RENOVARO INC

Risk factors that may affect our business and financial results are discussed within Item 1A. “Risk Factors” of our annual report for the fiscal year ended June 30, 2023, on Form 10-K (“2023 Form 10-K”) filed with the SEC on October 2, 2023.

The following risk factors are in addition to the risks referenced above. The effects of the events and circumstances described in the following risk factors may heighten the risks contained in the Company’s Annual Report on Form 10-K.

Risks Related to Renovaro Cube

Risks Related to Renovaro Cube’s Limited Operating History, Financial Position and Capital Requirements

Renovaro Cube is an artificial intelligence (“AI”)-driven healthcare technology company operating in a rapidly evolving field and has a limited operating history, which makes it difficult to evaluate Renovaro Cube’s current business and predict Renovaro Cube’s future performance.

Renovaro Cube is an AI-driven healthcare technology company operating in a rapidly evolving field and, having commenced operations in 2013, has a limited operating history. Renovaro Cube shifted its business from the financial technology (or FinTech) industry to cancer diagnostics only in 2018. Renovaro Cube does not currently have a commercial product for sale. Renovaro Cube has never generated any revenue relating to its cancer diagnostics AI platform. Renovaro Cube’s short operating history as a company makes any assessment of its current business or future success and viability subject to significant uncertainty. Renovaro Cube expects to encounter risks and difficulties, including those frequently experienced by early-stage companies in rapidly evolving fields. If Renovaro Cube does not address these risks and difficulties successfully, its business will suffer.

Renovaro Cube has a history of net losses and anticipates that it may continue to incur net losses for the foreseeable future.

Grace Systems (Renovaro Cube’s predecessor) has primarily incurred net losses since its inception in 2013 and has never generated any revenue relating to its cancer diagnostics AI platform. Renovaro Cube anticipates that it may continue to incur primarily net losses in the foreseeable future. Renovaro Cube has invested significant financial resources in research and development activities, including to develop its technology and investigational products and plan for commercial launch of its AI platform. The amount of Renovaro Cube’s future net losses will depend, in part, on the level of Renovaro Cube’s future expenditures and its ability to generate revenue following the commercialization of its AI platform. Moreover, Renovaro Cube’s net losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of Renovaro Cube’s results of operations may not be a good indication of Renovaro Cube’s future performance.

Renovaro Cube expects to continue to incur significant expenses and operating losses for the foreseeable future if, and as, it:

Renovaro Cube has never generated revenue from its cancer diagnostics AI platform, and does not expect any near-term revenue to offset Renovaro Cube’s ongoing operating expenses, and may never be able to maintain profitability.

Renovaro Cube’s ability to generate revenue from product sales and maintain profitability in the future depends on its ability to commercialize its products. While Renovaro Cube plans to commercially launch its AI platform in the European Union and United Kingdom in 2024, Renovaro Cube cannot assure you that it will successfully be able to do so as planned, if at all, and Renovaro Cube’s failure to do so would prevent Renovaro Cube from generating revenue. Furthermore, even if Renovaro Cube is able to launch its AI platform or other products in a timely manner, Renovaro Cube may not be able to generate sufficient revenue to offset its costs and maintain profitability. Renovaro Cube’s ability to generate future revenue from product sales depends heavily on its success in:

Renovaro Cube anticipates incurring substantial costs to commercialize Renovaro Cube’s products. Renovaro Cube’s expenses could increase beyond expectations if it is required by the U.S. Food and Drug Administration (the “FDA”), the European Medicines Agency (the “EMA”), the Medicines and Healthcare products Regulatory Agency (“MHRA”) or other regulatory agencies to delay its launch, narrow or change its intended use or product claims, modify or expand its clinical validation, perform future additional clinical validation, either pre- or post-approval, or conduct clinical trials. Even if Renovaro Cube is able to generate revenue from the sale of any products, Renovaro Cube may not become profitable and may need to obtain additional funding to continue its operations.

Renovaro Cube will require additional financing in order to start its commercialization efforts and develop additional products.

To date, Renovaro Cube has financed its operations primarily through the sale of its equity securities and cash flow from consulting services previously provided by Renovaro Cube. Renovaro Cube’s product development and clinical validation activities are expensive, and Renovaro Cube expects to start to spend substantial amounts as it prepares for the launch and commercialization of its AI platform, continues to enhance its AI platform, broadens the applications of its AI platform and develops new products. In addition, obtaining any necessary or desirable regulatory approvals and clearances from the FDA, the MHRA, or the EMA for Renovaro Cube’s products will require substantial additional funding.

Renovaro Cube will require additional capital for the development of its AI platform and future products. Renovaro Cube’s future capital requirements depend on many additional factors, including:

Risks Related to Renovaro Cube’s Business Operations, Products and Industry

Renovaro Cube’s products may not perform as expected, which could materially and adversely affect Renovaro Cube’s business, financial condition, results of operations and growth prospects.

Renovaro Cube does not currently have a commercial product. Renovaro Cube’s success depends on the market’s confidence that it can provide reliable, high-quality products. Assuming successful launch, Renovaro Cube’s products may not perform as expected. If this were to occur, Renovaro Cube’s business, financial condition, results of operations and growth prospects would suffer.

Renovaro Cube’s AI platform requires a number of complex and sophisticated biochemical and bioinformatics processes, many of which are highly sensitive to external factors. An operational or technological failure in one of these complex processes or fluctuations in external variables may result in sensitivity and specificity rates that are lower than Renovaro Cube anticipates or that vary between test runs or in a higher than anticipated number of tests that fail to produce consistent results. In addition, Renovaro Cube regularly evaluates and refines its algorithms and other processes under development. These refinements may inadvertently result in unanticipated issues that may reduce Renovaro Cube’s sensitivity and specificity rates or otherwise adversely affect the performance of the tests supported by Renovaro Cube’s AI platform and the results of such tests.

