What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-12 · 149 added, 107 removed, 335 unchanged (43% of the section changed)

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Forward Looking Statements

This Quarterly Report on Form 10-Q for the three-month

period ended March 31, 2022 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended

(the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking

statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization efforts,

business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking statements

are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

risks and changes in circumstances that are difficult to predict.

These statements may be identified by words such as “expects,”

“plans,” “projects,” “will,” “may,” “anticipates,” “believes,”

“should,” “intends,” “estimates,” and other words of similar meaning.

This Quarterly Report on Form 10-Q for the three

and six-month periods ended June 30, 2022 contains “forward-looking statements” within the meaning of the Securities Act of

1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking statements contain information about our expectations, beliefs or intentions regarding our product development and

commercialization efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters.

forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently

subject to uncertainties, risks and changes in circumstances that are difficult to predict.

These statements may be identified by words

such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,”

“believes,” “should,” “intends,” “estimates,” and other words of similar meaning.

Actual results could differ materially from those

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dollars, unless otherwise noted.

We are a biotechnology company dedicated to developing

treatments for certain medical conditions.

Currently, two of our programs are focused on kidney disease that we believe have the potential

to offer medical benefit.

As we grow the Company and build our team, we intend to focus on identifying medical conditions within and outside

of kidney disease.

Our current development programs are focused on the development of two novel therapies:

Renazorb, for treatment of

hyperphosphatemia in patients with chronic kidney disease, and UNI 494, for treatment of acute kidney injury (AKI).

We are a clinical-stage biotechnology company dedicated to developing treatments for serious and life-threatening diseases.

two of our programs are focused on kidney diseases that we believe have the potential to offer medical benefit.

As we grow the Company

and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease.

Our current development

programs are focused on the development of two novel therapies:

Renazorb, for treatment of hyperphosphatemia in patients with endstage

renal disease (ESRD), a latestage chronic kidney disease, and UNI-494, for treatment of acute kidney injury (AKI).

Based on the unique

mechanism of action of UNI-494 to restore mitochondrial function, UNI-494 has potential applications in several indications in which mitochondrial

dysfunction is implicated, such as chronic kidney disease (CKD), liver diseases and ophthalmic diseases.

Chronic kidney disease (CKD) is the gradual loss

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and is caused by multiple etiologies.

Our business model is to license technologies

and drugs and pursue development, regulatory approval, and commercialization of those products in global markets.

Many biotechnology companies

utilize similar strategies of in-licensing and then developing and commercializing drugs.

We believe, however, that our management team’s

broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing

these assets into the Company at an attractive price with limited upfront cost.

Since our formation we have devoted substantially

all of our resources to developing our product candidates.

We have incurred significant operating losses to date.

Our net losses were

$10.0 million and $3.5 million for the twelve months ended December 31, 2021 and for the three months ended March 31, 2022,

respectively.

As of March 31, 2022, we had an accumulated deficit of $19.5 million.

We expect that our operating expenses will increase

significantly as we continue to advance our product candidates through pre-clinical and clinical development, seek regulatory approval,

and prepare for and, if approved, proceed to commercialization;

acquire, discover, validate and develop additional product candidates;

Our business model is to license drugs and technologies, and pursue development, regulatory approval, and commercialization of those products

in global markets.

Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.

We believe, however, that our management team’s broad network and extensive drug development expertise in the biopharmaceutical

industry, and successful track record, gives us an advantage in identifying and bringing these assets into the Company at an attractive

price with limited upfront cost.

Since our formation we have devoted substantial resources to developing our product candidates.

incurred significant operating losses to date.

Our net losses were $2.0 million and $7.2 million for the six months ended June 30, 2021,

and for the six months ended June 30, 2022, respectively.

As of June 30, 2022, we had an accumulated deficit of $23.1 million.

that our operating expenses will increase significantly as we continue to advance our product candidates through pre-clinical and clinical

development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization;

acquire, discover, validate, and

develop additional product candidates;

obtain, maintain, protect, and enforce our intellectual property portfolio;

and hire additional personnel.

In addition, we expect to incur

additional costs associated with operating as a public company.

and hire additional

personnel to execute our plans.

In addition, we expect to incur additional costs associated with operating as a public company.

We have funded our operations primarily from the

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supply the materials to be used during the development and commercialization of our product candidates.

The COVID-19 Pandemic and its Impacts on Our

The Impact of the COVID-19 Pandemic and Climate

Change on Our Business

In March 2020, the World Health Organization declared

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financial statements.

Our suppliers and service providers may also experience

a disruption in their business as a result of natural or man-made disasters.

A significant natural or man-made disaster, such as an earthquake,

prolonged or repeated power outage, fire, drought or other extreme weather events and changing weather patterns, which are increasing

in frequency due to the impacts of climate change, could severely damage our facilities or the facilities of our suppliers or service

providers, which could have a material adverse effect on our business and financial condition.

