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Item 1A. Risk Factors

2021-03-11 compared with 2020-03-20 · 1260 added, 1213 removed, 189 unchanged (93% of the section changed)

6 unchanged sentences

circumstances, the market price of our common stock would likely decline.

Risks Related to ArTara’s

Financial Condition

ArTara has a very

limited operating history and has never generated any revenues.

ArTara is an early-stage

biopharmaceutical company with a very limited operating history that may make it difficult to evaluate the success of its business

to date and to assess its future viability.

ArTara’s operations with respect to the entity that operationally survived the

Merger, have been limited to organizing and staffing the company, business planning, raising capital and in-licensing rights to

TARA-002 and IV Choline Chloride, have been limited to business planning, raising capital, developing ArTara’s pipeline assets

(TARA-002 and IV Choline Chloride), identifying product candidates, and other research and development.

ArTara has not yet demonstrated

an ability to successfully complete any clinical trials and has never completed the development of any product candidate, nor has

it ever generated any revenue from product sales or otherwise.

Consequently, ArTara has no meaningful operations upon which to

evaluate its business, and predictions about its future success or viability may not be as accurate as they could be if it had

a longer operating history or a history of successfully developing and commercializing biopharmaceutical products.

ArTara expects to

incur significant losses for the foreseeable future and may never achieve or maintain profitability.

Risks Related to Our Financial Condition

We have a very limited operating history

and have never generated any revenues.

We are an early-stage

biopharmaceutical company with a very limited operating history that may make it difficult to evaluate the success of our business

to date and to assess our future viability.

Our operations, with respect to the entity that operationally survived the Merger,

have been limited to organizing and staffing the company, business planning, raising capital, developing our pipeline assets (TARA-002

and IV Choline Chloride), identifying product candidates, and other research and development.

Although our employees have made

regulatory submissions and conducted successful clinical trials in the past across many therapeutic areas while employed at other

companies, we have not yet demonstrated an ability to successfully complete any clinical trials and have never completed the development

of any product candidate, nor have we ever generated any revenue from product sales or otherwise.

Consequently, we have no meaningful

operations upon which to evaluate our business, and predictions about our future success or viability may not be as accurate as

they could be if we had a longer operating history or a history of successfully developing and commercializing biopharmaceutical

We expect to incur significant losses

for the foreseeable future and may never achieve or maintain profitability.

Investment in biopharmaceutical

product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that

a product candidate will fail to gain regulatory approval or become commercially viable.

ArTara has never generated any revenues,

and cannot estimate with precision the extent of our future losses.

ArTara expects to incur increasing levels of operating losses

for the foreseeable future as it executes on the plan to continue research and development activities, including the ongoing and

planned clinical development of its product candidates, potentially acquire new products and/or product candidates, seek regulatory

approvals of and potentially commercialize any approved product candidates, hire additional personnel, protect its intellectual

property, and incur the additional costs of operating as a public company.

ArTara expects to continue to incur significant and

increasing operating losses and negative cash flows for the foreseeable future.

These losses have had and will continue to have

an adverse effect on ArTara’s financial position and working capital.

To become and remain

profitable, ArTara must develop or acquire and eventually commercialize a product with significant market potential.

require the Company to be successful in a range of challenging activities, including completing preclinical studies and clinical

trials, obtaining marketing approval, manufacturing, marketing and selling any product candidate for which ArTara obtains marketing

approval, and satisfying post-marketing requirements, if any.

ArTara may never succeed in these activities and, even if ArTara

succeeds in obtaining approval for and commercializing one or more products, ArTara may never generate revenues that are significant

enough to achieve profitability.

In addition, as a young business, ArTara may encounter unforeseen expenses, difficulties, complications,

delays and other known and unknown challenges.

Furthermore, because of the numerous risks and uncertainties associated with biopharmaceutical

product development, ArTara is unable to accurately predict the timing or amount of increased expenses or when, or if, ArTara will

be able to achieve profitability.

If ArTara achieves profitability, it may not be able to sustain or increase profitability on

a quarterly or annual basis and may continue to incur substantial research and development and other expenditures to develop and

market additional product candidates.

ArTara’s failure to become and remain profitable would decrease the value of the company

and could impair its ability to raise capital, maintain its research and development efforts, expand the business or continue operations.

A decline in the value of the Company could also cause you to lose all or part of your investment.

ArTara will need

to raise additional financing in the future to fund ArTara’s operations, which may not be available to it on favorable terms

ArTara will require

substantial additional funds to conduct the costly and time-consuming clinical efficacy trials necessary to pursue regulatory approval

of each potential product candidate and to continue the development of TARA-002 and IV Choline Chloride in new indications or uses.

ArTara’s future capital requirements will depend upon a number of factors, including:

the number and timing of future product

candidates in the pipeline;

product development is highly speculative because it entails substantial upfront capital and significant risk that a product candidate

will fail to gain regulatory approval or become commercially viable.

We have never generated any revenues, and cannot estimate

with precision the extent of our future losses.

We expect to incur increasing levels of operating losses for the foreseeable future

as we execute on the plan to continue research and development activities, including the ongoing and planned clinical development

of our product candidates, potentially acquire new products and/or product candidates, seek regulatory approvals of and potentially

commercialize any approved product candidates, hire additional personnel, protect our intellectual property, and incur the additional

costs of operating as a public company.

We expect to continue to incur significant and increasing operating losses and negative

cash flows for the foreseeable future.

These losses have had and will continue to have an adverse effect on our financial position

and working capital.

To become and remain profitable,

we must develop or acquire and eventually commercialize a product with significant market potential.

This will require us to be

successful in a range of challenging activities, including completing preclinical studies and clinical trials, obtaining marketing

approval, manufacturing, marketing and selling any product candidate for which we obtain marketing approval, and satisfying post-marketing

requirements, if any.

We may never succeed in these activities and, even if we succeed in obtaining approval for and commercializing

one or more products, we may never generate revenues that are significant enough to achieve profitability.

In addition, as a young

business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges.

because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately

predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.

If we achieve profitability,

we may not be able to sustain or increase profitability on a quarterly or annual basis and may continue to incur substantial research

and development and other expenditures to develop and market additional product candidates.

Our failure to become and remain profitable

would decrease the value of us and could impair our ability to raise capital, maintain our research and development efforts, expand

the business or continue operations.

A decline in the value of us could also cause you to lose all or part of your investment.

The COVID-19 coronavirus could adversely

impact our business, including our clinical development plans.

In December 2019, a novel

coronavirus disease (“COVID-19”) was reported and in January 2020, the World Health Organization (the “WHO”)

declared it a Public Health Emergency of International Concern.

On February 28, 2020, the WHO raised its assessment of the COVID-19

threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and

on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

As COVID-19 continues to spread in the United States and around

the world, we may experience disruptions that could severely impact our business, including:

interruption of key manufacturing, research and clinical

development activities, due to limitations on work and travel imposed or recommended by federal or state governments, employers

delays or difficulties in clinical trial site operations, including difficulties in recruiting clinical site investigators and clinical site staff and difficulties in enrolling patients;

interruption of key business activities, due to illness and/or quarantine of key individuals and delays associated with recruiting, hiring and training new temporary or permanent replacements for such key individuals, both internally and at our third party service providers;

delays in research and clinical trial sites receiving the supplies and materials needed to conduct preclinical studies and clinical trials, due to work stoppages, travel and shipping interruptions or restrictions or other reasons;

delays or difficulties conducting nonclinical studies due to limitations in employee resources or laboratory closures;

difficulties in raising additional capital needed to pursue the development of our programs due to the slowing of our economy and near term and/or long term negative effects of the pandemic on the financial, banking and capital markets;

changes in local regulations as part of a response to the COVID-19 coronavirus outbreak which may require us to change the ways in which research, including clinical development, is conducted, which may result in unexpected costs;

delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources, travel restrictions or forced furlough of government employees.

The global outbreak

of COVID- continues to evolve.

The extent to which the COVID-19 coronavirus may impact our business will depend on future developments,

which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the

duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures

or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the

The duration and extent of the impact from the COVID-19 pandemic depend on future developments that cannot be accurately

predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions

and the impact of these and other factors on our operations, employees, partners and vendors.

If we are not able to respond to

and manage the impact of such events effectively, our business will be harmed.

In addition, while the

potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, it has significantly

disrupted global financial markets, and may limit our ability to access additional capital, which could in the future negatively

affect our liquidity.

A recession or market correction resulting from the spread of COVID-19 could materially affect our business

and the value of our common stock.

To the extent the COVID-19

pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other

risks and uncertainties described elsewhere in this “Risk Factors”

We will need to raise additional financing

in the future to fund our operations, which may not be available to us on favorable terms or at all.

We will require substantial

additional funds to conduct the costly and time-consuming clinical efficacy trials necessary to pursue regulatory approval of each

potential product candidate and to continue the development of TARA-002 and IV Choline Chloride in new indications or uses.

future capital requirements will depend upon a number of factors, including:

the number and timing of future product candidates

in the pipeline;

progress with and results from preclinical testing and clinical trials;

the ability to manufacture

sufficient drug supplies to complete preclinical and clinical trials;

the costs involved in preparing, filing, acquiring, prosecuting,

maintaining and enforcing patent and other intellectual property claims;

and the time and costs involved in obtaining regulatory

approvals and favorable reimbursement or formulary acceptance.

Raising additional capital may be costly or difficult to obtain

and could significantly dilute stockholders’ ownership interests or inhibit ArTara’s ability to achieve its business

If ArTara raises additional funds through public or private equity offerings, the terms of these securities may include

liquidation or other preferences that adversely the rights of its common stockholders.

Further, to the extent that ArTara raises

additional capital through the sale of common stock or securities convertible or exchangeable into common stock, your ownership

interest in ArTara will be diluted.

In addition, any debt financing may subject ArTara to fixed payment obligations and covenants

limiting or restricting its ability to take specific actions, such as incurring additional debt, making capital expenditures or

declaring dividends.

If ArTara raises additional capital through marketing and distribution arrangements or other collaborations,

strategic alliances or licensing arrangements with third parties, ArTara may have to relinquish certain valuable intellectual property

or other rights to its product candidates, technologies, future revenue streams or research programs or grant licenses on terms

that may not be favorable to it.

Even if ArTara were to obtain sufficient funding, there can be no assurance that it will be available

on terms acceptable to ArTara or its stockholders.

Clinical drug development

is very expensive, time-consuming and uncertain.

Clinical development

for ArTara’s product candidates is very expensive, time-consuming, difficult to design and implement, and the outcomes are

inherently uncertain.

Most product candidates that commence clinical trials are never approved by regulatory authorities for commercialization

and of those that are approved many do not cover their costs of development.

In addition, ArTara, any partner with which it may

in the future collaborate, the FDA, an institutional review board (IRB), or other regulatory authorities, including state and local

agencies and counterpart agencies in foreign countries, may suspend, delay, require modifications to or terminate ArTara’s

clinical trials at any time.

Risks Related to Drug/Biologics

business depends on the successful clinical development, regulatory approval and commercialization of TARA-002 and IV Choline Chloride.

The success of ArTara’s

business, including its ability to finance itself and generate revenue in the future, primarily depends on the successful development,

the ability to manufacture sufficient

drug supplies to complete preclinical and clinical trials;

the costs involved in preparing, filing, acquiring, prosecuting, maintaining

and enforcing patent and other intellectual property claims;

and the time and costs involved in obtaining regulatory approvals

and favorable reimbursement or formulary acceptance.

Raising additional capital may be costly or difficult to obtain and could

significantly dilute stockholders’

ownership interests or inhibit our ability to achieve our business objectives.

of economic conditions, general global economic uncertainty, political change, and other factors, including uncertainty associated

with the COVID-19 pandemic, we do not know whether additional capital will be available when needed, or that, if available, we

will be able to obtain additional capital on reasonable terms.

Specifically, the COVID-19 pandemic has significantly disrupted

global financial markets, and may limit our ability to access capital, which could in the future negatively affect our liquidity.

If we raise additional

funds through public or private equity offerings, the terms of these securities may include liquidation or other preferences that

adversely affect the rights of our common stockholders.

Further, to the extent that we raise additional capital through the sale

of common stock or securities convertible or exchangeable into common stock, the ownership interests of our common stockholders

will be diluted.

In addition, any debt financing may subject us to fixed payment obligations and covenants limiting or restricting

our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing

arrangements with third parties, we may have to relinquish certain valuable intellectual property or other rights to our product

candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.

Even if we were to obtain sufficient funding, there can be no assurance that it will be available on terms acceptable to us or

our stockholders.

Clinical drug development is very expensive,

time-consuming and uncertain.

Clinical development for our product candidates

is very expensive, time-consuming, difficult to design and implement, and the outcomes are inherently uncertain.

Most product candidates

that commence clinical trials are never approved by regulatory authorities for commercialization and of those that are approved

many do not cover their costs of development.

In addition, we, any partner with which we may in the future collaborate, the FDA,

an institutional review board (IRB), or other regulatory authorities, including state and local agencies and counterpart agencies

in foreign countries, may suspend, delay, require modifications to or terminate our clinical trials at any time.

Risks Related to Drug/Biologics Development

Our business depends on the successful

clinical development, regulatory approval and commercialization of TARA-002 and IV Choline Chloride.

The success of our business,

including our ability to finance our self and generate revenue in the future, primarily depends on the successful development,

regulatory approval and commercialization of TARA-002 and IV Choline Chloride.

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and IV Choline Chloride depends on a number of factors, including the following:

timely and successful completion of required clinical trials not yet initiated, which may be significantly

slower or costlier than ArTara currently anticipates and/or produce results that do not achieve the endpoints of the trials;

whether ArTara is required by the FDA or similar foreign regulatory agencies to conduct additional

studies beyond those planned to support the approval and commercialization of TARA-002 and IV Choline Chloride;

achieving and maintaining, and, where applicable, ensuring that ArTara’s third-party contractors

achieve and maintain compliance with their contractual obligations and with all regulatory requirements applicable to TARA-002

and IV Choline Chloride;

ability of third parties with whom ArTara contracts to manufacture adequate clinical trial and

commercial supplies of TARA-002 and IV Choline Chloride, to remain in good standing with regulatory agencies and to develop, validate

and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (“cGMP”);

a continued acceptable safety profile during clinical development and following approval of TARA-002

and IV Choline Chloride;

ability to obtain favorable labeling for TARA-002 and IV Choline Chloride through regulators that

allows for successful commercialization, given the drugs may be marketed only to the extent approved by these regulatory authorities

(unlike with most other industries);

ability to successfully commercialize TARA-002 and IV Choline Chloride in the United States and

internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration

acceptance by physicians, insurers and payors, and patients of the quality, benefits, safety and

efficacy of TARA-002 and IV Choline Chloride, if either is approved, including relative to alternative and competing treatments;

timely and successful completion of required clinical trials not yet initiated, which may be significantly slower or costlier than we currently anticipate and/or produce results that do not achieve the endpoints of the trials;

whether we are required by the FDA or similar foreign regulatory agencies to conduct additional studies beyond those planned to support the approval and commercialization of TARA-002 and IV Choline Chloride;

achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain compliance with their contractual obligations and with all regulatory requirements applicable to TARA-002 and IV Choline Chloride;

ability to confirm the comparability of TARA-002 and OK-432;

ability of third parties with whom we contract to manufacture adequate clinical trial and commercial supplies of TARA-002 and IV Choline Chloride, to remain in good standing with regulatory agencies and to develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (“cGMP”);

a continued acceptable safety profile during clinical development and following approval of TARA-002 and IV Choline Chloride;

ability to obtain favorable labeling for TARA-002 and IV Choline Chloride through regulators that allows for successful commercialization, given the drugs may be marketed only to the extent approved by these regulatory authorities (unlike with most other industries);

ability to successfully commercialize TARA-002 and IV Choline Chloride in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others;

acceptance by physicians, insurers and payors, and patients of the quality, benefits, safety and efficacy of TARA-002 and IV Choline Chloride, if either is approved, including relative to alternative and competing treatments;

existence of a regulatory environment conducive to the success of TARA-002 and IV Choline Chloride;

ability to price TARA-002 and IV Choline Chloride to recover ArTara’s development costs and

generate a satisfactory profit margin;

ArTara’s ability and its partners’ ability to establish and enforce intellectual property

rights in and to TARA-002 and IV Choline Chloride.

If ArTara does not

achieve one or more of these factors, many of which are beyond its control, in a timely manner or at all, ArTara could experience

significant delays or an inability to obtain regulatory approvals or commercialize TARA-002 and IV Choline Chloride.

Even if regulatory

approvals are obtained, ArTara may never be able to successfully commercialize TARA-002 and IV Choline Chloride.

Accordingly, ArTara

cannot assure you that it will be able to generate sufficient revenue through the sale of TARA-002 and IV Choline Chloride to continue

its business.

ArTara has never

conducted a clinical trial itself and may be unable to successfully do so for TARA-002 or IV Choline Chloride.

ability to price TARA-002 and IV Choline Chloride to recover our development costs and generate a satisfactory profit margin;

our ability and our partners’

ability to establish and enforce intellectual property rights in and to TARA-002 and IV Choline Chloride.

If we do not achieve one

or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays

or an inability to obtain regulatory approvals or commercialize TARA-002 and IV Choline Chloride.

Even if regulatory approvals

are obtained, we may never be able to successfully commercialize TARA-002 and IV Choline Chloride.

Accordingly, we cannot assure

you that we will be able to generate sufficient revenue through the sale of TARA-002 and IV Choline Chloride to continue our business.

The COVID-19 pandemic is impacting our business

and the business of the third-parties with which we contract for key services related to our clinical development plans.

crisis persists, it is likely to have a significant delay in our development timelines and result in additional and unexpected

Presently, we anticipate that the stress of COVID-19 on healthcare systems around the globe will negatively impact our ability

to conduct clinical trials in the near term due primarily to the lack of resources at clinical trial sites and the resulting inability

to enroll patients in these trials.

In addition, it is possible that the stress of the COVID-19 pandemic on regulatory agencies

may make it more difficult to collaborate with, and receive guidance from, such agencies, which could delay our development timelines

and negatively impact our business.

We have never made an IND, BLA or NDA

submission or conducted a clinical trial and may be unable to successfully do so for TARA-002 or IV Choline Chloride.

The conduct of a clinical

trials is a long, expensive, complicated and highly regulated process.

Although ArTara’s employees have conducted successful

clinical trials in the past across many therapeutic areas while employed at other companies, ArTara as a company has not conducted

any clinical trials, and as a result may require more time and incur greater costs than it anticipates.

Failure to commence or

complete, or delays in, ArTara’s planned clinical trials would prevent it from or delay ArTara in obtaining regulatory approval

of and commercializing TARA-002 and IV Choline Chloride, which would adversely impact its financial performance, as well as subjecting

it to significant contract liabilities.

TARA-002 is an

immunotherapy, the first indication for which ArTara plans to pursue is the treatment of lymphatic malformations, an indication

for which there are no FDA-approved therapies.

This makes it difficult to predict the timing and costs of clinical development

for TARA-002, as well as the regulatory approval path.

To date, there are

no FDA-approved therapies for the treatment of lymphatic malformations and the standard of care is surgery.

The regulatory approval

process for novel product candidates such as TARA-002 can be more expensive and take longer than for other, better known or extensively

studied therapeutic approaches.

In addition, the clinical trials conducted on TARA-002 in the United States to date, included a

control arm in which treatment was initially delayed.

It is unclear whether this trial design could support FDA approval or whether

a placebo-control or other randomization will be required by the FDA.

Delay or failure to obtain, or unexpected costs in obtaining,

the regulatory approval necessary to bring TARA-002 to market could decrease ArTara’s ability to generate sufficient revenue

to maintain its business.

The regulatory path to approval of TARA-002 is dependent on FDA

acceptance on prior clinical data from OK-432.

The proposed regulatory strategy for the TARA-002 program is combination

of demonstrating comparability to a product that is not FDA approved.

By demonstrating that TARA-002 is, in fact, OK-432, ArTara

believes that the large volume of data published on OK-432 including the data generated by the University of Iowa led study will

then apply to TARA-002.

This strategy will rely on some components of a biosimilar pathway, with a significant difference being

that the same genetically distinct strain and proprietary manufacturing processes will be used to produce TARA-002 as OK-432.

comparability is demonstrated and accepted by regulatory authorities, ArTara will attempt to rely on existing OK-432 safety and

efficacy data to file the Biologics Licensing Application (BLA).

Although our employees have made regulatory submissions

and conducted successful clinical trials in the past across many therapeutic areas while employed at other companies, we, as a

company, have not submitted an investigational new drug application (IND), conducted any clinical trials, or submitted a BLA or

new drug application (NDA), and as a result may require more time and incur greater costs than we anticipate.

Failure to commence

or complete, or delays in, our planned regulatory submissions or clinical trials would prevent us from, or delay us, in obtaining

regulatory approval of and commercializing TARA-002 and IV Choline Chloride, which would adversely impact our financial performance,

as well as subject us to significant contract liabilities.

TARA-002 is an immunopotentiator, and

one indication for which we plan to pursue is the treatment of lymphatic malformations.

There are no FDA-approved therapies for

the treatment of lymphatic malformations.

It is difficult to predict the timing and costs of clinical development for TARA-002

with respect to lymphatic malformations as well as the corresponding regulatory approval path.

To date, there are no

FDA-approved therapies for the treatment of lymphatic malformations.

The regulatory approval process for novel product candidates

such as TARA-002 can be more expensive and take longer than for other, better known or extensively studied therapeutic approaches.

In addition, the previous clinical trials conducted on OK-432 for LMs in the United States included a control arm in which treatment

was initially delayed.

It is unclear whether this trial design could support FDA approval or whether a placebo-control or other

randomization will be required by the FDA.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval

necessary to bring TARA-002 to market could decrease our ability to generate sufficient revenue to maintain our business.

The regulatory path to approval of TARA-002

is dependent on FDA acceptance of prior clinical data from OK-432.

The proposed regulatory

strategy for the TARA-002 program is a combination of demonstrating comparability to a product that is not FDA approved and relying

upon existing data.

By demonstrating that TARA-002 is, in fact, OK-432, we believe that the large volume of data published on OK-432

including the data generated by the University of Iowa led study in LMs will then apply to TARA-002.

We have been granted initial

comparability by FDA and if comparability is fully demonstrated and accepted by regulatory authorities, we will attempt to rely

on existing OK-432 safety and efficacy data to submit the BLA.

There is no example to date of a biologic product that was approved

utilizing this regulatory approach that we are aware of.

product candidates may cause undesirable side effects or have other unexpected properties that could delay or prevent their regulatory

approval, limit the commercial profile of an approved label, or result in post-approval regulatory action.

Our product candidates may cause undesirable

side effects or have other unexpected properties that could delay or prevent their regulatory approval, limit the commercial profile

of an approved label, or result in post-approval regulatory action.

Unforeseen side effects

from TARA-002 or IV Choline Chloride could arise either during clinical development or, if approved, after it has been marketed.

Undesirable side effects could cause ArTara, any partners with which ArTara may collaborate, or regulatory authorities to interrupt,

extend, modify, delay or halt clinical trials and could result in a more restrictive or narrower label or the delay or denial of

regulatory approval by the FDA or comparable foreign authorities.

Results of clinical

trials could reveal a high and unacceptable severity and prevalence of side effects.

In such an event, trials could be suspended

or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny

approval of a product candidate for any or all targeted indications.

The drug-related side effects could affect patient recruitment

or the ability of enrolled patients to complete the trial or result in product liability claims.

Any of these occurrences may harm

ArTara’s business, financial condition, operating results and prospects.

Additionally, if ArTara

or others identify undesirable side effects, or other previously unknown problems, caused by a product after obtaining U.S.

foreign regulatory approval, a number of potentially negative consequences could result, which could prevent ArTara or its potential

partners from achieving or maintaining market acceptance of the product and could substantially increase the costs of commercializing

such product.

Even if a product

candidate obtains regulatory approval, it may fail to achieve the broad degree of physician and patient adoption and use necessary

for commercial success.

Undesirable side effects could cause us, any partners with which we may collaborate, or regulatory authorities to interrupt, extend,

modify, delay or halt clinical trials and could result in a more restrictive or narrower label or the delay or denial of regulatory

approval by the FDA or comparable foreign authorities.

Results of clinical trials

could reveal a high and unacceptable severity and prevalence of side effects.

In such an event, trials could be suspended or terminated,

and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of a product

candidate for any or all targeted indications.

The drug-related side effects could affect patient recruitment or the ability of

enrolled patients to complete the trial or result in product liability claims.

Any of these occurrences may harm our business,

financial condition, operating results and prospects.

Additionally, if we or

others identify undesirable side effects, or other previously unknown problems, caused by a product after obtaining U.S.

regulatory approval, a number of potentially negative consequences could result, which could prevent us or our potential partners

from achieving or maintaining market acceptance of the product and could substantially increase the costs of commercializing such

A fast track designation by the FDA may not actually lead

to a faster development or regulatory review or approval process for IV Choline Chloride for the treatment of IFALD.

The FDA has granted fast

track designation to IV Choline Chloride for the treatment of IFALD.

If a drug is intended for the treatment of a serious or life-threatening

condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply

for fast track designation.

Even though we have received fast track designation for IV Choline Chloride for the treatment of IFALD,

we may not experience a faster development process, review or approval.

The FDA may withdraw fast track designation if it believes

that the designation is no longer supported by data from our clinical development program.

Although the FDA has granted Rare Pediatric Disease Designation

for TARA-002 for the treatment of LMs, a BLA for TARA-002, if approved, may not meet the eligibility criteria for a priority

review voucher.

Rare Pediatric Disease

Designation has been granted for TARA-002 for the treatment of LMs.

In 2012, Congress authorized the FDA to award priority review

vouchers to sponsors of certain rare pediatric disease product applications.

This provision is designed to encourage development

of new drug and biological products for prevention and treatment of certain rare pediatric diseases.

Specifically, under this program,

a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease”

may qualify for a voucher

that can be redeemed to receive a priority review of a subsequent marketing application for a different product.

The sponsor of

a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another

The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the

transfer has not yet submitted the application.

The FDA may also revoke any priority review voucher if the rare pediatric disease

drug for which the voucher was awarded is not marketed in the U.S.

within one year following the date of approval.

For the purposes of this

program, a “rare pediatric disease”

is a (a) serious or life-threatening disease in which the serious or life-threatening

manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children,

and adolescents;

and (b) rare disease or conditions within the meaning of the Orphan Drug Act.

Congress has only authorized

the Rare Pediatric Disease Priority Review Voucher program until September 30,2024.

However, if a drug candidate received Rare

Pediatric Disease Designation before September 30,2024, it is eligible to receive a voucher if it is approved before September

However, TARA-002 for

the treatment of LMs may not be approved by that date, or at all, and, therefore, we may not be in a position to obtain a priority

review voucher prior to expiration of the program, unless Congress further reauthorizes the program.

Additionally, designation

of a drug for a rare pediatric disease does not guarantee that a BLA will meet the eligibility criteria for a rare pediatric

disease priority review voucher at the time the application is approved.

Finally, a Rare Pediatric Disease Designation does

not lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval.

We may or may not realize any benefit from receiving a voucher.

Even if a product candidate obtains

regulatory approval, it may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial

The commercial success

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the effectiveness of the product compared to other available therapies;

the availability of coverage and adequate reimbursement from managed care plans and other healthcare

the cost of treatment in relation to alternative treatments and willingness to pay on the part

in the case of TARA-002, overcoming physician or patient biases toward surgery for the treatment

of lymphatic malformations;

insurers’ willingness to see the applicable indication as a disease worth treating;

the availability of coverage and adequate reimbursement from managed care plans and other healthcare payors;

the cost of treatment in relation to alternative treatments and willingness to pay on the part of patients;

in the case of TARA-002, overcoming physician or patient biases toward surgery for the treatment of lymphatic malformations;

insurers’

willingness to see the applicable indication as a disease worth treating;

proper administration;

patient satisfaction with the results, administration and overall treatment experience;

limitations or contraindications, warnings, precautions or approved indications for use different

than those sought by ArTara that are contained in the final FDA-approved labeling for the applicable product;

limitations or contraindications, warnings, precautions or approved indications for use different than those sought by us that are contained in the final FDA-approved labeling for the applicable product;

any FDA requirement to undertake a risk evaluation and mitigation strategy;

the effectiveness of ArTara’s sales, marketing, pricing, reimbursement and access, government

affairs, and distribution efforts;

the effectiveness of our sales, marketing, pricing, reimbursement and access, government affairs, and distribution efforts;

adverse publicity about a product or favorable publicity about competitive products;

new government regulations and programs, including price controls and/or limits or prohibitions

on ways to commercialize drugs, such as increased scrutiny on direct-to-consumer advertising of pharmaceuticals;

new government regulations and programs, including price controls and/or limits or prohibitions on ways to commercialize drugs, such as increased scrutiny on direct-to-consumer advertising of pharmaceuticals;

potential product liability claims or other product-related litigation.

If either of TARA-002

or IV Choline Chloride is approved for use but fails to achieve the broad degree of physician and patient adoption necessary for

commercial success, ArTara’s operating results and financial condition will be adversely affected, which may delay, prevent

or limit its ability to generate revenue and continue its business.

Any adverse developments

that occur in patients undergoing treatment with OK-432 / Picibanil or in patients participating in clinical trials conducted by

third parties may affect ArTara’s ability to obtain regulatory approval or commercialize TARA-002.

If either TARA-002 or

IV Choline Chloride is approved for use but fails to achieve the broad degree of physician and patient adoption necessary for commercial

success, our operating results and financial condition will be adversely affected, which may delay, prevent or limit our ability

to generate revenue and continue our business.

Any adverse developments that occur in

patients undergoing treatment with OK-432 / Picibanil or in patients participating in clinical trials conducted by third parties

may affect our ability to obtain regulatory approval or commercialize TARA-002.

Chugai Pharmaceutical

Co., Ltd., over which ArTara has no control, has the rights to commercialize TARA-002 and it is currently marketed in Japan and

Taiwan, under the name Picibanil for various indications.

In addition, clinical trials using Picibanil are currently ongoing in

various countries around the world.

If serious adverse events occur with patients using Picibanil or during any clinical trials

of Picibanil conducted by third parties, the FDA may delay, limit or deny approval of TARA-002 or require ArTara to conduct additional

clinical trials as a condition to marketing approval, which would increase its costs.

If ArTara receives FDA approval for TARA-002

and a new and serious safety issue is identified in connection with use of Picibanil or in clinical trials of Picibanil conducted

by third parties, the FDA may withdraw their approval of the product or otherwise restrict ArTara’s ability to market and

sell TARA-002.

In addition, treating physicians may be less willing to administer TARA-002 due to concerns over such adverse events,

which would limit ArTara’s ability to commercialize TARA-002.

ArTara may in the

future conduct clinical trials for its product candidates outside the United States, and the FDA and applicable foreign regulatory

authorities may not accept data from such trials.

ArTara may in the

future choose to conduct one or more of its clinical trials outside of the United States.

Although the FDA or applicable foreign

regulatory authority may accept data from clinical trials conducted outside the United States or the applicable jurisdiction, acceptance

of such study data by the FDA or applicable foreign regulatory authority may be subject to certain conditions or exclusion.

data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will

not approve the application on the basis of foreign data alone unless such data are applicable to the U.S.

Co., Ltd., over which we have no control, has the rights to commercialize TARA-002 and it is currently marketed in Japan and Taiwan,

under the name Picibanil, for various indications.

In addition, clinical trials using Picibanil are currently ongoing in various

countries around the world.

If serious adverse events occur with patients using Picibanil or during any clinical trials of Picibanil

conducted by third parties, the FDA may delay, limit or deny approval of TARA-002 or require us to conduct additional clinical

trials as a condition to marketing approval, which would increase our costs.

If we receive FDA approval for TARA-002 and a new

and serious safety issue is identified in connection with use of Picibanil or in clinical trials of Picibanil conducted by third

parties, the FDA may withdraw the approval of the product or otherwise restrict our ability to market and sell TARA-002.

treating physicians may be less willing to administer TARA-002 due to concerns over such adverse events, which would limit our

ability to commercialize TARA-002.

We may in the future conduct clinical

trials for our product candidates outside the United States, and the FDA and applicable foreign regulatory authorities may not

accept data from such trials.

We may in the future choose

to conduct one or more of our clinical trials outside of the United States.

Although the FDA or applicable foreign regulatory authority

may accept data from clinical trials conducted outside the United States or the applicable jurisdiction, acceptance of such study

data by the FDA or applicable foreign regulatory authority may be subject to certain conditions or exclusion.

Where data from foreign

clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will not approve the application

on the basis of foreign data alone unless such data are applicable to the U.S.

population and U.S.

medical practice;

the studies were performed by clinical investigators of recognized competence;

and the data are considered valid

without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able

to validate the data through an on-site inspection or other appropriate means.

were performed by clinical investigators of recognized competence;

and the data are considered valid without the need for an on-site

inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through

an on-site inspection or other appropriate means.

Many foreign regulatory bodies have similar requirements.

In addition, such foreign studies would be subject to the applicable local laws of the foreign jurisdictions where the studies

are conducted.

There can be no assurance the FDA or applicable foreign regulatory authority will accept data from trials conducted

outside of the United States or the applicable home country.

If the FDA or applicable foreign regulatory authority does not accept

such data, it would likely result in the need for additional trials, which would be costly and time-consuming and delay aspects

of ArTara’s business plan.

ArTara may choose

not to continue developing or commercializing any of its product candidates at any time during development or after approval, which

would reduce or eliminate its potential return on investment for those product candidates.

At any time, ArTara

may decide to discontinue the development of any of its product candidates for a variety of reasons, including the appearance of

new technologies that make its product obsolete, competition from a competing product or changes in or failure to comply with applicable

regulatory requirements.

If ArTara terminates a program in which it has invested significant resources, ArTara will not receive

any return on its investment and it will have missed the opportunity to have allocated those resources to potentially more productive

or third party’s clinical trials may fail to demonstrate the safety and efficacy of its product candidates, or serious adverse

or unacceptable side effects may be identified during their development, which could prevent or delay marketing approval and commercialization,

increase ArTara’s costs or necessitate the abandonment or limitation of the development of the product candidate.

In addition, such foreign

studies would be subject to the applicable local laws of the foreign jurisdictions where the studies are conducted.

no assurance the FDA or applicable foreign regulatory authority will accept data from trials conducted outside of the United States

or the applicable home country.

If the FDA or applicable foreign regulatory authority does not accept such data, it would likely

result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan.

We may choose not to continue developing

or commercializing any of our product candidates at any time during development or after approval, which would reduce or eliminate

the potential return on investment for those product candidates.

At any time, we may decide

to discontinue the development of any of our product candidates for a variety of reasons, including the appearance of new technologies

that make our product obsolete, competition from a competing product or changes in or failure to comply with applicable regulatory

requirements.

For example, we are reviewing the research and preclinical and clinical data of vonapanitase and have not yet determined

whether to pursue further development of this product candidate in the future.

If we terminate a program

in which we have invested significant resources, we will not receive any return on our investment and we will have missed the opportunity

to have allocated those resources to potentially more productive uses.

Our or our third party’s clinical

trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects

may be identified during their development, which could prevent or delay marketing approval and commercialization, increase our

costs or necessitate the abandonment or limitation of the development of the product candidate.

Before obtaining marketing

approvals for the commercial sale of any product candidate, ArTara must demonstrate through lengthy, complex and expensive preclinical

approvals for the commercial sale of any product candidate, we must demonstrate through lengthy, complex and expensive preclinical

testing and clinical trials that such product candidate is both safe and effective for use in the applicable indication, and failures

2 unchanged sentences

characteristics that are unexpected.

Based on the safety profile seen in clinical testing, ArTara may need to abandon development

or limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or

more tolerable from a risk-benefit perspective.

The FDA or an IRB may also require that ArTara suspend, discontinue, or limit clinical

trials based on safety information.

Based on the safety profile seen in clinical testing, we may need to abandon development or

limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or more

tolerable from a risk-benefit perspective.

The FDA or an IRB may also require that we suspend, discontinue, or limit clinical trials

based on safety information.

Such findings could further result in regulatory authorities failing to provide marketing authorization

3 unchanged sentences

side effects were not seen until after the drug was marketed, causing regulators to remove the drug from the market post-approval.

ArTara’s regulatory

strategy for TARA-002 requires first that it can demonstrate that TARA-002 is the same biologic substance as OK-432, which is currently

manufactured in Japan and marketed in Japan and Taiwan by Chugai.

In order to demonstrate comparability, ArTara plans to conduct

studies using batches of OK-432 from Japan and batches of TARA-002 manufactured in the United States by its CMO.

If ArTara can

demonstrate comparability, it plans to engage with the FDA to seek its agreement to use OK-432’s safety and efficacy data

from clinical trials previously conducted by third parties for its BLA filing.

There can be no assurances that ArTara’s CMO

will be able to produce a sufficiently comparable product or that the FDA will find such substances comparable or permit ArTara

to use any of the data from prior clinical trials as part of the BLA filing for TARA-002.

Other Risks Related

to ArTara’s Business

product candidates, if approved, will face significant competition and their failure to compete effectively may prevent them from

achieving significant market penetration.

The pharmaceutical

industry is characterized by rapidly advancing technologies, intense competition, less effective patent terms, and a strong emphasis

on developing newer, fast-to-market proprietary therapeutics.

Our regulatory strategy

for TARA-002 requires that we demonstrate that TARA-002 is the same biologic substance as OK-432, which is currently manufactured

in Japan and marketed in Japan and Taiwan by Chugai.

The FDA has agreed that we have successfully demonstrated initial manufacturing

comparability between TARA-002 and OK-432;

we are on track to conduct three large-scale batch runs to confirm comparability.

Manufacturing Practice (GMP) scale up is currently in process and we have initiated GMP comparability runs.

There can be no assurances

that our contract manufacturer will be able to produce a sufficiently comparable product or that the FDA will find such substances

comparable or permit us to use any of the data from prior clinical trials as part of the BLA filing for TARA-002.

Other Risks Related to Our Business

Our product candidates, if approved,

will face significant competition and their failure to compete effectively may prevent them from achieving significant market penetration.

The pharmaceutical industry

is characterized by rapidly advancing technologies, intense competition, less effective patent terms, and a strong emphasis on

developing newer, fast-to-market proprietary therapeutics.

Numerous companies are engaged in the development, patenting, manufacturing

and marketing of healthcare products competitive with those that ArTara is developing, including TARA-002 and IV Choline Chloride.

ArTara will face competition from a number of sources, such as pharmaceutical companies, generic drug companies, biotechnology

companies and academic and research institutions, many of which have greater financial resources, marketing capabilities, sales

forces, manufacturing capabilities, research and development capabilities, regulatory expertise, clinical trial expertise, intellectual

property portfolios, more international reach, experience in obtaining patents and regulatory approvals for product candidates

and other resources than ArTara.

Some of the companies that offer competing products also have a broad range of other product offerings,

large direct sales forces and long-term customer relationships with ArTara’s target physicians, which could inhibit ArTara’s

market penetration efforts.

With respect to ArTara’s

lead product candidate, TARA-002, for the treatment of LMs, the active ingredient in TARA-002 is a genetically distinct strain

and marketing of healthcare products competitive with those that we are developing, including TARA-002 and IV Choline Chloride.

We will face competition from a number of sources, such as pharmaceutical companies, generic drug companies, biotechnology companies

and academic and research institutions, many of which have greater financial resources, marketing capabilities, sales forces, manufacturing

capabilities, research and development capabilities, regulatory expertise, clinical trial expertise, intellectual property portfolios,

more international reach, experience in obtaining patents and regulatory approvals for product candidates and other resources than

Some of the companies that offer competing products also have a broad range of other product offerings, large direct sales

forces and long-term customer relationships with our target physicians, which could inhibit our market penetration efforts.

With respect to our lead

product candidate, TARA-002, for the treatment of LMs and NMIBC, the active ingredient in TARA-002 is a genetically distinct strain

of Streptococcus pyogenes (group A, type 3) Su strain.

TARA-002 is produced through a proprietary manufacturing process.

ArTara anticipates that, if approved by the FDA, TARA-002 will be protected by 12 years of biologic exclusivity.

We anticipate that, if approved by the FDA, TARA-002 will be protected by 12 years of biologic exclusivity.

In addition, TARA-002

is likely to have seven years of Orphan Drug Designation exclusivity if deemed comparable to OK-432 by the FDA or based on the

prevalence of the disease.

There are no pharmacotherapies currently available for the treatment of LMs and the current standard

of care is a high-risk surgical procedure.

There are a handful of drug development companies and academic researchers exploring

oral formulations of various agents including macrolides, phosphodiesterase inhibitors, and calcineurin/ mTOR inhibitors.

are in early development and earlier experiments in LMs utilizing other compounds utilizing these mechanisms have not produced

conclusive evidence of safety or efficacy.

is likely to have seven years of concurrent Orphan Drug Designation exclusivity for the treatment of LMs if deemed comparable to

OK-432 by the FDA based on the prevalence of the disease.

There are no approved pharmacotherapies currently available for the treatment

of LMs and the current standard of care is a high-risk surgical procedure.

There are a number of drug development companies and

academic researchers exploring oral formulations of various agents including macrolides, phosphodiesterase inhibitors, and calcineurin/

mTOR inhibitors.

These are in early development.

TARA-002, if approved for the treatment of NMIBC, would be subject to competition

from existing treatment methods of surgery, chemotherapy and immunomodulatory therapy.

There are no treatments

4 unchanged sentences

will be protected by Orphan Drug Designation exclusivity for seven years.

TARA-002 and any

future product candidates for which ArTara intends to seek approval as biologic products may face competition sooner than anticipated.

TARA-002 and any future product candidates

for which we intend to seek approval as biologic products may face competition sooner than anticipated.

The Patient Protection

7 unchanged sentences

During this 12-year period of exclusivity, another company may still market a competing

version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical

data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.

3 unchanged sentences

While it is uncertain when such processes are intended to implement BPCIA may be fully

adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for ArTara’s

biological products.

ArTara believes that

any of its product candidates approved as a biological product under a BLA should qualify for the 12-year period of exclusivity.

However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will

not consider ArTara’s product candidates to be reference products for competing products, potentially creating the opportunity

for biosimilar competition sooner than anticipated.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity

provisions, have also been the subject of recent litigation.

Moreover, the extent to which a biosimilar, once approved, will be

substituted for any one of ArTara’s reference products in a way that is similar to traditional generic substitution for non-biological

products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

ArTara expects

to rely on third-party CROs and other third parties to conduct and oversee its clinical trials.

If these third parties do not meet

ArTara’s requirements or otherwise conduct the trials as required, ArTara may not be able to satisfy its contractual obligations

or obtain regulatory approval for, or commercialize, its product candidates.

ArTara expects to

rely on third-party contract research organizations (CROs) to conduct and oversee its TARA-002 and IV Choline Chloride clinical

trials and other aspects of product development.

ArTara also expects to rely on various medical institutions, clinical investigators

and contract laboratories to conduct its trials in accordance with ArTara’s clinical protocols and all applicable regulatory

requirements, including the FDA’s regulations and good clinical practice (GCP) requirements, which are an international standard

meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors,

and state regulations governing the handling, storage, security and recordkeeping for drug and biologic products.

These CROs and

other third parties will play a significant role in the conduct of these trials and the subsequent collection and analysis of data

from the clinical trials.

ArTara will rely heavily on these parties for the execution of its clinical trials and preclinical studies

and will control only certain aspects of their activities.

ArTara and its CROs and other third-party contractors will be required

to comply with GCP and good laboratory practice (GLP) requirements, which are regulations and guidelines enforced by the FDA and

comparable foreign regulatory authorities.

Regulatory authorities enforce these GCP and GLP requirements through periodic inspections

of trial sponsors, principal investigators and trial sites.

If ArTara or any of these third parties fail to comply with applicable

GCP and GLP requirements, or reveal noncompliance from an audit or inspection, the clinical data generated in ArTara’s clinical

trials may be deemed unreliable and the FDA or other regulatory authorities may require ArTara to perform additional clinical trials

before approving ArTara’s or ArTara’s partners’ marketing applications.

ArTara cannot assure that upon inspection

by a given regulatory authority, such regulatory authority will determine that any of ArTara’s clinical or preclinical trials

comply with applicable GCP and GLP requirements.

In addition, ArTara’s clinical trials generally must be conducted with product

produced under cGMP regulations.

ArTara’s failure to comply with these regulations and policies may require it to repeat

clinical trials, which would delay the regulatory approval process.

If any of ArTara’s

CROs or clinical trial sites terminate their involvement in one of its clinical trials for any reason, it may not be able to enter

into arrangements with alternative CROs or clinical trial sites or do so on commercially reasonable terms.

In addition, if ArTara’s

relationship with clinical trial sites is terminated, it may experience the loss of follow-up information on patients enrolled

in its ongoing clinical trials unless ArTara is able to transfer the care of those patients to another qualified clinical trial

In addition, principal investigators for ArTara’s clinical trials may serve as scientific advisors or consultants to

it from time to time and could receive cash or equity compensation in connection with such services.

If these relationships and

any related compensation result in perceived or actual conflicts of interest, the integrity of the data generated at the applicable

clinical trial site may be questioned by the FDA.

ArTara currently

has no marketing capabilities and no sales organization.

If ArTara is unable to establish sales and marketing capabilities on its

own or through third parties, ArTara will be unable to successfully commercialize its product candidates, if approved, or generate

product revenue.

ArTara currently has

no marketing capabilities and no sales organization.

To commercialize ArTara’s product candidates, if approved, in the United

States, Canada, the European Union, Latin America and other jurisdictions it seeks to enter, ArTara must build its marketing, sales,

distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services,

and ArTara may not be successful in doing so.

Although ArTara’s employees have experience in the marketing, sale and distribution

of pharmaceutical products, and business development activities involving external alliances, from prior employment at other companies,

ArTara as a company has no prior experience in the marketing, sale and distribution of pharmaceutical products, and there are significant

risks involved in building and managing a sales organization, including its ability to hire, retain and incentivize qualified individuals,

generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically

dispersed sales and marketing team.

Any failure or delay in the development of ArTara’s internal sales, marketing, distribution

and pricing/reimbursement/access capabilities would impact adversely the commercialization of these products.

ArTara has only

received the exclusive rights to the materials required to commercialize TARA-002 in territories other than Japan and Taiwan until

June 17, 2024, or an earlier date if Chugai terminates the agreement with ArTara for any number of reasons, including for convenience

after June 2020, following which such rights become nonexclusive.

adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our biological

We believe that any of

our product candidates approved as a biological product under a BLA should qualify for the 12-year period of exclusivity.

there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider

our product candidates to be reference products for competing products, potentially creating the opportunity for biosimilar competition

sooner than anticipated.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been

the subject of recent litigation.

Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of

our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear,

and will depend on a number of marketplace and regulatory factors that are still developing.

We rely on third-party CROs and other

third parties to conduct and oversee our clinical trials.

If these third parties do not meet our requirements or otherwise conduct

the trials as required, we may not be able to satisfy our contractual obligations or obtain regulatory approval for, or commercialize,

our product candidates.

We rely on third-party

contract research organizations (CROs) to conduct and oversee our TARA-002 and IV Choline Chloride clinical trials and other aspects

of product development.

We also rely on various medical institutions, clinical investigators and contract laboratories to conduct

our trials in accordance with our clinical protocols and all applicable regulatory requirements, including the FDA’s regulations

and good clinical practice (GCP) requirements, which are an international standard meant to protect the rights and health of patients

and to define the roles of clinical trial sponsors, administrators and monitors, and state regulations governing the handling,

storage, security and recordkeeping for drug and biologic products.

These CROs and other third parties will play a significant

role in the conduct of these trials and the subsequent collection and analysis of data from the clinical trials.

We will rely heavily

on these parties for the execution of our clinical trials and preclinical studies and will control only certain aspects of their

We and our CROs and other third-party contractors will be required to comply with GCP and good laboratory practice

(GLP) requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities.

authorities enforce these GCP and GLP requirements through periodic inspections of trial sponsors, principal investigators and

If we or any of these third parties fail to comply with applicable GCP and GLP requirements, or reveal noncompliance

from an audit or inspection, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other regulatory

authorities may require us to perform additional clinical trials before approving our or our partners’

marketing applications.

We cannot assure that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our

clinical or preclinical trials comply with applicable GCP and GLP requirements.

In addition, our clinical trials generally must

be conducted with product produced under cGMP regulations.

Our failure to comply with these regulations and policies may require

us to repeat clinical trials, which would delay the regulatory approval process.

If any of our CROs or

clinical trial sites terminate their involvement in one of our clinical trials for any reason, we may not be able to enter into

arrangements with alternative CROs or clinical trial sites or do so on commercially reasonable terms.

In addition, if our relationship

with clinical trial sites is terminated, we may experience the loss of follow-up information on patients enrolled in our clinical

trials unless we are able to transfer the care of those patients to another qualified clinical trial site.

In addition, principal

investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and could receive

cash or equity compensation in connection with such services.

If these relationships and any related compensation result in perceived

or actual conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be questioned by

We currently have limited marketing capabilities

and no sales organization.

If we are unable to grow our sales and marketing capabilities on our own or through third parties, we

will be unable to successfully commercialize our product candidates, if approved, or generate product revenue.

We currently have limited

marketing capabilities and no sales organization.

To commercialize our product candidates, if approved, in the United States, Canada,

the European Union, Latin America and other jurisdictions we seek to enter, we must build our marketing, sales, distribution, managerial

and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful

Although our employees have experience in the marketing, sale and distribution of pharmaceutical products, and business

development activities involving external alliances, from prior employment at other companies, we, as a company, have no prior

experience in the marketing, sale and distribution of pharmaceutical products, and there are significant risks involved in building

and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient

sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales

and marketing team.

Any failure or delay in the development of our internal sales, marketing, distribution and pricing/reimbursement/access

capabilities would impact adversely the commercialization of these products.

We have only received the exclusive rights

to the materials required to commercialize TARA-002 in territories other than Japan and Taiwan until June 17, 2030, or an earlier

date if Chugai terminates the agreement with us for any number of reasons, following which such rights become nonexclusive.

Pursuant to an agreement

with Chugai Pharmaceutical Co., Ltd.

dated June 17, 2019, Chugai agreed to provide ArTara with exclusive access to the starting

material necessary to manufacture TARA-002 as well as technical support necessary for ArTara to develop and commercialize TARA-002

anywhere in the world other than Japan and Taiwan.

However, this agreement does not prevent Chugai from providing such materials

and support to any third party for medical, compassionate use and/or non-commercial research purposes and this agreement is not

exclusive following June 17, 2024 or following any termination of the agreement by either party, which includes a termination by

Chugai for convenience, which it has the right to do upon 90 days’ notice after June 2020.

Once ArTara’s rights to

the materials and technology necessary to manufacture, develop and commercialize TARA-002 are not exclusive, third parties, including

those with greater expertise and greater resources, could obtain such materials and technology and develop a competing therapy,

which would adversely affect ArTara’s ability to generate revenue and achieve or maintain profitability.

ArTara currently

has no products approved for sale, and it may never obtain regulatory approval to commercialize any of its product candidates.

dated June 17, 2019, as amended on July 14, 2020 (effective June 30, 2020), Chugai agreed

to provide us with exclusive access to the starting material necessary to manufacture TARA-002 as well as technical support necessary

for us to develop and commercialize TARA-002 anywhere in the world other than Japan and Taiwan.

However, this agreement does not

prevent Chugai from providing such materials and support to any third party for medical, compassionate use and/or non-commercial

research purposes and this agreement is exclusive through June 17, 2030 or following any termination of the agreement by either

Once our rights to the materials and technology necessary to manufacture, develop and commercialize TARA-002 are not exclusive,

third parties, including those with greater expertise and greater resources, could obtain such materials and technology and develop

a competing therapy, which would adversely affect our ability to generate revenue and achieve or maintain profitability.

We currently have no products approved

for sale, and we may never obtain regulatory approval to commercialize any of our product candidates.

The research, testing,

manufacturing, safety surveillance, efficacy, quality control, recordkeeping, labeling, packaging, storage, approval, sale, marketing,

distribution, import, export and reporting of safety and other post-market information related to its biopharmaceutical products

distribution, import, export and reporting of safety and other post-market information related to our biopharmaceutical products

are subject to extensive regulation by the FDA and other regulatory authorities in the United States and in foreign countries,

and such regulations differ from country to country and frequently are revised.

Even after ArTara

achieves U.S.

regulatory approval for a product candidate, if any, ArTara will be subject to continued regulatory review and compliance

For example, with respect to ArTara’s product candidates, the FDA may impose significant restrictions on the

approved indicated uses for which the product may be marketed or on the conditions of approval.

A product candidate’s approval

may contain requirements for potentially costly post-approval studies and surveillance, including Phase 4 clinical trials, to monitor

the safety and efficacy of the product.

ArTara also will be subject to ongoing FDA obligations and continued regulatory review

with respect to, among other things, the manufacturing, processing, labeling, packaging, distribution, pharmacovigilance and adverse

event reporting, storage, advertising, promotion and recordkeeping for ArTara’s product candidates.

These requirements

include submissions of safety and other post-marketing information and reports, registration, continued compliance with cGMP requirements

and with the FDA’s GCP requirements and GLP requirements, which are regulations and guidelines enforced by the FDA for all

of ArTara’s product candidates in clinical and preclinical development, and for any clinical trials that it conducts post-approval,

as well as continued compliance with the FDA’s laws governing commercialization of the approved product, including but not

limited to the FDA’s Office of Prescription Drug Promotion (OPDP) regulation of promotional activities, fraud and abuse,

Even after we achieve

regulatory approval for a product candidate, if any, we will be subject to continued regulatory review and compliance obligations.

For example, with respect to our product candidates, the FDA may impose significant restrictions on the approved indicated uses

for which the product may be marketed or on the conditions of approval.

A product candidate’s approval may contain requirements

for potentially costly post-approval studies and surveillance, including Phase 4 clinical trials, to monitor the safety and efficacy

of the product.

We also will be subject to ongoing FDA obligations and continued regulatory review with respect to, among other

things, the manufacturing, processing, labeling, packaging, distribution, pharmacovigilance and adverse event reporting, storage,

advertising, promotion and recordkeeping for our product candidates.

These requirements include

submissions of safety and other post-marketing information and reports, registration, continued compliance with cGMP requirements

and with the FDA’s GCP requirements and GLP requirements, which are regulations and guidelines enforced by the FDA for all

of our product candidates in clinical and preclinical development, and for any clinical trials that it conducts post-approval,

as well as continued compliance with the FDA’s laws governing commercialization of the approved product, including but not

limited to the FDA’s Office of Prescription Drug Promotion (OPDP) regulation of promotional activities, fraud and abuse,

product sampling, scientific speaker engagements and activities, formulary interactions as well as interactions with healthcare

practitioners.

To the extent that a product candidate is approved for sale in other countries, ArTara may be subject to similar

or more onerous (i.e., prohibition on direct-to-consumer advertising that does not exist in the United States.) restrictions and

requirements imposed by laws and government regulators in those countries.

To the extent that a product candidate is approved for sale in other countries, we may be subject to similar or

more onerous (i.e., prohibition on direct-to-consumer advertising that does not exist in the United States) restrictions and requirements

imposed by laws and government regulators in those countries.

In addition, manufacturers

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regulatory authorities for compliance with cGMP regulations.

If ArTara or a regulatory agency discovers previously unknown problems

If we or a regulatory agency discovers previously unknown problems

with a product, such as adverse events of unanticipated severity or frequency, or problems with the manufacturing, processing,

distribution or storage facility where, or processes by which, the product is made, a regulatory agency may impose restrictions

on that product or ArTara, including requesting that ArTara initiate a product recall, or requiring notice to physicians or the

public, withdrawal of the product from the market, or suspension of manufacturing.

If ArTara, its product

candidates or the manufacturing facilities for its product candidates fail to comply with applicable regulatory requirements, a

regulatory agency may:

impose restrictions on the sale, marketing or manufacturing of the product, amend, suspend or withdraw

product approvals or revoke necessary licenses;

mandate modifications to promotional and other product-specific materials or require ArTara to

provide corrective information to healthcare practitioners or in its advertising;

require ArTara or its partners to enter into a consent decree, which can include imposition of

various fines, reimbursements for inspection costs, required due dates for specific actions, penalties for noncompliance and, in

extreme cases, require an independent compliance monitor to oversee ArTara’s activities;

issue warning letters, bring enforcement actions, initiate surprise inspections, issue show cause

notices or untitled letters describing alleged violations, which may be publicly available;

on that product or us, including requesting that we initiate a product recall, or requiring notice to physicians or the public,

withdrawal of the product from the market, or suspension of manufacturing.

If we, our product candidates

or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory

impose restrictions on the sale, marketing or manufacturing of the product, amend, suspend or withdraw product approvals or revoke necessary licenses;

mandate modifications to promotional and other product-specific materials or require us to provide corrective information to healthcare practitioners or in our advertising;

require us or our partners to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions, penalties for noncompliance and, in extreme cases, require an independent compliance monitor to oversee our activities;

issue warning letters, bring enforcement actions, initiate surprise inspections, issue show cause notices or untitled letters describing alleged violations, which may be publicly available;

commence criminal investigations and prosecutions;

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place restrictions on the kind of promotional activities that can be done;

delay or refuse to approve pending applications or supplements to approved applications filed by

ArTara or its potential partners;

refuse to permit drugs or precursor chemicals to be imported or exported to or from the United

delay or refuse to approve pending applications or supplements to approved applications filed by us or our potential partners;

refuse to permit drugs or precursor chemicals to be imported or exported to or from the United States;

suspend or impose restrictions on operations, including costly new manufacturing requirements;

seize or detain products or require ArTara or its partners to initiate a product recall.

seize or detain products or require us or our partners to initiate a product recall.

The regulations, policies

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may be enacted, including at the state and local levels, which can differ by geography and could prevent or delay regulatory approval

of ArTara’s product candidates or further restrict or regulate post-approval activities.

ArTara cannot predict the likelihood,

nature or extent of adverse government regulations that may arise from future legislation or administrative action, either in the

United States or abroad.

If ArTara is not able to achieve and maintain regulatory compliance, it may not be permitted to commercialize

its product candidates, which would adversely affect its ability to generate revenue and achieve or maintain profitability.

ArTara may face

product liability exposure, and if successful claims are brought against it, ArTara may incur substantial liability if its insurance

coverage for those claims is inadequate.

ArTara faces an inherent

risk of product liability or similar causes of action as a result of the clinical testing of its product candidates and will face

an even greater risk if ArTara commercializes any products.

This risk exists even if a product is approved for commercial sale

by the FDA and manufactured in facilities licensed and regulated by the FDA or an applicable foreign regulatory authority and notwithstanding

ArTara complying with applicable laws on promotional activity.

ArTara’s products and product candidates are designed to affect

important bodily functions and processes.

Any side effects, manufacturing defects, misuse or abuse associated with ArTara’s

product candidates could result in injury to a patient or potentially even death.

ArTara cannot offer any assurance that it will

not face product liability suits in the future, nor can it assure that its insurance coverage will be sufficient to cover its liability

under any such cases.

of our product candidates or further restrict or regulate post-approval activities.

We cannot predict the likelihood, nature or

extent of adverse government regulations that may arise from future legislation or administrative action, either in the United

States or abroad.

If we are not able to achieve and maintain regulatory compliance, we may not be permitted to commercialize our

product candidates, which would adversely affect our ability to generate revenue and achieve or maintain profitability.

We may face product liability exposure,

and if successful claims are brought against us, we may incur substantial liability if our insurance coverage for those claims

is inadequate.

We face an inherent risk

of product liability or similar causes of action as a result of the clinical testing of our product candidates and will face an

even greater risk if we commercialize any products.

This risk exists even if a product is approved for commercial sale by the FDA

and manufactured in facilities licensed and regulated by the FDA or an applicable foreign regulatory authority and notwithstanding

that we comply with applicable laws on promotional activity.

Our products and product candidates are designed to affect important

bodily functions and processes.

Any side effects, manufacturing defects, misuse or abuse associated with our product candidates

could result in injury to a patient or potentially even death.

We cannot offer any assurance that we will not face product liability

suits in the future, nor can we assure you that our insurance coverage will be sufficient to cover our liability under any such

In addition, a liability

claim may be brought against ArTara even if its product candidates merely appear to have caused an injury.

claim may be brought against us even if our product candidates merely appear to have caused an injury.

Product liability claims

may be brought against ArTara by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming

into contact with its product candidates, among others, and under some circumstances even government agencies.

If ArTara cannot

successfully defend itself against product liability or similar claims, it will incur substantial liabilities, reputational harm

and possibly injunctions and punitive actions.

In addition, regardless of merit or eventual outcome, product liability claims may

may be brought against us by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into

contact with our product candidates, among others, and under some circumstances even government agencies.

If we cannot successfully

defend our self against product liability or similar claims, we will incur substantial liabilities, reputational harm and possibly

injunctions and punitive actions.

In addition, regardless of merit or eventual outcome, product liability claims may result in:

withdrawal or delay of recruitment or decreased enrollment rates of clinical trial participants;

termination or increased government regulation of clinical trial sites or entire trial programs;

the inability to commercialize ArTara’s product candidates;

decreased demand for ArTara’s product candidates;

impairment of ArTara’s business reputation;

the inability to commercialize our product candidates;

decreased demand for our product candidates;

impairment of our business reputation;

product recall or withdrawal from the market or labeling, marketing or promotional restrictions;

substantial costs of any related litigation or similar disputes;

distraction of management’s attention and other resources from ArTara’s primary business;

distraction of management’s attention and other resources from our primary business;

significant delay in product launch;

substantial monetary awards to patients or other claimants against ArTara that may not be covered

by insurance;

substantial monetary awards to patients or other claimants against us that may not be covered by insurance;

withdrawal of reimbursement or formulary inclusion;

loss of revenue.

ArTara intends to

obtain product liability insurance coverage for its clinical trials.

Large judgments have been awarded in class action or individual

lawsuits based on drugs that had unanticipated side effects.

ArTara’s insurance coverage may not be sufficient to cover all

of its product liability-related expenses or losses and may not cover it for any expenses or losses it may suffer.

Moreover, insurance

coverage is becoming increasingly expensive, restrictive and narrow, and, in the future, ArTara may not be able to maintain adequate

insurance coverage at a reasonable cost, in sufficient amounts or upon adequate terms to protect it against losses due to product

liability or other similar legal actions.

ArTara will need to increase its product liability coverage if any of its product candidates

receive regulatory approval, which will be costly, and it may be unable to obtain this increased product liability insurance on

commercially reasonable terms or at all and for all geographies in which ArTara wishes to launch.

A successful product liability

claim or series of claims brought against ArTara, if judgments exceed its insurance coverage, could decrease its cash and harm

its business, financial condition, operating results and future prospects.

employees, independent contractors, principal investigators, other clinical trial staff, consultants, vendors, CROs and any partners

with whom ArTara may collaborate may engage in misconduct or other improper activities, including noncompliance with regulatory

standards and requirements.

ArTara is exposed

to the risk that its employees, independent contractors, principal investigators, other clinical trial staff, consultants, vendors,

CROs and any partners with which ArTara may collaborate may engage in fraudulent or other illegal activity.

Misconduct by these

persons could include intentional, reckless, gross or negligent misconduct or unauthorized activity that violates:

We intend to obtain product

liability insurance coverage for our clinical trials.

Large judgments have been awarded in class action or individual lawsuits

based on drugs that had unanticipated side effects.

Our insurance coverage may not be sufficient to cover all of our product liability-related

expenses or losses and may not cover us for any expenses or losses we may suffer.

Moreover, insurance coverage is becoming increasingly

expensive, restrictive and narrow, and, in the future, we may not be able to maintain adequate insurance coverage at a reasonable

cost, in sufficient amounts or upon adequate terms to protect us against losses due to product liability or other similar legal

We will need to increase our product liability coverage if any of our product candidates receive regulatory approval,

which will be costly, and we may be unable to obtain this increased product liability insurance on commercially reasonable terms

or at all and for all geographies in which we wish to launch.

A successful product liability claim or series of claims brought

against us, if judgments exceed our insurance coverage, could decrease our cash and harm our business, financial condition, operating

results and future prospects.

Our employees, independent contractors,

principal investigators, other clinical trial staff, consultants, vendors, CROs and any partners with whom we may collaborate may

engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the

risk that our employees, independent contractors, principal investigators, other clinical trial staff, consultants, vendors, CROs

and any partners with which we may collaborate may engage in fraudulent or other illegal activity.

Misconduct by these persons

could include intentional, reckless, gross or negligent misconduct or unauthorized activity that violates:

laws or regulations,

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federal, state and foreign healthcare fraud and abuse laws and data privacy;

anticorruption laws, antikickback

anticorruption laws, anti-kickback

and Medicare/Medicaid rules, or laws that require the true, complete and accurate reporting of financial information or data, books

If any such or similar actions are instituted against ArTara and ArTara is not successful in defending itself or asserting

ArTara’s rights, those actions could have a significant impact on ArTara’s business, including the imposition of civil,

criminal and administrative and punitive penalties, damages, monetary fines, possible exclusion from participation in Medicare,

Medicaid and other federal healthcare programs, debarments, contractual damages, imprisonment, reputational harm, diminished profits

and future earnings, injunctions, and curtailment or cessation of ArTara’s operations, any of which could adversely affect

ArTara’s ability to operate ArTara’s business and ArTara’s operating results.

ArTara may be subject

to risks related to off-label use of its product candidates.

If any such or similar actions are instituted against us and we are not successful in defending our self or asserting

our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal

and administrative and punitive penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid

and other federal healthcare programs, debarments, contractual damages, imprisonment, reputational harm, diminished profits and

future earnings, injunctions, and curtailment or cessation of our operations, any of which could adversely affect our ability to

operate our business and our operating results.

We may be subject to risks related to

off-label use of our product candidates.

The FDA strictly regulates

the advertising and promotion of drug products, and drug products may only be marketed or promoted for their FDA approved uses,

consistent with the product’s approved labeling.

Advertising and promotion of any product candidate that obtains approval

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Violations, including promotion

of ArTara’s products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations,

and civil, criminal and/or administrative sanctions by the FDA.

Additionally, advertising and promotion of any product candidate

that obtains approval outside of the United States will be heavily scrutinized by relevant foreign regulatory authorities.

Even if ArTara obtains

regulatory approval for its product candidates, the FDA or comparable foreign regulatory authorities may require labeling changes

or impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially

costly post-approval studies or post-market surveillance.

of our products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil,

criminal and/or administrative sanctions by the FDA.

Additionally, advertising and promotion of any product candidate that obtains

approval outside of the United States will be heavily scrutinized by relevant foreign regulatory authorities.

Even if we obtain regulatory

approval for our product candidates, the FDA or comparable foreign regulatory authorities may require labeling changes or impose

significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly

post-approval studies or post-market surveillance.

In the United States,

engaging in impermissible promotion of ArTara’s product candidates for off-label uses can also subject it to false claims

litigation under federal and state statutes, which can lead to civil, criminal and/or administrative penalties and fines and agreements,

such as a corporate integrity agreement, that materially restrict the manner in which ArTara promotes or distributes its product

If ArTara does not lawfully promote its products once they have received regulatory approval, ArTara may become subject

to such litigation and, if it is not successful in defending against such actions, those actions could have a material adverse

effect on its business, financial condition and operating results and even result in having an independent compliance monitor assigned

to audit ArTara’s ongoing operations for a lengthy period of time.

If ArTara or any

partners with which ArTara may collaborate are unable to achieve and maintain coverage and adequate levels of reimbursement for

TARA-002 or IV Choline Chloride following regulatory approval, their commercial success may be hindered severely.

If TARA-002 and IV

Choline Chloride only becomes available by prescription, successful sales by ArTara or by any partners with which ArTara may collaborate

depend on the availability of coverage and adequate reimbursement from third-party payors.

Patients who are prescribed medicine

for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with

their prescription drugs.

The availability of coverage and adequate reimbursement from governmental healthcare programs, such as

Medicare and Medicaid in the United States, and private third-party payors is often critical to new product acceptance.

decisions may depend on clinical and economic standards that disfavor new drug products when more established or lower-cost therapeutic

alternatives are already available or subsequently become available, or may be affected by the budgets and demands on the various

entities responsible for providing health insurance to patients who will use TARA-002 and IV Choline Chloride.

Even if ArTara obtains

coverage for its products, the resulting reimbursement payment rates might not be adequate or may require co-payments that patients

find unacceptably high.

Patients are unlikely to use a product unless coverage is provided, and reimbursement is adequate to cover

a significant portion of the cost.

engaging in impermissible promotion of our product candidates for off-label uses can also subject us to false claims litigation

under federal and state statutes, which can lead to significant civil, criminal and/or administrative penalties and fines and agreements,

such as a corporate integrity agreement, that materially restrict the manner in which we promote or distribute our product candidates.

If we do not lawfully promote our products once they have received regulatory approval, we may become subject to such litigation

and, if we are not successful in defending against such actions, those actions could have a material adverse effect on our business,

financial condition and operating results and even result in having an independent compliance monitor assigned to audit our ongoing

operations for a lengthy period of time.

If we or any partners with which we may

collaborate are unable to achieve and maintain coverage and adequate levels of reimbursement for TARA-002 or IV Choline Chloride

following regulatory approval, their commercial success may be hindered severely.

If TARA-002 and IV Choline

Chloride only becomes available by prescription, successful sales by us or by any partners with which we may collaborate depend

on the availability of coverage and adequate reimbursement from third-party payors.

Patients who are prescribed medicine for the

treatment of their conditions generally rely on third-party payors to reimburse most or part of the costs associated with their

prescription drugs.

The availability of coverage and adequate reimbursement from governmental healthcare programs, such as Medicare

and Medicaid in the United States, and private third-party payors is often critical to new product acceptance.

Coverage decisions

may depend on clinical and economic standards that disfavor new drug products when more established or lower-cost therapeutic alternatives

are already available or subsequently become available, or may be affected by the budgets and demands on the various entities responsible

for providing health insurance to patients who will use TARA-002 and IV Choline Chloride.

Even if we obtain coverage for our products,

the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high.

Patients are unlikely to use a product unless coverage is provided, and reimbursement is adequate to cover a significant portion

In addition, the market

for ArTara’s products will depend significantly on access to third-party payors’ drug formularies or lists of medications

for which third-party payors provide coverage and reimbursement.

for our products will depend significantly on access to third-party payors’

drug formularies or lists of medications for

which third-party payors provide coverage and reimbursement.

The industry competition to be included in such formularies often

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the formulary.

Third-party payors,

whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare

Third-party payors, whether

foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare

In addition, in the United States, although private third-party payors tend to follow Medicare practices, no uniform or

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process is often a time-consuming and costly process that must be played out across many jurisdictions and different entities and

which will require ArTara to provide scientific, clinical and health economics support for the use of its products compared to

current alternatives and do so to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained

and in what time frame.

Further, ArTara believes

that future coverage and reimbursement likely will be subject to increased restrictions both in the United States and in international

Third-party coverage and reimbursement for ArTara’s products may not be available or adequate in either the United

States or international markets, which could harm ArTara’s business, financial condition, operating results and prospects.

Healthcare reform

measures could hinder or prevent the commercial success of ArTara’s product candidates.

The current presidential

administration and certain members of the majority of the U.S.

Congress have sought to repeal all or part of the Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, “Affordable Care Act”),

and implement a replacement program.

For example, the so-called “individual mandate” was repealed as part of tax reform

legislation adopted in December 2017, such that the shared responsibility payment for individuals who fail to maintain minimum

essential coverage under section 5000A of the Code was eliminated beginning in 2019.

In addition, litigation may result in the

repeal or replacement of prevent some or all of the Affordable Care Act legislation from taking effect.

For example, on December

14, 2018, the U.S.

District Court for the Northern District of Texas held that the individual mandate is a critical and inseverable

feature of the Affordable Care Act, and therefore, because it was repealed as part of the tax reform legislation, the remaining

provisions of the Affordable Care Act are invalid as well.

which will require us to provide scientific, clinical and health economics support for the use of our products compared to current

alternatives and do so to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained and

in what time frame.

Further, we believe that

future coverage and reimbursement likely will be subject to increased restrictions both in the United States and in international

Third-party coverage and reimbursement for our products may not be available or adequate in either the United States or

international markets, which could harm our business, financial condition, operating results and prospects.

Healthcare reform measures could hinder

or prevent the commercial success of our product candidates.

The Trump administration

and certain members of the U.S.

Congress sought to repeal all or part of the Patient Protection and Affordable Care Act, as amended

by the Health Care and Education Reconciliation Act (collectively, “Affordable Care Act”), and implement a replacement

For example, the so-called “individual mandate”

was repealed as part of tax reform legislation adopted in

December 2017, informally titled the Tax Cuts and Jobs Act (the “Tax Act”), such that the shared responsibility payment

for individuals who fail to maintain minimum essential coverage under section 5000A of the Code was eliminated beginning in 2019.

In addition, litigation may result in the repeal or replacement of prevent some or all of the Affordable Care Act legislation from

taking effect.

For example, on December 14, 2018, the U.S.

District Court for the Northern District of Texas held that the individual

mandate is a critical and inseverable feature of the Affordable Care Act, and therefore, because it was repealed as part of the

Tax Act, the remaining provisions of the Affordable Care Act are invalid as well.

On December 18, 2019, the U.S.

Court of Appeals for the Fifth Circuit

upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court

to determine whether the remaining provisions of the ACA are invalid as well.

The impact of this ruling is stayed as it is appealed

to the Fifth Circuit Court of Appeals.

While the ruling will have no immediate effect, it is unclear how this decision, future

decisions, and subsequent appeals, if any, will impact the law.

In 2019 and beyond, ArTara may face additional uncertainties as

a result of likely federal and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions

of the Affordable Care Act.

There is no assurance that the Affordable Care Act, as amended in the future, will not adversely affect

ArTara’s business and financial results.

Additionally, there has been increasing legislative and enforcement interest in the United

States with respect to drug pricing practices.

For example, the Trump administration previously released a “Blueprint,”

or plan, to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer

competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list

price of their products, and reduce the out of pocket costs of drug products paid by consumers, and the Trump administration’s

budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug

prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and

biosimilar drugs in October 2018, the U.S.

President proposed to lower Medicare Part B drug prices, in addition to contemplating

other measures to lower prescription drug prices.

While these and other measures in the proposal may require additional authorization

to become effective, ArTara expects that additional state and federal healthcare reform measures will be adopted in the future,

any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could

result in reduced demand for its product candidates if approved or additional pricing pressures.

There are also calls

to place additional restrictions on or to ban all direct-to-consumer advertising of pharmaceuticals, which would limit ArTara’s

ability to market its product candidates.

The United States is in a minority of jurisdictions that allow this kind of advertising

and its removal could limit the potential reach of a marketing campaign.

ArTara may also

be subject to stricter healthcare laws, regulation and enforcement, and its failure to comply with those laws could adversely affect

its business, operations and financial condition.

Certain federal and

state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to ArTara’s

ArTara is subject to regulation by both the federal government and the states in which it or its partners conduct business.

The healthcare laws and regulations that may affect ArTara’s ability to operate include:

Court of Appeals

for the Fifth Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back

to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

The United States Supreme Court

is currently reviewing this case, although it is unclear when a decision will be made.

Although the United States Supreme Court

has yet ruled on the constitutionality of the Affordable Care Act on January 28, 2021, President Biden issued an executive order

to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance

coverage through the Affordable Care Act marketplace.

The executive order also instructs certain governmental agencies to review

and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid

demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining

access to health insurance coverage through Medicaid or the Affordable Care Act.

It is unclear how the Supreme Court ruling, other

such litigation and the healthcare reform efforts of the Biden administration will impact the Affordable Care Act and our business.

Additionally, there has

been increasing legislative and enforcement interest in the United States with respect to drug pricing practices.

the Trump administration previously released a “Blueprint,”

or plan, to lower drug prices and reduce out of pocket

costs of drugs that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal

healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of

drug products paid by consumers, and the Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion

allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs

for patients, and increase patient access to lower-cost generic and biosimilar drugs.

On March 10, 2020, the Trump administration

sent “principles”

for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare

Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket

expenses, and place limits on pharmaceutical price increases.

Several final rules have been recently promulgated that seek to implement

several of the Trump administration’s proposals.

However, it is unclear whether the Biden administration will work to reverse

these measures or pursue similar policy initiatives.

We expect that additional state and federal healthcare reform measures will

be adopted in the future, particularly in light of the new Presidential administration, any of which could limit the amounts that

federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product

candidates if approved or additional pricing pressures.

There are also calls to

place additional restrictions on or to ban all direct-to-consumer advertising of pharmaceuticals, which would limit our ability

to market our product candidates.

The United States is in a minority of jurisdictions that allow this kind of advertising and its

removal could limit the potential reach of a marketing campaign.

Further, it is possible that additional government action is taken

in response to the COVID-19 pandemic.

We may also be subject to stricter healthcare

laws, regulation and enforcement, and our failure to comply with those laws could adversely affect our business, operations and

financial condition.

Certain federal and state

healthcare laws and regulations pertaining to fraud and abuse and patients’

rights are and will be applicable to our business.

We are subject to regulation by both the federal government and the states in which we or our partners conduct business.

The healthcare

laws and regulations that may affect our ability to operate include but are not limited to:

the federal Anti-Kickback Statute;

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Because of the breadth

of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of ArTara’s

business activities could be subject to challenge under one or more of such laws.

In addition, recent healthcare reform legislation

has strengthened these laws.

of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business

activities could be subject to challenge under one or more of such laws.

In addition, recent healthcare reform legislation has

strengthened these laws.

For example, the recently enacted Affordable Care Act, among other things, amended the intent requirement

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compliance with these laws may prove costly.

In addition, any action against ArTara for violation of these laws, even if ArTara

successfully defends against it, could cause ArTara to incur significant legal expenses and divert its management’s attention

from the operation of its business and result in reputational damage.

If ArTara’s operations are found to be in violation

of any of the laws described above or any other governmental laws or regulations that apply to ArTara, it may be subject to penalties,

including administrative, civil and criminal penalties, damages, including punitive damages, fines, disgorgement, the exclusion

from participation in federal and state healthcare programs, imprisonment or the curtailment or restructuring of its operations,

and injunctions, any of which could adversely affect ArTara’s ability to operate its business and its financial results.

ArTara intends

to in-license and acquire product candidates and may engage in other strategic transactions, which could impact its liquidity,

increase its expenses and present significant distractions to its management.

ArTara’s strategy

is to in-license and acquire product candidates and it may engage in other strategic transactions.

Additional potential transactions

that ArTara may consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint

ventures, restructurings, divestitures, business combinations and investments.

Any such transaction may require ArTara to incur

non-recurring or other charges, may increase its near- and long-term expenditures and may pose significant integration challenges

or disrupt its management or business, which could adversely affect its operations and financial results.

Accordingly, there can

be no assurance that ArTara will undertake or successfully complete any transactions of the nature described above, and any transaction

that it does complete could harm its business, financial condition, operating results and prospects.

ArTara has no current plan,

commitment or obligation to enter into any transaction described above, and ArTara is not engaged in discussions related to additional

partnerships.

failure successfully to in-license, acquire, develop and market additional product candidates or approved products would impair

its ability to grow its business.

ArTara intends to

in-license, acquire, develop and market additional products and product candidates.

Because ArTara’s internal research and

development capabilities are limited, it may be dependent on pharmaceutical companies, academic or government scientists and other

researchers to sell or license products or technology to it.

The success of this strategy depends partly on ArTara’s ability

to identify and select promising pharmaceutical product candidates and products, negotiate licensing or acquisition agreements

with their current owners, and finance these arrangements.

In addition, any action against us for violation of these laws, even if we successfully

defend against it, could cause us to incur significant legal expenses and divert management’s attention from the operation

of our business and result in reputational damage.

If our operations are found to be in violation of any of the laws described

above or any other governmental laws or regulations that apply to us, we may be subject to significant penalties, including administrative,

civil and criminal penalties, damages, including punitive damages, fines, disgorgement, the exclusion from participation in federal

and state healthcare programs, imprisonment, additional oversight and reporting obligations, or the curtailment or restructuring

of our operations, and injunctions, any of which could adversely affect our ability to operate our business and financial results.

We intend to in-license and acquire product

candidates and may engage in other strategic transactions, which could impact our liquidity, increase our expenses and present

significant distractions to our management.

Our strategy is to in-license

and acquire product candidates and we may engage in other strategic transactions.

Additional potential transactions that we may

consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings,

divestitures, business combinations and investments.

Any such transaction may require us to incur non-recurring or other charges,

may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or

business, which could adversely affect our operations and financial results.

Accordingly, there can be no assurance that we will

undertake or successfully complete any transactions of the nature described above, and any transaction that we do complete could

harm our business, financial condition, operating results and prospects.

We have no current plan, commitment or obligation to enter

into any transaction described above, and we are not engaged in discussions related to additional partnerships.

Our failure to successfully in-license,

acquire, develop and market additional product candidates or approved products would impair our ability to grow our business.

We intend to in-license,

acquire, develop and market additional products and product candidates.

Because our internal research and development capabilities

are limited, we may be dependent on pharmaceutical companies, academic or government scientists and other researchers to sell or

license products or technology to us.

The success of this strategy depends partly on our ability to identify and select promising

pharmaceutical product candidates and products, negotiate licensing or acquisition agreements with their current owners, and finance

these arrangements.

The process of proposing,

negotiating and implementing a license or acquisition of a product candidate or approved product is lengthy and complex.

companies, including some with substantially greater financial, marketing, sales and other resources, may compete with ArTara for

the license or acquisition of product candidates and approved products.

ArTara has limited resources to identify and execute the

acquisition or in-licensing of third-party products, businesses and technologies and integrate them into its current infrastructure.

Moreover, ArTara may devote resources to potential acquisitions or licensing opportunities that are never completed, or ArTara

may fail to realize the anticipated benefits of such efforts.

ArTara may not be able to acquire the rights to additional product

candidates on terms that it finds acceptable or at all.

Further, any product

candidate that ArTara acquires may require additional development efforts prior to commercial sale, including preclinical or clinical

testing and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to risks of failure

typical of pharmaceutical product development, including the possibility that a product candidate will not be shown to be sufficiently

companies, including some with substantially greater financial, marketing, sales and other resources, may compete with us for the

license or acquisition of product candidates and approved products.

We have limited resources to identify and execute the acquisition

or in-licensing of third-party products, businesses and technologies and integrate them into our current infrastructure.

we may devote resources to potential acquisitions or licensing opportunities that are never completed, or we may fail to realize

the anticipated benefits of such efforts.

We may not be able to acquire the rights to additional product candidates on terms that

we find acceptable or at all.

Further, any product candidate

that we acquire may require additional development efforts prior to commercial sale, including preclinical or clinical testing

and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to risks of failure typical

of pharmaceutical product development, including the possibility that a product candidate will not be shown to be sufficiently

safe and effective for approval by regulatory authorities.

In addition, ArTara cannot provide assurance that any approved products

that it acquires will be manufactured or sold profitably or achieve market acceptance.

ArTara expects

to rely on collaborations with third parties for the successful development and commercialization of its product candidates.

ArTara expects to

rely upon the efforts of third parties for the successful development and commercialization of ArTara’s current and future

product candidates.

The clinical and commercial success of ArTara’s product candidates may depend upon maintaining successful

relationships with third-party partners which are subject to a number of significant risks, including the following:

ArTara’s partners’ ability to execute their responsibilities in a timely, cost-efficient

and compliant manner;

In addition, we cannot provide assurance that any approved products

that we acquire will be manufactured or sold profitably or achieve market acceptance.

We expect to rely on collaborations with

third parties for the successful development and commercialization of our product candidates.

We expect to rely upon

the efforts of third parties for the successful development and commercialization of our current and future product candidates.

The clinical and commercial success of our product candidates may depend upon maintaining successful relationships with third-party

partners which are subject to a number of significant risks, including the following:

our partners’

ability to execute their responsibilities in a timely, cost-efficient and compliant manner;

reduced control over delivery and manufacturing schedules;

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the failure of partners to perform their obligations for technical, market or other reasons;

misappropriation of ArTara’s current or future product candidates;

other risks in potentially meeting ArTara’s current and future product commercialization

schedule or satisfying the requirements of its end-users.

ArTara cannot assure

you that it will be able to establish or maintain third-party relationships in order to successfully develop and commercialize

its product candidates.

ArTara relies completely

on third-party contractors to supply, manufacture and distribute clinical drug supplies for its product candidates, which may include

sole-source suppliers and manufacturers;

ArTara intends to rely on third parties for commercial supply, manufacturing and distribution

if any of its product candidates receive regulatory approval;

and ArTara expects to rely on third parties for supply, manufacturing

and distribution of preclinical, clinical and commercial supplies of any future product candidates.

ArTara does not currently

have, nor does it plan to acquire, the infrastructure or capability to supply, store, manufacture or distribute preclinical, clinical

or commercial quantities of drug substances or products.

Additionally, ArTara has not entered into a long-term commercial supply

agreement to provide it with such drug substances or products.

As a result, ArTara’s ability to develop its product candidates

is dependent, and ArTara’s ability to supply its products commercially will depend, in part, on ArTara’s ability to

obtain the APIs and other substances and materials used in its product candidates successfully from third parties and to have finished

products manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for preclinical

and clinical testing and commercialization.

If ArTara fails to develop and maintain supply and other technical relationships with

these third parties, it may be unable to continue to develop or commercialize its products and product candidates.

ArTara does not have

direct control over whether its contract suppliers and manufacturers will maintain current pricing terms, be willing to continue

supplying ArTara with APIs and finished products or maintain adequate capacity and capabilities to serve its needs, including quality

control, quality assurance and qualified personnel.

ArTara is dependent on its contract suppliers and manufacturers for day-to-day

compliance with applicable laws and cGMPs for production of both APIs and finished products.

If the safety or quality of any product

or product candidate or component is compromised due to a failure to adhere to applicable laws or for other reasons, ArTara may

not be able to commercialize or obtain regulatory approval for the affected product or product candidate successfully, and ArTara

may be held liable for injuries sustained as a result.

In order to conduct

larger or late-stage clinical trials for its product candidates and supply sufficient commercial quantities of the resulting drug

product and its components, if that product candidate is approved for sale, ArTara’s contract manufacturers and suppliers

will need to produce its drug substances and product candidates in larger quantities, more cost-effectively and, in certain cases,

at higher yields than they currently achieve.

If ArTara’s third-party contractors are unable to scale up the manufacture

of any of its product candidates successfully in sufficient quality and quantity and at commercially reasonable prices, or are

shut down or put on clinical hold by government regulators, and ArTara is unable to find one or more replacement suppliers or manufacturers

capable of production at a substantially equivalent cost in substantially equivalent volumes and quality, and ArTara is unable

to transfer the processes successfully on a timely basis, the development of that product candidate and regulatory approval or

commercial launch for any resulting products may be delayed, or there may be a shortage in supply, either of which could significantly

harm its business, financial condition, operating results and prospects.

ArTara expects to

continue to depend on third-party contract suppliers and manufacturers for the foreseeable future.

ArTara’s supply and manufacturing

agreements, if any, do not guarantee that a contract supplier or manufacturer will provide services adequate for its needs.

Additionally,

any damage to or destruction of ArTara’s third-party manufacturer’s or suppliers’ facilities or equipment, even

by force majeure, may significantly impair its ability to have its products and product candidates manufactured on a timely basis.

ArTara’s reliance on contract manufacturers and suppliers further exposes it to the possibility that they, or third parties

with access to their facilities, will have access to and may misappropriate ArTara’s trade secrets or other proprietary information.

In addition, the manufacturing facilities of certain of ArTara’s suppliers may be located outside of the United States.

may give rise to difficulties in importing ArTara’s products or product candidates or their components into the United States

or other countries.

The manufacture

of biologics is complex and ArTara’s third-party manufacturers may encounter difficulties in production.

CMO encounter such difficulties, the ability to provide supply of TARA-002 for clinical trials, ArTara’s ability to obtain

marketing approval, or its ability to obtain commercial supply of TARA-002, if approved, could be delayed or stopped.

no experience in biologic manufacturing and does not own or operate, and it does not expect to own or operate, facilities for product

manufacturing, storage and distribution, or testing.

ArTara is completely dependent on CMOs to fulfill its clinical and commercial

supply of TARA-002.

misappropriation of our current or future product candidates;

other risks in potentially meeting our current and future product commercialization schedule or satisfying the requirements of our end-users.

We cannot assure you that

we will be able to establish or maintain third-party relationships in order to successfully develop and commercialize our product

We rely completely on third-party contractors

to supply, manufacture and distribute clinical drug supplies for our product candidates, which may include sole-source suppliers

and manufacturers;

we intend to rely on third parties for commercial supply, manufacturing and distribution if any of our product

candidates receive regulatory approval;

and we expect to rely on third parties for supply, manufacturing and distribution of preclinical,

clinical and commercial supplies of any future product candidates.

We do not currently have,

nor do we plan to acquire, the infrastructure or capability to supply, store, manufacture or distribute preclinical, clinical or

commercial quantities of drug substances or products.

Additionally, we have not entered into a long-term commercial supply agreement

to provide us with such drug substances or products.

As a result, our ability to develop our product candidates is dependent, and

our ability to supply our products commercially will depend, in part, on our ability to obtain the APIs and other substances and

materials used in our product candidates successfully from third parties and to have finished products manufactured by third parties

in accordance with regulatory requirements and in sufficient quantities for preclinical and clinical testing and commercialization.

If we fail to develop and maintain supply and other technical relationships with these third parties, we may be unable to continue

to develop or commercialize our products and product candidates.

We do not have direct

control over whether our contract suppliers and manufacturers will maintain current pricing terms, be willing to continue supplying

us with API and finished products or maintain adequate capacity and capabilities to serve our needs, including quality control,

quality assurance and qualified personnel.

We are dependent on our contract suppliers and manufacturers for day-to-day compliance

with applicable laws and cGMPs for production of both APIs and finished products.

If the safety or quality of any product or product

candidate or component is compromised due to a failure to adhere to applicable laws or for other reasons, we may not be able to

commercialize or obtain regulatory approval for the affected product or product candidate successfully, and we may be held liable

for injuries sustained as a result.

In order to conduct larger

or late-stage clinical trials for our product candidates and supply sufficient commercial quantities of the resulting drug product

and its components, if that product candidate is approved for sale, our contract manufacturers and suppliers will need to produce

our drug substances and product candidates in larger quantities, more cost-effectively and, in certain cases, at higher yields

than they currently achieve.

If our third-party contractors are unable to scale up the manufacture of any of our product candidates

successfully in sufficient quality and quantity and at commercially reasonable prices, or are shut down or put on clinical hold

by government regulators, and we are unable to find one or more replacement suppliers or manufacturers capable of production at

a substantially equivalent cost in substantially equivalent volumes and quality, and we are unable to transfer the processes successfully

on a timely basis, the development of that product candidate and regulatory approval or commercial launch for any resulting products

may be delayed, or there may be a shortage in supply, either of which could significantly harm our business, financial condition,

operating results and prospects.

We expect to continue

to depend on third-party contract suppliers and manufacturers for the foreseeable future.

Our supply and manufacturing agreements,

if any, do not guarantee that a contract supplier or manufacturer will provide services adequate for our needs.

Additionally, any

damage to or destruction of our third-party manufacturer’s or suppliers’

facilities or equipment, even by force majeure,

may significantly impair our ability to have our products and product candidates manufactured on a timely basis.

Our reliance on

contract manufacturers and suppliers further exposes us to the possibility that they, or third parties with access to their facilities,

will have access to and may misappropriate our trade secrets or other proprietary information.

In addition, the manufacturing facilities

of certain of our suppliers may be located outside of the United States.

This may give rise to difficulties in importing our products

or product candidates or their components into the United States or other countries.

In addition, we cannot

be certain that any prolonged, intensified or worsened effect from the COVID-19 pandemic would not impact our supply chain.

The manufacture of biologics is complex

and our third-party manufacturers may encounter difficulties in production.

If our CDMO encounters such difficulties, the ability

to provide supply of TARA-002 for clinical trials, our ability to obtain marketing approval, or our ability to obtain commercial

supply of TARA-002, if approved, could be delayed or stopped.

We have no experience

in biologic manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing,

storage and distribution, or testing.

We are completely dependent on CDMOs to fulfill our clinical and commercial supply of TARA-002.

The process of manufacturing biologics is complex, highly regulated and subject to multiple risks.

Manufacturing

biologics is highly susceptible to product loss due to contamination, equipment failure, improper installation or operation of

equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling

the production process.

Even minor deviations from normal manufacturing processes could result in reduced production yields, product

defects and other supply disruptions and higher costs.

If microbial, viral or other contaminations are discovered at the facilities

of ArTara’s manufacturer, such facilities may need to be closed for an extended period of time to investigate and remedy

the contamination, which could delay clinical trials, result in higher costs of drug product and adversely harm its business.

if the FDA determines that ArTara’s manufacturer is not in compliance with FDA laws and regulations, including those governing

cGMPs, the FDA may deny BLA approval until the deficiencies are corrected or it replaces the manufacturer in its BLA with a manufacturer

that is in compliance.

In addition, there

are risks associated with large scale manufacturing for clinical trials or commercial scale including, among others, cost overruns,

Manufacturing biologics is highly

susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or

operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process.

Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other

supply disruptions and higher costs.

If microbial, viral or other contaminations are discovered at the facilities of our manufacturer,

such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay

clinical trials, result in higher costs of drug product and adversely harm our business.

Moreover, if the FDA determines that our

manufacturer is not in compliance with FDA laws and regulations, including those governing cGMPs, the FDA may deny BLA approval

until the deficiencies are corrected or we replace the manufacturer in our BLA with a manufacturer that is in compliance.

In addition, there are

risks associated with large scale manufacturing for clinical trials or commercial scale including, among others, cost overruns,

potential problems with process scale-up, process reproducibility, stability issues, compliance with cGMPs, lot consistency and

timely availability of raw materials.

Even if ArTara obtains regulatory approval for TARA-002 or any future product candidates,

there is no assurance that its manufacturers will be able to manufacture the approved product to specifications acceptable to the

FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of

the product or to meet potential future demand.

If ArTara’s manufacturers are unable to produce sufficient quantities for

clinical trials or for commercialization, commercialization efforts would be impaired, which would have an adverse effect on ArTara’s

business, financial condition, results of operations and growth prospects.

Scaling up a biologic manufacturing process is a difficult

and uncertain task, and any CMO ArTara contracts may not have the necessary capabilities to complete the implementation and development

process of further scaling up production, transferring production to other sites, or managing its production capacity to timely

meet product demand.

ArTara expects

its stock price to be highly volatile.

The market price of

ArTara’s shares could be subject to significant fluctuations.

Market prices for securities of biotechnology and other life

sciences companies historically have been particularly volatile subject even to large daily price swings.

Some of the factors that

may cause the market price of ArTara’s shares to fluctuate include, but are not limited to:

the ability of ArTara to obtain timely regulatory approvals for TARA-002, IV Choline Chloride or

future product candidates, and delays or failures to obtain such approvals;

Even if we obtain regulatory approval for TARA-002 or any future product candidates, there

is no assurance that our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA

or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the

product or to meet potential future demand.

If our manufacturers are unable to produce sufficient quantities for clinical trials

or for commercialization, commercialization efforts would be impaired, which would have an adverse effect on our business, financial

condition, results of operations and growth prospects.

Scaling up a biologic manufacturing process is a difficult and uncertain

task, and any CDMO we contract may not have the necessary capabilities to complete the implementation and development process of

further scaling up production, transferring production to other sites, or managing its production capacity to timely meet product

We expect our stock price to be highly

The market price of our

shares could be subject to significant fluctuations.

Market prices for securities of biotechnology and other life sciences companies

historically have been particularly volatile subject even to large daily price swings.

Some of the factors that may cause the market

price of our shares to fluctuate include, but are not limited to:

our ability to obtain timely regulatory approvals for TARA-002, IV Choline Chloride or future product candidates, and delays or failures to obtain such approvals;

failure of TARA-002 or IV Choline Chloride, if approved, to achieve commercial success;

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the results of current and any future clinical trials of TARA-002 or IV Choline Chloride;

failure of other ArTara product candidates, if approved, to achieve commercial success;

the entry into, or termination of, or breach by partners of key agreements, including key commercial

partner agreements;

the initiation of, material developments in, or conclusion of any litigation to enforce or defend

any intellectual property rights or defend against the intellectual property rights of others;

failure of other of our product candidates, if approved, to achieve commercial success;

the entry into, or termination of, or breach by partners of key agreements, including key commercial partner agreements;

the initiation of, material developments in, or conclusion of any litigation to enforce or defend any intellectual property rights or defend against the intellectual property rights of others;

announcements of any dilutive equity financings;

announcements by commercial partners or competitors of new commercial products, clinical progress

or the lack thereof, significant contracts, commercial relationships or capital commitments;

failure to elicit meaningful stock analyst coverage and downgrades of the company’s stock

announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments;

failure to elicit meaningful stock analyst coverage and downgrades of our stock by analysts;

the loss of key employees.

Moreover, the stock

markets in general have experienced substantial volatility in our industry that has often been unrelated to the operating performance

of individual companies or a certain industry segment.

Moreover, the stock markets

in general have experienced substantial volatility in our industry that has often been unrelated to the operating performance of

individual companies or a certain industry segment.

These broad market fluctuations may also adversely affect the trading price

of ArTara’s shares.

of our shares.

In the past, following

periods of volatility in the market price of a company’s securities, shareholders have often instituted class action securities

litigation against those companies.

Such litigation, if instituted, could result in substantial costs and diversion of management

attention and resources, which could significantly harm ArTara’s profitability and reputation.

In addition, such securities

litigation often has ensued after a reverse merger or other merger and acquisition activity.

Such litigation if brought could impact

negatively ArTara’s business.

ArTara incurs

costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

ArTara incurs significant

legal, accounting and other expenses that ArTara Subsidiary Inc.

did not incur as a private company, including costs associated

with public company reporting and other SEC requirements.

ArTara also will incur costs associated with corporate governance requirements,

including requirements under the Sarbanes-Oxley Act, as well as new rules implemented by the SEC and Nasdaq.

These rules and regulations

are expected to increase ArTara’s legal and financial compliance costs and to make some activities more time-consuming and

ArTara’s executive officers and other personnel will need to devote substantial time to gaining expertise regarding

operations as a public company and compliance with applicable laws and regulations.

These rules and regulations may also make it

expensive for ArTara to operate its business.

ArTara is expected

to take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies, which could result

in its common stock being less attractive to investors.

ArTara expects to

have a public float of less than $250 million and therefore will qualify as a smaller reporting company under the rules of the

As a smaller reporting company, ArTara will be able to take advantage of reduced disclosure requirements, such as simplified

executive compensation disclosures and reduced financial statement disclosure requirements in its SEC filings.

Decreased disclosures

in ArTara’s SEC filings due to its status as a smaller reporting company may make it harder for investors to analyze its

results of operations and financial prospects.

We cannot predict if investors will find ArTara’s common stock less attractive

if it relies on these exemptions.

If some investors find its common stock less attractive as a result, there may be a less active

trading market for its common stock and its stock price may be more volatile.

ArTara may take advantage of the reporting exemptions

applicable to a smaller reporting company until it is no longer a smaller reporting company, which status would end once it has

a public float greater than $250 million.

In that event, ArTara could still be a smaller reporting company if its annual revenues

were below $100 million and it has a public float of less than $700 million.

ArTara does not

anticipate paying any dividends in the foreseeable future.

The current expectation

is that ArTara will retain its future earnings to fund the development and growth of the Company’s business.

capital appreciation, if any, of the shares of ArTara will be your sole source of gain, if any, for the foreseeable future.

If ArTara fails

to attract and retain management and other key personnel, it may be unable to continue to successfully develop or commercialize

its product candidates or otherwise implement its business plan.

ArTara’s ability

to compete in the highly competitive pharmaceuticals industry depends on its ability to attract and retain highly qualified managerial,

scientific, medical, legal, sales and marketing and other personnel.

ArTara is highly dependent on its management and scientific

The loss of the services of any of these individuals could impede, delay or prevent the successful development of ArTara’s

product pipeline, completion of its planned clinical trials, commercialization of its product candidates or in-licensing or acquisition

of new assets and could impact negatively its ability to implement successfully its business plan.

If ArTara loses the services

of any of these individuals, it might not be able to find suitable replacements on a timely basis or at all, and its business could

be harmed as a result.

ArTara might not be able to attract or retain qualified management and other key personnel in the future

due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses.

ability to use its net operating loss carry-forwards to offset future taxable income may be subject to certain limitations.

As of December 31,

2019, for U.S.

federal and state income tax reporting purposes, ArTara has approximately $11.4 million of unused net operating

losses (“NOLs”) available for carry forward to future years.

The 2019 and 2018 federal and New York City NOLs may

be carried forward indefinitely, but utilization will be subject to an annual deduction limitation of 80% of taxable income.

2019 and 2018 losses will not be allowed to be carried back.

The 2019 state NOLs may be carried forward through the year 2039

and may be applied against future taxable income.

The 2017 federal and New York City NOLs will begin to expire during the

year ended December 31, 2037.

Because United States tax laws limit the time during which NOL carry forwards may be applied

against future taxable income, ArTara may be unable to take full advantage of its NOLs for federal income tax purposes when ArTara

does generate taxable income.

Further, net operating loss carryforwards of both ArTara and Private ArTara will be limited since

there was a more than 50% ownership change for each entity.

ArTara may be adversely

affected by natural disasters, pandemics and other catastrophic events and by man-made problems such as terrorism that could disrupt

its business operations, and its business continuity and disaster recovery plans may not adequately protect it from a serious disaster.

ArTara’s corporate

office is located in New York, New York.

If a disaster, power outage, computer hacking, or other event occurred that prevented

ArTara from using all or a significant portion of an office, that damaged critical infrastructure, such as enterprise financial

systems, IT systems, manufacturing resource planning or enterprise quality systems, or that otherwise disrupted operations, it

may be difficult or, in certain cases, impossible for it to continue its business for a substantial period of time.

contract manufacturer’s and suppliers’ facilities are located in multiple locations where other natural disasters or

similar events, such as tornadoes, fires, explosions or large-scale accidents or power outages, or IT threats, could severely disrupt

ArTara’s operations and have a material adverse effect on its business, financial condition, operating results and prospects.

In addition, pandemic, acts of terrorism and other geo-political unrest could cause disruptions in ArTara’s business or the

businesses of its partners, manufacturers or the economy as a whole.

All of the aforementioned risks may be further increased if

ArTara does not implement a disaster recovery plan or its partners’ or manufacturers’ disaster recovery plans prove

to be inadequate.

attention and resources, which could significantly harm our profitability and reputation.

In addition, such securities litigation

often has ensued after a reverse merger or other merger and acquisition activity.

Such litigation if brought could impact negatively

our business.

We incur costs and demands upon management

as a result of complying with the laws and regulations affecting public companies.

As a public company, we

have incurred, and will continue to incur, significant legal, accounting and other expenses that ArTara Subsidiary Inc.

incur as a private company, including costs associated with public company reporting and other SEC requirements.

We have also incurred,

and will continue to incur, costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley

Act, as well as rules implemented by the SEC and Nasdaq.

We expect the rules and

regulations applicable to public companies will continue to substantially increase our legal and financial compliance costs and

to make some activities more time-consuming and costly.

Our executive officers and other personnel will need to continue to devote

substantial time to gaining expertise regarding operations as a public company and compliance with applicable laws and regulations.

These rules and regulations may also make it expensive for us to operate our business.

We are able to take advantage of reduced

disclosure and governance requirements applicable to smaller reporting companies, which could result in our common stock being

less attractive to investors.

We have a public float

of less than $250 million and therefore qualify as a smaller reporting company under the rules of the SEC.

As a smaller reporting

company, we are able to take advantage of reduced disclosure requirements, such as simplified executive compensation disclosures

and reduced financial statement disclosure requirements in our SEC filings.

Decreased disclosures in our SEC filings due to our

status as a smaller reporting company may make it harder for our investors to analyze our results of operations and financial prospects.

We cannot predict if investors will find our common stock less attractive due to our reliance on these exemptions.

If some investors

find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock

price may be more volatile.

We may take advantage of the reporting exemptions applicable to a smaller reporting company until we

are no longer a smaller reporting company, which status would end once we have a public float greater than $250 million.

event, we could still be a smaller reporting company if our annual revenues were below $100 million and we have a public float

of less than $700 million.

If we fail to attract and retain management

and other key personnel, we may be unable to continue to successfully develop or commercialize our product candidates or otherwise

implement our business plan.

Our ability to compete

in the highly competitive pharmaceuticals industry depends on our ability to attract and retain highly qualified managerial, scientific,

medical, legal, sales and marketing and other personnel.

We are highly dependent on our management and scientific personnel.

loss of the services of any of these individuals could impede, delay or prevent the successful development of our product pipeline,

completion of our planned clinical trials, commercialization of our product candidates or in-licensing or acquisition of new assets

and could impact negatively our ability to implement successfully our business plan.

If we lose the services of any of these individuals,

we might not be able to find suitable replacements on a timely basis or at all, and our business could be harmed as a result.

might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition

for qualified personnel among biotechnology, pharmaceutical and other businesses.

Our ability to use our net operating

loss carryforwards and certain other tax attributes to offset future taxable income or taxes may be limited.

Under the Tax Act, as modified by the CARES Act, federal net

operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility

of such federal net operating losses in tax years beginning after December 31, 2020.

It is uncertain if and to what extent various

states and localities will conform to the Tax Act or the CARES Act.

In addition, under Sections 382 and 383 of the Internal Revenue

Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,”

which is generally defined as a greater than 50% change in its equity ownership value over a three-year period, the corporation’s

ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income

or taxes may be limited.

We have experienced an ownership change in the past and we may also experience additional ownership changes

in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership

change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future operating

results by effectively increasing our future tax obligations.

In addition, at the state level, there may be periods during which

the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state

As a result, if we earn net taxable income, we may be unable to use all or a material portion of our net operating

loss carryforwards and other tax attributes, which could potentially result in increased future tax liability to us and adversely

affect our future cash flows.

We may be adversely affected by natural

disasters, pandemics and other catastrophic events and by man-made problems such as terrorism that could disrupt our business operations,

and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Our corporate office is

located in New York, New York.

If a disaster, power outage, computer hacking, or other event occurred that prevented us from using

all or a significant portion of an office, that damaged critical infrastructure, such as enterprise financial systems, IT systems,

manufacturing resource planning or enterprise quality systems, or that otherwise disrupted operations, it may be difficult or,

in certain cases, impossible for us to continue our business for a substantial period of time.

As an example, New York City has

been significantly impacted by the COVID-19 pandemic and, due to safety considerations for our employees and government restrictions,

we do not know when we will be able to use our office facilities located there.

Our contract manufacturer’s and suppliers’

facilities are located in multiple locations where there are similar stay-at-home orders in place for the current crisis and where

other natural disasters or similar events, such as tornadoes, fires, explosions or large-scale accidents or power outages, or IT

threats, pandemic, acts of terrorism and other geo-political unrest, could severely disrupt our operations and have a material

adverse effect on our business, financial condition, operating results and prospects.

All of the aforementioned risks may be further

increased if we do not implement a disaster recovery plan or our partners’

or manufacturers’

disaster recovery plans

prove to be inadequate.

To the extent that any of the above should result in delays in the regulatory approval, manufacture, distribution

or commercialization of TARA-002 or IV Choline Chloride, its business, financial condition, operating results and prospects would

business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in its cyber-security.

Despite the implementation of security measures, ArTara’s internal computer systems

and those of its current and future CROs and other contractors and consultants are vulnerable to damage from computer viruses,

unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

The risk of a security breach

or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber-terrorists,

has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have

If such an event were to occur and cause interruptions in ArTara’s operations, it could result in a material disruption

of its development programs and its business operations.

In the first quarter of 2020, our email server was compromised in a cyber-attack.

We quickly isolated the incident and have, since, implemented additional risk prevention measures.

In addition, since ArTara sponsors

clinical trials, any breach that compromises patient data and identities causing a breach of privacy could generate significant

reputational damage and legal liabilities and costs to recover and repair, including affecting trust in the company to recruit

for future clinical trials.

For example, the loss of clinical trial data from completed or future clinical trials could result

in delays in ArTara’s regulatory approval efforts and significantly increase its costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result in a loss of, or damage to, ArTara’s data or applications

or inappropriate disclosure of confidential or proprietary information, ArTara could incur liability and the further development

and commercialization of its products and product candidates could be delayed.

The COVID-19 coronavirus

could adversely impact our business, including our clinical development plans.

In December 2019,

a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China.

Since then, the COVID-19 coronavirus has

spread to multiple countries, including the United States.

As the COVID-19 coronavirus continues to spread in the United States

and around the world, we may experience disruptions that could severely impact our business, including:

interruption of key manufacturing, research and clinical development activities, due to limitations

on work and travel imposed or recommended by federal or state governments, employers and others;

delays or difficulties in clinical trial site operations, including difficulties in recruiting

clinical site investigators and clinical site staff and difficulties in enrolling patients;

interruption of key business activities, due to illness and/or quarantine of key individuals and

delays associated with recruiting, hiring and training new temporary or permanent replacements for such key individuals, both internally

and at our third party service providers;

delays in research and clinical trial sites receiving the supplies and materials needed to conduct

preclinical studies and clinical trials, due to work stoppages, travel and shipping interruptions or restrictions or other reasons;

difficulties in raising additional capital needed to pursue the development of our programs due

to the slowing of our economy and near term and/or long term negative effects of the pandemic on the financial, banking and capital

changes in local regulations as part of a response to the COVID-19 coronavirus outbreak which may

require us to change the ways in which research, including clinical development, is conducted, which may result in unexpected costs;

delays in necessary interactions with regulators, ethics committees and other important agencies

and contractors due to limitations in employee resources, travel restrictions or forced furlough of government employees.

The global outbreak of the COVID-19 coronavirus continues to

rapidly evolve.

The extent to which the COVID-19 coronavirus may impact our business will depend on future developments, which

are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration

of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business

disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the virus.

Anti-takeover provisions

in ArTara’s charter documents and under Delaware law could make an acquisition of ArTara more difficult and may prevent attempts

by ArTara stockholders to replace or remove ArTara’s management.

Provisions in ArTara’s

certificate of incorporation and bylaws may delay or prevent an acquisition or a change in management.

In addition, because ArTara’s

is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL, which prohibits stockholders owning in

excess of 15% of the outstanding ArTara voting stock from merging or combining with ArTara.

These provisions may frustrate or prevent

any attempts by ArTara’s stockholders to replace or remove then current management by making it more difficult for stockholders

to replace members of the board of directors, which is responsible for appointing the members of management.

The certificate

of incorporation of ArTara provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially

all disputes between ArTara and its stockholders, which could limit its stockholders’ ability to obtain a favorable judicial

forum for disputes with ArTara or its directors, officers or other employees.

The certificate of

incorporation of ArTara provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative

action or proceeding brought on ArTara’s behalf, any action asserting a breach of fiduciary duty owed by any of its directors,

officers or other employees to the ArTara or its stockholders, any action asserting a claim against it arising pursuant to any

provisions of the DGCL, its certificate of incorporation or its bylaws, or any action asserting a claim against it that is governed

by the internal affairs doctrine.

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial

forum that it finds favorable for disputes with ArTara or its directors, officers or other employees, which may discourage such

lawsuits against ArTara and its directors, officers and other employees.

If a court were to find the choice of forum provision

contained in the certificate of incorporation to be inapplicable or unenforceable in an action, ArTara may incur additional costs

associated with resolving such action in other jurisdictions.

Certain stockholders

have the ability to control or significantly influence certain matters submitted to ArTara’s stockholders for approval.

Certain stockholders

have consent rights over certain significant matters of ArTara’s business.

These include decisions to effect a merger or

other similar transaction, changes to the principal business of ArTara, and the sale or other transfer of TARA-002 or other assets

with an aggregate value of more than $2,500,000.

As a result, these stockholders, have significant influence over certain matters

that require approval by ArTara’s stockholders.

If equity research

analysts do not publish research or reports, or publish unfavorable research or reports, about ArTara, its business or its market,

its stock price and trading volume could decline.

The trading market

for ArTara’s common stock is influenced by the research and reports that equity research analysts publish about it and its

Equity research analysts may elect not to provide research coverage of ArTara’s common stock after the completion

of the Merger, and such lack of research coverage may adversely affect the market price of its common stock.

In the event it does

have equity research analyst coverage, ArTara will not have any control over the analysts or the content and opinions included

in their reports.

The price of ArTara’s common stock could decline if one or more equity research analysts downgrade its

stock or issue other unfavorable commentary or research.

If one or more equity research analysts ceases coverage of ArTara or fails

to publish reports on it regularly, demand for its common stock could decrease, which in turn could cause its stock price or trading

volume to decline.

If ArTara fails

to maintain proper and effective internal controls, its ability to produce accurate financial statements on a timely basis could

ArTara is subject

to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.

or commercialization of TARA-002 or IV Choline Chloride, our business, financial condition, operating results and prospects would

Anti-takeover provisions in our charter

documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to

replace or remove management.

Provisions in our certificate

of incorporation and bylaws may delay or prevent an acquisition or a change in management.

In addition, because we are incorporated

in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits stockholders owning in excess of 15%

of the outstanding voting stock from merging or combining with us.

These provisions may frustrate or prevent any attempts by our

stockholders to replace or remove then current management by making it more difficult for stockholders to replace members of the

board of directors, which is responsible for appointing the members of management.

The certificate of incorporation of ours

provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and

our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for disputes with us or

our directors, officers or other employees.

The certificate of incorporation

of ours provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action

or proceeding brought on our behalf, any action asserting a breach of fiduciary duty owed by any of our directors, officers or

other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provisions of the DGCL,

our certificate of incorporation or our bylaws, or any action asserting a claim against us that is governed by the internal affairs

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds

favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and

our directors, officers and other employees.

If a court were to find the choice of forum provision contained in the certificate

of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such

action in other jurisdictions.

Certain stockholders have the ability

to control or significantly influence certain matters submitted to our stockholders for approval.

Certain stockholders have

consent rights over certain significant matters of our business.

These include decisions to effect a merger or other similar transaction,

changes to the principal business of ours, and the sale or other transfer of TARA-002 or other assets with an aggregate value of

more than $2,500,000.

As a result, these stockholders, have significant influence over certain matters that require approval by

our stockholders.

If we fail to maintain proper and effective

internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the

reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.

The Sarbanes-Oxley

Act requires, among other things, that ArTara maintain effective disclosure controls and procedures and internal control over financial

ArTara must perform system and process evaluation and testing of its internal control over financial reporting to allow

management to report on the effectiveness of its internal controls over financial reporting in its Annual Report on Form 10-K filing

Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial

We must perform system and process evaluation and testing of our internal control over financial reporting to allow

management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing

for that year, as required by Section 404 of the Sarbanes-Oxley Act.

As a private company, ArTara was not required to test its

internal controls within a specified period.

This will require that it incur substantial professional fees and internal costs to

expand its accounting and finance functions and that it expend significant management efforts.

ArTara may experience difficulty

in meeting these reporting requirements in a timely manner.

ArTara may discover

weaknesses in its system of internal financial and accounting controls and procedures that could result in a material misstatement

of its financial statements.

ArTara’s internal control over financial reporting will not prevent or detect all errors and

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that

the control system’s objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of

controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and

instances of fraud will be detected.

If ArTara is not able

to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, or if it is unable to maintain proper and effective internal

controls, ArTara may not be able to produce timely and accurate financial statements.

If that were to happen, the market price

of its common stock could decline and it could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory

Risks Related to Intellectual

Property Rights

ArTara may not

be able to obtain, maintain or enforce global patent rights or other intellectual property rights that cover its product candidates

and technologies that are of sufficient breadth to prevent third parties from competing against ArTara.

ArTara’s success

with respect to its product candidates will depend, in part, on its ability to obtain and maintain patent protection in both the

United States and other countries, to preserve its trade secrets and to prevent third parties from infringing on its proprietary

ArTara’s ability to protect its product candidates from unauthorized or infringing use by third parties depends in

substantial part on its ability to obtain and maintain valid and enforceable patents around the world.

This will require that we incur substantial professional fees

and internal costs to expand our accounting and finance functions and that we expend significant management efforts.

We may experience

difficulty in meeting these reporting requirements in a timely manner.

We may discover weaknesses

in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our

financial statements.

Our internal control over financial reporting will not prevent or detect all errors and all fraud.

system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s

objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute

assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to

comply with the requirements of Section 404 of the Sarbanes-Oxley Act, or if we are unable to maintain proper and effective internal

controls, we may not be able to produce timely and accurate financial statements.

If that were to happen, the market price of our

common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

Risks Related to Intellectual Property Rights

We may not be able to obtain, maintain

or enforce global patent rights or other intellectual property rights that cover our product candidates and technologies that are

of sufficient breadth to prevent third parties from competing against us.

Our success with respect

to our product candidates will depend, in part, on our ability to obtain and maintain patent protection in both the United States

and other countries, to preserve our trade secrets and to prevent third parties from infringing on our proprietary rights.

ability to protect our product candidates from unauthorized or infringing use by third parties depends in substantial part on our

ability to obtain and maintain valid and enforceable patents around the world.

The patent application

process, also known as patent prosecution, is expensive and time-consuming, and ArTara and its current or future licensors and

licensees may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or

in a timely manner in all the countries that are desirable.

It is also possible that ArTara or its current licensors, or any future

licensors or licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization

activities before it is too late to obtain patent protection on them.

Therefore, these and any of ArTara’s patents and applications

may not be prosecuted and enforced in a manner consistent with the best interests of its business.

Moreover, ArTara’s competitors

independently may develop equivalent knowledge, methods and know-how or discover workarounds to ArTara patents that would not constitute

infringement.

Any of these outcomes could impair ArTara’s ability to enforce the exclusivity of its patents effectively,

which may have an adverse impact on its business, financial condition and operating results.

process, also known as patent prosecution, is expensive and time-consuming, and we and our current or future licensors and licensees

may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely

manner in all the countries that are desirable.

It is also possible that we or our current licensors, or any future licensors or

licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization activities

before it is too late to obtain patent protection on them.

Therefore, these and any of our patents and applications may not be

prosecuted and enforced in a manner consistent with the best interests of our business.

Moreover, our competitors independently

may develop equivalent knowledge, methods and know-how or discover workarounds to our patents that would not constitute infringement.

Any of these outcomes could impair our ability to enforce the exclusivity of our patents effectively, which may have an adverse

impact on our business, financial condition and operating results.

Due to legal standards

relating to patentability, validity, enforceability and claim scope of patents covering pharmaceutical inventions, ArTara’s

ability to obtain, maintain and enforce patents is uncertain and involves complex legal and factual questions especially across

Accordingly, rights under any existing patents or any patents ArTara might obtain or license may not cover its product

candidates or may not provide ArTara with sufficient protection for its product candidates to afford a sustainable commercial advantage

against competitive products or processes, including those from branded, generic and over-the-counter pharmaceutical companies.

In addition, ArTara cannot guarantee that any patents or other intellectual property rights will issue from any pending or future

patent or other similar applications owned by or licensed to ArTara.

Even if patents or other intellectual property rights have

issued or will issue, ArTara cannot guarantee that the claims of these patents and other rights are or will be held valid or enforceable

by the courts, through injunction or otherwise, or will provide ArTara with any significant protection against competitive products

or otherwise be commercially valuable to ArTara in every country of commercial significance that ArTara may target.

Competitors in the

field of immunology and oncology therapeutics have created a substantial amount of prior art, including scientific publications,

posters, presentations, patents and patent applications and other public disclosures including on the Internet.

ability to obtain and maintain valid and enforceable patents depends on whether the differences between its technology and the

prior art allow its technology to be patentable over the prior art.

ArTara does not have outstanding issued patents covering all

of the recent developments in its technology and is unsure of the patent protection that it will be successful in obtaining, if

Even if the patents do successfully issue, third parties may design around or challenge the validity, enforceability or scope

of such issued patents or any other issued patents ArTara owns or licenses, which may result in such patents being narrowed, invalidated

or held unenforceable.

If the breadth or strength of protection provided by the patents ArTara holds or pursues with respect to

its product candidates is challenged, it could dissuade companies from collaborating with ArTara to develop or threaten its ability

to commercialize or finance its product candidates.

relating to patentability, validity, enforceability and claim scope of patents covering pharmaceutical inventions, our ability

to obtain, maintain and enforce patents is uncertain and involves complex legal and factual questions especially across countries.

Accordingly, rights under any existing patents or any patents we might obtain or license may not cover our product candidates or

may not provide us with sufficient protection for our product candidates to afford a sustainable commercial advantage against competitive

products or processes, including those from branded, generic and over-the-counter pharmaceutical companies.

In addition, we cannot

guarantee that any patents or other intellectual property rights will issue from any pending or future patent or other similar

applications owned by or licensed to us.

Even if patents or other intellectual property rights have issued or will issue, we cannot

guarantee that the claims of these patents and other rights are or will be held valid or enforceable by the courts, through injunction

or otherwise, or will provide us with any significant protection against competitive products or otherwise be commercially valuable

to us in every country of commercial significance that we may target.

Competitors in the field

of immunology and oncology therapeutics have created a substantial amount of prior art, including scientific publications, posters,

presentations, patents and patent applications and other public disclosures including on the Internet.

Our ability to obtain and

maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow our technology

to be patentable over the prior art.

We do not have outstanding issued patents covering all of the recent developments in our technology

and are unsure of the patent protection that we will be successful in obtaining, if any.

Even if the patents do successfully issue,

third parties may design around or challenge the validity, enforceability or scope of such issued patents or any other issued patents

we own or license, which may result in such patents being narrowed, invalidated or held unenforceable.

If the breadth or strength

of protection provided by the patents we hold or pursue with respect to our product candidates is challenged, it could dissuade

companies from collaborating with us to develop or threaten our ability to commercialize or finance our product candidates.

The laws of some foreign

2 unchanged sentences

in foreign jurisdictions.

If ArTara encounters such difficulties in protecting or are otherwise precluded from effectively protecting

its intellectual property in foreign jurisdictions, its business prospects could be substantially harmed, especially internationally.

Proprietary trade

secrets and unpatented know-how are also very important to ArTara’s business.

Although ArTara has taken steps to protect

its trade secrets and unpatented know-how by entering into confidentiality agreements with third parties, and intellectual property

protection agreements with officers, directors, employees, and certain consultants and advisors, there can be no assurance that

binding agreements will not be breached or enforced by courts, that ArTara would have adequate remedies for any breach, including

injunctive and other equitable relief, or that its trade secrets and unpatented know-how will not otherwise become known, inadvertently

disclosed by ArTara or its agents and representatives, or be independently discovered by its competitors.

If trade secrets are

independently discovered, ArTara would not be able to prevent their use and if ArTara and its agents or representatives inadvertently

disclose trade secrets and/or unpatented know-how, ArTara may not be allowed to retrieve this and maintain the exclusivity it previously

ArTara may not

be able to protect its intellectual property rights throughout the world.

Filing, prosecuting

and defending patents on ArTara’s product candidates does not guarantee exclusivity.

The requirements for patentability differ

in certain countries, particularly developing countries.

In addition, the laws of some foreign countries do not protect intellectual

property rights to the same extent as laws in the United States, especially when it comes to granting use and other kinds of patents

and what kind of enforcement rights will be allowed, especially injunctive relief in a civil infringement proceeding.

If we encounter such difficulties in protecting, or are otherwise precluded from effectively protecting,

our intellectual property in foreign jurisdictions, our business prospects could be substantially harmed, especially internationally.

Proprietary trade secrets

and unpatented know-how are also very important to our business.

Although we have taken steps to protect our trade secrets and

unpatented know-how by entering into confidentiality agreements with third parties, and intellectual property protection agreements

with officers, directors, employees, and certain consultants and advisors, there can be no assurance that binding agreements will

not be breached or enforced by courts, that we would have adequate remedies for any breach, including injunctive and other equitable

relief, or that our trade secrets and unpatented know-how will not otherwise become known, inadvertently disclosed by us or our

agents and representatives, or be independently discovered by our competitors.

If trade secrets are independently discovered, we

would not be able to prevent their use and if we and our agents or representatives inadvertently disclose trade secrets and/or

unpatented know-how, we may not be allowed to retrieve this and maintain the exclusivity we previously enjoyed.

We may not be able to protect our intellectual

property rights throughout the world.

Filing, prosecuting and

defending patents on our product candidates does not guarantee exclusivity.

The requirements for patentability differ in certain

countries, particularly developing countries.

In addition, the laws of some foreign countries do not protect intellectual property

rights to the same extent as laws in the United States, especially when it comes to granting use and other kinds of patents and

what kind of enforcement rights will be allowed, especially injunctive relief in a civil infringement proceeding.

Consequently,

ArTara may not be able to prevent third parties from practicing its inventions in all countries outside the United States and even

in launching an identical version of ArTara’s product notwithstanding ArTara has a valid patent in that country.

may use ArTara’s technologies in jurisdictions where it has not obtained patent protection to develop their own products,

or produce copy products, and, further, may export otherwise infringing products to territories where ArTara has patent protection

but enforcement on infringing activities is inadequate or where ArTara has no patents.

These products may compete with ArTara’s

products, and ArTara’s patents or other intellectual property rights may not be effective or sufficient to prevent them from

Many companies have

encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems

of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual

property protection, particularly those relating to pharmaceuticals, and the judicial and government systems are often corrupt,

which could make it difficult for ArTara to stop the infringement of its patents or marketing of competing products in violation

of its proprietary rights generally.

Proceedings to enforce its patent rights in foreign jurisdictions could result in substantial

costs and divert its efforts and attention from other aspects of its business, could put its global patents at risk of being invalidated

or interpreted narrowly and its global patent applications at risk of not issuing, and could provoke third parties to assert claims

ArTara may not prevail in any lawsuits that ArTara initiates or infringement actions brought against ArTara, and the

damages or other remedies awarded, if any, may not be commercially meaningful when ArTara is the plaintiff.

When ArTara is the

defendant it may be required to post large bonds to stay in the market while it defends itself from an infringement action.

In addition, certain

countries in Europe and certain developing countries have compulsory licensing laws under which a patent owner may be compelled

to grant licenses to third parties, especially if the patent owner does not enforce or use its patents over a protracted period

In some cases, the courts will force compulsory licenses on the patent holder even when finding the patent holder’s

patents are valid if the court believes it is in the best interests of the country to have widespread access to an essential product

covered by the patent.

In these situations, the royalty the court requires to be paid by the license holder receiving the compulsory

license is not calculated at fair market value and can be inconsequential, thereby disaffecting the patentholder’s business.

In these countries, ArTara may have limited remedies if its patents are infringed or if ArTara is compelled to grant a license

to its patents to a third party, which could also materially diminish the value of those patents.

This would limit its potential

revenue opportunities.

Accordingly, ArTara’s efforts to enforce its intellectual property rights around the world may be

inadequate to obtain a significant commercial advantage from the intellectual property that ArTara owns or licenses, especially

in comparison to what it enjoys from enforcing its intellectual property rights in the Unites States.

Finally, the company’s

ability to protect and enforce its intellectual property rights may be adversely affected by unforeseen changes in both U.S.

foreign intellectual property laws, or changes to the policies in various government agencies in these countries, including but

not limited to the patent office issuing patents and the health agency issuing pharmaceutical product approvals For example, in

Brazil, pharmaceutical patents require initial approval of the Brazilian health agency (ANVISA).

Finally, many countries have large

backlogs in patent prosecution, and in some countries in Latin America it can take years, even decades, just to get a pharmaceutical

patent application reviewed notwithstanding the merits of the application.

Obtaining and maintaining

ArTara’s patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements

imposed by governmental patent agencies, and its patent protection could be reduced or eliminated for non-compliance with these

requirements.

Periodic maintenance

and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime

we may not be able to prevent third parties from practicing our inventions in all countries outside the United States and even

in launching an identical version of our product notwithstanding we have a valid patent in that country.

Competitors may use our

technologies in jurisdictions where we have not obtained patent protection to develop their own products, or produce copy products,

and, further, may export otherwise infringing products to territories where we have patent protection but enforcement on infringing

activities is inadequate or where we have no patents.

These products may compete with our products, and our patents or other intellectual

property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered

significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain

countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection,

particularly those relating to pharmaceuticals, and the judicial and government systems are often corrupt, which could make it

difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts

and attention from other aspects of our business, could put our global patents at risk of being invalidated or interpreted narrowly

and our global patent applications at risk of not issuing, and could provoke third parties to assert claims against us.

not prevail in any lawsuits that we initiate or infringement actions brought against us, and the damages or other remedies awarded,

if any, may not be commercially meaningful when we are the plaintiff.

When we are the defendant we may be required to post large

bonds to stay in the market while we defend ourselves from an infringement action.

In addition, certain countries

in Europe and certain developing countries have compulsory licensing laws under which a patent owner may be compelled to grant

licenses to third parties, especially if the patent owner does not enforce or use its patents over a protracted period of time.

In some cases, the courts will force compulsory licenses on the patent holder even when finding the patent holder’s patents

are valid if the court believes it is in the best interests of the country to have widespread access to an essential product covered

by the patent.

In these situations, the royalty the court requires to be paid by the license holder receiving the compulsory license

is not calculated at fair market value and can be inconsequential, thereby disaffecting the patent holder’s business.

these countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents

to a third party, which could also materially diminish the value of those patents.

This would limit our potential revenue opportunities.

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant

commercial advantage from the intellectual property that we own or license, especially in comparison to what we enjoy from enforcing

our intellectual property rights in the Unites States.

Finally, our ability to protect and enforce our intellectual property rights

may be adversely affected by unforeseen changes in both U.S.

and foreign intellectual property laws, or changes to the policies

in various government agencies in these countries, including but not limited to the patent office issuing patents and the health

agency issuing pharmaceutical product approvals For example, in Brazil, pharmaceutical patents require initial approval of the

Brazilian health agency (ANVISA).

Finally, many countries have large backlogs in patent prosecution, and in some countries in Latin

America it can take years, even decades, just to get a pharmaceutical patent application reviewed notwithstanding the merits of

the application.

Obtaining and maintaining patent protection

depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental

patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance and

annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime

of the patent.

9 unchanged sentences

format and style the country requires.

If ArTara or its licensors fail to maintain the patents and patent applications covering

its product candidates for any reason, the Company’s competitors might be able to enter the market, which would have an adverse

effect on ArTara’s business.

If ArTara fails

to comply with its obligations under its intellectual property license agreements, it could lose license rights that are important

to its business.

Additionally, these agreements may be subject to disagreement over contract interpretation, which could narrow

the scope of its rights to the relevant intellectual property or technology or increase its financial or other obligations to its

ArTara has entered

into in-license arrangements with respect to certain of its product candidates.

These license agreements impose various diligence,

milestone, royalty, insurance and other obligations on ArTara.

If ArTara fails to comply with these obligations, the respective

licensors may have the right to terminate the license, in which event ArTara may not be able to develop or market the affected

product candidate.

The loss of such rights could materially adversely affect its business, financial condition, operating results

and prospects.

For more information about these license arrangements, see “ Description of ArTara’s Business—Collaborations

and License Agreements.

If ArTara is sued

for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent

or delay it from developing or commercializing its product candidates.

ArTara’s commercial

success depends on its ability to develop, manufacture, market and sell its product candidates and use its proprietary technologies

without infringing the proprietary rights of third parties.

ArTara cannot assure that marketing and selling such candidates and

using such technologies will not infringe existing or future patents.

Numerous U.S.- and foreign-issued patents and pending patent

applications owned by third parties exist in the fields relating to its product candidates.

As the biotechnology and pharmaceutical

industries expand and more patents are issued, the risk increases that others may assert that its product candidates, technologies

or methods of delivery or use infringe their patent rights.

Moreover, it is not always clear to industry participants, including

us, which patents and other intellectual property rights cover various drugs, biologics, drug delivery systems or their methods

of use, and which of these patents may be valid and enforceable.

Thus, because of the large number of patents issued and patent

applications filed in ArTara’s fields across many countries, there may be a risk that third parties may allege they have

patent rights encompassing ArTara’s product candidates, technologies or methods.

In addition, there

may be issued patents of third parties that are infringed or are alleged to be infringed by ArTara’s product candidates or

proprietary technologies notwithstanding patents ArTara may possess.

Because some patent applications in the United States may

be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions

are typically not published until 18 months after filing and because publications in the scientific literature often lag behind

actual discoveries, ArTara cannot be certain that others have not filed patent applications for technology covered by its own and

in-licensed issued patents or its pending applications.

ArTara’s competitors may have filed, and may in the future file,

patent applications covering ArTara’s own product candidates or technology similar to ArTara’s technology.

patent application may have priority over ArTara’s own and in-licensed patent applications or patents, which could further

require ArTara to obtain rights to issued patents covering such technologies, which may mean paying significant licensing fees

If we or our licensors fail to maintain the patents and patent applications covering our

product candidates for any reason, our competitors might be able to enter the market, which would have an adverse effect on our

If we fail to comply with our obligations

under our intellectual property license agreements, we could lose license rights that are important to our business.

Additionally,

these agreements may be subject to disagreement over contract interpretation, which could narrow the scope of our rights to the

relevant intellectual property or technology or increase our financial or other obligations to our licensors.

We have entered into in-license

arrangements with respect to certain of our product candidates.

These license agreements impose various diligence, milestone, royalty,

insurance and other obligations on us.

If we fail to comply with these obligations, the respective licensors may have the right

to terminate the license, in which event we may not be able to develop or market the affected product candidate.

The loss of such

rights could materially adversely affect our business, financial condition, operating results and prospects.

If we are sued for infringing intellectual

property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing

or commercializing our product candidates.

Our commercial success

depends on our ability to develop, manufacture, market and sell our product candidates and use our proprietary technologies without

infringing the proprietary rights of third parties.

We cannot assure that marketing and selling such candidates and using such

technologies will not infringe existing or future patents.

Numerous U.S.- and foreign-issued patents and pending patent applications

owned by third parties exist in the fields relating to our product candidates.

As the biotechnology and pharmaceutical industries

expand and more patents are issued, the risk increases that others may assert that our product candidates, technologies or methods

of delivery or use infringe their patent rights.

Moreover, it is not always clear to industry participants, including us, which

patents and other intellectual property rights cover various drugs, biologics, drug delivery systems or their methods of use, and

which of these patents may be valid and enforceable.

Thus, because of the large number of patents issued and patent applications

filed in our fields across many countries, there may be a risk that third parties may allege they have patent rights encompassing

our product candidates, technologies or methods.

In addition, there may

be issued patents of third parties that are infringed or are alleged to be infringed by our product candidates or proprietary technologies

notwithstanding patents we may possess.

Because some patent applications in the United States may be maintained in secrecy until

the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published

until 18 months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot

be certain that others have not filed patent applications for technology covered by our own and in-licensed issued patents or our

pending applications.

Our competitors may have filed, and may in the future file, patent applications covering our product candidates

or technology similar to our technology.

Any such patent application may have priority over our own and in-licensed patent applications

or patents, which could further require us to obtain rights to issued patents covering such technologies, which may mean paying

significant licensing fees or the like.

If another party has filed a U.S.

patent application on inventions similar to those owned or in-licensed to us, ArTara

or, in the case of in-licensed technology, the licensor may have to participate, in the United States, in an interference proceeding

to determine priority of invention.

ArTara may be exposed

to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that its

product candidates or proprietary technologies infringe such third parties’ intellectual property rights, including litigation

resulting from filing under Paragraph IV of the Hatch-Waxman Act or other countries’ laws similar to the Hatch-Waxman Act.

These lawsuits could claim that there are existing patent rights for such drug, and this type of litigation can be costly and could

adversely affect its operating results and divert the attention of managerial and technical personnel, even if ArTara does not

infringe such patents or the patents asserted against ArTara is ultimately established as invalid.

There is a risk that a court

would decide that ArTara is infringing the third party’s patents and would order ArTara to stop the activities covered by

In addition, there is a risk that a court will order ArTara to pay the other party significant damages for having

violated the other party’s patents.

Because ArTara relies

on certain third-party licensors and partners and will continue to do so in the future, if one of its licensors or partners is

sued for infringing a third party’s intellectual property rights, ArTara’s business, financial condition, operating

results and prospects could suffer in the same manner as if ArTara were sued directly.

In addition to facing litigation risks,

ArTara has agreed to indemnify certain third-party licensors and partners against claims of infringement caused by ArTara’s

proprietary technologies, and ArTara has entered or may enter into cost-sharing agreements with some its licensors and partners

that could require ArTara to pay some of the costs of patent litigation brought against those third parties whether or not the

alleged infringement is caused by its proprietary technologies.

In certain instances, these cost-sharing agreements could also

require ArTara to assume greater responsibility for infringement damages than would be assumed just on the basis of its technology.

The occurrence of

any of the foregoing could adversely affect ArTara’s business, financial condition or operating results.

ArTara may be subject

to claims that its officers, directors, employees, consultants or independent contractors have wrongfully used or disclosed to

ArTara alleged trade secrets of their former employers or their former or current customers.

As is common in the

biotechnology and pharmaceutical industries, certain of ArTara’s employees were formerly employed by other biotechnology

or pharmaceutical companies, including its competitors or potential competitors.

Moreover, ArTara engages the services of consultants

to assist ArTara in the development of ArTara’s products and product candidates, many of whom were previously employed at,

or may have previously been or are currently providing consulting services to, other biotechnology or pharmaceutical companies,

including its competitors or potential competitors.

ArTara may be subject to claims that these employees and consultants or ArTara

has inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers or their

former or current customers.

Although ArTara has no knowledge of any such claims being alleged to date, if such claims were to

arise, litigation may be necessary to defend against any such claims.

Even if ArTara is successful in defending against any such

claims, any such litigation could be protracted, expensive, a distraction to its management team, not viewed favorably by investors

and other third parties, and may potentially result in an unfavorable outcome.

Unresolved Staff

patent application on inventions similar to those owned

or in-licensed to us, or, in the case of in-licensed technology, the licensor may have to participate, in the United States, in

an interference proceeding to determine priority of invention.

We may be exposed to,

or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our product

candidates or proprietary technologies infringe such third parties’

intellectual property rights, including litigation resulting

from filing under Paragraph IV of the Hatch-Waxman Act or other countries’

laws similar to the Hatch-Waxman Act.

These lawsuits

could claim that there are existing patent rights for such drug, and this type of litigation can be costly and could adversely

affect our operating results and divert the attention of managerial and technical personnel, even if we do not infringe such patents

or the patents asserted against us is ultimately established as invalid.

There is a risk that a court would decide that we are

infringing the third party’s patents and would order us to stop the activities covered by the patents.

In addition, there

is a risk that a court will order us to pay the other party significant damages for having violated the other party’s patents.

Because we rely on certain

third-party licensors and partners and will continue to do so in the future, if one of our licensors or partners is sued for infringing

a third party’s intellectual property rights, our business, financial condition, operating results and prospects could suffer

in the same manner as if we were sued directly.

In addition to facing litigation risks, we have agreed to indemnify certain third-party

licensors and partners against claims of infringement caused by our proprietary technologies, and we have entered or may enter

into cost-sharing agreements with some our licensors and partners that could require us to pay some of the costs of patent litigation

brought against those third parties whether or not the alleged infringement is caused by our proprietary technologies.

instances, these cost-sharing agreements could also require us to assume greater responsibility for infringement damages than would

be assumed just on the basis of our technology.

The occurrence of any

of the foregoing could adversely affect our business, financial condition or operating results.

We may be subject to claims that our

officers, directors, employees, consultants or independent contractors have wrongfully used or disclosed to us alleged trade secrets

of their former employers or their former or current customers.

As is common in the biotechnology

and pharmaceutical industries, certain of our employees were formerly employed by other biotechnology or pharmaceutical companies,

including our competitors or potential competitors.

Moreover, we engage the services of consultants to assist us in the development

of our products and product candidates, many of whom were previously employed at, or may have previously been or are currently

providing consulting services to, other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

We may be subject to claims that these employees and consultants or we have inadvertently or otherwise used or disclosed trade

secrets or other proprietary information of their former employers or their former or current customers.

Although we have no knowledge

of any such claims being alleged to date, if such claims were to arise, litigation may be necessary to defend against any such

Even if we are successful in defending against any such claims, any such litigation could be protracted, expensive, a distraction

to our management team, not viewed favorably by investors and other third parties, and may potentially result in an unfavorable

General Risk Factors

We do not anticipate paying any dividends

in the foreseeable future.

The current expectation

is that we will retain our future earnings to fund the development and growth of our business.

As a result, capital appreciation,

if any, of your shares of us will be your sole source of gain, if any, for the foreseeable future.

Our business and operations would suffer

in the event of system failures, cyber-attacks or a deficiency in our cyber-security.

Despite the implementation

of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants

are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and

electrical failures.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including

by computer hackers, foreign governments, and cyber-terrorists, has generally increased as the number, intensity and sophistication

of attempted attacks and intrusions from around the world have increased.

If such an event were to occur and cause interruptions

in our operations, it could result in a material disruption of our development programs and our business operations.

quarter of 2020, our email server was compromised in a cyber-attack.

We quickly isolated the incident and have, since, implemented

additional risk prevention measures.

In addition, since we sponsor clinical trials, any breach that compromises patient data and

identities causing a breach of privacy could generate significant reputational damage and legal liabilities and costs to recover

and repair, including affecting trust in us to recruit for future clinical trials.

For example, the loss of clinical trial data

from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our

costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result in a loss of, or damage

to, our data or applications or inappropriate disclosure of confidential or proprietary information, we could incur liability and

the further development and commercialization of our products and product candidates could be delayed.

If equity research analysts do not publish

research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading

volume could decline.

The trading market for

our common stock is influenced by the research and reports that equity research analysts publish about us and our business.

research analysts may elect not to provide research coverage of our common stock, and such lack of research coverage may adversely

affect the market price of our common stock.

In the event we do have equity research analyst coverage, we will not have any control

over the analysts or the content and opinions included in their reports.

The price of our common stock could decline if one or

more equity research analysts downgrade our stock or issue other unfavorable commentary or research.

If one or more equity research

analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which in

turn could cause our stock price or trading volume to decline.

Unresolved Staff Comments.

This item is not applicable.

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-K

Item 1A. Risk Factors