Cautionary Note Regarding Forward-Looking Statements


This Quarterly Report on Form 10-Q (including but not limited to this Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations") contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are intended to qualify for the "safe harbor" created by those
sections. In addition, we may make forward-looking statements in other documents
filed with or furnished to the Securities and Exchange Commission ("SEC"), and
our management and other representatives may make forward-looking statements
orally or in writing to analysts, investors, representatives of the media and
others. These statements relate to future events or to our future operating or
financial performance and involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements.



Forward-looking statements can generally be identified by the fact that they do
not relate strictly to historical or current facts and include, but are not
limited to, statements using terminology such as "can", "may", "could",
"should", "assume", "forecasts", "believe", "designed to", "will", "expect",
"plan", "anticipate", "estimate", "potential", "position", "predicts",
"strategy", "guidance", "intend", "seek", "budget", "project" or "continue", or
the negative thereof or other comparable terminology regarding beliefs, plans,
expectations or intentions regarding the future.   You should read statements
that contain these words carefully because they:



    ·   discuss our future expectations;

    ·   contain projections of our future results of operations or of our
        financial condition; and

    ·   state other "forward-looking" information.




We believe it is important to communicate our expectations. However,
forward-looking statements are based on our current expectations, assumptions,
estimates and projections about our business and our industry and are subject to
known and unknown risks, uncertainties and other factors. Accordingly, our
actual results and the timing of certain events may differ materially from those
expressed or implied in such forward-looking statements due to a variety of
factors and risks, including, but not limited to, those set forth in this
Item 2, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and in our unaudited condensed consolidated financial statements
and notes thereto included in this Quarterly Report, those set forth from time
to time in our other filings with the SEC, including our Annual Report on
Form 10-K, for the fiscal year ended April 30, 2022 and the following factors
and risks:

· As a result of the clinical hold that has been placed on our IND by the

FDA, it has taken and may continue to take considerable time and expense


        to respond to the FDA, and no assurance can be given that the FDA will
        remove the clinical hold in which case our business and prospects will
        likely suffer material adverse consequences;

· We contract with Austrianova for the manufacture of our product candidates

and for certain preclinical and clinical activities. Austrianova may not

be able to manufacture sufficient quantities of our product candidates for

preclinical studies and clinical trials which could delay, prevent or

impair our development or commercialization efforts. The production of our

product candidates relies in part on the proprietary know-how of

Austrianova which is held by them as a trade secret and as to which we are

not privy;

· We rely on officers of Austrianova for the development of our product

candidates. If they decide to terminate their relationship with us, we may

not be successful in the development of our product candidates;

· In the event Austrianova experiences financial difficulties, their ability

to provide products or services to us may be delayed or curtailed and may

affect the carrying value of our intellectual property and cost based


        investment in Austrianova;








  27

· At this time, we are unaware of any available substitute manufacturer

other than Austrianova;

· We are seeking FDA approval to commence a clinical trial in the U.S. of

our product candidate for LAPC based on clinical data that was obtained in

trials conducted nearly 20 years ago outside the U.S., and it is possible

that the FDA may not accept data from trials conducted in such locations

or conducted nearly 20 years ago nor allow us to proceed with a Phase 2b

as opposed to a Phase 1 or Phase 1/2 trial;



    ·   Results in previous clinical trials of our encapsulated live cell and
        ifosfamide combination for pancreatic cancer may not be replicated in
        future clinical trials which could result in development delays or a
        failure to obtain marketing approval;

    ·   Due to the significant resources required for the development of our
        programs, and depending on our ability to access capital, we must
        prioritize development of certain product candidates. We may expend our

limited resources on programs that do not yield a successful product

candidate and fail to capitalize on product candidates or indications that


        may be more profitable or for which there is a greater likelihood of
        success; and

    ·   As the patents covering our Cell-in-a-Box technology have expired, our
        intellectual property, which is primarily trade secrets, and data and
        market exclusivity may not be sufficient to block others from
        commercializing identical or competing products.

· We have experienced significant management changes which could increase

our control risks and have a material adverse effect on our ability to do


        business and our results of operations.





Any or all of our forward-looking statements may turn out to be wrong. They may
be affected by inaccurate assumptions that we might make or by known or unknown
risks and uncertainties. Actual outcomes and results may differ materially from
what is expressed or implied in our forward-looking statements. Among the
factors that could affect future results are:

· our expectations of future revenues, expenditures, capital or other

funding requirements;

· the inherent uncertainties of product development based on our new and as

yet not fully proven technologies;

· the risks and uncertainties regarding the actual effect on humans of

seemingly safe and efficacious formulations and treatments when tested

clinically;

· the inherent uncertainties associated with clinical trials of product

candidates;

· the inherent uncertainties associated with the process of obtaining

regulatory clearance or approval to market product candidates;

· the inherent uncertainties associated with commercialization of products

that have received regulatory clearance or approval;

· economic and industry conditions generally and in our specific markets;


        and

    ·   the volatility of, and decline in, our stock price.





All forward-looking statements and risk factors included in this Quarterly
Report are made as of the date hereof, in each case based on information
available to us as of the date hereof, and we assume no obligations to update
any forward-looking statement or risk factor, unless we are required to do so by
law. If we do update one or more forward-looking statements, no inference should
be drawn that we will make updates with respect to other forward-looking
statements or that we will make any further updates to those forward-looking
statements at any future time.









  28







Forward-looking statements may include our plans and objectives for future
operations, including plans and objectives relating to our product candidates
and our future economic performance, projections, business strategy and timing
and likelihood of success. Assumptions relating to the forward-looking
statements included in this Quarterly Report involve judgments with respect to,
among other things, future economic, competitive and market conditions, future
business decisions, and the time and money required to successfully complete
development and commercialization of our technologies, all of which are
difficult or impossible to predict accurately and many of which are beyond

our
control.




Any of the assumptions underlying the forward-looking statements contained in
this Quarterly Report could prove inaccurate and, therefore, we cannot assure
you that any of the results or events contemplated in any of such
forward-looking statements will be realized. Based on the significant
uncertainties inherent in these forward-looking statements, the inclusion of any
such statement should not be regarded as a representation or as a guarantee by
us that our objectives or plans will be achieved, and we caution you against
relying on any of the forward-looking statements contained herein.



Overview of Business




We are a biotechnology company focused on developing cellular therapies for
cancer, diabetes, and malignant ascites based upon a proprietary cellulose-based
live cell encapsulation technology known as "Cell-in-a-Box®." The Cell-in-a-Box®
technology is intended to be used as a platform upon which therapies for several
types of cancer, including LAPC, will be developed. The current generation of
our product candidate is referred to as "CypCaps™."



On August 15, 2022, the Company entered into a Cooperation Agreement
("Cooperation Agreement") with Iroquois Master Fund Ltd. and its affiliates,
pursuant to which the Company elected a reconstituted Board. The Board has
formed a Business Review Committee to evaluate, investigate and review the
Company's business, affairs, strategy, management and operations and in its sole
discretion, to make recommendations to the Company's management and Board with
respect thereto. The Business Review Committee is also reviewing many of the
risks relative to the Company's business. In addition, the Board is reviewing
risks associated with the Company's development programs and its relationship
with SG Austria, including that all licensed patents have expired, that know-how
relating to the Company's Cell-in-a-Box® technology solely resides with SG
Austria, and that the incentives of SG Austria and its management may not be
currently aligned with those of the Company. The Board has curtailed spending on
the Company's programs, including pre-clinical and clinical activities, until
the review by the Business Review Committee and the Board is complete and the
Board has determined the actions and plans to be implemented. The Business
Review Committee's recommendations will include potentially seeking a new
framework for the Company's relationship with SG Austria and its subsidiaries.
In the event that the Company is unsuccessful in seeking an acceptable new
framework, the Company will reevaluate whether it should continue those programs
which are dependent on SG Austria, including its development programs for LAPC,
diabetes and malignant ascites. The issues involving SG Austria have delayed the
Company's timeline for addressing the FDA clinical hold for its planned clinical
trial in LAPC and could result in other delays or termination of the development
activities. In addition, the curtailment of spending on the Company's programs
pending the review by the Business Review Committee and the Board may cause
additional delays.



The Cell-in-a-Box® encapsulation technology potentially enables genetically
engineered live human cells to be used as a means to produce various
biologically active molecules. The technology is intended to result in the
formation of pinhead-sized cellulose-based porous capsules in which genetically
modified live human cells can be encapsulated and maintained. In a laboratory
setting, this proprietary live cell encapsulation technology has been shown to
create a micro-environment in which encapsulated cells survive and flourish.
They are protected from environmental challenges, such as the sheer forces
associated with bioreactors and passage through catheters and needles, which we
believe enables greater cell growth and production of the active molecules. The
capsules are largely composed of cellulose (cotton) and are bioinert.



We have been developing therapies for pancreatic and other solid cancerous
tumors by using genetically engineered live human cells that we believe are
capable of converting a cancer prodrug into its cancer-killing form. We
encapsulate those cells using the Cell-in-a-Box® technology and place those
capsules in the body as close as possible to the tumor. In this way, we believe
that when a cancer prodrug is administered to a patient with a particular type
of cancer that may be affected by the prodrug, the killing of the patient's
cancerous tumor may be optimized.







  29







We have also been developing a way to delay the production and accumulation of
malignant ascites that results from many types of abdominal cancerous tumors.
Our potential therapy for malignant ascites involves using the same encapsulated
cells we employ for pancreatic cancer but placing the encapsulated cells in the
peritoneal cavity of a patient and administering ifosfamide intravenously.



We have also been developing a potential therapy for Type 1 diabetes and
insulin-dependent Type 2 diabetes. Our product candidate for the treatment of
diabetes consists of encapsulated genetically modified insulin-producing cells.
The encapsulation will be done using the Cell-in-a-Box® technology. Implanting
these encapsulated cells in the body is designed to have them function as a
bio-artificial pancreas for purposes of insulin production.



In addition to the two cancer programs discussed above, we have been working on
ways to exploit the benefits of the Cell-in-a-Box® technology to develop
therapies for cancer that involve prodrugs based upon certain constituents of
the Cannabis plant. However, until the FDA allows us to commence our clinical
trial in LAPC and we are able to validate our Cell-in-a-Box® encapsulation
technology in a clinical trial, we are not spending any further resources
developing our Cannabis Program.



Finally, the Company has been developing a potential therapy for Type 1 diabetes
and insulin-dependent Type 2 diabetes. The Company's product candidate for the
treatment of diabetes consists of encapsulated genetically modified
insulin-producing cells. The encapsulation will be done using the
Cell-in-a-Box®technology. Implanting these encapsulated cells in the body is
designed to have them function as a bio-artificial pancreas for purposes of
insulin production.



Until the Business Review Committee completes its evaluation of the Company's
programs and the Company enters into a new framework for its relationship with
SG Austria, spending on the Company's development programs has been curtailed.

Investigational New Drug Application and Clinical Hold


On September 1, 2020, we submitted an IND to the FDA for a planned clinical
trial in LAPC. On October 1, 2020, we received notice from the FDA that it had
placed our IND on clinical hold. On October 30, 2020, the FDA sent us a letter
setting forth the reasons for the clinical hold and providing specific guidance
on what we must do to have the clinical hold lifted.

In order to address the clinical hold, the FDA has requested that we:





   ·  Provide additional sequencing data and genetic stability studies;

· Conduct a stability study on our final formulated product candidate as well

as the cells from our Master Cell Bank ("MCB");

· Evaluate the compatibility of the delivery devices (the prefilled syringe

and the microcatheter used to implant the CypCaps™) with our product

candidate for pancreatic cancer;

· Provide additional detailed description of the manufacturing process of our

product candidate for pancreatic cancer;

· Provide additional product release specifications for our encapsulated

cells;

· Demonstrate comparability between the 1st and 2nd generation of our product

candidate for pancreatic cancer and ensure adequate and consistent product


      performance and safety between the two generations;

   ·  Conduct a biocompatibility assessment using the capsules material;

· Address specified insufficiencies in the Chemistry, Manufacturing and


      Controls information in the cross-referenced Drug Master File;

· Conduct an additional nonclinical study in a large animal (such as a pig)

to assess the safety, activity, and distribution of the product candidate

for pancreatic cancer; and

· Revise the Investigators Brochure to include any additional preclinical


      studies conducted in response to the clinical hold and remove any
      statements not supported by the data we generated.








  30

The FDA also requested that we address the following issues as an amendment to our IND:

· Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests

for assessing purity, safety, and potency;

· Perform qualification studies for the drug substance filling step to ensure

that the product candidate for pancreatic cancer remains sterile and stable

during the filling process;

· Submit an updated batch analysis for the product candidate for the specific

lot that will be used for manufacturing all future product candidates;

· Provide additional details for the methodology for the Resorufin (CYP2B1)

potency and the PrestoBlue cell metabolic assays;

· Provide a few examples of common microcatheters that fit the specifications


       in our Angiography Procedure Manual;

     · Clarify the language in our Pharmacy Manual regarding proper use of the
       syringe fill with the product candidate for pancreatic cancer; and

· Provide a discussion with data for trial of the potential for cellular and

humoral immune reactivity against the heterologous rat CYP2B1 protein and


       potential for induction of autoimmune-mediated toxicities in our study
       population.





