What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-11 compared with 2023-05-15 · 247 added, 246 removed, 522 unchanged (49% of the section changed)

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is a clinical stage pharmaceutical company seeking to develop innovative solutions for severe pain relief while reducing the fear of

and the potential for addiction, opioid misuse, abuse and overdose.

We have also incorporated a 79.2%-owned subsidiary, EBIR, Inc.

known as Covistat, Inc.), a clinical stage pharmaceutical company that is developing a compound utilized in our overdose protection program

for the treatment of COVID-19.

and the potential for opioid misuse, abuse and overdose.

Our lead product candidate, PF614, is an extended release TAAP prodrug of oxycodone.

TAAP modification

of prescription drugs removed the ability to crush, chew or manipulate and inject to achieve the effect of the medication more quickly

than by swallowing.

TAAP modification of prescription drugs removed the ability to crush, chew or manipulate and inject to achieve the effect of the medication

more quickly than by swallowing.

MPAR ® adds a layer of overdose protection to each TAAP product.

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We may never be able to develop or commercialize a marketable product.

lead product candidate, PF614, is in Phase 2 clinical development, PF614-MPAR™ is in Phase 1b clinical development and nafamostat

is proceeding towards Phase 2 clinical development.

Our other product candidates and our research initiatives are in preclinical or earlier

stages of development.

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on

the successful development and eventual commercialization of one or more of our product candidates.

We have not yet successfully completed

any pivotal clinical trials, nor have we obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales

and marketing activities.

lead product candidate, PF614, is in Phase 2 clinical development, PF614-MPAR is in Phase 1b clinical development and nafamostat is proceeding

towards Phase 2 clinical development.

Our other product candidates and our research initiatives are in preclinical or earlier stages

of development.

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful

development and eventual commercialization of one or more of our product candidates.

We have not yet successfully completed any pivotal

clinical trials, nor have we obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing

have incurred significant operating losses since inception and we expect to continue to incur net losses for the foreseeable future.

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particularly if and as we:

continue preclinical studies

and continues existing and initiates new clinical trials for PF614, PF614-MPAR™ and nafamostat, our lead product candidates

being tested for chronic pain and infectious disease;

advance the development

of our product candidate pipeline of other product candidates, including through business development efforts to invest in or in-license

other technologies or product candidates;

maintain, expand and protect

our intellectual property portfolio;

hire additional clinical,

quality control, medical, scientific and other technical personnel to support our clinical operations;

seek regulatory approval

for any product candidates that successfully complete clinical trials;

undertake any pre-commercialization

activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory

expand our infrastructure

and facilities to accommodate our growing employee base;

add operational, financial

and management information systems and personnel, including personnel to support our research and development programs and any future

commercialization efforts.

preclinical studies and continues existing and initiates new clinical trials for PF614, PF614-MPAR and nafamostat, our lead product

candidates being tested for chronic pain and infectious disease;

the development of our product candidate pipeline of other product candidates, including through business development efforts to

invest in or in-license other technologies or product candidates;

expand and protect our intellectual property portfolio;

additional clinical, quality control, medical, scientific and other technical personnel to support our clinical operations;

regulatory approval for any product candidates that successfully complete clinical trials;

any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which

we may receive regulatory approval;

our infrastructure and facilities to accommodate our growing employee base;

operational, financial and management information systems and personnel, including personnel to support our research and development

programs and any future commercialization efforts.

have incurred and expect to continue to incur costs associated with operating as a public company, including significant legal, accounting,

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viability is dependent on our ability to raise additional capital to finance our operations.

Without raising additional capital through

a future offering, we believe that current cash on hand is insufficient to fund operations through the end of the fourth quarter of 2023.

expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our product candidates

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an aggregate purchase price of $5.0 million (collectively, the “ First Closing Notes ”) and (ii) warrants to purchase

18,058 shares of the Company’s common stock in the aggregate at an exercise price of $152.60 per share.

1,507 shares of the Company’s common stock in the aggregate at a current exercise price of $3.64 per share.