At the current time, we are unable to quantify

the potential effects of climate change on our future financial statements.

Components of Results of Operations

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Results of Operations

Comparison of the Three Months Ended March 31,

Comparison of the Three Months Ended June 30,

2021 and 2022

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Interest expense

Total other income (expenses)

Research and Development Expenses

Research and development expenses increased by

approximately $1.4 million, or 277%, from approximately $493,000 for the three months ended June 30, 2021 to approximately $1.9 million

for the three months ended June 30, 2022.

The increase in research and development expenses was primarily due to a $895,000 increase in

drug development costs.

Labor costs increased $625,000 from the prior period.

Other costs increased $17,000.

Non-cash stock compensation

decreased $170,000.

General and Administrative Expenses

General and administrative expenses increased

by $1.5 million, or 521%, from approximately $286,000 for the three months ended June 30, 2021 to approximately $1.8 million for the three

months ended June 30, 2022 primarily due to an increase of $389,000 in insurance expense for directors and officers.

Labor costs increased

$306,000 from the prior period.

Consulting and professional services costs increased $299,000.

Stock compensation increased $169,000,

and travel, rent, and other costs increased $327,000.

Other Income (Expenses)

Other income (expenses) decreased by $321,000,

or 100% from approximately $321,000 for the three months ended June 30, 2021 to $0 for the three months ended June 30, 2022.

was due to the conversion to equity in July 2021 of our outstanding convertible notes, including accrued interest, as a result of our

initial public offering.

Comparison of the Six Months Ended June 30,

2021 and 2022

The following table summarizes our results of

operations for the periods indicated (in thousands):

Six Months Ended

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expenses):

Interest expense

Gain on extinguishment of debt

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Research and development expenses increased by

approximately $1.5 million, or 330%, from approximately $450,000 for the three months ended March 31, 2021 to approximately $1.9 million

for the three months ended March 31, 2022.

The increase in research and development expenses was primarily due to a $843,000 increase

approximately $2.9 million, or 303%, from approximately $942,000 for the six months ended June 30, 2021 to approximately $3.8 million

for the six months ended June 30, 2022.

The increase in research and development expenses was primarily due to a $1.9 million increase

in drug development costs.

Labor costs increased $604,000 from the prior period.

Consulting and other costs increased $123,000.

stock compensation decreased $85,000.

Labor costs increased $1.2 million from the prior period.

Other costs increased $22,000.

Non-cash stock compensation

decreased $255,000.

General and Administrative Expenses

General and administrative expenses increased

by $1.3 million, or 471%, from approximately $281,000 for the three months ended March 31, 2021 to approximately $1.6 million for the

three months ended March 31, 2022 primarily due to an increase of $389,000 in insurance expense for directors and officers.

increased $293,000 from the prior period.

Consulting and professional services costs increased $371,000, and stock compensation, travel,

rent, and other costs increased $270,000.

by $2.8 million, or 495%, from approximately $568,000 for the six months ended June 30, 2021 to approximately $3.4 million for the six

months ended June 30, 2022 primarily due to an increase of $778,000 in insurance expense for directors and officers.

Labor costs increased

$597,000 from the prior period.

Consulting and professional services costs increased $626,000.

Stock compensation increased $342,000,

and travel, rent, and other costs increased $469,000.

Other Income (Expenses)

Other income (expenses) decreased by $554,000,

or 100% from approximately $233,000 for the three months ended March 31, 2021 to $0 for the three months ended March 31, 2022.

or 100% from approximately $554,000 for the six months ended June 30, 2021 to $0 for the six months ended June 30, 2022.

was due primarily to the conversion to equity in July 2021 of our outstanding convertible notes, including accrued interest, as a result

of our initial public offering.

The decrease was partially offset by a gain on debt extinguishment of $19,000 during the three months

ended March 31, 2021.

The decrease was partially offset by a gain on debt extinguishment of $19,000 during the six months ended

June 30, 2021.

Liquidity and Capital Resources

Sources of Liquidity

Since our formation through March 31, 2022, we

Since our formation through June 30, 2022, we

have funded our operations with the sale of common stock, convertible notes and from a loan from our Chief Executive Officer and principal

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We have incurred net losses since our inception.

For the three months ended March 31, 2022, we had a net loss of $3.5 million, and we expect to incur substantial additional losses

in future periods.

As of March 31, 2022, we had an accumulated deficit of $19.5 million.

For the six months ended June 30, 2022, we had a net loss of $7.2 million, and we expect to incur substantial additional losses in

future periods.

As of June 30, 2022, we had an accumulated deficit of $23.1 million.

We expect to continue incurring losses for the

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level of expenditures, after receiving the net proceeds of $22.3 million on July 15, 2021 as a result of the Company’s IPO

and given the Company’s cash balance of approximately $13.6 million as of March 31, 2022, the Company believes that it will need

and given the Company’s cash balance of approximately $10.6 million as of June 30, 2022, the Company believes that it will need

funding before the end of the second quarter 2023 to continue operations, satisfy its obligations and fund the future expenditures that

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additional capital, the requirements for which will depend on many factors, including:

scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and

clinical trials for our current product candidates and future product candidates;

number and scope of clinical programs we decide to pursue;

cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

scope and costs of development and commercial manufacturing activities;

cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing

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

costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending

intellectual property-related claims;

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

efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support

the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following

FDA approval;

impact, if any, of the coronavirus pandemic on our business operations;

ability to access capital;

implementation of operational, financial and management systems;

costs associated with being a public company.

the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates;

the number and scope of clinical programs we decide to pursue;

the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

the scope and costs of development and commercial manufacturing activities;

the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval;

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

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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

our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

the impact, if any, of the coronavirus pandemic on our business operations;

our ability to access capital;

our implementation of operational, financial and management systems;

the costs associated with being a public company.

A change in the outcome of any of these or other

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Related Party Payable

We entered into a Service Agreement on July 1,

2017, as amended on April 6, 2020 (“Service Agreement”), with Globavir Biosciences, Inc.

We entered into a Service Agreement on July 1, 2017, as amended on

April 6, 2020 (“Service Agreement”), with Globavir Biosciences, Inc.

(“Globavir”).

Executive Officer is also the Chief Executive Officer of Globavir.

Pursuant to the Service Agreement, we receive administrative, consulting

services, shared office space and other services in connection with our drug development programs.

The initial amended term of the Service

Agreement expired on December 31, 2020, and the agreement automatically renews for successive one-month periods after the initial termination

Pursuant to the Service Agreement, we paid Globavir $50,000 per month through December 31, 2019 and $10,000 per month commencing

on January 1, 2020.

During the fourth quarter of 2021, we determined that future services under the Service Agreement were no longer required,

and we wrote off the $28,000 remaining prepaid balance due from Globavir as of December 31, 2021.

During the three months ended March

31, 2022, after determining that although a shared office space is no longer utilized, consulting services continue to be provided, the

Company plans to amend the Service Agreement to reflect the consulting services and a reduced service fee of $6,000 per month.

Our Chief Executive Officer

is also the Chief Executive Officer of Globavir.

Pursuant to the Service Agreement, we receive administrative, consulting services, shared

office space and other services in connection with our drug development programs.

The initial amended term of the Service Agreement expired

on December 31, 2020, and the agreement automatically renews for successive one-month periods after the initial termination date.

to the Service Agreement, we paid Globavir $50,000 per month through December 31, 2019 and $10,000 per month commencing on January 1,

During the fourth quarter of 2021, we determined that future services under the Service Agreement were no longer required, and we

wrote off the $28,000 remaining prepaid balance due from Globavir as of December 31, 2021.

During the six months ended June 30, 2022,

after determining that although a shared office space is no longer utilized, consulting services continued to be provided, we amended

the Service Agreement to reflect the consulting services at a reduced service fee of $6,000 per month and a termination date of June 30,

Convertible Notes

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and uses of cash for each of the periods presented below (in thousands):

Three Months Ended

Six Months Ended

Net cash (used in) provided by:

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Net cash used in operating activities was $6.0

million for the three months ended March 31, 2022.

million for the six months ended June 30, 2022.

Cash used in operating activities was primarily due to the use of funds for development

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Net cash used in operating activities was $890,000

for the three months ended March 31, 2021.

for the six months ended June 30, 2021.

Cash used in operating activities was primarily due to the use of funds in our operations for

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Net cash used in investing activities was $2,000

for the three months ended March 31, 2022 and was due to the purchase of furniture and fixtures for our corporate office.

There were no

comparable fixed asset purchases during the prior year.

for the six months ended June 30, 2022 and was due to the purchase of furniture and fixtures for our corporate office.

There were no comparable

fixed asset purchases during the prior year.

Cash Flows from Financing Activities

There were no cash flows provided by financing

activities during the three months ended March 31, 2022.

activities during the six months ended June 30, 2022.

Net cash provided by financing activities was

$820,000 for the three months ended March 31, 2021 and was primarily related to the issuance of convertible notes to investors for $1.0

million as well as the receipt of $119,000 in proceeds from the exercise of options.

Net repayments on loans from our chief executive

officer offset the cash inflows by $309,000.

$891,000 for the six months ended June 30, 2021 and was primarily related to the issuance of convertible notes to investors for $1.0 million

as well as the receipt of $119,000 in proceeds from the exercise of options.

Net repayments on loans from our chief executive officer

offset the cash inflows by $223,000.

Critical Accounting Policies, Significant Judgments

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policies and estimates to be related to research and development accruals, stock-based compensation and common stock valuations.

have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2022 from those

used for the year ended December 31, 2021.

have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2022 from those used

for the year ended December 31, 2021.

The below policies are listed to provide a list of our policies for the most significant critical

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis