphan Drug Designation (ODD) in the United States and Europe for the treatment of ITP.OPERATIONS

InThis ~~March 2015~~discussion, ~~the~~which ~~FDA~~refers ~~accepted~~to our historical ~~Investigational~~results ~~New~~of ~~Drug~~operations ~~(IND)~~and ~~application~~financial ~~for a Phase I/II open-label~~condition, ~~dose-escalating~~should ~~study~~be ofread ~~PRTX-100~~ in ~~adults~~conjunction with ~~persistent/chronic~~ ~~ITP (~~the ~~“PRTX-100-202~~other ~~Study”).~~sections Inof ~~June~~this ~~2015~~Annual Report, ~~the~~including “Risk ~~U.S.~~Factors,” ~~Food~~“Business” and ~~Drug~~the ~~Administration~~consolidated ~~(FDA) granted~~financial ~~ODD~~statements toand ~~PRTX-100~~other ~~for~~consolidated ~~the~~financial ~~treatment~~information included ofin ~~ITP.~~this InAnnual ~~July~~Report. The ~~2015,~~various ~~the~~sections ~~European~~of ~~Medicines~~this ~~Agency~~discussion ~~(EMA)~~contain ~~granted approval for~~ a ~~Phase~~ 1bnumber ~~open-label,~~of ~~dose~~forward-~~escalating~~looking ~~study~~statements, all of ~~PRTX-100~~which inare ~~adult~~based ~~patients~~on ~~with~~our ~~persistent/chronic~~current ~~ITP~~expectations ~~(the~~and ~~“PRTX-100-203 Study”).~~could Inbe ~~September~~affected ~~2015,~~by the ~~EMA~~uncertainties ~~Committee~~and ~~for~~risk ~~Orphan~~factors ~~Medicinal~~described ~~Products~~throughout this ~~(COMP)~~Annual ~~issued~~Report. See a“Special ~~positive~~Note ~~opinion recommending~~Regarding ~~PRTX~~Forward-~~100~~Looking ~~for~~Statements.” Our ~~designation~~actual asresults may andiffer ~~orphan~~materially. ~~medicinal~~You ~~product~~should ~~for~~read ~~the~~this ~~treatment~~Management’s ofDiscussion ~~ITP.~~and InAnalysis ~~November~~of ~~2015,~~Financial weCondition ~~enrolled~~and Results ~~our~~of ~~first~~Operations ~~patient~~ in ~~the~~conjunction ~~PRTX-100-202~~with ~~Study~~our in2017 ~~the~~financial ~~United~~statements ~~States~~ and inaccompanying ~~January~~notes ~~2016~~included weelsewhere ~~enrolled our first patient~~ in ~~the PRTX-100-203~~this ~~Study~~Annual ~~in Europe~~Report. The Wematters doaddressed ~~not~~in ~~anticipate~~this ~~generating~~Management’s ~~operating~~Discussion ~~revenue~~and ~~for~~Analysis ~~the~~of ~~foreseeable~~Financial ~~future~~Condition and doResults ~~not~~of Operations, may ~~currently~~contain ~~have~~certain ~~any~~forward-looking ~~products~~statements ~~that~~involving ~~are~~risks ~~marketable~~and uncertainties.

In August 2010, we commenced a multi-center Phase 1b clinical trial of PRTX-100 in South Africa in adult patients with active RA on methotrexate or leflunomide (the “PRTX-100-103 Study”). In January 2012, we completed patient dosing in the PRTX-100-103 Study with a total of 37 patients enrolled in four cohorts ranging from 0.15 micrograms/kg to 1.50 micrograms/kg of PRTX-100 or placebo, administered weekly for four weeks. Measures of safety, PK and disease activity were evaluated over 16 weeks following the first dose. The PRTX-100-103 Study results demonstrated that PRTX-100 was generally safe and well-tolerated in patients with active RA at all tested dose levels.34

In November 2012, we commenced enrollment in the United States for a new multicenter Phase 1b randomized, multiple-dose, dose-escalation study (the “PRTX-100-104 Study”) of PRTX-100 in combination with methotrexate or leflunomide in adult patients with active RA. The sequential dose-escalation phase of this study was expected to enroll patients into five cohorts ranging from 1.50 micrograms/kg up to 18.0 micrograms/kg of PRTX-100 or placebo. At each dose, one quarter of patients would receive a placebo treatment. Similar to the PRTX-100-103 Study, the primary objective of the PRTX-100-104 Study was to assess the safety and tolerability of intravenous PRTX-100 administered weekly over five weeks in patients with active RA on methotrexate or leflunomide therapy. The secondary objectives included determining the effects of PRTX-100 on measures of disease activity, assessing the immunogenicity and evaluating the PK parameters after repeated doses, and determining possible relationships between the immunogenicity of PRTX-100 and safety and PK.Overview

InWe ~~August~~are ~~2013,~~focused ~~upon~~on ~~completion~~the development of ~~the~~a ~~fourth~~class ~~cohort,~~of webiopharmaceutical ~~expanded~~drugs ~~the~~for 3treating autoimmune and inflammatory diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP).0 ~~microgram~~Our lead product candidate, ~~6.0~~PRTX-100, ~~microgram~~a new generation immunomodulatory therapy, ~~and~~is ~~12.0~~a ~~micrograms/kg~~highly-purified ~~dose~~form ~~cohorts~~of Staphylococcal protein A, which is a bacterial protein known to modify aspects of the human immune system. PRTX-100~~-104~~ ~~Study.~~has Andemonstrated ~~additional~~effectiveness ~~nine~~in ~~patients~~animal ~~were~~models ~~enrolled~~of inautoimmune ~~the~~diseases ~~expansion~~and ~~cohort~~has ~~that~~demonstrated ~~was~~activity ~~completed~~on incultured ~~October~~human ~~2013.~~immune Incells ~~total~~at very low concentrations, although the ~~first~~effectiveness ~~four~~of ~~dose~~PRTX-~~escalating cohorts~~100 shown in pre-clinical studies using animal models may not be predictive of the ~~PRTX-100-104~~results ~~Study,~~that we ~~which~~would ~~included~~see ~~these~~in ~~three~~future ~~expanded~~human ~~cohorts~~clinical trials. The safety, ~~enrolled~~tolerability 41and ~~patients~~pharmacokinetics ~~with~~(PK) ~~doses~~of ~~ranging~~PTRX-100 ~~from~~in ~~1.5~~humans have now ~~micrograms/kg~~been upcharacterized toin ~~12.0~~six ~~micrograms/kg~~clinical studies and was granted Orphan Drug Designation (ODD) in the United States and Europe for the treatment of ITP.

In ~~November~~March ~~2013~~2015, wethe ~~initiated~~FDA ~~enrollment~~accepted our ofInvestigational ~~the~~New ~~fifth~~Drug ~~and~~(IND) ~~final~~application ~~cohort~~for ~~(Cohort~~a 5)Phase I/II open-label, dose-escalating study of PRTX-100 in adults with persistent/chronic ITP (the “PRTX -100-~~104~~202 Study”). ~~The~~In ~~Cohort~~June 52015, ~~sub~~the U.S. Food and Drug Administration (FDA) granted ODD to PRTX-~~study~~100 ~~enrolled~~for 20the ~~patients~~treatment ~~who~~of ~~received~~ITP. ~~five~~In July 2015, the European Medicines Agency (EMA) granted approval for a ~~weekly~~Phase ~~fixed~~1b open-~~weight~~label, ~~doses~~dose-escalating study of PRTX-100 ~~followed~~in byadult uppatients towith ~~four~~persistent/chronic ~~additional~~ITP ~~monthly~~(the ~~maintenance~~“PRTX-100-203 Study”). ~~doses~~In ofSeptember 2015, the EMA Committee for Orphan Medicinal Products (COMP) issued a positive opinion recommending PRTX-100 infor ~~weeks~~designation 8,as 12an orphan medicinal product for the treatment of ITP. In November 2015, we enrolled ~~16,~~our first patient in the PRTX-100-202 Study in the United States and 20in January 2016 we enrolled our first patient in the PRTX-100-203 Study in Europe. ~~The~~Enrollment ~~primary~~is ~~objective~~currently ofcontinuing in both studies in the ~~Cohort~~third 5cohorts ~~sub-study~~at ~~was~~an toincreased ~~assess~~dose. In ~~safety~~August ~~and~~2017, ~~tolerability~~the FDA’s Office of ~~these~~Orphan ~~doses~~Product ~~administered~~Development (OOPD) awarded us a grant of $403,000 to support onfuture clinical development of PRTX-100 as a ~~modified~~treatment ~~schedule~~for ITP. InWe ~~total,~~do 11not ~~out~~anticipate ofgenerating 20operating ~~patients~~revenue infor ~~Cohort~~the foreseeable 5future ~~completed~~and ~~all~~do ~~study~~not ~~visits~~currently byhave ~~August~~any ~~2014~~products ~~per~~that ~~protocol~~are marketable.

34In August 2010, we commenced a multi-center Phase 1b clinical trial of PRTX-100 in South Africa in adult patients with active RA on methotrexate or leflunomide (the “PRTX-100-103 Study”). In January 2012, we completed patient dosing in the PRTX-100-103 Study with a total of 37 patients enrolled in four cohorts ranging from 0.15 micrograms/kg to 1.50 micrograms/kg of PRTX-100 or placebo, administered weekly for four weeks. Measures of safety, PK and disease activity were evaluated over 16 weeks following the first dose. The PRTX-100-103 Study results demonstrated that PRTX-100 was generally safe and well-tolerated in patients with active RA at all tested dose levels.

In ~~the~~November ~~Cohort 5 sub-study~~2012, ~~the~~we ~~amount~~commenced ofenrollment in ~~PRTX-100~~the ~~administered~~United ~~and~~States ~~its~~for ~~dosing~~a ~~frequency~~new ~~were~~multicenter ~~varied~~Phase ~~from~~1b ~~Cohorts~~randomized, 1multiple-dose, ~~through~~dose-escalation 4study to(the ~~explore~~“PRTX-100-104 ~~effects on safety,~~Study”) ~~tolerability~~of ~~and~~PRTX-100 ~~measures~~in ofcombination ~~disease~~with ~~activity.~~methotrexate ~~The~~or ~~addition~~leflunomide ofin ~~four~~adult ~~monthly~~patients ~~maintenance~~with ~~doses~~active ~~after~~RA. ~~the~~The ~~five~~sequential ~~weekly~~dose-escalation ~~doses did~~phase ~~not~~of ~~increase~~this ~~the~~study ~~rate~~was orexpected ~~type~~to ofenroll ~~Adverse~~patients ~~Event~~into ~~(AE),~~five ~~even~~cohorts inranging ~~those~~from ~~patients~~1.50 ~~who~~micrograms/kg ~~developed~~up ~~anti-drug~~to ~~antibodies~~18.0 ~~(ADAs),~~micrograms/kg ~~nor~~of PRTX-100 ~~indicate~~or ~~any~~placebo. ~~apparent~~At ~~correlation~~each ~~between~~dose, ~~the~~one ~~development~~quarter of ~~ADAs~~patients ~~and~~would ~~effects~~receive ona ~~measures~~placebo oftreatment. RASimilar ~~disease~~to ~~activity.~~the ~~In addition~~PRTX-100-103 Study, ~~Cohort~~the 5primary objective ~~patients~~of ~~showed~~the ~~improvement~~PRTX-100-104 inStudy ~~measures~~was ofto ~~disease~~assess ~~activity,~~the ~~including~~safety ~~ACR20~~and ~~scores,~~tolerability ~~compared~~of tointravenous ~~Cohort~~PRTX-100 1administered weekly over ~~through~~five 4weeks in patients ~~who~~with ~~did~~active ~~not~~RA ~~receive~~on ~~any~~methotrexate ~~monthly~~or ~~maintenance~~leflunomide ~~doses,~~therapy. ~~suggesting~~The ~~that~~secondary ~~the~~objectives ~~addition~~included ofdetermining ~~monthly~~the ~~maintenance~~effects ~~administration~~ of PRTX-100 ~~and~~on ~~weight-based~~measures ~~dosing~~of ~~were~~disease anactivity, ~~important~~assessing ~~aspect~~the ofimmunogenicity and evaluating the ~~dosing~~PK ~~protocol~~parameters after repeated doses, and ~~should~~determining ~~be considered~~possible inrelationships ~~future~~between ~~trials~~the immunogenicity of PRTX-100 and safety and PK.

AIn ~~total~~August of2013, 61upon ~~patients~~completion ~~enrolled~~of ~~across~~the ~~five~~fourth cohort, we expanded the 3.0 microgram, 6.0 microgram, and 12.0 micrograms/kg dose cohorts inof the PRTX -100-104 Study. atAn additional nine ~~study~~patients ~~sites~~were enrolled in the ~~United~~expansion ~~States.~~cohort ~~For~~that ~~patients~~was completed in ~~all~~October ~~five~~2013. ~~cohorts~~In total, ~~PRTX-100~~the ~~appeared safe~~first ~~and~~four ~~well~~dose-escalating cohorts ~~tolerated~~of inthe ~~all~~PRTX-100-104 ~~individuals~~Study, ~~including~~which ~~those~~included ~~who~~these ~~developed~~three ~~ADAs~~expanded cohorts, ~~and~~enrolled ~~the~~41 ~~AE profile~~patients ~~was~~with ~~consistent~~doses ~~with~~ranging ~~our~~from ~~prior~~1.5 micrograms/kg ~~clinical~~up ~~trial~~to ~~results~~12.0 micrograms/kg.

In ~~February~~November ~~2015~~2013, we ~~commenced~~initiated enrollment~~, at~~ ~~a single U.S. site,~~ of the afifth ~~Phase~~and ~~I/II~~final ~~open-label,~~cohort ~~multiple,~~(Cohort ~~fixed-dose~~5) ~~study~~in (the “PRTX- 100-~~105~~104 Study”). ~~which~~The ~~was open~~Cohort ~~only~~5 ~~to PRTX~~sub-~~100-104~~study ~~Study~~enrolled 20 patients who ~~indicated~~received ~~their~~five weekly ~~desire~~fixed-weight ~~for~~doses ~~additional~~of ~~treatment. The~~ PRTX-100~~-105~~ ~~Study~~followed ~~was~~by anup ~~open-label, single group study with former participants from the 104 Study who were eligible~~ to ~~receive~~four aadditional ~~fixed~~monthly ~~dose~~maintenance doses of PRTX-100 ~~over~~in aweeks ~~6-month~~8, 12, 16, ~~period~~and 20. The primary ~~study~~objective ~~endpoint~~ of the ~~105~~Cohort ~~Study~~5 sub-study was ~~the~~to assess safety and tolerability of athese ~~fixed~~doses ~~dose of PRTX-100~~ administered ~~over~~on a anmodified ~~extended period~~schedule. ~~The~~In ~~secondary endpoints included immunogenicity~~total, ~~effects~~11 onout ~~measures~~ of RA20 ~~disease~~patients ~~activity,~~in ~~evaluation~~Cohort ~~of anti-PRTX-100~~5 ~~antibody presence, and feasibility of joint evaluations with ultrasound and biomarkers as disease markers. A total of eight patients~~ completed all ~~105~~study ~~Study~~ visits by August 2014 per protocol.

In the ~~PRTX-100-105~~Cohort ~~Study~~5 sub-study, athe ~~preliminary~~amount ~~interim~~of PRTX-100 ~~analysis~~administered ~~indicated~~and ~~that~~its ~~for~~dosing ~~patients~~frequency ~~who~~were ~~completed~~varied ~~per~~from ~~protocol,~~Cohorts ~~PRTX-100~~1 ~~exhibited~~through an4 ~~acceptable~~to explore effects on safety, ~~profile~~tolerability and RAmeasures of disease activity. ~~was~~The ~~improved~~addition inof afour ~~majority~~monthly ofmaintenance ~~patients~~doses atafter the ~~end~~five ofweekly ~~the~~doses ~~study~~did asnot ~~compared~~increase tothe ~~baseline.~~rate Noor ~~serious~~type of ~~adverse~~Adverse ~~events~~Event (~~SAEs~~AE) ~~were~~, ~~reported.~~even Atin ~~study~~those ~~day~~patients ~~196,~~who ~~one~~developed ~~month~~anti-drug ~~after~~antibodies ~~the~~(ADAs), ~~final~~nor ~~dose,~~indicate ~~patients~~any ~~who~~apparent ~~completed~~correlation between the ~~study~~development ~~per~~of ~~protocol~~ADAs ~~demonstrated~~and ~~a mean~~effects ~~reduction~~on measures of ~~the~~RA ~~DAS28CRP~~disease ~~score from 5~~activity.25 toIn ~~2.52~~addition, ~~suggesting~~Cohort a5 ~~clinically~~patients ~~meaningful~~showed improvement in measures of disease activity., ~~Additionally~~including ACR20 scores, ~~clinical~~ ~~assessment~~compared byto ~~Ultrasound~~Cohort ~~Power~~1 ~~Doppler~~through ~~Joint~~4 ~~Counts~~patients ~~(UPD)~~who did not receive any monthly maintenance doses, ~~also~~suggesting ~~revealed~~that athe ~~reduction~~addition inof ~~average~~monthly ~~disease~~maintenance ~~severity~~administration byof ~~day 196,~~PRTX-100 and ~~the~~weight-based ~~correlation~~dosing ~~between~~were an important aspect of the ~~UPD~~dosing protocol and ~~the~~should ~~DAS28CRP~~be ~~was~~considered ~~r=0.624~~in ~~(p<~~future trials of PRTX-100.~~0005).~~

In November 2015, we commenced enrollment and enrolled our first patient in the PRTX-100-202 Study. The PRTX-100-202 Study may enroll up to 36 patients in as many as six cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoint of the PRTX-100-202 Study is a platelet response to PRTX-100. Secondary endpoints include safety, immunogenicity, and pharmacokinetics. In February 2016, following a planned interim data review by an Independent Data Safety Monitoring Committee (the “SMC”), enrollment is continuing for patients in the PRTX-100-202 Study at an increased dose.35

InA ~~January~~total ~~2016,~~of we61 ~~commenced~~patients ~~enrollment~~enrolled ofacross five ~~our~~cohorts ~~first patient~~ in the ~~European based~~ PRTX- 100-~~203~~104 Study. ~~The~~at ~~PRTX-100-203~~nine ~~Study~~study ~~may~~sites ~~enroll~~in upthe toUnited 30States. For patients in asall ~~many as~~ five cohorts, ~~at sites in France. Each patient will receive four weekly intravenous doses of~~ PRTX-100 ~~and will be monitored for~~appeared upsafe toand 48well ~~weeks~~tolerated ~~thereafter.~~in ~~The~~all ~~primary~~individuals, ~~study~~including ~~endpoints~~those ofwho ~~the~~developed ~~PRTX-100-203 Study include safety~~ADAs, ~~immunogenicity~~ and ~~pharmacokinetics. Secondary~~the ~~endpoints~~AE ~~include~~profile ~~platelet~~was ~~response~~consistent ~~and~~with ~~duration.~~our ~~In May 2016, following a planned interim data review by the SMC, enrollment~~prior isclinical ~~continuing~~trial ~~for patients in the PRTX-100-203 Study at an increased dose~~results.

WeIn ~~maintain~~February an2015, ~~administrative~~we ~~office~~commenced inenrollment, at ~~Florham~~a single U.S. site, of a Phase I/II open-label, multiple, fixed-dose study (the “PRTX-100-105 Study”) which was ~~Park~~open only to PRTX-100-104 Study patients who indicated their desire for additional treatment. The PRTX-100-105 Study was an open-label, single ~~New~~group ~~Jersey~~study ~~and~~with ~~currently~~former ~~outsource~~participants ~~all~~from the 104 Study who were eligible to receive a fixed dose of ~~our~~PRTX-100 ~~product~~over ~~development~~a 6-month period. The primary study endpoint of the 105 Study was the safety and ~~regulatory~~tolerability ~~activities,~~of ~~including~~a ~~clinical~~fixed ~~trial~~dose ~~activities,~~of PRTX-100 administered over ~~manufacturing~~an ~~and~~extended ~~laboratory~~period. ~~operations~~The secondary endpoints included immunogenicity, toeffects ~~third-party~~on ~~contract~~measures ~~research~~of ~~organizations~~RA disease activity, ~~consultants~~evaluation of anti-PRTX-100 antibody presence, and ~~facilities~~feasibility of joint evaluations with ultrasound and biomarkers as disease markers. A total of eight patients completed all 105 Study visits per protocol.

In ~~April~~the ~~2009~~PRTX-100-105 Study, ~~under~~a ~~prior~~preliminary ~~management~~interim analysis indicated that for patients who completed per protocol, ~~we ceased~~PRTX-100 ~~all~~exhibited ~~operations~~an acceptable safety profile and ~~terminated~~RA ~~all~~disease activity ~~employees~~was improved in ~~light~~a majority of ~~insufficient~~patients ~~funds~~at the end of the study as compared to ~~continue~~baseline. ~~our~~No ~~clinical~~serious ~~trials~~adverse ~~and~~events ~~related~~(SAEs) ~~product~~were ~~development~~reported. ~~Our~~At ~~business~~study ~~was~~day ~~dormant~~196, ~~until~~one ~~current~~month ~~management~~after ~~took~~the ~~control~~final ofdose, ~~our~~patients ~~operations~~who incompleted ~~November~~the ~~2009~~study ~~following~~per protocol demonstrated a mean reduction of the ~~change~~DAS28CRP inscore ~~control~~from ~~transaction~~5.25 ~~more~~to ~~fully~~2.52, ~~described~~suggesting ~~below~~a clinically meaningful improvement in disease activity. WeAdditionally, clinical ~~are~~assessment ~~currently~~by ~~actively~~Ultrasound ~~pursuing~~Power ~~the~~Doppler ~~commercial~~Joint ~~development~~Counts of(UPD), also revealed a reduction in average disease severity by day ~~PRTX-100~~196, ~~for~~and the ~~treatment~~correlation ofbetween RAthe UPD and ~~ITP~~the DAS28CRP was r=0.624 (p<.0005).

35In November 2015, we commenced enrollment and enrolled our first patient in the PRTX-100-202 Study. The PRTX-100-202 Study may enroll up to 36 patients in as many as six cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for up to 48 weeks thereafter. The primary study endpoint of the PRTX-100-202 Study is a platelet response to PRTX-100. Secondary endpoints include safety, immunogenicity, and pharmacokinetics. One patient in each of the two completed cohorts of the PRTX-100-202 Study had a platelet response per protocol. Enrollment is continuing for patients in the third cohort in the PRTX-100-202 Study at an increased dose.

~~Change~~In January 2016, we commenced enrollment of our first patient in ~~Control~~the European based PRTX-100-203 Study. The PRTX-100-203 Study may enroll up to 30 patients in as many as five cohorts. Each patient will receive four weekly intravenous doses of PRTX-100 and ~~Incremental~~will ~~Financing~~be monitored for up to ~~Transactions~~48 weeks thereafter. The primary study endpoints of the PRTX-100-203 Study include safety, immunogenicity and pharmacokinetics. Secondary endpoints include platelet response and duration. One patient in the first cohort of the PRTX-100-203 Study had a platelet response per protocol. In addition, we recently opened seven new clinical study sites in the United Kingdom and dosed the first patient. Enrollment is continuing for patients in the third cohort in the PRTX-100-203 Study at an increased dose.

OnWe ~~November~~maintain ~~11,~~an ~~2009~~administrative ~~(the~~office ~~“Effective Date”), we consummated a financing transaction (the “Financing”)~~ in ~~which we raised $3,000,000 of working capital~~Florham ~~pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Niobe Ventures~~Park, ~~LLC,~~New aJersey ~~Delaware~~and ~~limited liability~~currently ~~company~~outsource ~~(“Niobe”).~~all ~~Pursuant to the Purchase Agreement, we issued to Niobe (i) 8,695,652 restricted shares~~ of our ~~common~~product ~~stock~~development ~~at a purchase price of $0.23 per share (or $2 million in the aggregate)~~ and ~~(ii)~~regulatory aactivities, ~~senior~~including ~~secured~~clinical ~~convertible promissory~~trial ~~note in the principal amount of $1 million convertible into shares of our common stock at an initial conversion price~~activities, ~~equal~~manufacturing toand ~~$0.23~~laboratory ~~per share (the “$1 Million Secured Note”). On February 11~~operations, ~~2011,~~to ~~Niobe~~third-party ~~converted~~contract ~~the~~research ~~$1 Million Secured Note~~organizations, ~~including~~consultants ~~$37,500~~and ~~of accrued interest thereon, into 4,510,870 shares of common stock~~facilities.

AsIn ~~contemplated~~April by2009, ~~the~~under ~~Purchase~~prior ~~Agreement~~management, we ceased all ofoperations ~~our executive officers~~ and terminated all ofemployees ~~the~~in ~~members~~light of ~~our~~insufficient ~~Board~~funds ~~of Directors (the “Board”) prior~~ to ~~the~~continue ~~closing of~~our ~~the~~clinical ~~Financing,~~trials ~~with~~and ~~the~~related ~~exception of Frank M. Dougherty, resigned effective concurrently with the closing of the Financing.~~product Mrdevelopment. ~~Dougherty~~Our ~~resigned~~business ~~effective~~was ~~upon~~dormant ~~the~~until ~~expiration~~current ofmanagement ~~the~~took ~~10-day~~control ~~notice period required by Rule 14f-1 under the Securities Exchange Act~~ of ~~1934,~~our asoperations ~~amended~~in ~~(the~~November ~~“Exchange~~2009 ~~Act”).~~following ~~In addition, effective upon~~ the ~~closing of the Financing, our Board~~change ~~appointed~~in ~~Arnold~~control P.transaction ~~Kling~~more asfully adescribed ~~director and then elected him as our president and elected Kirk M~~below. ~~Warshaw as our chief financial officer and secretary.~~

OnChange February 11, 2011, for the purpose of providing us with additional working capital, pursuant to an existing Credit Facility Agreement dated as of December 2, 2009 (the “Facility”) with Niobe, we issued to Niobe a senior secured convertible promissory note in ~~the~~Control principal amount of $2 million (the “$2 Million Secured Convertible Note”). The $2 Million Secured Convertible Note provided for conversion into shares of our common stock at a conversion price of $0.23 per share, for an aggregate of 8,695,652 shares of our common stock (net of accrued interest thereon), bore interest at a rate of 3% per annum and ~~matured~~Incremental onFinancing ~~December 31, 2013. The original maturity was December 31, 2012 but in December 2012 Niobe agreed, for no consideration, to extend the maturity date to December 31, 2013.~~Transactions

~~The~~On $2November ~~Million~~11, ~~Secured~~2009 ~~Convertible~~(the ~~Note was~~“Effective ~~convertible at any time~~Date”), bywe ~~the~~consummated ~~holder,~~a ~~subject~~financing ~~only~~transaction to (the ~~requirement~~“Financing”) ~~that~~in which we ~~have~~raised ~~sufficient~~$3,000,000 ~~authorized shares~~ of ~~common~~working ~~stock~~capital ~~after~~pursuant ~~taking~~to ~~into~~a ~~account~~Securities ~~all~~Purchase ~~outstanding~~Agreement ~~shares of common stock and~~ (the ~~maximum~~“Purchase ~~number~~Agreement”) ofwith ~~shares~~Niobe ~~issuable~~Ventures, ~~under~~LLC, ~~all~~a ~~issued~~Delaware ~~and~~limited ~~outstanding~~liability ~~convertible~~company ~~securities~~(“Niobe”). InPursuant ~~addition,~~to the $2Purchase ~~Million~~Agreement, ~~Secured Convertible Note would automatically be converted if~~ we ~~undertake~~ ~~certain~~issued ~~Fundamental~~to ~~Transactions,~~Niobe ~~as defined in the $2 Million Secured Convertible Note,~~ (~~such~~i) ~~as a merger~~8,695,652 ~~sale~~restricted ofshares ~~all~~ of our ~~assets,~~common ~~exchange~~stock orat ~~tender~~a ~~offer,~~purchase orprice ~~reclassification~~ of ~~our~~$0.23 ~~stock~~per share (or ~~compulsory exchange). The~~ $2 ~~Million~~million ~~Secured Convertible~~in ~~Note~~the ~~also~~aggregate) ~~provided~~and ~~for~~(ii) ~~the~~a ~~adjustment~~senior ofsecured ~~the~~convertible promissory ~~conversion~~note ~~price~~ in the ~~event~~principal amount of ~~stock~~$1 ~~dividends~~million ~~and~~convertible ~~stock~~into ~~splits,~~shares ~~and provides~~of ~~for~~our ~~acceleration~~common ofstock ~~maturity,~~ at ~~the holder’s option, upon~~ an ~~event~~initial ofconversion ~~default,~~price equal asto ~~defined~~$0.23 inper share (the “$21 Million Secured ~~Convertible~~ Note”). On ~~August~~February 2711, ~~2013~~2011, Niobe ~~elected~~converted ~~to convert~~ the ~~principal~~$1 ~~and~~Million ~~accrued~~Secured Note, ~~interest~~including of $237,~~155,000~~500 ~~under~~of ~~the~~accrued $2interest ~~Million Secured~~thereon, ~~Convertible Note~~ into 94,~~369~~510,~~565~~870 shares of common stock.