Further, Renovaro Cube plans to iterate and improve, enhancing product performance, offerings, scalability and/or cost of goods. However, Renovaro Cube may not be successful in transitioning its AI platform to a new or enhanced version or iteration. Product development involves a lengthy and complex process and Renovaro Cube may be unable to commercialize, validate, or improve performance of any of its AI platform or products on a timely basis, or at all. Renovaro Cube’s failure to successfully develop new and/or improved products (including new versions of its existing platform and other products) on a timely basis could have a material adverse effect on Renovaro Cube’s results of operations and business.

Even if Renovaro Cube commercially launches its AI platform and other products, they may fail to achieve the degree of market acceptance necessary for commercial success.

The commercial success of Renovaro Cube’s AI platform and other future products will depend upon the degree of market acceptance by consumers, including self-insured employers, integrated health systems, healthcare providers, patients and, over the long-term, third-party payors. The degree of market acceptance of Renovaro Cube’s products will depend on a number of factors, including:

The failure of Renovaro Cube’s AI platform, once introduced, to be listed in physician guidelines or of any future clinical validation to produce favorable results or to be published in peer-reviewed journals could limit the adoption of its AI platform. In addition, healthcare providers and third-party payors, including Medicare, may rely on physician guidelines issued by industry groups, medical societies and other key organizations, such as the U.S. Preventive Services Task Force, before utilizing or reimbursing the cost of any diagnostic or screening test. Although Renovaro Cube has conducted prior clinical validation of its AI platform, this platform is not yet, and may never be, listed in any such guidelines.

Further, if Renovaro Cube’s products and the technology underlying them do not receive sufficient favorable exposure in peer-reviewed publications, the rate of physician and market acceptance of Renovaro Cube’s products and positive reimbursement or coverage decisions for Renovaro Cube’s products could be negatively affected. The publication of clinical data in peer-reviewed journals is a crucial step in commercializing and obtaining reimbursement or coverage for Renovaro Cube’s products, and Renovaro Cube’s inability to control when, if ever, results are published may delay or limit Renovaro Cube’s ability to derive sufficient revenues from any of its products that is developed using data from a clinical study.

Failure to achieve broad market acceptance of Renovaro Cube’s products, once launched, would materially harm Renovaro Cube’s business, financial condition and results of operations.

Renovaro Cube may be unable to develop and commercialize new products.

Renovaro Cube continues to expand its research and development efforts to use its proprietary AI platform to develop new products, including in disease areas beyond cancer. The commercialization of any new products will require the completion of certain clinical development activities, regulatory activities and the expenditure of additional cash resources. Renovaro Cube cannot assure you that it can successfully complete the clinical development of any such products.

Renovaro Cube also cannot assure you that it will be able to reduce its expenditures sufficiently, generate sufficient revenue from products that it successfully commercializes or otherwise mitigate the risks associated with its business to raise enough capital to develop and commercialize new products. In addition, once Renovaro Cube’s development efforts for a product are completed, commercialization efforts, including allocation of resources necessary to comply with applicable laws and regulations, will require significant expenditures. Any failure by Renovaro Cube to develop and commercialize new products could have a material adverse effect on Renovaro Cube’s ability to implement its strategy and grow its business.

One of the key elements of Renovaro Cube’s strategy is to expand access to its tests by pursuing reimbursement and/or coverage from third-party payors. If Renovaro Cube’s products do not receive adequate coverage or reimbursement from third-party payors, its ability to expand access to its tests beyond its initial sales channels and its overall commercial success will be limited.

Renovaro Cube anticipates that it will not have broad-based coverage or reimbursement at the initial commercial launch. However, a key element to Renovaro Cube’s strategy is to expand access to its tests by pursuing coverage and/or reimbursement by third-party payors, including government payors. Coverage and reimbursement by third-party payors, including managed care organizations, private health insurers and government healthcare programs, such as Medicare and Medicaid in the United States and similar programs in other countries, for the types of early detection and post-diagnosis service tests that Renovaro Cube provides can be limited and uncertain. Healthcare providers may not order Renovaro Cube’s products unless third-party payors cover or provide adequate reimbursement for a substantial portion of the price of Renovaro Cube’s products. If Renovaro Cube is not able to obtain adequate coverage or an acceptable level of reimbursement for its products from third-party payors, there could be a greater co-insurance or co-payment obligation for any individual for whom a test is ordered. The individual may be forced to pay the entire cost of a test out-of-pocket, which could dissuade physicians from ordering Renovaro Cube’s products and, if ordered, could result in delay in, or decreased likelihood of, Renovaro Cube’s collection of payment. Renovaro Cube believes its revenue and revenue growth will depend on its success in achieving broad coverage and adequate reimbursement for its products from third-party payors.

Coverage and reimbursement by a third-party payor may depend on a number of factors, including a payor’s determination that a product is appropriate, medically necessary and cost-effective. Each payor will make its own decision as to whether to establish a policy or enter into a contract to cover Renovaro Cube’s products and the amount it will reimburse for such products. Any determination by a payor to cover and the amount it will reimburse for Renovaro Cube’s products would likely be made on an indication-by-indication basis. For example, because Renovaro Cube intends to cover a broad asymptomatic population with its future products which could potentially generate a significant number of false-positive results on an absolute basis, Renovaro Cube may face additional scrutiny in obtaining reimbursement from third-party payors given the additional costs of further diagnostic workup. As a result, obtaining approvals from third-party payors to cover Renovaro Cube’s products and establishing adequate coding recognition and reimbursement levels is an unpredictable, challenging, time-consuming and costly process and Renovaro Cube may never be successful. If third-party payors do not provide adequate coverage or reimbursement for Renovaro Cube’s products, Renovaro Cube’s ability to succeed commercially will be limited.

Even if Renovaro Cube establishes relationships with payors to provide its products at negotiated rates, such agreements would not obligate any healthcare providers to order its products or guarantee that it would receive reimbursement for its products from these or any other payors at adequate levels. Thus, these payor relationships, or any similar relationships, may not result in acceptable levels of coverage or reimbursement for Renovaro Cube’s products or meaningful increases in the number of billable tests it sells to healthcare providers. Renovaro Cube believes it may take several years to achieve coverage or adequate reimbursement with a majority of third-party payors, including with those payors offering negotiated rates. In addition, Renovaro Cube cannot predict whether, under what circumstances, or at what payment levels payors will cover or reimburse for its products. If Renovaro Cube fails to establish and maintain broad-based coverage or reimbursement for its products, its ability to expand access to its products, generate increased revenue and grow its test volume and customer base will be limited and its overall commercial success will be limited.