We assembled a scientific and regulatory team of experts to address the FDA
requests. That team has been working diligently to complete the items requested
by the FDA. We are in the latter stages of conducting the studies and providing
the information requested by the FDA. We have completed the pilot study of two
pigs and are evaluating the preliminary data before it commences the larger
study of 90 pigs.

The following provides a detailed summary of our activities to have the clinical hold lifted:

· Additional Regulatory Expertise Added to IND Team. In addition to ?our

existing team of regulatory experts, we retained Biologics Consulting to

perform a regulatory "Gap Analysis" and to assist us with our resubmission of

the IND. Biologics Consulting is a full-service regulatory and product

development consulting firm for biologics, pharmaceuticals and medical devices

and has personnel with extensive FDA experience.

· Stability Studies on Our Clinical Trial Product Candidate for Pancreatic

Cancer. We have successfully completed the required product stability studies.

The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for

pancreatic cancer being stored frozen at -80C. These studies included

container closure integrity testing for certain timepoints.

· Additional Studies Requested by the FDA. We have successfully completed

various additional studies requested by the FDA, including a stability study

on the cells from our MCB used to make our CypCaps™. We are already at the

36-month stability timepoint for the cells from our MCB. We are also collating

existing information on the reproducibility and quality of the filling of the

MCB cells into vials ready for CypCaps™ manufacturing.

· Determination of the Exact Sequence of the Cytochrome P450 2B1 Gene. We have

completed the determination of the exact sequence of the cytochrome P450 2B1

gene inserted at the site previously identified on chromosome 9 using

state-of-the-art nanopore sequencing. This is a cutting edge, unique and

scalable technology that permits real-time analysis of long DNA fragments. The

result of this analysis of the sequence data confirmed that the genes are

intact.

· Confirmation of the Exact Sequence of the Cytochrome P450 2B1 Gene Insert. An

additional, more detailed analysis of the integration site of the cytochrome

P450 2B1 gene from the augmented HEK293 cell clone that is used in our

CypCaps™ was found to be intact. In this new study, we were able to confirm

the previously determined structure of the integrated transgene sequence using

more data points. These studies also set the stage for a next step analysis to

determine the genetic stability of the cytochrome P450 2B1 gene at the DNA

level after multiple rounds of cell growth. This new study has been completed

in which our original Research Cell Bank ("RCB") cells were compared with

cells from the MCB. The analysis confirmed that the cytochrome P450 2B1 and

the surrounding sequence has remained stable with no changes detected at the


    DNA level.







  31

· Biocompatibility Studies. We have been involved with 10 biocompatibility


      studies requested by the FDA, eight of which have been completed
      successfully. The remaining studies are underway or about to start. The
      Acute Systemic Toxicity Study of Empty Cellulose Sulphate Capsules in Mice
      is underway. The Skin Sensitization Study of Empty Cellulose Sulphate

Capsules in Guinea Pigs is about to start. These last two studies ?should

be completed well before the pig study (see below) is completed.

To enable the biocompatibility studies to be performed, we had Austrianova

Singapore Pte. Ltd. ("Austrianova") manufacture an additional 400 syringes

of empty capsules.

· Systemic Toxicity Testing. We evaluated the potential toxicity of the

capsule component of our product candidate for pancreatic cancer? and

determined there is no evidence of toxicity in any of the parameters

examined. The study also confirmed previous data that shows our capsule

material is bioinert.

· Micro-Compression and Swelling Testing. This testing is underway. We are

developing and optimizing two reproducible methods for testing and

confirming the physical stability and integrity of our CypCaps™ under

extreme pressure. These studies required the acquisition of new equipment

by Austrianova as well as validation and integration into Austrianova's

Quality Control laboratory.

· Break Force and Glide Testing. We are in the process of developing a

protocol to measure whether the syringe, attached to the catheter when used

to expel the capsules, will still have a break and glide force that is

within the specifications we have established. We are setting the

specifications based on the syringe/plunger manufacturer's measured break


      and glide forces, or alternatively, accepted ranges for glide forces
      routinely used in the clinic.

   ·  Capsules Compatibility with the Syringe and Other Components of the
      Microcatheter Delivery System. We are in the process of showing that

CypCaps™ are not in any way adversely affected by the catheters used by

interventional radiologists to deliver them into a patient. Compatibility

data is being generated to demonstrate that the quality of the CypCaps™ is

maintained after passage through the planned microcatheter systems.

· CypCaps Capsules and Cell Viability after Exposure to Contrast Medium. We

have commenced testing to show that exposure of CypCaps™ to the contrast


      medium interventional radiologists ?used to implant the CypCaps™ in a
      patient has no adverse effect on CypCaps™. Contrast medium is used to
      visualize the blood vessels during implantation.

· Master Drug File Information. Austrianova is providing additional detailed

confidential information on the manufacturing process, including

information on the improvements and advancements made to our product

candidate for pancreatic cancer since the last clinical trials were

conducted with respect to reproducibility and safety. However, Austrianova

has not changed the overall physical characteristics of CypCaps™ between

the 1st and 2nd generations.



   ·  Additional Documentation Requested by the FDA. We are in the process of
      updating our IND submission documentation, including our discussion on
      immunological aspects of our treatment for LAPC.

· Pig Study. We have commenced a study in pigs to address biocompatibility

and long-term implantation and dispersion of CypCaps™. The study has two

phases: (i) a pilot study with 2 pigs; and (ii) a 90-pig study. The first

phase has been completed and we are evaluating preliminary data. We believe

this study should complement the positive data already available from the

previous human clinical trials showing the safety of CypCaps™ implantation

in human patients. The second phase of the pig study may be delayed as a

result of supply chain problems, production delays at Austrianova, and to


      the Company's curtailment of spending pending review of the Company's
      programs by the Business Review Committee and the reconstituted Board (See
      "Business Review Committee"), including seeking a new framework for its
      relationship with SG Austria and its subsidiaries.








  32






Reverse Stock Split



Effective July 12, 2021, we filed a Certificate of Change with the Nevada
Secretary of State that authorized a 1:1500 reverse stock split of our common
stock. The reverse stock split resulted in reducing the authorized number of
shares of our common stock from 50 billion to 33,333,334 with a par value of
$0.0001 per share. Any fractional shares resulting from the reverse stock split
were rounded up to the next whole share. All warrants, option, share and per
share information in this Quarterly Report gives retroactive effect to such
1:1500 reverse stock split.

Impact of COVID-19 on Our Financial Condition and Results of Operations





In March 2020, the World Health Organization declared an outbreak of COVID-19 as
a pandemic, and the world's economies have experienced pronounced effects.
Despite the multiple COVID-19 vaccines globally, there remains uncertainty
around the extent and duration of disruption and any future related financial
impact cannot reasonably be estimated at this time. COVID-19 has caused and may
continue to cause significant, industry-wide delays in clinical trials. Although
the Company is not yet in a clinical trial, the Company has filed an IND with
the FDA to commence a clinical trial in LAPC, and this clinical trial may
experience delays relating to COVID-19 once commenced, including but not limited
to: (i) delays or difficulties in enrolling patients in the Company's clinical
trial if the FDA allows the Company to go forward with the trial; (ii) delays or
difficulties in clinical site activation, including difficulties in recruiting
clinical site investigators and clinical site personnel; (iii) delays in
clinical sites receiving the supplies and materials needed to conduct the
clinical trial, including interruption in global shipping that may affect the
transport of the Company's clinical trial product; (iv) changes in local
regulations as part of a response to COVID-19 which may require the Company to
change the ways in which its clinical trial is to be conducted, which may result
in unexpected costs, or to discontinue the clinical trial altogether; (v)
diversion of healthcare resources away from the conduct of clinical trials,
including the diversion of hospitals serving as the Company's clinical trial
sites and hospital staff supporting the conduct of the Company's clinical trial;
(vi) interruption of key clinical trial activities, such as clinical trial site
monitoring, due to limitations on travel imposed or recommended by federal or
state governments, employers and others, or interruption of clinical trial
subject visits and study procedures, the occurrence of which could affect the
integrity of clinical trial data; (vii) risk that participants enrolled in our
clinical trials will acquire COVID-19 while the clinical trial is ongoing, which
could impact the results of the clinical trial, including by increasing the
number of observed adverse events; (viii) delays in necessary interactions with
local regulators, ethics committees, and other important agencies and
contractors due to limitations in employee resources or forced furlough of
government employees; (ix) limitations in employee resources that would
otherwise be focused on the conduct of the Company's clinical trial because of
sickness of employees or their families or the desire of employees to avoid
contact with large groups of people; (x) refusal of the FDA to accept data from
clinical trials in affected geographies; and (xi) interruption or delays to the
Company's clinical trial activities. Many of these potential delays may be
exacerbated by the impact of COVID-19 in foreign countries where the Company is
conducting these preclinical studies, including India, Europe, Singapore and
Thailand.



Further, the various precautionary measures taken by many governmental
authorities around the world in order to limit the spread of COVID-19 has had
and may continue to have an adverse effect on the global markets and global
economy, including on the availability and pricing of employees, resources,
materials, manufacturing and delivery efforts and other aspects of the global
economy. COVID-19 could materially disrupt the Company's business and
operations, hamper its ability to raise additional funds or sell securities,
continue to slow down the overall economy, curtail consumer spending, interrupt
the Company's supply chain, and make it hard to adequately staff the Company's
operations.



Performance Indicators



Non-financial performance indicators used by management to manage and assess how
the business is progressing will include, but are not limited to, the ability
to: (i) acquire appropriate funding for all aspects of our operations; (ii)
acquire and complete necessary contracts; (iii) complete activities for
producing genetically modified human cells and having them encapsulated for our
preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory
work completed to enable studies and trials to be submitted to regulatory
agencies; (v) complete all required tests and studies on the cells and capsules
we plan to use in our clinical trial in patients with LAPC; (vi) ensure
completion of the production of encapsulated cells according to cGMP regulations
to use in our planned clinical trial; (vii) complete all of the tasked the FDA
requires of us in order to have the clinical hold lifted; and (viii) obtain
approval from the FDA to lift the clinical hold on our IND so that we may
commence our clinical trial in LAPC.







  33






There are numerous items required to be completed successfully to ensure our
final product candidate is ready for use in our planned clinical trial in LAPC.
The effects of material transactions with related parties, and certain other
parties to the extent necessary for such an undertaking, may have substantial
effects on both the timeliness and success of our current and prospective
financial position and operating results. In addition, the review of our
programs by our Business Review Committee and reconstituted Board and the
curtailment of spending until their review is complete and recommendations are
made may have an adverse effect on the timeliness and success of our programs.
In addition, if we are unsuccessful in seeking a new framework for the Company's
relationship with SG Austria and its subsidiaries, the Company will reevaluate
whether it should continue those programs which are dependent on SG Austria,
including its programs for LAPC, diabetes and malignant ascites. See "Overview
of Business." We will assess these factors on a regular basis to provide
accurate information to our shareholders.



Results of Operations

Three and six months ended October 31, 2022 compared to three and six months ended October 31, 2021





Revenue

We had no revenues for the three and six months ended October 31, 2022, and 2021.

Operating Expenses and Loss from Operations





The total operating expenses and loss from operations during the three months
ended October 31, 2022, increased by $1,313,777 to $2,318,620 from $1,004,843 in
the three months ended October 31, 2021. The increase is mainly attributable to
increases in R&D costs, compensation expense, legal and professional expense,
and consulting expense in 2022 from 2021, net of a decrease in general and
administrative costs in the amount of $75,632.



                                            Three Months        Change -         Three Months
                                                Ended           Increase            Ended
                                             October 31,       (Decrease)        October 31,
Operating expenses:                             2022           and Percent           2021
R&D                                         $     177,996     $      42,776     $      135,220
                                                                        32%

Compensation expense                        $     400,420     $     135,408     $      265,012
                                                                        51%

Director fees                               $     102,335     $      41,281     $       61,054
                                                                        68%

General and administrative, legal and
professional                                $   1,637,869     $   1,094,312     $      543,557
                                                                       201%








  34







The total operating expenses and loss from operations during the six months
ended October 31, 2022, increased by $1,971,034 to $3,999,228 from $2,028,194 in
the six months ended October 31, 2021. The increase is mainly attributable to
increases in R&D costs, compensation expense, legal and professional expense,
and consulting expense in 2022 from 2021, net of a decrease in general and
administrative costs of $192,909.



                                                                     Change -
                                             Six Months Ended        Increase         Six Months Ended
                                               October 31,          (Decrease)          October 31,
Operating expenses:                                2022             and Percent             2021
R&D                                         $          337,269     $      58,436     $          278,833
                                                                             21%

Compensation expense                        $          728,138     $     194,241     $          533,897
                                                                             36%

Director fees                               $          155,062     $      30,849     $          124,213
                                                                             25%

General and administrative, legal and
professional                                $        2,778,759     $   1,687,508     $        1,091,251
                                                                            155%




Other Income (Expenses), Net



Other income, net, for the three months ended October 31, 2022, was $438,113 as
compared to other expense, net of $25,097 for the three months ended October 31,
2021. Other income, net, for the three months ended October 31, 2022, is
attributable to interest income of $439,171 and other expenses of $1,058. Other
income, net, for the three months ended October 31, 2021, is attributable to
interest income of $25,619 net of interest expense of $42 and other expenses of
$480. The increase in interest income is attributable to an increase in the
rates of interest.