On February 1, 2012, we raised $1,000,000 of working capital pursuant to a loan from Niobe. We issued to Niobe a secured promissory note in the principal amount of $1,000,000 (the “February 2012 Secured Note”). The February 2012 Secured Note bore interest at a rate of 3% per annum and had a maturity date of February 1, 2014.36

OnAs ~~June~~contemplated 5,by ~~2012~~the Purchase Agreement, all weof ~~raised~~our anexecutive ~~additional~~officers ~~$1,000,000~~ and all of ~~working~~the ~~capital~~members ~~pursuant~~of our Board of Directors (the “Board”) prior to anthe ~~incremental~~closing ~~loan~~of the ~~from~~Financing, ~~Niobe~~with ~~and~~the ~~issued~~exception toof ~~Niobe~~Frank aM. ~~secured~~Dougherty, ~~promissory~~resigned ~~note~~effective inconcurrently with the ~~principal~~closing ~~amount~~ of ~~$1,000,000,~~the ~~which~~Financing. Mr. Dougherty ~~bore~~resigned ~~interest~~effective atupon athe ~~rate~~expiration of 3%the ~~per~~10-day ~~annum~~notice ~~and~~period ~~had~~required aby ~~maturity~~Rule ~~date~~14f-1 ofunder ~~May~~the 31Securities Exchange Act of 1934, ~~2014~~as amended (the “~~June~~Exchange ~~2012 Secured Note~~Act”). In addition, effective upon the closing of the Financing, our Board appointed Arnold P. Kling as a director and then elected him as our president and elected Kirk M. Warshaw as our chief financial officer and secretary.

On ~~October~~February 111, ~~2012~~2011, wefor ~~raised~~the ~~$800,000~~purpose of providing us with additional working capital, pursuant to an ~~incremental~~existing ~~loan~~Credit ~~from~~Facility Agreement dated as of December 2, 2009 (the “Facility”) with Niobe, ~~and~~we issued to Niobe a senior secured convertible promissory note in the principal amount of $~~800~~2 million (the “$2 Million Secured Convertible Note”). The $2 Million Secured Convertible Note provided for conversion into shares of our common stock at a conversion price of $0.23 per share,~~000~~ for an aggregate of 8,695,652 ~~which~~shares of our common stock (net of accrued interest thereon), bore interest at a rate of 3% per annum and ~~had~~matured aon December 31, 2013. The original maturity ~~date~~was ofDecember ~~October~~31, 12012 but in December 2012 Niobe agreed, ~~2014~~for (no consideration, to extend the ~~“October 2012~~maturity ~~Secured~~date ~~Note”)~~to December 31, 2013.

OnThe ~~December~~$2 3Million Secured Convertible Note was convertible at any time, ~~2012~~by the holder, subject only to the requirement that we ~~raised~~have ~~$700,000~~sufficient authorized shares of common stock ~~additional~~after ~~working~~taking ~~capital~~into ~~pursuant~~account toall anoutstanding ~~incremental~~shares ~~loan~~of ~~from~~common ~~Niobe~~stock and the maximum number of shares issuable under all issued toand outstanding ~~Niobe~~convertible asecurities. In ~~secured~~addition, ~~promissory~~the ~~note~~$2 Million Secured Convertible Note would automatically be converted if we undertake certain Fundamental Transactions, as defined in the ~~principal~~$2 Million Secured Convertible Note, (such as a merger, sale ~~amount~~of all of ~~$700~~our assets,~~000~~ exchange or tender offer, ~~which~~or ~~bore~~reclassification ~~interest~~of atour astock ~~rate~~or compulsory exchange). The $2 Million Secured Convertible Note also provided for the adjustment of 3%the ~~per~~conversion ~~annum~~price in the event of stock dividends and ~~had~~stock asplits, and provides for acceleration of maturity, ~~date~~at the holder’s option, upon an event of ~~October~~default, 1as defined in the $2 Million Secured Convertible Note. On August 27, ~~2014~~2013, (Niobe elected to convert the ~~“December~~principal and accrued interest of $2,155,000 under the ~~2012~~$2 Million Secured Convertible Note”) into 9,369,565 shares of common stock.

~~Collectively,~~On ~~the~~ February 1, 2012, ~~Secured~~we ~~Note~~raised $1,000,000 of working capital pursuant to a loan from Niobe. We issued to Niobe a secured promissory note in the ~~June~~principal ~~2012~~amount ~~Secured~~of ~~Note~~$1, 000,000 (the ~~October~~“February 2012 Secured Note”). ~~and~~The ~~the~~February ~~December~~ 2012 Secured Note ~~are~~bore ~~hereinafter~~interest ~~referred~~at toa asrate ~~the~~of 3% per annum and had ~~“2012~~a ~~Secured~~maturity ~~Notes~~date of February 1, 2014.”

On ~~January~~June 185, ~~2013~~2012, we raised an additional $21,~~500~~000,000 of ~~additional~~ working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $21,~~500~~000,000, which bore interest at a rate of 3% per annum and had a maturity date of ~~January~~May 1531, ~~2015~~2014 (the “~~January~~June ~~2013~~2012 Secured Note”).

On ~~May~~October 131, ~~2013~~2012, we raised $2800,000~~,000~~ of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $2800,000,~~000,~~ which bore interest at a rate of 3% per annum and had a maturity date of ~~May~~October 131, ~~2015~~2014 (the “~~May~~October ~~2013 Secured~~2012 Secured Note”).

36On December 3, 2012, we raised $700,000 of additional working capital pursuant to an incremental loan from Niobe and issued to Niobe a secured promissory note in the principal amount of $700,000, which bore interest at a rate of 3% per annum and had a maturity date of October 1, 2014 (the “December 2012 Secured Note”).

~~On August 27~~Collectively, ~~2013,~~the weFebruary ~~raised~~2012 ~~$1,000,000~~Secured ofNote, ~~additional~~the ~~working~~June ~~capital~~2012 ~~pursuant~~Secured toNote, anthe ~~incremental~~October ~~loan~~2012 ~~from~~Secured ~~Niobe~~Note and ~~issued to Niobe a secured promissory note in~~ the ~~principal amount~~December of2012 ~~$1,000,000,~~Secured ~~which~~Note ~~bears~~are ~~interest~~hereinafter atreferred ato ~~rate~~as ~~of 3% per annum and matures on August 27, 2015 (~~the “~~August~~2012 ~~2013~~ Secured ~~Note”)~~ Notes.”

~~Collectively,~~On ~~the~~ January 18, 2013, ~~Secured~~we ~~Note~~raised $2,500,000 of ~~the~~additional ~~May~~working ~~2013~~capital ~~Secured~~pursuant ~~Note,~~to an incremental loan from Niobe and issued to Niobe a secured promissory note in the ~~August~~principal amount ~~2013~~of ~~Secured~~$2,500,000, ~~Note~~which ~~are~~bore ~~hereinafter~~interest ~~referred~~at toa asrate of 3% per annum and had a maturity date of January 15, 2015 (the “January 2013 Secured ~~Notes.~~Note”).

~~Collectively~~On May 13, ~~the~~2013, ~~2012~~we ~~Secured~~raised ~~Notes~~$2,000,000 ~~and~~of ~~the~~additional ~~2013~~working ~~Secured~~capital ~~Notes~~pursuant ~~represent~~to an incremental loan from Niobe and issued to Niobe a ~~total~~secured promissory note in the principal amount of $92,000,000, inwhich ~~principal~~bore ~~amount~~interest at a rate of ~~loans~~3% ~~from~~per ~~Niobe~~annum and ~~are~~had ~~hereinafter~~a ~~referred~~maturity todate as of May 13, 2015 (the “~~Secured~~May ~~Notes.~~2013 Secured Note”).

On October 11, 2013, we issued a Consolidated, Amended and Restated Promissory Note to Niobe in the principal amount of $9,219,366 (the “Consolidated Note”). The face amount of the Consolidated Note reflects the $9.0 million aggregate principal amount of the Secured Notes plus interest accrued at 3% per annum on each note from its respective date of issuance. The terms of the Consolidated Note were identical to the Secured Notes except that: (a) the maturity date was September 1, 2015, which is after the latest maturity date of any of the Secured Notes; and (b) it provided for partial mandatory repayment in the event that the Company received aggregate gross proceeds in excess of $7.5 million from a single or multiple “Liquidity Events” in an amount equal to twenty-five (25%) percent of such gross proceeds (the “Mandatory Repayment”). A “Liquidity Event” means (a) the sale of any of our equity, or equity-linked, securities, and (b) the receipt of proceeds, directly or indirectly related to a development and/or commercialization relationship entered into with an unaffiliated third party. In the Secured Notes, the entire principal amount of each note was due, at Niobe’s election, upon the consummation of an equity financing of $7.5 million or greater. Consistent with the terms of the Secured Notes and related security agreements entered into, our obligations under the Consolidated Note are secured by a first priority perfected security interest in all of our assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013. Effective as of October 1, 2014, the maturity date of the Consolidated Note was extended until September 1, 2016. All other terms and provisions of the Consolidated Note remained unchanged and in full force and effect.37

On ~~January~~August 2327, ~~2014~~2013, we ~~consummated~~raised ~~a private placement financing to accredited investors of 471,334 shares of common stock at~~ $~~6.00 per share~~1, ~~yielding gross proceeds of $2~~000,~~828,~~000~~. No~~ ~~commissions were payable in connection with the financing transaction. Proceeds~~ of ~~the financing have been, and will continue~~ toadditional ~~be, used for~~ working capital ~~purposes,~~pursuant ~~principally~~ to ~~fund~~an ~~ongoing~~incremental ~~clinical~~loan ~~trials~~from Niobe and ~~studies~~issued ~~and~~to ~~related~~Niobe ~~activities.~~a ~~The investors~~secured promissory note in the ~~offering~~principal amount ~~were~~of ~~granted~~$1,000,000, ~~piggy-back~~which ~~registration~~bears ~~rights~~interest inat ~~connection~~a ~~with~~rate ~~certain~~of ~~registration~~3% ~~statements~~per ~~filed by~~annum ~~us,~~and ~~subject~~matures toon ~~certain~~August ~~exceptions~~27, ~~including~~2015 a(the ~~registration~~“August ~~statement~~2013 ~~filed in connection with a primary offering~~Secured Note”).

~~On November 4~~Collectively, ~~2014, we entered into a new Credit Facility Agreement (~~the ~~“2014~~January ~~Credit~~2013 ~~Facility~~Secured ~~Agreement”) pursuant to which we may borrow up to an additional~~Note, ~~$5.0 million from Niobe in~~ the ~~form~~May of2013 ~~secured~~Secured ~~loans in accordance with the 2014 Credit Facility Agreement~~Note, atand ~~any time prior to~~ the ~~December~~August ~~31,~~2013 ~~2015~~Secured expiration date. Each loan made under the 2014 Credit Facility Agreement will be represented by a senior secured promissory note bearing interest at a rate of 3% per annum and maturing on September 1, 2016 (each a “Note~~”). Our~~ ~~obligations~~are ~~under~~hereinafter ~~each~~referred ~~Note will be secured by a first priority perfected security interest in all of our assets pursuant~~ to ~~the Second Consolidated, Amended and Restated Security Agreement between us and Niobe, entered into at the same time~~ as the ~~2014~~ ~~Credit Facility Agreement (the~~ “~~Security~~2013 ~~Agreement”)~~Secured Notes.”

~~In addition~~Collectively, ~~on November 4, 2014, we entered into a Note Modification Agreement (~~the ~~“Note~~2012 ~~Modification~~Secured ~~Agreement”)~~Notes ~~with~~and ~~Niobe pursuant to which~~ the ~~Consolidated~~ ~~Note,~~2013 asSecured ~~modified~~Notes inrepresent ~~October 2014, was further amended to increase the threshold amount requiring~~ a ~~Mandatory~~total ~~Prepayment~~of ~~from~~ $~~7.5 Million to more than $10 Million. As a result~~9,000,000 ~~partial prepayment will now be triggered~~ in ~~the~~principal ~~event~~amount of aloans ~~Liquidity~~from ~~Event in~~Niobe ~~which we receive gross proceeds in excess of $10 million. All other terms~~ and ~~provisions~~are ofhereinafter ~~the~~referred ~~Consolidated~~to ~~Note~~as ~~remained~~the ~~unchanged~~“Secured ~~and in full force and effect~~Notes.”

On ~~December~~October 111, ~~2015~~2013, ~~the~~we ~~2014~~issued ~~Credit~~a ~~Facility~~Consolidated, ~~was~~Amended ~~amended~~and Restated Promissory Note to ~~increase~~Niobe in the ~~funds~~principal ~~available~~amount ~~for~~of ~~loans~~$9,219,366 to(the us“Consolidated toNote”). The face amount of the Consolidated Note reflects the $79.50 million ~~and~~aggregate toprincipal ~~extend~~amount of the ~~expiration~~Secured Notes plus interest accrued at 3% per annum on each note from its respective date of ~~such~~issuance. The ~~credit~~terms ~~facility to~~of ~~December~~the ~~31,~~Consolidated ~~2016~~Note ~~pursuant~~were identical to ~~which~~the weSecured ~~entered~~Notes ~~into~~except ~~and~~that: an(a) ~~Amended~~the ~~and~~maturity ~~Restated~~date ~~2014~~was ~~Credit~~September ~~Facility~~1, ~~Agreement~~2015, ~~(the~~which ~~“Amended and~~is ~~Restated~~after ~~Agreement”).~~the ~~Each~~latest ~~loan~~maturity ~~under~~date of any of the ~~Amended~~Secured Notes; and ~~Restated~~(b) ~~Agreement~~it ~~has~~provided ~~been~~for ~~and~~partial ~~will~~mandatory berepayment ~~represented~~in bythe aevent ~~senior~~that the Company received aggregate gross proceeds ~~secured~~in ~~promissory~~excess ~~note~~of ~~bearing~~$7.5 ~~interest~~million atfrom a ~~rate~~single ofor 3%multiple ~~per~~“Liquidity ~~annum~~Events” ~~which~~in ~~matures~~an onamount ~~September~~equal 1,to ~~2017~~twenty-five (~~each~~25%) apercent of such gross proceeds (the “~~New~~Mandatory ~~Note~~Repayment”). A “Liquidity Event” means (a) the sale of any ~~Collectively~~of our equity, ~~the~~or ~~Note~~equity-linked, securities, and (b) the ~~New~~receipt ~~Note~~of ~~are~~proceeds, ~~hereinafter~~directly ~~referred~~or indirectly related to asa ~~the~~development ~~“Notes”~~and/or commercialization relationship entered into with an unaffiliated third party. In ~~addition~~the Secured Notes, the ~~Security~~entire ~~Agreement~~principal amount of each note was ~~also~~due, ~~amended~~at ~~and~~Niobe’s ~~restated~~election, toupon ~~secure~~the consummation of an equity financing of $7.5 million or greater. Consistent with the ~~Company’s~~terms of the Secured Notes and related security agreements entered into, our obligations under the Consolidated Note are secured by a first priority perfected security interest in all ~~the~~of ~~Notes~~our assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013.

37On January 23, 2014, we consummated a private placement financing to accredited investors of 471,334 shares of common stock at $6.00 per share, yielding gross proceeds of $2,828,000. No commissions were payable in connection with the financing transaction. Proceeds of the financing have been, and will continue to be, used for working capital purposes, principally to fund ongoing clinical trials and studies and related activities. The investors in the offering were granted piggy-back registration rights in connection with certain registration statements filed by us, subject to certain exceptions, including a registration statement filed in connection with a primary offering.

AsOn ofNovember ~~May 31~~4, ~~2016~~2014, ~~the~~we ~~outstanding~~entered ~~principal~~into a new ~~balance~~Credit ~~under~~Facility Agreement (the “2014 Credit Facility ~~totaled~~Agreement”) ~~$7,100,000.~~pursuant ~~During~~to ~~the~~which ~~fiscal~~we ~~year~~may ~~ended~~borrow ~~May~~up ~~31,~~to ~~2016~~an additional $5.0 Million from Niobe, wein ~~borrowed~~the anform ~~aggregate~~ of ~~$3,795,000,~~secured ~~$345~~loans,~~000~~ onin ~~each~~accordance ofwith ~~July~~the 1,2014 ~~2015,~~Credit ~~July~~Facility ~~31,~~Agreement ~~2015,~~at ~~August~~any time prior to the December 31, 2015, ~~October~~expiration 6,date ~~2015,~~(the ~~November~~“2014 ~~10,~~Credit ~~2015,~~Facility”). ~~December 1,~~Each ~~2015,~~loan ~~January~~made 4,under ~~2016,~~the ~~February~~2014 1,Credit ~~2016,~~Facility Agreement ~~March~~has 4,been ~~2016.~~represented ~~April~~by 1,a ~~2016~~senior ~~and~~secured ~~May~~promissory 3,note ~~2016.~~bearing ~~Payment~~interest at a rate of ~~the~~3% ~~principal~~per ~~and~~annum ~~accrued interest~~which matures on September ~~the~~1, ~~Notes~~2016 ~~will,~~(each atan ~~Niobe’s~~“Original ~~election,~~Note”). ~~automatically~~Our ~~become~~obligations ~~immediately~~under ~~due~~each ~~and~~Original ~~payable~~Note ifhave webeen ~~undertake~~secured ~~certain~~by a first ~~Fundamental~~priority ~~Transactions~~perfected orsecurity ~~upon~~interest anin ~~Event~~all of ~~Default~~our assets pursuant to the Second Consolidated, ~~both~~Amended asand ~~defined~~Restated inSecurity ~~the~~Agreement between ~~Notes.~~us ~~Our~~and ~~obligations~~Niobe, ~~under~~entered into at the ~~Notes~~same ~~are~~time ~~secured by~~as the ~~Security~~2014 Credit Facility Agreement, as(the ~~amended~~“Security Agreement”).

~~All~~In ofaddition, ~~the~~on ~~securities~~November ~~issued~~4, in2014, ~~the~~we ~~aforementioned~~entered ~~financings~~into ~~were~~a ~~issued~~Note inModification ~~reliance~~Agreement ~~upon~~ (the ~~exemption~~“Note ~~from~~Modification ~~the~~Agreement”) ~~registration~~with ~~requirements~~Niobe ofpursuant to which the ~~Securities~~Consolidated Note, ~~Act~~as ofmodified ~~1933~~in October 2014, aswas further amended ~~(the~~ ~~“Act”)~~to ~~pursuant~~increase tothe ~~Section~~threshold 4(amount requiring a~~)(5)~~ ~~and~~Mandatory ~~Rule~~Prepayment ~~506~~from of$7.5 Million ~~Regulation~~to Dmore ~~thereof~~than $10 Million. ~~The~~As ~~offer~~a result, ~~sale~~partial ~~and~~prepayment ~~issuance~~will now be triggered in the event of ~~such securities~~a ~~were~~Liquidity ~~made~~Event ~~without~~in ~~general~~which we ~~solicitation~~receive orgross ~~advertising.~~proceeds ~~The~~in ~~securities~~excess ~~were~~of ~~offered~~$10 ~~and~~million. ~~issued~~All ~~only~~other toterms ~~“accredited investors”~~and asprovisions ~~such~~of ~~term~~the isConsolidated ~~defined~~Note inremained ~~Rule~~unchanged and ~~501~~in ~~under~~full ~~the~~force ~~Act~~and effect.

~~Critical~~On ~~Accounting~~December ~~Policies~~1, 2015, the 2014 Credit Facility was amended to increase the funds available for loans to us to $7.5 million and to extend the expiration date of such credit facility to December 31, 2016 pursuant to which we entered into and an Amended and Restated 2014 Credit Facility Agreement (the “Amended and Restated Agreement”). Each loan under the Amended and Restated Agreement has been and will be represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on September 1, 2017 (each a “New Note”). In addition, the Security Agreement was also amended and restated to secure our obligations under all the Original Notes and all the New Notes.

~~Our~~On ~~financial~~June ~~statements~~30, ~~are~~2016, ~~prepared~~the 2014 inCredit ~~conformity with~~Facility ~~accounting~~was ~~principles~~again ~~generally~~amended ~~accepted~~to inincrease the ~~United~~funds ~~States~~available offor ~~America.~~loans ~~Note~~to 4us to $9.0 million (the ~~financial~~“Second ~~statements~~Amended and ~~for~~Restated Agreement”). Each loan under the ~~years ended~~Second ~~May~~Amended 31and Restated Agreement has been represented by a New Note. In addition, ~~2016~~the Security Agreement was also amended and ~~2015,~~restated ~~describe~~to secure our obligations under all the ~~significant~~notes ~~accounting~~issued ~~policies~~under the 2014 Credit Facility as of June 30, 2016 and ~~methods~~all ~~used~~the inNew Notes issued pursuant to the ~~preparation~~Second ofAmended ~~our~~and ~~financial statements~~Restated Agreement.

We have identified the policies below as some of the more critical to our business and the understanding of our financial position and results of operations. These policies may involve a high degree of judgment and complexity in their application and represent the critical accounting policies used in the preparation of our financial statements. Although we believe our judgments and estimates are appropriate and correct, actual future results may differ from estimates. If different assumptions or conditions were to prevail, the results could be materially different from these reported results. The impact and any associated risks related to these policies on our business operations are discussed throughout this Annual Report where such policies affect our reported and expected financial results.38

~~The~~On ~~preparation~~August of31, ~~our financial statements~~2016, we inand ~~conformity~~Niobe ~~with~~agreed ~~accounting~~to ~~principles~~extend ~~generally accepted in~~ the ~~United~~maturity ~~States,~~date ~~requires~~of ~~management~~the toConsolidated ~~make~~Note ~~estimates~~ and ~~assumptions that affect~~ the ~~reported~~maturity ~~amounts~~dates of ~~assets,~~all ~~liabilities~~thirteen ~~and~~outstanding ~~equity~~Original Notes ~~and~~with ~~disclosure~~an ofaggregate ~~contingent~~principal ~~assets~~amount ~~and~~of ~~liabilities~~$5,030,000, atfrom ~~the date~~September of1, ~~the~~2016 ~~financial~~to ~~statements~~September ~~and~~1, ~~the~~2017. ~~reported~~All ~~amounts~~other ofterms ~~expenses~~and ~~during~~provisions of the ~~reporting~~Consolidated ~~period.~~Note ~~These~~and ~~estimates~~Original ~~have~~Notes aremained ~~material impact~~unchanged ~~on our financial statements~~ and ~~are discussed~~ in ~~detail~~full ~~throughout~~force ~~this~~and ~~Annual Report~~effect.

AsOn ~~part~~October of31, 2016, the 2014 ~~process~~Credit ofFacility ~~preparing~~was ~~our~~amended ~~financial statements,~~to weincrease ~~are~~the ~~required~~funds available for loans to ~~estimate~~us ~~income~~to ~~taxes~~$11.25 inmillion ~~each~~and to extend the expiration date of the ~~jurisdictions~~facility into ~~which~~June we15, ~~operate.~~2017 ~~This~~(the ~~process~~“Third ~~involves~~Amended ~~estimating actual~~and ~~current~~Restated ~~tax~~Agreement”). ~~expense~~Each ~~together~~loan ~~with~~under ~~assessing~~the ~~temporary~~Third ~~differences~~Amended and ~~resulting~~Restated ~~from~~Agreement ~~differing~~will ~~treatment~~be ofrepresented ~~items~~by ~~for~~a ~~tax~~senior ~~and accounting~~secured ~~purposes.~~promissory ~~These~~note ~~differences~~bearing ~~result~~interest inat ~~deferred~~a ~~tax~~rate ~~assets~~of ~~and~~3% ~~liabilities,~~per annum which matures ~~are~~on ~~included~~March ~~within~~31, ~~the~~2018 ~~balance~~(each ~~sheet. We~~a ~~must~~“2018 ~~then~~Note”). ~~assess~~The ~~the~~Security ~~likelihood~~Agreement ~~that~~was ~~our~~also ~~deferred~~amended ~~tax~~and ~~assets~~restated ~~will~~to besecure ~~recovered~~our obligations ~~from~~under ~~future~~all ~~taxable~~the ~~income~~notes ~~and~~issued tounder the ~~extent we~~2014 ~~believe~~Credit ~~that~~Facility ~~recovery~~as isof ~~not~~October ~~likely~~31, we2016 ~~must~~and ~~establish~~all athe ~~valuation~~2018 ~~allowance~~Notes. In ~~the event that~~ addition, we ~~determine~~and ~~that~~Niobe wealso ~~would be~~agreed ~~able~~ to ~~realize~~extend ~~deferred~~to ~~tax~~March ~~assets~~31, in2018, the ~~future~~maturity indates ~~excess~~ of the ~~net~~Consolidated ~~recorded~~Note ~~amount,~~and anall ~~adjustment to~~ the ~~deferred~~notes ~~tax~~issued ~~asset~~and ~~valuation~~outstanding ~~allowance~~under ~~would~~the ~~increase~~2014 ~~income~~Credit inFacility ~~the~~as ~~period~~of ~~such~~October ~~determination~~31, ~~was made~~2016.

WeAs ~~account~~of ~~for~~May ~~our~~31, ~~stock~~2017, ~~option grants under~~ the outstanding ~~provisions~~principal ofbalance under the ~~accounting~~2014 ~~guidance~~Credit ~~for~~Facility ~~Share-Based~~totaled ~~Payments~~$11,080,000. ~~Such~~During ~~guidance requires~~ the ~~recognition~~year ofended ~~the~~May ~~fair~~31, ~~value~~2017, ofwe borrowed ~~share-based~~an ~~compensation~~aggregate inof ~~the~~$3,980,000 ~~statements~~including of$345,000 ~~operations.~~on ~~The~~June ~~fair~~1, ~~value~~2016, of$375,000 ~~our~~on ~~stock~~June ~~option~~30, ~~awards~~2016, ~~was~~$375,000 ~~estimated~~on ~~using~~August a1, ~~Black-Scholes~~2016, $345,000 ~~option~~on ~~valuation~~September ~~model.~~9, ~~This~~2016, ~~model~~$345,000 ~~requires~~on ~~the~~October ~~input~~3, of2016, ~~highly~~$345,000 ~~subjective~~on ~~assumptions~~November ~~and~~1, ~~elections~~2016, in$345,000 ~~adopting~~on ~~and~~December ~~implementing~~9, 2016, $345,000 on January ~~this~~3, ~~guidance~~2017, ~~including~~$290,000 ~~expected~~on ~~stock~~February ~~price~~2, ~~volatility~~2017, $290,000 on March 3, 2017, $290,000 on April 5, 2017, and ~~the~~$290,000 ~~estimated~~on ~~life~~May 11, 2017. Payment of ~~each~~the ~~award.~~principal ~~The~~and ~~fair~~accrued ~~value~~interest ofon ~~share-based~~all ~~awards is~~outstanding ~~amortized~~notes ~~over~~issued under the ~~vesting~~2014 ~~period~~Credit ofFacility ~~the~~will, ~~award~~at Niobe’s election, automatically become immediately due and wepayable ~~have~~if ~~elected~~we toundertake ~~use~~certain ~~the~~Fundamental ~~straight-line~~Transactions ~~method~~or ~~for~~upon ~~awards~~an ~~granted~~Event ~~after~~of Default, both as defined in such notes. Our obligations under all such notes are secured by the ~~adoption~~Security ofAgreement, ~~this~~as ~~guidance~~amended.

~~Results~~All of ~~Operations~~the securities issued in the aforementioned financings were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”) pursuant to Section 4(a)(5) and Rule 506 of Regulation D thereof. The offer, sale and issuance of such securities were made without general solicitation or advertising. The securities were offered and issued only to “accredited investors” as such term is defined in Rule 501 under the Act.

~~Fiscal~~Critical ~~year~~Accounting ~~ended May 31, 2016 compared to fiscal year ended May 31, 2015~~Policies

~~Research~~Our ~~and~~financial ~~Development~~statements ~~Expenses~~are ~~– Research~~prepared ~~and~~in ~~Development~~conformity with ~~expenses~~accounting ~~increased~~principles ~~from~~generally ~~$2,989,311~~accepted in ~~our~~the ~~2015~~United ~~fiscal~~States ~~year~~of toAmerica. ~~$3,136,800~~Note in4 ~~our~~to ~~2016~~the ~~fiscal~~financial ~~year.~~statements ~~The~~for the years ~~increase~~ended ofMay ~~$147~~31,~~489,~~ or2017 5%and 2016, ~~was~~describe the ~~result~~significant ofaccounting apolicies ~~slight~~and ~~increase~~methods used in the ~~expenses~~preparation ~~associated with the formulation and production~~ of our ~~bulk drug substance and drug product~~financial statements.

38We have identified the policies below as some of the more critical to our business and the understanding of our financial position and results of operations. These policies may involve a high degree of judgment and complexity in their application and represent the critical accounting policies used in the preparation of our financial statements. Although we believe our judgments and estimates are appropriate and correct, actual future results may differ from estimates. If different assumptions or conditions were to prevail, the results could be materially different from these reported results. The impact and any associated risks related to these policies on our business operations are discussed throughout this Annual Report where such policies affect our reported and expected financial results.

~~Administrative~~The ~~Expenses~~preparation -of ~~Administrative~~our ~~expenses~~financial statements, ~~decreased~~in toconformity ~~$5,160,468~~with accounting principles generally accepted in ~~our~~the ~~2016~~United ~~fiscal~~States, ~~year~~requires ~~from~~management $7to make estimates and assumptions that affect the reported amounts of assets,~~785,086~~ inliabilities ~~our~~and ~~2015~~equity ~~fiscal~~and ~~year.~~disclosure ~~The~~of ~~decrease~~contingent assets and liabilities at the date of $2the financial statements and the reported amounts of expenses during the reporting period.6 ~~million~~These ~~was~~estimates ~~related~~have a material impact ~~almost~~on ~~solely~~our tofinancial astatements ~~decrease~~and are discussed in ~~non-cash~~detail ~~stock~~throughout ~~compensation~~this Annual Report.

~~Professional~~As ~~Fees~~part -of ~~Professional~~the ~~fees~~process of preparing our financial ~~increased~~statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax expense together with assessing temporary differences resulting from ~~$523,613~~differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheet. We must then assess the likelihood that our ~~2015~~deferred ~~fiscal~~tax ~~year~~assets will be recovered from future taxable income and to ~~$682~~the extent we believe that recovery is not likely,~~853~~ inwe ~~our~~must ~~2016~~establish ~~fiscal~~a ~~year~~valuation allowance. ~~The~~In ~~increase~~the event that we determine that we would be able to realize deferred tax assets in the future in excess of ~~$159,240,~~the ornet ~~30%~~recorded amount, ~~was~~ ~~due~~an adjustment to ~~increases~~the deferred tax asset valuation allowance would increase income in ~~consulting~~the ~~and~~period ~~legal~~such ~~expenses~~determination was made.

Interest Expense – Interest expense increased from $320,769 in our 2015 fiscal year to $434,312 in our 2016 fiscal year. The increase was attributable to the increased level of borrowing during 2016 as described above.39

~~Net~~We ~~Loss~~account ~~Outlook~~for our stock option grants under the provisions of the accounting guidance for Share-Based Payments. Such guidance requires the recognition of the fair value of share-based compensation in the statements of operations. The fair value of our stock option awards was estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections in adopting and implementing this guidance, including expected stock price volatility and the estimated life of each award. The fair value of share-based awards is amortized over the vesting period of the award and we have elected to use the straight-line method for awards granted after the adoption of this guidance.

WeResults have not generated any product sales revenues, have incurred operating losses since inception and have not achieved profitable operations. Our accumulated deficit from inception through May 31, 2016 was $94,622,528 and we expect to continue to incur substantial losses in future periods. We expect that our operating losses in future periods will be the result of ~~continued~~Operations ~~research and development expenses relating to PRTX-100, as well as costs incurred in preparation for the potential commercialization of PRTX-100.~~

InFiscal ~~addition~~year toended ~~additional~~May ~~financing~~31, we2017 ~~are highly~~compared ~~dependent~~to onfiscal ~~the~~year ~~success of our research and development efforts and, ultimately, upon regulatory approval and market acceptance~~ended ofMay ~~our products under development~~31, particularly our lead product candidate, PRTX-100. We may never receive regulatory approval for any of our product candidates, generate product sales revenues, achieve profitable operations or generate positive cash flows from operations, and even if profitable operations are achieved, they may not be sustained on a continuing basis.2016

~~Liquidity~~Research and ~~Capital~~Development ~~Resources~~Expenses – Research and Development expenses decreased from $3,136,800 in our 2016 fiscal year to $2,383,769 in our 2017 fiscal year. The decrease of approximately $753,000, or 24%, was primarily the result of a decrease in the expenses associated with clinical trial activities.

~~Since~~Administrative ~~1999,~~Expenses we- ~~have~~Administrative ~~incurred significant losses~~expenses ~~and~~decreased wefrom ~~expect to experience operating losses and negative operating cash flow for the foreseeable future. Historically~~$5,160,468 in our ~~primary source~~2016 offiscal ~~cash~~year to ~~meet~~$754,317 ~~short-term~~in ~~and~~our ~~long-term~~2017 ~~liquidity~~fiscal ~~needs~~year. ~~has~~The ~~been~~decrease ~~the sale~~ of ~~shares~~approximately of$4.4 ~~our common stock and loans from~~million ~~our~~was ~~majority~~related ~~stockholder.~~almost Wesolely ~~have~~to ~~issued~~a ~~shares~~decrease in ~~private~~non-cash ~~placements~~stock ~~at discounts to then current market price~~compensation.

OnProfessional ~~December~~Fees 2,- ~~2009,~~Professional wefees ~~entered into the Facility~~increased ~~with~~from ~~Niobe to provide us with up to~~ $2682,~~000,000~~853 ~~of additional working capital~~ in ~~the~~our ~~form~~2016 offiscal ~~secured~~year ~~loans at any time prior~~ to ~~June~~ 30$867,085 ~~2012~~in ~~subject to~~ our ~~achievement~~2017 offiscal ~~certain predetermined benchmarks~~year. OnThe ~~February~~increase ~~11,~~of ~~2011~~approximately ~~we received~~ $2184,000,~~000~~ ofor ~~additional working capital from Niobe under the Facility~~28%, ~~and~~was primarily ~~issued~~due to ~~Niobe~~increases ~~the~~in $2consulting ~~million Secured Convertible Note. On the same date, Niobe converted the $1 Million Secured Note~~ and ~~accrued~~legal ~~interest thereon, into 4,510,870 shares of our common stock~~expenses.

OnInterest ~~August~~Expense ~~27,~~– ~~2013~~Interest expense increased from $434,312 ~~Niobe~~in ~~elected~~our 2016 fiscal year to ~~convert the~~$557,534 ~~principal~~in ~~and~~our ~~accrued~~2017 ~~interest~~fiscal year. The increase of approximately $2123,~~155,~~000 ~~under~~was ~~the~~primarily attributable $2to ~~Million~~the ~~Secured~~increased ~~Convertible~~level ~~Note~~of ~~into~~borrowing ~~9,369,565~~during ~~shares~~2017 ofas ~~common stock~~described above.

~~From~~Net ~~February~~Loss ~~1, 2012 through August 27, 2013 we raised an aggregate of $9,000,000 of working capital pursuant to seven loans from Niobe, in varying principal amounts and issued to Niobe the Secured Notes.~~Outlook

AsWe ~~described~~have ~~above,~~not ongenerated ~~October~~any ~~11,~~product ~~2013~~sales werevenues, ~~issued~~have ~~the~~incurred ~~Consolidated~~operating ~~Note~~losses tosince ~~Niobe.~~inception ~~The~~and ~~face~~have ~~amount~~not ofachieved ~~the~~profitable ~~Consolidated~~operations. ~~Note~~Our ~~reflects~~accumulated ~~the~~deficit ~~$9.0~~from ~~million aggregate principal~~inception ~~amount~~through ofMay ~~the~~31, ~~Secured~~2017 ~~Notes~~was ~~plus~~$99,186,249 ~~interest~~and ~~accrued~~we atexpect 3%to ~~per~~continue ~~annum~~to onincur ~~each~~substantial ~~note~~losses ~~from~~in ~~its~~future ~~respective~~periods. ~~date~~We ofexpect ~~issuance.~~that ~~Our obligations~~our ~~under~~operating ~~the~~losses ~~Consolidated~~in ~~Note~~future ~~are~~periods ~~secured~~will bybe athe ~~first~~result ~~priority~~of ~~perfected~~continued ~~security~~research ~~interest~~and indevelopment ~~all~~expenses ofrelating ~~our~~to ~~assets~~PRTX-100, ~~pursuant~~as towell as acosts ~~Consolidated, Amended~~incurred ~~and~~in ~~Restated~~preparation ~~Security~~for ~~Agreement~~the ~~dated~~potential ~~October~~commercialization ~~11,~~of ~~2013~~PRTX-100.

~~Effective~~In asaddition ofto ~~October~~additional 1financing, ~~2014,~~ we ~~entered~~are ~~into~~highly adependent ~~Note~~on ~~Modification~~the ~~Agreement~~success ~~with~~of ~~Niobe~~our research and development efforts and, ~~pursuant~~ultimately, toupon ~~which~~regulatory ~~the~~approval ~~maturity~~and ~~date~~market acceptance of ~~the~~our ~~Consolidated~~products ~~Note~~under ~~was~~development, ~~extended~~particularly ~~until September~~our 1lead product candidate, ~~2016~~PRTX-100. We ~~All~~may ~~other~~never ~~terms~~receive ~~and~~regulatory ~~provisions~~approval for any of ~~the~~our ~~Consolidated~~product ~~Note~~candidates, ~~remained~~generate ~~unchanged~~product ~~and~~sales inrevenues, ~~full~~achieve ~~force~~profitable operations or generate positive cash flows from operations, and ~~effect~~even if profitable operations are achieved, they may not be sustained on a continuing basis.

OnLiquidity ~~January~~and ~~23,~~Capital ~~2014,~~Resources ~~we consummated a private placement financing to accredited investors of 471,334 shares of common stock at $6.00 per share, yielding gross proceeds of $2,828,000.~~

OnSince ~~November 4~~1999, ~~2014,~~ we ~~entered~~have ~~into~~incurred ~~the~~significant ~~2014~~losses ~~Credit~~and ~~Facility~~we ~~Agreement~~expect ~~pursuant~~ to ~~which~~experience weoperating ~~may~~losses ~~borrow~~and upnegative tooperating ancash ~~additional~~flow $5for ~~million~~the ~~from~~foreseeable ~~Niobe~~future. Historically, inour ~~the~~primary source ~~form~~ of ~~secured~~cash ~~loans, in~~to ~~accordance~~meet ~~with~~short-term ~~the~~and ~~2014~~long-term ~~Credit~~liquidity ~~Facility~~needs ~~Agreement~~has atbeen ~~any~~the ~~time~~sale ~~prior~~of toshares ~~the~~of ~~December~~our ~~31,~~common ~~2015~~stock ~~expiration~~and ~~date.~~loans ~~Each loan made~~from ~~under~~our ~~the~~majority ~~2014~~stockholder. ~~Credit~~We ~~Facility~~have ~~Agreement~~issued isshares ~~represented~~in byprivate aplacements ~~Note~~at ~~and~~discounts ~~secured~~to bythen acurrent ~~first~~market ~~priority perfected security interest in all of our assets~~price.

39On December 2, 2009, we entered into the Facility with Niobe to provide us with up to $2,000,000 of additional working capital in the form of secured loans at any time prior to June 30, 2012 subject to our achievement of certain predetermined benchmarks. On February 11, 2011 we received $2,000,000 of additional working capital from Niobe under the Facility, and issued to Niobe the $2 million Secured Convertible Note. On the same date, Niobe converted the $1 Million Secured Note and accrued interest thereon, into 4,510,870 shares of our common stock.

InOn ~~addition,~~August ~~on November 4~~27, ~~2014~~2013, ~~the~~Niobe ~~Consolidated Note~~elected ~~was further amended~~ to ~~increase~~ convert the ~~threshold~~principal ~~amount~~and ~~requiring~~accrued ainterest ~~Mandatory~~of ~~Prepayment from~~ $~~7.5 million to more than $10 million. As a result~~2,155,000 ~~partial~~under ~~prepayment will now be triggered in~~ the ~~event of a Liquidity Event in which we receive gross proceeds in excess of~~ $102 ~~million.~~Million ~~All~~Secured ~~other~~Convertible ~~terms and provisions of the Consolidated~~ Note ~~remained~~into ~~unchanged~~9,369,565 ~~and~~shares inof ~~full force and effect~~common stock.

AsFrom ofFebruary ~~May 31~~1, ~~2016,~~2012 ~~the~~through ~~outstanding~~August ~~principal balance under the 2014 Credit Facility totaled $7~~27,~~100,000.~~ ~~During the year ended May 31, 2016,~~ 2013 we ~~borrowed~~raised an aggregate ~~$3,795,000 pursuant to which we issued eleven Notes in the principal amount~~ of $~~345~~9,000 ~~each (for an aggregate of $3~~,~~795,~~000). ~~Payment~~ of ~~the~~ ~~principal~~working ~~and~~capital ~~accrued~~pursuant ~~interest~~to onseven ~~the~~loans ~~Notes~~from ~~will, at~~ Niobe~~’s election~~, ~~automatically~~in ~~become~~varying ~~immediately~~principal ~~due~~amounts and ~~payable~~issued ifto weNiobe ~~undertake certain Fundamental Transactions or upon an Event of Default, both as defined in~~ the ~~Notes.~~Secured ~~Our obligations under the~~ Notes ~~are secured by the Security Agreement, as amended~~.

~~Subsequent~~As ~~Event~~described above, on October 11, 2013 we issued the Consolidated Note to Niobe. The face amount of the Consolidated Note reflects the $9.0 million aggregate principal amount of the Secured Notes plus interest accrued at 3% per annum on each note from its respective date of issuance. Our obligations under the Consolidated Note are secured by a first priority perfected security interest in all of our assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013.

OnEffective ~~June~~as of October 1, ~~2016~~2014, we ~~borrowed~~entered into ana ~~additional $345,000~~Note ~~from~~Modification Agreement with Niobe, ~~under~~pursuant to which the ~~2014~~maturity ~~Credit~~date ~~Facility~~of ~~and~~the ~~issued~~Consolidated aNote ~~them~~was aextended ~~New~~until September 1, 2016. All other terms and provisions of the Consolidated Note remained unchanged and in ~~that~~full ~~amount~~force and effect.

On ~~June~~January 3023, ~~2016~~2014, ~~the~~we ~~2014~~consummated ~~Credit~~a ~~Facility~~private ~~was~~placement ~~amended~~financing to ~~increase~~accredited ~~the~~investors ~~funds~~of ~~available~~471,334 ~~for~~shares ~~loans~~of tocommon usstock toat $96.000 ~~million~~per ~~(the “Second Amended and Restated Agreement”). Each loan under the Second Amended and Restated Agreement will be represented by a New Note. In addition~~share, ~~the~~yielding ~~Security~~gross ~~Agreement was~~proceeds ~~also~~of ~~amended and restated to secure our obligations under all the Notes including the New Notes to be issued under the Second Amended and Restated Agreement~~$2,828,000.

On ~~July~~November 14, ~~2016~~2014, we ~~borrowed~~entered into the 2014 Credit Facility Agreement pursuant to which we may borrow up to an additional $~~375,000~~5 million from Niobe, ~~under~~in the form of secured loans, in accordance with the 2014 Credit Facility ~~pursuant~~Agreement at any time prior to the ~~Second~~December ~~Amended~~31, ~~and~~2015 ~~Restated~~expiration date. Each loan made under the 2014 Credit Facility Agreement ~~and~~is ~~issued~~represented by a ~~them~~Note and secured by a ~~New Note~~first priority perfected security interest in all ~~that~~of ~~amount~~our assets.

OnIn ~~July 15~~addition, ~~2016,~~on weNovember ~~entered~~4, ~~into~~2014, anthe Consolidated ~~agreement~~Note ~~with~~was ~~Niobe~~further ~~pursuant~~amended to ~~which~~increase ~~Niobe~~the ~~agreed~~threshold toamount ~~exchange~~requiring ~~all~~a ~~Notes~~Mandatory ~~outstanding,~~Prepayment ~~which~~from as$7.5 ofmillion ~~May~~to ~~31,~~more ~~2016~~than ~~had~~$10 anmillion. ~~aggregate~~As ~~outstanding~~a ~~principal balance of $16~~result,~~319,366,~~ ~~for~~partial ~~shares~~prepayment ofwill ~~our~~now ~~common~~be ~~stock,~~triggered atin the ~~price~~event ~~per~~of ~~share~~a ~~that~~Liquidity ~~our common~~Event ~~stock is sold to public investors~~ in awhich ~~qualified~~we ~~public~~receive ~~offering. The agreement defines a “qualified public offering” to mean a public offering of our common stock yielding~~ gross proceeds toin us excess of ~~at least~~ $~~7.0~~10 million ~~which is consummated on or before October 31, 2016~~. ~~The~~All ~~agreement~~other ~~further~~terms ~~provided~~and ~~that~~provisions ~~50%~~ of ~~accrued~~the ~~but~~Consolidated ~~unpaid~~Note ~~interest would~~remained ~~also~~unchanged beand ~~converted~~in ~~into~~full ~~common~~force ~~stock~~ and ~~50% would be paid out of the proceeds of the qualified public offering~~effect.

~~Net~~On ~~Cash~~December ~~Used~~1, in2015, ~~Operating~~the ~~Activities~~2014 Credit Facility was amended to increase the funds available for loans to us to $7.5 million and ~~Operating~~to ~~Cash~~extend ~~Flow~~the expiration date of such credit facility ~~Requirements~~to ~~Outlook~~December 31, 2016 pursuant to which we entered into the Amended and Restated Agreement. Each loan under the Amended and Restated Agreement has been and will be represented by a New Note. In addition, the Security Agreement was also amended and restated to secure our obligations under all the Notes.

~~Our~~On ~~operating~~June ~~cash~~3, ~~outflows~~2016, ~~for~~we filed amendment #1 to the ~~fiscal~~Registration ~~years~~Statement ~~ended~~on ~~May~~Form ~~31,~~S-1 ~~2016~~with the U.S. Securities and ~~2015~~Exchange ~~have~~Commission ~~resulted~~(SEC) (SEC File No. 333-206008), originally ~~primarily~~filed ~~from~~on ~~research~~July ~~and~~31, ~~development~~2015, ~~expenditures~~with ~~associated~~respect ~~for~~to ~~PRTX-100~~a ~~and~~proposed ~~administrative~~public ~~purposes~~offering of our securities. We ~~expect~~are toactively ~~continue to~~seeking ~~use~~sources ~~cash~~of ~~resources~~ financing to fund ~~operating~~our ~~losses~~continuing operations and ~~expect~~development toprograms. ~~continue~~To raise additional capital, we may sell equity or debt securities. There can be no assurance that we will be able to ~~incur~~complete ~~operating~~any ~~losses~~future financing transaction in ~~fiscal~~a ~~2017~~timely ~~and~~manner ~~beyond~~or ~~due~~on acceptable terms or otherwise. If we are not able to ~~continuing~~raise ~~research~~additional ~~and~~cash, ~~development~~we ~~activities~~may be forced to delay, curtail, or cease our operations.

~~Net~~On ~~Cash~~June ~~Used~~30, in2016, ~~Investing~~the 2014 ~~Activities~~Credit Facility was again amended to increase the funds available for loans to us to $9.0 million (the “Second Amended and ~~Investing~~Restated ~~Requirements~~Agreement”). Each loan under the Second Amended and Restated Agreement has been represented by a New Note. In ~~Outlook~~addition, the Security Agreement was also amended and restated to secure our obligations under all the notes issued and outstanding under the 2014 Credit Facility as of June 30, 2016 and all the New Notes issued pursuant to the Second Amended and Restated Agreement.

WeOn doAugust ~~not~~31, ~~expect~~2016, towe beand ~~required~~Niobe agreed to extend ~~make~~the ~~any significant~~maturity ~~investments~~date inof ~~information~~the ~~technology~~Consolidated Note and ~~laboratory~~the ~~equipment~~maturity dates of all thirteen outstanding Original Notes with an aggregate principal amount of $5,030,000, from September 1, 2016 to ~~support~~September ~~our~~1, ~~future~~2017. ~~research~~All other terms and ~~development~~provisions ~~activities~~of the Consolidated Note and Original Notes remained unchanged and in full force and effect.

WeOn ~~may~~October ~~never~~31, ~~receive~~2016, ~~regulatory~~the 2014 ~~approval~~Credit Facility was amended to increase the funds available for loans to us to $11.25 million and to extend the expiration ~~any~~date of ~~our~~such ~~product~~facility ~~candidates~~to June 15, ~~generate~~2017 ~~product~~(the ~~sales~~“Third ~~revenues,~~Amended ~~achieve~~and ~~profitable~~Restated ~~operations~~Agreement”). orEach ~~generate~~loan ~~positive~~under ~~cash~~the ~~flows~~Third Amended ~~from~~and ~~operations,~~Restated ~~and~~Agreement ~~even~~will ifbe ~~profitable~~represented ~~operations~~by ~~are~~a ~~achieved,~~senior ~~these~~secured ~~may~~promissory ~~not~~note bebearing ~~sustained~~interest onat a ~~continuing~~rate ~~basis.~~of We3% ~~have~~per ~~invested~~annum which matures on March 31, 2018 (each a ~~significant~~“2018 ~~portion~~Note”). ofThe ~~our~~Security ~~time~~Agreement was also amended and ~~financial~~restated ~~resources~~to ~~since~~secure our obligations ~~inception~~under inall the ~~development~~notes ofissued ~~PRTX-100,~~under ~~and~~the ~~our~~2014 ~~potential to~~Credit ~~achieve~~Facility ~~revenues~~as ~~from~~of ~~product~~October ~~sales~~31, in2016 and all the ~~foreseeable~~2018 ~~future~~Notes. isIn ~~dependent~~addition, we ~~largely~~and ~~upon~~Niobe ~~obtaining~~also ~~regulatory~~agreed ~~approval~~to ~~for~~extend ~~and successfully~~to ~~commercializing~~March ~~PRTX-100~~31, ~~especially~~2018, in the ~~United~~maturity ~~States.~~dates Weof ~~expect~~the toConsolidated ~~continue~~Note toand ~~use~~all ~~our~~the ~~cash~~notes ~~and~~issued ~~investments~~and ~~resources~~outstanding tounder ~~fund~~the ~~operating~~2014 ~~and~~Credit ~~investing~~Facility ~~activities~~as of October 31, 2016.

4041

~~Off-Balance~~As ~~Sheet~~of ~~Arrangements~~May 31, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $11,080,000. During the year ended May 31, 2017, we borrowed an aggregate of $3,980,000 including $345,000 on June 1, 2016, $375,000 on June 30, 2016, $375,000 on August 1, 2016, $345,000 on September 9, 2016, $345,000 on October 3, 2016, $345,000 on November 1, 2016, $345,000 on December 9, 2016, $345,000 on January 3, 2017, $290,000 on February 2, 2017, $290,000 on March 3, 2017, $290,000 on April 5, 2017, and $290,000 on May 11, 2017. Payment of the principal and accrued interest on all outstanding notes issued under the 2014 Credit Facility will, at Niobe’s election, automatically become immediately due and payable if we undertake certain Fundamental Transactions or upon an Event of Default, both as defined in such notes. Our obligations under all such notes are secured by the Security Agreement, as amended.

AsSubsequent of May 31, 2016 we had no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.Events

~~ITEM~~On 7AJune 1, 2017, the 2014 Credit Facility was amended to increase the amount of the funds available for loans to us to $13.05 ~~QUANTITATIVE~~million ~~AND~~and ~~QUALITATIVE~~to ~~DISCLOSURES~~extend ~~ABOUT~~the ~~MARKET~~expiration ~~RISK~~date of such facility to March 31, 2018 (the “Fourth Amended and Restated Agreement”). Each loan under the Fourth Amended and Restated Agreement will be represented by a new 2018 Note. The Security Agreement was also amended and restated to also secure our obligations under all the new 2018 Notes issued pursuant to the Fourth Amended and Restated Agreement.

AsOn aJune ~~smaller~~15, ~~reporting~~2017, ~~company~~July 10, as2017 ~~defined~~and August 10, in2017, ~~Rule~~we ~~12b-2~~borrowed of$290,000, ~~the~~$290,000 ~~Exchange~~and ~~Act~~$290,000, werespectively ~~are~~(an ~~not~~additional ~~required~~aggregate borrowing of $870,000), under the 2014 Credit Facility pursuant to ~~provide~~the Fourth Amended and Restated Agreement and issued Niobe a new 2018 Note for each borrowing in the same ~~information~~principal ~~required~~amount byof ~~this~~each ~~item~~loan.

~~ITEM~~On 8August 22, 2017, we and Niobe agreed to extend the maturity date of all outstanding notes issued to Niobe from the current maturity date of March 31, 2018, to a new maturity date of September 1, 2018. All ~~FINANCIAL~~other ~~STATEMENTS~~terms ~~AND~~and ~~SUPPLEMENTARY~~provisions ~~DATA~~of such notes remained unchanged and in full force and effect.

~~See~~Net ~~the~~Cash ~~index~~Used toin ~~the~~Operating ~~Financial~~Activities ~~Statements below,~~and ~~beginning~~Operating onCash ~~page~~Flow Requirements ~~F-1.~~Outlook

~~ITEM~~Our 9operating cash outflows for the fiscal years ended May 31, 2017 and 2016 have resulted primarily from research and development expenditures associated for PRTX-100 and administrative purposes. We ~~CHANGES~~expect INto ~~AND~~continue ~~DISAGREEMENTS~~to use ~~WITH~~cash ~~ACCOUNTANTS~~resources ONto ~~ACCOUNTING~~fund ~~AND~~operating ~~FINANCIAL~~losses ~~DISCLOSURE~~and expect to continue to incur operating losses in fiscal 2017 and beyond due to continuing research and development activities.

~~Not~~Net ~~applicable.~~Cash Used in Investing Activities and Investing Requirements Outlook

~~ITEM~~We ~~9A.~~do ~~CONTROLS~~not ~~AND~~expect ~~PROCEDURES~~to be required to make any significant investments in information technology and laboratory equipment to support our future research and development activities.

(We may never receive regulatory approval for any of our product candidates, generate product sales revenues, achieve profitable operations or generate positive cash flows from operations, and even if profitable operations are achieved, these may not be sustained on a~~) Evaluation~~ continuing basis. We have invested a significant portion of ~~Disclosure~~our ~~Controls~~time and ~~Procedures~~financial resources since our inception in the development of PRTX-100, and our potential to achieve revenues from product sales in the foreseeable future is dependent largely upon obtaining regulatory approval for and successfully commercializing PRTX-100, especially in the United States. We expect to continue to use our cash and investments resources to fund operating and investing activities.

Our management, with the participation of our president and chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13aOff-~~15(e)~~Balance ~~and~~Sheet 15d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the president and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.Arrangements

~~Our~~As ~~management,~~of ~~including our~~May ~~president and chief financial officer~~31, ~~does~~2017 ~~not~~we ~~expect~~had ~~that~~no ~~our~~off-balance ~~disclosure controls and procedures or our internal controls~~sheet ~~will~~arrangements ~~prevent~~such ~~all~~as ~~errors and all fraud. A control system~~guarantees, noretained ~~matter~~or ~~how~~contingent ~~well~~interest ~~conceived~~in ~~and~~assets ~~operated~~transferred, ~~can~~obligation ~~provide~~under ~~only reasonable assurance that the objectives of the control system are met. Further, the design of~~ a ~~control~~derivative ~~system must reflect the fact that~~instrument ~~there are resource constraints~~ and ~~the~~obligation ~~benefits~~arising out of ~~controls~~or ~~must~~a bevariable ~~considered~~interest ~~relative to their costs. Because of the inherent limitations~~ in ~~all~~an ~~control~~unconsolidated ~~systems, management’s evaluation of controls and procedures can only provide reasonable assurance that all control issues and instances of fraud, if any, within Protalex have been detected~~entity.

~~(b) Management's Report~~ITEM on7A. ~~Internal~~QUANTITATIVE ~~Control~~AND ~~over~~QUALITATIVE ~~Financial~~DISCLOSURES ~~Reporting~~ABOUT MARKET RISK

~~Our~~As ~~management~~a issmaller ~~responsible for establishing and maintaining adequate internal control over financial~~ reporting (company, as defined in Rule ~~13a~~12b-~~15(f)~~2 ~~under~~of the Exchange Act~~). Our management assessed the effectiveness of our internal control over financial reporting as of May 31~~, ~~2016.~~we Inare ~~making~~not ~~this~~required ~~assessment,~~to ~~our~~provide ~~management used~~ the ~~criteria~~information ~~set~~required ~~forth~~ by ~~the~~this ~~Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework as adopted in 1992~~item. ~~Our management has concluded that, as of May 31, 2016, our internal control over financial reporting is effective based on these criteria.~~

~~(c) Changes in~~ITEM ~~Internal~~8. ~~Control~~FINANCIAL ~~over~~STATEMENTS ~~Financial~~AND ~~Reporting~~SUPPLEMENTARY DATA

~~There~~See ~~were~~the noindex ~~changes~~to ~~in our internal controls over financial reporting that occurred during~~ the ~~last~~Financial ~~fiscal~~Statements ~~quarter covered by this Annual Report that has materially affected~~below, orbeginning ison ~~reasonably~~page ~~likely to materially affect, our internal control over financial reporting~~F-1.

4142

ITEM 9B9. ~~OTHER~~CHANGES ~~INFORMATION~~IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~None~~Not applicable.

~~PART~~ITEM ~~III~~9A. CONTROLS AND PROCEDURES

~~ITEM~~(a) ~~10.~~Evaluation ~~DIRECTORS,~~of ~~EXECUTIVE~~Disclosure ~~OFFICERS~~Controls ~~AND~~and ~~CORPORATE GOVERNANCE~~Procedures

~~The~~Our ~~following~~management, ~~table~~with ~~sets~~the participation ~~forth~~of ~~information concerning~~our president and chief financial officer, carried out an evaluation of the effectiveness of our ~~officers~~“disclosure controls and ~~directors~~procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~June~~the 30end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, ~~2016:~~the president and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Name	Age	Title
Arnold P. Kling	58	President and Director
Kirk M. Warshaw	58	Chief Financial Officer, Secretary and Director
Marco M. Elser	57	Director

Our management, including our president and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable 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, management’s evaluation of controls and procedures can only provide reasonable assurance that all control issues and instances of fraud, if any, within Protalex have been detected.

~~Arnold~~(b) P. Kling. Mr. Kling has served as our president and director since November 2009. For the past 15 years, Mr. Kling has been the senior managing partner for a group of private equity investment funds that invest and manage early stage companies whose technologies have the potential to disrupt their targeted markets. From 1993 to 1995 he was a senior executive and general counsel of a Nasdaq listed licensing and multimedia company. From 1990 through 1993, Mr. Kling was an associate and partner in the corporate and financial services department of Tannenbaum, Helpern, Syracuse & Hirschtritt LLP, a mid-size New York law firm. Mr. Kling received a Bachelor of Science degree from New York University in International Business in 1980 and a Juris Doctor degree from Benjamin Cardozo School of Law in 1983. Mr. Kling’Management's ~~professional~~Report ~~experience~~on ~~and~~Internal ~~background~~Control ~~with~~over ~~other~~Financial ~~companies and with us, as our president and director since 2009, have given him the expertise needed to serve as one of our directors.~~Reporting

~~Kirk~~Our M.management ~~Warshaw.~~is ~~Mr.~~responsible ~~Warshaw~~for ~~has served~~establishing ~~as our chief financial officer, secretary~~ and ~~director~~maintaining ~~since~~adequate ~~November~~internal ~~2009.~~control ~~Mr.~~over ~~Warshaw is a~~ financial ~~professional~~reporting ~~who,~~(as ~~since 1990,~~defined ~~has provided clients~~ in ~~various~~Rule ~~industries~~13a-15(f) ~~with~~under ~~advice~~the onExchange ~~accounting, corporate finance, and general business matters~~Act). ~~Prior~~Our management toassessed ~~starting~~the ~~his~~effectiveness ~~own~~of ~~consulting~~our ~~firm,~~internal ~~from~~control ~~1983~~over tofinancial ~~1990,~~reporting heas ~~held the various titles~~ of ~~controller,~~May ~~Chief Financial Officer~~31, ~~President, and chief executive officer at three separate financial institutions in New Jersey~~2017. ~~From~~In ~~1980~~making ~~through~~this ~~1983~~assessment, ~~Mr. Warshaw was a~~our ~~Senior~~management ~~Accountant~~used at the ~~public~~criteria ~~accounting~~set ~~firm~~forth ofby ~~Deloitte,~~the ~~Haskins~~Committee &of ~~Sells.~~Sponsoring ~~Mr.~~Organizations ~~Warshaw~~of isthe aTreadway ~~1980~~Commission ~~graduate~~in ofInternal ~~Lehigh University~~Control-Integrated ~~and~~Framework ~~has~~as ~~been~~adopted ~~a CPA~~ in ~~New Jersey since 1982~~1992. ~~Mr.~~Our ~~Warshaw’s~~management ~~professional~~has ~~experience~~concluded ~~and background with other companies and with us~~that, as ~~our~~of ~~chief~~May ~~financial~~31, ~~officer and director since 2009~~2017, ~~have~~our ~~given~~internal ~~him~~control ~~the~~over ~~expertise~~financial ~~needed~~reporting is toeffective ~~serve~~based ason ~~one~~these ~~of our directors~~criteria.