If Renovaro Cube’s products, or the products of its competitors, directly or indirectly result in harm or injury to patients, Renovaro Cube could be subject to significant reputational and liability risks, and its operating results, reputation and business could suffer.

Renovaro Cube’s success will depend on the market’s confidence that its developed products can provide reliable, high-quality results, once such products are launched. Renovaro Cube believes that patients, physicians and regulators are likely to be particularly sensitive to errors in the use of its products or failure of its products to perform as described, and there can be no guarantee that its products will meet their expectations. Renovaro Cube’s initial product is intended to be used to detect a cancer signal in patients, but its results are not diagnostic. If a cancer signal is detected, the product would be used to localize the origin of the cancer signal. A “cancer signal detected” test result would need to be followed up by appropriate diagnostic methods. Because this product cannot detect all cancer signals, and may not detect signals for all cancer types, a negative test would not rule out the presence of cancer. Additionally, a patient undergoing unnecessary diagnostic tests on the basis of a false-positive result or an erroneous location of cancer signal result could expose Renovaro Cube to significant liability and reputational risks notwithstanding the emotional and mental health effects to which the patient may be exposed. Similarly, a patient who receives a cancer diagnosis shortly following a “no cancer signal detected” test result may create negative publicity about Renovaro Cube’s product, which would discourage adoption. Performance failures could establish a negative perception of Renovaro Cube’s products among physicians, patients and regulators, jeopardize Renovaro Cube’s ability to successfully commercialize its products, impair Renovaro Cube’s ability to obtain regulatory approvals or secure favorable coverage or reimbursement, or otherwise result in reputational harm. In addition, Renovaro Cube may be subject to legal claims arising from any errors in the use, manufacture, design, labelling or performance of its products, including any false-positive or false-negative results.

In addition, other companies are developing competing cancer detection tests and technologies focused on improving cancer care with cancer detection tests and post-diagnostic products. If any tests marketed or being developed by Renovaro Cube’s competitors that are similar to its products do not perform in accordance with expectations or cause harm or injury to patients, such failure to perform, harm or injury may result in lower confidence in early disease detection and post-diagnosis tests in general, which could potentially adversely affect confidence in Renovaro Cube’s products and result in an adverse impact on its operating results and reputation.

If Renovaro Cube’s facilities or those of its third-party collaborators become inoperable, Renovaro Cube’s ability to provide its products will be significantly impaired and its business will be harmed.

Renovaro Cube relies on its third-party collaborators, consultants, contractors, vendors, suppliers and service providers. The facilities of these partners could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, tornadoes, hurricanes, fires, extreme weather conditions, medical epidemics, pandemics, global conflict, war and other natural or man-made disasters or business interruptions. In addition, they may be affected by government shutdowns, changes to applicable laws, regulations and policies, or withdrawn funding. The occurrence of any of these business disruptions could seriously harm their ability to complete their contracted services to Renovaro Cube, which may adversely impact its operations and financial condition.

Renovaro Cube’s business and results of operations will suffer if it fails to compete effectively.

The testing and diagnostic products industry is intensely competitive. Renovaro Cube has competitors both in Europe and abroad, including Grail, Inc., Exact Sciences Corporation, Freenome, Inc. and Thrive Earlier Detection Corp., that have stated that they are developing tests designed to detect cancer. Renovaro Cube’s competitors have, or may have, substantially greater financial, technical and other resources, such as larger research and development staff and well-established marketing and sales forces, and they may operate in jurisdictions where lower standards of evidence are required to bring products to market. Renovaro Cube’s competitors may succeed in developing, acquiring, or licensing, on an exclusive basis or otherwise, tests or services that are more effective or less costly than Renovaro Cube’s products. In addition, established medical technology, biotechnology, or pharmaceutical companies may invest heavily to accelerate the discovery and development of tests that could make Renovaro Cube’s products less competitive than Renovaro Cube anticipates.

Renovaro Cube’s ability to compete successfully will depend largely on its ability to:

Renovaro Cube may not be able to compete effectively if Renovaro Cube is unable to accomplish one or more of these or similar objectives.

If Renovaro Cube cannot enter new collaborations in a timely manner and on acceptable terms, its efforts to develop and commercialize its products could be delayed or adversely affected.

From time to time, Renovaro Cube expects to engage in discussions with potential development and/or commercial collaborators that may or may not lead to collaborations. However, Renovaro Cube cannot guarantee that any discussions will result in development or commercial collaborations. Further, once news of discussions regarding possible collaborations are known in the general public, regardless of whether the news is accurate, failure to announce a collaboration agreement, or the entity’s announcement of a collaboration with an entity other than Renovaro Cube, could result in adverse speculation about Renovaro Cube, its products or its technology, resulting in harm to its reputation and its business. In addition, establishing collaborations is difficult and time-consuming and may require Renovaro Cube’s significant financial investment. Potential collaborators may elect not to work with Renovaro Cube based on their assessment of its financial, regulatory, or intellectual property position. Even if Renovaro Cube establishes new collaborations, they may not result in the successful development or commercialization of its products or technology.

If Renovaro Cube is unable to establish sales and marketing capabilities, it may not be successful in commercializing Renovaro Cube’s products.

Renovaro Cube has only limited sales and marketing infrastructures and no experience as a company in the sale, marketing and distribution of screening or diagnostic tests. In preparation of a commercial launch, Renovaro Cube is rapidly hiring additional personnel in Renovaro Cube’s sales and marketing organization.

Factors that may inhibit Renovaro Cube’s efforts to commercialize any of its products include:

Renovaro Cube’s business is subject to economic, political, regulatory and other risks associated with international operations.

