UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February 28,~~August 31, 2017

☐¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-28385

Protalex, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

91-2003490

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

131 Columbia Turnpike, Suite 1

Florham Park, NJ 07932

(Address of Principal Executive Offices and Zip Code)

215-862-9720

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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. ☒ x Yes ☐ ¨ 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 he registrant was required to submit and post such files). x ☒ Yes ☐ ¨ No

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

Large accelerated filer ☐¨ Accelerated filer ☐¨ Non-accelerated filer ☐¨ (Do not check if a smaller reporting company) Smaller reporting company ☒x Emerging growth company ¨

~~Indicate~~If an emerging growth company, indicate by check mark ~~whether~~if the registrant ishas aelected ~~shell~~not ~~company~~to use the extended transition period for ~~(as~~complying ~~defined~~with inany ~~Rule~~new ~~12b-2~~or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). ~~☐ Yes ☒ No~~ ¨

~~Number~~Indicate by ofcheck ~~shares~~mark ~~outstanding~~whether of the ~~issuer’s~~registrant ~~Common~~is ~~Stock, par~~a ~~value~~shell ~~$0.00001~~company ~~per~~(as ~~share,~~defined asin ofRule ~~April~~12b-2 4,of ~~2017:~~the ~~28,767,582~~Exchange ~~shares~~Act). ¨ Yes x No

Number of shares outstanding of the issuer’s Common Stock, par value $0.00001 per share, as of October 11, 2017: 28,767,582 shares.

PROTALEX, INC.

Quarterly Report on Form 10-Q

For the Period Ended ~~February~~August 2831, 2017

1 TABLE OF CONTENTS

		Page No.
PART I.	FINANCIAL INFORMATION
ITEM 1.	Financial Statements:
	Condensed Balance Sheets at February 28, 2017 (Unaudited) and May 31, 2016	3
	Condensed Balance Sheets at August 31, 2017 (Unaudited) and May 31, 2017	3
	Condensed Statements of Operations for the three and nine months ended February 28, 2017 and February 29, 2016 (Unaudited)	4
	Condensed Statements of Operations for the three months ended August 31, 2017 and August 31, 2016 (Unaudited)	4
	Condensed Statements of Cash Flows for the nine months ended February 28, 2017 and February 29, 2016 (Unaudited)	5
	Condensed Statements of Cash Flows for the three months ended August 31, 2017 and August 31, 2016 (Unaudited)	5
	Notes to Unaudited Condensed Financial Statements	6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1211
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3029
ITEM 4.	Controls and Procedures	3029
PART II.	OTHER INFORMATION
ITEM 6.	Exhibits	3029
	SIGNATURES	3130

FORWARD-LOOKING STATEMENTS

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” regarding the plans and objectives of management for future operations and market trends and expectations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the continued expansion of our business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. The terms “we”, “our”, “us”, or any derivative thereof, as used herein refer to Protalex, Inc., a Delaware corporation, and its predecessors.

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

PROTALEX, INC.

CONDENSED BALANCE SHEETS

	February 28,			May 31,
	August 31,			May 31,
	2017			~~2016~~2017
	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	~~580~~477,~~962~~258		$	~~444~~487,~~179~~383
Prepaid expenses		~~141~~58,~~283~~133			55107,~~687~~209
Total current assets		~~722~~535,~~245~~391			~~499~~594,~~866~~592
OTHER ASSETS:
Intellectual technology property, net of
Intellectual technology property, net of accumulated amortization of $17,403 and $17,148 as of August 31, 2017 and May 31, 2017, respectively		2,132			2,387
accumulated amortization of $16,893 and $16,128 as
Total other assets		2,132			2,387
of February 28, 2017 and May 31, 2016, respectively		2,642			3,407
Total Assets	$	537,523		$	596,979
Total other assets		2,642			3,407
Total Assets	$	724,887		$	503,273
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	~~525~~588,~~013~~669		$	~~561~~489,~~683~~029
Accrued expenses		5736,~~786~~106			4557,~~572~~786
Total current liabilities		~~582~~624,~~799~~775			~~607~~546,~~255~~815
LONG TERM LIABILITIES:
Senior Secured Note – related party		1921,~~429~~169,366			1620,~~319~~299,366
Senior Secured Note Accrued Interest – related party		1,~~339~~647,~~088~~977			~~932~~1,~~882~~490,416
Total liabilities		2123,~~351~~442,~~253~~118			1722,~~859~~336,~~503~~597
STOCKHOLDERS' (DEFICIT)
Preferred stock, par value $0.00001, 1,000,000 shares authorized; none issued and outstanding		0			0
Common stock, par value $0.00001,
Common stock, par value $0.00001, 100,000,000 shares authorized; 28,767,582 and 28,767,582 shares issued and outstanding, respectively		288			288
100,000,000 shares authorized; 28,767,582 and 28,767,582 shares issued and outstanding, respectively		288			288
Additional paid in capital		77,446,343			77,446,343
Additional paid in capital		77,446,343			77,266,010
Accumulated deficit		(100,351,226	)		(99,186,249	)
Accumulated deficit		(98,072,997	)		(94,622,528	)
Total stockholders’ (deficit)		(22,904,595	)		(21,739,618	)
Total stockholders’ deficit		(20,626,366	)		(17,356,230	)
Total liabilities and stockholders’ (deficit)	$	537,523		$	596,979
Total liabilities and stockholders’ deficit	$	724,887		$	503,273

The accompanying notes are an integral part of these unaudited condensed financial statements.

PROTALEX, INC.

CONDENSED STATEMENTS OF OPERATIONS

	Three Months Ended February 28, 2017			Three Months Ended February 29, 2016			Nine Months Ended February 28, 2017			Nine Months Ended February 29, 2016
	Three Months Ended August 31, 2017			Three Months Ended August 31, 2016
	(Unaudited)			(Unaudited)			~~(Unaudited)~~			~~(Unaudited)~~
Revenues	$	0		$	0		$	0		$	0
Operating Expenses
Research and development		~~814~~681,~~002~~829			~~808~~448,~~177~~981			~~1,738,842~~			~~2,409,183~~
Administrative		~~127~~142,~~616~~390			~~796~~357,~~624~~936			~~580,031~~			~~4,395,245~~
Professional fees		~~178~~182,~~588~~943			~~122~~331,~~962~~907			~~724,626~~			~~536,716~~
Depreciation and amortization		255			255			~~765~~			~~765~~
Operating loss		(1,~~120~~007,~~461~~417	)		(1,~~728~~139,~~018~~079	)		~~(3,044,264~~	)		~~(7,341,909~~	)
Other income (expense)
Interest income		1			1			2			2
Interest expense		(~~141~~157,~~400~~561	)		(~~111~~129,~~873~~340	)		~~(406,207~~	)		~~(313,345~~	)
Loss before income taxes		(1,~~261~~164,~~860~~977	)		(1,~~839~~268,~~890~~418	)		~~(3,450,469~~	)		~~(7,655,252~~	)
Provision for income taxes		0			0			0			0
Net loss	$	(1,~~261~~164,~~860~~977	)	$	(1,~~839~~268,~~890~~418	)	$	~~(3,450,469~~	)	$	~~(7,655,252~~	)
Weighted average number of common shares outstanding – basic and diluted		28,767,582			28,767,582			28,767,582			28,767,582
Weighted average number of common shares outstanding		28,767,582			28,767,582
Loss per common share – basic and diluted	$	(0.04	)	$	(0.06	)	$	~~(0.12~~	)	$	~~(0.27~~	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

PROTALEX, INC.

CONDENSED STATEMENTS OF CASH FLOWS

	Nine Months			Nine Months
	Three Months			Three Months
	Ended			Ended
	February 28,			February 29,
	August 31,			August 31,
	2017			2016
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(31,~~450~~164,~~469~~977	)	$	(71,~~655~~268,~~252~~418	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation and amortization		~~765~~255			~~765~~255
Equity based expense		~~180,333~~0			4180,~~044,171~~333
(Increase)/decrease in:
Prepaid expenses and deposits		~~(85~~49,~~596~~076	)		(3116,~~405~~137	)
Increase/(decrease) in:
Accounts payable and accrued expenses		~~381~~77,~~750~~960			~~548~~(173,~~143~~116	)
Net cash and cash equivalents used in operating activities		(2,973,217	)		(3,093,578	)
Accrued interest payable		157,561			129,340
Net cash and cash equivalents used in operating activities		(880,125	)		(1,147,743	)
CASH FLOWS FROM INVESTING ACTIVITIES:		0			0
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of note payable to individuals		3870,~~110,~~000			21,~~760~~095,000
Net cash and cash equivalents provided by financing activities		3870,~~110,~~000			21,~~760~~095,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		136,783			(333,578	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(10,125	)		(52,743	)
Cash and cash equivalents, beginning of period		~~444~~487,~~179~~383			~~928~~444,~~279~~179
Cash and cash equivalents, ending of period	$	~~580~~477,~~962~~258		$	~~594~~391,~~701~~436
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Interest paid	$	0		$	0
Taxes paid	$	0		$	0

The accompanying notes are an integral part of these unaudited condensed financial statements.

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND BUSINESS ACTIVITIES

The Company is focused on the development of a class of ~~biopharmaceutical~~ biopharmaceutical drugs for treating autoimmune and inflammatory diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP). Its lead product ~~candidate~~, PRTX-100, is a highly-purified form of Staphylococcal protein A, a bacterial protein known to modify aspects of the human immune system.

The Company maintains an administrative office in Florham Park, New Jersey and currently outsources all of its product development and regulatory activities, including clinical trial activities, manufacturing and laboratory operations, to third-party contract research organizations and facilities.

In April 2009, the Company ceased all operations and terminated all employees in light of insufficient funds to continue its clinical trials and related product development. The Company’s business was dormant until new management took control of its operations in November 2009. Since then the Company has been actively pursuing the commercial development of PRTX-100 for the treatment of RA and ITP. In the United States, the Company has open Investigational New Drug (IND) applications for the treatment of RA and ITP and in Europe, an open Investigational Medicinal Products Dossier (IMPD) for ITP.

PRTX-100 has demonstrated effectiveness in animal models of autoimmune diseases as well as 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 of future human clinical trials. The safety, tolerability and pharmakinetics of PRTX-100 in humans have been characterized in six clinical studies and PRTX-100 has been granted Orphan Drug Designation (ODD) in the United States and Europe for the treatment of ITP. The Company does not anticipate generating operating revenue for the foreseeable future and does not currently have any products that are marketable.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared in in conformity with accounting principles generally accepted in the United States of America ~~(GAAP)~~, which contemplate continuation of the Company as a going concern. The ability of the Company to continue as a going concern is dependent upon developing products that receive regulatory approval and market acceptance. There is no assurance that these benchmarks will be realized. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

There is substantial doubt about the Company’s ability to continue as a going concern. From inception through ~~February~~August 2831, 2017, the Company has incurred an accumulated deficit of $98100,~~072~~351,~~997~~226. For the years ended May 31, ~~2016~~2017 and ~~2015~~2016, the Company had net losses of $94,~~415~~563,~~450~~721 and $119,~~619~~415,~~796~~450, respectively, and for the ~~nine~~ three months ended ~~February~~August 2831, 2017, the Company had a net loss of $31,~~450~~164,~~469~~977. The Company utilized $43,~~279~~936,~~100~~796 and $34,~~991~~279,~~479~~100 of ~~cash~~ cash for operating activities for the years ended May 31, ~~2016~~2017 and ~~2015~~2016, respectively, and $2880,~~973,217~~125 during the ~~nine~~three months ended ~~February~~ 28August 31, 2017. As of ~~February~~August 2831, 2017, the Company had cash and cash equivalents of $~~580~~477,~~962~~258 and negative net working capital of $~~139~~89,~~446~~384. The Company has incurred negative cash flow from operating activities since its inception. The Company has spent, and subject to obtaining additional financing, expects to continue to spend, substantial amounts in connection with executing its business strategy, including continued development efforts relating to PRTX-100.

The Company has no significant payments due on long-term obligations. However, the Company anticipates entering into significant contracts to perform product manufacturing and to conduct clinical trials in the future and that it will need to raise additional capital to fund the ongoing FDA regulatory approval process. If the Company is unable to obtain approval of its future IND applications or otherwise advance the FDA approval process, its ability to sustain its operations would be significantly jeopardized.

The most likely sources of additional financing include the sale of the Company’s equity or debt securities. On June 3, 2016, the Company filed ~~amendment~~Amendment #1 to ~~its~~the Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) (SEC File No. 333-206008), originally filed on July 31, 2015, with respect to a proposed public offering of Company securities. There is no assurance that the Company will consummate a public offering of its securities, or any other offering. Accordingly, additional capital that is required by the Company may not be available on reasonable terms, or at all.

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 3. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim financial data contained in this Report is unaudited; however in the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. The results of operations in interim periods are not necessarily indicative of the results that may be expected for the full year.

Information regarding the organization and business of the Company, accounting policies followed by the Company and other important information is contained in the notes to the Company's financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, ~~2016~~2017. This Report should be read in conjunction with the Company’s Annual Report.

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions affecting the reported amounts of assets, liabilities, and expense, and the disclosure of contingent assets and liabilities. Estimated amounts could differ from actual results.

Loss per Common Share

The Financial Accounting Standards Board (FASB) has issued guidance for “Earnings Per Share” which provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net loss to common stockholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities consisting of employee stock options and warrants have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. As of ~~February~~August 2831, 2017 and ~~February~~August 2931, 2016, the Company had potentially dilutive securities consisting of 3,980,543 and 43,~~605~~982,543 stock options, respectively~~, outstanding~~.

Cash and Cash Equivalents

For the purposes of reporting cash flows, the Company considers all cash accounts which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. The cash and cash equivalent deposits are not insured by The Federal Deposit Insurance Corporation.

Reclassifications

Certain reclassifications have been made to the prior periods to conform to the current presentations in the financial statements.

Research and Development

Research and development costs are expensed as incurred.

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 3. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Share Based Compensation

Effective June 1, 2006, the Company adopted the FASB accounting guidance for fair value recognition provisions of the “Accounting for Share-Based Payment”. This standard requires the Company to measure the cost of employee services received in exchange for equity share options granted based on the grant-date fair value of the options. The cost is recognized as compensation expense over the vesting period of the options. The fair value of compensation costs attributed to equity rights issued was $~~180,333~~0 and $4180,~~044,171~~333 and is included in operating expenses for the ~~nine~~ three months ended ~~February~~August 2831, 2017 and ~~February~~August 2931, 2016, respectively. These amounts included both the compensation cost of stock options granted prior to but not yet vested as of June 1, 2006 and compensation cost for all options granted subsequent to May 31, 2006. In accordance with the modified prospective application transition method, prior period results are not restated. Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification. No tax benefit was recorded as of ~~February 28~~August 31, 2017 in connection with these compensation costs due to the uncertainty regarding ultimate realization of certain net operating loss carryforwards. The Company has also implemented the SEC interpretations in Staff Accounting Bulletin (SAB) for “Share-Based Payments,” in connection with the adoption of FASB accounting guidance.

As of February 28, 2017, the Company had issued 4,607,943 stock options, of which 400 were exercised and 27,000 have expired. Stock options vest pursuant to the terms set forth in individual stock option agreements.

The accounting guidance requires the use of a valuation model to calculate the fair value of each stock-based award. The Company uses the Black-Scholes model to estimate the fair value of stock options granted based on the following assumptions:

Expected Term or Life. The expected term or life of stock options granted issued represents the expected weighted average period of time from the date of grant to the estimated date that the stock option would be fully exercised. The weighted average expected option term was determined using a combination of the “simplified method” for plain vanilla options as allowed by the accounting guidance. The “simplified method” calculates the expected term as the average of the vesting term and original contractual term of the options.

Expected Volatility. Expected volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate. Expected volatility is based on the historical daily volatility of the price of our common shares. The Company estimated the expected volatility of the stock options at grant date.

Risk-Free Interest Rate. The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our stock-based awards.

At ~~February~~August 2831, 2017, there were 4,~~580~~180,543 stock options outstanding, of which 3,980,543 were exercisable. At ~~February~~August 2831, 2017, the aggregate unrecognized compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was $0. The remaining options will be valued once they vest upon ~~specified~~the future events. The Company did not grant any options during the ~~nine~~three months ended ~~February~~August 2831, 2017, and 2400,000 options expired.

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 3. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

The fair value of the options is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	Nine Months Ended February 28, 2017		Nine Months Ended February 29, 2016
Dividends per year		0		0
Volatility percentage		0.00%		606%
Risk free interest rate		0.00%		4.00%
Expected life (years)		0.00		5.00
Weighted Average Fair Value		$-		$5.41

NOTE 4. RECENT ACCOUNTING PRONOUNCEMENTS

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

In August 2014, the FASB issued Accounting Standards ~~Update~~ Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this ASU provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. The Company is currently reviewing the provisions of this ASU to determine if there will be ~~any~~ any impact on its results of operations, cash flows or financial condition. The Company does not believe that accounting standards currently adopted will have a material effect on the accompanying financial statements.

~~NOTE 5. RELATED PARTIES~~8

Niobe Ventures, LLC, a Delaware limited liability company (“Niobe”), the majority stockholder of the Company and the holder of the Consolidated Note (defined in Note 6, below), is controlled by Arnold P. Kling, the Company’s president and a director.

During the fiscal year ended May 31, 2015, the Company issued an option for an aggregate of 100,000 shares of its common stock, with par value of $0.00001 per share (“Common Stock”) to Marco Elser, a director of the Company. This option has a five year term, an exercise price of $6.00 per share and fully vested on the date of issuance. This option has been valued at $625,000 for which $625,000 of compensation expense has been recorded.

During the fiscal year ended May 31, 2015, the Company issued an option for an aggregate of 100,000 shares of Common Stock to Kirk Warshaw, the Company’s CFO and a director. This option has a five year term, an exercise price of $6.00 per share and fully vested on the date of issuance. This option has been valued at $625,000 for which $625,000 of compensation expense has been recorded.

During the fiscal year ended May 31, 2016, the Company issued an option for an aggregate of 250,000 shares of Common Stock to Kirk Warshaw, the Company’s CFO and a director. This option has a five year term, an exercise price of $5.41 per share and vested 50% on the date of issuance and 50% on the one year anniversary. This option has been valued at $1,352,500 of which $1,352,500 of compensation expense has been recorded.

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 5. RELATED PARTIES

NOTE 6. SENIOR SECURED NOTES - RELATED PARTY

On October 11, 2013, the Company 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 outstanding secured notes then held by Niobe (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 changed to September 1, 2015, which was 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 Prepayment Amount”). A “Liquidity Event” means (a) the sale of any of the Company’s 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, the Company’s obligations under the Consolidated Note are secured by a first priority perfected security interest in all of the Company’s assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013.

On November 4, 2014, the Company entered into a new Credit Facility Agreement (the “2014 Credit Facility Agreement”) pursuant to which the Company may borrow up to an additional $5.0 Million from Niobe, in the form of secured loans, at any time prior to December 31, 2015 (the “2014 Credit Facility”). Each loan made to the Company by Niobe under the 2014 Credit Facility Agreement has been represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on September 1, 2016 (each an “Original Note”). The obligations of the Company pursuant to each Original Note have been secured by a first priority perfected security interest in all of the assets of the Company pursuant to the Second Consolidated, Amended and Restated Security Agreement between the Company and Niobe, entered into at the same time as the 2014 Credit Facility Agreement (the “Security Agreement”).

In addition, on November 4, 2014, the Company entered into a Note Modification Agreement (the “Note Modification Agreement”) with Niobe pursuant to which the Consolidated Note 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 the Company receives gross proceeds in excess of $10 million. All other terms and provisions of the Consolidated Note remained unchanged and in full force and effect.

In October 2015, the Company entered into an agreement with Niobe pursuant to which Niobe agreed to convert all notes outstanding into shares of Common Stock, at the offering price in a “qualified public offering” consummated by the Company. The agreement defined a “qualified public offering” to mean a public offering of Common Stock yielding gross proceeds to the Company of at least $7 million, which is consummated on or before February 29, 2016. The agreement further provided that accrued interest would be paid out of the proceeds of the qualified public offering. On December 1, 2015, the agreement expired pursuant its own terms.

On December 1, 2015, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $7.5 million and to extend the expiration date of such credit facility to December 31, 2016 pursuant to which the Company and Niobe 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 the Company’s obligations under all the Original Notes and all the New Notes.

On June 30, 2016, the 2014 Credit Facility was again amended to increase the funds available for loans to the Company to $9.0 million (the “Second Amended and Restated Agreement”). Each loan under the Second Amended and Restated Agreement has been represented by a New Note. In addition, the Security Agreement was also amended and restated to secure the Company’s 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.

109

PROTALEX, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 6. SENIOR SECURED NOTES - RELATED PARTY (Continued)

On August 31, 2016, the Company and Niobe agreed to extend the maturity date of the Consolidated Note and the maturity dates of all thirteen outstanding Original Notes with an aggregate principal amount of $5,030,000, from September 1, 2016 to September 1, 2017. All other terms and provisions of the Consolidated Note and Original Notes remained unchanged and in full force and effect.

On October 31, 2016, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $11.25 million and to extend the expiration date of such 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 the Company’s obligations under all the notes issued under the 2014 Credit Facility as of October 31, 2016 and all the 2018 Notes. In addition, the Company 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.

As of ~~February~~May 2831, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $1011,~~210~~080,000. During the ~~nine~~year ~~months~~ ended ~~February~~May 2831, 2017, the Company borrowed an aggregate of ~~$3,110,000; $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~~980, ~~$345,~~000 ~~on November 1, 2016, $345,000 on December 9, 2016, $345,000 on January 3, 2017, and $290,000 on February 2, 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 the Company undertakes certain Fundamental Transactions or upon an Event of Default, both as defined in such notes. The Company’s obligations under all such notes are secured by the Security Agreement, as amended.

On June 1, 2017, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $13.05 million and to extend the expiration 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 2018 Note. The Security Agreement was also amended and restated to also secure the Company’s obligations under all 2018 Notes issued pursuant to the Fourth Amended and Restated Agreement.

On June 15, 2017, July 10, 2017 and August 10, 2017, the Company borrowed $290,000, $290,000 and $290,000, respectively, under the 2014 Credit Facility pursuant to the Fourth Amended and Restated Agreement and issued Niobe a new 2018 Note for each borrowing in the same principal amount of each loan.

On August 22, 2017, the Company 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 other terms and provisions of such notes remained unchanged and in full force and effect.

As of August 31, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $11,950,000. During the three months ended August 31, 2017, the Company borrowed an aggregate of $870,000; $290,000 on June 15, 2017, $290,000 on July 10, 2017, and $290,000 on August 10, 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 the Company undertakes certain Fundamental Transactions or upon an Event of Default, both as defined in such notes. The Company’s obligations under all such notes are secured by the Security Agreement, as amended.

NOTE 7. SUBSEQUENT EVENTS

On ~~March~~September 315, 2017, the Company borrowed an additional $290,000 under the terms of the ~~Third~~Fourth Amended and Restated Agreement ~~and~~ and issued Niobe a 2018 Note with a maturity date of September 1, 2018 for ~~this~~the loan in the same principal amount.

The Company has evaluated all other subsequent events and has determined that there were no other subsequent events to recognize or disclose in these financial statements.

ITEM 2.

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

Overview

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 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 Investigational New Drug (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 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 the third cohorts at an increased dose. In August 2017, the FDA’s Office of Orphan Product 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 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 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.

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 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 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.

~~ITEM~~A 2total of 61 patients enrolled across five cohorts in the PRTX 100-104 Study at nine study sites in the United States. ~~MANAGEMENT’S~~For ~~DISCUSSION~~patients ~~AND~~in ~~ANALYSIS~~all OFfive ~~FINANCIAL~~cohorts, ~~CONDITION~~PRTX-100 ~~AND~~appeared safe ~~RESULTS~~and OFwell ~~OPERATIONS~~tolerated in all individuals, including those who developed ADAs, and the AE profile was consistent with our prior clinical trial results.

~~Overview~~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.

WeIn ~~are focused on~~ the ~~development~~PRTX-100-105 ofStudy, a preliminary ~~class~~interim ofanalysis ~~biopharmaceutical~~indicated ~~drugs~~that for ~~treating~~patients ~~autoimmune~~who ~~and~~completed ~~inflammatory~~per ~~diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP). Our lead product candidate~~protocol, PRTX-100, aexhibited ~~new~~an ~~generation~~acceptable ~~immunomodulatory~~safety ~~therapy,~~profile isand ~~a highly-purified form~~RA ofdisease ~~Staphylococcal~~activity ~~protein~~was A,improved ~~which~~in is a ~~bacterial~~majority ~~protein~~of ~~known~~patients toat ~~modify~~the ~~aspects~~end of the ~~human~~study ~~immune~~as ~~system.~~compared ~~PRTX-100~~to ~~has~~baseline. ~~demonstrated effectiveness~~No inserious ~~animal~~adverse ~~models~~events (SAEs) ofwere ~~autoimmune~~reported. ~~diseases~~At ~~and~~study ~~has~~day ~~demonstrated~~196, ~~activity~~one onmonth ~~cultured~~after ~~human~~the ~~immune~~final ~~cells~~dose, atpatients ~~very~~who ~~low concentrations,~~completed ~~although~~ the ~~effectiveness~~study ofper ~~PRTX-100~~protocol ~~shown~~demonstrated a inmean ~~pre-clinical~~reduction ~~studies~~of ~~using~~the ~~animal~~DAS28CRP ~~models~~score ~~may~~from ~~not~~5.25 beto ~~predictive of~~2.52, ~~the~~suggesting ~~results~~a ~~that~~clinically wemeaningful ~~would~~improvement ~~see~~ in ~~future~~disease ~~human~~activity. Additionally, clinical ~~trials.~~assessment ~~The~~by ~~safety,~~Ultrasound ~~tolerability~~Power ~~and~~Doppler ~~pharmacokinetics~~Joint Counts (PKUPD), ofalso ~~PTRX-100 in~~revealed ~~humans~~a ~~have~~reduction ~~now~~in ~~been~~average ~~characterized~~disease inseverity ~~six~~by ~~clinical~~day 196, ~~studies~~ and ~~was~~the ~~granted~~correlation ~~Orphan~~between ~~Drug Designation (ODD) in~~ the ~~United~~UPD ~~States~~ and ~~Europe for~~ the ~~treatment~~DAS28CRP ofwas ~~ITP~~r=0.624 (p<.0005).

