What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-08 compared with 2023-05-11 · 296 added, 261 removed, 158 unchanged (78% of the section changed)

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and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than

statements of historical fact contained in this Quarterly Report, including statements regarding future events, our future financial

performance, business strategy and plans and objectives of management for future operations, are forward-looking statements.

attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,”

“continue,” “could,” “estimates,” “expects,” “intends,” “may,”

“plans,” “potential,” “predicts,” “should,” or “will” or the negative of

these terms or other comparable terminology.

Although we do not make forward-looking statements unless we believe we have a reasonable

basis for doing so, we cannot guarantee their accuracy.

These statements are only predictions and involve known and unknown risks, uncertainties

and other factors, including the risks outlined under “Risk Factors” or elsewhere in this Quarterly Report, which may cause

our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking

Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time and it is

not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which

any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking

All forward-looking statements included in this document are based on information available to us on the date hereof, and

we assume no obligation to update any such forward-looking statements.

statements of historical fact contained in this Quarterly Report, including statements regarding future events, our future financial performance,

business strategy and plans and objectives of management for future operations, are forward-looking statements.

We have attempted to identify

forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,”

“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,”

“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology.

we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined

under “Risk Factors” or elsewhere in this Quarterly Report, which may cause our or our industry’s actual results, levels

of activity, performance or achievements expressed or implied by these forward-looking statements.

Moreover, we operate in a very competitive

and rapidly changing environment.

New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can

we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual

results to differ materially from those contained in any forward-looking statements.

All forward-looking statements included in this document

are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.

You should not place undue reliance on any forward-looking

statement, each of which applies only as of the date of this Quarterly Report on Form-10-Q.

Before you invest in our securities, you

should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this

Quarterly Report could negatively affect our business, operating results, financial condition and stock price.

Except as required by

law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Quarterly Report

on Form-10-Q to conform our statements to actual results or changed expectations.

Before you invest in our securities, you should

be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Quarterly

Report could negatively affect our business, operating results, financial condition and stock price.

Except as required by law, we undertake

no obligation to update or revise publicly any of the forward-looking statements after the date of this Quarterly Report on Form-10-Q

to conform our statements to actual results or changed expectations.

Business Overview

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potentially addresses areas of high unmet medical need in the treatment of central nervous system (CNS) diseases and other disorders.

Our lead product candidate, esmethadone, is being

developed as a rapidly acting, oral agent for the treatment of depression and other potential indications.

On October 15, 2019, we reported

top-line data from study REL-1017-202.

This was a double-blind, placebo-controlled Phase 2 clinical trial evaluating the safety, tolerability

and efficacy of two oral doses of REL-1017, 25 mg once a day and 50 mg once a day, as an adjunctive treatment in patients with major depressive

disorder (MDD), who experienced an inadequate response to 1 to 3 adequate antidepressant treatments with an antidepressant medication.

Our lead product candidate, esmethadone, is

being developed as a rapidly acting, oral agent for the treatment of depression and other potential indications.

On October 15,

2019, we reported top-line data from study REL-1017-202.

During late 2022, we announced RELIANCE I and III did not achieve their

primary endpoints.

Relmada plans to complete two additional adjunctive Phase 3 trials (RELIANCE II and RELIGHT) and a long-term, open label

Phase 2 Clinical Trial

In the REL-1017-202 study, 62 subjects, with an average age of 49.2

years, with an average Hamilton Depression Rating Scale score of 25.3 and an average Montgomery-Asberg Depression Rating Scale (MADRS)

score of 34.0 (severe depression), were randomized.

In the REL-1017-202 study, 62 subjects, with an

average age of 49.2 years, with an average Hamilton Depression Rating Scale score of 25.3 and an average Montgomery-Asberg Depression

Rating Scale (MADRS) score of 34.0 (severe depression), were randomized.

Other demographic characteristics were balanced across all arms.

After an initial

screening period, subjects were randomized to one of three arms:

placebo, REL-1017 25 mg or REL-1017 50 mg, in addition to stable background

antidepressant therapy.

Subjects in the REL-1017 treatment arms received one loading dose of either 75 mg (25 mg arm) or 100 mg (50 mg

arm) of REL-1017.

After an initial screening period, subjects were randomized to one of three arms:

placebo, REL-1017 25 mg or REL-1017 50 mg, in addition

to stable background antidepressant therapy.

Subjects in the REL-1017 treatment arms received one loading dose of either 75 mg (25 mg

arm) or 100 mg (50 mg arm) of REL-1017.

Subjects were treated inpatient for 7 days and discharged home at Day 9.

They returned for follow-up visits at Day 14

They returned for follow-up

visits at Day 14 and Day 21.

Efficacy was measured on Days 2, 4 and 7 in the dosing period and on Day 14, one week after treatment discontinuation.

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Phase 3 Program

On December 20, 2020, Relmada announced that

the first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate,

REL-1017, as an adjunctive treatment for MDD.

On December 20, 2020, Relmada announced that the

first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate, REL-1017,

as an adjunctive treatment for MDD.

On April 1, 2021, Relmada announced the initiation

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candidate, REL-1017, as an adjunctive treatment for MDD.

On October 4, 2021, Relmada announced the initiation

of RELIANCE III study, a monotherapy trial for the Company’s lead product candidate, REL-1017.

On October 4, 2021, Relmada

announced the initiation of RELIANCE III study, a monotherapy trial for the Company’s lead product candidate, REL-1017.

On August 9, 2022, Relmada

announced that the FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.

On October 13, 2022,

Relmada announced that its RELIANCE III study, evaluating REL-1017 in the monotherapy setting for MDD, did not achieve its primary endpoint,

which was a statistically significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study,

the REL-1017 treatment arm showed a MADRS reduction of 14.8 points at Day 28 versus 13.9 points for the placebo arm, a higher than expected

placebo response.

On December 7, 2022,

Relmada announced that its RELIANCE I study, evaluating REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint,

which was a statistically significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study,

the REL-1017 treatment arm (n= 113) showed a MADRS reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114),

which is a clinically meaningful difference of 2.2 points on the MADRS.

The study also showed a nominally statistically significant difference

in the response rate, with a response rate of 39.8% in the REL-1017 arm vs 27.2% in the placebo arm (p<0.05).

Patients who complete

the RELIANCE trials are eligible to rollover into the long-term, open-label study, which also is expected to include subjects who had

On October 13, 2022, Relmada announced that its

RELIANCE III study, evaluating REL-1017 in the monotherapy setting for MDD, did not achieve its primary endpoint, which was a statistically

significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study, the REL-1017 treatment

arm showed a MADRS reduction of 14.8 points at Day 28 versus 13.9 points for the placebo arm, a higher than expected placebo response.

On December 7, 2022, Relmada announced that its

RELIANCE I study, evaluating REL-1017 as an adjunctive treatment for MDD, did not achieve its primary endpoint, which was a statistically

significant improvement in depression symptoms compared to placebo as measured by MADRS on Day 28.

In the study, the REL-1017 treatment

arm (n= 113) showed a MADRS reduction of 15.1 points at Day 28 versus 12.9 points for the placebo arm (n=114), which is a clinically meaningful

difference of 2.2 points on the MADRS.

The study also showed a nominally statistically significant difference in the response rate, with

a response rate of 39.8% in the REL-1017 arm vs 27.2% in the placebo arm (p<0.05).

Additionally, in a prespecified protocol analysis,

the REL-1017 treatment arm (n=101) showed a MADRS reduction of 15.6 points at Day 28 versus 12.5 points for the placebo arm (n+97), a

difference of 3.1 points, with p=0.051.

who completed the RELIANCE trials were eligible to rollover into the long-term, open-label study, which also included subjects who had

not previously participated in a REL-1017 clinical trial.

In addition, in order to support potential regulatory submissions

seeking approval for REL-1017 as monotherapy and adjunctive treatment, the FDA confirmed that, based on what is known at this time, Relmada

will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data have been generated to date.

The FDA also confirmed that Relmada does not need to conduct a Thorough QT analysis (TQT) cardiac study in humans to support cardiac

safety in potential regulatory submissions for REL-1017, as the data provided so far and the data generated by the Phase 3 program will

be adequate to evaluate the cardiac safety profile of REL-1017.

This rollover study completed subject visits on July 11, 2023.

During the second half of 2023, Relmada anticipates

RELIGHT, a Phase 3 clinical trial for REL-1017, as an adjunctive treatment for MDD, will commence.

In addition, in order

to support potential regulatory submissions seeking approval for REL-1017 as monotherapy and adjunctive treatment, the FDA confirmed that,

based on what is known at this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient

clinical data have been generated to date.

The FDA also confirmed that Relmada does not need to conduct a Thorough QT analysis (TQT) cardiac

study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data provided so far and the data generated

by the Phase 3 program will be adequate to evaluate the cardiac safety profile of REL-1017.

Human Abuse Potential (HAP) Studies

Top-line Results -Oxycodone:

On July 27, 2021, Relmada announced top-line

results that showed that all three doses of REL-1017 (25 mg, 75 mg and 150 mg, the therapeutic, supratherapeutic and maximum tolerated

doses (MTD), respectively, tested in recreational opioid users, demonstrated a highly statistically significant difference vs.

control drug, oxycodone 40 mg.

The study’s primary endpoint was a measure of “likability” with the subjects rating

the maximum effect (or Emax) for Drug Liking “at the moment”, using a 1-100 bipolar rating scale (known as a visual analog

scale or VAS), with 100 as the highest likability, 50 as neutral (placebo-like), and 0 the highest dislike.

In summary, all tested doses

of REL-1017, including the 150 mg MTD, showed a highly statistically significant difference in abuse potential versus oxycodone with

p-values less than 0.05.

On July 27, 2021, Relmada announced top-line results

that showed that all three doses of REL-1017 (25 mg, 75 mg and 150 mg, the therapeutic, supratherapeutic and maximum tolerated doses (MTD),

respectively) tested in recreational opioid users, demonstrated a highly statistically significant difference vs.

the active control drug,

oxycodone 40 mg.

The study’s primary endpoint was a measure of “likability” with the subjects rating the maximum effect

(or Emax) for Drug Liking “at the moment”, using a 1=100 bipolar rating scale (known as a visual analog scale or VAS), with

100 as the highest likability, 50 as neutral (placebo-like), and 0 the highest dislike.

In summary, all tested doses of REL-1017, including

the 150 mg MTD, showed a highly statistically significant difference in abuse potential versus oxycodone with p-values less than 0.05.

Consistent results were seen for the secondary endpoints.

Additionally, all REL-1017 doses including 150 mg

(6 times the therapeutic dose and MTD) were statistically equivalent to placebo (p<0.05).

These results support the lack of opioid

effects of REL-1017.

Additionally, all REL-1017 doses including 150 mg (6 times the therapeutic dose

and MTD) were statistically equivalent to placebo (p<0.05).

These results support the lack of opioid effects of REL-1017.

Top-line Results -Ketamine:

On February 23, 2022, Relmada announced top-line

results that showed that all three doses of REL-1017 (25 mg, 75 mg, and 150 mg, the therapeutic, supratherapeutic and MTD, respectively)

tested in recreational drug users, demonstrated a substantial (30+ points) and statistically significant difference vs.

the active control

drug, intravenous ketamine 0.5 mg/kg over 40 minutes, and, importantly, were statistically equivalent to placebo.

The study’s primary

endpoint was a measure of “likability” with the subjects rating the maximum effect (or Emax) for Drug Liking “at this

moment”, using a 1-100 bipolar rating scale (known as a visual analog scale or VAS), with 100 as the highest likability, 50 as

neutral (placebo-like), and 0 the highest dislike.

On February 23, 2022,

Relmada announced top-line results that showed that all three doses of REL-1017 (25 mg, 75 mg, and 150 mg, the therapeutic, supratherapeutic

and MTD, respectively) tested in recreational drug users, demonstrated a substantial (30+ points) and statistically significant difference

the active control drug, intravenous ketamine 0.5 mg/kg over 40 minutes, and, importantly, were statistically equivalent to placebo.

The study’s primary endpoint was a measure of “likability” with the subjects rating the maximum effect (or Emax) for

Drug Liking “at this moment”, using a 1-100 bipolar rating scale (known as a visual analog scale or VAS), with 100 as the

highest likability, 50 as neutral (placebo-like), and 0 the highest dislike.

Consistent results are seen for the secondary endpoints.

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These include:

Results of RELIANCE II, the second of two adjunctive MDD trials, in

the first half of 2024.

Initiation of a new Phase III adjunctive MDD trial in mid-2023 with

completion anticipated in the second half of 2024.

Results of RELIANCE – OLS (Long-term, Open-label) study in MDD

of RELIANCE II, the second of three adjunctive MDD trials, in the first half of 2024.

Initiation of a new Phase III adjunctive MDD trial in mid-2023 with completion anticipated in the second half of 2024.

Results of RELIANCE – OLS (Long-term, Open-label) study in MDD in mid 2023.

Our Development Program

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REL-1017) as a treatment for MDD

In 2020, the National Institute of Mental Health (NIMH) estimated that

21.0 million adults aged 18 or older in the United States had at least one major depressive episode in the past year.

According to data

from nationally representative surveys supported by NIMH, only about half of Americans diagnosed with major depression in a given year

receive treatment.

Of those receiving treatment with as many as four different standard antidepressants, 33% of drug-treated depression

patients do not achieve adequate therapeutic benefits according to the Sequenced Treatment Alternatives to Relieve Depression (STAR*D)

trial published in the American Journal of Psychiatry.

addition to the high failure rate, only two of the marketed products for depression, esketamine (marketed by Johnson and Johnson as Spravato®),

an in-clinic nasal spray treatment, and dextromethorphan-bupropion (marketed by Axsome as Auvelity ä ),

In 2020, the National Institute of Mental Health

(NIMH) estimated that 21.0 million adults aged 18 or older in the United States had at least one major depressive episode in the past

According to data from nationally representative surveys supported by NIMH, only about half of Americans diagnosed with major depression

in a given year receive treatment.

Of those receiving treatment with as many as four different standard antidepressants, 33% of drug-treated

depression patients do not achieve adequate therapeutic benefits according to the Sequenced Treatment Alternatives to Relieve Depression

(STAR*D) trial published in the American Journal of Psychiatry.

addition to the high failure rate, only two of the marketed products for depression, esketamine (marketed by Johnson and Johnson as Spravato®),an

in-clinic nasal spray treatment, and dextromethorphan-bupropion (marketed by Axsome as Auvelity ä ),

can demonstrate rapid antidepressant effects, while the other currently approved products can take two to eight weeks to show activity.

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as well as all atypical antipsychotics used adjunctively with standard, FDA-approved antidepressants.

Working through the same brain

mechanisms as ketamine and esketamine but potentially lacking their adverse side effects, esmethadone is being developed as a rapidly

acting, oral agent for the treatment of depression and potentially other CNS conditions.

In chemistry an enantiomer, also known as an

optical isomer, is one of two stereoisomers that are mirror images of each other that are non-superimposable (not identical), much as

one’s left and right hands are the same except for being reversed along one axis.

A racemic compound, or racemate, is one that

has equal amounts of left- and right-handed enantiomers of a chiral molecule.

For racemic drugs, often only one of a drug’s enantiomers

is responsible for the desired physiologic effects, while the other enantiomer is less active or inactive.

Working through the same brain mechanisms

as ketamine and esketamine but potentially lacking their adverse side effects, esmethadone is being developed as a rapidly acting, oral

agent for the treatment of depression and potentially other CNS conditions.

In chemistry an enantiomer, also known as an optical

isomer, is one of two stereoisomers that are mirror images of each other that are non-superimposable (not identical), much as one’s

left and right hands are the same except for being reversed along one axis.

A racemic compound, or racemate, is one that has equal amounts

of left- and right-handed enantiomers of a chiral molecule.

For racemic drugs, often only one of a drug’s enantiomers is responsible

for the desired physiologic effects, while the other enantiomer is less active or inactive.

As a single isomer of racemic methadone, esmethadone

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Our Corporate History and Background

We are a clinical-stage, publicly traded biotechnology company developing

NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of depression and

other CNS diseases.

We are a clinical-stage, publicly traded biotechnology

company developing NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment

of depression and other CNS diseases.

Currently, none of our product candidates have

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generating revenues for the foreseeable future.

We had a net loss of $26,321,576 for the three months ended March 31, 2023.

We had net loss of $51,624,530 for the six months ended June 30, 2023.

At June 30, 2023,

we had an accumulated deficit of $513,735,465.

Business Strategy

Our strategy is to leverage our considerable

industry experience, understanding of CNS markets and development expertise to identify, develop and commercialize product candidates

with significant market potential that can fulfill unmet medical needs in the treatment of CNS diseases.

We have assembled a management

team along with both scientific advisors, including recognized experts in the fields of depression, and business advisors with significant

industry and regulatory experience to lead and execute the development and commercialization of esmethadone.

Our strategy is to leverage our considerable industry

experience, understanding of CNS markets and development expertise to identify, develop and commercialize product candidates with significant

market potential that can fulfill unmet medical needs in the treatment of CNS diseases.

We have assembled a management team along with

both scientific advisors, including recognized experts in the fields of depression, and business advisors with significant industry and

regulatory experience to lead and execute the development and commercialization of esmethadone.

We plan to further develop esmethadone as our

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13% for cancer and 12% for cardiovascular disease.

The depression treatment market is

segmented on the basis of antidepressants drugs, devices, and therapies.

Antidepressants are the largest and most popular market segment.

The antidepressants segment consists of large pharmaceutical and generic companies, such as Eli Lilly, Pfizer, GlaxoSmithKline, Allergan,

Sage Therapeutics and Johnson & Johnson.

Some of the notable drugs produced by these companies are Cymbalta ® (Eli Lilly),

Effexor ® (Pfizer), Pristiq ® (Pfizer), Zulresso ® (Sage), Spravato ® (Johnson

& Johnson) and Auvelity ä (Axsome).

depression treatment market is segmented on the basis of antidepressants drugs, devices, and therapies.

Antidepressants are the largest

and most popular market segment.

The antidepressants segment consists of large pharmaceutical and generic companies, such as Eli Lilly,

Pfizer, GlaxoSmithKline, Allergan, Sage Therapeutics and Johnson & Johnson.

Some of the notable drugs produced by these companies

are Cymbalta® (Eli Lilly), Effexor® (Pfizer), Pristiq® (Pfizer), Zulresso® (Sage), Spravato® (Johnson & Johnson)

and Auvelity ä (Axsome).

Intellectual Property Portfolio and Market

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We have also secured an Orphan Drug Designation from the FDA for d-methadone for “the treatment of postherpetic neuralgia”

(postherpetic neuralgia is lasting pain in areas of skin affected by previous outbreaks of shingles, caused by the varicella-zoster,

or herpes zoster, virus).

which, upon potential NDA approval, carries 7-year FDA Orphan Drug marketing exclusivity.

(postherpetic neuralgia is lasting pain in areas of skin affected by previous outbreaks of shingles, caused by the varicella-zoster, or

herpes zoster, virus) which, upon potential NDA approval, carries 7-year FDA Orphan Drug marketing exclusivity.

In the European Union,

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We believe that the key elements for our market success include:

Compelling lead product opportunity, REL-1017 currently in the second

of two Phase 3 trials for the adjunctive treatment of MDD.

Robust and highly statistically significant, efficacy seen with esmethadone

in a randomized Phase 2 trial with the primary endpoint at 7 days, with onset of action seen at 4 days, and the effect carrying through

to 14 days (7 days post treatment).

Successful Phase 1 safety studies of esmethadone and strong clinical

activity signal in depression established in three independent animal models in preclinical studies.

Potential in additional multiple indications in underserved markets

with large patient population in other affective disorders, and cognitive disorders.

Compelling lead product

opportunity, REL-1017 currently in the second of three Phase 3 trials for the adjunctive treatment of MDD.

Robust and highly statistically

significant, efficacy seen with esmethadone in a randomized Phase 2 trial with the primary endpoint at 7 days, with onset of action seen

at 4 days, and the effect carrying through to 14 days (7 days post-treatment).

Successful Phase 1 safety studies of esmethadone and strong clinical activity signal in depression established in three independent animal models in preclinical studies.

Potential in additional multiple indications in underserved markets with large patient population in other affective disorders, and cognitive disorders

Scientific support of leading experts:

Our scientific advisors include

clinicians and scientists who are affiliated with a number of highly regarded medical institutions such as Harvard, Cornell, Yale,

and University of Pennsylvania.

Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions such as Harvard, Cornell, Yale, and University of Pennsylvania.

Substantial IP portfolio and market protection:

approved and filed

patent applications provide coverage beyond 2033.

A vailable Information

approved and filed patent applications provide coverage beyond 2033.

Available Information

Reports we file with the Securities and Exchange

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Results of Operations

For the Three Months Ended March 31, 2023 versus March 31, 2022

For the Three Months Ended June 30, 2023 versus June 30, 2022

Operating Expenses

Research and development

$ (17,172,466 )

General and administrative

and Development Expense

Research and development expense for the three months ended March 31,

2023 was approximately $15,861,000 compared to $25,012,900 for the three months ended March 31, 2022, a decrease of approximately $9,151,900.

The change was primarily driven by:

Decrease in study costs of $9,050,700 primarily associated with lower consultants costs due to the completion of RELIANCE I and RELIANCE III late in 2022;

Decrease in other research expenses

of $1,124,900 associated with the completion of RELIANCE I and RELIANCE III late in 2022;

Decrease in manufacturing

and drug storage costs of $351,200 related to materials needed to complete the Phase 3 program;

in stock-based compensation expense of $735,700;

in compensation expense of $639,200 due to higher employee-related costs.

and Administrative Expense

and administrative expense for the three months ended March 31, 2023 was approximately $12,292,600 compared to $13,284,600 for the three

months ended March 31, 2022, a decrease of approximately $992,000.

The change was primarily due to:

Decrease in stock-based compensation expense of $1,312,000 primarily related to options granted to employees;

Increase in compensation expense of $229,200 due to higher employee-related costs;

Increase in other general and administrative expenses of $90,800 primarily due to an increase in consulting services.

$ (19,485,346 )

Research and Development Expense

Research and development expense for the three

months ended June 30, 2023, was approximately $13,740,200 compared to $30,912,700 for the three months ended June 30, 2022, a decrease

of approximately $17,172,500.

The decrease was primarily due to:

An increase in stock-based compensation expense of $486,200 related to options granted to employees;

Increase in compensation expense of $293,500 due to an increase in research and development employees and their related bonuses;

in study costs of $13,347,300 associated with the completion of the RELIANCE I and III in late 2022;

Decrease in other research expenses of $4,378,100 primarily associated

with reduction of consultants, clinical research associates, and medical science liaisons contracted to assist in RELIANCE I and III that

concluded in late 2022;

Decrease in manufacturing and drug storage costs of $226,800.

General and Administrative Expense

General and administrative expense for the three

months ended June 30, 2023, was approximately $12,286,500 compared to $14,599,400 for the three months ended June 30, 2022, a decrease

of approximately $ 2,312,900.

The decrease was primarily due to:

Increase in compensation expense of $157,400 primarily related an increase of general and administrative employees;

Decrease in stock-based compensation expense of $1,611,600 related to option grants to employees and key consultants;

Decrease in other general and administrative expenses of $858,700 primarily

due to a decrease in consulting services.

Other Income (Expense)

Interest / investment income was approximately $1,363,400

$1,207,600 and $329,900 for the three months ended March 31, 2023 and 2022, respectively.

The increase was due to higher interest

rates and investment yields.

Realized loss on short-term investments was approximately $666,700 and $15,000 for the three months ended

March 31, 2023 and 2022, respectively.

Unrealized gain on short-term investments was approximately $1,291,100 and an unrealized loss on

short-term investments was $1,763,300 for the three months ended March 31, 2023 and 2022, respectively.

The Company did not provide for income taxes

for the three months ended March 31, 2023 and 2022, since there was a loss and a full valuation allowance against all deferred tax assets.

The net loss for the Company for the three months ended March 31, 2023

and $387,300 for the three months ended June 30, 2023 and 2022, respectively.

The increase was due to higher interest rates and investment

Realized gain on short-term investments was approximately $0 and $24,500 for the three months ended June 30, 2023 and 2022, respectively.

Unrealized loss on short-term investments was approximately $639,600 and $1,186,300 for the three months ended June 30, 2023 and 2022,

respectively.

Gain on settlement of fees was $6,351,600 for the three months ended June 30, 2022.

The net loss for the Company for the three months ended June 30, 2023

and 2022 was approximately $25,303,000 and $39,935,000, respectively.

The Company had loss per common share, basic and diluted of $0.87

and $1.40 for the three months ended March 31, 2023 and 2022, respectively.

As shown in the accompanying financial statements, the Company incurred

negative operating cash flows of $16,505,094 for the three months ended March 31, 2023 and has an accumulated deficit of $488,432,511

from inception through March 31, 2023.

Management believes that the Company’s

existing cash and cash equivalents and short-term investments will enable it to fund operating expenses and capital expenditure

requirements for at least 12 months from the issuance of these unaudited condensed consolidated financial statements.

point management will evaluate the size and scope of any subsequent operations and clinical trials that will affect the timing of

additional financings through public or private sales of equity or debt securities or from bank or other loans or through strategic

collaboration and/or licensing agreements.

Further, additional financing does not affect the

Company’s conclusion that based on the cash on hand and the budgeted cash flow requirements, the Company has sufficient funds

to maintain operations for at least 12 months from the issuance of these unaudited condensed consolidated financial statements.

The following table sets forth selected cash flow information for

the periods indicated below:

Three Months Ended

Cash used in operating activities

The Company had loss per share basic and diluted of $0.84 and $1.33

for the three months ended June 30, 2023 and 2022, respectively.

The Company did not provide for income taxes for

the three months ended June 30, 2023 and 2022, since there was a loss and a full valuation allowance against all deferred tax assets.

Results of Operations

For the Six Months Ended June 30, 2023 versus June 30, 2022

Operating Expenses

Research and development

$ (26,324,309 )

General and administrative

$ (29,629,160 )

Research and Development Expense

Research and development expense for the six months ended June 30,

2023 was approximately $29,601,200 compared to $55,925,500 for the six months ended June 30, 2022, a decrease of approximately $26,324,300.

The decrease was primarily due to:

An increase in stock-based compensation expense of $1,122,000;

Increase in compensation expense of $932,700 due to an increase in research and development employees and their related bonuses;

Decrease in study costs

of $22,398,100 associated with the completion of RELIANCE I and III in late 2022;

Decrease in other research expenses of $5,371,900 primarily associated

with the reduction consultants, clinical research associates, and medical science liaisons contracted to assist in the execution of our

Phase 3 trials assist in RELIANCE I and III that concluded in late 2022;

Decrease in manufacturing and drug storage costs of $578,000;

Decrease in pre-clinical and toxicology expenses of $131,000.

General and Administrative Expense

General and administrative expense for the six

months ended June 30, 2023 was approximately $24,579,100 compared to $27,884,000 for the six months ended June 30, 2022, a decrease of

approximately $3,304,900.

The decrease was primarily due to:

Increase in compensation expense of $386,700 primarily related an increase

of general and administrative employees and their related bonuses;

Decrease in stock-based

compensation expense of $2,923,800 related to option grants to employees and key consultants;

Decrease in other general and administrative expenses of $767,800 primarily

due to a decrease in consulting services.

Other Income (Expense)

Interest / investment income was approximately $2,571,000

and $717,300 for the six months ended June 30, 2023 and 2022, respectively.

The increase was due to higher interest rates and investment

Realized loss on short-term investments was approximately $666,700 for the six months ended June 30, 2023 compared to a realized

gain of approximately $9,500 for the six months ended June 30, 2022.

Unrealized gain on short-term investments was approximately $651,500

compared to an unrealized loss of approximately $2,949,600 for the six months ended June 30, 2023 and 2022, respectively.

on settlement of fees was $6,351,600 for the three months ended June 30, 2022.

The net loss for the Company for the six months

ended June 30, 2023 and 2022 was approximately $51,624,500 and $79,680,800, respectively.

The Company had loss per share basic and diluted

of $1.72 and $2.73 for the six months ended June 30, 2023 and 2022, respectively.

The Company did not provide for income taxes for

the six months ended June 30, 2023 and 2022, since there was a loss and a full valuation allowance against all deferred tax assets.

As shown in the accompanying financial statements,

the Company incurred negative operating cash flows of $29,778,363 for the six months ended June 30, 2023 and has an accumulated deficit

of $513,735,465 from inception through June 30, 2023.

At June 30, 2023, the Company had cash and cash equivalents and short term investments

of $118,529,091.

Management believes that the Company’s existing

cash and cash equivalents and short-term investments will enable it to fund operating expenses and capital expenditure requirements for

at least 12 months from the issuance of these unaudited condensed consolidated financial statements.

Beyond that point management will

evaluate the size and scope of any subsequent operations and clinical trials that will affect the timing of additional financings through

public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements.

Further, additional financing does not affect the Company’s conclusion that based on the cash on hand and the budgeted cash flow

requirements, the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these unaudited condensed

consolidated financial statements.

The following table sets forth selected cash flow information for the

periods indicated below:

Cash used in operating activities

Cash provided by (used in) investing activities

(10,027,668 )

Cash provided by financing activities

Net increase in cash and cash equivalents

the three months ended March 31, 2023, cash used in operating activities was $16,505,094 primarily due to the net loss of $26,321,576

offset by non-cash stock compensation charges of $11,354,466.

There were realized losses and unrealized gains on short term investments

of $666,708 and $1,291,110, respectively.

In addition, there was a decrease in operating assets and liabilities of $913,582 for the three

months ended March 31, 2023.

For the three months ended March 31, 2022, cash used in operating activities

was $19,429,743 primarily due to the net loss of $39,745,783 offset by non-cash stock compensation charges of $11,930,681.

realized losses of and unrealized losses on short term investments of $15,022 and $1,763,287, respectively.

In addition, there was a decrease

in operating assets and liabilities of $6,607,050.

For the three months ended March 31, 2023, cash

provided by investing activities was $40,003,549 related to the purchase of $34,767,288 and the sale of $74,770,836 short-term investments.

For the three months ended March 31, 2022, cash

used by investing activities was $10,027,668 related to the purchase of $25,915,957 and the sale of $15,888,289 short-term investments.

There was no cash provided by financing activities

for the three months ended March 31, 2023.

Net increase (decrease) in cash and cash equivalents

For the six months ended June 30, 2023, cash used

in operating activities was $29,778,363 primarily due to the net loss of $51,624,530 offset by non-cash stock-based compensation charges

of $22,523,983.

There were realized losses and unrealized gains on short-term investments of $666,708 and $651,476, respectively.

there was a decrease in operating assets and liabilities of $693,048.

For the six months ended June 30, 2022, cash used

in operating activities was $41,055,884 primarily due to the net loss of $79,680,751 offset by non-cash stock-based compensation charges

of $24,225,697.

There were realized gains and unrealized losses of $9,480 and $2,949,624, respectively.

There was a gain on settlement

of fees of $6,351,606.

In addition, there was an increase in operating assets and liabilities of $17,810,632.

For the six months ended June 30, 2023, cash provided

by investing activities was $38,851,812, due to $45,577,832 of purchases of short-term investments offset by $84,429,644 of sales of short-term

For the six months ended June 30, 2022, cash used

in investing activities was $10,168,188, due to $33,412,425 of purchases of short-term investments offset by $23,244,237 of sales of short-term

There was no net cash provided by financing activities

for the six months ended June 30, 2023.

Net cash provided by financing activities for

the three months ended March 31, 2022 was $29,948,348 due to sales of common stock of $29,583,542, proceeds from warrants exercised for

common stock of $300,006, and proceeds from options exercised for common stock of $64,800.

the six months ended June 30, 2022 was $44,041,499 due to proceeds from the issuance of common stock of $42,728,599, proceeds from options

exercised for common stock of $417,544, and proceeds from warrants exercised for common stock of $895,356.

Effects of Inflation

Our assets are primarily monetary, consisting

of cash and cash equivalents.

of cash and cash equivalents and short-term investments.

Because of their liquidity, these assets are not directly affected by inflation.

Because we intend to retain

and continue to use our equipment, we believe that the incremental inflation related to replacement costs of such items will not materially

affect our operations.

However, the rate of inflation affects our expenses, such as those for employee compensation and contract services,

which could increase our level of expenses and the rate at which we use our resources.

However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase

our level of expenses and the rate at which we use our resources.

Commitments and Contingencies

Please refer to Note 7 in our Annual Report

on Form 10-K for the year ended December 31, 2022 under the heading Commitments and Contingencies.

To our knowledge there have been

no material changes to the risk factors that were previously disclosed in the Company’s Annual Report on Form 10-K for the

year ended December 31, 2022.

Additional risks and uncertainties not currently known to us or that we currently deem to be

immaterial also may materially adversely affect our business, financial condition and/or operating results.

Please refer to Note 7 in our Annual Report on

Form 10-K for the year ended December 31, 2022 under the heading Commitments and Contingencies.

To our knowledge there have been no material

changes to the risk factors that were previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially

adversely affect our business, financial condition and/or operating results.

Critical Accounting Policies and Estimates

2 unchanged sentences

subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our unaudited condensed consolidated financial

statements are presented in accordance with U.S.

Our unaudited condensed

consolidated financial statements are presented in accordance with U.S.

GAAP, and all applicable U.S.

GAAP accounting standards effective as of March 31, 2023

have been taken into consideration in preparing the unaudited consolidated financial statements.

The preparation of unaudited condensed

consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,

and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

for the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that

are not readily apparent from other sources.

On a continual basis, management reviews its estimates utilizing currently available information,

changes in facts and circumstances, historical experience, and reasonable assumptions.

After such reviews, and if deemed appropriate,

management’s estimates are adjusted accordingly.

Actual results could differ from those estimates and assumptions under different

and/or future circumstances.

GAAP accounting standards effective

as of June 30, 2023 have been taken into consideration in preparing the unaudited consolidated financial statements.

The preparation of

unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts

of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses for the reporting period.

Management bases its estimates on historical experience and on various assumptions

that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying

value of assets and liabilities that are not readily apparent from other sources.

On a continual basis, management reviews its estimates

utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions.

such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly.

Actual results could differ from those

estimates and assumptions under different and/or future circumstances.

Management considers an accounting estimate to be critical if:

it requires assumptions to be made that were uncertain at the time

the estimate was made;

changes in the estimate, or the use of different estimating methods

that could have been selected, could have a material impact on results of operations or financial condition.

We evaluate our estimates and assumptions on

an ongoing basis and none of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial

statements involve a high level of estimation uncertainty.

For additional discussion regarding the application of the significant accounting

policies, see Note 2 to the Company’s unaudited condensed consolidated financial statements included in this report.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK.

it requires assumptions to be made that were uncertain at the time the estimate was made;

changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on results of operations or financial condition.

We evaluate our estimates and assumptions on an

ongoing basis and none of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial statements

involve a high level of estimation uncertainty.

For additional discussion regarding the application of the significant accounting policies,

see Note 2 to the Company’s unaudited condensed consolidated financial statements included in this report.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

There have been no material changes to our exposures

2 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