At the second closing,

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principal amount of $10.6 million (collectively, the “ Second Closing Notes ”, together with the First Closing Notes,

the “ 2021 Notes ”) for an aggregate purchase price of $10.0 million and (ii) warrants to purchase 36,116 shares of

the Company’s common stock in the aggregate at an exercise price of $152.60 per share.

the “ 2021 Notes ”) for an aggregate purchase price of $10.0 million and (ii) warrants to purchase 3,005 shares of the

Company’s common stock in the aggregate at a current exercise price of $3.64 per share.

The 2021 Notes were satisfied on October

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and interest on the 2022 Notes was repaid in the first quarter of 2023.

However, we remain obligated under the 2022 Notes to pay additional

cash as true-up payments for interest or redemption amounts that we paid in shares of common stock that were valued below $24.07 or the

lower conversion price of $9.01 in effect between January 12, 2023 and May 12, 2023.

The true-up payments compensate for the difference

We were obligated under the 2022 Notes to pay additional cash

as true-up payments for interest or redemption amounts that we paid in shares of common stock that were valued below $24.07 or the lower

conversion price of $9.01 in effect between January 12, 2023 and May 12, 2023.

The true-up payments compensate the holder for the difference

between the value of a share and the conversion price in effect at the time of redemption, multiplied by the number of shares paid.

true-up payments are due (in cash) on May 12, 2023.

true-up payments totaling $0.6 million were paid on May 12, 2023.

connection with each of the first and second closings of the 2022 Notes we also issued warrants to purchase 38,894 shares of the Company’s

common stock.

The warrants have an exercise price of $24.07and are exercisable for five years following issuance of the 2022 Notes.

issuance of these warrants required us to reduce the conversion price of the 2021 Notes and the exercise price of the outstanding warrants

associated with the 2021 Notes to $187.20.

proceeds of the 2022 Notes are being used for working capital purposes subject to certain customary restrictions are secured by the Company’s

rights to its patents and licenses.

We are restricted from issuing certain additional debt or equity without the prior written consent

of the holders for certain specified periods set forth in the 2022 Notes.

If, at any time while the 2022 Notes are outstanding, we carry

out one or more capital raises in excess of $5.0 million, the holder has the right to require us to use up to 20% of the gross proceeds

of such transaction to redeem all or a portion of the convertible notes for an amount in cash equal to the cash Mandatory Redemption

Amount (i.e., 108% of outstanding principal and unpaid interest).

In connection with a financing which occurred in December 2022, we

repaid $0.7 million of principal on the 2022 Notes and paid an additional $0.1 million of interest and premium payments.

The warrants have a current exercise price of $3.64 and are exercisable for five years following issuance of the 2022 Notes.

Underwriting Agreement

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a period of 90 days after the date of the final prospectus relating to the Offering.

Securities Purchase Agreement

February Offering

February 2, 2023, we entered into a definitive Securities Purchase Agreement (the “ Purchase Agreement ”) with

certain institutional investors (the “ Purchasers ”), pursuant to which the Company agreed to issue and sell

in a registered direct offering (the “ Offering ”), priced “at-the-market” under the rules of The

Nasdaq Stock Market, an aggregate of 297,619 shares (the “ Shares ”) of common stock of the Company, par value

$0.0001 per share (the “ Common Stock ”), at an offering price of $10.08 per share, for gross proceeds of approximately

$3.0 million before the deduction of placement agent fees and offering expenses.

The closing of the Offering occurred on February 6,

certain institutional investors (the “ Purchasers ”), pursuant to which the Company agreed to issue and sell in a

registered direct offering (the “ Offering ”), priced “at-the-market” under the rules of The Nasdaq

Stock Market, an aggregate of 297,619 shares (the “ Shares ”) of common stock of the Company, par value $0.0001 per

share (the “ Common Stock ”), at an offering price of $10.08 per share, for gross proceeds of approximately $3.0

million before the deduction of placement agent fees and related costs of $0.3 million.

The closing of the Offering occurred on

February 6, 2023.

The Shares were offered by the Company pursuant to a shelf registration statement on Form S-3 (File No.

