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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 422 added, 345 removed, 53 unchanged (94% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

should read the following discussion and analysis of our financial condition and plan of operations together with and our accompanying

financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.

In addition to historical information,

this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results

may differ materially from those discussed below.

Factors that could cause or contribute to such differences include, but are not limited

to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report

on Form 10-K.

All amounts in this report are in U.S.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and

analysis of our financial condition and plan of operations together with and our accompanying financial statements and the related notes

appearing elsewhere in this Annual Report on Form 10-K.

In addition to historical information, this discussion and analysis contains

forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results may differ materially from those discussed

Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those

discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K.

All amounts in this

report are in U.S.

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).

treatments for kidney disease that have the potential to offer medical benefit.

Our 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).

Chronic kidney disease (CKD) is the gradual loss

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Our initial focus is developing drugs and getting them approved

in the US, and then to partner with global biopharmaceutical companies in the rest of the world.

According to estimates by The Centers

for Disease Control and Prevention (CDC) in 2019, 37 million (approximately 15%) adults in the United States have CKD and, of these, approximately

2 million patients with CKD stage 3-5, and around 400 thousand patients with end-stage renal disease (ESRD) have hyperphosphatemia.

the European Union (EU), around 20 million (approximately 8%) adults have CKD, more than 1 million CKD stage 3-5 patients, and approximately

180 thousand patients with ESRD have hyperphosphatemia.

The number of patients with ESRD in the US is increasing steadily and is projected

to reach between 971,000 and 1,259,000 in 2030.

is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury).

After 90 days, the patient is considered

to have progressed into CKD.

AKI affects over 2 million US patients and costs the healthcare system over $9 billion per year.

more than 300,000 patients per year in the US and is caused by multiple etiologies.

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.

in the US, and then look to partner with the other global biopharmaceutical companies in the rest of the world.

According to estimates

by The Centers for Disease Control and Prevention (CDC) in 2019, 37 million (approximately 15%) adults in the United States have CKD

and, of these, approximately 2 million patients with CKD stage 3-5, and around 400 thousand patients with end-stage renal disease (ESRD)

have hyperphosphatemia.

In the European Union (EU), around 20 million (approximately 8%) adults have CKD, more than 1 million CKD stage

3-5 patients, and approximately 180 thousand patients with ESRD have hyperphosphatemia.

The number of patients with ESRD is increasing

steadily and is projected to reach between 971,000 and 1,259,000 in 2030.

AKI is a sudden episode of kidney failure or

kidney damage (within the first 90 days of injury).

After 90 days, the patient is considered to have progressed into CKD.

over 2 million US patients and costs the healthcare system over $9 billion per year.

AKI kills more than 300,000 patients per year in

the US 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

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and hire additional personnel.

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

have funded our operations primarily from the sale and issuance of common stock, convertible promissory notes and from a loan, including

cash and deferred salary from our Chief Executive Officer and principal stockholder.

ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of

our current product candidates and future product candidates.

Until such time as we can generate significant revenue from product sales,

if ever, we expect to finance our operations through private or public equity or debt financings, collaborative or other arrangements

with corporate sources, or through other sources of financing.

Adequate funding may not be available to us on acceptable terms, or at

If we fail to raise capital or enter into agreements to raise capital as and when needed, we may have to significantly delay, scale

back or discontinue the development and commercialization of our current product candidates and future product candidates.

plan to continue to use third-party service providers, including contract manufacturing organizations, to carry out our pre-clinical

and clinical development and to manufacture and supply the materials to be used during the development and commercialization of our product

Between January 1, 2021 and May 19, 2021, we issued a series of convertible

promissory notes in the aggregate principal amount of $1.1 million.

These notes bear interest at a rate of 12% per annum and mature on

the one year anniversary of their respective dates of issuance.

These notes automatically converted into common stock upon consummation

of our IPO at 70% of the public offering price per unit.

As a result of its IPO, on July 13, 2021 the Company

began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 received approximately $22.3 million

in net proceeds after deducting the underwriting discounts, commissions, and offering expenses.

July 15, 2021, in connection with the completion of the Company’s IPO, all outstanding convertible notes, including principal and

accrued interest, were automatically converted into shares of common stock.

The conversion was calculated based on 70% of the IPO price

per unit and resulted in the issuance of 736,773 shares of common stock and 184,193 warrants to purchase additional shares of common

COVID-19 Pandemic and its Impacts on Our Business

March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.

This pandemic could result in difficulty

securing clinical trial site locations, CROs, and/or trial monitors and other critical vendors and consultants supporting our trial.

These situations, or others associated with COVID-19, could cause delays in our clinical trial plans and could increase expected costs,

all of 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 this pandemic on our future financial statements.

of Results of Operations

and Development Expenses

Substantially

all of our research and development expenses consist of expenses incurred in connection with the development of our product candidates.

These expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs,

costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries

and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees and allocated

overheads, including information technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution

clause in the purchase of in process research and development technology (“IPR&D”).

We expense both internal and external

research and development expenses as they are incurred.

do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs,

such as payroll and other personnel expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third

parties to conduct research and development activities on our behalf, are not tracked by product candidate.

expect our research and development expenses to increase substantially for at least the next few years, as we seek to initiate additional

clinical trials for our product candidates, complete our clinical programs, pursue regulatory approval of our product candidates and

prepare for the possible commercialization of such product candidates.

Predicting the timing or cost to complete our clinical programs

or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including

factors outside of our control.

For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials

beyond those that we currently anticipate, we could be required to expend significant additional financial resources and time on the

completion of clinical development.

Furthermore, we are unable to predict when or if our product candidates will receive regulatory approval

with any certainty.

and Administrative Expenses

and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based

compensation expenses, professional fees for legal, consulting, accounting and tax services, including information technology costs and

utilities, and other general operating expenses not otherwise classified as research and development expenses, as well as services incurred

pursuant to a services agreement with Globavir Biosciences Inc., a related party.

anticipate that our general and administrative expenses will increase as a result of increased personnel costs, expanded infrastructure

and higher consulting, legal and accounting services costs associated with complying with the applicable stock exchange and the SEC requirements,

investor relations costs and director and officer insurance premiums associated with being a public company.

expenses consist primarily of interest expense related to convertible notes and a loss on conversion of convertible notes.

of Operations

of the Years Ended December 31, 2020 and 2021 (in thousands)

Operating expenses:

and administrative

We have funded our operations primarily from

the sale and issuance of common stock, convertible promissory notes and from a loan, including cash and deferred salary from our Chief

Executive Officer and principal stockholder.

Our ability to generate

product revenue will depend on the successful development, regulatory approval and eventual commercialization of our current product

candidates and future product candidates.

Until such time as we can generate significant revenue from product sales, if ever, we expect

to finance our operations through private or public equity or debt financings, collaborative or other arrangements with corporate sources,

or through other sources of financing.

Adequate funding may not be available to us on acceptable terms, or at all.

If we fail to raise

capital or enter into agreements to raise capital as and when needed, we may have to significantly delay, scale back or discontinue the

development and commercialization of our current product candidates and future product candidates.

We plan to continue

to use third-party service providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development

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

Recent Developments

On March 3, 2023, we entered into a securities

purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to

which we agreed to issue and sell, in a private placement (the “Offering”), 30,190 shares of Series A-1 Convertible Preferred

Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), which offering will result in up to $130 million in

gross proceeds and initial upfront funding of $30 million.

Pursuant to the Certificate of Designation of

Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Certificate of Designation”),

each share of Series A-1 Preferred Stock is, subject to the Stockholder Approval (as defined below), convertible into a unit (“Unit”)

consisting of (i) shares of common stock, par value $0.001 per share (the “Common Stock”) and, if applicable, shares of Series

A-2 Convertible Preferred Stock, par value $0.001 per share (the “Series A-2 Preferred Stock”), in lieu of Common Stock,

(ii) a tranche A warrant to acquire shares of Series A-3 Convertible Preferred Stock (the “Tranche A Warrant”), (iii) a tranche

B warrant to acquire shares of Series A-4 Convertible Preferred Stock (the “Tranche B Warrant”), and (iv) a tranche C warrant

to acquire shares of Series A-5 Convertible Preferred Stock (the “Tranche C Warrant”, together with the Tranche A Warrant

and the Tranche B Warrant, the “Warrants”).

