What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-13 · 137 added, 163 removed, 366 unchanged (45% of the section changed)

13 unchanged sentences

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.

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.

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.

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

5 unchanged sentences

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.

lead product candidate, PF614, is ready for Phase 3 clinical development, PF614-MPAR is in Phase 1b clinical development and nafamostat

has completed Phase 1 clinical development.

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

56 unchanged sentences

to commercialize our product candidates, if approved, we may require substantial additional funding in the future.

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.

Gross proceeds from this offering were approximately $7.0 million before the deduction

of placement agent fees and related costs of $0.7 million.

The Series A-1 and Series A-2 warrants were repriced to $1.31 per share and

exercised in February 2024.

Wainwright & Co.

acted as the exclusive placement agent for the offering.

The Company 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 was 125% of the price of the shares

in the offering.

connection with the offering, the Company amended 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 the amended warrants have a reduced exercise price of $3.64 per share, at an additional offering

price of $0.125 per amended warrant.

October 23, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) for an aggregate financing of $1.7

million with investors, including $0.2 million with a board member.

The notes are subject to an original issue discount of 8%, have a

term of six months from their respective date of issuance and accrue interest at the rate of 6.0% per annum.

The Company is required

to pay scheduled redemption amounts in cash with a premium of 10% or, at the election of the investor at any time, some or all of the

principal amount and interest may be paid by conversion of shares under the note into common stock based on a conversion price equal

Conversions and repayments of principal and interest on the notes in January and February 2024 totaled $1.7 million.

Company also issued warrants to purchase an aggregate of 3,767,091 shares of common stock at an exercise price of $1.5675 that are exercisable

for five years following issuance.

Warrants for 1.3 million shares of common stock were exercised in January 2024.

Warrant Inducement

11 unchanged sentences

closing of the offering occurred on February 14, 2024.

connection with the execution of the Inducement Letter, the Company entered into a waiver related to the 2023 Notes’s SPA it had

connection with the execution of the Inducement Letter, the Company entered into a waiver related to the 2023 Notes’ SPA it had

entered into as of October 23, 2023.

30 unchanged sentences

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.

3 unchanged sentences

or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

estimate and accrue for the value of goods and services received from CROs and other third parties each reporting period based on an

evaluation of the progress to completion of specific tasks using information provided to us by our service providers.

This process involves

reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf

and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or

otherwise notified of actual costs.

estimate and accrue for the value of goods and services received from CROs and certain other third parties each reporting period based

on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers.

involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed

on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been

invoiced or otherwise notified of actual costs.

do not track our research and development expenses on a program-by-program basis.

26 unchanged sentences

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

50 unchanged sentences

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, 2024

As of June 30, 2024

and December 31, 2023, we continue to maintain a full valuation allowance against all of our deferred tax assets based on our evaluation

2 unchanged sentences

requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174.

has not impacted our effective tax rate or our cash tax payable in 2024;

not impacted our effective tax rate or our cash tax payable in 2024;

however, if the requirement to capitalize Section 174 expenditures

20 unchanged sentences

of Operations

of the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

of the three months ended June 30, 2024 and 2023:

Three Months Ended June 30,

Federal grants

5 unchanged sentences

Other income (expense):

Change in fair value of convertible notes

Change in fair value of liability classified warrants

Interest expense

Other income and expense, net

Other income, net

Total other income (expenses), net

5 unchanged sentences

grant funding

from federal grants for the three months ended March 31, 2024 and 2023 totaled $0.3 million and $0.8 million, respectively.

from federal grants for the three months ended June 30, 2024 and 2023 totaled $0.2 million and $0.5 million, respectively.

The difference

is due to the timing of research activities eligible for funding, as current funding under the MPAR grant was completed in December 2023.

We expect funding from federal grants to fluctuate in the future due to the timing of preclinical and clinical development activities

under the grants.

We expect funding from federal grants to increase in the third quarter due to increased preclinical activities under the OUD grant following

the recent selection of a lead drug candidate.

and development expenses

and development expenses for the three months ended March 31, 2024 and 2023 were $0.8 million and $1.8 million, respectively, representing

and development expenses for the three months ended June 30, 2024 and 2023 were $0.9 million and $1.6 million, respectively, representing

a decrease of $0.7 million.

3 unchanged sentences

We expect future

research and development expenses to approximate current levels but may need to adjust the timing of research and development based on

our ability to raise capital sufficient to fund these expenses.

and administrative expenses

and administrative expenses for the three months ended June 30, 2024 and 2023 were $1.2 million and $1.1 million, respectively, representing

an increase of $0.1 million.

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

income and expense

income and expense for the three months ended June 30, 2024, consisted primarily of interest expenses associated with the amortization

of the original issue discount and the debt issuance costs associated with the 2023 Notes.

The comparative period for 2023 consisted

primarily of changes in fair value associated with the Company’s liability-classified warrants.

of Operations

of the six months ended June 30, 2024 and 2023:

Six Months Ended June 30

Federal grants

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Change in fair value of convertible notes

Change in fair value of liability classified warrants

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

$ (5,084,572 )

$ (4,432,145 )

grant funding

from federal grants for the six months ended June 30, 2024 and 2023 totaled $0.5 million and $1.3 million, respectively.

The difference

is due to the timing of research activities eligible for funding, as current funding under the MPAR grant was completed in December 2023.

We expect funding from federal grants to increase in the second half of 2024 due to increased preclinical activities under the OUD grant

following the recent selection of a lead drug candidate.

and development expenses

and development expenses for the six months ended June 30, 2024 and 2023 were $1.7 million and $3.4 million, respectively, representing

a decrease of $1.7 million.

The decrease was primarily the result of reduced 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.

We expect future

research and development expenses to approximate current levels but may need to be adjusted based on our ability to raise capital sufficient

1 unchanged sentence

and administrative expenses

and administrative expenses for the three months ended March 31, 2024 and 2023 were $1.4 million and $1.6 million, respectively, representing

and administrative expenses for the six months ended June 30, 2024 and 2023 were $2.6 million and $2.7 million, respectively, representing

a decrease of $0.1 million.

The decrease was primarily a result of reduced stock-based compensation and consulting fees in the 2024 period.

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

income and expense

income and expense for the three months ended March 31, 2024, consisted primarily of interest expenses associated with the amortization

of the original issue discount and the debt issuance costs associated with the 2023 Notes and represented a net change in other income

and expense of $1.6 million compared to the three months ended March 31, 2023.

The comparative period for 2023 consisted primarily of

changes in fair value associated with the 2022 Notes and the Company’s liability-classified warrants.

income and expense for the six months ended June 30, 2024, consisted primarily of interest expense associated with the amortization of

the original issue discount and the debt issuance costs associated with the 2023 Notes and represented a net change in other income and

expense of $1.3 million compared to the six months ended June 30, 2023.

The comparative period for 2023 consisted primarily of changes

in fair value associated with the 2022 Notes and the Company’s liability-classified warrants.

and capital resources

of liquidity and capital

of March 31, 2024, we had $3.4 million of cash and cash equivalents.

of June 30, 2024, we had $1.0 million of cash and cash equivalents.

Since inception, we have generated limited revenues and have incurred

13 unchanged sentences

financing will be available to us on favorable terms, if at all.

funding under two approved federal research grants totaled $1.9 million at March 31, 2024 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.

cash funding under two approved federal research grants totaled $1.9 million at June 30, 2024 and is expected to be utilized by August

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.

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

5 unchanged sentences

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

1 unchanged sentence

$ (6,715,461 )

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

$ (1,731,937 )

the three months ended March 31, 2024 and 2023, we used cash in operating activities of $3.4 million and $3.6 million, respectively.

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

the three months ended March 31, 2024, net cash provided by financing activities was $5.7 million, primarily consisting of net proceeds

the six months ended June 30, 2024 and 2023, we used cash in operating activities of $5.7 million and $6.7 million, respectively.

decrease primarily resulted from the timing of vendor invoicing and payments and a reduction in research and development activities in

the 2024 period.

the six months ended June 30, 2024, net cash provided by financing activities was $5.6 million, primarily consisting of net proceeds

from warrant exercises and the warrant inducement, less repayment of convertible notes and financed insurance premiums.

During the three

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

2023 February Offering, less repayment of convertible notes and financed insurance premiums.

During the six

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

2023 February and 2023 May Offerings, less repayment of convertible notes and financed insurance premiums.

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

7 unchanged sentences

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.

commitments as of March 31, 2024, included an estimated $17.6 million related to open purchase orders and contractual obligations that

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.

commitments as of June 30, 2024, included approximately $16 million related to open purchase orders and contractual obligations that

occurred in the ordinary course of business, including commitments with contract research organizations for multi-year pre-clinical and

6 unchanged sentences

increase significantly because 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

23 unchanged sentences

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

29 unchanged sentences

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