333-269157), which was

initially filed with the Securities and Exchange Commission (the “ Commission ”) on January 9, 2023 and was declared

effective by the Commission on January 17, 2023 (the “Registration Statement”), and a related prospectus.

a concurrent private placement (the “ Private Placement ”), the Company issued to the Purchasers, for each share

of Common Stock purchased in the Offering, a common warrant to purchase one share of Common Stock (the “ Common Warrants ”).

333-269157), which was initially filed with the Securities and Exchange Commission (the “ Commission ”) on January

9, 2023 and was declared effective by the Commission on January 17, 2023 (the “Registration Statement”), and a related

a concurrent private placement (the “ Private Placement ”), the Company issued to the Purchasers, for each share of

Common Stock purchased in the Offering, a common warrant to purchase one share of Common Stock (the “ Common Warrants ”).

The Common Warrants are exercisable immediately upon issuance and terminate five and one-half years following issuance.

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acted as the exclusive placement agent (the “ Placement Agent ”) for the Offering.

warrants (the “ Placement Agent Warrants ”) to purchase up to 20,833 shares of Common Stock to the Placement

Agent (including its designees).

These warrants have an exercise price equal to $12.60 per share and are exercisable for five years from

the commencement of sales in the Offering.

The Common Warrants and Placement Agent Warrants and the shares of our Common Stock issuable

upon the exercise of the Common Warrants and Placement Agent Warrants are not being registered under the Securities Act of 1933, as amended

(the “ Securities Act ”), are not being offered pursuant to the Registration Statement, and are being offered

pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b).

We issued warrants

(the “ Placement Agent Warrants ”) to purchase up to 20,833 shares of Common Stock to the Placement Agent (including

its designees).

These warrants have an exercise price equal to $12.60 per share and are exercisable for five years from the commencement

of sales in the Offering.

The Common Warrants and Placement Agent Warrants and the shares of our Common Stock issuable upon the exercise

of the Common Warrants and Placement Agent Warrants are not being registered under the Securities Act of 1933, as amended (the “ Securities

Act ”), are not being offered pursuant to the Registration Statement, and are being offered pursuant to the exemption provided

in Section 4(a)(2) under the Securities Act and Rule 506(b).

the Purchase Agreement, we agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any

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reflected in public disclosures.

May 12, 2023, the Company completed a public offering of an aggregate of 1,800,876 shares of its common stock at par value $0.0001 per

share (including pre-funded warrants in lieu thereof), Series A-1 warrants to purchase up to 1,800,876 shares of common stock and Series

A-2 warrants to purchase up to 1,800,876 shares of common stock, at a combined public offering price of $3.887 per share (or pre-funded

warrant in lieu thereof) and accompanying warrants.

The Series A-1 warrants have an exercise price of $3.64 per share, are exercisable

immediately upon issuance and expire five years from the date of issuance, and the Series A-2 warrants have an exercise price of $3.64

per share, are exercisable immediately upon issuance and expire eighteen months from the date of issuance.

holder of a warrant issued in the offering will not have the right to exercise any portion of its warrants if the holder, together with

its affiliates, would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the

number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “ Beneficial Ownership Limitation ”);

provided, however, that upon 61 days’ prior notice to the Company, the holder may increase or decrease the Beneficial Ownership

Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99%.

Gross proceeds from this offering

are approximately $7.0 million before the deduction of placement agent fees and related costs of $0.7 million.

Wainwright & Co.

acted as the exclusive placement agent for the offering.

The shares and related warrants were offered by the Company

pursuant to a registration statement on Form S-1 (File No.

333-271480), which was initially filed with the Commission on April 28, 2023

and was declared effective by the Commission on May 9, 2023 (the “Registration Statement”), and a related prospectus.

Registration Statement also registered warrants issued to the placement agent to purchase 126,061 shares of Common Stock at a per share

exercise price of $4.8588, which is 125% of the price of the Shares in the offering.

connection with the offering, the Company also agreed to amend certain existing warrants to purchase up to an aggregate of 210,085 shares

of the Company’s common stock that were previously issued in September 2021 through December 2022 to purchasers in the offering

at exercise prices ranging from $16.80 to $187.20 per share, such that effective upon the closing of the offering the amended warrants

will have a reduced exercise price of $3.64 per share, at an additional offering price of $0.125 per amended warrant.

of Our Operating Results

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In September 2018, we were awarded a research and development grant

related to the development of our MPAR TM overdose prevention technology (the “MPAR Grant”).

In September 2019,

we were awarded a second research and development grant related to the development of our TAAP/MPAR TM abuse deterrent technology

for Opioid Use Disorder (“OUD”) (the “OUD Grant”).

Grant funds are awarded annually through a Notice of Award

which contains certain terms and conditions including, but not limited to, complying with the grant program legislation, regulation and

policy requirements, complying with conditions on expenditures of funds with respect to other applicable statutory requirements such

as the federal appropriations acts, periodic reporting requirements, and budget requirements.

related to the development of our MPAR® overdose prevention technology (the “MPAR Grant”).

In September 2019, we were

awarded a second research and development grant related to the development of our TAAP/MPAR® abuse deterrent technology for Opioid

Use Disorder (“OUD”) (the “OUD Grant”).

Grant funds are awarded annually through a Notice of Award which contains

certain terms and conditions including, but not limited to, complying with the grant program legislation, regulation and policy requirements,

complying with conditions on expenditures of funds with respect to other applicable statutory requirements such as the federal appropriations

acts, periodic reporting requirements, and budget requirements.

and Development Expenses

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We expense research and development costs as incurred, which include:

expenses incurred to conduct

the necessary preclinical studies and clinical trials required to obtain regulatory approval;

expenses incurred under

agreements with CROs that are primarily engaged in the oversight and conduct of our drug discovery efforts and preclinical studies,

clinical trials and CMOs that are primarily engaged to provide preclinical and clinical drug substance and product for our research

and development programs;

other costs related to

acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and clinical trial materials,

including manufacturing validation batches, as well as investigative sites and consultants that conduct our clinical trials, preclinical

studies and other scientific development services;

payments made in cash or

equity securities under third-party licensing, acquisition and option agreements;

employee-related expenses,

including salaries and benefits, travel and stock-based compensation expense for employees engaged in research and development functions;

costs related to compliance

with regulatory requirements;

allocated facilities-related

costs, depreciation and other expenses, which include rent and utilities.

incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval;

incurred under agreements with CROs that are primarily engaged in the oversight and conduct of our drug discovery efforts and preclinical

studies, clinical trials and CMOs that are primarily engaged to provide preclinical and clinical drug substance and product for our

research and development programs;

costs related to acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and

clinical trial materials, including manufacturing validation batches, as well as investigative sites and consultants that conduct

our clinical trials, preclinical studies and other scientific development services;

made in cash or equity securities under third-party licensing, acquisition and option agreements;

employee-related

expenses, including salaries and benefits, travel and stock-based compensation expense for employees engaged in research and development

related to compliance with regulatory requirements;

facilities-related costs, depreciation and other expenses, which include rent and utilities.

recognize external development costs as incurred.

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As a result, we expect that our research and development expenses will remain elevated as we continue our existing,

and commence additional, planned clinical trials for PF614, PF614-MPAR™ and nafamostat, as well as conduct other preclinical and

clinical development, including submitting regulatory filings for our other product candidates, subject to our ability to obtain financing.

We also expect our related personnel costs to increase and, as a result, we expect our research and development expenses, including costs

and commence additional, planned clinical trials for PF614, PF614-MPAR and nafamostat, as well as conduct other preclinical and clinical

development, including submitting regulatory filings for our other product candidates, subject to our ability to obtain financing.

also expect our related personnel costs to increase and, as a result, we expect our research and development expenses, including costs

associated with stock-based compensation, to remain elevated.

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to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of the following:

the scope, progress, outcome

and costs of our preclinical development activities, clinical trials and other research and development activities;

establishing an appropriate

safety and efficacy profile with investigational new drug (“ IND ”) enabling studies;

successful patient enrollment

in and the initiation and completion of clinical trials;

the timing, receipt and

terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S.

the extent of any required

post-marketing approval commitments to applicable regulatory authorities;

establishing clinical and

commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party

manufacturers are able to make product successfully;

development and timely

delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

obtaining, maintaining,

defending and enforcing patent claims and other intellectual property rights;

significant and changing

government regulation;

launching commercial sales

of our product candidates, if and when approved, whether alone or in collaboration with others;

maintaining a continued

acceptable safety profile of our product candidates following approval, if any, of our product candidates.

scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development

an appropriate safety and efficacy profile with investigational new drug (“ IND ”) enabling studies;

patient enrollment in and the initiation and completion of clinical trials;

timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S.

extent of any required post-marketing approval commitments to applicable regulatory authorities;

clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that

we or our third-party manufacturers are able to make product successfully;

and timely delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial

maintaining, defending and enforcing patent claims and other intellectual property rights;

and changing government regulation;

commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;

a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.

changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical

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on issuance of convertible notes

elected the fair value option to account for the 2021 Notes as we believe the fair value option provides users of the financial statements

with greater ability to estimate the outcome of future events as facts and circumstances change, particularly with respect to changes

in the fair value of the common stock underlying the conversion option.

The 2022 Notes are accounted for under ASC 480 – Distinguishing

Liabilities from Equity, due to share settlement features contained within the notes.

As a result, the 2022 Notes are recorded as

liabilities at fair value upon initial recognition and at the balance sheet date.

We use a discounted cash flow model and a Monte Carlo

simulation to estimate the fair value of the notes, both of which rely on unobservable Level 3 inputs.

The loss on issuance of convertible

notes represents the difference between the gross proceeds received and the calculated fair value on the issuance date of the notes.

2022 Notes are accounted for under ASC 480 – Distinguishing Liabilities from Equity, due to share settlement features contained

within the notes.

As a result, the 2022 Notes are recorded as liabilities at fair value upon initial recognition and at the balance sheet

We use a discounted cash flow model and a Monte Carlo simulation to estimate the fair value of the notes, both of which rely on

unobservable Level 3 inputs.

The loss on issuance of convertible notes represents the difference between the gross proceeds received

and the calculated fair value on the issuance date of the notes.

costs for convertible notes

issuance costs for convertible notes represent the original issue discount (expensed immediately due to the initial recognition at fair

value of both the 2021 and 2022 Notes noted above), legal and accounting fees incurred in connection with the issuance of the 2021 and

issuance costs for convertible notes represent the original issue discount (expensed immediately due to the initial recognition at

fair value of the 2022 Notes noted above), and legal and accounting fees incurred in connection with the issuance of the 2022

in fair value of convertible notes

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available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

As of March 31, 2023

As of June 30, 2023

and December 31, 2022, we continue to maintain a full valuation allowance against all of our deferred tax assets based on our evaluation

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of Operations

of the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

of the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

Federal grants

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Interest expense

Other income and expense, net

Other income, net

Total other income (expenses), net

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grant funding

from federal grants for the three months ended March 31, 2023 and 2022 totaled $0.8 million and $0.6 million, respectively.

from federal grants for the three months ended June 30, 2023 and 2022 totaled $0.5 million and $0.2 million, respectively.

The difference

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and development expenses

and development expenses for the three months ended March 31, 2023 and 2022 were $1.8 million and $3.1 million, respectively, representing

and development expenses for the three months ended June 30, 2023 and 2022 were $1.6 million and $5.3 million, respectively, representing

a decrease of $3.7 million.

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We do not currently track expenses on a program-by-program basis.

We expect future research and development expenses to approximate current levels.

expect future research and development expenses to approximate current levels.

and administrative expenses

and administrative expenses for the three months ended March 31, 2023 and 2022 were $1.6 million and $2.3 million, respectively, representing

and administrative expenses for the three months ended June 30, 2023 and 2022 were $1.1 million and $1.9 million, respectively, representing

a decrease of $0.8 million.

The decrease was primarily a result of reduced stock-based compensation, liability insurance and employee

bonus expenses in the 2023 period.

The decrease was primarily a result of reduced stock-based compensation, reduced costs associated with liability

insurance and no current employee bonus expenses in the 2023 period.

We expect future general and administrative expenses to approximate

current levels.

income and expense

in fair value of the 2022 Notes (outstanding in 2023) and the 2021 Notes (outstanding in 2022) are due to the significant fluctuations

in the Company’s share price as well as the balance outstanding for the respective Notes for the relevant period.

The change in

fair value of liability classified warrants for the three months ended June 30, 2023 are primarily the result of the warrants outstanding

for both the 2021 Notes and 2022 Notes compared to only changes related to the warrants associated with the 2021 Notes in the prior period,

as well as fluctuations associated with the Company’s decreasing stock price.

Loss on debt conversions is driven by the difference

between the conversion price of the 2021 Notes and the average of the high and low stock price on the date of conversion.

corresponding activity in the 2023 period associated with the 2021 Notes due to the settlement of the 2021 Notes during the previous

of the six months ended June 30, 2023 and 2022:

Six Months Ended June 30

Federal grants

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

(11,857,986 )

Other income (expense):

Change in fair value of convertible notes

Change in fair value of liability classified warrants

Loss on debt conversions

Interest expense

Other income, net

Total other income, net

Net loss attributable to noncontrolling interests

Deemed dividend related to warrants down round provision

Net loss attributable to common stockholders

$ (4,432,145 )

$ (9,665,976 )

grant funding

from federal grants for the six months ended June 30, 2023 and 2022 totaled $1.3 million and $0.8 million, respectively.

The difference

is due to the timing of research activities eligible for funding.

We expect funding from federal grants to fluctuate in the future due

to the timing of preclinical and clinical development activities under the grants.

and development expenses

and development expenses for the six months ended June 30, 2023 and 2022 were $3.4 million and $8.4 million, respectively, representing

a decrease of $5.0 million.

The decrease was primarily the result of changes in timing of external research and development costs related

to clinical and pre-clinical programs for PF614 and PF614-MPAR.

We do not currently track expenses on a program-by-program basis.

expect future research and development expenses to approximate current levels.

and administrative expenses

and administrative expenses for the six months ended June 30, 2023 and 2022 were $2.7 million and $4.2 million, respectively, representing

a decrease of $1.5 million.

The decrease was primarily a result of reduced stock-based compensation, reduced liability insurance and

no current employee bonus expenses in the 2023 period.

We expect future general and administrative expenses to approximate current levels.

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The change in

fair value of liability classified warrants for the three months ended March 31, 2023 are primarily the result of the warrants outstanding

fair value of liability classified warrants for the six months ended June 30, 2023 are primarily the result of the warrants outstanding

for both the 2021 Notes and 2022 Notes compared to only changes related to the warrants associated with the 2021 Notes in the prior period,

as well as fluctuations associated with the Company’s decreasing share price.

as well as fluctuations associated with the Company’s decreasing stock price.

Loss on debt conversions is driven by the difference

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of liquidity and capital

of March 31, 2023, we had $1.4 million of cash and cash equivalents.

of June 30 2023, we had $3.8 million of cash and cash equivalents.

On May 12, 2023, we completed a public offering with gross

proceeds of $7.0 million, before deducting placement agent fees and other offering expenses, for the sale of an aggregate of 1.8

million shares of common stock (or pre-funded warrants in lieu thereof) at a combined offering price of $3.887 per share, including

warrants to purchase up to 3.6 million shares at an exercise price of $3.637 per share.

Since inception, we have generated limited

revenues and have incurred significant operating losses and negative cash flows from our operations, and we anticipate that we will

continue to incur losses for the foreseeable future.

We have not yet commercialized any of our product candidates and we do not

expect to generate revenue from sales of any product candidates for several years, if at all.

proceeds of $7.0 million, before deducting placement agent fees and related costs of $0.7 million, for the sale of an aggregate of

1.8 million shares of common stock (or pre-funded warrants in lieu thereof) at a combined offering price of $3.887 per share,

including warrants to purchase up to 3.6 million shares at an exercise price of $3.64 per share.

Since inception, we have generated

limited revenues and have incurred significant operating losses and negative cash flows from our operations, and we anticipate that

we will continue to incur losses for the foreseeable future.

We have not yet commercialized any of our product candidates and we do

not expect to generate revenue from sales of any product candidates for several years, if at all.

have funded our operations to date primarily with proceeds from the sale of common equity, funding under federal research grants and

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that anticipated additional financing will be available to us on favorable terms, if at all, or that we will enter into any collaborations.

funding under two approved federal research grants totaled $3.9 million at March 31, 2023 and is expected to be utilized by August 31,

Pursuant to the terms and conditions of the two grants, we are required to submit progress reports to NIDA on an annual basis and

a final research performance progress report within 120 days of the performance period end date.

Additionally, the grants limit the use

of funds to activities that are clearly severable and independent from activities that involve human subjects until the receipt by NIDA

of (i) Institutional Review Board (“ IRB ”) approval, (ii) federal-wide assurance from the Office for Human Research

Protections, (iii) a Data and Safety Monitoring Plan, (iv) certification that all key personnel have completed education on the protection

of human subjects and (v) a Clinical Trials Dissemination Plan.

We must also comply with the data sharing policies of NIDA and the NIH

Public Access Policy, that require submission of final peer-reviewed journal manuscripts that arise from the use of grants to PubMed

Central immediately upon acceptance for publication.

funding under two approved federal research grants totaled $3.2 million at June 30, 2023 and is expected to be utilized by August 2024.

Pursuant to the terms and conditions of the two grants, we are required to submit progress reports to NIDA on an annual basis and a final

research performance progress report within 120 days of the performance period end date.

Additionally, the grants limit the use of funds

to activities that are clearly severable and independent from activities that involve human subjects until the receipt by NIDA of (i)

Institutional Review Board (“ IRB ”) approval, (ii) federal-wide assurance from the Office for Human Research Protections,

(iii) a Data and Safety Monitoring Plan, (iv) certification that all key personnel have completed education on the protection of human

subjects and (v) a Clinical Trials Dissemination Plan.

We must also comply with the data sharing policies of NIDA and the NIH Public

Access Policy, that require submission of final peer-reviewed journal manuscripts that arise from the use of grants to PubMed Central

immediately upon acceptance for publication.

grant must be repaid.

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for such common stock on the first day of trading on Nasdaq.

The strike price was reduced to $8.58 per share as of March 31, 2023 because

The exercise price was reduced to $3.64 per share as of June 30, 2023 because

of a pricing adjustment per the GEM Agreement which is reflected on the consolidated statement of operations as a deemed dividend.

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or other costs or expenses reasonably incurred in investigating, preparing, or defending against any such loss.

September 24, 2021, we entered into a Securities Purchase Agreement for an aggregate financing of $15.0 million with institutional investors.

The Company issued to the investors (i) 2021 Notes in the aggregate principal amount of $15.9 million for an aggregate purchase price

of $15.0 million and (ii) warrants to purchase 4,512 shares of the Company’s common stock in the aggregate at a current exercise

price of $187.20 per share.

The 2021 Notes were satisfied on October 11, 2022.

June 30, 2022, we entered into a Securities Purchase Agreement for an aggregate financing of $8.0 million with institutional investors.

The Company issued to the investors (i) 2022 Notes in the aggregate principal amount of $8.48 million for an aggregate purchase price

of $8.0 million and (ii) warrants to purchase 38,894 shares of the Company’s common stock in the aggregate at a current exercise

price of $24.07 per share.

The first funding of $4.0 million occurred on July 1, 2022 and the second funding of $4.0 million occurred

on August 9, 2022 At March 31, 2023, the outstanding principal of the Notes were satisfied and a remaining balance of $0.6 million owed

to the institutional investors was reflected in Accrued Expenses and Other Liabilities.

following table summarizes our cash flows for each of the periods presented:

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities

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Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

$ (1,731,937 )

Net increase (decrease) in cash and cash equivalents

$ (8,530,090 )

the three months ended March 31, 2023 and 2022, we used cash in operating activities of $3.6 million and $3.4 million, respectively.