The shares of Series A-3 Convertible Preferred Stock, Series A-4 Convertible

Preferred Stock and Series A-5 Convertible Preferred Stock issuable upon exercise of the Warrants collectively are referred to herein

as the “Preferred Warrant Shares”.

The Tranche A warrants for an aggregate exercise price of approximately $25 million are

exercisable until 21 days following our announcement of receipt of FDA approval for Renazorb, the Tranche B warrants for an aggregate

exercise price of approximately $25 million are exercisable until 21 days following our announcement of receipt of Transitional Drug

Add-On Payment Adjustment (“TDAPA”) approval for Renazorb, and the Tranche C Warrant for an aggregate exercise price of approximately

$50 million are exercisable until 21 days following four quarters of commercial sales of Renazorb following receipt of TDAPA approval.

Subject to the terms and limitations contained

in the Certificate of Designation, the Series A-1 Preferred Stock issued in the Offering will not become convertible until our stockholders

approve the issuance of the Units upon conversion of the Series A-1 Preferred Stock and the issuance of all Common Stock upon conversion

of the Series A Preferred Stock (as defined below), among other items (the “Stockholder Approval”).

On the tenth (10th) Trading

Day (as defined in the Certificate of Designation) following the announcement of the Stockholder Approval, each share of Series A-1 Preferred

Stock shall automatically convert into a Unit.

Subject to the limitations set forth in the Certificate of Designation, at the option

of the holder, each share of Series A-2 Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock

or Series A-5 Convertible Preferred Stock shall be convertible into one share of Common Stock.

In addition, in connection with the Offering,

we agreed to modify our dividend policy to state that we intend to pay dividends to all stockholders, including holders of Series A Preferred

Stock on an as-if-converted-to-Common-Stock basis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends

shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following approval of Renazorb by the FDA,

if obtained, and the commencement of commercial sales.

The COVID-19 Pandemic and its Impacts on Our

In March 2020, the World Health Organization

declared the outbreak of COVID-19 a global pandemic.

This pandemic could result in difficulty securing clinical trial site locations,

CROs, and/or trial monitors and other critical vendors and consultants supporting our trial.

These situations, or others associated with

COVID-19, could cause delays in our clinical trial plans and could increase expected costs, all of 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 this pandemic

on our future financial statements.

Components of Results of Operations

We recognize revenue from product sales or services

rendered when control of the promised goods are transferred to a counterparty in an amount that reflects the consideration to which we

expect to be entitled in exchange for those goods and services.

To achieve this core principle, we apply the following five steps:

the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction

price to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.

We may earn licensing

revenue in the future if we negotiate business development arrangements with third parties.

Research and Development Expenses

Substantially all of our research and development

expenses consist of expenses incurred in connection with the development of our product candidates.

These expenses include fees paid

to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies,

product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit

costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including information

technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in process

research and development technology (“IPR&D”).

We expense both internal and external research and development expenses

as they are incurred.

We do not allocate our costs by product candidate,

as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory

supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities

on our behalf, are not tracked by product candidate.

We expect our research and development expenses

to increase substantially for at least the next few years, as we seek to initiate additional clinical trials for our product candidates,

complete our clinical programs, pursue regulatory approval of our product candidates and prepare for the possible commercialization of

such product candidates.

Predicting the timing or cost to complete our clinical programs or validation of our commercial manufacturing

and supply processes is difficult and delays may occur because of many factors, including factors outside of our control.

if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, we

could be required to expend significant additional financial resources and time on the completion of clinical development.

we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.

General and Administrative Expenses

General and administrative expenses consist principally

of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees

for legal, consulting, accounting and tax services, including information technology costs and utilities, and other general operating

expenses not otherwise classified as research and development expenses, as well as services incurred pursuant to a services agreement

with Globavir Biosciences Inc., a related party.