Renovaro Cube’s business is subject to risks associated with conducting business internationally. For example, some of Renovaro Cube’s suppliers and parties with whom it has collaborative relationships are located outside of the Netherlands, including in the United Kingdom and Israel. Accordingly, Renovaro Cube’s future results could be harmed by a variety of factors, including:

Risks Related to Renovaro Cube’s Employee Matters and Managing Growth

Renovaro Cube is highly dependent on its key personnel. If Renovaro Cube is not successful in attracting, motivating and retaining highly qualified personnel, it may not be able to successfully implement its business strategy.

Renovaro Cube’s ability to compete in the highly competitive biotechnology industry depends upon its ability to attract, motivate and retain highly qualified personnel. Renovaro Cube is highly dependent on its executive management team and its scientific, medical, technological and engineering personnel, all of whom have been working together as a group for only a limited period of time. The loss of the services provided by any of Renovaro Cube’s executive officers, other key employees and other scientific and medical advisors, and Renovaro Cube’s inability to find suitable replacements as needed, could result in delays in commercialization of its products and harm its business. Renovaro Cube does not maintain “key person” insurance policies on the lives of these individuals or the lives of any of its other employees.

Renovaro Cube is headquartered in Amsterdam, the Netherlands, a region in which many other healthcare companies, technology companies and academic and research institutions are headquartered. Competition for personnel is intense and the turnover rate can be high, which may limit Renovaro Cube’s ability to hire and retain highly qualified personnel on acceptable terms or at all. Renovaro Cube expects that it may need to recruit talent from outside of its region, and doing so may be costly and difficult. If Renovaro Cube is unable to attract and retain highly qualified personnel, its ability to develop and commercialize its products may be limited.

If Renovaro Cube is unable to scale its operations successfully to support demand for its products following the launch of its platform, its business could suffer.

As and to the extent demand increases beyond Renovaro Cube’s expectations following the launch of Renovaro Cube’s platform, Renovaro Cube will likely need to start to ramp up operating capacity. Renovaro Cube will need to implement new infrastructure, data processing capabilities, customer service, billing and systems processes, and expand Renovaro Cube’s internal quality assurance program and technology to support operations on a larger scale. Renovaro Cube will also need collaboration arrangements with third-party laboratories to process its physical tests or, if processing of such tests is not fully outsourced to support demand, will need to obtain equipment and certified and licensed laboratory personnel to process these physical tests internally. Renovaro Cube may face difficulties increasing the scale of its operations, including implementing changes in infrastructure or programs or acquiring additional equipment or personnel. As Renovaro Cube refines its products and develops additional products, Renovaro Cube may need to introduce new equipment, implement new systems, technology, controls and procedures, and hire personnel with different qualifications, licenses or certifications.

The value of Renovaro Cube’s products will depend, in part, on Renovaro Cube’s ability to perform tests, whether through a licensed provider or internally, and return results to providers on a timely basis and at an appropriate quality standard, and on Renovaro Cube’s reputation for such timeliness and quality. Failure to establish necessary arrangements with licensed providers, to implement necessary procedures, to transition to new equipment or processes, or to hire the appropriately qualified personnel could result in higher costs of processing, longer turnaround times or an inability to meet market demand. There can be no assurance that Renovaro Cube or any such licensed provider will be able to perform tests on a timely basis at a level consistent with demand, that Renovaro Cube will be able to maintain the quality of its test results as Renovaro Cube scales its commercial operations, or that Renovaro Cube will be successful in responding to the potential growing complexity of its operations, including the related data analysis requirements.

In addition, Renovaro Cube’s growth may place a significant strain on its management, operating and financial systems, research and development, and its sales, marketing, and administrative resources. As a result of Renovaro Cube’s growth, its operating costs may escalate even faster than planned, and some of its internal systems may need to be enhanced or replaced. If Renovaro Cube cannot effectively manage its expanding operations and its costs, Renovaro Cube may not be able to grow successfully or it may grow at a slower pace, and its business could be adversely affected.

Renovaro Cube will need to grow the size and capabilities of its organization, and it may experience difficulties in managing this growth.

As of February 13, 2024, Renovaro Cube had 11 full-time employees and four independent contractors, including two full-time. As Renovaro Cube’s growth plan and strategies develop, it must add a significant number of additional managerial, operational, financial and other personnel. Future growth will impose significant added responsibilities on members of management, including:

Renovaro Cube’s future financial performance and its ability to commercialize its products will depend, in part, on its ability to effectively manage any future growth. Renovaro Cube’s management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to manage these growth activities. Renovaro Cube’s ability to successfully manage its expected growth is uncertain given the fact that Renovaro Cube has been in full operation as an independent company focusing on cancer diagnostics AI only since 2018. Renovaro Cube’s executive management team’s lack of long-term experience working together may adversely impact their ability to effectively manage its business and growth.

If Renovaro Cube is not able to effectively expand its organization by hiring new employees, it may not be able to successfully implement the tasks necessary to commercialize its products, which would have a negative impact on Renovaro Cube’s business and result of operations.

Risks Related to Renovaro Cube’s Legal Compliance and Litigation

Changes in funding or disruptions at the EMA, the MRHA, and other government agencies caused by funding shortages or global health concerns could hinder Renovaro Cube’s ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of Renovaro Cube’s business may rely, which could negatively impact its business.

The ability of the EMA, the MRHA, and, in the future, the FDA and other government agencies to review and clear or approve new products or changes to existing products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the agency’s ability to hire and retain key personnel and accept the payment of user fees, government shutdowns and other events that may otherwise affect the agency’s ability to perform routine functions. For example, average review times at the FDA have fluctuated in recent years as a result of such factors. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the EMA, the MRHA, and, in the future, the FDA and other agencies may also slow the time necessary for new medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved by necessary government agencies, which would adversely affect Renovaro Cube’s business.

If Renovaro Cube is sued for product or professional liability, it could face substantial liabilities that exceed its resources.

Renovaro Cube’s business depends upon its ability to obtain reliable and accurate test results that incorporate rapidly evolving understanding of how to interpret minute signals detected by Renovaro Cube’s assays as indications of potential presence of disease. Actual or perceived errors resulting from laboratory or reporting errors, false positive or false negative test results, or the manufacture, design, or labelling of Renovaro Cube’s products, could subject Renovaro Cube to product liability or professional liability claims. A product liability or professional liability claim against Renovaro Cube could result in substantial damages and be costly and time-consuming to defend. Any liability claim brought against Renovaro Cube, with or without merit, could increase its insurance rates or prevent it from securing insurance coverage in the future. Additionally, any liability lawsuit could damage Renovaro Cube’s reputation or force it to delay or suspend sales of its products. The occurrence of any of these events could have a material adverse effect on Renovaro Cube’s business, results of operations, financial condition and prospects.

Renovaro Cube’s employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

Renovaro Cube is exposed to the risk of fraud, misconduct, or other illegal activity by its employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and negligent conduct that fails to comply with the rules and regulations of the Centers for Medicare & Medicaid Services (the “CMS”), the FDA, the EMA, the MRHA and other comparable regulatory authorities; provide true, complete and accurate information to such regulatory authorities; comply with manufacturing and clinical laboratory standards; comply with healthcare fraud and abuse laws in the United Kingdom, Europe and, in the future, the United States and similar fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to Renovaro Cube. When Renovaro Cube begins commercializing its products in the United Kingdom and Europe and, in the future, the United States, its potential exposure under such laws will increase significantly, and its costs associated with compliance with such laws are also likely to increase. In particular, research, sales, marketing, education and other business arrangements in the healthcare industry are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices, as well as off-label product promotion. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, educating, marketing and promotion, sales and commission, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of clinical validation, which could result in regulatory sanctions and cause serious harm to Renovaro Cube’s reputation. Renovaro Cube has adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by employees and third parties, and the precautions Renovaro Cube takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting Renovaro Cube from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against Renovaro Cube, and Renovaro Cube is not successful in defending itself or asserting its rights, those actions could have a significant impact on Renovaro Cube’s business, including the imposition of significant fines or other sanctions. Even if it is later determined after an action is instituted against Renovaro Cube that Renovaro Cube was not in violation of these laws, Renovaro Cube may be faced with negative publicity, incur significant expenses defending its actions and have to divert significant management resources from other matters.

Renovaro Cube’s products, if used for the diagnosis of disease, could be subject to government regulation, and the regulatory approval and maintenance process for such products may be expensive, time-consuming, and uncertain both in timing and in outcome.

Renovaro Cube’s products are not subject to FDA or other government regulatory clearance or approval if they are not intended to be used for the diagnosis, treatment or prevention of disease. However, as Renovaro Cube expands its product line to encompass products that are intended to be used for the diagnosis of disease, certain of its products will become subject to regulation by the FDA, or comparable international agencies, including requirements for regulatory clearance or approval of such products before they can be marketed. Such regulatory approval processes or clearances may be expensive, time-consuming, and uncertain, and Renovaro Cube’s failure to obtain or comply with such approvals and clearances could have an adverse effect on its business, financial condition, or operating results. In addition, changes to the current regulatory framework, including the imposition of additional or new regulations, could arise at any time during the development or marketing of Renovaro Cube’s future products, which may negatively affect its ability to obtain or maintain FDA or comparable regulatory approval of its products, if required.

Diagnostic products are regulated as medical devices by the FDA and comparable international agencies and may require either clearance from the FDA or such other comparable agencies following the 510(k) pre-market notification process or pre-market approval from the FDA, in each case prior to marketing. Obtaining the requisite regulatory approvals can be expensive and may involve considerable delay. If Renovaro Cube fails to obtain, or experiences significant delays in obtaining, regulatory approvals for diagnostic products that it develops in the future, Renovaro Cube may not be able to launch or successfully commercialize such products in a timely manner, or at all.

In addition, if Renovaro Cube’s products labelled as “For Research Use Only. Not for use in diagnostic procedures,” or RUO, are used, or could be used, for the diagnosis of disease, the regulatory requirements related to marketing, selling, and supporting such products could change or be uncertain, even if such use by Renovaro Cube’s customers is without its consent. If the FDA or other regulatory agencies assert that any of Renovaro Cube’s RUO products are subject to regulatory clearance or approval, Renovaro Cube’s business, financial condition, or results of operations could be adversely affected.

Regulatory and legislative developments on the use of AI and machine learning could adversely affect Renovaro Cube’s use of such technologies in its platform and other products.

As the regulatory framework for machine learning technology and AI evolves, Renovaro Cube’s business, financial condition, and results of operations may be adversely affected. The regulatory framework for machine learning technology, AI and automated decision-making is evolving. It is possible that new laws and regulations will be adopted in the United Kingdom, the European Union, the United States and/or other foreign jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of Renovaro Cube’s AI platform and data analytics and the way in which Renovaro Cube uses AI and machine learning technology. Further, the cost to comply with such laws or regulations could be significant and would increase Renovaro Cube’s operating expenses, which could adversely affect its business, financial condition and results of operations.

For example, in Europe, on April 21, 2021, the European Commission proposed a regulation seeking to establish a comprehensive, risk-based governance framework for AI in the European Union market. The proposed legislation is intended to apply to companies that develop, use and/ or provide AI in the European Union and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security and accuracy, and proposes fines for breach of up to 6% of worldwide annual turnover. In addition, on September 28, 2022, the European Commission proposed the AI Liability Directive and the revised Product Liability Directive seeking to establish a harmonized civil liability regime for AI in the European Union in order to facilitate civil claims in respect of harm caused by AI and to include AI-enabled products within the scope of the European Union’s existing product liability regime. If enacted, this regulatory framework is expected to have a material impact on the way AI is regulated in the European Union, and together with developing guidance and/or decisions in this area, may affect Renovaro Cube’s use of AI and its ability to provide and to improve its services, require additional compliance measures and changes to its operations and processes, result in increased compliance costs and potential increases in civil claims against Renovaro Cube, and could adversely affect its business, operations and financial condition.

Risks Related to Renovaro Cube’s Technology and Intellectual Property

Issues in the development and use of AI, including machine learning and computer vision, in Renovaro Cube’s AI platform may result in reputational harm or liability.

AI is integrated into Renovaro Cube’s platform and is a significant element of its business offerings going forward. As with many developing technologies, AI presents risks, challenges and unintended consequences that could affect its further development, adoption, and use, and therefore Renovaro Cube’s business. AI algorithms and training methodologies may be flawed. Data sets may be insufficient, of poor quality, or contain biased information. Inappropriate or controversial data practices by data scientists, engineers, and end-users of Renovaro Cube’s systems could impair the acceptance of AI solutions. If the analyses that AI applications assist in producing are deficient or inaccurate, Renovaro Cube could be subjected to competitive harm, potential legal liability, and brand or reputational harm. Some uses of AI present ethical issues, and Renovaro Cube’s judgment as to the ethical concerns may not be perceived as accurate. While Renovaro Cube aims to develop and use AI responsibly and attempts to identify and mitigate ethical and legal issues presented by its use, Renovaro Cube may be unsuccessful in identifying or resolving issues before they arise. If Renovaro Cube uses AI as part of its platform in a manner that is controversial or perceived as unethical, this may lead to adverse results for Renovaro Cube’s financial condition and operations or the financial condition and operations of its collaborators or vendors, which may further lead to Renovaro Cube experiencing competitive harm, legal liability and brand or reputational harm. In addition, AI-related issues, deficiencies and/or failures could give rise to legal and/or regulatory action, including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new applications of existing data protection, privacy, intellectual property, and other laws.

Failure of, or defects in, Renovaro Cube’s machine learning and cloud-based computing infrastructure, or increased regulation in the machine learning space, could impair Renovaro Cube’s ability to process its data, develop products, or provide test results, and harm its business and results of operations.

The design, development, maintenance and operation of Renovaro Cube’s technology over time is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors. Overcoming technical obstacles and correcting defects or errors could prove to be impossible or impracticable, and the costs incurred may be substantial and adversely affect Renovaro Cube’s results of operations. Additionally, regulation in the machine learning space is constantly evolving and may make it difficult for Renovaro Cube to continue using its machine learning approach. If Renovaro Cube’s technology does not function reliably, fails to meet expectations in terms of performance, or cannot be fully utilized due to increasing regulation, Renovaro Cube may be unable to provide, or its customers may stop using, its products.

Renovaro Cube currently hosts all of its data on, and conducts its data analysis through, local hosting facilities. Any technical problems or outages that may arise in connection with these hosting facilities could result in the loss of Renovaro Cube’s data or delayed or ineffective data processing. A variety of factors, including infrastructure changes, human or software errors, viruses, malware, security attacks, fraud, spikes in customer usage, or denial of service issues could cause interruptions in Renovaro Cube’s service. Such service interruptions may reduce or inhibit Renovaro Cube’s ability to provide its products, delay any further clinical validation and any future clinical studies, and damage its relationships with its customers. Renovaro Cube could also be exposed to potential lawsuits, liability claims or regulatory actions, if, for example, Renovaro Cube’s local servers experienced a data privacy breach. If Renovaro Cube was required to transfer its data to an alternative hosting provider, the transfer and acclimation to the new provider could result in significant business delays and require additional resources.

Real or perceived errors, failures, or bugs in Renovaro Cube’s platform and future products could adversely affect its business, results of operations, financial condition, and growth prospects.

Renovaro Cube’s platform is, and its future products will be, complex, and therefore, undetected errors, failures, bugs, or defects may be present in such platform or products or occur in the future in its platform or products, its technology or software or the technology or software Renovaro Cube licenses from third parties, including open source software, especially when updates or new products are released. Such software and technology is used in information technology (“IT”) environments with different operating systems, system management software, devices, databases, servers, storage, middleware, custom and third-party applications, and equipment and networking configurations, which may cause errors, failures, bugs, or defects in the IT environment into which such software and technology is deployed. This diversity increases the likelihood of errors, failures, bugs, or defects in those IT environments. Some of the features in Renovaro Cube’s platform are powered by machine learning and AI, which depend on datasets and algorithms that could be flawed, including through inaccurate, insufficient, outdated, or biased data. Despite testing by Renovaro Cube, real or perceived errors, failures, bugs, or defects may not be found until Renovaro Cube’s customers use its products. Real or perceived errors, failures, bugs, or defects in Renovaro Cube’s products could result in negative publicity, loss of or delay in market acceptance of its platform or future products and harm to its brand, loss of investor confidence, weakening of its competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in its customer agreements. In such an event, Renovaro Cube may be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem. Any real or perceived errors, failures, bugs, or defects in Renovaro Cube’s products could also impair its ability to attract new customers, retain existing customers, or expand their use of its products, which would adversely affect Renovaro Cube’s business, results of operations and financial condition.

Renovaro Cube may also be subject to liability claims for damages related to real or perceived errors, failures, bugs, or defects in its platform or future products. A material liability claim or other occurrence that harms Renovaro Cube’s reputation or decreases market acceptance of its platform or future products may harm its business and results of operations. Finally, since some of Renovaro Cube’s customers use its products for compliance reasons, any errors, failures, bugs, defects, disruptions in service or other performance problems with Renovaro Cube’s products may damage its customers’ businesses and could hurt its reputation.

Renovaro Cube’s internal computer systems, or those expected to be used by its third-party research institution collaborators or other contractors or consultants, may fail or suffer security breaches.

Despite the implementation of security and back-up measures, Renovaro Cube’s internal computer, server and other information technology systems as well as those of its third-party collaborators, consultants, contractors, suppliers and service providers, may be vulnerable to damage from physical or electronic break-ins, computer viruses, malware, ransomware, denial of service and other cyber-attacks or disruptive incidents that could result in unauthorized access to, use or disclosure of, corruption of, or loss of sensitive and/or proprietary data, including personal and health information, and could subject Renovaro Cube to significant liabilities, regulatory and enforcement actions and reputational damage. For example, the loss of clinical study data from future clinical studies could result in delays in any regulatory clearance or approval efforts and significantly increase Renovaro Cube’s costs to recover or reproduce the data, and subsequently commercialize its future products. If Renovaro Cube or its third-party collaborators, consultants, contractors, suppliers or service providers were to suffer an attack or breach, for example, that resulted in the unauthorized access to or use or disclosure of personal or health information, Renovaro Cube may have to notify physicians, patients, partners, collaborators, government authorities and the media, and may be subject to investigations, civil penalties, administrative and enforcement actions and litigation, any of which could harm Renovaro Cube’s business and reputation. Likewise, Renovaro Cube relies on its third-party research institution collaborators and other third parties to conduct clinical validation, and similar events relating to their computer systems could also have a material adverse effect on Renovaro Cube’s business. To the extent that any disruption or security breach were to result in a loss of, or damage to, Renovaro Cube’s data or systems, or inappropriate or unauthorized access to or disclosure or use of confidential, proprietary, or other sensitive, personal, or health information, Renovaro Cube could incur liability and suffer reputational harm, and the development and commercialization of its products could be delayed.

Renovaro Cube’s insurance policies may not be adequate to compensate it for the potential losses arising from such disruptions, failure, or security breach. In addition, such insurance may not be available to Renovaro Cube in the future on economically reasonable terms, or at all. Further, Renovaro Cube’s insurance may not cover all claims made against it and defending a suit, regardless of its merit, could be costly, divert management attention and harm Renovaro Cube’s reputation.

If Renovaro Cube is unable to protect the confidentiality of its trade secrets, Renovaro Cube’s business and competitive position would be harmed.

Renovaro Cube relies on trade secrets and confidentiality agreements to protect its know-how, technology, data and other proprietary information and to maintain its competitive position. Trade secrets and know-how can be difficult to protect. Renovaro Cube expects its trade secrets and know-how to, over time, be disseminated within the industry through independent development, the publication of journal articles describing the methodology and the movement of personnel from academic to industry scientific positions.

Renovaro Cube seeks to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as Renovaro Cube’s employees, directors, corporate collaborators, outside scientific collaborators, contract research organizations (“CROs”), contract manufacturers, suppliers, service providers, consultants, advisors and other third parties. Renovaro Cube also enters into confidentiality and invention or patent assignment agreements with its employees and consultants, and reminds departing employees when they leave their employment of their continuing confidentiality obligations. Renovaro Cube cannot guarantee that it has entered into such agreements with each party that may have, or have had, access to Renovaro Cube’s trade secrets or proprietary technology and processes. Despite Renovaro Cube’s efforts, any of these parties may breach the agreements and disclose Renovaro Cube’s proprietary information, including Renovaro Cube’s trade secrets, and Renovaro Cube may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. Some courts outside The Netherlands are less willing or unwilling to protect trade secrets. For example, in China, claims regarding infringement or misappropriation of trade secrets are difficult to prove, and consequently plaintiffs are rarely successful in bringing these claims. If any of Renovaro Cube’s trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, Renovaro Cube would have no right to prevent them from using that technology or information to compete with Renovaro Cube. If any of Renovaro Cube’s trade secrets were to be misappropriated by, disclosed to, or independently developed by a competitor or other third party, Renovaro Cube’s competitive position could be materially and adversely harmed.

Renovaro Cube has and may enter into collaboration, license, contract research and/or manufacturing relationships with contract organizations that operate in certain countries that are at heightened risk oftheft of technology, data and intellectual property through direct intrusion by private parties or foreign actors, including those affiliated with or controlled by state actors. Accordingly, Renovaro Cube’s efforts to protect and enforce Renovaro Cube’s intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Renovaro Cube develops or licenses, and Renovaro Cube may be at heightened risk of losing its proprietary intellectual property rights around the world, including outside of such countries, to the extent such theft or intrusion destroys the proprietary nature of its intellectual property.

Renovaro Cube depends on its information technology and telecommunications systems and those of third parties, the failure or disruption of which could harm its business.

Renovaro Cube depends on information technology and telecommunications systems, including those provided by third parties and their vendors, for significant elements of its operations, such as its information management systems, research and development, scientific and medical data analysis and general administrative activities. In addition, Renovaro Cube’s third-party service providers depend upon technology and telecommunications systems provided by outside vendors. Following the Closing, Renovaro Cube expects that the combined company will expand and strengthen a number of enterprise software systems that affect a broad range of business processes and functions, including, for example, systems handling human resources, financial controls and reporting, customer relationship management, regulatory compliance, security controls and other infrastructure operations. These expansions may prove more difficult than Renovaro Cube expects and could cause disruptions in its operations or additional expense.

Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and back-up measures, some of Renovaro Cube’s servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive events. Despite the precautionary measures Renovaro Cube has taken to detect and prevent or solve problems that could affect its information technology and telecommunications systems, failures or significant downtime of these systems or those used by its third-party service providers and their vendors could prevent Renovaro Cube from conducting tests, preparing and providing reports to future customers, billing payors, conducting research and development activities, maintaining its financial controls and other reporting functions, and managing the administrative aspects of its business. Any disruption or loss of information technology or telecommunications systems on which critical aspects of Renovaro Cube’s operations depend could have an adverse effect on its business.

If Renovaro Cube’s trademarks and trade names are not adequately protected, Renovaro Cube may not be able to build name recognition in its markets of interest and its business may be adversely affected.

Renovaro Cube uses certain unregistered trademarks and trade names in its business. These trademarks or trade names may be challenged, infringed or declared generic or determined to be infringing on other marks. Renovaro Cube may not be able to protect its rights to these trademarks and trade names in the future, which Renovaro Cube views as valuable to building name recognition among potential partners and customers in its markets of interest. At times, competitors or other third parties have adopted or may adopt trade names or trademarks similar to Renovaro Cube’s trade names and/or trademarks, thereby impeding its ability to build brand identity and possibly leading to market confusion and/or litigation. In addition, there could be potential trade name or trademark infringement claims brought by owners of registered trademarks or trademarks that incorporate variations of Renovaro Cube’s unregistered trademarks or trade names. Over the long term, if Renovaro Cube is unable to establish name recognition based on its trademarks and trade names, then Renovaro Cube may not be able to compete effectively and Renovaro Cube’s business may be adversely affected. Renovaro Cube’s efforts to enforce, protect or defend its proprietary rights related to trademarks and trade names may be ineffective and could result in substantial costs and diversion of resources and could adversely affect Renovaro Cube’s business, financial condition, results of operations and prospects.

Intellectual property litigation may lead to unfavorable publicity that harms Renovaro Cube’s reputation.

During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions and other interim proceedings in the litigation. Such announcements could harm Renovaro Cube’s reputation, the perceived value of Renovaro Cube’s intellectual property or the potential market for its products, which could have a material adverse effect on its business.

Renovaro Cube’s success depends on its ability to develop and commercialize its technology without infringing, misappropriating, or otherwise violating the intellectual property of third parties. Third parties may initiate legal proceedings alleging that Renovaro Cube is infringing their intellectual property rights, and if they prevail, could block sales of Renovaro Cube’s products and force Renovaro Cube to make large damages and/or royalty payments, which could have a material adverse effect on the success of its business.

Renovaro Cube’s commercial success in part depends upon its ability, and the ability of its collaborators, to market, sell and distribute Renovaro Cube’s products and use Renovaro Cube’s proprietary technologies without infringing, misappropriating or otherwise violating the proprietary rights of third parties. There is considerable intellectual property litigation in the medical technology, biotechnology, diagnostic and pharmaceutical industries. Renovaro Cube may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to its products, including interference proceedings before the United Kingdom Intellectual Property Office, the European Patent Office, the United States Patent and Trademark Office and similar bodies in other jurisdictions. Third parties may assert infringement claims against Renovaro Cube based on existing patents or patents that may be issued in the future.

If Renovaro Cube is found to infringe, misappropriate, or otherwise violate a third party’s intellectual property rights, it could be required to obtain a license from such third party to continue developing, marketing, selling and distributing Renovaro Cube’s products, or to cease using the infringing technology. However, Renovaro Cube may not be able to obtain any required license on commercially reasonable terms or at all. Even if Renovaro Cube were able to obtain a license, it could be non-exclusive, thereby giving Renovaro Cube’s competitors access to the same technologies licensed to Renovaro Cube. In addition, Renovaro Cube could be found liable for monetary damages, including treble damages if it is found to have willfully infringed a patent and attorneys’ fees if the court finds the case to be exceptional. A finding of infringement, misappropriation, or other violation could prevent Renovaro Cube from commercializing its products or force Renovaro Cube to cease some of its operations, which could materially harm its business. Claims that Renovaro Cube has misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on Renovaro Cube’s business.

Even if resolved in Renovaro Cube’s favor, litigation or other legal proceedings relating to intellectual property claims may cause Renovaro Cube to incur significant expenses and could distract Renovaro Cube’s personnel from their normal responsibilities. Such litigation or proceedings could substantially increase Renovaro Cube’s operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. Renovaro Cube may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of Renovaro Cube’s competitors may be able to sustain the costs of such litigation or proceedings more effectively than Renovaro Cube can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on Renovaro Cube’s ability to compete in the market place.

Renovaro Cube’s use of open-source software could subject Renovaro Cube’s proprietary technology to unwanted open-source license conditions that could negatively impact its business.

A portion of Renovaro Cube’s technology capabilities incorporates open-source software, and Renovaro Cube may incorporate open-source software into other offerings or products in the future. If an author or other third party that distributed such open-source software to Renovaro Cube were to allege that Renovaro Cube had not complied with the conditions of one or more of these licenses, Renovaro Cube could be required to incur significant legal expenses defending against such allegations. Further, the outcome of such litigation may be particularly uncertain in some cases, because there is little legal precedent governing the interpretation of certain terms of common open source licenses. In addition, if Renovaro Cube combines its proprietary software with open-source software in a certain manner and makes it available to others, under some open-source licenses, it could be required to license or make available the source code of its proprietary software, which could substantially help its competitors develop products that are similar to or better than Renovaro Cube’s and harm its business.

The success and growth of Renovaro Cube’s business depends upon its ability to continuously innovate and develop new products and technologies.

Renovaro Cube’s solution is a technology-driven platform that relies on innovation to remain competitive. The process of developing new technologies and products is complex, and Renovaro Cube has built and seeks to further develop its own technology using the latest in AI and machine learning, cloud-based technologies and other tools to differentiate Renovaro Cube’s products and technologies. In addition, Renovaro Cube’s dedication to incorporating technological advancements into its AI platform requires significant financial and personnel resources and talent. Renovaro Cube’s development efforts with respect to these initiatives could distract management from current operations and could divert capital and other resources from other growth initiatives important to Renovaro Cube’s business. Renovaro Cube operates in an industry experiencing rapid technological change and frequent product introductions. Renovaro Cube may not be able to make technological improvements as quickly as demanded by its customers, or Renovaro Cube may not be able to accurately predict the demand or growth of its technological investments, which could harm its ability to attract customers and have a material and adverse effect on its business, results of operations, financial condition and future prospects. In addition, Renovaro Cube may not be able to effectively implement new technology-driven products and services as quickly as its competitors or be successful in marketing these products and services to potential customers. If Renovaro Cube is unable to successfully and timely innovate, Renovaro Cube could experience reputational damage and decreased demand for its AI platform and other products and technologies and its growth, business, results of operations, financial condition and future prospects could be materially and adversely affected.

Renovaro Cube’s AI platform and other related products may become obsolete due to fast growing technological innovations or the entry of competitors with more financial and brand power.

AI is a fast growing industry and Renovaro Cube must successfully adapt and manage technological advancements in AI and AI-related markets, as well as effectively compete with the emergence of additional competitors in the AI industry in order to maintain and grow Renovaro Cube’s AI business and products. Thus, the success of Renovaro Cube’s AI platform, other products and business depends in large part on its ability to keep pace with rapid technological changes in the development and implementation of AI products. For example, the development of groundbreaking technological innovations in AI, or innovations that would render AI obsolete, would harm Renovaro Cube’s business and make its platform or other products less durable. Further, the entry of competitors into the AI market that have more financial and brand power could cause Renovaro Cube’s share of the market to be significantly reduced thereby negatively affecting its business, operating results and financial condition.