The increase primarily resulted from the timing of vendor invoicing and payments.

the three months ended March 31, 2023, there were no investing activities.

the three months ended March 31, 2023, net cash provided by financing activities was $1.9 million, primarily consisting of proceeds from

2023 Offering, net of transaction costs and the repayment of financed insurance premiums and cash payment of convertible notes.

the three months ended March 31, 2022, net cash used in financing activities was $0.4 million, primarily consisting of repayment of financed

insurance premiums.

the six months ended June 30, 2023 and 2022, we used cash in operating activities of $6.7 million and $7.9 million, respectively.

decrease primarily resulted from the timing of vendor invoicing and payments.

the six months ended June 30, 2023, there were no investing activities.

the six months ended June 30, 2023, net cash provided by financing activities was $7.4 million, primarily consisting of proceeds from

2023 February and 2023 May offerings, net of transaction costs and the repayment of financed insurance premiums and cash payment of 2022

During the six months ended June 30, 2022, net cash used in financing activities was $0.7 million, primarily consisting of repayment

of financed insurance premiums and cash redemption payment of convertible notes.

primary use of cash is to fund operating expenses, primarily related to our research and development activities.

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and amount of our operating expenditures will depend largely on our ability to:

advance preclinical development

of our early-stage programs and clinical trials of our product candidates;

manufacture, or have manufactured

on our behalf, preclinical and clinical drug material and develop processes for late state and commercial manufacturing;

seek regulatory approvals

for any product candidates that successfully complete clinical trials;

establish a sales, marketing,

medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval

and intend to commercialize on our own;

hire additional clinical,

quality control and scientific personnel;

expand our operational,

financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and

commercialization efforts and our operations as a public company;

obtain, maintain, expand

and protect our intellectual property portfolio;

manage the costs of preparing,

filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and

defending intellectual property related claims;

manage the costs of operating

as a public company.

preclinical development of our early-stage programs and clinical trials of our product candidates;

or have manufactured on our behalf, preclinical and clinical drug material and develop processes for late state and commercial manufacturing;

regulatory approvals for any product candidates that successfully complete clinical trials;

a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain

marketing approval and intend to commercialize on our own;

additional clinical, quality control and scientific personnel;

our operational, financial and management systems and increase personnel, including personnel to support our clinical development,

manufacturing and commercialization efforts and our operations as a public company;

maintain, expand and protect our intellectual property portfolio;

the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights,

including enforcing and defending intellectual property related claims;

the costs of operating as a public company.

have generated limited revenues and have incurred significant operating losses since our inception.

As of March 31, 2023, had an accumulated

As of June 30, 2023, had an accumulated

deficit of $115.4 million.

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increase significantly as a result of many factors, including:

the scope, progress, results

and costs of researching and developing our product candidates, and conducting preclinical and clinical trials;

the costs, timing and outcome

of regulatory review of our product candidates;

the costs, timing and ability

to manufacture our product candidates to supply our clinical and preclinical development efforts and our clinical trials;

the costs of future activities,

including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which

we receive marketing approval;

the costs of manufacturing

commercial-grade product and necessary inventory to support commercial launch;

the ability to receive

additional non-dilutive funding, including grants from organizations and foundations;

the revenue, if any, received

from commercial sale of our products, should any of our product candidates receive marketing approval;

the costs of preparing,

filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and

defending intellectual property-related claims;

our ability to establish

and maintain collaborations on favorable terms, if at all;

the extent to which we

acquire or in-license other product candidates and technologies.

scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical and clinical

costs, timing and outcome of regulatory review of our product candidates;

costs, timing and ability to manufacture our product candidates to supply our clinical and preclinical development efforts and our

clinical trials;

costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product

candidates for which we receive marketing approval;

costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;

ability to receive additional non-dilutive funding, including grants from organizations and foundations;

revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual

property rights and defending intellectual property-related claims;

ability to establish and maintain collaborations on favorable terms, if at all;

extent to which we acquire or in-license other product candidates and technologies.

Accounting Policies and Significant Judgments and Estimates

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of estimated accrued research and development expenses include fees paid to:

vendors, including research

laboratories, in connection with preclinical development activities;

CROs and investigative

sites in connection with preclinical studies and clinical trials;

CMOs in connection with

drug substance and drug product formulation of preclinical studies and clinical trial materials.

including research laboratories, in connection with preclinical development activities;

and investigative sites in connection with preclinical studies and clinical trials;

in connection with drug substance and drug product formulation of preclinical studies and clinical trial materials.

base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis