What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-02-14 compared with 2021-11-15 · 121 added, 82 removed, 288 unchanged (41% of the section changed)

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of those cells to survive and expand when they are given back to the same person (autologous transplantation).

date, our operations have been funded by sales of our securities and the issuance of debt.

We have never generated any sales revenue,

and we expect this to continue until our therapies or products are approved for marketing in the United States and/or Europe.

if we are successful in having our therapies or products approved for sale in the United States and/or Europe, we cannot guarantee

that a market for the therapies or products will develop.

We may never be profitable.

Respiratory Diseases

June 2021, Enochian BioSciences acquired the exclusive license to a potential pan-SARS-Cornavirus-1 and-2 (SARS-CoV) and pan-Influenza

April 2021, Enochian Biosciences acquired the exclusive license to a potential pan-SARS-Cornavirus-1 and-2 (SARS-CoV) and pan-Influenza

inhaled treatment and prophylaxis.

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of the American Society of Gene and Cell Therapy (ASGCT) in May 2020.

leading scientists and public health experts were announced as members of our newly formed Scientific Advisory Board focused on

respiratory diseases on August 30, 2021.

leading scientist and public health expert serves on our Scientific Advisory Board focused on respiratory diseases.

Human Immunodeficiency

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scientific findings from a mouse study on the ENOB-HV-01 approach were presented at the annual ASCGT conference in May 2020.

in vitro and in vivo studies are ongoing and/or planned.

We hope to make a Pre-IND submission to the US FDA in the

latter part of 2022.

are also developing ENOB-HV-11 and ENOB-HV-12 that will utilize a novel cellular- and immunotherapy approach that could potentially

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Our co-founder and inventor,

Serhat Gumrukcu, who is also the Director of Seraph Research Institute (SRI), submitted Pre-IND for ENOB-HV-21 an innovative

treatment of Natural Killer (NK) and Gamma Delta T-Cells (GDT) collected from another person.

It is believed that the GDT cells,

a small subset of immune cells that can be infected with HIV, could be a key factor in controlling the virus.

The initial scientific

findings were presented during the ASCGT Conference this past May.

Enochian BioSciences has an exclusive license to use the underlying

patent to develop ENOB-HV-21 for the prevention, treatment, and/or amelioration of and/or therapy exclusively for HIV in humans,

and research and development exclusively relating to HIV in humans.

Serhat Gümrükcü, who is also the Director of Seraph Research Institute (SRI), submitted Pre-IND for ENOB-HV-21,

an innovative treatment of Natural Killer (NK) and Gamma Delta T-Cells (GDT) collected from another person.

It is believed that

the GDT cells, a small subset of immune cells that can be infected with HIV, could be a key factor in controlling the virus.

initial scientific findings were presented during the ASCGT Conference this past May.

Enochian Biosciences has an exclusive license

to use the underlying patent to develop ENOB-HV-21 for the prevention, treatment, and/or amelioration of and/or therapy exclusively

for HIV in humans, and research and development exclusively relating to HIV in humans.

are in the development phase of additional product candidates related to our HIV pipeline.

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On August 23, 2021, we announced the addition of a third leading expert with substantial experience in HBV clinical trials.

On September 27, 2021, the

Company announced the completion of a Pre-Investigational New Drug (IND) process following receipt of written comments from the

Food and Drug Administration (FDA) Center for Biologics Evaluation and Research (CBER) Office of Tissues and Advanced Therapies

(OTAT) for ENOB-HB-01.

The initial in vitro

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in vivo cure study is in advanced stages.

A Pre-IND request was accepted.

A Pre-IND request has been completed with productive comments and insights.

IND could potentially be submitted towards the end of 2022 with potential for enrollment in a clinical trial to begin by the end

of 2022 or in 2023.

Based on learning from peer-reviewed publications

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Results are expected in

late 2021or first half 2022.

Recent Developments

On August 11, 2021, and with an effective date

of July 1, 2021, the Company and Dr.

Dybul entered into an Employment Agreement.

On September 27, 2021, the

Company announced the completion of a Pre-Investigational New Drug (IND) process following receipt of written comments from the

Food and Drug Administration (FDA) Center for Biologics Evaluation and Research (CBER) Office of Tissues and Advanced Therapies

(OTAT) for ENOB-HB-01.

On October 18, 2021, the Company announced the

completion of an Investigator Pre-Investigational New Drug (IND) process following receipt of written comments from the U.S.

and Drug Administration (FDA) Center for Biologics Evaluation and Research (CBER) Office of Tissues and Advanced Therapies (OTAT)

for ENOB-HV-21.

first half 2022.

If the results are promising, a potential Pre-IND and an IND with potential for enrollment in a clinical trial

maybegin in 2022.

date, our operations have been funded by sales of our securities and the issuance of debt.

We have never generated any sales revenue,

and we expect this to continue until our therapies or products are approved for marketing in the United States and/or Europe.

if we are successful in having our therapies or products approved for sale in the United States and/or Europe, we cannot guarantee

that a market for the therapies or products will develop.

We may never be profitable.

Corporate History

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which could in the future negatively affect the financial resources available to us.

of Operations for the three months ended September 30, 2021 and 2020

The following table sets

forth our revenues, expenses and net loss for the three months ended September 30, 2021 and 2020.

The financial information below

is derived from our unaudited condensed consolidated financial statements.

Results of Operations

for the three and six months ended December 31, 2021 compared to the three and six months ended December 31, 2020

The following table

sets forth our revenues, expenses and net loss for the three and six months ended December 31, 2021 and 2020.

The financial information

below is derived from our unaudited condensed consolidated financial statements.

For the Three Months Ended

September 30,

For the Six Months Ended

Increase/(Decrease)

Operating Expenses

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LOSS FROM OPERATIONS

$ (6,330,791 )

$ (3,305,216 )

$ (3,025,575 )

$ (13,835,464 )

$ (6,163,973 )

$ (7,671,491 )

Other Income (Expense)

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Interest expense

Gain on currency transactions

Gain (Loss) on currency transactions

Interest income

Total Other Income (Expense)

Total Other (expense) income

Loss Before Income Taxes

$ (6,582,941 )

Income Tax Benefit (Provision)

$ (2,934,454 )

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$ (16,994,876 )

Results of Operations

for the three months ended September 30, 2021 compared to the three months ended September 30, 2020

$ (5,453,818 )

$ (11,541,058 )

Income Tax Benefit

$ (6,582,941 )

$ (2,933,296 )

$ (3,649,645 )

$ (16,994,910 )

$ (5,329,866 )

$ (11,665,044 )

We are a pre-revenue, pre-clinical biotechnology company.

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Our operating expenses for

the three months ended September 30, 2021, and September 30, 2020 were $7,504,673 and $2,858,757,

the three months ended December 31, 2021, and December 31, 2020 were $6,330,791 and $3,305,216

respectively, representing an increase of $3,025,575, or approximately 92% .

The increase in operating expenses primarily

relate to general and administrative expenses.

Our operating expenses for

the six months ended December 31, 2021, and December 31, 2020, were $13,835,464 and $6,163,973, respectively, representing an increase

of $7,671,491 or approximately 124%.

The change is primarily related to the increase in general and administrative expenses of

$4,903,687, and an increase in R&D expenses of $2,747,984.

General and administrative

expenses for the three months ended September 30, 2021, and September 30, 2020 were $4,466,697 and $1,777,923, respectively, representing

expenses for the three months ended December 31, 2021, and December 31, 2020, were $4,154,901 and $1,939,988, respectively, representing

an increase of $2,214,914 or approximately 114%.

The variance is primarily related to an increase in stock-based compensation of

$2,401,819, and an increase in compensation expense of $353,422, partially offset by decreases in legal fees and consulting fees

totaling $161,881.

$1,683,901, an increase in compensation and related expenses of $301,743, and an increase in lab expenses of $160,618.

General and administrative

expenses for the six months ended December 31, 2021, and December 31, 2020, were $8,621,598 and $3,717,911, respectively, representing

an increase of $4,903,687 or approximately 132%.

The largest contributors to the increase in general and administrative expenses

were the increases in stock-based compensation of $4,085,720, officer compensation of $436,062, salaries expense of $196,065, laboratory

expenses of $171,847, and recruiting expenses of $117,233, offset by a decrease in security expenses of $139,175.

Research and development

expenses for the three months ended September 30, 2021, and September 30, 2020 were $3,006,243 and $1,050,3776, respectively, representing

expenses for the three months ended December 31, 2021, and December 31, 2020, were $2,144,085 and $1,334,468, respectively, representing

a decrease of $809,617 or approximately 61%.

The variance is primarily driven by $684,939 contract development and manufacturing

company (“CDMO”) partner expenses related to CV-01, $75,000 related to COVID license payments that were not established

in prior year, and $33,000 in new contract research organization (“CRO”) payments.

All other R&D costs remained

relatively flat.

Research and development

expenses for the six months ended December 31, 2021, and December 31, 2020, were $5,150,328 and $2,384,844, respectively, representing

an increase of $2,765,484 or approximately 116%.

The variance is primarily driven by a $1,500,000 milestone payment related to

the pre-IND submission for ENOB-HB-01, $600,000 related to costs for ENOB-HV-21, an increase in CRO costs of $48,000, Covid license

payments of $75,000, and $76,383 in additional regulatory consulting fees, partially offset by a decrease of $400,000 in payments

of 3 rd party R&D study fees incurred in the prior period but, not incurred in the current period.

All other R&D

costs have remained relatively stable during these periods.

The largest contributors to the increase in research and development expenses

were the increases in license costs related to ENOB HB-01 of $1,500,000 for achievement of milestone, costs incurred for ENOB HV-21

of $600,000, newly incurred costs with CDMO and CRO partners totaling $765,939, new COVID license payments of $150,000, offset

by a reduction in license costs related to ENOB-HB-01 totaling $400,000 that were incurred in the prior period only.

The Company recorded other

(expense) of $2,907,262 for the three months ended September 30, 2021, compared to other income of $339,393 for the three months

ended September 30, 2020, representing an increase in other expense of $3,246,655 or 957%.

The variance is primarily due to the

change in fair value of the contingent consideration liability expense of $3,252,042.

(expense) of $252,150 for three months ended December 31, 2021, compared to other income of $370,762 for the three months ended

December 31, 2020, representing an increase in other (expense) of $622,912 or 168%.

The variance is primarily due to the change

in fair value of the contingent consideration liability expense of $660,666.

The Company recorded other

(expense) of $3,159,412 for the six months ended December 31, 2020, compared to other income of $710,155 for the six months ended

December 31, 2020, representing an increase in other (expense) of $3,869,567 or 545%.

The variance is primarily due to the change

in fair value of the contingent consideration liability expense of $3,912,708.

Net loss for the three months

ended September 30, 2021, and 2020, was $10,411,969 and $2,396,570, respectively, representing an increase in loss of $8,015,399

ended December 31, 2021, and 2020, was $6,582,941 and $2,933,296, respectively, representing an increase in loss of $3,649,645

or approximately 124%.

The increase in loss was primarily due to the increase in expense related to the change in fair value of

the contingent consideration of $3,252,042, an increase in research and development expenses of $1,955,867 primarily related to

the $1,500,000 milestone payment made in connection with the HBV license agreement and, costs related to ENOB-HV-21, and an increase

in general and administrative expenses of $2,688,774.

The increase in net loss was primarily due to an increase in general and administrative expenses of $2,214,913,

an increase in research and development expenses of $809,617, and the change in the change in fair value of the contingent consideration

Net loss for the six months

ended December 31, 2021, and 2020, was $16,994,910 and $5,329,866, respectively, representing an increase in loss of $11,665,044

or approximately 219%.

The increase in net loss was primarily due to the increase in general and administrative expenses of $4,903,687,

an increase in research and development costs of $2,765,484, and an increase in expense related to the change in fair value of

the contingent consideration of $3,912,708.

Liquidity and Capital Resources

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and ENOB-HV-21.

We will also require additional funding to continue our research and development of ENOB-HV-11/12 and ENOB-DC-11

and ENOB-FL-01 and -11 and ENOB-CV-11, to fund the Coronavirus and Influenza Indications License Agreement in furtherance of treatment

We will also require additional funding to continue our research and development of ENOB-HV-11/12, ENOB-DC-11,

ENOB-FL-01 and -11 and ENOB-CV-11, to fund the Coronavirus and Influenza Indications License Agreement in furtherance of treatment

related to all coronaviruses, and for possible future strategic acquisitions of businesses, products or technologies complementary

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when needed could materially adversely affect our growth plans and our financial condition and results of operations.

As of September 30, 2021,

As of December 31, 2021,

the Company had $13,707,907 in cash and working capital of $8,416,386 as compared to $20,664,410 in cash and working capital of

$19,013,100 as of June 30, 2021, a decrease of 34 % and 56%, respectively.

Total assets at September

Total assets at December

31, 2021, were $183,136,138 compared to $189,605,225 as of June 30, 2021.

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decrease in cash of $6,956,503.

The change is primarily attributed to $3,006,243 in research and development costs primarily related

to the HBV License Agreement and ENOB-HV-21 studies, and general and administrative expenses of $1,738,722 net of non-cash items.

Total liabilities at September

The change in cash is primarily attributed to $5,150,328 in research and development costs related

to the HBV license agreement, costs related to ENOB-CV-01 for related CDMO and CRO costs, and ENOB-HV-21 studies along with approximately

$3,710,286 in general and administrative expenses, net of non-cash items, offset by an increase in funding totaling $3,178,339

related to warrants exercised during the period and drawdowns from the LPC equity line.

Total liabilities at December

31, 2021, were $17,516,675 compared to $14,942,286 as of June 30, 2021.

The increase in total liabilities was primarily related

to the increase of 2,824,642 in the contingent consideration liability as a result of mark-to-market adjustment, and the increase

in accounts payable of $227,307, partially offset by the reduction in accrued expenses of $817,554 due to timing, and a decrease

in other short-term liabilities of $90,602.

to an increase of $2,991,897 in the contingent consideration liability as a result of mark-to-market adjustment, and an increase

in other current liabilities of $409,273 related to a financing arrangement for a new insurance policy, partially offset by the

reduction in accrued expenses of $677,940, and the reduction of accounts payable of $153,809 due to timing.

The following is a summary

of the Company’s cash flows (used by) or provided by operating, investing, and financing activities:

September 30,

Ended September 30,

Ended December

Net Cash (Used in) Operating Activities

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Cash used in operating activities

for the three months ended September 30, 2021, and 2020 was ($5,276,687) and ($2,755,665), respectively.

Cash used in operating

activities during the current period included $3,006,243 in research and development costs primarily related to the HBV License

Agreement and studies related to ENOB-HV-21, and general and administrative expenses of $1,738,722 net of non-cash items.

for the six months ended December 31, 2021, and 2020 was ($9,897,151) and ($5,251,828), respectively.

Cash used in operating activities

during the current period included $5,150,328 in research and development costs related to the HBV license agreement, costs related

to ENOB-CV-01 for related CDMO and CRO costs, and ENOB-HV-21 studies along with approximately $3,710,286 in general and administrative

expenses, net of non-cash items.

Cash provided by financing

activities for the six months ended December 31, 2021, was $2,950,741 as compared to cash used by financing activities of $40,408

during the six months ended December 31, 2020.

During the six months ended December 31, 2021, the Company received financing from

the drawdown of its LPC equity line of $3,048,339 and the exercise of warrants held by shareholders of $130,000.

Off-Balance Sheet Arrangements

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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