In ~~March~~November 2015, ~~the~~we ~~FDA~~commenced ~~accepted our Investigational~~enrollment ~~New~~and ~~Drug~~enrolled ~~(IND)~~our ~~application~~first ~~for~~patient ain ~~Phase~~the ~~I/II open-label, dose-escalating study of~~ PRTX-100-202 inStudy. ~~adults~~The ~~with persistent/chronic ITP (the “~~PRTX-100-202 Study~~”).~~ Inmay ~~June~~enroll ~~2015,~~up ~~the~~to ~~U.S.~~36 ~~Food~~patients ~~and~~in ~~Drug~~as ~~Administration~~many ~~(FDA)~~as ~~granted~~six cohorts. ~~ODD~~Each topatient ~~PRTX-100~~will ~~for~~receive ~~the treatment~~four ofweekly ~~ITP.~~intravenous Indoses ~~July~~of ~~2015,~~PRTX-100 ~~the~~and ~~European~~will ~~Medicines~~be ~~Agency~~monitored ~~(EMA) granted approval~~ for aup ~~Phase~~to 1b48 ~~open-label,~~weeks ~~dose-escalating~~thereafter. ~~study~~The ofprimary ~~PRTX-100~~study inendpoint ~~adult~~of ~~patients with persistent/chronic ITP (~~the “PRTX-100-~~203~~202 Study~~”).~~ Inis ~~September 2015, the EMA Committee for Orphan Medicinal Products (COMP) issued~~ a ~~positive~~platelet ~~opinion~~response ~~recommending~~to PRTX-100. ~~for~~Secondary ~~designation~~endpoints asinclude ansafety, ~~orphan~~immunogenicity, ~~medicinal~~and ~~product for the treatment of ITP~~pharmacokinetics. InOne ~~November~~patient ~~2015,~~in weeach ~~enrolled~~of ~~our~~the ~~first~~two ~~patient~~completed incohorts of the PRTX-100-202 Study inhad ~~the~~a ~~United States~~platelet ~~and~~response inper ~~January~~protocol. Enrollment ~~2016~~is wecontinuing ~~enrolled~~for ~~our~~patients ~~first~~in ~~patient~~the third cohort in the PRTX-100-~~203~~202 Study inat ~~Europe.~~an ~~Enrollment~~increased ~~is currently continuing in both studies~~dose. ~~We do not anticipate generating operating revenue for the foreseeable future and do not currently have any products that are marketable.~~

In ~~August~~January ~~2010~~2016, we commenced ~~a multi-center~~enrollment ~~Phase~~of 1bour ~~clinical~~first ~~trial~~patient ofin the European based PRTX-100-203 inStudy. ~~South~~The ~~Africa~~PRTX-100-203 inStudy ~~adult~~may enroll up to 30 patients ~~with~~in ~~active~~as RAmany onas five ~~methotrexate~~cohorts. orEach ~~leflunomide~~patient ~~(the~~will “receive four weekly intravenous doses of PRTX-100~~-103 Study”).~~ Inand ~~January~~will ~~2012,~~be wemonitored ~~completed~~for ~~patient~~up ~~dosing~~to in48 weeks thereafter. The primary study endpoints of the PRTX-100-~~103~~203 Study ~~with~~include asafety, ~~total~~immunogenicity ofand 37pharmacokinetics. ~~patients~~Secondary ~~enrolled in four~~endpoints ~~cohorts~~include ~~ranging~~platelet ~~from~~response 0and duration.15 ~~micrograms/kg~~One topatient ~~1.50~~in ~~micrograms/kg~~the first cohort of the PRTX-100-203 orStudy ~~placebo,~~had ~~administered~~a ~~weekly~~platelet ~~for~~response ~~four~~per ~~weeks~~protocol. ~~Measures~~ ofIn ~~safety~~addition, PKwe ~~and~~recently ~~disease~~opened ~~activity~~seven ~~were~~new ~~evaluated~~clinical ~~over~~study 16sites ~~weeks~~in ~~following~~ the ~~first~~United ~~dose.~~Kingdom ~~The~~and ~~PRTX-100-103~~dosed ~~Study~~the ~~results~~first ~~demonstrated~~patient. Enrollment is ~~that~~continuing ~~PRTX-100~~for ~~was~~patients ~~generally~~in ~~safe~~the ~~and~~third ~~well-tolerated~~cohort in ~~patients~~the ~~with~~PRTX-100-203 ~~active~~Study RA at ~~all~~an ~~tested~~increased dose ~~levels~~.

InWe ~~November~~maintain ~~2012,~~an weadministrative ~~commenced~~office ~~enrollment~~ in ~~the United States for a new multicenter Phase 1b randomized~~Florham Park, ~~multiple-dose,~~New ~~dose-escalation~~Jersey ~~study~~and ~~(the~~currently ~~“PRTX-100-104~~outsource ~~Study”) of~~all ~~PRTX-100 in combination with methotrexate or leflunomide in adult patients with active RA. The sequential dose-escalation phase~~ of ~~this~~our ~~study~~product ~~was~~development ~~expected~~and toregulatory ~~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~~activities, ~~one~~including ~~quarter~~clinical oftrial ~~patients would receive a placebo treatment. Similar to the PRTX-100-103 Study~~activities, ~~the primary~~ ~~objective~~manufacturing ofand ~~the~~laboratory ~~PRTX-100-104~~operations, ~~Study was~~ to ~~assess the safety and tolerability of intravenous PRTX~~third-~~100~~party ~~administered~~contract ~~weekly~~research ~~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~~organizations, ~~assessing~~consultants ~~the immunogenicity~~ and ~~evaluating the PK parameters after repeated doses, and determining possible relationships between the immunogenicity of PRTX-100 and safety and PK~~facilities.

In ~~August~~April ~~2013~~2009, ~~upon~~under ~~completion~~prior ~~of the fourth cohort~~management, we ~~expanded~~ceased ~~the~~all ~~3.0~~operations ~~microgram, 6.0 microgram,~~ and ~~12.0~~terminated ~~micrograms/kg~~all ~~dose~~employees ~~cohorts~~in light of ~~the~~insufficient ~~PRTX-100-104~~funds ~~Study.~~to ~~An additional~~continue ~~nine~~our ~~patients~~clinical ~~were~~trials ~~enrolled~~and inrelated product ~~the~~development. ~~expansion~~Our ~~cohort~~business ~~that~~ was ~~completed~~dormant inuntil ~~October~~current ~~2013.~~management Intook ~~total,~~control ~~the first four dose-escalating cohorts~~ of ~~the~~our ~~PRTX-100-104~~operations ~~Study,~~in ~~which~~November ~~included~~2009 ~~these~~following the ~~three~~change ~~expanded~~in ~~cohorts,~~control ~~enrolled~~transaction 41more ~~patients~~fully ~~with~~described ~~doses ranging from 1~~below.~~5 micrograms/kg up to 12.0 micrograms/kg.~~

InChange ~~November 2013, we initiated enrollment of the fifth and final cohort (Cohort 5)~~ in ~~the~~Control 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.~~Incremental ~~The~~Financing 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.Transactions

InOn ~~the~~November ~~Cohort 5 sub-study~~11, 2009 (the ~~amount of~~“Effective ~~PRTX-100~~Date”), ~~administered~~we ~~and~~consummated ~~its~~a ~~dosing~~financing ~~frequency~~transaction ~~were~~(the ~~varied~~“Financing”) ~~from~~in ~~Cohorts~~which 1we ~~through~~raised ~~4 to explore effects on safety~~$3,000,000 ~~tolerability and measures~~ of ~~disease~~working ~~activity.~~capital pursuant ~~The~~to ~~addition~~a ofSecurities ~~four~~Purchase ~~monthly~~Agreement ~~maintenance~~(the ~~doses~~“Purchase ~~after~~Agreement”) ~~the~~with ~~five~~Niobe ~~weekly~~Ventures, ~~doses~~LLC, ~~did~~a ~~not~~Delaware ~~increase the~~limited ~~rate~~liability orcompany ~~type of Adverse Event~~ (AE“Niobe”),. ~~even~~Pursuant into ~~those~~the ~~patients~~Purchase ~~who~~Agreement, ~~developed~~we ~~anti-drug~~issued ~~antibodies~~to Niobe (~~ADAs~~i) 8,695,652 ~~nor~~restricted ~~indicate~~shares of ~~any~~our ~~apparent correlation~~common ~~between~~stock ~~the~~at ~~development~~a purchase price of ~~ADAs~~$0.23 ~~and~~per ~~effects~~share on(or ~~measures~~$2 ofmillion RAin ~~disease~~the ~~activity.~~aggregate) Inand ~~addition,~~(ii) ~~Cohort~~a 5senior ~~patients~~secured ~~showed~~convertible ~~improvement~~promissory note in ~~measures~~the ofprincipal ~~disease~~amount ~~activity,~~of ~~including~~$1 ~~ACR20~~million ~~scores,~~convertible ~~compared~~into toshares ~~Cohort~~of 1our ~~through~~common 4stock ~~patients~~at ~~who~~an ~~did~~initial ~~not~~conversion ~~receive~~price ~~any~~equal ~~monthly~~to ~~maintenance~~$0.23 ~~doses,~~per ~~suggesting~~share ~~that~~ (the ~~addition~~“$1 ofMillion ~~monthly~~Secured ~~maintenance~~Note”). ~~administration~~On ofFebruary ~~PRTX-100~~11, ~~and~~2011, ~~weight-based dosing~~Niobe ~~were~~converted anthe ~~important~~$1 ~~aspect~~Million ofSecured Note, ~~the~~including ~~dosing~~$37,500 ~~protocol~~of ~~and~~accrued ~~should~~interest bethereon, ~~considered~~into in4,510,870 ~~future~~shares ~~trials~~ of ~~PRTX-100~~common stock.

AAs ~~total~~contemplated by the Purchase Agreement, all of 61our ~~patients~~executive ~~enrolled~~officers ~~across~~and all of the members of our Board of Directors (the “Board”) prior to the closing of ~~five~~the ~~cohorts~~Financing, inwith the ~~PRTX~~exception ~~100-104~~of ~~Study~~Frank atM. ~~nine~~Dougherty, ~~study~~resigned ~~sites~~effective inconcurrently with the ~~United~~closing ~~States~~of the Financing. Mr. Dougherty ~~For~~resigned ~~patients~~effective inupon ~~all~~the ~~five~~expiration ~~cohorts,~~of ~~PRTX~~the 10-~~100~~day ~~appeared~~notice period required by Rule 14f-1 under the Securities Exchange ~~safe~~Act ~~and~~of ~~well~~1934, ~~tolerated~~as inamended ~~all~~(the ~~individuals~~“Exchange Act”). In addition, ~~including~~effective ~~those~~upon ~~who~~the ~~developed~~closing ~~ADAs~~of the Financing, our Board appointed Arnold P. Kling as a director and ~~the~~then AEelected ~~profile~~him ~~was~~as ~~consistent~~our ~~with~~president and elected Kirk M. Warshaw as our ~~prior~~chief ~~clinical~~financial ~~trial~~officer ~~results~~and secretary.

InOn February ~~2015~~11, we2011, ~~commenced~~for ~~enrollment,~~the purpose of atproviding aus ~~single~~with ~~U.S.~~additional ~~site~~working capital, ofpursuant ato ~~Phase~~an ~~I/II~~existing ~~open-label,~~Credit ~~multiple,~~Facility ~~fixed-dose~~Agreement ~~study~~dated as of December 2, 2009 (the “~~PRTX-100-105 Study~~Facility”) ~~which~~with ~~was open~~Niobe, ~~only~~we issued to ~~PRTX-100-104~~Niobe ~~Study~~a ~~patients~~senior ~~who~~secured ~~indicated~~convertible ~~their~~promissory ~~desire~~note ~~for~~in ~~additional~~the ~~treatment.~~principal ~~The~~amount ~~PRTX-100-105 Study was an open-label,~~of ~~single~~$2 ~~group~~million ~~study~~(the ~~with~~“$2 ~~former~~Million ~~participants~~Secured ~~from~~Convertible ~~the~~Note”). ~~104~~The ~~Study~~$2 ~~who~~Million ~~were~~Secured ~~eligible~~Convertible toNote ~~receive~~provided afor ~~fixed~~conversion into ~~dose~~shares of ~~PRTX-100~~our ~~over~~common astock ~~6-month period.~~at ~~The~~a ~~primary~~conversion ~~study~~price ~~endpoint~~ of ~~the~~$0.23 ~~105~~per ~~Study~~share, ~~was~~for ~~the~~an ~~safety~~aggregate ~~and tolerability~~ of a8,695,652 ~~fixed~~shares ~~dose~~ of ~~PRTX-100~~our ~~administered~~common ~~over~~stock an(net ~~extended~~of ~~period.~~accrued ~~The~~interest ~~secondary~~thereon), ~~endpoints~~bore ~~included~~interest ~~immunogenicity,~~at ~~effects~~a onrate ~~measures~~ of RA3% ~~disease~~per ~~activity,~~annum ~~evaluation~~and ~~of anti-PRTX-100~~matured ~~antibody~~on ~~presence~~December 31, ~~and~~2013. ~~feasibility~~The oforiginal ~~joint~~maturity was ~~evaluations~~December ~~with~~31, ~~ultrasound~~2012 ~~and~~but ~~biomarkers~~in asDecember ~~disease~~2012 ~~markers.~~Niobe Aagreed, ~~total of~~for ~~eight~~no ~~patients~~consideration, ~~completed~~to ~~all~~extend ~~105~~the ~~Study~~maturity ~~visits~~date ~~per~~to ~~protocol~~December 31, 2013.

InThe ~~the~~$2 ~~PRTX-100-105~~Million ~~Study,~~Secured aConvertible ~~preliminary~~Note ~~interim~~was ~~analysis~~convertible ~~indicated~~at ~~that~~any ~~for~~time, ~~patients~~by ~~who~~the ~~completed~~holder, ~~per~~subject ~~protocol,~~only ~~PRTX-100~~to ~~exhibited~~the anrequirement ~~acceptable~~that ~~safety~~we ~~profile~~have ~~and~~sufficient RAauthorized shares of common ~~disease~~stock ~~activity~~after ~~was~~taking ~~improved~~into inaccount aall ~~majority~~outstanding shares of ~~patients~~common atstock and the ~~end~~maximum number of ~~the~~shares ~~study~~issuable asunder ~~compared~~all toissued and ~~baseline~~outstanding convertible securities. In Noaddition, ~~serious~~the ~~adverse~~$2 ~~events (SAEs)~~Million ~~were~~Secured ~~reported.~~Convertible AtNote ~~study~~would ~~day~~automatically ~~196,~~be converted ~~one~~if ~~month~~we ~~after~~undertake ~~the~~certain ~~final~~Fundamental ~~dose~~Transactions, ~~patients~~as ~~who~~defined ~~completed~~in the ~~study~~$2 ~~per~~Million ~~protocol~~Secured ~~demonstrated a~~Convertible ~~mean~~Note, ~~reduction~~(such as a merger, sale of ~~the~~all ~~DAS28CRP~~of ~~score~~our ~~from~~assets, ~~5.25~~exchange toor ~~2.52~~tender offer, ~~suggesting~~or areclassification ~~clinically~~of ~~meaningful~~our ~~improvement~~stock inor ~~disease~~compulsory ~~activity~~exchange). The ~~Additionally,~~$2 ~~clinical~~Million ~~assessment~~Secured byConvertible ~~Ultrasound~~Note ~~Power~~also ~~Doppler~~provided ~~Joint~~for ~~Counts~~the ~~(UPD),~~adjustment ~~also~~of ~~revealed~~the aconversion ~~reduction~~price in ~~average~~the ~~disease~~event ~~severity~~of bystock ~~day~~dividends and stock ~~196~~splits, and provides for acceleration of maturity, at the ~~correlation~~holder’s ~~between~~option, upon an event of default, as defined in the ~~UPD~~$2 Million Secured Convertible Note. On August 27, 2013, Niobe elected to convert the principal and accrued interest of $2,155,000 under the ~~DAS28CRP~~$2 ~~was~~Million ~~r=0.624~~Secured ~~(p<~~Convertible Note into 9,369,565 shares of common stock.~~0005).~~

InOn ~~November~~February ~~2015~~1, 2012, we ~~commenced~~raised ~~enrollment~~$1,000,000 ~~and~~of ~~enrolled~~working ~~our~~capital ~~first~~pursuant ~~patient~~to ina ~~the~~loan ~~PRTX-100-202~~from ~~Study~~Niobe. ~~The~~We ~~PRTX-100-202~~issued ~~Study~~to ~~may~~Niobe ~~enroll~~a upsecured topromissory 36note ~~patients~~ in asthe ~~many~~principal asamount ~~six cohorts. Each patient will receive four weekly intravenous doses~~ of ~~PRTX-100 and will be monitored for up to 48 weeks thereafter.~~$1,000,000 ~~The primary study endpoint of~~ (the ~~PRTX-100-202~~“February ~~Study~~2012 isSecured ~~a platelet response to PRTX-100~~Note”). ~~Secondary~~The ~~endpoints~~February ~~include~~2012 ~~safety,~~Secured ~~immunogenicity, and~~Note ~~pharmacokinetics.~~bore ~~One~~interest ~~patient~~at ina ~~the~~rate ~~first cohort~~ of ~~the~~3% ~~PRTX-100-202~~per ~~Study~~annum ~~had~~and had a ~~platelet~~maturity ~~response~~date ~~per~~of ~~protocol.~~February ~~Enrollment is~~1, ~~continuing for patients in the second cohort in the PRTX-100-202 Study at an increased dose~~2014.

InOn ~~January~~June ~~2016~~5, 2012, we ~~commenced~~raised ~~enrollment~~an additional $1,000,000 of ~~our~~working ~~first~~capital ~~patient~~pursuant into ~~the~~an ~~European~~incremental ~~based~~loan ~~PRTX-100-203~~from ~~Study.~~Niobe ~~The~~and ~~PRTX-100-203~~issued ~~Study may enroll up~~ to 30Niobe ~~patients~~a insecured aspromissory ~~many~~note ~~as five cohorts at sites~~ in ~~France.~~the ~~Each patient will receive four weekly intravenous doses of PRTX-100 and will be monitored for~~principal upamount ~~to 48 weeks thereafter. The primary study endpoints~~ of ~~the PRTX-100-203 Study include safety~~$1,000,000, ~~immunogenicity~~which ~~and~~bore ~~pharmacokinetics. Secondary~~interest ~~endpoints~~at ~~include~~a ~~platelet~~rate ~~response and duration One patient in the first cohort~~ of ~~the~~3% ~~PRTX-100-203~~per ~~Study~~annum and had a ~~platelet response~~maturity ~~per~~date ~~protocol.~~of ~~Enrollment~~May is31, ~~continuing~~2014 ~~for patients in~~ (the ~~second~~“June ~~cohort~~2012 Secured ~~in the PRTX-100-203 Study at an increased dose~~Note”).

WeOn ~~maintain~~October an1, ~~administrative~~2012, ~~office~~we ~~in Florham~~raised ~~Park~~$800,000 of ~~New~~additional ~~Jersey~~working ~~and~~capital ~~currently~~pursuant ~~outsource~~to ~~all~~an ofincremental ~~our~~loan ~~product~~from ~~development~~Niobe and ~~regulatory~~issued ~~activities,~~to ~~including~~Niobe ~~clinical~~a ~~trial~~secured promissory note in the principal ~~activities~~amount of $800,000, ~~manufacturing~~which bore interest at a rate of 3% per annum and ~~laboratory~~had ~~operations,~~a tomaturity ~~third-party~~date ~~contract~~of ~~research~~October ~~organizations~~1, ~~consultants~~2014 ~~and~~(the ~~facilities~~“October 2012 Secured Note”).

InOn ~~April~~December ~~2009~~3, ~~under~~2012, ~~prior~~we ~~management~~raised $700,000 weof ~~ceased~~additional ~~all~~working ~~operations~~capital ~~and~~pursuant ~~terminated~~to ~~all~~an ~~employees~~incremental inloan ~~light~~from ofNiobe ~~insufficient~~and ~~funds~~issued to ~~continue~~Niobe ~~our~~a ~~clinical~~secured ~~trials~~promissory ~~and~~note ~~related product~~in ~~development.~~the ~~Our~~principal amount ~~business~~of ~~was~~$700,000, ~~dormant~~which ~~until~~bore ~~current~~interest ~~management~~at ~~took~~a ~~control~~rate of ~~our~~3% ~~operations~~per inannum ~~November~~and ~~2009~~had ~~following the~~a ~~change~~maturity indate ~~control~~of ~~transaction~~October ~~more~~1, ~~fully~~2014 ~~described below. We are currently actively pursuing~~ (the ~~commercial development of~~“December ~~PRTX-100~~2012 ~~for~~Secured ~~the treatment of RA and ITP~~Note”).

~~Change~~Collectively, inthe ~~Control~~February 2012 Secured Note, the June 2012 Secured Note, the October 2012 Secured Note and ~~Incremental~~the ~~Financing~~December 2012 Secured Note are hereinafter referred to ~~Transactions~~as the “2012 Secured Notes.”

On ~~November~~January 1118, ~~2009 (the “Effective Date”)~~2013, we ~~consummated a financing transaction (the “Financing”) in which we~~ raised $32,~~000~~500,000 of additional working capital pursuant to aan ~~Securities~~incremental ~~Purchase~~loan ~~Agreement~~from ~~(the “Purchase Agreement”) with~~ Niobe ~~Ventures,~~and ~~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 $12,500,000, ~~million~~which ~~convertible~~bore ~~into~~interest ~~shares~~at a rate of ~~our~~3% ~~common~~per ~~stock~~annum atand anhad ~~initial~~a ~~conversion~~maturity ~~price equal~~date toof ~~$0.23~~January ~~per~~15, ~~share~~2015 (the “$1January 2013 ~~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.~~

AsOn ~~contemplated~~May by13, ~~the Purchase Agreement~~2013, ~~all~~ ofwe ~~our~~raised ~~executive~~$2,000,000 ~~officers and all~~ of additional ~~the~~working ~~members~~capital ofpursuant ~~our Board of Directors (the “Board”) prior~~ to ~~the~~an ~~closing~~incremental ~~of the~~loan ~~Financing,~~from ~~with~~Niobe ~~the~~and ~~exception~~issued ofto ~~Frank~~Niobe M.a ~~Dougherty,~~secured ~~resigned~~promissory ~~effective~~note ~~concurrently~~in ~~with~~ the ~~closing~~principal amount of ~~the~~$2,000,000, ~~Financing. Mr. Dougherty~~which ~~resigned~~bore ~~effective~~interest ~~upon~~at ~~the~~a ~~expiration~~rate of ~~the~~3% ~~10-day~~per ~~notice~~annum ~~period~~and ~~required~~had bya ~~Rule~~maturity ~~14f-1~~date ~~under the Securities Exchange Act~~ of ~~1934~~May 13, as2015 ~~amended~~ (the “~~Exchange~~May ~~Act~~2013 Secured Note”). 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 ~~February~~August 1127, ~~2011~~2013, ~~for~~we ~~the~~raised ~~purpose of~~$1,000,000 ~~providing~~of ~~us with~~ additional working capital, pursuant to an ~~existing~~incremental ~~Credit~~loan ~~Facility~~from ~~Agreement dated as of December 2, 2009 (the “Facility”) with~~ Niobe, weand 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~~1, ~~for an aggregate of 8~~000,~~695~~000,~~652~~ ~~shares~~which ofbears ~~our common stock (net of accrued~~ interest ~~thereon), bore interest~~ at a rate of 3% per annum and ~~matured~~matures on ~~December~~August 3127, ~~2013.~~2015 ~~The original maturity was December 31, 2012 but in December 2012 Niobe agreed, for no consideration, to extend~~ (the ~~maturity~~“August ~~date to December 31,~~ 2013 Secured Note”).

13Collectively, 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.”

~~The $2 Million Secured Convertible Note was convertible at any time~~Collectively, by the ~~holder,~~2012 ~~subject~~Secured ~~only~~Notes ~~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 $22013 ~~Million~~ Secured ~~Convertible~~Notes ~~Note~~represent ~~would automatically be converted if we undertake certain Fundamental Transactions, as defined in the $2 Million Secured Convertible Note, (such as~~ a ~~merger, sale~~total of ~~all of our assets~~$9, ~~exchange or tender offer~~000,000 ~~or reclassification of our stock or compulsory exchange). The $2 Million Secured Convertible Note also provided for the adjustment of the conversion price~~ in ~~the~~principal ~~event~~amount of ~~stock~~loans ~~dividends~~from ~~and stock splits, and provides for acceleration of maturity, at the holder’s option, upon an event of default, as defined in the $2 Million Secured Convertible Note. On August 27, 2013,~~ Niobe ~~elected to convert the principal~~ and ~~accrued~~are ~~interest~~hereinafter ofreferred ~~$2,155,000~~to ~~under~~as the ~~$2 Million~~ “Secured ~~Convertible Note into 9,369,565 shares of common stock~~Notes.”

On ~~February~~October 111, ~~2012~~2013, we ~~raised~~issued a Consolidated, Amended and Restated Promissory Note to Niobe in the principal amount of $19,~~000~~219,~~000~~366 (the “Consolidated Note”). The face amount of the Consolidated Note reflects the $9.0 million aggregate principal amount of ~~working~~the ~~capital~~Secured ~~pursuant~~Notes toplus ainterest ~~loan~~accrued at 3% per annum on each note from ~~Niobe~~its respective date of issuance. The Weterms ~~issued~~of the Consolidated Note were identical to ~~Niobe~~the Secured Notes except that: (a) ~~secured~~the ~~promissory~~maturity ~~note~~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 ~~principal~~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 ~~$1,000,000~~such gross proceeds (the “~~February~~Mandatory ~~2012~~Repayment”). A ~~Secured~~“Liquidity ~~Note~~Event” means (a). ~~The~~the ~~February~~sale ~~2012~~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 ~~Note~~Notes, ~~bore~~the ~~interest~~entire principal amount of each note was due, at aNiobe’s ~~rate~~election, upon the consummation of 3%an ~~per~~equity ~~annum~~financing of $7.5 million or greater. Consistent with the terms of the Secured Notes and ~~had~~related security agreements entered into, our obligations under the Consolidated Note are secured by a ~~maturity~~first ~~date~~priority perfected security interest in all of ~~February~~our 1assets pursuant to a Consolidated, ~~2014~~Amended and Restated Security Agreement dated October 11, 2013.

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”).13

On ~~October~~January 123, ~~2012~~2014, we ~~raised~~consummated a private placement financing to accredited investors of 471,334 shares of common stock at $~~800~~6.00 per share, yielding gross proceeds of $2,828,000. No commissions were payable in connection with the financing transaction. Proceeds of ~~additional~~the ~~working~~financing ~~capital~~have ~~pursuant~~been, and will continue to anbe, ~~incremental~~used ~~loan~~for ~~from~~working ~~Niobe~~capital ~~and~~purposes, ~~issued~~principally to ~~Niobe~~fund aongoing ~~secured~~clinical ~~promissory~~trials ~~note~~and instudies ~~the~~and ~~principal~~related activities. ~~amount~~The ofinvestors ~~$800,000,~~in ~~which~~the ~~bore~~offering ~~interest~~were atgranted apiggy-back ~~rate~~registration ofrights 3%in ~~per~~connection ~~annum~~with ~~and~~certain ~~had~~registration astatements ~~maturity~~filed by ~~date~~us, ofsubject ~~October~~to 1certain exceptions, ~~2014~~including ~~(the~~a ~~“October 2012~~registration ~~Secured~~statement ~~Note”)~~filed in connection with a primary offering.

On ~~December~~November 34, ~~2012~~2014, we ~~raised~~entered ~~$700,000~~into a new ofCredit ~~additional~~Facility ~~working~~Agreement ~~capital~~(the “2014 Credit Facility Agreement”) pursuant to which we may borrow up to an ~~incremental~~additional $5.0 ~~loan~~Million from Niobe, ~~and~~in ~~issued~~the toform ~~Niobe~~of a secured ~~promissory~~loans, ~~note~~ in accordance with the ~~principal~~2014 Credit Facility Agreement at any time prior ~~amount~~to ofthe ~~$700~~December 31,~~000,~~ ~~which~~2015 ~~bore~~expiration date (the “2014 Credit Facility”). Each loan made under the 2014 Credit Facility Agreement has been represented by a senior secured promissory note bearing interest at a rate of 3% per annum ~~and~~which ~~had~~matures on September 1, 2016 (each an “Original Note”). Our obligations under each Original Note have been secured by a ~~maturity~~first priority ~~date~~perfected security interest in all of ~~October~~our 1assets 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 “~~December 2012~~Security ~~Secured Note~~Agreement”).

~~Collectively~~In addition, ~~the~~on ~~February~~November ~~2012~~4, ~~Secured~~2014, we entered into a Note, Modification Agreement (the ~~June~~“Note ~~2012~~Modification ~~Secured~~Agreement”) with Niobe pursuant to which the Consolidated Note, ~~the~~as modified in October ~~2012~~2014, ~~Secured~~was ~~Note~~further ~~and~~amended to increase the ~~December~~threshold ~~2012~~amount ~~Secured~~requiring ~~Note~~a ~~are~~Mandatory ~~hereinafter~~Prepayment ~~referred~~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 aswe receive gross proceeds in excess of $10 million. All other terms and provisions of the ~~“2012~~Consolidated ~~Secured~~Note ~~Notes~~remained unchanged and in full force and effect.”

On ~~January~~December 181, ~~2013~~2015, wethe ~~raised~~2014 ~~$2,500,000~~Credit Facility was amended to increase the funds available for loans to us to $7.5 million and to extend the expiration date of ~~additional~~such ~~working~~credit ~~capital~~facility to December 31, 2016 pursuant to which we entered into and an ~~incremental~~Amended and Restated 2014 Credit Facility Agreement (the “Amended and Restated Agreement”). Each loan ~~from~~under ~~Niobe~~the Amended and ~~issued~~Restated toAgreement ~~Niobe~~has abeen ~~secured~~and ~~promissory~~will ~~note~~be inrepresented ~~the~~by ~~principal~~a senior ~~amount~~secured ofpromissory ~~$2,500,000,~~note ~~which~~bearing ~~bore~~ interest at a rate of 3% per annum ~~and~~which ~~had~~matures aon ~~maturity~~September ~~date~~1, of2017 ~~January~~(each 15a “New Note”). In addition, ~~2015~~the (Security Agreement was also amended and restated to secure our obligations under all the ~~“January~~Original Notes and all ~~2013~~the ~~Secured~~New ~~Note”)~~Notes.

On ~~May~~June 1330, ~~2013~~2016, the we2014 ~~raised~~Credit ~~$2,000,000~~Facility ~~of additional~~was ~~working~~again ~~capital~~amended ~~pursuant~~ to anincrease ~~incremental~~the ~~loan~~funds ~~from~~available ~~Niobe~~for ~~and~~loans ~~issued~~to us to ~~Niobe~~$9.0 amillion ~~secured~~(the ~~promissory~~“Second ~~note~~Amended and inRestated Agreement”). Each loan under the ~~principal amount~~Second ofAmended ~~$2,000,000,~~and ~~which~~Restated ~~bore~~Agreement ~~interest~~has atbeen represented by a ~~rate~~New ofNote. 3%In addition, ~~per~~the ~~annum~~Security Agreement was also amended and ~~had~~restated ato ~~maturity~~secure ~~date~~our obligations under all the notes issued under the 2014 Credit Facility as of ~~May~~June 1330, ~~2015~~2016 (and all the ~~“May~~New ~~2013 Secured~~Notes ~~Note”)~~issued pursuant to the Second Amended and Restated Agreement.

On August 2731, ~~2013~~2016, we ~~raised~~and ~~$1,000,000 of~~Niobe ~~additional~~agreed ~~working~~to ~~capital~~extend ~~pursuant~~the tomaturity andate ~~incremental~~of ~~loan~~the ~~from~~Consolidated ~~Niobe~~Note and ~~issued~~the tomaturity ~~Niobe~~dates aof ~~secured~~all ~~promissory~~thirteen ~~note~~outstanding inOriginal Notes ~~the~~with an aggregate principal amount of $15,~~000~~030,000, ~~which~~from ~~bears~~September ~~interest~~1, at2016 ato ~~rate~~September 1, 2017. All other terms and provisions of 3%the ~~per~~Consolidated ~~annum~~Note and ~~matures~~Original onNotes ~~August~~remained ~~27,~~unchanged ~~2015~~and ~~(the~~in ~~“August~~full ~~2013~~force ~~Secured Note”)~~and effect.

~~Collectively~~On October 31, 2016, the ~~January~~2014 ~~2013~~Credit ~~Secured~~Facility was amended to increase the funds available for loans to us to $11.25 million and to extend the expiration ~~Note,~~date of the ~~May~~facility ~~2013~~to ~~Secured~~June ~~Note~~15, 2017 (the “Third Amended and Restated Agreement”). Each loan under the ~~August~~Third ~~2013~~Amended and ~~Secured~~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”). ~~are~~The ~~hereinafter~~Security ~~referred~~Agreement was also amended and restated to assecure our obligations under all the ~~“2013~~notes ~~Secured~~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.

~~Collectively,~~As ~~the~~of ~~2012~~May ~~Secured~~31, ~~Notes~~2017, ~~and~~ the ~~2013~~outstanding ~~Secured~~principal balance ~~Notes~~under ~~represent~~the a2014 ~~total~~Credit ofFacility totaled $911,~~000~~080,000. inDuring ~~principal~~the ~~amount~~year ofended ~~loans~~May ~~from~~31, ~~Niobe~~2017, ~~and~~we ~~are~~borrowed ~~hereinafter~~an ~~referred~~aggregate ~~to as~~of ~~the “Secured Notes~~$3,980,000.”

On ~~October~~June 111, ~~2013~~2017, wethe ~~issued~~2014 aCredit ~~Consolidated,~~Facility ~~Amended~~was ~~and~~amended ~~Restated Promissory Note~~ to ~~Niobe~~increase in the ~~principal~~funds ~~amount~~available offor ~~$9,219,366~~loans ~~(the~~to ~~“Consolidated~~us ~~Note”). The~~to ~~face amount of the Consolidated Note reflects the~~ $913.005 million ~~aggregate~~and ~~principal~~to ~~amount~~extend of the ~~Secured~~expiration ~~Notes plus interest accrued at 3% per annum on each note from its respective~~ date of ~~issuance. The~~such ~~terms of the Consolidated Note were identical~~facility to ~~the~~March ~~Secured Notes except that: (a) the maturity date was September 1~~31, ~~2015,~~2018 ~~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~~Fourth ~~Events”~~Amended inand anRestated ~~amount equal to twenty-five (25%) percent of such gross proceeds (the “Mandatory Repayment~~Agreement”). A ~~“Liquidity~~Each ~~Event”~~loan ~~means~~under ~~(a)~~ the ~~sale~~Fourth ofAmended ~~any of our equity, or equity-linked, securities,~~ and ~~(b)~~Restated ~~the~~Agreement will ~~receipt~~be ofrepresented ~~proceeds,~~by ~~directly or indirectly related to~~ a ~~development~~2018 ~~and/or commercialization relationship entered into with an unaffiliated third party~~Note. InThe ~~the~~Security ~~Secured~~Agreement ~~Notes, the entire principal amount of each note~~ was ~~due,~~also atamended ~~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~~restated ~~security~~to ~~agreements~~also ~~entered~~secure ~~into,~~ our obligations under all the ~~Consolidated Note~~2018 ~~are~~Notes ~~secured~~issued ~~by a first priority perfected security interest in all of our assets~~ pursuant to athe ~~Consolidated,~~Fourth Amended and Restated ~~Security~~ Agreement ~~dated October 11, 2013~~.

On ~~January~~June 2315, ~~2014~~2017, weJuly ~~consummated~~10, a2017 ~~private~~and August ~~placement~~10, ~~financing to accredited investors of 471~~2017,~~334~~ ~~shares~~we ofborrowed ~~common stock at~~ $~~6.00 per share~~290,000, ~~yielding gross proceeds of~~ $2290,~~828,~~000~~. No~~ ~~commissions~~and ~~were payable in connection with the financing transaction. Proceeds of the financing have been~~$290,000, ~~and will continue to be~~respectively, ~~used~~under ~~for~~the ~~working~~2014 ~~capital~~Credit ~~purposes,~~Facility ~~principally~~pursuant to ~~fund~~the ~~ongoing~~Fourth ~~clinical trials~~ Amended and ~~studies~~Restated Agreement and ~~related~~issued ~~activities. The~~Niobe ~~investors~~a innew ~~the~~2018 ~~offering~~Note ~~were~~for ~~granted~~each ~~piggy-back~~borrowing ~~registration rights~~ in ~~connection~~the ~~with~~same ~~certain~~principal ~~registration~~amount ~~statements~~of ~~filed by~~each ~~us, subject to certain exceptions, including a registration statement filed in connection with a primary offering~~loan.

On ~~November~~August 422, ~~2014~~2017, we ~~entered~~and ~~into~~Niobe aagreed ~~new~~to ~~Credit~~extend ~~Facility Agreement (~~the ~~“2014~~maturity ~~Credit~~date ~~Facility~~of ~~Agreement”)~~all ~~pursuant~~outstanding tonotes ~~which~~issued ~~we may borrow up~~ to anNiobe ~~additional $5.0 Million~~ from ~~Niobe,~~the incurrent ~~the~~maturity ~~form~~date of ~~secured~~March ~~loans~~31, in2018 ~~accordance~~to ~~with~~a ~~the 2014 Credit Facility Agreement at any time prior~~new tomaturity ~~the December 31, 2015 expiration~~ date ~~(the “2014 Credit Facility”). Each loan made under the 2014 Credit Facility Agreement has been represented by a senior secured promissory note bearing interest at a rate~~ of ~~3% per annum which matures on~~ September 1, ~~2016 (each an “Original Note”)~~2018. All ~~Our~~other ~~obligations~~terms ~~under~~and ~~each~~provisions ~~Original Note have been secured by a first priority perfected security interest in all~~ of ~~our~~such ~~assets~~notes ~~pursuant~~remained tounchanged ~~the Second Consolidated, Amended~~ and ~~Restated~~in ~~Security~~full ~~Agreement between~~force us and ~~Niobe, entered into at the same time as the 2014 Credit Facility Agreement (the “Security Agreement”)~~ effect.

InAs ~~addition,~~of onAugust ~~November~~31, 42017, the outstanding principal balance under the 2014 Credit Facility totaled $11,950,000. weDuring ~~entered into~~the athree ~~Note~~months ~~Modification~~ended ~~Agreement~~August (31, 2017, the ~~“Note~~Company ~~Modification~~borrowed ~~Agreement”)~~an ~~with~~aggregate ~~Niobe~~of ~~pursuant~~$870,000; to$290,000 ~~which~~on ~~the~~June ~~Consolidated Note~~15, as2017, ~~modified~~$290,000 inon ~~October~~July ~~2014~~10, ~~was~~2017, ~~further~~and ~~amended~~$290,000 toon ~~increase~~August 10, 2017. Payment of the ~~threshold~~principal ~~amount~~and ~~requiring~~accrued ainterest ~~Mandatory~~on ~~Prepayment~~all ~~from~~outstanding ~~$7.5 Million~~notes toissued ~~more~~under ~~than~~the ~~$10~~2014 ~~Million.~~Credit AsFacility awill, ~~result~~at Niobe’s election, ~~partial~~automatically ~~prepayment~~become ~~will~~immediately ~~now~~due beand ~~triggered~~payable inif the ~~event~~Company ofundertakes acertain ~~Liquidity~~Fundamental ~~Event~~Transactions or inupon ~~which we~~an ~~receive~~Event ~~gross~~of ~~proceeds~~Default, inboth ~~excess~~as ofdefined ~~$10~~in ~~million~~such notes. ~~All~~The ~~other~~Company’s ~~terms~~obligations ~~and~~under ~~provisions~~all ofsuch ~~the~~notes ~~Consolidated~~are ~~Note~~secured ~~remained unchanged~~by ~~and~~the inSecurity ~~full~~Agreement, ~~force~~as ~~and effect~~amended.

On ~~December~~September 115, ~~2015~~2017, ~~the~~we ~~2014~~borrowed ~~Credit~~an ~~Facility was~~additional ~~amended to increase the funds available for loans to us to~~ $~~7.5~~290,000 under ~~million and to extend~~ the ~~expiration~~terms ~~date~~ of ~~such~~the ~~credit~~Fourth ~~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~~issued ~~Agreement~~Niobe ~~has been and will be represented by~~ a ~~senior secured~~2018 ~~promissory~~Note ~~note~~with ~~bearing interest at~~ a ~~rate~~maturity date of ~~3% per annum which matures on~~ September 1, ~~2017~~2018 (~~each~~ a “New 2018 Note”)~~. In~~ ~~addition,~~for the ~~Security~~loan in ~~Agreement was also amended and restated to secure our obligations under all~~ the ~~Original~~same ~~Notes~~principal ~~and all the New Notes~~amount.

OnAll ~~June~~of ~~30,~~the ~~2016,~~ securities issued in the ~~2014~~aforementioned financings ~~Credit~~were ~~Facility~~issued ~~was~~in ~~again~~reliance ~~amended~~upon tothe ~~increase~~exemption from the ~~funds~~registration ~~available~~requirements ~~for~~of ~~loans~~the toSecurities usAct toof ~~$9.0~~1933, ~~million~~as amended (the “~~Second Amended and Restated Agreement~~Act”). ~~Each~~pursuant ~~loan~~to ~~under~~Section ~~the~~4(a)(5) ~~Second Amended~~ and ~~Restated~~Rule ~~Agreement~~506 ~~has~~of ~~been~~Regulation ~~represented~~D ~~by a New Note~~thereof. The ~~In addition~~offer, ~~the~~sale ~~Security~~and ~~Agreement~~issuance of ~~was~~such ~~also~~securities ~~amended~~were ~~and~~made ~~restated~~without togeneral ~~secure~~solicitation ~~our~~or ~~obligations~~advertising. ~~under~~The ~~all~~securities ~~the~~were ~~notes~~offered and issued ~~under~~only ~~the~~to ~~2014~~“accredited ~~Credit~~investors” ~~Facility~~ as ofsuch ~~June~~term ~~30,~~is ~~2016~~defined ~~and~~in ~~all~~Rule ~~the~~501 ~~New~~under ~~Notes issued pursuant to~~ the ~~Second Amended and Restated Agreement~~Act.

OnAbout August 31, 2016, we and Niobe agreed to extend the maturity date of the Consolidated Note and the maturity dates of all thirteen outstanding Original Notes with an aggregate principal amount of $5,030,000, from September 1, 2016 to September 1, 2017. All other terms and provisions of the Consolidated Note and Original Notes remained unchanged and in full force and effect.PRTX-100

OnPRTX-100 ~~October~~is ~~31,~~a ~~2016~~proprietary, ~~the~~ ~~2014~~highly ~~Credit~~purified form ~~Facility~~of ~~was~~the ~~amended~~Staphylococcal tobacterial ~~increase~~protein ~~the~~known ~~funds~~as ~~available~~Protein ~~for~~A ~~loans~~which tois usa tobacterial ~~$11.25~~protein ~~million~~known ~~and~~ to ~~extend~~modify ~~the~~aspects ~~expiration date~~ of the ~~facility~~human immune tosystem. ~~June~~PRTX-100 ~~15,~~has ~~2017 (~~the ~~“Third~~ability, ~~Amended~~at ~~and~~very ~~Restated~~low ~~Agreement”).~~concentrations, ~~Each~~to ~~loan~~bind ~~under~~to ~~the~~human ~~Third~~B-lymphocytes ~~Amended~~ and ~~Restated~~macrophages ~~Agreement~~and ~~will~~to bemodulate immune ~~represented~~processes. byPre-clinical astudies ~~senior~~also ~~secured~~demonstrate ~~promissory~~that ~~note~~low ~~bearing~~doses ~~interest~~of atPRTX-100 ahave ~~rate~~potent oftherapeutic 3%effects ~~per~~in ~~annum~~certain ~~which~~models ~~matures~~of onimmune-mediated ~~March~~inflammatory ~~31, 2018 (each a “2018 Note”)~~diseases. ~~The~~Both ~~Security~~the ~~Agreement~~PRTX-100-103 ~~was also amended~~ and ~~restated to secure our obligations under all~~ the ~~notes~~PRTX-100-104 ~~issued~~studies ~~under~~demonstrated ~~the~~that ~~2014~~PRTX-100 ~~Credit~~was ~~Facility~~generally safe asand ofwell ~~October~~tolerated ~~31,~~at ~~2016 and~~ all ~~the~~dose ~~2018 Notes. In addition~~levels, we and ~~Niobe~~at ~~also~~certain ~~agreed~~higher todoses, ~~extend~~more topatients ~~March~~showed ~~31,~~improvement ~~2018,~~in ~~the~~measures ~~maturity dates~~ of ~~the~~disease activity ~~Consolidated~~than ~~Note~~did ~~and~~patients ~~all~~at the ~~notes~~lower ~~issued~~dose ~~and outstanding~~or ~~under~~placebo ~~the 2014 Credit Facility as of October 31, 2016~~cohorts.

AsAnimal of February 28, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $10,210,000. During the nine months ended February 28, 2017, we borrowed an aggregate of $3,110,000; $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, and $290,000 on February 2, 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.Studies

15Protalex’s lead product candidate, PRTX-100, has demonstrated positive results in several standard mouse models of autoimmunity, including the following:

OnCollagen-Induced ~~March~~Arthritis 3- PRTX-100 has demonstrated reproducible efficacy in this well-established animal model of RA. Mice received two injections of collagen in order to stimulate an inflammatory response. One group was treated with various doses of PRTX-100, ~~2017~~a second group received Enbrel®, a weleading ~~borrowed~~commercially anavailable ~~additional~~treatment ~~$290~~for RA,~~000~~ ~~under~~and the ~~terms~~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 ~~Third~~first ~~Amended~~two to three weeks of treatment, and ~~Restated~~slowed disease ~~Agreement~~progression as compared with the control group. Thereafter, the PRTX-100-treated mice continued to remain disease-free whereas the mice treated with Enbrel® showed a resumption of joint inflammation and ~~issued~~tissue ~~Niobe~~damage. This response to Enbrel® was expected because the mice developed immune response to it because it is a ~~2018~~foreign ~~Note~~protein. ~~for~~Overall, ~~this~~these ~~loan~~results indicate that PRTX-100 is a potential treatment for RA in ~~the~~humans. ~~same~~The ~~principal~~data ~~amount~~from these studies has served as a rationale for conducting clinical trials in human patients.

~~All~~BXSB ofMice ~~the~~- ~~securities~~These ~~issued~~animals are ingenetically ~~the~~predisposed ~~aforementioned financings~~to ~~were~~autoimmune ~~issued~~diseases. inThis ~~reliance~~model ~~upon~~is ~~the~~used ~~exemption~~to ~~from~~evaluate ~~the~~drugs ~~registration~~for ~~requirements~~autoimmune ofdiseases ~~the~~such ~~Securities~~as ~~Act~~Lupus and ofother ~~1933,~~autoimmune asdiseases. ~~amended (~~This genetic model more closely approximates the ~~“Act”)~~human ~~pursuant~~condition toin ~~Section~~that ~~4(a)(5)~~it is complex, multi-factorial and ~~Rule~~usually ~~506~~treated ofby ~~Regulation~~multiple Ddrug ~~thereof~~regimens. ~~The~~ ~~offer~~In these studies, ~~sale~~mice were treated with PRTX-100 and ~~issuance of~~sacrificed ~~such~~at ~~securities~~regular intervals. Their organs were ~~made~~weighed ~~without~~and ~~general~~sectioned ~~solicitation~~for orhistological ~~advertising.~~analysis ~~The~~and ~~securities~~their spleens were ~~offered~~used ~~and~~for ~~issued~~immunological ~~only~~assays. ~~to “accredited~~Spleen ~~investors”~~enlargement, asor ~~such~~splenomegaly, ~~term~~was issignificantly ~~defined~~reduced in ~~Rule~~treated ~~501~~animals ~~under~~compared with the ~~Act~~controls at almost every time point, demonstrating the ability of PRTX-100 to delay the onset and severity of this disease.

~~About PRTX-100~~ 15

~~PRTX~~Completed pre-~~100~~clinical issafety astudies ~~proprietary, highly purified~~in ~~form~~animals ofshowed ~~the~~no ~~Staphylococcal~~drug-related ~~bacterial~~toxicity ~~protein~~at ~~known~~doses asup ~~Protein A which is a bacterial protein known~~ to ~~modify~~5-fold ~~aspects of~~ the ~~human immune~~highest ~~system.~~currently ~~PRTX-100~~planned ~~has~~clinical ~~the~~trial ~~ability,~~dose. atThese ~~very~~studies were ~~low~~conducted ~~concentrations,~~on toNew ~~bind~~Zealand towhite ~~human~~rabbits ~~B-lymphocytes~~ and ~~macrophages~~on ~~and~~cynomolgus ~~to modulate immune processes~~monkeys. ~~Pre-clinical~~No ~~studies~~differences ~~also~~were ~~demonstrate~~observed ~~that~~in ~~low~~body ~~doses~~weight ofgain ~~PRTX-100~~or ~~have~~food consumption, ~~potent~~nor ~~therapeutic effects~~ in ~~certain~~hematology, ~~models of~~clinical ~~immune-mediated~~chemistry, ~~inflammatory~~urinalysis, ~~diseases.~~or ~~Both~~organ ~~the~~weight ~~PRTX-100-103~~data ~~and~~in ~~the~~animals ~~PRTX-100-104~~treated ~~studies~~with ~~demonstrated that~~ PRTX-100 ~~was generally~~compared ~~safe~~with ~~and~~controls ~~well~~treated ~~tolerated~~with atvehicle. ~~all~~These ~~dose~~study ~~levels,~~results ~~and~~represent ata ~~certain~~necessary ~~higher~~component ~~doses, more patients showed improvement in measures~~ of ~~disease activity~~our ~~than~~IND ~~did~~application ~~patients~~with at the ~~lower dose or placebo cohorts~~FDA.

~~Animal~~Additional ~~Studies~~studies in monkeys have further characterized the PK, toxicity, and pharmacodynamics of PRTX-100 with up to 12 weekly doses.

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

~~Collagen-Induced~~Favorable ~~Arthritis~~ pre- ~~PRTX-100~~clinical ~~has~~safety ~~demonstrated~~and ~~reproducible~~ efficacy studies infor ~~this~~our ~~well-established~~lead ~~animal~~compound, ~~model~~PRTX-100, oflaid ~~RA.~~the ~~Mice~~foundation ~~received~~for ~~two~~the ~~injections~~IND offor ~~collagen in~~treating ~~order to stimulate an inflammatory response~~RA. ~~One~~We ~~group~~submitted ~~was~~the ~~treated~~IND ~~with~~to ~~various~~the ~~doses~~FDA ofin ~~PRTX-100, a second group received Enbrel®,~~March a2005 ~~leading~~and ~~commercially~~later ~~available~~in ~~treatment~~March ~~for~~2005 ~~RA, and~~ the ~~control~~FDA ~~group~~verbally ~~was~~disclosed ~~injected~~to ~~with~~us ~~vehicle~~that ~~saline~~it ~~solution.~~had ~~The~~placed ~~mice~~our ~~were observed~~IND ~~for~~on clinical ~~symptoms~~hold, ~~joint~~pending ~~size~~additional ~~and loss of function~~product characterization. ~~The~~In ~~results~~August ~~showed~~2005, ~~that~~we ~~low~~formally ~~doses~~replied ofto ~~PRTX-100~~the FDA and ~~standard~~in ~~doses of~~September ~~Enbrel®~~2005, ~~suppressed~~the ~~clinical~~FDA ~~symptoms~~notified ~~including~~us ~~joint~~that ~~swelling~~it ~~over~~had lifted the ~~first~~clinical ~~two~~hold toon ~~three~~our ~~weeks~~IND ~~of treatment,~~ and ~~slowed disease~~that ~~progression~~our asproposed ~~compared~~study ~~with~~could ~~the control group~~proceed. ~~Thereafter,~~We ~~the~~have ~~PRTX-100-treated~~completed ~~mice~~five ~~continued~~clinical totrials ~~remain~~under ~~disease-free~~this IND. ~~whereas~~Our ~~the~~first ~~mice~~Phase ~~treated~~I ~~with~~single-dose ~~Enbrel®~~clinical ~~showed~~trial acommenced ~~resumption~~in ofDecember ~~joint~~2005 ~~inflammation~~ and ~~tissue~~was ~~damage~~completed in March 2006. This ~~response~~trial towas ~~Enbrel®~~performed ~~was~~in ~~expected~~healthy ~~because~~volunteers ~~the~~and ~~mice~~was ~~developed~~designed ~~immune~~primarily ~~response~~ to itassess ~~because~~the itsafety isand atolerability ~~foreign~~of ~~protein.~~a ~~Overall,~~single ~~these~~intravenous ~~results~~dose ~~indicate~~of PRTX-100. This study demonstrated that PRTX-100 isappears asafe ~~potential~~and ~~treatment~~well-tolerated ~~for~~at RAthe indoses ~~humans~~administered. ~~The~~There ~~data~~were ~~from~~no ~~these~~deaths ~~studies~~or ~~has~~serious adverse ~~served~~events. asThe aPK ~~rationale~~profile ~~for~~was ~~conducting~~determined ~~clinical trials~~and infound ~~human~~consistent ~~patients~~with that projected from pre-clinical models.

~~BXSB~~In ~~Mice~~May -2007, ~~These~~we ~~animals are~~filed ~~genetically~~an ~~predisposed~~amendment to ~~autoimmune~~the IND ~~diseases~~with the FDA. This ~~model~~amendment isincluded ~~used~~the tofinal ~~evaluate~~Phase ~~drugs~~I ~~for~~safety ~~autoimmune~~study ~~diseases~~report ~~such~~from asthe ~~Lupus and~~2006 ~~other~~trial, ~~autoimmune~~changes ~~diseases.~~to ~~This~~our ~~genetic~~techniques for ~~model~~purification ~~more~~and ~~closely~~characterization ~~approximates~~of ~~the~~PRTX-100, ~~human~~a ~~condition~~Chemistry, inManufacturing ~~that~~and itControls ~~is complex~~update, ~~multi-factorial~~ and ~~usually~~a ~~treated~~protocol byfor ~~multiple~~a ~~drug~~second single-dose ~~regimens~~Phase I clinical trial. In ~~these~~July ~~studies~~and August 2007 a second Phase I study was performed under the IND, ~~mice~~to ~~were~~further ~~treated~~characterize the ~~with~~safety, PK, and pharmacodynamic profile of a single-dose of PRTX-100 ~~and~~in ~~sacrificed~~healthy volunteers at ~~regular~~doses ~~intervals.~~in the projected therapeutic ~~Their~~range. ~~organs~~Final ~~were~~results ~~weighed~~indicated ~~and~~that ~~sectioned~~the ~~for~~drug ~~histological~~appears ~~analysis~~safe and ~~their~~well-tolerated. ~~spleens~~In ~~were~~August ~~used~~2009, ~~for~~a ~~immunological~~Phase ~~assays.~~1b ~~Spleen~~randomized, double-blind, ~~enlargement~~placebo-controlled, ormultiple ~~splenomegaly~~dose, ~~was~~dose-escalation ~~significantly~~and ~~reduced~~tolerability study of PRTX-100 in ~~treated~~combination ~~animals~~with ~~compared~~methotrexate or leflunomide in patients with active RA, (the ~~controls~~“PRTX at100-103 ~~almost~~Study”) ~~every~~was ~~time~~approved ~~point, demonstrating~~by the ~~ability~~South ofAfrican Medicines Control Agency. The PRTX-100-103 toStudy ~~delay~~commenced ~~the~~in ~~onset~~August 2010 at three sites in South Africa and ~~severity~~was ofcompleted ~~this~~in ~~disease~~January 2012 as detailed below.

~~Completed~~In ~~pre-clinical~~November ~~safety~~2012, ~~studies~~we incommenced enrollment ~~animals~~and ~~showed~~dosing noof ~~drug-related~~patients ~~toxicity~~ at ~~doses~~a uptotal toof ~~5-fold~~nine sites in the ~~highest~~United ~~currently~~States ~~planned~~for ~~clinical~~the ~~trial~~PRTX-100-104 ~~dose.~~Study, ~~These~~a ~~studies~~second multicenter Phase 1b ~~were~~randomized, ~~conducted~~multiple-dose, ondose-escalation ~~New~~study ~~Zealand~~of ~~white~~PRTX-100 ~~rabbits~~in ~~and~~combination onwith ~~cynomolgus~~methotrexate ~~monkeys.~~or Noleflunomide ~~differences~~in ~~were~~adults ~~observed~~with active RA which is still in ~~body~~progress ~~weight~~as ~~gain~~detailed orbelow. ~~food~~The PRTX-100-104 Study sequentially escalated the weekly dose of PRTX-100 from ~~consumption~~1.5 micrograms/kg, ~~nor~~the highest dose in ~~hematology,~~the ~~clinical~~prior ~~chemistry,~~RA ~~urinalysis~~patient study, orto ~~organ~~doses ~~weight~~of ~~data~~3.0, in6.0, ~~animals~~and ~~treated~~12.0 ~~with~~micrograms/kg. of PRTX-100. ~~compared~~In ~~with~~July ~~controls~~2014, ~~treated~~the ~~with~~last ~~vehicle.~~patient ~~These~~in ~~study~~the ~~results~~PRTX-100-104 ~~represent~~Study areceived ~~necessary~~their ~~component~~last ofdose ~~our~~in ~~IND~~the ~~application~~fifth ~~with~~and ~~the~~final ~~FDA~~cohort.

~~Additional~~In ~~studies~~February in2015, ~~monkeys~~we ~~have~~commenced ~~further~~enrollment, ~~characterized~~at ~~the~~a PKsingle U.S. site, ~~toxicity~~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 ~~pharmacodynamics~~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 upultrasound toand 12biomarkers ~~weekly~~as ~~doses~~disease markers. A total of eight patients completed all 105 Study visits per protocol.

Immune Thrombocytopenia (ITP) - ITP is an uncommon autoimmune bleeding disorder characterized by insufficient platelets in the blood. The affected individuals make antibodies against their own platelets leading to the platelets' destruction, which in turn leads to the abnormal bleeding. A small clinical trial in adult patients with chronic ITP was designed to provide safety data on repeated weekly dosing with PRTX-100 (the “PRTX-100b-103 Study”). This clinical study was to be conducted under the Australian and New Zealand Clinical Trial ~~Trials~~Notification procedure, not under a U.S. IND, and was initiated, but not completed. A leading Australian clinical research organization was contracted to manage and monitor this clinical trial. After the approval of the clinical protocol by ethics committees at six sites in Australia and one in New Zealand, the PRTX-100b-103 Study began enrolling patients in the second quarter of 2008. The PRTX-100b-103 Study was designed to evaluate the safety and PK of up to four doses of PRTX-100, starting at the lowest dose, and escalating upwards after safety review of the prior dose.

~~Favorable~~The ~~pre~~PRTX-~~clinical~~100b-103 ~~safety~~Study ~~and~~proved ~~efficacy~~difficult ~~studies~~to ~~for~~enroll ~~our~~due ~~lead~~to ~~compound,~~other ~~PRTX~~on-~~100,~~going ~~laid~~ITP ~~the~~Phase ~~foundation~~III ~~for~~studies ~~the~~and ~~IND~~subsequent ~~for~~availability ~~treating~~of ~~RA.~~two Wenew ~~submitted~~and ~~the~~effective ~~IND~~medicines tofor ~~the~~ITP. ~~FDA in March~~Nine ~~2005~~patients ~~and~~were ~~later~~dosed inat ~~March~~the ~~2005~~first ~~the~~two ~~FDA~~dose ~~verbally~~levels ~~disclosed~~by tothe usend ~~that~~of itthe ~~had~~first ~~placed~~quarter ~~our~~of ~~IND~~2009. onAt ~~clinical~~this ~~hold,~~point ~~pending~~further ~~additional~~recruitment ~~product~~of ~~characterization.~~patients Inwas ~~August~~suspended. ~~2005,~~No weside ~~formally~~effects ~~replied~~or totoxicities ~~the~~were ~~FDA~~noted ~~and~~with inrepeated ~~September~~weekly ~~2005,~~doses ~~the~~of ~~FDA~~PRTX-100 ~~notified~~at usdoses ~~that~~of it0.075 ~~had~~and ~~lifted~~0.15 ~~the~~micrograms ~~clinical~~per ~~hold~~kg ~~on our IND and~~ that ~~our~~were ~~proposed~~not ~~study~~seen ~~could~~with ~~proceed.~~single Wedoses ~~have~~in ~~completed~~healthy ~~five~~volunteer ~~clinical~~ trials ~~under this IND~~. ~~Our~~ ~~first~~This ~~Phase I single~~repeated-dose ~~clinical~~safety ~~trial~~data ~~commenced~~from inthe ~~December~~PRTX-100b-103 Study ~~2005 and~~ was ~~completed~~included in ~~March~~the ~~2006.~~clinical ~~This~~ trial ~~was~~application ~~performed in healthy volunteers and was designed primarily~~ to ~~assess~~evaluate ~~the safety and tolerability of a single intravenous dose of~~ PRTX-100~~. This~~ ~~study~~in ~~demonstrated~~patients ~~that PRTX-100 appears safe and well-tolerated at the doses administered. There were no deaths or serious adverse events. The PK profile was determined and found consistent~~ with ~~that projected from pre-clinical models~~RA.

In ~~May~~March ~~2007~~2015, ~~we filed an amendment to~~ the ~~IND~~ ~~with the~~ FDA. ~~This~~accepted ~~amendment~~our ~~included~~IND application ~~the~~for ~~final~~a Phase I/II ~~safety~~open-label, dose-escalating study ~~report~~of ~~from~~PRTX-100 ~~the~~in ~~2006~~adults ~~trial,~~with ~~changes~~persistent/chronic toITP ~~our~~(the ~~techniques for purification and characterization of~~ “PRTX-100,-202 Study”). aIn ~~Chemistry,~~June ~~Manufacturing and Controls update~~2015, ~~and~~the aFDA ~~protocol~~granted ~~for~~ODD ato ~~second single~~PRTX-~~dose~~100 ~~Phase~~for Ithe ~~clinical~~treatment ~~trial~~of ITP. In July ~~and~~2015, ~~August~~the ~~2007~~EMA agranted ~~second~~approval for a Phase I1b open-label, dose-escalating study ~~was~~of ~~performed~~PRTX-100 ~~under~~in ~~the~~adult ~~IND,~~patients towith ~~further~~persistent/chronic ~~characterize~~ ITP (the ~~safety,~~“PRTX-100-203 Study”). ~~PK,~~In ~~and~~September ~~pharmacodynamic~~2015, ~~profile~~COMP ofissued a ~~single-dose~~positive ofopinion recommending PRTX-100 infor ~~healthy~~designation ~~volunteers~~as atan ~~doses~~orphan inmedicinal ~~the projected therapeutic~~product ~~range.~~for ~~Final results indicated that~~ the ~~drug~~treatment ~~appears~~of ~~safe and well-tolerated~~ITP. In ~~August~~November ~~2009~~2015, awe ~~Phase~~enrolled 1bour ~~randomized,~~first ~~double-blind, placebo-controlled,~~patient ~~multiple~~in ~~dose,~~the ~~dose-escalation and tolerability study of~~ PRTX-100-202 Study in ~~combination~~the ~~with~~United ~~methotrexate~~States orand ~~leflunomide~~ in January ~~patients~~2016 ~~with~~enrolled ~~active~~our ~~RA,~~first (patient in the “PRTX 100-~~103~~203 Study”) ~~was~~in ~~approved~~Europe. byEnrollment ~~the~~is ~~South~~continuing ~~African~~in ~~Medicines~~both ~~Control~~studies ~~Agency.~~in the third ~~The~~cohorts ~~PRTX-100-103~~at ~~Study~~an ~~commenced~~increased indose. In August ~~2010~~2017, atOOPD ~~three~~awarded ~~sites~~us ina ~~South~~grant ~~Africa~~of ~~and~~$403,000 ~~was~~to ~~completed~~support inthe ~~January~~future ~~2012~~clinical development of PRTX-100 as ~~detailed~~a ~~below~~treatment for ITP.

InRheumatoid ~~November~~arthritis ~~2012, we commenced enrollment~~- ~~and~~RA ~~dosing~~is ~~of patients at~~ a ~~total~~highly ofinflammatory ~~nine~~polyarthritis ~~sites~~often inleading ~~the~~to ~~United~~joint ~~States~~destruction, ~~for~~deformity ~~the~~and ~~PRTX-100-104~~loss ~~Study,~~of afunction. ~~second~~In ~~multicenter~~addition ~~Phase 1b~~to ~~randomized,~~characteristic ~~multiple-dose,~~symmetric ~~dose-escalation~~swelling ~~study~~ of ~~PRTX-100~~peripheral injoints, ~~combination~~systemic ~~with~~symptoms ~~methotrexate~~related orto ~~leflunomide~~chronic ininflammation ~~adults~~can ~~with~~commonly ~~active~~occur. Chronic RApain, ~~which~~disability isand ~~still~~excess inmortality ~~progress~~are asunfortunate ~~detailed below~~sequelae. ~~The~~RA ~~PRTX-100-104~~is ~~Study sequentially escalated~~ the ~~weekly~~most ~~dose~~common ofautoimmune ~~PRTX-100 from 1.5 micrograms/kg~~disease, ~~the~~affecting ~~highest~~1% ~~dose in the prior RA patient study,~~ to ~~doses~~2% of ~~3.0, 6.0, and 12.0 micrograms/kg. of PRTX-100. In~~ ~~July 2014,~~ the ~~last~~world’s ~~patient~~population, inwith ~~the~~prevalence ~~PRTX-100-104~~rising ~~Study~~with ~~received~~age ~~their~~to ~~last~~about ~~dose~~5% in ~~the~~women ~~fifth~~over ~~and final cohort~~55.

InPRTX-100 ~~February~~shows ~~2015,~~measurable weactivity ~~commenced~~in ~~enrollment, at~~ a ~~single~~standard ~~U.S.~~mouse ~~site,~~ model of aautoimmune ~~Phase~~arthritis. ~~I/II~~A ~~open-label,~~substantial ~~multiple,~~body ~~fixed-dose~~of ~~study~~published ~~(the~~literature ~~“PRTX-100-105~~and ~~Study”)~~proprietary ~~which~~data ~~was open~~delineate ~~only~~the toimmunomodulatory activities of PRTX-100~~-104~~, ~~Study~~which ~~patients~~are ~~who~~distinct ~~indicated~~from ~~their~~those ~~desire~~of ~~for~~current ~~additional~~major ~~treatment.~~biologic ~~The~~treatments ~~PRTX-100-105~~for ~~Study~~rheumatoid ~~was~~arthritis. ~~an open-label~~Accordingly, ~~single~~ ~~group~~we ~~study~~believe that ~~with~~RA ~~former~~represents ~~participants~~a ~~from~~potentially ~~the~~important ~~104~~clinical ~~Study~~indication ~~who~~for ~~were~~treatment ~~eligible~~with ~~to receive a fixed dose of~~ PRTX-100 ~~over a 6-month period~~. ~~The~~While ~~primary~~recent ~~study~~advances ~~endpoint~~in ofbiologic ~~the~~treatments for ~~105~~RA ~~Study~~have ~~was~~improved the ~~safety~~prognosis ~~and~~for ~~tolerability~~many ofpatients, amany ~~fixed~~others ~~dose~~continue ofto ~~PRTX-100~~live ~~administered~~with ~~over an~~debilitating ~~extended period. The secondary endpoints included immunogenicity, effects on measures of~~ RA disease activity, ~~evaluation~~due ofeither ~~anti-PRTX-100~~to ~~antibody~~the ~~presence~~cost, ~~and~~side-effects, ~~feasibility~~or oflimited ~~joint~~effectiveness ~~evaluations with ultrasound and biomarkers as disease markers. A total~~ of ~~eight~~these ~~patients~~newer ~~completed all 105 Study visits per protocol~~therapies.

~~Immune Thrombocytopenia (ITP) - ITP is an uncommon autoimmune bleeding disorder characterized by insufficient platelets in the blood.~~ The affected individuals make antibodies against their own platelets leading to the platelets' destruction, which in turn leads to the abnormal bleeding. A small clinical trial in adult patients with chronic ITP was designed to provide safety data on repeated weekly dosing with PRTX-100 ~~(the “PRTX~~-~~100b-~~103 Study”). This clinical study was to be conducted under the Australian and New Zealand Clinical Trial Notification procedure, not under a U.S. IND, and was initiated, but not completed. A leading Australian clinical research organization was contracted to manage and monitor this clinical trial. After the approval of the clinical protocol by ethics committees at six sites in Australia and one in New Zealand, the PRTX-100b-103 Study began enrolling patients in the second quarter of 2008. The PRTX-100b-103 Study was designed to evaluate the safety and PK of up to four doses of PRTX-100, starting at the lowest dose, and escalating upwards after safety review of the prior dose.

~~The~~In ~~PRTX-100b-103~~August ~~Study~~2010, ~~proved~~we ~~difficult~~commenced a multi-center toPhase ~~enroll~~1b ~~due~~clinical totrial ~~other~~of onPRTX-~~going~~100 ~~ITP~~in ~~Phase~~South ~~III~~Africa ~~studies~~on ~~and~~adult ~~subsequent~~patients ~~availability~~with ofactive ~~two~~RA ~~new~~on ~~and~~methotrexate ~~effective~~or ~~medicines for ITP~~leflunomide. ~~Nine~~The PRTX-100-103 ~~patients~~Study ~~were~~served ~~dosed~~to atevaluate ~~the~~safety ~~first~~and ~~two~~potential ~~dose~~efficacy ~~levels~~of byPRTX-100 ~~the~~in ~~end~~patients ofwith ~~the~~active ~~first~~RA ~~quarter~~and ofwas ~~2009.~~approved Atto ~~this~~enroll ~~point~~up ~~further recruitment of~~to 40 patients ~~was~~in ~~suspended~~four dose-escalating cohorts. NoIn ~~side~~January ~~effects~~2012, orwe ~~toxicities~~completed ~~were~~patient ~~noted~~dosing ~~with~~in ~~repeated~~the ~~weekly~~fourth ~~doses~~cohort of the PRTX-100-103 Study. atA ~~doses~~total of ~~0.075~~37 ~~and~~patients were enrolled in four cohorts ranging from 0.15 ~~micrograms~~ ~~per~~ micrograms/kg ~~that~~to ~~were~~1.50 ~~not~~micrograms/kg ~~seen~~of ~~with~~PRTX-100 ~~single~~or placebo, ~~doses~~administered inweekly ~~healthy~~for ~~volunteer~~four ~~trials~~weeks. ~~This~~Measures ~~repeated-dose~~of safety, ~~data~~PK, ~~from~~and disease activity were evaluated over 16 weeks following the first dose. The PRTX-~~100b~~100-103 Study ~~was~~results ~~included~~demonstrated inthat ~~the~~PRTX-100 ~~clinical~~was ~~trial~~generally ~~application~~safe toand ~~evaluate PRTX~~well-~~100~~tolerated in patients with active RA at all tested dose levels and at the higher doses, decreased RA activity as scored by the CDAI.

InThe ~~March~~number ~~2015, the FDA accepted our IND application for a Phase I/II open-label, dose-escalating study~~ of ~~PRTX-100~~patients ~~in adults~~ with ~~persistent/chronic~~a ~~ITP (the “PRTX~~DAS28-~~100-202~~CRP ~~Study”)~~< 3.2 In(Disease ~~June~~Activity ~~2015,~~Score) ~~the~~at ~~FDA~~six ~~granted~~weeks ~~ODD~~was tothe ~~PRTX-100~~predefined ~~for~~disease ~~the~~activity ~~treatment~~endpoint of ~~ITP. In July 2015,~~ the ~~EMA granted approval for a Phase 1b open-label, dose-escalating~~ study. ofThe ~~PRTX-100~~results inshowed ~~adult~~that the patients ~~with~~receiving ~~persistent/chronic ITP (the “~~PRTX-100~~-203 Study”).~~ Inwere ~~September~~more ~~2015,~~likely ~~COMP~~to ~~issued~~respond athan ~~positive~~those ~~opinion~~receiving ~~recommending~~placebo ~~PRTX-100~~at ~~for~~all ~~designation~~times, ~~as an orphan medicinal product for~~ the ~~treatment~~number of ~~ITP.~~responders increased Inover ~~November~~time ~~2015,~~during ~~we enrolled our first patient in~~ the ~~PRTX-100-202~~16 ~~Study~~week instudy ~~the~~evaluation ~~United~~period, ~~States~~ and ~~in January~~that ~~2016 enrolled our first patient in~~ the ~~PRTX~~maximum ~~100-203~~tolerated ~~Study~~dose inwas ~~Europe.~~not ~~Enrollment~~reached ~~is continuing in both studies~~ at anthe ~~increased~~highest dose level.

~~Rheumatoid~~Additionally, ~~arthritis~~the results indicate that PRTX-100 did not change CRP (C-Reactive Protein) levels, even in those patients whose swollen and tender joint count and global RAVAS is(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 ~~highly~~post-hoc ~~inflammatory~~analysis ~~polyarthritis~~was ~~often~~performed ~~leading~~examining tochanges ~~joint~~in ~~destruction~~the CDAI scores in all patients. The CDAI score does not evaluate CRP as a component, ~~deformity~~but instead comprises physician and ~~loss~~patient-assessed chemical markers of ~~function~~disease activity. In the ~~addition~~placebo, ~~to characteristic~~0.15 ~~symmetric~~micrograms/kg, ~~swelling~~and of0.45 ~~peripheral~~micrograms/kg ~~joints~~dose groups, ~~systemic~~one ~~symptoms~~out ~~related~~of toeight ~~chronic~~patients ~~inflammation~~in ~~can~~each ~~commonly~~group ~~occur~~attained low disease activity (CDAI ≤ 10) on two or more consecutive visits. ~~Chronic~~In the 0.90 micrograms/kg and 1.50 micrograms/kg dose groups, two of ~~pain~~eight and two of five patients, ~~disability~~respectively, attained this same endpoint, and ~~excess~~maintained ~~mortality~~a ~~are~~CDAI ~~unfortunate~~< ~~sequelae.~~10 RAuntil isthe week 16 final visit. Of the ~~most~~four ~~common~~apparent ~~autoimmune~~responders ~~disease,~~in ~~affecting~~the 1%.50 tomicrograms/kg 2%group, oftwo attained a CDAI ≤ 6 (remission), one attained a ~~the~~CDAI ~~world’s~~≤ ~~population~~10 (low activity), ~~with~~and ~~prevalence~~one ~~rising~~achieved ~~with~~a ~~age~~CDAI of 10.1 at one or more visits. The mean time to ~~about~~peak 5%response in ~~women~~this ~~over~~group occurred 55six weeks after their last dose.

17The disease activity results from the PRTX-100-103 Study demonstrated an acceptable safety profile, and suggested treatment with PRTX-100 could affect disease activity, although these effects were not statistically significant. In November 2012 we commenced the PRTX-100-104 Study to provide a better understanding of safety and potential treatment effect on RA disease activity measurements as well as to help define the optimal dose.

PRTX-100 shows measurable activity in a standard mouse model of autoimmune arthritis. A substantial body of published literature and proprietary data delineate the immunomodulatory activities of PRTX-100, which are distinct from those of current major biologic treatments for rheumatoid arthritis. Accordingly, we believe that RA represents a potentially important clinical indication for treatment with PRTX-100. While recent advances in biologic treatments for RA have improved the prognosis for many patients, many others continue to live with debilitating RA disease activity due either to the cost, side-effects, or limited effectiveness of these newer therapies.17

The PRTX-100-~~103~~104 Study

In ~~August~~November ~~2010~~2012, we commenced enrollment in the United States for a ~~multi-center~~ new multicenter Phase 1b ~~clinical~~randomized, ~~trial~~multiple-dose, dose-escalation study (the “PRTX-100-104 Study”) of PRTX-100 in ~~South~~combination ~~Africa~~with onmethotrexate or leflunomide in adult patients with active RA ~~on methotrexate or leflunomide~~. The ~~PRTX~~sequential dose-~~100-103~~escalation phase ~~Study~~of ~~served~~this tostudy ~~evaluate~~was ~~safety~~expected ~~and~~to ~~potential~~enroll ~~efficacy~~up ofto ~~PRTX-100~~40 in patients ~~with~~into ~~active~~five RAcohorts ~~and~~ranging ~~was~~from ~~approved~~1.50 tomicrograms/kg ~~enroll~~ up to 40 ~~patients~~18.0 inmicrograms/kg of ~~four dose~~PRTX-~~escalating~~100 ~~cohorts~~or placebo. InAt ~~January~~each ~~2012~~dose, weone ~~completed~~quarter ~~patient~~of ~~dosing~~patients inwould ~~the~~receive ~~fourth~~a ~~cohort~~placebo oftreatment. Similar to the PRTX-100-103 Study., the Aprimary ~~total~~objective of 37the ~~patients~~PRTX-100-104 ~~were~~Study ~~enrolled~~was into ~~four~~assess ~~cohorts~~the ~~ranging~~safety ~~from~~and ~~0.15~~tolerability ~~micrograms/kg to 1.50 micrograms/kg~~ of intravenous PRTX-100 ~~or placebo,~~ administered weekly ~~for~~over ~~four~~five weeks. ~~Measures~~in ofpatients ~~safety,~~with ~~PK,~~active ~~and~~RA ~~disease~~on ~~activity~~methotrexate ~~were~~or ~~evaluated~~leflunomide ~~over~~therapy. 16The ~~weeks~~secondary ~~following~~objectives included determining the ~~first~~effects ~~dose.~~of ~~The~~ PRTX-100~~-103~~ ~~Study~~on ~~results~~measures ~~demonstrated~~of ~~that~~disease ~~PRTX-100~~activity, ~~was~~assessing ~~generally~~the ~~safe~~immunogenicity and ~~well-tolerated~~evaluating inthe ~~patients~~PK ~~with active~~parameters RAafter atrepeated doses, ~~all~~and ~~tested~~determining ~~dose~~possible ~~levels~~relationships ~~and~~between at the ~~higher~~immunogenicity ~~doses,~~of ~~decreased~~PRTX-100 RAand ~~activity~~safety asand ~~scored by the CDAI~~PK.

~~The~~In ~~number~~August of2013, ~~patients~~following ~~with~~ a ~~DAS28-CRP~~planned interim <safety ~~3.2~~review ~~(Disease~~by ~~Activity~~our ~~Score)~~Independent atData ~~six~~Safety ~~weeks~~Monitoring ~~was~~Committee ~~the~~and ~~predefined~~upon ~~disease~~completion ~~activity~~of ~~endpoint~~the offourth cohort, we expanded the ~~study~~3.0 microgram, ~~The~~6.0 ~~results~~microgram, ~~showed~~and ~~that the~~12.0 ~~patients~~micrograms/kg ~~receiving~~dose cohorts of the PRTX-100-104 Study. An additional nine patients were ~~more~~enrolled in ~~likely~~the toexpansion ~~respond~~cohort ~~than~~that ~~those~~was ~~receiving~~completed ~~placebo~~in atOctober ~~all~~2013. ~~times~~In total, the ~~number~~first four dose-escalating cohorts of ~~responders~~the PRTX-100-104 ~~increased~~Study, ~~over~~which ~~time~~included ~~during~~these ~~the~~three 16expanded ~~week~~cohorts, ~~study~~enrolled ~~evaluation~~41 ~~period,~~patients ~~and~~at ~~that~~five ~~the~~U.S. ~~maximum~~clinical ~~tolerated~~centers ~~dose~~with ~~was~~doses ~~not~~ranging ~~reached~~from 1.5 atmicrograms/kg up to 12.0 micrograms/kg. Five patients withdrew from the ~~highest dose~~study ~~level~~prior to their day 85 visit.

~~Additionally,~~In ~~the~~November ~~results~~2013, ~~indicate~~following ~~that~~completion ~~PRTX-100~~of ~~did~~the ~~not~~Cohort ~~change~~4 ~~CRP~~expansion ~~(C-Reactive Protein) levels~~cohorts, ~~even~~we ininitiated ~~those~~enrollment ~~patients~~of ~~whose~~the ~~swollen~~fifth and ~~tender~~final ~~joint~~cohort ~~count and global VAS~~ (~~Visual~~Cohort ~~Analogue Scale~~5) ~~scores~~in ~~had decreased to low levels after treatment. Because of~~ the ~~influence~~PRTX of100-104 ~~the CRP component on~~Study. ~~the~~The ~~DAS28-CRP~~Cohort ~~score,~~5 ~~a post~~sub-~~hoc~~study ~~analysis~~enrolled ~~was~~20 ~~performed examining changes in the CDAI scores in all~~ patients. ~~The~~who ~~CDAI~~received ~~score~~five ~~does not~~weekly ~~evaluate~~fixed-weight ~~CRP~~doses asof aPRTX-100 ~~component,~~followed ~~but~~by ~~instead~~up ~~comprises~~to ~~physician~~four ~~and~~additional monthly ~~patient-assessed~~maintenance ~~chemical~~doses ~~markers~~ of ~~disease~~PRTX-100 ~~activity.~~in ~~In the~~weeks ~~placebo~~8, ~~0.15~~12, ~~micrograms/kg~~16, and 020.45 ~~micrograms/kg~~The ~~dose~~primary ~~groups,~~objective ~~one out~~ of ~~eight~~the ~~patients~~Cohort in5 ~~each~~sub-study ~~group~~was ~~attained~~to ~~low disease~~assess ~~activity~~safety ~~(CDAI~~and ≤tolerability ~~10)~~of onthese ~~two~~doses oradministered ~~more~~on ~~consecutive~~a ~~visits.~~modified ~~In the 0~~schedule.90 Secondary ~~micrograms/kg~~objectives ~~and~~included ~~1.50~~determining ~~micrograms/kg~~the effects ~~dose groups, two~~ of ~~eight~~ ~~and~~PRTX-100 ~~two~~on measures of ~~five~~disease ~~patients~~activity, ~~respectively,~~assessing ~~attained~~the ~~this~~immunogenicity ~~same endpoint,~~ and ~~maintained~~evaluating ~~a CDAI < 10 until~~ the ~~week~~PK 16parameters ~~final~~after repeated ~~visit.~~doses, Ofand ~~the~~determining ~~four~~possible ~~apparent~~relationships ~~responders~~between in the ~~1.50~~immunogenicity ~~micrograms/kg~~of ~~group,~~PRTX-100 ~~two~~and ~~attained a CDAI ≤ 6 (remission)~~safety, ~~one~~PK ~~attained~~and ~~a CDAI~~efficacy ≤parameters. ~~10 (low activity)~~In total, ~~and~~11 ~~one~~out ~~achieved~~of a20 ~~CDAI~~patients ofin ~~10.1~~Cohort at5 ~~one~~completed orall ~~more~~study visits. ~~The~~by ~~mean~~August ~~time~~2014 toper ~~peak response in this group occurred six weeks after their last dose~~protocol.

~~The~~In ~~disease~~November ~~activity~~2014, ~~results~~we ~~from~~announced ~~the~~final ~~PRTX-100-103~~data ~~Study~~from ~~demonstrated~~Cohorts an1 ~~acceptable~~through ~~safety~~4 ~~profile,~~ and ~~suggested~~an ~~treatment~~interim ~~with~~analysis ~~PRTX-100~~of ~~could~~pooled ~~affect~~data ~~disease~~from ~~activity,~~Cohort ~~although these~~5 ~~effects~~of ~~were~~the ~~not~~104 ~~statistically significant~~Study. InFor ~~November~~patients ~~2012~~in weall ~~commenced~~five cohorts of the ~~PRTX-100-~~104 Study, toPRTX-100 ~~provide~~appeared asafe ~~better~~and ~~understanding of~~well ~~safety~~tolerated ~~and~~in ~~potential~~all ~~treatment~~individuals, ~~effect~~including onthose RAwho ~~disease~~developed ~~activity~~ADAs, ~~measurements~~and asthe ~~well~~AE profile aswas toconsistent ~~help~~with ~~define~~our ~~the~~prior ~~optimal~~clinical ~~dose~~trial results.

~~The~~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. In total, twenty patients were randomized to 420 µg PRTX-~~104~~100 ~~Study~~(12 patients), 240 µg PRTX-100 (3 patients) or placebo (5 patients). The addition of four monthly maintenance doses after the five weekly doses did not increase the rate or type of AEs, even in those patients who developed ADAs nor indicate any apparent correlation between the development of ADAs and effects on measures of RA disease activity.

In ~~November 2012~~addition, weCohort ~~commenced~~5 ~~enrollment~~patients showed improvement in ~~the~~measures ~~United~~of ~~States~~disease ~~for~~activity, aincluding ~~new~~ACR20 ~~multicenter Phase 1b randomized~~scores, ~~multiple-dose,~~compared ~~dose-escalation~~to ~~study~~Cohort ~~(the~~1 ~~“PRTX-100-104~~through ~~Study”) of~~4 ~~PRTX-100 in combination with methotrexate or leflunomide in adult~~ patients ~~with~~who ~~active~~did ~~RA.~~not ~~The~~receive ~~sequential~~any ~~dose-escalation phase~~monthly ofmaintenance ~~this~~doses, ~~study~~suggesting ~~was~~that ~~expected~~the toaddition ~~enroll~~of upmonthly tomaintenance 40administration ~~patients into five cohorts ranging from 1.50 micrograms/kg up to 18.0 micrograms/kg~~ of PRTX-100 orand ~~placebo. At each dose, one quarter of patients would receive a placebo treatment. Similar to the PRTX~~weight-~~100-103~~based ~~Study,~~dosing were ~~the~~an ~~primary~~important ~~objective~~aspect of the ~~PRTX-100-104~~dosing ~~Study~~protocol ~~was to assess the safety~~ and ~~tolerability~~should ofbe ~~intravenous~~considered ~~PRTX-100 administered weekly over five weeks~~ in ~~patients~~future ~~with~~trials ~~active RA on methotrexate or leflunomide therapy. The secondary objectives included determining the effects~~ of PRTX-100. onA ~~measures~~total of ~~disease~~61 ~~activity,~~patients ~~assessing~~enrolled across the ~~immunogenicity~~five ~~and~~cohorts ~~evaluating~~in the PKPRTX ~~parameters~~100-104 ~~after~~Study ~~repeated doses,~~at ~~and~~nine ~~determining~~study ~~possible~~sites ~~relationships~~in ~~between~~ the ~~immunogenicity~~United ~~of PRTX-100 and safety and PK~~States.

InThe August 2013, following a planned interim safety review by our Independent Data Safety Monitoring Committee and 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~~105 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 at five U.S. clinical centers with doses ranging from 1.5 micrograms/kg up to 12.0 micrograms/kg. Five patients withdrew from the study prior to their day 85 visit.

In ~~November~~February ~~2013~~2015, ~~following~~we ~~completion~~commenced enrollment, ofat ~~the~~a ~~Cohort~~single 4U.S. ~~expansion cohorts~~site, ~~we initiated enrollment~~ of ~~the~~a ~~fifth~~Phase ~~and~~I/II ~~final~~open-label, ~~cohort~~multiple, ~~(Cohort~~fixed-dose 5)study in (the “PRTX -100-~~104~~105 Study.”) which was ~~The~~open ~~Cohort~~only 5to ~~sub~~PRTX-~~study~~100-104 ~~enrolled~~Study 20 patients who ~~received~~indicated ~~five~~their ~~weekly~~desire ~~fixed-weight~~for ~~doses~~additional oftreatment. The PRTX-100-105 ~~followed~~Study bywas upan open-label, single group study with former participants from the 104 Study who were eligible to ~~four~~receive ~~additional monthly~~a ~~maintenance~~fixed ~~doses~~dose of PRTX-100 inover ~~weeks~~a ~~8, 12, 16, and 20~~6-month period. The primary ~~objective~~study endpoint of the ~~Cohort~~105 5Study ~~sub-study~~ was tothe ~~assess~~ safety and tolerability of ~~these~~a ~~doses~~fixed ~~administered~~dose onof aPRTX-100 ~~modified~~administered ~~schedule~~over an extended period. ~~Secondary~~ ~~objectives~~The secondary endpoints included ~~determining~~immunogenicity, ~~the~~ effects ~~of PRTX-100~~ on measures of RA disease activity, ~~assessing~~evaluation ~~the~~of anti-PRTX-100 ~~immunogenicity~~antibody ~~and evaluating the PK parameters after repeated doses~~presence, and ~~determining~~feasibility ~~possible~~of ~~relationships~~joint ~~between~~evaluations ~~the~~with ~~immunogenicity~~ultrasound ~~of PRTX-100~~ and ~~safety,~~biomarkers PKas ~~and~~disease ~~efficacy parameters~~markers. ~~In total,~~A ~~11 out~~ total of 20eight patients ~~in Cohort 5~~ completed all ~~study~~105 Study visits ~~by August 2014~~ per protocol.

18In 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 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 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 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.18

InThe ~~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. In total, twenty patients were randomized to 420 µg PRTX-~~100~~202 (12 patients), 240 µg PRTX-100 (3 patients) or placebo (5 patients). The addition of four monthly maintenance doses after the five weekly doses did not increase the rate or type of AEs, even in those patients who developed ADAs nor indicate any apparent correlation between the development of ADAs and effects on measures of RA disease activity.Study

In ~~addition~~November 2015, ~~Cohort~~we 5commenced ~~patients~~enrollment and ~~showed~~enrolled ~~improvement in~~our ~~measures~~first ofpatient ~~disease~~in ~~activity,~~the ~~including~~PRTX-100-202 ~~ACR20~~Study. ~~scores,~~The ~~compared~~PRTX-100-202 toStudy ~~Cohort~~may 1enroll ~~through~~up 4to 36 patients ~~who~~in ~~did~~as ~~not~~many ~~receive~~as ~~any monthly~~six ~~maintenance~~cohorts. ~~doses,~~Each ~~suggesting~~patient ~~that~~will ~~the~~receive ~~addition~~four ofweekly ~~monthly~~intravenous ~~maintenance~~doses ~~administration~~ of PRTX-100 and ~~weight-based~~will ~~dosing~~be ~~were~~monitored for up to 48 weeks thereafter. anThe ~~important~~primary ~~aspect~~study endpoint of the ~~dosing~~PRTX-100-202 ~~protocol~~Study is a platelet response to PRTX-100. Secondary endpoints include safety, immunogenicity, and ~~should~~pharmacokinetics. beOne ~~considered~~patient in ~~future~~each ~~trials~~of the two completed cohorts of the PRTX-100.-202 AStudy ~~total~~had ofa 61platelet ~~patients~~response ~~enrolled~~per protocol. ~~across~~Enrollment is continuing for patients in the ~~five~~third ~~cohorts~~cohort in the PRTX -100-~~104~~202 Study at ~~nine~~an ~~study~~increased ~~sites in the United States~~dose.

The PRTX-100-~~105~~203 Study

In ~~February~~January ~~2015~~2016, we commenced enrollment, ~~at a single U.S. site,~~ of aour ~~Phase~~first ~~I/II~~patient ~~open-label,~~in ~~multiple,~~the ~~fixed-dose~~European ~~study~~based ~~(the “~~PRTX-100-~~105~~203 Study”). ~~which~~The ~~was open only to~~ PRTX-100-~~104~~203 Study ~~patients~~may ~~who~~enroll ~~indicated~~up ~~their~~to ~~desire~~30 ~~for~~patients ~~additional~~in ~~treatment.~~as ~~The~~many ~~PRTX-100-105 Study was an open-label,~~as ~~single~~five ~~group~~cohorts. ~~study~~Each ~~with~~patient ~~former~~will ~~participants~~receive ~~from~~four ~~the~~weekly ~~104~~intravenous ~~Study~~doses ~~who~~of ~~were~~PRTX-100 ~~eligible~~and towill ~~receive~~be amonitored ~~fixed~~for ~~dose~~up ofto ~~PRTX-100~~48 ~~over~~weeks ~~a 6-month period~~thereafter. The primary study ~~endpoint~~endpoints of the ~~105~~PRTX-100-203 Study ~~was~~include ~~the~~ safety, immunogenicity and ~~tolerability~~pharmacokinetics. ofSecondary aendpoints include ~~fixed~~platelet ~~dose~~response ofand ~~PRTX-100~~duration. ~~administered~~One ~~over an~~patient ~~extended~~in ~~period.~~the ~~The~~first ~~secondary~~cohort ~~endpoints~~of ~~included~~the ~~immunogenicity,~~PRTX-100-203 ~~effects~~Study onhad ~~measures~~a ofplatelet RAresponse ~~disease~~per ~~activity~~protocol. In addition, ~~evaluation~~we ~~of anti-PRTX-100~~recently ~~antibody~~opened ~~presence,~~seven ~~and~~new ~~feasibility~~clinical ofstudy ~~joint~~sites ~~evaluations~~in ~~with~~the ~~ultrasound~~United Kingdom and ~~biomarkers~~dosed asthe ~~disease~~first ~~markers~~patient. AEnrollment ~~total~~is ofcontinuing ~~eight~~for patients ~~completed~~in ~~all~~the ~~105~~third cohort in the PRTX-100-203 Study ~~visits~~at ~~per~~an ~~protocol~~increased dose.

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 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).Manufacturing

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. 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-~~202~~life. ~~Study~~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.

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 the first cohort of the PRTX-100-202 Study had a platelet response per protocol. Enrollment is continuing for patients in the second cohort in the PRTX-100-202 Study at an increased dose.Markets

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 ~~PRTX-100-203~~disease ~~Study~~occurs in all ethnic groups and in every part of the world.

InRA ~~January~~was ~~2016,~~chosen weas ~~commenced~~a ~~enrollment~~target disease because ofit ~~our~~represents ~~first~~a ~~patient~~well-defined, inrapidly ~~the~~growing ~~European~~market ~~based~~for ~~PRTX-100-203~~which ~~Study~~there is no current uniformly effective treatment. ~~The~~Sixty ~~PRTX-100-203~~percent of ~~Study~~people ~~may~~with ~~enroll~~inadequately uptreated RA are unable to 30work ~~patients~~10 inyears asafter ~~many~~onset. asIt is estimated that despite treatment with current ~~five~~approved ~~cohorts~~RA therapeutics, at ~~sites~~least inone-third ~~France~~of patients continue to have significant disability and limitations due to their disease. Current ~~Each~~treatments ~~patient~~are ~~will~~costly, ~~receive~~some ~~four~~are ~~weekly~~associated ~~intravenous~~with ~~doses~~increased risk of ~~PRTX-100~~cancer and ~~will~~opportunistic beinfections, ~~monitored~~and ~~for~~in most cases upmust tobe 48continued ~~weeks~~for ~~thereafter~~decades. The ~~primary~~market ~~study~~for ~~endpoints~~the ofexisting ~~the~~biologic ~~PRTX-100-203~~RA ~~Study~~drugs ~~include~~is ~~safety,~~primarily ~~immunogenicity~~limited ~~and~~to ~~pharmacokinetics. Secondary~~those ~~endpoints~~countries ~~include~~that ~~platelet~~have a ~~response~~high ~~and~~per ~~duration.~~capita ~~One~~income ~~patient~~because intreatment ~~the~~can ~~first~~cost ~~cohort~~tens of ~~the~~thousands ~~PRTX-100-203~~of ~~Study~~dollars ~~had~~per apatient ~~platelet response~~ per ~~protocol~~year. ~~Enrollment~~Thus, isa ~~continuing~~large ~~for~~portion ~~patients~~of the inworld’s ~~the~~patient ~~second~~population ~~cohort~~cannot inafford the existing biologic RA drugs. In contrast, we believe that PRTX-100 could potentially provide patients with a therapy that is efficacious, cost-~~203~~effective, ~~Study~~and athas ana ~~increased~~highly ~~dose~~favorable benefit-risk ratio.

InOnce ~~addition~~further developed and approved, we believe ~~have~~that ~~signed~~PRTX-100 ancould ~~agreement with~~be aused ~~leading~~to ~~contract~~treat ~~research~~patients ~~organization~~with moderate to ~~manage~~severe ~~the~~cases ~~addition~~ of ~~initially~~RA, ~~seven~~and ~~new~~particularly ~~clinical~~those ~~sites~~individuals for whom other treatments failed. Given the differences in the ~~United~~regulatory ~~Kingdom.~~approval process in different parts of the world, it is reasonable Weto ~~anticipate~~believe ~~these~~that ~~sites~~PRTX-100 ~~will~~might ~~commence~~first ~~patient~~be ~~screening~~used ~~shortly~~in the developing world and then in Europe and North America.

19In addition, we believe ITP also represents a potential indication for PRTX-100. ITP or Immune 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 it is more common in 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 remove the spleen (splenectomy) is recommended which increases the platelet count in about half of patients.

~~Manufacturing~~ 19

WeITP ~~currently~~has ~~contract~~no ~~the~~known ~~manufacturing~~cure, and relapses may ofoccur ~~our~~years ~~lead~~after ~~drug~~seemingly ~~substance~~successful ~~PRTX-100~~medical toor ~~Eurogentec~~surgical Smanagement.A. inIf ~~Belgium~~the ~~where~~patient’s itcondition isdoes ~~produced~~not ~~under~~improve ~~Current~~with ~~Good~~the use ~~Manufacturing~~of ~~Practice~~prednisone, or ~~cGMP,~~a ~~conditions.~~corticosteroid Indrug ~~July~~that ~~2014,~~is wethe ~~contracted~~first ~~with~~line ~~Eurogentec~~therapy for ~~the~~ITP, ~~manufacture~~other oftreatments ~~additional~~may ~~bulk~~include: ~~drug~~danazol ~~substance~~ (~~our “active pharmaceutical ingredients”~~Danocrine) ~~(“API”)~~, a ~~which~~drug wetaken ~~believe~~by ~~will~~mouth; beinfusions ~~sufficient supply for completion~~ of ~~our~~high-dose ~~current clinical~~gamma ~~studies.~~globulin ~~The~~(an ~~stability~~immune ~~testing~~factor); ~~and~~drugs ~~packaging~~that ofsuppress the ~~final~~immune ~~drug~~system; ~~product~~anti-RhD therapy for ~~clinical~~people ~~supplies~~with iscertain ~~performed~~blood bytypes; ~~Eurogentec. The~~and ~~packaging~~newer ofagents ~~the~~like ~~final~~romiplostim ~~drug~~(Nplate) ~~product~~and iseltrombopag ~~conducted~~(Promacta) atthat ~~separate FDA-approved facilities. These companies, in~~ stimulate the ~~aggregate,~~bone ~~have provided~~marrow ~~the~~to ~~drug~~make ~~product~~more ~~for~~platelets. ~~both~~Global ~~toxicological~~sales ~~testing~~of Nplate and ~~clinical~~Promacta ~~supplies.~~were Weapproximately ~~believe~~$584 ~~that~~million ~~this~~and ~~entire~~$635 ~~process~~million, ~~is scaleable~~respectively, toin ~~commercial~~2016. ~~production~~Neither ~~but~~romiplostim ~~will~~nor ~~require~~eltrombopag ~~additional~~impact ~~manufacturing~~the ~~resources.~~principal ~~The~~pathological ~~original~~mechanism ~~three~~of ~~clinical~~ITP, ~~trials~~namely ~~of PRTX~~immune-~~100~~mediated ~~were~~plated ~~conducted~~destruction, ~~with~~and awe ~~liquid~~believe ~~formulation~~that ~~and~~PRTX-100 ~~all~~may ~~subsequent studies~~ have ~~utilized~~ a ~~newer~~more ~~lyophilized~~direct ~~formulation~~impact ~~designed~~on toITP ~~achieve better~~disease ~~stability and longer product shelf-life~~processes. ~~Compared to therapeutic doses of other biologic products used to treat RA and ITP~~Thus, we believe ~~the~~that ~~overall costs for these proposed therapeutic doses of~~ PRTX-100 may ~~are~~complement ~~significantly~~or ~~less~~reduce ~~due to~~ the ~~low~~use ~~dose~~of ~~and~~thrombopoeitic ~~the simplicity~~agents ofin ~~drug~~adult ~~substance~~patients ~~manufacture~~with ITP.

~~Markets~~Preliminary information gained in the laboratory on the mechanism of action of PRTX-100 also suggests potential efficacy in a range of autoimmune and inflammatory diseases, including, but not limited to psoriasis, myasthenia gravis (MG), chronic idiopathic demyelinating polyneuropathy, and pemphigus. We recently completed a study of PRTX-100 in an animal model of MG and expect to initiate a second confirmatory study and have top-line results in the 1st quarter of 2018. MG is an autoimmune disorder caused by anti-self antibodies that react with the neuromuscular junction causing muscle weakness and fatigability.

RAOur islong-term ~~our~~strategy ~~most~~contemplates ~~advanced primary indication. RA is a serious autoimmune disorder that causes~~ the ~~body’s~~pursuit ~~immune system to produce antibodies that attack the lining~~ of ~~the~~ ~~joints,~~FDA ~~resulting in inflammation and pain. RA can lead to joint deformity or destruction, organ damage, disability and premature~~approval ~~death.~~of ~~According~~PRTX-100 to ~~both~~treat ~~the~~other ~~Arthritis~~autoimmune ~~Foundation~~ and ~~the~~inflammatory ~~American~~diseases ~~College of Rheumatology websites, approximately 1.5 million people~~ in ~~the~~addition ~~United~~to ~~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~~ITP.

RA 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.Competition

~~Once~~We ~~further~~believe, ~~developed~~based ~~and~~on ~~approved,~~the wepre-clinical trials ~~believe~~and the results to date of our five Phase I RA clinical studies, that PRTX-100 ~~could~~has bea ~~used~~potential tocompetitive ~~treat~~advantage ~~patients~~as ~~with~~it ~~moderate~~may be tosafer ~~severe~~and ~~cases~~more ofefficacious than existing RA therapies, and ~~particularly~~may ~~those~~cost ~~individuals~~less ~~for~~to manufacture than competing biologic-based therapies. ~~whom~~Current ~~other~~RA treatments ~~failed.~~are ~~Given~~characterized ~~the~~by ~~differences~~complex inmanufacturing ~~the~~methods ~~regulatory~~and, ~~approval~~in ~~process~~2016, resulted in ~~different~~an ~~parts~~average annual retail cost of ~~the~~approximately ~~world~~$13,000 itto is$30,000 ~~reasonable to~~per ~~believe~~patient, ~~that~~if ~~PRTX~~the newer disease-~~100~~modifying ~~might~~anti-rheumatic ~~first~~drugs beapproved in the last 20 years were used. The incost can increase according to the ~~developing~~size/weight ~~world~~of a patient and ~~then~~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 ~~Europe~~those cost estimates. Several pharmaceutical agents are currently being used, with varying degrees of success, to control the signs and ~~North~~symptoms ~~America~~of RA and slow its progression. Available treatment options include:

In· addition, we believe ITP also represents a potential indication for PRTX-100. ITP or Immune 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 it is more common in children than in adults. In children, the disease usually resolves without treatment. Adults are usually treated with an Analgesic/anti-inflammatory ~~steroid~~preparations, ~~medicine~~ranging ~~(prednisone).~~from Insimple ~~some~~aspirin ~~cases, surgery~~ to ~~remove~~ the ~~spleen~~COX-2 ~~(splenectomy) is recommended which increases the platelet count in about half of patients.~~inhibitors;

~~ITP~~· ~~has~~Immunosuppressive/antineoplastic 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~~including ~~2016.~~azathioprine ~~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.~~methotrexate;

~~Preliminary~~· ~~information~~TNF ~~gained~~(Tumor inNecrosis ~~the~~Factor) ~~laboratory on~~inhibitors, ~~the~~also ~~mechanism~~known ofas ~~action of PRTX~~anti-~~100~~TNF ~~also~~therapy, ~~suggests~~currently ~~potential~~represented ~~efficacy~~by inetanercept a(Enbrel®), ~~range~~infliximab of(Remicade®), ~~autoimmune~~ and ~~inflammatory~~adalimumab ~~diseases,~~(Humira®) ~~including, but~~and ~~not~~the ~~limited~~newer ~~to psoriasis~~entries, ~~myasthenia~~certolizumab ~~gravis,~~(Cimzia®) ~~chronic idiopathic demyelinating polyneuropathy,~~ and ~~pemphigus.~~golimumab (Simponi®);

~~Our~~· ~~long~~Soluble Interleukin-~~term~~l ~~strategy contemplates the pursuit of FDA approval of PRTX~~(IL-~~100~~I) toReceptor ~~treat~~Therapy, ~~other~~Anakinra ~~autoimmune~~(Kineret®) and ~~inflammatory~~(Il-6) ~~diseases~~tocilizumab ~~in addition to RA and ITP.~~(Actemra®);

20· Costimulatory molecule inhibitor abatacept (Orencia®);

~~Competition~~· Anti CD20 B-cell-directed therapy, rituximab (Rituxan®); and

We· ~~believe,~~Janus ~~based~~Kinase on(JAK) ~~the pre-clinical trials and the results to date of our five Phase I RA clinical studies~~inhibitor, ~~that~~tofacitinib ~~PRTX-100~~citrate ~~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~~(Xeljanz). 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:

·Many ~~Analgesic/anti-inflammatory~~large ~~preparations~~and small pharmaceutical companies are active in this market, ~~ranging~~with ~~from~~Amgen ~~simple~~Corporation ~~aspirin~~(with toPfizer), Johnson & Johnson, Inc. (with Merck) and Abbott Laboratories dominating the ~~COX-~~market for biologic therapies with their respective products, Enbrel®, Remicade® and Humira®. According to each company’s 2016 annual report, Enbrel generated revenues of approximately $8.9 billion combined for Amgen and Pfizer, Remicade generated revenues of more than $8.2 billion combined for Johnson & Johnson and Merck, and AbbVie reported generated revenues of over $16 billion for Humira. For other TNF inhibitors, Cimzia generated revenues of $1.4 billion for UCB; Simponi generated revenues of $2.5 billion for Johnson & Johnson and Merck; and Orencia generated revenues of $2.3 billion for Bristol Myers Squibb. Kineret generated revenues of $114 million in sales for SOBI, which acquired from Amgen the rights to develop and commercialize Kineret in 2014. Actemra generated revenues of $1.7 billion for Roche. Also for Roche, Rituxan earned $1.5 billion for the treatment of RA alone, and billions more for other indications. Xeljanz nearly doubled its earnings for Pfizer from $523 million in 2015 to $927 million in 2016. Revenue figures above reflect the use of these drugs for RA, other indications and off label uses.

~~· Immunosuppressive/antineoplastic drugs, including azathioprine and methotrexate;~~20

·Post–marketing ~~TNF~~experience ~~(Tumor~~has ~~Necrosis~~indicated that ~~Factor)~~current ~~inhibitors,~~and ~~also~~newly-marketed ~~known~~disease asmodifying anti-rheumatic drugs (DMARDs) subject patients to an increased risk of certain SAEs. Products which inhibit the action of TNF-alpha, ~~therapy~~being the longest on the market and the most studied, ~~currently~~have ~~represented~~demonstrated an increased incidence of certain SAEs. Due to suppression of the immune system by ~~etanercept~~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 (~~Enbrel®~~anti-CD20) use increases the potential for Hep B reactivation and multifocal leukoencephalopathy, ~~infliximab~~a fatal viral disease. Kineret (~~Remicade®~~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 ~~adalimumab~~an increase in cholesterol levels. Orencia (~~Humira®~~T cell inhibition) ~~and~~also works by weakening the ~~newer~~immune ~~entries~~system, ~~certolizumab~~therefore ~~(Cimzia®)~~can increase the risk of infections. Patients using Orencia have developed lymphoma and ~~golimumab~~lung cancer. Xeljanz (~~Simponi®~~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 ~~Soluble Interleukin-l (IL-I) Receptor Therapy, Anakinra (Kineret®)~~ Regulation and ~~(Il-6)~~Product ~~tocilizumab (Actemra®);~~Approval

·The ~~Costimulatory~~FDA ~~molecule~~and ~~inhibitor~~comparable ~~abatacept~~regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the testing (~~Orencia®~~preclinical and clinical);, manufacturing, labeling, storage, recordkeeping, advertising, promotion, import, export, marketing and distribution, among other things, of drugs and drug product candidates. If we do 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 ~~Anti~~the ~~CD20~~United ~~B-cell-directed~~States, ~~therapy~~the FDA regulates drugs under the Food Drug and Cosmetic Act, ~~rituximab~~or ~~(Rituxan®);~~FDCA, and 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):

· ~~Janus~~completion ~~Kinase~~of ~~(JAK)~~extensive ~~inhibitor~~preclinical laboratory tests, ~~tofacitinib~~preclinical ~~citrate~~animal ~~(Xeljanz).~~studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice or GLP regulations and other regulations;

In· ~~addition,~~submission ~~close~~ to ~~approval~~the ~~is:~~FDA of an IND application which must become effective before clinical trials may begin;

•· ~~Baricitinib~~performance ~~(Olumiant)-~~of ~~Eli~~multiple ~~Lilly’s~~adequate ~~oral, selective JAK 1~~ and ~~JAK~~well-controlled 2clinical ~~inhibitor.~~trials Inmeeting ~~January~~FDA ~~2017,~~requirements ~~the~~to ~~Committee~~establish ~~for Medicinal Products for Human Use (CHMP),~~ the ~~European~~safety ~~Medicines~~and ~~Agency's~~efficacy ~~(EMA) committee responsible for human medicines, recommended it for approval for the treatment~~ of ~~RA. The EMA is~~ the ~~European~~product ~~Union's~~candidate ~~equivalent to the FDA. Final decision~~ for ~~approval~~each ~~will~~proposed ~~be made by the EMA. Also in January 2017, the FDA extended the action date to allow time to review additional data analysis in response to the FDA’s information requests.~~indication;

~~Many~~· ~~large~~submission and small pharmaceutical 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®, Remicade® and Humira®. According to each company’s respective 2016 annual reports, Enbrel generated revenues of ~~approximately~~ ~~$8.9~~a ~~billion~~Biological ~~combined~~License ~~for~~Application ~~Amgen~~or ~~and~~BLA Pfizer, Remicade generated revenues of more than $8.2 billion combined for Johnson & Johnson and Merck, and AbbVie reported generated revenues of over $16 billion for Humira. For other TNF inhibitors, Cimzia generated revenues of $1.4 billion for UCB; Simponi generated revenues of $2.5 billion for Johnson & Johnson and Merck; and Orencia generated revenues of $2.3 billion for Bristol Myers Squibb. Kineret generated revenues of $114 million in sales for SOBI, which acquired from Amgen the rights to ~~develop and commercialize Kineret in 2014. Actemra generated revenues of $1.7 billion for Roche. Also for Roche, Rituxan earned $1.5 billion for~~ the treatment of RA alone, and billions more for other indications. Xeljanz nearly doubled its earnings for Pfizer from $523 million in 2015 to $927 million in 2016. Revenue figures above reflect the use of these drugs for RA, other indications and off label uses.FDA;

~~Post–marketing~~· ~~experience~~satisfactory ~~has~~completion ~~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~~FDA 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 (antipre-~~CD20)~~approval ~~use~~inspection ~~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-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 ~~immune~~manufacturing ~~system,~~facilities ~~therefore~~at ~~can~~which ~~increase~~ the ~~risk~~product ofcandidate ~~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~~produced, ~~including invasive~~ and ~~opportunistic~~potentially ~~infections and the reactivation of tuberculosis. Lymphomas and~~ other ~~malignancies~~involved ~~have~~facilities ~~been~~as ~~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~~well, ~~“Mortality~~to ~~Rates~~assess ~~in Patients~~compliance with ~~Rheumatoid Arthritis Treated with Tumor Necrosis Factor Inhibitors”~~cGMP, ~~following~~regulations 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~~other ~~long~~applicable ~~list~~regulations; ~~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.~~

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

~~Government~~The ~~Regulation~~ testing and ~~Product~~approval ~~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 basis, if at all. Risks to us related to these regulations are described in the Risk Factors in Item 1A of this Annual Report.

~~The~~A ~~FDA~~separate ~~and~~submission ~~comparable~~to ~~regulatory~~the ~~agencies~~FDA, under inan ~~state~~existing ~~and~~IND ~~local~~must ~~jurisdictions~~also ~~and~~be inmade ~~foreign~~for ~~countries~~each ~~impose~~successive ~~substantial~~clinical ~~requirements~~trial ~~upon~~conducted ~~the~~during ~~testing~~product ~~(preclinical~~development. ~~and~~The ~~clinical),~~FDA must also approve ~~manufacturing,~~changes ~~labeling,~~to ~~storage,~~an ~~recordkeeping,~~existing ~~advertising,~~IND. ~~promotion~~Further, ~~import~~an independent institutional review board, ~~export~~or IRB, ~~marketing~~for ~~and~~each ~~distribution,~~medical ~~among~~center ~~other~~proposing to conduct ~~things,~~the ofclinical ~~drugs~~trial must review and ~~drug~~approve ~~product~~the ~~candidates.~~plan Iffor weany doclinical ~~not~~trial ~~comply~~before ~~with~~it ~~applicable~~commences ~~requirements,~~at wethat ~~may~~center beand ~~fined,~~it ~~the~~must ~~government~~monitor ~~may~~the ~~refuse~~study tountil ~~approve~~completed. ~~our~~The ~~marketing~~FDA, ~~applications~~the IRB or ~~allow~~the ussponsor tomay ~~manufacture~~suspend ora ~~market~~clinical ~~our~~trial ~~products,~~at ~~and~~any wetime ~~may~~on bevarious ~~criminally~~grounds, ~~prosecuted.~~including Wea ~~and~~finding ~~our~~that ~~manufacturers~~the ~~may~~subjects ~~also~~or bepatients ~~subject~~are being exposed to ~~regulations~~an ~~under~~unacceptable ~~other~~health Urisk.S. ~~federal,~~Clinical ~~state,~~testing ~~local~~also must satisfy extensive Good Clinical Practice or GCP requirements and ~~foreign~~regulations ~~laws~~for informed consent.

InClinical the United States, the FDA regulates drugs under the Food Drug and Cosmetic Act, or FDCA, and 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):Trials

·For ~~completion~~purposes of ~~extensive~~BLA ~~preclinical~~submission ~~laboratory~~and ~~tests~~approval, clinical ~~preclinical~~trials ~~animal~~are ~~studies~~typically ~~and~~conducted ~~formulation~~in ~~studies,~~the ~~all~~following ~~performed~~three insequential ~~accordance~~phases, ~~with~~which ~~the~~may ~~FDA’s~~overlap ~~Good~~(although ~~Laboratory~~additional ~~Practice~~ or ~~GLP~~different trials ~~regulations~~may ~~and~~be ~~other~~required ~~regulations;~~by the FDA as well):

· ~~submission~~Phase I clinical trials are initially conducted in a limited population to test the ~~FDA~~drug ofcandidate anfor ~~IND~~safety, ~~application~~dose ~~which~~tolerance, ~~must~~absorption, ~~become~~metabolism, ~~effective~~distribution ~~before~~and ~~clinical~~excretion in healthy humans or, on occasion, in patients, such as cancer patients. In some cases, particularly in cancer trials, a sponsor may ~~begin;~~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.

· ~~performance~~Phase ofII ~~multiple~~clinical ~~adequate~~trials ~~and~~are ~~well-controlled~~generally ~~clinical~~conducted ~~trials~~in ~~meeting~~a ~~FDA~~limited ~~requirements~~patient population to ~~establish~~identify ~~the~~possible ~~safety~~adverse effects and safety risks, to determine the efficacy of the ~~product~~drug candidate for ~~each~~specific ~~proposed~~targeted ~~indication;~~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.

~~· submission of a Biological License Application or BLA to the FDA;~~21

· ~~satisfactory~~Phase ~~completion~~III ofclinical antrials ~~FDA~~are ~~pre-approval~~commonly ~~inspection~~referred ofto ~~the~~as ~~manufacturing~~pivotal ~~facilities~~trials. atWhen ~~which~~Phase II clinical trials demonstrate that a dose range of the ~~product~~drug candidate is ~~produced,~~effective and ~~potentially~~has ~~other~~an ~~involved~~acceptable ~~facilities~~safety asprofile, ~~well~~Phase III clinical trials are undertaken in large patient populations to further evaluate dosage, to ~~assess~~provide ~~compliance~~substantial ~~with~~evidence ~~cGMP,~~of ~~regulations~~clinical efficacy and ~~other~~to ~~applicable~~further ~~regulations;~~test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

·In some cases, the FDA ~~review~~may ~~and~~condition continued approval of ~~the~~a BLA ~~prior~~on the sponsor’s agreement to ~~any~~conduct ~~commercial~~additional ~~marketing~~clinical trials with due diligence. In other cases, ~~sale~~the sponsor and the FDA may agree that additional safety and/or ~~shipment~~efficacy data should be provided; however, continued approval of the BLA ~~drug~~may not always depend on timely submission of such information. Such post-approval studies are typically referred to as Phase IV studies.

~~The~~Biological ~~testing~~License and 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 basis, if at all. Risks to us related to these regulations are described in the Risk Factors in Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 31, 2016.Application

AThe ~~separate~~results ~~submission~~of todrug ~~the~~candidate ~~FDA~~development, ~~under~~ anpreclinical ~~existing~~testing ~~IND~~and ~~must~~clinical ~~also~~trials, betogether ~~made~~with, ~~for~~among ~~each~~other ~~successive~~things, ~~clinical~~detailed ~~trial~~information ~~conducted~~on ~~during~~the ~~product~~manufacture ~~development.~~and ~~The FDA must also approve~~composition ~~changes~~of tothe anproduct ~~existing~~and ~~IND.~~proposed ~~Further~~labeling, anand ~~independent~~the ~~institutional~~payment ~~review~~of ~~board,~~a oruser ~~IRB~~fee, ~~for~~are ~~each~~submitted ~~medical center proposing~~ to ~~conduct~~ the ~~clinical~~FDA ~~trial~~as ~~must~~part ~~review~~of ~~and~~a ~~approve~~BLA. ~~the~~The ~~plan~~FDA ~~for~~reviews all ~~any~~BLAs ~~clinical~~submitted ~~trial~~ before it ~~commences~~accepts atthem ~~that~~for ~~center~~filing and itmay ~~must~~request ~~monitor the~~additional ~~study~~information ~~until~~rather ~~completed.~~than ~~The~~accepting ~~FDA,~~a ~~the~~BLA ~~IRB~~for orfiling. Once ~~the sponsor may suspend~~ a ~~clinical~~BLA ~~trial~~is ataccepted ~~any~~for ~~time on various grounds~~filing, ~~including a finding that~~ the ~~subjects~~FDA orbegins ~~patients are being exposed to~~ an ~~unacceptable~~in-depth ~~health~~review ~~risk.~~of ~~Clinical~~the ~~testing also must satisfy extensive Good Clinical Practice or GCP requirements and regulations for informed consent~~application.

~~Clinical~~During ~~Trials~~its review of a BLA, the FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA may refuse to approve a BLA and issue a not approvable letter if the applicable regulatory criteria are not satisfied, 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 FDA may ultimately decide that the BLA does not satisfy the criteria for approval. Data from clinical trials are not always conclusive and the FDA may interpret data differently than we or our collaboration partners interpret data. If the FDA’s evaluations of the BLA and the clinical and manufacturing procedures and facilities are favorable, the FDA 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 or 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 results of these post-marketing programs. Drugs may be marketed only for the FDA-approved indications and in accordance with the FDA-approved label. Further, if there are any modifications to the drug, including changes in indications, other labeling changes, or manufacturing processes or facilities, we may be required to submit and 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.

~~For~~Fast ~~purposes~~Track of BLA submission and approval, clinical trials are typically conducted in the following three sequential phases, which may overlap (although additional or different trials may be required by the FDA as well):Designation

·The ~~Phase~~FDA’s Ifast ~~clinical~~track ~~trials~~program ~~are~~is ~~initially~~intended to ~~conducted~~facilitate inthe adevelopment ~~limited~~and ~~population~~ to ~~test~~expedite the ~~drug~~review ~~candidate~~of drugs that are intended for ~~safety,~~the ~~dose~~treatment ~~tolerance,~~of ~~absorption,~~a ~~metabolism,~~serious ~~distribution~~or life-threatening condition and ~~excretion~~that indemonstrate ~~healthy~~the ~~humans~~potential ~~or,~~to onaddress ~~occasion,~~unmet inmedical ~~patients~~needs. Under the fast track program, ~~such~~applicants asmay ~~cancer~~seek traditional ~~patients.~~approval Infor ~~some~~a ~~cases,~~product ~~particularly~~based inon ~~cancer~~data ~~trials~~demonstrating an effect on a clinically meaningful endpoint, or approval based on a well-established surrogate endpoint. The sponsor of a new drug candidate may ~~decide~~request the FDA to ~~conduct~~designate ~~what~~the isdrug ~~referred~~candidate for toa specific indication as a ~~“Phase~~fast ~~1b”~~track ~~evaluation,~~drug ~~which~~at isthe atime ~~second~~of ~~safety-focused~~original ~~Phase~~submission Iof ~~clinical~~its ~~trial~~IND, ~~typically~~or ~~designed~~at toany ~~evaluate~~time ~~the~~thereafter ~~impact~~prior to receiving marketing approval of a marketing application. The FDA will determine if the drug candidate inqualifies ~~combination~~for ~~with~~fast ~~currently~~track designation ~~FDA-approved~~within ~~drugs~~60 days of receipt of the sponsor’s request.

·If ~~Phase~~the IIFDA ~~clinical~~grants ~~trials~~fast ~~are~~track ~~generally~~designation, it ~~conducted~~may ininitiate areview ~~limited~~of ~~patient~~sections ~~population~~of toa ~~identify~~BLA ~~possible~~before ~~adverse~~the ~~effects~~application ~~and~~is ~~safety~~complete. ~~risks,~~This toso-called ~~determine~~“rolling ~~the~~review” ~~efficacy~~is available ofif the ~~drug~~applicant ~~candidate~~provides ~~for specific targeted indications~~ and tothe ~~determine~~FDA anapproves ~~optimal~~a ~~dosage.~~schedule ~~Multiple~~for ~~Phase~~the IIsubmission ~~clinical~~of ~~trials~~the ~~may~~remaining beinformation ~~conducted~~and by the ~~sponsor~~applicant has topaid ~~obtain~~applicable ~~information~~user ~~prior~~fees. toThe ~~beginning~~FDA’s ~~larger~~Prescription ~~and~~Drug ~~more~~User ~~expensive~~Fee ~~Phase~~Act ~~III~~or ~~clinical~~PDUFA ~~trials.~~review Inclock ~~some~~for ~~cases,~~both a ~~sponsor~~standard ~~may~~and ~~decide~~priority BLA tofor ~~conduct~~a ~~what~~fast istrack ~~referred~~product todoes asnot abegin ~~“Phase~~until ~~IIb”~~the ~~evaluation,~~complete ~~which~~application is asubmitted. ~~second~~Additionally, ~~confirmatory~~fast ~~Phase~~track IIdesignation ~~clinical~~may be ~~trial~~withdrawn ~~that~~by ~~could,~~the FDA if ~~positive~~it ~~and~~believes ~~accepted~~that by the ~~FDA,~~designation ~~serve~~is asno alonger ~~pivotal~~supported ~~clinical~~by ~~trial~~emerging indata, ~~the~~or ~~approval~~if ofthe adesignated drug development ~~candidate~~program is no longer being pursued.

·In ~~Phase~~some ~~III~~cases, ~~clinical trials are commonly referred to as pivotal trials. When Phase II clinical trials demonstrate that~~ a ~~dose~~fast ~~range~~track ~~of the~~ designated drug candidate ismay ~~effective~~also ~~and~~qualify ~~has~~for anone ~~acceptable~~or ~~safety~~more ~~profile, Phase III clinical trials are undertaken in large patient populations to further evaluate dosage, to provide substantial evidence~~ of ~~clinical~~the ~~efficacy~~following ~~and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.~~programs:

In· ~~some~~Priority ~~cases~~Review. As explained above, ~~the~~a ~~FDA~~drug candidate may ~~condition~~be ~~continued approval~~eligible offor a ~~BLA~~six-month onpriority review. The FDA assigns priority review status to an application if the ~~sponsor’s~~drug ~~agreement~~candidate provides a significant improvement compared to ~~conduct~~marketed ~~additional~~drugs ~~clinical~~in ~~trials~~the ~~with~~treatment, ~~due~~diagnosis ~~diligence~~or prevention of a disease. InA ~~other~~fast ~~cases,~~track ~~the sponsor~~drug ~~and~~would ordinarily meet the FDA’s criteria for priority review, but may ~~agree~~also ~~that~~be ~~additional~~assigned ~~safety~~a ~~and/or~~standard ~~efficacy~~review. ~~data~~We ~~should~~do not know whether any of our drug candidates will be ~~provided;~~assigned ~~however~~priority review status or, ~~continued~~if ~~approval~~priority ofreview ~~the BLA~~status ~~may~~is ~~not~~assigned, ~~always~~whether ~~depend~~that onreview ~~timely~~or ~~submission~~approval ofwill ~~such~~be ~~information.~~faster ~~Such~~than ~~post-approval~~conventional ~~studies~~FDA ~~are~~procedures, ~~typically~~or ~~referred~~that tothe asFDA ~~Phase IV studies~~will ultimately approve the drug.

~~Biological~~· ~~License~~Accelerated ~~Application~~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.

~~The~~When ~~results of drug candidate development~~appropriate, ~~preclinical~~ ~~testing~~we ~~and~~intend ~~clinical~~to ~~trials,~~seek ~~together with, among other things, detailed information on the manufacture and composition~~fast oftrack ~~the product and proposed labeling~~designation, ~~and~~accelerated ~~the~~approval ~~payment~~or ofpriority areview ~~user~~for ~~fee,~~our ~~are~~drug ~~submitted~~candidates. toWe ~~the~~cannot ~~FDA~~predict aswhether ~~part~~any of aour ~~BLA.~~drug ~~The FDA reviews~~candidates ~~all~~will ~~BLAs~~obtain ~~submitted~~fast ~~before~~track, itaccelerated ~~accepts~~approval, ~~them~~or ~~for~~priority ~~filing~~review ~~and~~designation, ~~may~~or ~~request~~the ~~additional~~ultimate ~~information~~impact, ~~rather~~if ~~than~~any, ~~accepting~~of athese ~~BLA for filing.~~expedited ~~Once~~review amechanisms ~~BLA~~on isthe ~~accepted~~timing ~~for~~or ~~filing,~~likelihood of the FDA ~~begins~~approval anof ~~in-depth~~any ~~review~~ of ~~the~~our ~~application~~drug candidates.

~~During~~Satisfaction ~~its review~~ of ~~a BLA,~~ the FDA ~~may refer~~regulations ~~the~~and ~~application~~approval torequirements or ansimilar ~~advisory~~requirements ~~committee~~of ~~for~~foreign ~~review,~~regulatory ~~evaluation~~agencies ~~and~~typically ~~recommendation~~takes asseveral toyears, ~~whether~~and the ~~application~~actual ~~should~~time ~~be approved.~~required ~~The FDA~~ may ~~refuse~~vary tosubstantially based ~~approve~~upon athe ~~BLA~~type, complexity and ~~issue~~novelty aof ~~not approvable letter if~~ the ~~applicable~~product ~~regulatory criteria are not satisfied,~~ or itdisease. ~~may require additional clinical or other data~~Typically, ~~including~~if ~~one~~a ordrug ~~more~~candidate ~~additional~~is ~~pivotal~~intended ~~Phase III~~to ~~clinical~~treat ~~trials.~~a ~~Even~~chronic ~~if such data are submitted~~disease, ~~the~~as ~~FDA~~is ~~may ultimately decide that~~ the ~~BLA~~case ~~does~~with ~~not satisfy~~ the ~~criteria~~drug ~~for~~candidate ~~approval.~~we ~~Data from clinical trials~~ are ~~not~~developing, ~~always~~safety ~~conclusive~~ and ~~the~~efficacy ~~FDA may interpret~~ data ~~differently~~must ~~than~~be wegathered orover ~~our~~an ~~collaboration~~extended ~~partners interpret data.~~period ~~If the FDA’s evaluations~~ of ~~the~~time. ~~BLA~~Government ~~and~~regulation ~~the clinical and manufacturing procedures and facilities are favorable, the FDA~~ may ~~issue~~ ~~either~~delay ~~an approval letter~~ or anprevent ~~approvable~~marketing ~~letter,~~of ~~which~~drug ~~contains~~candidates ~~the~~for ~~conditions~~a ~~that~~considerable ~~must~~period beof ~~met~~time inand ~~order~~impose ~~to secure final~~costly ~~approval~~procedures ofupon ~~the~~our ~~BLA~~activities. IfThe ~~and~~FDA ~~when~~or ~~those~~any ~~conditions~~other ~~have~~regulatory ~~been~~agency ~~met~~may tonot ~~the~~grant ~~FDA’s~~approvals ~~satisfaction,~~for ~~the~~changes ~~FDA~~in ~~will~~dosage ~~issue~~form anor ~~approval~~new ~~letter,~~indications ~~authorizing commercial marketing of the drug~~ for ~~certain~~our ~~indications. The FDA may withdraw~~ drug ~~approval~~candidates ifon ~~ongoing~~a ~~regulatory requirements~~timely ~~are~~basis, ~~not met~~ or ifat ~~safety~~all. ~~problems~~Even ~~occur~~if ~~after~~a ~~the~~ drug ~~reaches~~candidate ~~the~~receives ~~market.~~regulatory ~~In addition~~approval, the ~~FDA~~ approval may ~~require~~be ~~testing, including~~significantly ~~Phase IV~~limited ~~clinical trials, and surveillance programs~~ to ~~monitor~~specific ~~the~~disease ~~effect~~states, ofpatient ~~approved~~populations ~~products~~and ~~that~~dosages. ~~have been commercialized~~Further, ~~and~~ ~~the~~even ~~FDA~~after ~~has~~regulatory ~~the~~approval is ~~power~~obtained, tolater ~~prevent~~discovery orof ~~limit~~previously ~~further~~unknown ~~marketing~~problems ofwith a drug ~~based on the results of these post-marketing programs. Drugs~~ may beresult ~~marketed only for the FDA-approved indications and~~ in ~~accordance~~restrictions ~~with~~on the ~~FDA-approved~~drug ~~label.~~or ~~Further,~~even ~~if there are~~complete ~~any~~withdrawal ~~modifications~~of to the drug, ~~including~~from ~~changes~~the inmarket. ~~indications,~~Delays ~~other~~in ~~labeling changes~~obtaining, or ~~manufacturing~~failures ~~processes~~to ~~or facilities~~obtain, we ~~may~~regulatory beapprovals ~~required~~for toour ~~submit~~drug ~~and~~candidate would ~~obtain~~harm ~~FDA~~our ~~approval~~business. ofIn aaddition, ~~new~~we ~~BLA~~cannot orpredict ~~BLA~~what ~~supplement,~~adverse ~~which~~governmental regulations may ~~require~~arise usfrom tofuture ~~develop~~U.S. ~~additional data~~ or ~~conduct~~foreign governmental ~~additional preclinical studies and clinical trials~~action.

~~Fast~~Regulatory ~~Track Designation~~Requirements

~~The~~Any ~~FDA’s~~drugs ~~fast~~manufactured ~~track~~or ~~program~~distributed isby ~~intended~~us or any potential collaboration partners pursuant to ~~facilitate~~future ~~the~~FDA ~~development~~approvals ~~and~~are subject to ~~expedite~~continuing regulation by the ~~review~~FDA, ofincluding ~~drugs~~recordkeeping requirements ~~that~~and ~~are~~reporting ~~intended~~of ~~for~~adverse experiences associated with the ~~treatment~~drug. ofDrug amanufacturers ~~serious~~and ortheir ~~life-threatening~~subcontractors are required ~~condition~~to register with the FDA and ~~that~~certain ~~demonstrate~~state ~~the~~agencies, ~~potential~~and toare ~~address~~subject ~~unmet~~to ~~medical~~periodic ~~needs.~~unannounced ~~Under~~inspections by the ~~fast~~FDA ~~track~~and ~~program~~certain state agencies for compliance with ongoing regulatory requirements, ~~applicants~~including ~~may~~cGMP, ~~seek~~which impose certain procedural and documentation ~~traditional~~requirements ~~approval~~upon ~~for~~us aand ~~product~~our ~~based~~third-party onmanufacturers. ~~data~~Failure ~~demonstrating~~to ancomply ~~effect~~with onthe statutory and regulatory requirements can subject a ~~clinically~~manufacturer ~~meaningful~~to ~~endpoint~~possible legal or regulatory action, such as warning letters, suspension of manufacturing, sales or ~~approval~~use, ~~based~~seizure onof aproduct, ~~well-established~~injunctive ~~surrogate~~action ~~endpoint. The~~or ~~sponsor~~possible ofcivil apenalties. ~~new~~We ~~drug~~cannot ~~candidate~~be ~~may~~certain ~~request~~that ~~the~~we ~~FDA~~or toour ~~designate~~present ~~the~~or ~~drug~~future ~~candidate~~third-party manufacturers ~~for~~or asuppliers ~~specific~~will ~~indication~~be asable ato ~~fast~~comply ~~track~~with ~~drug~~the atcGMP ~~the~~regulations ~~time~~and ofother ~~original~~ongoing ~~submission~~FDA ofregulatory ~~its~~requirements. ~~IND,~~If our present or future atthird-party ~~any~~manufacturers ~~time~~or ~~thereafter~~suppliers ~~prior~~are ~~to receiving~~not ~~marketing~~able ~~approval~~to ofcomply awith ~~marketing~~these ~~application.~~requirements, ~~The~~the FDA ~~will~~may ~~determine~~halt ifour ~~the~~clinical ~~drug~~trials, require ~~candidate~~us ~~qualifies~~to ~~for~~recall ~~fast~~a ~~track designation~~drug ~~within~~from ~~60 days~~distribution, ofor ~~receipt~~withdraw approval of the ~~sponsor’s~~BLA ~~request~~for that drug.

IfThe ~~the~~ FDA ~~grants~~closely ~~fast~~regulates ~~track~~the ~~designation, it~~post-approval ~~may~~marketing ~~initiate~~and ~~review~~ promotion of ~~sections~~drugs, ofincluding astandards ~~BLA~~and ~~before~~regulations ~~the~~for ~~application~~direct-to-consumer isadvertising, ~~complete.~~off-label ~~This~~promotion, soindustry-~~called~~sponsored ~~“rolling review” is~~scientific ~~available~~and ifeducational ~~the~~activities ~~applicant provides~~ and ~~the~~promotional ~~FDA~~activities ~~approves~~involving ~~a schedule for~~ the ~~submission of the remaining information and the applicant has paid applicable user fees~~Internet. ~~The~~A ~~FDA’s~~company ~~Prescription~~can ~~Drug~~make ~~User~~only ~~Fee~~those ~~Act~~claims orrelating ~~PDUFA~~to safety ~~review clock for both a standard~~ and ~~priority BLA~~efficacy ~~for~~that aare ~~fast~~approved ~~track product does not begin until the complete application is submitted. Additionally, fast track designation may be withdrawn~~ by the FDA. ifFailure itto ~~believes~~comply ~~that~~with ~~the~~these ~~designation~~requirements iscan noresult ~~longer~~in ~~supported~~adverse ~~by emerging data~~publicity, warning and/or ifuntitled ~~the~~letters, ~~designated~~corrective ~~drug development~~advertising ~~program~~and ispotential nocivil ~~longer~~and ~~being~~criminal ~~pursued~~penalties.

InOrphan ~~some~~Drug ~~cases,~~Designation ain ~~fast~~the ~~track~~United ~~designated drug~~States, ~~candidate~~the ~~may~~European Union ~~also~~and ~~qualify~~other ~~for~~foreign ~~one or more of the following programs:~~jurisdictions

·In ~~Priority~~June ~~Review. As explained above~~2015, athe ~~drug candidate may be eligible for a six-month priority review. The~~ FDA ~~assigns~~granted ~~priority~~Orphan ~~review~~Drug Designation ~~status~~ to anPRTX-100 ~~application if the drug candidate provides a significant improvement compared to marketed drugs~~ in the treatment, ~~diagnosis~~for ~~or prevention of a disease~~ITP. AIn ~~fast~~September ~~track~~2015, ~~drug~~COMP ~~would~~issued ~~ordinarily~~a ~~meet~~positive ~~the~~opinion ~~FDA’s~~recommending ~~criteria~~PRTX-100 for ~~priority~~designation as ~~review,~~an ~~but~~orphan ~~may~~medicinal ~~also~~product befor ~~assigned a standard review~~ITP. WeBased doupon ~~not~~study ~~know~~data ~~whether~~to ~~any of our drug candidates will be assigned priority review status or~~date, ifwe ~~priority~~believe ~~review status is assigned, whether~~ that ~~review~~PRTX-100 ormay ~~approval will~~ be ~~faster~~effective ~~than~~in ~~conventional~~the ~~FDA~~treatment of ~~procedures~~ITP, oras ~~that~~well ~~the~~as ~~FDA~~other ~~will~~orphan ~~ultimately~~immunological ~~approve the drug~~diseases.

~~· Accelerated Approval.~~ Under the ~~FDA’s~~U.S. ~~accelerated~~Orphan ~~approval~~Drug ~~regulations~~Act, ~~the~~Orphan Drug ~~FDA~~Designation is ~~authorized~~granted toby ~~approve~~the ~~drug~~FDA ~~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~~drugs ~~over~~intended ~~existing treatments based upon either a surrogate endpoint that is reasonably likely~~ to ~~predict~~treat ~~clinical benefit or on the basis of an effect on~~ a ~~clinical~~rare ~~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~~which ~~are substituted~~ for ~~measurements of observable clinical symptoms. A drug candidate approved on~~ this ~~basis~~program is ~~subject~~defined as tohaving ~~rigorous~~a ~~post-marketing~~prevalence ~~compliance requirements, including the completion~~ of ~~Phase~~fewer IVthan or200,000 ~~post-approval~~individuals ~~clinical~~in ~~trials to validate~~ the ~~surrogate~~United ~~endpoint or confirm the effect on the clinical endpoint~~States. ~~Failure~~Orphan toDrug ~~conduct~~Designation ~~required~~must ~~post-approval~~be ~~studies~~requested ~~with~~before submitting ~~due diligence, or to validate~~ a ~~surrogate endpoint or confirm a clinical benefit during post-~~marketing ~~studies,~~application. ~~may~~After ~~cause~~ the FDA togrants ~~seek~~an toOrphan ~~withdraw~~Drug ~~the~~Designation, ~~drug from~~ the ~~market~~generic onidentity anof ~~expedited~~the ~~basis.~~therapeutic ~~All~~agent and ~~promotional~~its ~~materials~~potential ~~for~~orphan ~~drug~~use ~~candidates approved under accelerated regulations~~ are ~~subject~~disclosed topublicly ~~prior review~~ by the FDA.

23Orphan 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.

When appropriate, we intend to seek fast track designation, accelerated approval or priority review for our drug candidates. We cannot predict whether any of our drug candidates will obtain fast track, accelerated approval, or priority review designation, or the ultimate impact, if any, of these expedited review mechanisms on the timing or likelihood of the FDA approval of any of our drug candidates.23

~~Satisfaction~~In addition, outside of the ~~FDA~~U.S. ~~regulations and~~medicinal ~~approval~~products ~~requirements~~used orto ~~similar~~treat ~~requirements~~life-threatening ofor ~~foreign~~chronically ~~regulatory~~debilitating ~~agencies~~conditions ~~typically~~that ~~takes~~affect ~~several~~no ~~years,~~more ~~and~~than ~~the~~five ~~actual~~in ~~time required~~10,000 ~~may~~people ~~vary~~in European ~~substantially~~Union ~~based~~and ~~upon~~medicinal ~~the~~products ~~type~~which, ~~complexity~~for ~~and~~economic ~~novelty~~reasons, ofwould ~~the~~be ~~product~~unlikely orto ~~disease.~~be ~~Typically,~~developed ifwithout aincentives ~~drug~~may ~~candidate~~be isgranted ~~intended~~orphan todesignation ~~treat~~in athe ~~chronic~~European ~~disease,~~Union. asThe isapplication ~~the~~for ~~case~~orphan ~~with~~designation ~~the~~is ~~drug~~submitted ~~candidate~~to wethe ~~are~~EMA ~~developing,~~before ~~safety~~an ~~and efficacy data must~~application beis ~~gathered~~made ~~over~~for anmarketing ~~extended~~authorization. ~~period~~Once ofauthorized, ~~time.~~orphan ~~Government~~medicinal ~~regulation~~products ~~may~~are ~~delay~~entitled orto ~~prevent~~ten ~~marketing~~years of ~~drug~~market ~~candidates~~exclusivity. During ~~for~~this aten-year ~~considerable~~ period, ofwith ~~time~~a ~~and~~limited ~~impose~~number ~~costly~~of ~~procedures~~exceptions, ~~upon~~neither ~~our~~the ~~activities.~~competent ~~The~~authorities ~~FDA~~of orthe ~~any~~European ~~other~~Union ~~regulatory~~member states ~~agency~~nor ~~may~~the ~~not~~EMA ~~grant~~are ~~approvals for~~permitted ~~changes~~to inaccept ~~dosage~~applications ~~form~~ or ~~new~~grant ~~indications~~marketing authorization for ~~our~~other ~~drug~~similar ~~candidates~~medicinal onproducts awith the ~~timely~~same ~~basis,~~orphan ~~or at all~~indication. ~~Even if a drug candidate receives regulatory approval~~However, ~~the~~marketing ~~approval~~authorization may be ~~significantly~~granted ~~limited~~ to ~~specific~~a ~~disease~~similar ~~states,~~medicinal ~~patient~~product ~~populations~~with ~~and~~the ~~dosages.~~same ~~Further,~~orphan ~~even~~indication ~~after~~during ~~regulatory~~the ~~approval~~ten-year isperiod ~~obtained,~~with ~~later~~the ~~discovery~~consent of ~~previously~~the ~~unknown~~marketing ~~problems~~authorization ~~with~~holder afor ~~drug~~the ~~may~~original ~~result~~orphan ~~in restrictions~~medicinal onproduct ~~the drug~~ or ~~even~~if ~~complete~~the ~~withdrawal~~manufacturer of the ~~drug~~original ~~from~~orphan ~~the~~medicinal ~~market.~~product ~~Delays~~is inunable ~~obtaining,~~to orsupply ~~failures~~sufficient toquantities. ~~obtain,~~Marketing ~~regulatory approvals~~authorization ~~for~~may ~~our~~also ~~drug~~be ~~candidate~~granted ~~would~~to ~~harm~~a ~~our~~similar ~~business.~~medicinal Inproduct ~~addition,~~with wethe ~~cannot~~same ~~predict~~orphan ~~what~~indication ~~adverse~~if ~~governmental~~this ~~regulations~~product ~~may~~is ~~arise from~~safer, ~~future~~more ~~U.S.~~effective or otherwise ~~foreign~~clinically ~~governmental~~superior ~~action~~to the original orphan medicinal product.

~~Regulatory~~We ~~Requirements~~retained the consulting services of Coté Orphan Consulting, LLC (Coté) to submit the application for Orphan Drug Designation in the EU for PRTX-100 as Protalex, Inc. does not maintain a European subsidiary. On October 9, 2015, PRTX-100 was granted Orphan Drug Designation in EU as EU/3/15/1562 (EMA/OD/111/15) for the treatment of Immune Thrombocytopenia. Coté Orphan Consulting UK Limited, a subsidiary of Coté Orphan Consulting, LLC, is identified as the sponsor of the designation for PRTX-100 in the EU. Under our agreement with Coté, we retain all ownership in the Orphan Drug Designation for PRTX-100 in the EU.

~~Any~~In ~~drugs~~August ~~manufactured or distributed by us or any potential collaboration partners pursuant to future FDA approvals are subject to continuing regulation by the FDA~~2017, ~~including recordkeeping requirements and reporting of adverse experiences associated with~~ the ~~drug.~~OOPD ~~Drug~~awarded manufacturers and their subcontractors are required to register with the FDA and certain state agencies, and are subject to periodic 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 manufacturers. Failure to comply with the statutory and regulatory requirements can subject~~ a ~~manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, sales~~grant ~~or use, seizure~~ of ~~product~~$403,000 ~~injunctive action or possible civil penalties. We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able~~ to ~~comply~~support ~~with~~ the ~~cGMP regulations and other ongoing FDA regulatory requirements. If our present or~~ future ~~third-party manufacturers or suppliers are not able to comply with these requirements, the FDA may halt our~~ clinical ~~trials,~~development ~~require~~of usPRTX-100 toas ~~recall~~ a ~~drug~~treatment ~~from distribution, or withdraw approval of the BLA~~ for ~~that drug~~ITP.

~~The~~Foreign FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. A company can make only those claims relating to safety and efficacy that are approved by the FDA. Failure to comply with these requirements can result in adverse publicity, warning and/or untitled letters, corrective advertising and potential civil and criminal penalties.Regulation

~~Orphan~~In ~~Drug~~addition ~~Designation~~to regulations in the United States, ~~the~~we ~~European~~will be ~~Union~~subject to a variety of foreign regulations governing clinical trials and ~~other~~commercial sales and distribution of our future products. Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign ~~jurisdictions~~countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

InUnder ~~June~~European ~~2015~~Union regulatory systems, marketing ~~the~~authorizations ~~FDA~~may ~~granted~~be ~~Orphan~~submitted ~~Drug Designation~~either tounder ~~PRTX-100~~a incentralized ~~the~~or ~~treatment~~mutual ~~for~~recognition ~~ITP~~procedure. InThe ~~September~~centralized ~~2015,~~procedure provides ~~COMP~~for ~~issued~~the grant of a ~~positive~~single ~~opinion~~marketing ~~recommending~~authorization ~~PRTX-100~~that is valid for ~~designation as~~all anEuropean ~~orphan~~Union ~~medicinal~~member ~~product~~states. The mutual recognition procedure provides for ~~ITP.~~mutual ~~Based~~recognition ~~upon~~of ~~study~~national ~~data~~approval todecisions. ~~date~~Under this procedure, wethe ~~believe~~holder ~~that~~of ~~PRTX-100~~a national marketing authorization may besubmit ~~effective~~an inapplication to the ~~treatment~~ remaining member states. Within 90 days of ~~ITP~~receiving the applications and assessment report, aseach ~~well~~member asstate ~~other~~must ~~orphan~~decide ~~immunological~~whether ~~diseases~~to recognize approval.

~~Under~~In ~~the~~addition ~~U.S. Orphan Drug Act, Orphan Drug Designation is granted by the FDA~~ to ~~drugs~~regulations ~~intended~~in toEurope ~~treat~~and ~~a rare disease or condition, which for this program is defined as having a prevalence of fewer than 200,000 individuals in~~ the United States., we ~~Orphan~~will ~~Drug Designation must~~ be ~~requested~~subject ~~before submitting~~to a ~~marketing~~variety ~~application.~~of ~~After~~foreign ~~the~~regulations ~~FDA~~governing ~~grants~~clinical antrials ~~Orphan~~and ~~Drug~~commercial ~~Designation,~~distribution ~~the generic identity~~ of ~~the~~our ~~therapeutic~~future ~~agent and its potential orphan use are disclosed publicly by the FDA~~products.

~~Orphan~~Patents, ~~Drug Designation does not shorten the regulatory review and approval process~~Trademarks, ~~nor does it provide any advantage in the regulatory review~~ and ~~approval~~Proprietary 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.Technology

InPatents ~~addition,~~and ~~outside~~other ofproprietary ~~the~~rights ~~U.S. medicinal~~are ~~products~~important ~~used~~ to ~~treat~~our ~~life-threatening~~business. orOur ~~chronically~~practice ~~debilitating~~is ~~conditions~~to ~~that~~file ~~affect~~patent noapplications ~~more~~to ~~than~~protect ~~five in 10~~technology,~~000~~ ~~people~~inventions ~~in European Union~~ and ~~medicinal~~improvements ~~products which, for economic reasons, would be unlikely~~ to ~~be developed without incentives may be~~our ~~granted~~technologies ~~orphan~~that ~~designation~~are inconsidered ~~the~~important ~~European Union. The application for orphan designation is submitted~~ to the ~~EMA~~development ~~before~~of anour ~~application is made for marketing authorization~~business. ~~Once~~We ~~authorized,~~have ~~orphan~~filed ~~medicinal~~several ~~products~~U.S. ~~are~~patent ~~entitled~~applications ~~to ten years of market exclusivity.~~and ~~During~~international ~~this~~counterparts ~~ten-year period, with a limited number~~ of ~~exceptions,~~certain ~~neither the competent authorities~~ of ~~the~~these ~~European Union member states nor the EMA are permitted to accept~~ applications. orWe ~~grant~~also ~~marketing~~rely ~~authorization~~upon ~~for~~our ~~other~~trade ~~similar medicinal products with the same orphan indication. However~~secrets, ~~marketing authorization may be granted to a similar medicinal product with the same orphan indication during the ten~~know-~~year~~how, ~~period~~and ~~with~~continuing ~~the consent of the marketing authorization holder for the original orphan medicinal~~technological ~~product~~innovations, oras ifwell ~~the~~as ~~manufacturer~~patents ofthat ~~the~~we ~~original orphan medicinal product is unable to supply sufficient quantities. Marketing authorization~~ may ~~also~~license befrom ~~granted~~other ~~to a similar medicinal product with the same orphan indication if this product is safer~~parties, ~~more effective or otherwise clinically superior~~ to ~~the~~develop ~~original~~and ~~orphan~~maintain ~~medicinal~~our ~~product~~competitive position.

24Our success will depend on our ability to maintain our trade secrets and proprietary technology in the United States and in other countries.

We retained the consulting services of Coté Orphan Consulting, LLC (Coté) to submit the application for Orphan Drug Designation in the EU for PRTX-100 as Protalex, Inc. does not maintain a European subsidiary. On October 9, 2015, PRTX-100 was granted Orphan Drug Designation in EU as EU/3/15/1562 (EMA/OD/111/15) for the treatment of Immune Thrombocytopenia. Coté Orphan Consulting UK Limited, a subsidiary of Coté Orphan Consulting, LLC, is identified as the sponsor of the designation for PRTX-100 in the EU. Under our agreement with Coté, we retain all ownership in the Orphan Drug Designation for PRTX-100 in the EU.24

~~Foreign~~The ~~Regulation~~table below provides a list of our issued patents:

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our future products. Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

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

~~Under~~We ~~European~~also ~~Union~~have ~~regulatory~~a ~~systems, marketing~~patent ~~authorizations~~application ~~may~~pending in beHong ~~submitted~~Kong. ~~either~~It ~~under~~is aour ~~centralized~~policy orto ~~mutual~~require ~~recognition~~our ~~procedure.~~employees, ~~The~~consultants, ~~centralized~~and ~~procedure provides~~parties ~~for~~to ~~the~~collaborative ~~grant~~agreements ofto aexecute ~~single~~confidentiality agreements ~~marketing~~upon ~~authorization~~the ~~that~~commencement isof ~~valid~~employment ~~for~~or ~~all~~consulting ~~European~~relationships ~~Union~~or ~~member~~collaborations ~~states~~with us. ~~The~~These ~~mutual~~agreements ~~recognition~~generally ~~procedure~~provide ~~provides~~that ~~for~~all ~~mutual~~confidential ~~recognition~~information ofdeveloped ~~national~~or ~~approval~~made ~~decisions.~~known ~~Under~~during ~~this procedure,~~ the ~~holder~~course of athe ~~national~~relationship ~~marketing authorization~~with ~~may~~us ~~submit~~is ~~an application~~ to ~~the~~be ~~remaining~~kept ~~member states. Within 90 days of receiving the applications~~ confidential and ~~assessment report,~~not ~~each~~to ~~member~~be ~~state~~disclosed ~~must~~to ~~decide~~third ~~whether~~parties toexcept ~~recognize~~in ~~approval~~specific circumstances.

~~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.~~Employees

~~Patents,~~We ~~Trademarks~~have two employees, our president and our ~~Proprietary~~chief ~~Technology~~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.

~~Patents~~Critical ~~and~~Accounting 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.Policies

Our ~~success~~financial ~~will~~statements ~~depend~~are onprepared ~~our ability~~in toconformity ~~maintain~~with ~~our~~accounting ~~trade~~principles ~~secrets~~generally ~~and~~accepted ~~proprietary technology~~ in the United States of America. Note 3 to the financial statements describes the significant accounting policies and methods used in ~~other~~the ~~countries~~preparation of our financial statements.

~~The~~We ~~table~~have identified the policies below ~~provides~~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 ~~list~~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, ~~issued~~actual ~~patents:~~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 Report where such policies affect our reported and expected financial results.

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

25The preparation of our financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. These estimates have a material impact on our financial statements and are discussed in detail throughout this Report.

WeAs ~~have~~part ~~also~~of ~~received~~the ~~Notice~~process of ~~Allowances~~preparing our ~~for~~financial anstatements, ~~additional~~we ~~patent~~are ~~soon~~required to beestimate ~~issued~~income taxes in ~~Europe~~each asof ~~well~~the asjurisdictions ~~having~~in ~~several~~which ~~patent~~we ~~applications~~operate. ~~pending~~This inprocess ~~Europe,~~involves estimating ~~Canada,~~actual ~~Hong~~current tax expense together with assessing temporary differences resulting from differing treatment of items ~~Kong~~for tax and ~~Japan~~accounting purposes. ItThese isdifferences ~~our~~result ~~policy~~in todeferred ~~require~~tax ~~our~~assets ~~employees,~~and ~~consultants~~liabilities, ~~and~~which ~~parties~~are toincluded ~~collaborative~~within ~~agreements~~the balance tosheet. ~~execute~~We ~~confidentiality agreements~~must ~~upon~~then assess the ~~commencement~~likelihood ofthat ~~employment~~our ordeferred ~~consulting~~tax ~~relationships~~assets orwill ~~collaborations~~be ~~with~~recovered ~~us.~~from ~~These~~future ~~agreements~~taxable ~~generally~~income and ~~provide~~to the extent we believe that ~~all~~recovery ~~confidential~~is ~~information~~not ~~developed~~likely, orwe ~~made~~must ~~known~~establish ~~during~~a ~~the~~valuation ~~course~~allowance. ofIn the ~~relationship~~event ~~with~~that uswe isdetermine tothat we would be ~~kept~~able ~~confidential and~~to ~~not~~realize todeferred betax ~~disclosed~~assets in the future in excess of the net recorded amount, an adjustment to ~~third~~the ~~parties~~deferred tax ~~except~~asset valuation allowance would increase income in ~~specific~~the ~~circumstances~~period such determination was made.

~~Employees~~We account 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 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.~~Operations

~~Critical~~For ~~Accounting~~the ~~Policies~~Three Months Ended August 31, 2017 and August 31, 2016

~~Our~~Research ~~financial~~and ~~statements~~Development ~~are~~Expenses ~~prepared in~~- ~~conformity~~Research ~~with~~and ~~accounting~~Development ~~principles~~expenses ~~generally~~(“R&D ~~accepted~~Expenses”) inwere $681,829 and $448,981 for the ~~United~~three ~~States~~months ofended ~~America~~August 31, 2017 and August 31, 2016, respectively. The ~~Note~~increase 3in toR&D expenses for the ~~financial~~three ~~statements~~month ~~describes~~period ended August 31, 2017 compared to the ~~significant~~same ~~accounting~~prior ~~policies~~year ~~and~~period ~~methods~~was ~~used~~due to an increase in clinical activities associated with the ~~preparation~~ITP study and an increase in production of ~~our~~drug ~~financial~~material ~~statements~~and drug product.

WeThere ~~have~~are ~~identified~~significant ~~the~~risks ~~policies~~and ~~below as~~uncertainties ~~some~~inherent ofin the ~~more~~preclinical ~~critical to our business~~ and ~~the~~clinical ~~understanding~~studies ofassociated with our ~~financial~~research ~~position~~ and ~~results~~development ~~of operations~~program. These ~~policies~~ studies may ~~involve~~yield varying aresults ~~high~~that ~~degree~~could ofdelay, ~~judgment~~limit ~~and~~or ~~complexity~~prevent ina ~~their~~program’s ~~application~~advancement ~~and~~through ~~represent~~ the ~~critical~~various ~~accounting~~stages ~~policies used in the preparation~~ of ~~our~~product ~~financial~~development and ~~statements.~~significantly ~~Although~~impact wethe ~~believe~~costs ~~our~~to ~~judgments~~be ~~and~~incurred, ~~estimates are appropriate~~ and ~~correct~~time involved, ~~actual~~ ~~future~~in ~~results~~bringing ~~may~~a ~~differ~~program ~~from~~to ~~estimates~~completion. IfAs ~~different~~a ~~assumptions or conditions were to prevail~~result, the ~~results could be materially~~costs ~~different~~to ~~from~~complete ~~these~~such ~~reported~~programs, ~~results.~~as ~~The~~well ~~impact~~as ~~and~~the ~~any~~period ~~associated~~in ~~risks~~which ~~related~~net tocash ~~these~~outflows ~~policies~~from onsuch ~~our~~programs ~~business operations~~ are ~~discussed~~expected ~~throughout~~to ~~this~~be ~~Report~~incurred, ~~where~~are not ~~such~~reasonably ~~policies affect our reported and expected financial results~~estimable.

~~The~~Administrative ~~preparation~~Expenses of- ~~our financial statements,~~Administrative inexpenses ~~conformity~~were ~~with accounting principles generally accepted in the United States~~$142,390 ~~requires management to make estimates~~ and ~~assumptions that~~$357,936 ~~affect~~for the ~~reported~~three ~~amounts~~months ofended ~~assets~~August 31, ~~liabilities~~2017 and ~~equity~~August ~~and~~31, ~~disclosure~~2016, ofrespectively. The ~~contingent~~decrease in ~~assets~~administrative ~~and~~expenses ~~liabilities~~for at the ~~date of~~three ~~the~~month ~~financial~~period ~~statements~~ended ~~and~~August ~~the~~31, ~~reported~~2017 ~~amounts~~compared ofto ~~expenses~~the ~~during~~same ~~the~~prior ~~reporting~~year period. ~~These~~was ~~estimates~~due ~~have~~to a ~~material impact~~ ondecrease ~~our financial statements and are discussed~~ in ~~detail~~stock ~~throughout~~compensation ~~this Report~~expense.

AsProfessional ~~part~~Fees of- ~~the~~Professional ~~process~~expenses ofwere ~~preparing our~~$182,943 ~~financial~~and ~~statements~~$331,907 wefor ~~are required to estimate income taxes in each of~~ the ~~jurisdictions~~three inmonths ~~which~~ended weAugust ~~operate.~~31, ~~This~~2017 ~~process involves estimating actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax~~ and ~~accounting~~August ~~purposes.~~31, ~~These differences result in deferred tax assets and liabilities~~2016, ~~which are included within the balance sheet~~respectively. WeThe ~~must~~decrease ~~then~~for ~~assess~~ the ~~likelihood~~three ~~that~~month ~~our deferred tax assets will be recovered from future taxable income and~~period toended ~~the~~August ~~extent we believe that recovery is not likely~~31, we2017 ~~must~~was ~~establish~~principally adue ~~valuation allowance. In the event that we determine that we would be able~~ to ~~realize deferred tax assets in~~ the ~~future~~non-recurring innature ~~excess~~ of ~~the~~fundraising ~~net~~expenses ~~recorded~~incurred ~~amount, an adjustment to the deferred tax asset valuation allowance would increase income~~ in the ~~period~~three ~~such~~months ~~determination~~ended August ~~was~~31, ~~made~~2016.

WeNet ~~account~~Loss 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.Outlook

26We 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 August 31, 2017 was $100,351,226 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 research and development expenses relating to PRTX-100, as well as costs incurred in preparation for the potential commercialization of PRTX-100.

~~Results~~In addition to additional financing, we are highly dependent on the success of ~~Operations~~our research and development efforts and, ultimately, upon regulatory approval and market acceptance of our products under development, 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.

~~For the Three Months Ended February 28, 2017 and February 29, 2016~~26

~~Research~~Liquidity and ~~Development~~Capital ~~Expenses - Research and Development expenses (“R&D Expenses”) were $814,002 and $808,177 for the three months ended February 28, 2017 and February 29, 2016, respectively.~~ Resources

~~There~~Since ~~are~~1999, ~~significant~~we ~~risks~~have ~~and~~incurred ~~uncertainties~~significant ~~inherent~~losses ~~in the preclinical~~ and ~~clinical~~we ~~studies~~expect ~~associated~~to ~~with~~experience ~~our~~operating ~~research~~losses and ~~development~~negative ~~program.~~operating ~~These~~cash ~~studies~~flow ~~may~~for ~~yield varying~~the ~~results~~foreseeable ~~that~~future. ~~could delay~~Historically, our ~~limit~~primary orsource ~~prevent a program’s advancement through the various stages~~ of ~~product~~cash ~~development and significantly impact the costs~~ to bemeet ~~incurred,~~short-term and ~~time~~long-term ~~involved,~~liquidity inneeds ~~bringing~~has abeen ~~program~~the tosale ~~completion.~~of Asshares aof ~~result,~~our ~~the~~Common ~~costs~~Stock and toloans ~~complete~~from ~~such~~our ~~programs,~~majority asstockholder. ~~well~~We ashave ~~the~~issued ~~period~~shares in ~~which~~private ~~net~~placements ~~cash~~at ~~outflows~~discounts ~~from such programs are expected~~ to bethen ~~incurred,~~current ~~are not~~market ~~reasonably estimable~~price.

~~Administrative~~On ~~Expenses~~December -2, ~~Administrative~~2009, we entered into the ~~expenses~~Facility ~~were~~with ~~$127,616~~Niobe ~~and~~to provide us with up to $~~796~~2,~~624~~000,000 ~~for~~of additional working capital in the ~~three~~form ~~months~~of ~~ended~~secured ~~February~~loans ~~28,~~at ~~2017~~any ~~and~~time prior ~~February~~to ~~29,~~June ~~2016~~30, ~~respectively. The decrease~~2012 insubject ~~administrative~~to ~~expenses~~our ~~for~~achievement ~~the~~of ~~three~~certain ~~month~~predetermined ~~period~~benchmarks. ~~ended~~On February 2811, ~~2017~~2011 ~~compared~~we received $2,000,000 of additional working capital from Niobe under the Facility, and issued to Niobe the ~~same~~$2 ~~prior~~million ~~year~~Secured ~~period~~Convertible ~~was~~Note. On the ~~due~~same todate, aNiobe ~~decrease~~converted inthe ~~stock~~$1 ~~compensation~~Million ~~expense~~Secured Note and accrued interest thereon, into 4,510,870 shares of our Common Stock.