Marco M. Elser. Mr. Elser has served as a director since February 2014. Since June 2015, Mr. Elser has been a partner with Lonsin Capital Ltd., an entity regulated by the Financial Conduct Authority of the United Kingdom and the fund manager of Lousin Global Credit Fund, a distressed debt fund registered in the Cayman Islands. From January 2002 until June, 2015, Mr. Elser was a partner with AdviCorp Plc, a London-based investment banking firm. From 1994 to 2001, Mr. Elser served as International Vice President of Northeast Securities, managing distressed funds for family offices and small institutions. Prior to that, from 1985 through 1994, he served as a First Vice President of Merrill Lynch Capital Markets in Rome and London. Mr. Elser is presently a director (~~since 2002~~c) ofChanges North Hills Signal Processing Corporation, a technology company, a director (since 2012) of Trans-Lux Corporation, a designer and manufacturer of digital signage display solutions, and a director (since 2016) of Scooterino srl, a Rome-based two-wheel ride sharing company. From 2002 to 2014, Mr. Elser was the president of the Harvard Club of Italy, an association he founded with other alumni in ~~Italy~~Internal ~~where~~Control heover ~~has~~Financial been living since 1984. He received his BA in Economics from Harvard College in 1981. Mr. Elser’s extensive knowledge of international finance and commerce allows him to make valuable contributions as one of our directors.Reporting

~~Scientific~~There ~~Advisory~~were ~~Board~~no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Our~~ITEM ~~Scientific Advisory Board (SAB) members work with our management team in the planning, development and execution of scientific and business strategies~~9B. ItOTHER reviews, and advises management on our progress in research and clinical development as well as new scientific perspectives. The SAB is composed of well-respected, experienced academic and industry leaders with diverse expertise and knowledge in a variety of areas, including drug discovery, translational research, drug development, and business development.INFORMATION

42None.

~~Benjamin~~PART Bowen, Ph.D. serves as Chairman of our SAB. Dr. Bowen has 25 years of healthcare-specific experience as a research scientist, research manager, investment banker, and advisor. Since 2004, he has been an investment banker at Rodman & Renshaw, LLC, The Benchmark Company, LLC, and Northland Capital Markets. Starting in 2012, Dr. Bowen has been President of Owatonna Advisors, Inc., a consultancy that provides scientific and business advice to early stage life science companies. Between 1988 and 2003, he worked as a scientist and research manager at Genentech, CIBA-Geigy, and Novartis, last serving as Executive Director in the Cardiovascular and Metabolic Disease Therapeutic Area at Novartis. Dr. Bowen received a Bachelor of Arts degree in chemistry from Hamline University in 1983 and a Ph.D. degree in organic chemistry from MIT in 1988.III

~~Michelle~~ITEM ~~Catalina, Ph~~10.D. ~~serves as Director of Preclinical Studies. Dr. Catalina has a background in immunology~~DIRECTORS, ~~molecular~~EXECUTIVE ~~biology~~OFFICERS ~~and~~AND ~~biochemistry.~~CORPORATE Dr. Catalina has served as an instructor at the University of Massachusetts Medical Center where she directed production of tetrameric molecules for detection of antigen specific T cells and projects to study the generation and maintenance of antigen specific T cells. Dr. Catalina has also conducted research investigating the role of homing receptors on inflammatory and antigen specific processes. She received a Bachelor of Science degree in biochemistry from the University of Illinois in 1991 and a Ph.D. degree in immunology from the University of Texas Southwestern Medical Center in 1996.GOVERNANCE

~~James~~The W.following ~~Dowe~~table ~~III~~sets ~~serves~~forth ~~as Vice Chairman~~information ofconcerning our ~~SAB~~officers and ~~has~~directors ~~over~~as ~~thirty years~~ of ~~experience~~August ~~in the various stages of a company’s development. His corporate experience ranges from being an active investor~~22, CEO and/or Chairman of startups to public companies. His primary focus has been in biotechnology, computer software and investment management companies. In 1980, Mr. Dowe founded and later became the CEO and Chairman of Excalibur Technologies Corporation whose search engine is recognized for its ability to index and retrieve mixed data types including digital images, signals and multilingual text. Excalibur was merged with the Media Systems Division of the Intel Corporation to form Convera Corporation (CNVR). Mr. Dowe was co-founder and a director of AZUR Environmental, a private company (acquired by Strategic Diagnostics Inc. (Nasdaq2017: ~~SDIX)). Mr. Dowe graduated from New Mexico State University with a Bachelor of Science degree in 1965 and served as an U.S. Naval officer during the Vietnam War.~~

Richard J. Francovitch, Ph.D. serves as Vice President of ITP Program. Dr. Francovitch received his academic training in pharmacology and has an extensive background in developing and commercializing pharmaceutical products on a global scale. Dr. Francovitch has over 25 years of experience in the pharmaceutical industry. For the last 15 years prior to joining the Company he held various senior level positions, including Vice President, Head of the Hematology Franchise at GlaxoSmithKline Pharmaceuticals (LSE/NYSE: GSK), one of the world's leading research-based pharmaceutical and healthcare companies. Dr. Francovitch received a Bachelor of Science degree in biology from the University of Maryland in 1979 and a Ph.D. degree in Pharmacology from Tulane University in 1985.

Name	Age	Title
Arnold P. Kling	59	President and Director
Kirk M. Warshaw	59	Chief Financial Officer, Secretary and Director
Marco M. Elser	58	Director

William E. Gannon, Jr., M.D. serves as our Chief Medical Officer. He also serves as Chief Scientific Officer & Medical Director for Capital City Technical Consulting (CCTC) in Washington, DC. In addition to receiving his medical training and clinical work at Ross University, Case Western Reserve and George Washington University, Dr. Gannon obtained an M.B.A. from George Washington University in 1988 and has since built a wealth of experience in the management of clinical trials including designing the trials and building operational teams to ensure their successful completion. Dr. Gannon’s primary focus has been on oncology therapeutic and diagnostic applications, but possesses a broad range of experience across therapeutic categories. Dr. Gannon has managed clinical trials and operations as well as the design, corporate and regulatory strategies, regulatory submissions and execution of Phase I through Phase IV clinical trials in the United States, Europe and Asia. Additionally, Dr. Gannon is involved in philanthropy in the Washington, DC area and currently serves on the Board of Directors for Emerging World Health and The Foundation for Sickle Cell Research.43

JArnold P. ~~Bruce~~Kling. ~~McClain, M~~Mr.D. ~~serves~~Kling ashas ~~Medical~~served ~~Director.~~as ~~Dr.~~our ~~McClain,~~president ~~has~~and adirector ~~background~~since inNovember ~~clinical~~2009. ~~research,~~For ~~clinical~~the ~~product~~past ~~development~~17 years, ~~product~~Mr. ~~safety,~~Kling ~~and~~has ~~product~~been ~~quality. Dr.~~the ~~McClain~~senior ~~served~~managing 20partner ~~years~~for ina group ~~the~~of ~~United~~private ~~States~~equity ~~Army~~investment infunds ~~clinical~~that invest and ~~academic~~manage ~~positions.~~early Hestage ~~devoted~~companies 14whose ~~years~~technologies inhave ~~both~~the ~~basic~~potential ~~and~~to ~~clinical~~disrupt ~~research~~their intargeted ~~infectious~~markets. ~~diseases~~From ~~and~~1993 ~~vaccinology~~to at1995 ~~Walter~~he ~~Reed~~was ~~Army~~a ~~Institute~~senior ofexecutive ~~Research~~ and ~~Walter~~general ~~Reed~~counsel ~~Army~~of ~~Medical~~a Nasdaq listed licensing and ~~Center~~multimedia company. ~~For~~From ~~the~~1990 ~~last~~through 191993, ~~years~~Mr. heKling ~~has~~was ~~developed~~an ~~pharmaceutical~~associate ~~products~~and partner in ~~industry,~~the ~~lastly~~corporate asand ~~chief~~financial ~~medical~~services ~~officer. Dr. McClain~~department ~~currently~~of ~~provides~~Tannenbaum, ~~independent~~Helpern, ~~pharmaceutical~~Syracuse ~~expertise~~& onHirschtritt ~~clinical development~~LLP, ~~product~~a ~~quality~~mid-size ~~and~~New ~~product~~York ~~safety~~law ~~to biopharmaceutical firms~~firm. DrMr. ~~McClain~~Kling received a Bachelor of Science degree infrom ~~biology~~New ~~from~~York ~~Spring~~University ~~Hill~~in ~~College~~International Business in ~~1970~~1980 and ~~his~~a MJuris Doctor degree from Benjamin Cardozo School of Law in 1983.D Mr. ~~from~~Kling’s ~~the~~professional ~~University~~experience and background with other companies and with us, as our president and director ofsince ~~Alabama~~2009, inhave ~~1974~~given him the expertise needed to serve as one of our directors.

43Kirk M. Warshaw. Mr. Warshaw has served as our chief financial officer, secretary and director since November 2009. Mr. Warshaw is a financial professional who, since 1990, has provided clients in various industries with advice on accounting, corporate finance, and general business matters. Prior to starting his own consulting firm, from 1983 to 1990, he held the various titles of controller, Chief Financial Officer, President, and chief executive officer at three separate financial institutions in New Jersey. From 1980 through 1983, Mr. Warshaw was a Senior Accountant at the public accounting firm of Deloitte, Haskins & Sells. Mr. Warshaw is a 1980 graduate of Lehigh University and has been a CPA in New Jersey since 1982. Mr. Warshaw’s professional experience and background with other companies and with us, as our chief financial officer and director since 2009, have given him the expertise needed to serve as one of our directors.

~~Third~~Marco M. Elser. Mr. Elser has served as a director since February 2014. Since June 2015, Mr. Elser has been a partner with Lonsin Capital Ltd., an entity regulated by the Financial Conduct Authority of the United Kingdom and the fund manager of Lousin Global Credit Fund, a distressed debt fund registered in the Cayman Islands. From January 2002 until June, 2015, Mr. Elser was a partner with AdviCorp Plc, a London-~~Party~~based investment ~~Consultants~~banking firm. From 1994 to 2001, Mr. Elser served as International Vice President of Northeast Securities, managing distressed funds for family offices and small institutions. Prior to that, from 1985 through 1994, he served as a First Vice President of Merrill Lynch Capital Markets in Rome and London. Mr. Elser was a director (from 2002 until May 2017) of North Hills Signal Processing Corporation, a technology company, a director (since 2012) of Trans-Lux Corporation, a designer and manufacturer of digital signage display solutions, and a director (since 2016) of Scooterino srl, a Rome-based two-wheel ride sharing company. From 2002 to 2014, Mr. Elser was the president of the Harvard Club of Italy, an association he founded with other alumni in Italy where he has been living since 1984. He received his BA in Economics from Harvard College in 1981. Mr. Elser’s extensive knowledge of international finance and commerce allows him to make valuable contributions as one of our directors.

WeScientific ~~engage~~Advisory ~~a number of third-party consultants from time-to-time that provide various services supporting our clinical development program and trials.~~Board

~~Family~~Our ~~Relationships~~Scientific Advisory Board (SAB) members work with our management team in the planning, development and execution of scientific and business strategies. It reviews, and advises management on our progress in research and clinical development as well as new scientific perspectives. The SAB is composed of well-respected, experienced academic and industry leaders with diverse expertise and knowledge in a variety of areas, including drug discovery, translational research, drug development, and business development.

~~None~~Benjamin Bowen, Ph.D. serves as Chairman of our ~~directors~~SAB. orDr. ~~executive~~Bowen ~~officers~~has over 25 years of healthcare-specific experience as a research scientist, research manager, investment isbanker, ~~related~~and byadvisor. ~~blood~~Since 2004, ~~marriage~~he orhas ~~adoption~~been an investment banker at Rodman & Renshaw, LLC, The Benchmark Company, LLC, and Northland Capital Markets. Starting in 2012, Dr. Bowen has been President of Owatonna Advisors, Inc., a consultancy that provides scientific and business advice to early stage life science companies. Between 1988 and 2003, he worked as a scientist and research manager at Genentech, CIBA-Geigy, and Novartis, last serving as Executive Director in the Cardiovascular and Metabolic Disease Therapeutic Area at Novartis. Dr. Bowen received a Bachelor of Arts degree in chemistry from Hamline University in 1983 and a Ph.D. degree in organic chemistry from MIT in 1988.

~~Section~~Michelle ~~16(~~Catalina, Ph.D. serves as Director of Preclinical Studies. Dr. Catalina has a) ~~Beneficial~~background ~~Ownership~~in ~~Reporting~~immunology, ~~Compliance~~molecular biology and biochemistry. Dr. Catalina has served as an instructor at the University of Massachusetts Medical Center where she directed production of tetrameric molecules for detection of antigen specific T cells and projects to study the generation and maintenance of antigen specific T cells. Dr. Catalina has also conducted research investigating the role of homing receptors on inflammatory and antigen specific processes. She received a Bachelor of Science degree in biochemistry from the University of Illinois in 1991 and a Ph.D. degree in immunology from the University of Texas Southwestern Medical Center in 1996.

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of our common stock (collectively, the "Reporting Persons") to report their ownership of and transactions in our common stock to the SEC. Copies of these reports are also required to be supplied to us. To our knowledge, during the fiscal year ended May 31, 2016 the Reporting Persons complied with all applicable Section 16(a) reporting requirements.44

~~Code~~James W. Dowe III serves as Vice Chairman of ~~Ethics~~our SAB and has over 35 years of experience in the various stages of a company’s development. His corporate experience ranges from being an active investor, CEO and/or Chairman of startups to public companies. His primary focus has been in biotechnology, computer software and investment management companies. In 1980, Mr. Dowe founded and later became the CEO and Chairman of Excalibur Technologies Corporation whose search engine is recognized for its ability to index and retrieve mixed data types including digital images, signals and multilingual text. Excalibur was merged with the Media Systems Division of the Intel Corporation to form Convera Corporation (CNVR). Mr. Dowe was co-founder and a director of AZUR Environmental, a private company (acquired by Strategic Diagnostics Inc. (Nasdaq: SDIX)). Mr. Dowe graduated from New Mexico State University with a Bachelor of Science degree in 1965 and served as an U.S. Naval officer during the Vietnam War.

~~Our~~Richard ~~Board~~J. ~~has~~Francovitch, ~~adopted~~Ph.D. ~~a Code of Ethics and~~serves ~~Business~~as ~~Conduct~~Vice ~~Code~~President of ~~Ethics~~ITP ~~and~~Program. ~~Business~~Dr. ~~Conduct,~~Francovitch orreceived ~~the~~his ~~Code,~~academic ~~that~~training ~~applies~~in topharmacology ~~all directors, officers~~ and ~~employees,~~has ~~including our~~an ~~principal~~extensive ~~executive officer, principal financial officer, principal accounting officer or controller or persons performing~~background ~~similar~~in ~~functions,~~developing and ~~contains~~commercializing ~~the~~pharmaceutical ~~general~~products ~~guidelines~~on ~~for~~a ~~conducting~~global ~~our~~scale. ~~business~~Dr. ~~The~~Francovitch ~~overall~~has ~~purpose~~over of25 ~~the~~years ~~Code is to ensure compliance~~ of ~~general~~experience ~~guidelines for conducting our business consistent with~~ in the ~~understanding~~pharmaceutical ~~of our standards of ethical business practices~~industry. ~~The~~For ~~Code~~the ~~includes~~last ~~provisions~~15 ~~relating~~years prior to ~~compliance~~joining ~~with~~the ~~all~~Company ~~laws~~he ~~and~~held ~~regulations~~various ~~governing~~senior ~~its~~level ~~operations~~positions, including ~~compliance~~Vice ~~with Regulation FD~~President, ~~professional~~Head ~~and personal use~~ of ~~our~~the ~~information~~Hematology ~~systems,~~Franchise ~~our~~at ~~commitment~~GlaxoSmithKline toPharmaceuticals ~~providing~~(LSE/NYSE: ~~a safe~~GSK), ~~orderly, diverse~~one ~~and tolerant work environment that is free~~ of ~~any discrimination or harassment, and~~ the ~~Company’~~world's ~~employment practices~~leading ~~regarding~~research-based ~~alcohol,~~pharmaceutical ~~drugs~~ and ~~violence~~healthcare ~~prevention~~companies. ~~All of our directors, officers and employees are expected to be familiar with the Code and to adhere to those principles and procedures set forth in the Code that apply to them~~Dr. ~~The~~Francovitch ~~Code,~~received ~~and~~a ~~any~~Bachelor ~~amendments to the Code, as well as any waivers that are required to be disclosed by the rules~~ of ~~the~~Science ~~SEC,~~degree isin ~~available~~biology onfrom ~~our web site at~~the ~~www.protalex.com.~~University ~~A copy~~ of ~~the~~Maryland ~~Code~~in ~~will~~1979 ~~also~~and ~~be provided to any person requesting same without charge. To request~~ a ~~copy, please make written request to Corporate Secretary c/o Protalex, Inc~~Ph.,D. ~~131~~degree ~~Columbia~~in ~~Turnpike,~~Pharmacology ~~Suite~~from 1,Tulane ~~Florham~~University ~~Park,~~in ~~NJ 07932~~1985.

~~Board~~William ~~Composition~~E. Gannon, Jr., M.D. serves as our Chief Medical Officer. He also serves as Chief Scientific Officer & Medical Director for Capital City Technical Consulting (CCTC) in Washington, DC. In addition to receiving his medical training and ~~Election~~clinical work at Ross University, Case Western Reserve and George Washington University, Dr. Gannon obtained an M.B.A. from George Washington University in 1988 and has since built a wealth of experience in the management of clinical trials including designing the trials and building operational teams to ensure their successful completion. Dr. Gannon’s primary focus has been on oncology therapeutic and diagnostic applications, but possesses a broad range of experience across therapeutic categories. Dr. Gannon has managed clinical trials and operations as well as the design, corporate and regulatory strategies, regulatory submissions and execution of Phase I through Phase IV clinical trials in the United States, Europe and Asia. Additionally, Dr. Gannon is involved in philanthropy in the Washington, DC area and currently serves on the Board of Directors for Emerging World Health.

~~Our~~J. ~~Board~~Bruce ~~currently~~McClain, ~~consists~~M.D. ofserves ~~three~~as ~~directors~~Medical Director. Dr. McClain, has a background in clinical research, clinical product development, product safety, and product quality. ~~Each~~Dr. ~~director~~McClain isserved ~~elected~~20 toyears ain ~~one-year~~the ~~term~~United States Army in clinical and ~~serves~~academic ~~until~~positions. ~~his~~He ~~successor~~devoted is14 ~~duly~~years ~~elected~~in both basic and clinical ~~qualified~~research in infectious diseases and vaccinology at Walter Reed Army Institute of Research and Walter Reed Army Medical Center. For the last 20 years he has developed pharmaceutical products in industry, lastly as chief medical officer. Dr. McClain Wecurrently ~~intend~~provides toindependent ~~expand~~pharmaceutical ~~our~~expertise ~~Board~~on clinical development, product quality and product safety to ~~five~~biopharmaceutical firms. ~~directors~~Dr. McClain received a ~~majority~~Bachelor of ~~who~~Science ~~will~~degree bein ~~independent~~biology ~~under~~from ~~the~~Spring ~~rules~~Hill ofCollege ~~the~~in ~~NASDAQ~~1970 ~~Capital Market~~and (his M.D. from the ~~“Nasdaq~~University of ~~Rules”)~~Alabama in 1974.

~~Board~~Third-Party ~~Committees~~Consultants

~~Our~~We ~~Board~~engage ~~has~~a ~~the authority to appoint committees to perform certain management and administrative functions. As of the date of this Annual Report, given the limited~~ number of ~~directors,~~ ~~our Board has not yet re~~third-~~established~~party ~~any committees. However, we expect that our Board will appoint new directors in~~consultants ~~the~~from ~~future~~time-to-time ~~and once the Board has been expanded, we anticipate~~ that ~~the~~provide ~~Board~~various ~~will~~services ~~again~~supporting ~~establish~~our ~~separate~~clinical ~~audit,~~development ~~compensation and~~program ~~nominating~~ and ~~corporate governance committees and may, from time to time, establish other committees it deems appropriate~~trials.

~~Audit~~Family ~~Committee Financial Expert~~Relationships

~~Our~~None ~~entire~~of ~~Board will act as~~ our ~~audit~~directors ~~committee until~~or ~~such~~executive ~~time it decides to re-establish a separate audit committee. The Board has determined that Mr. Warshaw qualifies as~~officers ~~our~~is ~~“audit~~related ~~committee~~by ~~financial expert~~blood,” asmarriage ~~that~~or ~~term is defined in Item 407(d)(5) of Regulation S-K~~adoption. ~~Mr. Warshaw is not independent for audit committee purposes under the definition contained in Section 10A(m)(3) of the Exchange Act.~~

44Section 16(a) Beneficial Ownership Reporting Compliance

~~Stockholder~~Section ~~Communications~~16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of our common stock (collectively, the "Reporting Persons") to report their ownership of and transactions in our common stock to the SEC. Copies of these reports are also required to be supplied to us. To our knowledge, during the fiscal year ended May 31, 2017 the Reporting Persons complied with all applicable Section 16(a) reporting requirements.

As of the date of this Annual Report, we do not yet have a defined process for security holders to send communications to the Board. Security holders that wish to communicate with the Board are encouraged to contact us at our principal executive offices by letter or telephone.45

~~ITEM~~Code ~~11.~~of ~~EXECUTIVE~~Ethics ~~COMPENSATION~~

~~Executive~~Our ~~Compensation~~Board has adopted a Code of Ethics and Business Conduct Code of Ethics and Business Conduct, or the Code, that applies to all directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, and contains the general guidelines for conducting our business. The overall purpose of the Code is to ensure compliance of general guidelines for conducting our business consistent with the understanding of our standards of ethical business practices. The Code includes provisions relating to compliance with all laws and regulations governing its operations, compliance with Regulation FD, professional and personal use of our information systems, our commitment to providing a safe, orderly, diverse and tolerant work environment that is free of any discrimination or harassment, and the Company’s employment practices regarding alcohol, drugs and violence prevention. All of our directors, officers and employees are expected to be familiar with the Code and to adhere to those principles and procedures set forth in the Code that apply to them. The Code, and any amendments to the Code, as well as any waivers that are required to be disclosed by the rules of the SEC, is available on our web site at www.protalex.com. A copy of the Code will also be provided to any person requesting same without charge. To request a copy, please make written request to Corporate Secretary c/o Protalex, Inc., 131 Columbia Turnpike, Suite 1, Florham Park, NJ 07932.

~~Compensation~~Board ~~Discussion~~Composition and ~~Analysis.~~Election of Directors

WeOur ~~are~~Board incurrently ~~the~~consists ~~process~~ of ~~assembling~~three ~~a compensation~~directors. ~~committee~~Each todirector ~~evaluate~~is ~~and~~elected ~~define~~to ~~the~~a ~~annual~~one-year ~~compensation~~term ~~for our executive officers~~ and ~~directors.~~serves ~~The~~until ~~objectives~~his ~~approved~~successor ~~by the~~is ~~compensation~~duly ~~committee~~elected ~~will be designed to attract~~ and ~~retain~~ qualified,. We ~~effective~~intend ~~managers with the experience necessary~~ to ~~manage~~expand our ~~business~~Board ~~effectively.~~to ~~Our~~five ~~financial~~directors ~~performance will be~~ a ~~major~~majority ~~factor in the compensation~~ of ~~key~~who ~~employees as well as their individual contributions. Stock options are expected to comprise a portion of total compensation. Stock options~~ will be ~~properly~~independent ~~accounted for~~ under ~~ASC 718 and will be either “incentive stock options” (as defined in~~ the ~~Internal~~rules ~~Revenue Code and federal tax regulations) or non-incentive options. ASC 718 will require us to measure the cost~~ of ~~employee services received in exchange for an award of equity instruments based on~~ the ~~grant-date~~NASDAQ ~~fair value of the award (with limited exceptions). That~~Capital ~~cost~~Market ~~will be recognized over the period during which an employee is required to provide service in exchange for any award the requisite service period~~ (~~usually~~ the ~~vesting~~“Nasdaq ~~period~~Rules”). The compensation amounts disclosed in the following compensation table reflects executive compensation prior to the existence of the compensation committee, but were nonetheless determined by factors that we believe were in the best interests of our stockholders.

~~The~~Board compensation paid to our named executive officers for fiscal 2016 is not necessarily indicative of how we will compensate our named executive officers in the future and we anticipate our compensation programs, as developed and implemented by our compensation committee, will vary significantly from our historical practices.Committees

~~Summary~~Our Board has the authority to appoint committees to perform certain management and administrative functions. As of ~~Compensation~~the date of this Annual Report, given the limited number of directors, our Board has not yet re-established any committees. However, we expect that our Board will appoint new directors in the future and once the Board has been expanded, we anticipate that the Board will again establish separate audit, compensation and nominating and corporate governance committees and may, from time to time, establish other committees it deems appropriate.

~~For~~Audit ~~the~~Committee ~~fiscal~~Financial year 2016, total compensation paid to Arnold Kling, our president, was $72,000, all of which constituted salary paid in cash. Total compensation paid to Kirk Warshaw, our chief financial officer in fiscal 2016, was $1,368,146, which included cash of $72,000 and stock options valued at $1,296,146. Neither Mr. Kling nor Mr. Warshaw has an employment agreement.Expert

~~The~~Our ~~primary~~entire ~~objective~~Board ofwill act as our ~~executive~~audit ~~compensation~~committee ~~program~~until issuch totime ~~attract~~it ~~and~~decides ~~retain~~to ~~qualified,~~re-establish ~~energetic~~a ~~managers~~separate ~~who~~audit ~~are~~committee. The ~~enthusiastic~~Board ~~about~~has ~~our~~determined ~~mission~~that ~~and culture~~Mr. AWarshaw ~~further objective~~qualifies ofas ~~the~~our ~~compensation~~“audit ~~program~~committee isfinancial toexpert,” ~~provide~~as ~~incentives~~that ~~and~~term ~~reward~~is ~~each~~defined ~~manager~~in ~~for~~Item ~~their~~407(d)(5) ~~contribution~~of Regulation S-K. Mr. InWarshaw is ~~addition,~~not weindependent ~~strive~~for ~~to promote~~audit ancommittee ~~ownership~~purposes ~~mentality~~under ~~among~~the ~~key~~definition ~~leadership~~contained ~~and~~in ~~the~~Section ~~board~~10A(m)(3) of ~~directors~~the Exchange Act.

ItStockholder is our intention to set total executive cash compensation at levels sufficient to attract and retain a strongly motivated leadership team. Each executive’s current and prior compensation will be considered in setting future compensation. In addition, we intend to review the compensation practices of other similarly situated companies. To some extent, our compensation plan is based on the market and the companies we compete against for executive management. We expect that the elements of our proposed compensation plan, base salary, bonus and stock options, will be similar to the elements of compensation used by many companies.Communications

~~Summary~~As ~~Compensation~~of ~~Table~~the date of this Annual Report, we do not yet have a defined process for security holders to send communications to the Board. Security holders that wish to communicate with the Board are encouraged to contact us at our principal executive offices by letter or telephone.

The following table sets forth, for the fiscal years ended May 31, 2016 and 2015, the information as to compensation paid to or earned by our then principal executive officer and our two other most highly compensated executive officers, other than the principal executive officer, whose total compensation exceeded $100,000 during the fiscal year ended May 31, 2016. These individuals are referred to in this Annual Report as our named executive officers. As none of our named executive officers received non-equity incentive plan compensation or nonqualified deferred compensation earnings during the fiscal years ended May 31, 2016 and 2015, we have omitted those columns from the table.46

45ITEM 11. EXECUTIVE COMPENSATION

Name and Principal Position	Year		Salary ($) (1)		Option Awards ($) (1)		Total ($)
Arnold P. Kling,		2016	$	72,000		0	$	72,000
President		2015	$	72,000		0	$	72,000
Kirk M. Warshaw,		2016	$	72,000	$	1,296,146	$	1,368,146
Chief Financial Officer		2015	$	72,000	$	625,000	$	697,000

Executive Compensation

~~(1)~~Compensation ~~Reflects~~Discussion ~~the value of stock options that was charged to income as reported in our financial statements~~ and ~~calculated using the provisions of FASB ASC 718 “Share-based Payments~~Analysis.~~” The assumptions underlying the valuation of equity awards are set forth in Note 7 of our financial statements for the fiscal years ended May 31, 2016 and 2015, included elsewhere in this report.~~

~~Employment~~We ~~Contracts~~are in the process of assembling a compensation committee to evaluate and define the annual compensation for our executive officers and directors. The objectives approved by the compensation committ

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