Other income, net, for the six months ended October 31, 2022, was $573,709 as
compared to other expense, net of $23,030 for the six months ended October 31,
2021. Other income, net, for the six months ended October 31, 2022, is
attributable to interest income of $578,673 and other expenses of $4,964. Other
income, net, for the six months ended October 31, 2021, is attributable to
interest income of $25,619, net of interest expense of $509 and other expenses
of $2,080. The increase in interest income is attributable to an increase in the
rates of interest.

Discussion of Operating, Investing and Financing Activities

The following table presents a summary of our sources and uses of cash for the six months ended October 31, 2022, and 2021.





                                                          Six Months Ended       Six Months Ended
                                                            October 31,            October 31,
                                                                2022                   2021

Net cash used in operating activities:                   $       (2,963,642 )   $       (2,626,834 )
Net cash used in investing activities:                   $                -     $                -

Net cash provided by (used in) financing activities: $ (5,475,011 ) $ 87,362,049 Effect of currency rate exchange

                         $              584     $            1,291

Net increase (decrease) in cash and cash equivalents $ (8,438,069 ) $ 84,736,506










  35






Operating Activities:



The cash and cash equivalents used in operating activities for the six months
ended October 31, 2022, and 2021, is a result of our net losses offset by
securities issued for services and compensation of approximately $18,000 and
$86,000, respectively, and changes to prepaid expenses, accounts payable and
accrued expenses totaling approximately $444,000 and $708,000, respectively.

Investing Activities: We had no investing activities for the six months ended October 31, 2022, and 2021.





Financing Activities:



The cash and cash equivalents used in financing activities for the six months
ended October 31, 2022, is mainly attributable to the repurchase of common stock
net of the proceeds from the sale of our common stock in the amount of
approximately $5.5 million.

Liquidity and Capital Resources


As of October 31, 2022, our cash and cash equivalents totaled approximately $77
million, compared to approximately $87 million as of October 31, 2021. Working
capital was approximately $76 million as of October 31, 2022, compared to
approximately $87 million as of October 31, 2021. The decrease in cash is
attributable to an increase in our operating expenses of approximately $2
million and the repurchase of our common stock of approximately $5.5 million.



On August 9, 2021, the Company entered into an underwriting agreement to offer
and sell shares of common stock, pre-funded warrants to purchase common stock
and warrants to purchase common stock in a public offering ("First Offering").
The gross proceeds of the First Offering were $15 million, before deducting
underwriting discounts, commissions, and offering expenses.



In August 2021, the Company received 27 cash exercise notices relating to the
common warrants with respect to the First Offering totaling 2,522,387 warrant
shares ("Warrant Exercises"). The Company received approximately $10,720,000 and
issued 2,522,387 shares of common stock as a result of the exercise notices.



On August 19, 2021, the Company entered into a securities purchase agreement
("Securities Purchase Agreement") with certain institutional investors
("Purchasers") pursuant to which the Company agreed to sell in a registered
direct offering ("Registered Direct Offering") shares of the Company's common
stock and pre-funded warrants to purchase shares of common stock. Further,
pursuant to the Securities Purchase Agreement, in a concurrent private placement
(together with the Registered Direct Offering, "Second Offering"), the Company
also agreed to issue to the Purchasers unregistered warrants ("Series A
Warrants") to purchase shares of common stock. The Company received gross
proceeds from the Second Offering, before deducting placement agent fees and
other offering expenses payable by the Company, of approximately $70 million. On
November 17, 2021, the Company's Registration Statement on Form S-3 registering
the resale of the common stock underlying the Series A Warrants was declared
effective by the U.S. Securities and Exchange Commission ("Commission").



In total, in August 2021, we received funding in the amount of approximately
$87.4 million through the First Offering and the Second Offering and the Warrant
Exercises. Sales of our common stock, pre-funded warrants and exercise of Common
Warrants occurred in the First Offering, Second Offering, and the Warrant
Exercises.



On May 14, 2018, we entered into amendments to all of the material agreements
with SG Austria and Austrianova (see Section entitled, History of the Business"
in Item 1. Business in our Form 10-K for the period ended April 30, 2022, for a
description of these amendments). These arrangements are under review by our
Business Review Committee and reconstituted Board which has curtailed spending
on our programs until their review is complete and recommendations are made.
This includes seeking a new framework for the Company's relationship with SG
Austria and Austrianova. In the event the Company is unsuccessful in such
efforts, the Company will reevaluate whether it should continue those programs
which are dependent on SG Austria, including its programs for LAPC, diabetes and
malignant ascites. We have no other off-balance sheet arrangements that could
have a material current effect or that are reasonably likely to have a material
adverse effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources.




To meet our short and long-term liquidity needs, we expect to use existing cash
balances and a variety of other means. Other sources of liquidity could include
additional potential issuances of debt or equity securities in public or private
financings, partnerships, collaborations and sale of assets. Our history of
operating losses and liquidity challenges may make it difficult for us to raise
capital on acceptable terms or at all. The demand for the equity and debt of
pharmaceutical companies like ours is dependent upon many factors, including the
general state of the financial markets. During times of extreme market
volatility, capital may not be available on favorable terms, if at all. Our
inability to obtain such additional capital could materially and adversely
affect our business operations. Our future capital requirements are difficult to
forecast and will depend on many factors, but we believe that our cash on hand
will enable us to fund operating expenses for at least the next 12 months
following the issuance of our financial statements.







  36






Service Agreements



We entered into several service agreements, with both independent and related
parties, pursuant to which services will be provided over the next twelve months
related to the clinical hold on our IND submission involving LAPC. The services
include developing studies and strategies relating to clearing the clinical
hold. The total cost is estimated to be approximately $347,000, of which the
related party portion will be approximately $291,000. These agreements are under
review by our Business Review Committee and reconstituted Board which has
curtailed spending on this program until their review is complete and
recommendations are made.

Critical Accounting Estimates and Policies


Our financial statements are prepared in accordance with U.S. GAAP. We are
required to make assumptions and estimates about future events and apply
judgments that affect the reported amounts of assets, liabilities, revenue and
expenses and the related disclosures. We base our assumptions, estimates and
judgments on historical experience, current trends and other factors that
management believes to be relevant at the time our financial statements are
prepared. On a regular basis, management reviews the accounting policies,
assumptions, estimates and judgments to ensure that our financial statements are
presented fairly and in accordance with U.S. GAAP. However, because future
events and their effects cannot be determined with certainty, actual results
could differ from our assumptions and estimates, and such differences could

be
material.




Our significant accounting policies are discussed in Note 2 of the Notes to our
Condensed Consolidated Financial Statements contained in this Quarterly Report.
Management believes that the accounting estimates are the most critical to aid
in fully understanding and evaluating our reported financial results and require
management's most difficult, subjective or complex judgments resulting from the
need to make estimates about the effects of matters that are inherently
uncertain. Management has reviewed these critical accounting estimates and
related disclosures with our Board.

Research and Development Expenses





R&D expenses consist of costs incurred for direct and overhead-related research
expenses and are expensed as incurred. Costs to acquire technologies, including
licenses, which are utilized in R&D and that have no alternative future use are
expensed when incurred. Technology developed for use in our product candidates
is expensed as incurred until technological feasibility has been established.



Stock-Based Compensation



Our stock-based compensation plans are described in Notes 2 and 5 of the Notes
to our Condensed Consolidated Financial Statements contained in this Quarterly
Report. We follow the provisions of ASC 718, Compensation - Stock Compensation
("ASC 718"), which requires the measurement and recognition of compensation
expense for all stock-based awards made to employees.



Net Income (Loss) Per Share



Basic net income (loss) per share of common stock is computed using the
weighted-average number of shares of common stock outstanding. Diluted net
income (loss) per share of common stock is computed using the weighted-average
number of shares of common stock and shares of common stock equivalents
outstanding. Potentially dilutive stock options and warrants to purchase
9,928,783 and 10,816,495 post reverse stock split shares of common stock at
October 31, 2022, and 2021, respectively, were excluded from the computation of
diluted net income (loss) per share because the effect would be anti-dilutive.

New Accounting Pronouncements

For a discussion of all recently adopted and recently issued but not yet adopted accounting pronouncements, see Note 2 "Summary of Significant Accounting Policies" of the Notes to our Condensed Consolidated Financial Statements contained in this Quarterly Report.









  37






Available Information



Our website is located at www.PharmaCyte.com.In addition, all our filings
submitted to the Commission, including our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all our other
reports and statements filed with the Commission are available on the
Commission's web site at www.sec.gov. Such filings are also available for
download free of charge on our website. The contents of the website are not, and
are not intended to be, incorporated by reference into this Quarterly Report or
any other report or document filed with the Commission or furnished by us, and
any reference to the websites are intended to be inactive textual references
only.

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