~~Professional~~On ~~Fees~~August -27, ~~Professional~~2013, ~~expenses~~Niobe ~~were~~elected ~~$178,588~~to ~~and~~convert ~~$122,962 for~~ the ~~three~~principal ~~months~~and ~~ended~~accrued ~~February~~interest ~~28,~~of ~~2017 and February 29~~$2, ~~2016~~155,000 ~~respectively.~~under ~~The increase for~~ the ~~three~~$2 ~~month~~Million ~~period~~Secured ~~ended~~Convertible ~~February~~Note 28into 9,369,565 shares ~~2017~~of ~~was~~Common ~~principally due to an increase in consulting fees~~Stock.

~~For~~From ~~the~~February ~~Nine~~1, ~~Months~~2012 ~~Ended~~through ~~February~~August 2827, 2013 ~~2017~~we ~~and~~raised ~~February 29~~an aggregate of $9,000,000 ~~2016~~of working capital pursuant to seven loans from Niobe, in varying principal amounts and issued to Niobe the Secured Notes.

~~Research~~As ~~and~~described ~~Development~~above, ~~Expenses~~on -October 11, 2013 ~~Research~~we ~~and~~issued ~~Development~~the ~~expenses~~Consolidated ~~(“R&D~~Note ~~Expenses”)~~to ~~were~~Niobe. The ~~$1,783,842~~face ~~and~~amount ~~$2,409,183~~of ~~for~~the Consolidated Note reflects the ~~nine~~$9.0 ~~months~~million ~~ended~~aggregate principal ~~February~~amount ~~28,~~of ~~2017~~the ~~and~~Secured ~~February~~Notes ~~29,~~plus ~~2016,~~interest ~~respectively. The~~accrued ~~decrease~~at in3% ~~R&D~~per ~~Expenses~~annum ~~for~~on ~~the~~each ~~nine~~note ~~month~~from ~~period~~its ~~ended~~respective ~~February 28,~~date ~~2017~~of ~~compared~~issuance. Our obligations tounder the ~~nine~~Consolidated ~~month~~Note ~~period~~are ~~ended~~secured ~~February~~by ~~29,~~a ~~2016~~first ~~was~~priority ~~primarily~~perfected ~~the~~security ~~result~~interest in all of our assets pursuant to a ~~decrease~~Consolidated, inAmended ~~clinical~~and ~~activities associated~~Restated ~~with~~Security ~~the~~Agreement ~~aforementioned~~dated ~~ITP~~October ~~studies~~11, 2013.

~~There~~On ~~are~~January ~~significant~~23, ~~risks and uncertainties inherent in the preclinical and clinical studies associated with our research and development program. These studies may yield varying results that could delay~~2014, ~~limit~~we orconsummated ~~prevent~~ a ~~program’s advancement through the various stages of product development~~private ~~and~~placement ~~significantly~~financing ~~impact the costs~~ to beaccredited ~~incurred,~~investors ~~and~~of ~~time involved~~471,334 inshares ~~bringing~~of aCommon ~~program~~Stock toat ~~completion~~$6.00 Asper ~~a result~~share, ~~the~~yielding ~~costs to~~gross ~~complete~~proceeds ~~such~~of ~~programs~~$2, ~~as well as the period in which net cash outflows from such programs are expected to be incurred~~828, ~~are not reasonably estimable~~000.

~~Administrative~~On ~~Expenses~~November -4, ~~Administrative~~2014, we entered into the ~~expenses~~2014 ~~were~~Credit ~~$580,031~~Facility ~~and~~Agreement ~~$4,395,245~~pursuant ~~for~~to ~~the~~which ~~nine~~we ~~months~~may ~~ended~~borrow ~~February~~up ~~28,~~to ~~2017~~an ~~and~~additional ~~February~~$5 ~~29,~~million ~~2016~~from Niobe, ~~respectively. The~~in the form of secured ~~decrease~~loans, in ~~administrative~~accordance ~~expenses~~with ~~for~~ the ~~nine~~2014 ~~month~~Credit ~~period~~Facility ~~ended~~Agreement ~~February~~at ~~28,~~any ~~2017~~time ~~compared~~prior to the ~~same~~December ~~prior~~31, ~~year~~2015 ~~period~~expiration ~~was~~date. Each loan ~~due~~made tounder the 2014 Credit Facility Agreement is represented by an Original Note and secured by a ~~decrease~~first priority perfected security interest in ~~stock~~all ~~compensation~~of ~~expense~~our assets.

~~Professional~~In ~~Fees~~addition, -on ~~Professional expenses~~November ~~were~~4, ~~$724~~2014,~~626~~ ~~and~~the ~~$536,716~~Consolidated Note ~~for~~was ~~the~~further ~~nine~~amended ~~months~~to ~~ended~~increase ~~February~~the ~~28,~~threshold ~~2017~~amount ~~and~~requiring ~~February~~a ~~29,~~Mandatory ~~2016,~~Prepayment ~~respectively~~from $7.5 ~~The~~million ~~increase for~~to ~~the~~more ~~nine~~than ~~month~~$10 ~~period~~million. As ~~ended~~a ~~February 28~~result, ~~2017~~partial ~~was~~prepayment ~~due~~will tonow anbe ~~increase~~triggered in ~~legal~~the ~~and~~event ~~banking~~of ~~fees~~a ~~related~~Liquidity toEvent ~~our~~in ~~filing~~which ofwe ~~Amendment~~receive gross proceeds in excess #1of to$10 ~~the~~million. ~~Registration~~All ~~Statement~~other onterms ~~Form~~and ~~S-1~~provisions inof ~~June~~the ~~2016~~Consolidated ~~and~~Note anremained ~~increase~~unchanged and in ~~consulting~~full ~~fees~~force and effect.

~~Net~~On ~~Loss~~December ~~Outlook~~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 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 Original Notes and all the New Notes.

WeOn ~~have~~June ~~not~~3, ~~generated~~2016, ~~any~~we ~~product~~filed ~~sales~~amendment #1 ~~revenues,~~to ~~have~~the ~~incurred~~Registration ~~operating~~Statement ~~losses~~on ~~since~~Form ~~inception~~S-1 ~~and~~with ~~have~~the ~~not~~U.S. ~~achieved~~Securities ~~profitable~~and ~~operations.~~Exchange ~~Our~~Commission ~~accumulated~~(SEC) ~~deficit~~(SEC ~~from inception~~File ~~through~~No. ~~February 28~~333-206008), ~~2017~~originally filed ~~was~~on ~~$98~~July 31,~~072~~ 2015,~~997~~ ~~and~~with werespect ~~expect~~ to ~~continue~~a toproposed ~~incur~~public ~~substantial~~offering ~~losses~~of inour ~~future periods~~securities. We are actively seeking sources of financing ~~expect~~to ~~that~~fund our ~~operating~~continuing ~~losses~~operations inand ~~future~~development ~~periods~~programs. To raise additional capital, we may sell equity or debt securities. There can be no assurance that we will be ~~the~~able ~~result~~to ofcomplete ~~continued~~any ~~research~~future ~~and~~financing ~~development~~transaction ~~expenses~~in ~~relating~~a totimely manner or on acceptable ~~PRTX-100,~~terms asor ~~well~~otherwise. asIf ~~costs~~we ~~incurred~~are innot ~~preparation~~able ~~for~~to ~~the~~raise ~~potential~~additional ~~commercialization~~cash, ofwe ~~PRTX-100~~may be forced to delay, curtail, or cease our operations.

InOn ~~addition~~June ~~to additional financing~~30, we2016, ~~are~~the ~~highly~~2014 ~~dependent~~Credit onFacility was again amended to increase the ~~success~~funds ofavailable ~~our~~for ~~research~~loans ~~and~~to ~~development~~us ~~efforts~~to ~~and,~~$9.0 ~~ultimately,~~million ~~upon~~pursuant ~~regulatory~~to ~~approval~~the Second Amended and ~~market acceptance~~Restated ofAgreement. ~~our~~Each ~~products~~loan under ~~development,~~the ~~particularly~~Second ~~our~~Amended ~~lead~~and ~~product~~Restated ~~candidate,~~Agreement ~~PRTX-100. We~~has ~~may~~been ~~never~~represented ~~receive~~by ~~regulatory~~a New Note. In ~~approval~~addition, ~~for~~the ~~any~~Security ofAgreement ~~our~~was ~~product~~also ~~candidates,~~amended ~~generate~~and ~~product~~restated ~~sales~~to ~~revenues,~~secure ~~achieve~~our ~~profitable~~obligations ~~operations~~under orall ~~generate~~the ~~positive~~notes issued under the 2014 ~~cash~~Credit ~~flows~~Facility ~~from~~as ~~operations,~~of ~~and~~June ~~even~~30, if2016 ~~profitable~~and ~~operations~~all ~~are~~the ~~achieved,~~New ~~they~~Notes ~~may~~issued ~~not~~pursuant beto ~~sustained~~the onSecond aAmended ~~continuing~~and ~~basis~~Restated Agreement.

27On August 31, 2016, we and Niobe agreed to extend the maturity date of the Consolidated Note and the maturity dates of all thirteen outstanding Original Notes with an aggregate principal amount of $5,030,000, from September 1, 2016 to September 1, 2017. All other terms and provisions of the Consolidated Note and Original Notes remained unchanged and in full force and effect.

~~Liquidity~~On October 31, 2016, the funds available for loans to us under the 2014 Credit Facility was increased to $11.25 million and ~~Capital~~the ~~Resources~~expiration date was extended to June 15, 2017 pursuant to the Third Amended and Restated Agreement. Each loan under the Third Amended and Restated Agreement will be represented by 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.

Since 1999, we have incurred significant losses and we expect to experience operating losses and negative operating cash flow for the foreseeable future. Historically, our primary source of cash to meet short-term and long-term liquidity needs has been the sale of shares of our Common Stock and loans from our majority stockholder. We have issued shares in private placements at discounts to then current market price.27

OnAs ~~December~~of 2,May ~~2009~~31, ~~we entered into the~~2017, ~~Facility~~the ~~with~~outstanding ~~Niobe~~principal tobalance ~~provide~~under usthe ~~with~~2014 upCredit toFacility totaled $211,~~000~~080,000. ofDuring ~~additional working capital in~~ the ~~form~~year ofended ~~secured~~May ~~loans at any time prior to June 30~~31, ~~2012 subject to our achievement of certain predetermined benchmarks. On February 11~~2017, ~~2011~~ we ~~received $2,000,000~~borrowed ofan ~~additional~~aggregate ~~working~~of ~~capital from Niobe under the Facility, and issued to Niobe the~~ $~~2 million Secured Convertible Note. On the same date~~3, ~~Niobe converted the $1 Million Secured Note and accrued interest thereon~~980, ~~into 4,510,870 shares of our Common Stock~~000.

On ~~August~~June 271, ~~2013~~2017, the ~~Niobe~~2014 ~~elected~~Credit Facility was amended to ~~convert~~increase the ~~principal~~funds available for loans to us to $13.05 million and ~~accrued~~to ~~interest~~extend the expiration date of $2such facility to March 31,~~155,000~~ 2018 (the “Fourth Amended and Restated Agreement”). Each loan under the $2Fourth ~~Million~~Amended and ~~Secured~~Restated ~~Convertible~~Agreement will be represented by a 2018 Note. ~~into~~The ~~9,369,565~~Security Agreement was also amended and restated to also secure ~~shares~~our ofobligations ~~Common~~under ~~Stock~~all the 2018 Notes issued pursuant to the Fourth Amended and Restated Agreement.

~~From~~On ~~February~~June 115, ~~2012~~2017, July ~~through~~10, 2017 and August 2710, ~~2013~~ 2017, we ~~raised~~borrowed an$290,000, ~~aggregate~~$290,000 ofand $9290,000,~~000~~ ofrespectively, ~~working~~under ~~capital~~the ~~pursuant~~2014 toCredit ~~seven~~Facility ~~loans~~pursuant to ~~from~~the ~~Niobe,~~Fourth inAmended ~~varying~~and ~~principal~~Restated ~~amounts~~Agreement and issued to Niobe a new 2018 Note for each borrowing in the ~~Secured~~same ~~Notes~~principal amount of each loan.

AsOn ~~described~~August ~~above~~22, ~~on October 11~~2017, ~~2013~~ we ~~issued~~and ~~the~~Niobe ~~Consolidated~~agreed ~~Note~~ to ~~Niobe. The~~extend ~~face amount of~~ the ~~Consolidated~~maturity ~~Note~~date ~~reflects the $9.0 million aggregate principal amount~~ of ~~the~~all ~~Secured~~outstanding ~~Notes~~notes ~~plus~~issued ~~interest~~to ~~accrued~~Niobe ~~at 3% per annum on each note~~ from ~~its~~the ~~respective~~current maturity date of ~~issuance. Our~~March ~~obligations~~31, ~~under~~2018 ~~the~~to ~~Consolidated~~a ~~Note~~new ~~are~~maturity ~~secured~~date byof aSeptember ~~first~~1, ~~priority~~2018. All ~~perfected~~other ~~security~~terms ~~interest~~and inprovisions ~~all~~ of ~~our~~such ~~assets~~notes ~~pursuant to~~remained aunchanged ~~Consolidated, Amended~~ and in ~~Restated~~full ~~Security~~force ~~Agreement~~and ~~dated October 11, 2013~~effect.

OnAs ~~January~~of 23August 31, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $11,950,000. weDuring ~~consummated~~the athree ~~private~~months ended August 31, ~~placement~~2017, ~~financing~~the toCompany ~~accredited~~borrowed ~~investors~~an aggregate of ~~471~~$870,~~334~~000; ~~shares~~$290,000 ofon ~~Common~~June ~~Stock~~15, at2017, $6290,000 on July 10, 2017, and $290,000 on August 10, 2017.00 ~~per~~Payment ~~share~~of the principal and accrued interest on all outstanding notes issued under the 2014 Credit Facility will, ~~yielding~~at Niobe’s ~~gross~~election, ~~proceeds~~automatically become immediately due and payable if the Company undertakes certain Fundamental Transactions or upon an Event of $2Default,~~828~~ both as defined in such notes. The Company’s obligations under all such notes are secured by the Security Agreement,~~000~~ as amended.

OnSubsequent November 4, 2014, we entered into the 2014 Credit Facility Agreement pursuant to which we may borrow up to an additional $5 million from Niobe, in the form of secured loans, in accordance with the 2014 Credit Facility Agreement at any time prior to the December 31, 2015 expiration date. Each loan made under the 2014 Credit Facility Agreement is represented by an Original Note and secured by a first priority perfected security interest in all of our assets.Events

InOn ~~addition,~~September ~~on November 4~~15, ~~2014~~2017, ~~the~~we ~~Consolidated Note~~borrowed ~~was~~an ~~further~~additional ~~amended to increase the threshold amount requiring a Mandatory Prepayment from~~ $~~7.5 million to more than $10 million. As a result~~290,000 ~~partial~~under ~~prepayment will now be triggered in~~ the ~~event~~terms of athe ~~Liquidity~~Fourth ~~Event~~Amended inand ~~which we receive gross proceeds in excess~~Restated ofAgreement ~~$10~~and ~~million.~~issued ~~All~~Niobe ~~other~~a ~~terms~~New ~~and~~2018 ~~provisions~~Note offor the ~~Consolidated~~loan ~~Note remained unchanged and~~ in ~~full~~the ~~force~~same ~~and~~principal ~~effect~~amount.

InNet ~~October~~Cash ~~2015,~~Used ~~we entered into an agreement with Niobe pursuant to which Niobe agreed to convert all notes outstanding, into shares of Common Stock, at the offering price~~ in aOperating ~~“qualified public offering” consummated by us. The agreement defines a “qualified public offering”~~Activities toand ~~mean~~Operating aCash ~~public~~Flow ~~offering~~Requirements of Common Stock yielding gross proceeds to us of at least $7 million which is consummated on or before February 28, 2017. The agreement further provided that accrued interest would be paid out of the proceeds of the qualified public offering. On December 1, 2015, the agreement expired pursuant its own terms.Outlook

OnOur ~~December~~operating 1,cash ~~2015,~~outflows for the ~~2014 Credit Facility~~three ~~was~~months ~~amended~~ended toAugust ~~increase~~31, ~~the~~2017 ~~funds~~and ~~available~~August ~~for~~31, ~~loans~~2016 tohave usresulted toprimarily ~~$7.5~~from ~~million~~research and todevelopment ~~extend~~expenditures ~~the~~associated for ~~expiration~~PRTX-100 ~~date~~and ofadministrative ~~such~~purposes. We ~~credit~~expect ~~facility~~ to ~~December~~continue ~~31, 2016 pursuant~~ to ~~which~~use wecash ~~entered~~resources ~~into~~to ~~the~~fund ~~Amended~~operating ~~and~~losses ~~Restated Agreement. Each loan under the Amended~~ and ~~Restated~~expect ~~Agreement~~to ~~has~~continue ~~been~~to ~~and~~incur ~~will~~operating belosses ~~represented~~in bythis afiscal ~~New~~year ~~Note. In addition, the Security Agreement was also amended~~ and ~~restated~~beyond due to ~~secure~~ ~~our~~continuing ~~obligations~~research ~~under all the Original Notes~~ and ~~all~~development ~~the New Notes~~activities.

OnNet ~~June~~Cash 3,Used ~~2016,~~in weInvesting ~~filed~~Activities ~~amendment #1 to the Registration Statement on Form S-1 with the U.S. Securities~~ and ~~Exchange~~Investing ~~Commission (SEC) (SEC File No. 333-206008), originally~~Requirements filed on July 31, 2015, with respect to a proposed public offering of our securities. We are actively seeking sources of financing to fund our continuing operations and development programs. To raise additional capital, we may sell equity or debt securities. There can be no assurance that we will be able to complete any future financing transaction in a timely manner or on acceptable terms or otherwise. If we are not able to raise additional cash, we may be forced to delay, curtail, or cease our operations.Outlook

OnWe ~~June~~do ~~30,~~not ~~2016, the~~expect ~~2014 Credit Facility was again amended~~ to be ~~increase~~required ~~the funds available for loans~~ to usmake toany ~~$9.0~~significant ~~million~~investments ~~pursuant~~in toinformation ~~the~~technology ~~Second Amended~~ and ~~Restated~~laboratory ~~Agreement.~~equipment ~~Each loan under the Second Amended and Restated Agreement has been represented by a New Note. In addition, the Security Agreement was also amended and restated~~ to ~~secure~~support our ~~obligations~~future ~~under all the notes issued under the 2014~~research ~~Credit Facility as of June 30, 2016~~ and ~~all~~development ~~the New Notes issued pursuant to the Second Amended and Restated Agreement~~activities.

OnWe ~~August~~may 31never receive regulatory approval for any of our product candidates, ~~2016~~generate product sales revenues, weachieve ~~and~~profitable ~~Niobe~~operations ~~agreed~~or generate positive cash flows tofrom ~~extend~~operations, ~~the~~and ~~maturity~~even ~~date~~if ofprofitable ~~the~~operations ~~Consolidated~~are ~~Note~~achieved, ~~and~~these ~~the~~may ~~maturity~~not ~~dates~~be ofsustained ~~all~~on ~~thirteen~~a ~~outstanding~~continuing ~~Original~~basis. ~~Notes~~We ~~with~~have aninvested ~~aggregate~~a ~~principal~~significant ~~amount~~portion of ~~$5,030,000,~~our ~~from~~time ~~September~~and 1financial resources since our inception in the development of PRTX-100, ~~2016~~and our potential to ~~September~~achieve 1,revenues ~~2017.~~from ~~All~~product ~~other~~sales ~~terms~~in the foreseeable future is dependent largely upon obtaining regulatory approval for and successfully ~~provisions~~commercializing ofPRTX-100, especially in the ~~Consolidated Note~~United ~~and~~States. ~~Original~~We ~~Notes~~expect ~~remained~~to ~~unchanged~~continue to use our cash and ininvestments ~~full~~resources to ~~force~~fund operating and ~~effect~~investing activities.

28Off-Balance Sheet Arrangements

OnAs ~~October~~of August 31, ~~2016~~2017, ~~the~~ ~~funds~~we ~~available~~had ~~for~~no ~~loans~~off-balance sheet toarrangements ussuch ~~under~~as ~~the~~guarantees, ~~2014~~retained ~~Credit~~or ~~Facility~~contingent ~~were~~interest ~~increased~~in toassets ~~$11.25 million and the expiration date was extended to June 15~~transferred, ~~2017~~obligation ~~pursuant to the Third Amended and Restated Agreement. Each loan~~ under ~~the Third Amended and Restated Agreement will be represented by~~ a ~~2018~~derivative ~~Note. The Security Agreement was also amended and restated to secure our obligations under~~instrument ~~all the notes issued under the 2014 Credit Facility as of October 31, 2016~~ and ~~all~~obligation ~~the~~arising ~~2018~~out ~~Notes. In addition, we and Niobe also agreed to extend to March 31, 2018, the maturity dates~~ of ~~the~~or ~~Consolidated~~a ~~Note~~variable ~~and~~interest ~~all~~in ~~the~~an ~~notes~~unconsolidated ~~issued and outstanding under the 2014 Credit Facility as of October 31, 2016~~entity.

~~As of February~~ 28, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $10,210,000. During the nine months ended February 28, 2017, we borrowed an aggregate of $3,110,000; $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, and $290,000 on February 2, 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.

~~Subsequent~~ITEM ~~Events~~3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

OnAs ~~March~~a ~~3, 2017,~~smaller wereporting ~~borrowed~~company anwe ~~additional~~are ~~$290,000~~not required ~~under~~to ~~the~~provide ~~terms of~~ the ~~Third~~information ~~Amended~~required ~~and~~by ~~Restated Agreement and issued Niobe a 2018 Note for~~ this ~~loan in the same principal amount~~Item.

~~Net~~ITEM ~~Cash~~4. ~~Used~~CONTROLS inAND ~~Operating Activities and Operating Cash Flow Requirements Outlook~~PROCEDURES

~~Our~~(a) ~~operating~~Evaluation ~~cash~~of ~~outflows~~Disclosure ~~for~~Controls ~~the nine months ended February 28, 2017~~ and February 29, 2016 have resulted primarily from research and development expenditures associated for PRTX-100 and administrative purposes. We expect to continue to use cash resources to fund operating losses and expect to continue to incur operating losses in this fiscal year and beyond due to continuing research and development activities.Procedures

~~Net~~Our ~~Cash~~management, ~~Used~~with the participation of both of our president and chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in ~~Investing~~the ~~Activities~~Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 13a-15(e) and ~~Investing~~15-d-15(e)) ~~Requirements~~as of the end of the period covered by this Report (the “Evaluation Date”). Based upon ~~Outlook~~that evaluation, both of our 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 our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

We(b) doChanges ~~not expect to be required to make any significant investments~~ in ~~information~~Internal ~~technology~~Control ~~and~~over ~~laboratory~~Financial ~~equipment to support our future research and development activities.~~Reporting

WeThere ~~may~~were ~~never~~no ~~receive~~changes ~~regulatory~~in ~~approval for any of~~ our ~~product~~internal ~~candidates, generate product sales revenues, achieve profitable operations or generate positive cash flows~~controls ~~from~~over ~~operations, and even if profitable operations are achieved, these may not be sustained on a continuing basis. We have invested a significant portion of our time and~~ financial ~~resources~~reporting ~~since~~that ~~our~~occurred ~~inception~~during in the ~~development~~quarter ofcovered ~~PRTX-100,~~by ~~and~~this ~~our~~Report ~~potential to~~that ~~achieve~~has ~~revenues~~materially ~~from~~affected, ~~product~~or ~~sales in the foreseeable future~~ is ~~dependent largely upon obtaining regulatory approval for and~~reasonably ~~successfully~~likely ~~commercializing PRTX-100, especially in the United States. We expect~~ to ~~continue~~materially toaffect, ~~use~~ our ~~cash~~internal ~~and~~control ~~investments~~over ~~resources to~~financial ~~fund operating and investing activities~~reporting.

~~Off-Balance~~PART ~~Sheet~~II ~~Arrangements~~– OTHER INFORMATION

AsITEM of February 28, 2017, 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 entity6. EXHIBITS

Exhibit No.	Description
10.1	Final Form of the Fourth Amended and Restated 2014 Credit Facility Agreement between the Company and Niobe dated as of June 1, 2017	Incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on August 23, 2017.

10.2	Final Form of the Sixth Consolidated, Amended and Restated Security Agreement between the Company and Niobe dated as of June 1, 2017	Incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on August 23, 2017.

10.3	Second Consolidated and Secured Notes Modification Agreement between the Company and Niobe dated August 22, 2017	Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed on August 23, 2017.

31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith.

31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith.

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Furnished herewith in accordance with Item 601 (32) (ii) of Regulation S-K.

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Furnished herewith in accordance with Item 601 (32) (ii) of Regulation S-K.

101.INS	XBRL Instance Document.	Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema Document.	Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~29

~~As a smaller reporting company we are not required to provide the information required by this Item.~~SIGNATURES

~~ITEM~~In 4.accordance ~~CONTROLS~~with ~~AND~~the ~~PROCEDURES~~requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

(a) Evaluation of Disclosure Controls and Procedures

Date: October 11, 2017	PROTALEX, INC.

	By:	/s/ Arnold P. Kling
		Arnold P. Kling, President
		(Principal Executive Officer)

Our management, with the participation of both of our president and chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this Report (the “Evaluation Date”). Based upon that evaluation, both of our 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 our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Date: October 11, 2017
	By:	/s/ Kirk M. Warshaw
		Kirk M. Warshaw, Chief Financial Officer
		(Principal Financial Officer)

~~(b) Changes in Internal Control over Financial Reporting~~ 30

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

PART II – OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith.
31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Furnished herewith in accordance with Item 601 (32) (ii) of Regulation S-K.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Furnished herewith in accordance with Item 601 (32) (ii) of Regulation S-K.
101.INS 101.SCH 101.CAL 101.LAB 101.PRE 101.DEF	XBRL Instance Document. XBRL Taxonomy Extension Schema Document. XBRL Taxonomy Extension Calculation Linkbase Document. XBRL Taxonomy Extension Label Linkbase Document. XBRL Taxonomy Extension Presentation Linkbase Document. XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith. Filed herewith. Filed herewith. Filed herewith. Filed herewith. Filed herewith.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 4, 2017	PROTALEX, INC.
	By: /s/ Arnold P. Kling
	Arnold P. Kling, President
	(Principal Executive Officer)

Date: April 4, 2017
	By: /s/ Kirk M. Warshaw
	Kirk M. Warshaw, Chief Financial Officer
	(Principal Financial Officer)

Filing Compare · PROTALEX INC