We anticipate that our general and administrative

expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting

services costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director

and officer insurance premiums associated with being a public company.

Other Expenses

Other expenses consist primarily of interest

expense related to convertible notes and a loss on conversion of convertible notes.

Results of Operations

Comparison of the Years Ended December 31,

2021 and 2022 (in thousands)

Licensing revenues:

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

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Loss on debt conversion

on extinguishment of debt

other income (expenses)

and Development Expenses

Research and development expenses increased by approximately $5.1 million,

or 499%, from $1.0 million for the year ended December 31, 2020 to $6.1 million for the year ended December 31, 2021.

in research and development expenses was primarily due to a $2.1 million increase in non-cash expense from the issuance of common stock

pursuant to the anti-dilution clause in the purchase of in process research and development technology from Spectrum Pharmaceuticals,

Gain on extinguishment of debt

Total other income (expenses)

Licensing Revenues

Licensing revenues increased approximately $1.0

million, or 100%, from the prior year due to a licensing agreement entered into with Lee’s Pharmaceutical (HK) Limited in July

We received an upfront payment of approximately $1.0 million.

There was no comparable revenue earned in the prior period.

earn additional licensing revenue in the future if we negotiate business development arrangements with third parties.

Research and Development Expenses

Research and development expenses increased by

approximately $6.4 million, or 105%, from $6.1 million for the year ended December 31, 2021 to $12.4 million for the year ended

December 31, 2022.

The increase in research and development expenses was primarily due to an increase in development costs of $6.5 million

due to product formulation, clinical study, and preclinical study services in the current period.

New employee hires increased labor

costs $1.6 million, and consulting and other costs increased $756,000 from the prior period.

The increase was partially offset by a $2.2

million decrease in non-cash expense from the issuance of common stock in 2021 pursuant to the anti-dilution clause in the purchase of

in process research and development technology from Spectrum Pharmaceuticals, Inc.

In addition, non-cash stock compensation costs decreased

$338,000 from the prior period.

General and Administrative Expenses

General and administrative expenses increased by approximately $3.7

million, or 127%, from $2.9 million for the year ended December 31, 2021 to $6.6 million for the year ended December 31, 2022 primarily

due to an increase of $1.4 million in consulting and professional services costs.

Labor costs increased $747,000 due to hiring of new

Non-cash stock compensation costs increased $419,000.

In addition, development costs increased $1.4 million due to product formulation

and preclinical study services in the current period.

New employee hires increased labor costs $868,000, and consulting and other costs

increased $178,000 from the prior period.

and Administrative Expenses

General and administrative expenses increased

by approximately $1.9 million, or 188%, from $1.0 million for the year ended December 31, 2020 to $2.9 million for the year ended December 31,

2021 primarily due to an increase of $729,000 in insurance expense for directors and officers.

Labor costs increased $410,000 due to hiring

of new employees.

Consulting and professional services costs increased $401,000.

Stock compensation increased $187,000, and rent, travel,

supplies and other costs increased $165,000.

Income (Expenses)

Other income (expenses) increased by approximately $796,000, or 326%

from $244,000 for the year ended December 31, 2020 to approximately $1.0 million for the year ended December 31, 2021.

The increase was

due primarily to increased interest expense incurred on our convertible notes of $384,000 as well as conversion to equity of our outstanding

convertible notes as a result of our IPO which resulted in a non-cash loss on debt conversion of $431,000.

The increase was partially

offset by a gain on extinguishment of our 2020 Paycheck Protection Plan loan of $19,000.

and Capital Resources

Insurance expense for directors and officers increased $525,000, and

rent, travel, supplies and other costs increased $567,000.

Other Income (Expenses)

Other income (expenses) decreased by approximately

$1.0 million, or 99% from $1.0 million for the year ended December 31, 2021 to approximately $6,000 for the year ended December 31, 2022.

The decrease was due primarily to decreased interest expense incurred on our convertible notes of $0.6 million as well as conversion

to equity of our outstanding convertible notes as a result of our IPO in 2021 which resulted in a non-cash loss on debt conversion of

$0.4 million.

Liquidity and Capital Resources

Sources of Liquidity

Since our formation through December 31,

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and principal stockholder.

During 2020, we raised additional funds through private placements by issuing common stock for $141,000 and

by issuing $1.3 million in convertible notes to investors.

During the year ended December 31, 2021, we raised $1.1 million through the

issuance of convertible notes to investors.

During 2021 we raised $1.1 million through the issuance of convertible notes to investors.

As a result of our initial public offering (“IPO”),

on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received approximately

$22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.

We intend to use the net

proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate

purposes, including hiring additional management and conducting market research and other commercial planning.

Funding Requirements

have incurred net losses since our inception.

For the year ended December 31, 2021, we had a net loss of $10.0 million, and we expect

to incur substantial additional losses in future periods.

on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received

approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.

the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and

corporate purposes, including hiring additional management and conducting market research and other commercial planning.

Future revenue streams may consist of collaboration

or licensing revenue as well as product sales.

We have generated approximately $1.6 million in licensing revenue to date.

Future Funding Requirements

We have incurred net losses since our inception.

For the year ended December 31, 2022, we had a net loss of $18.1 million, and we expect to incur substantial additional losses in

future periods.

As of December 31, 2022, we had an accumulated deficit of $34.0 million.

We expect to continue incurring losses for the

foreseeable future and will be required to raise additional capital in the future to complete our clinical trials, pursue product development

initiatives and penetrate markets for the sale of our products.

We believe that we will continue to have access to capital resources through

possible equity offerings, debt financings, corporate collaborations or other means.

There can be no assurance that we will be able to

obtain additional financing on terms acceptable to us, on a timely basis or at all.

If we are unable to secure additional capital, we

may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses

in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

Based on the Company’s current

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 $16.6 million as of December 31, 2021, the Company believes that it has

sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year

after the date that these financial statements are to be issued.

anticipate that we will need to raise substantial 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 approval;

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.

change in the outcome of any of these or other variables with respect to the development of any of our current product candidates or

future product candidates could significantly change the costs and timing associated with the development of that product candidate.

Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs

and capital requirements associated with such operating plans.

If we raise additional funds by issuing equity securities, our stockholders

may experience dilution.

Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations,

including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments

or engage in certain merger, consolidation or asset sale transactions.

Any debt financing or additional equity that we raise may contain

terms that are not favorable to us or our stockholders.

funding may not be available to us on acceptable terms or at all.

Our failure to raise capital as and when needed could have a negative

impact on our financial condition and our ability to pursue our business strategies.

If we are unable to raise additional funds when

needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also

be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer

to develop and commercialize ourselves.

If we are required to enter into collaborations and other arrangements to supplement our funds,

we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms

that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

Party Payable

entered into a Service Agreement on July 1, 2017, as amended on April 6, 2020 (“Service Agreement”), with Globavir Biosciences,

(“Globavir”).

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.

Pursuant to the Service Agreement, we paid Globavir $50,000 per month through December

On March 6, 2023, we announced completion of

a securities purchase agreement with certain healthcare-focused institutional investors that will provide up to $130.0 million in gross

proceeds through a private placement and that includes initial upfront funding of $30.0 million.

Proceeds from the offering will be used

to support our NDA submission with the FDA for approval of Renazorb for the treatment of hyperphosphatemia in the U.S.

and, if approved,

for the commercial launch of Renazorb in the U.S.

We expect to continue incurring losses in the

future and will be required to raise additional capital in the future to complete our clinical trials, pursue product development initiatives

and penetrate markets for the sale of our products.

We believe that we will continue to have access to capital resources through possible

equity offerings, debt financings, corporate collaborations or other means.

There can be no assurance that we will be able to obtain

additional financing on terms acceptable to us, on a timely basis or at all.

If we are unable to secure additional capital, we may be

required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in

order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

Based on our current level of expenditures,

and after receiving the net proceeds of $28.1 million from a private placement financing, we believe that we have sufficient resources

such that there is not substantial doubt about our ability to continue operations for at least one year after the date that these financial

statements are available to be issued.

We anticipate that we will need to raise substantial

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

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,

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

variables with respect to the development of any of our current product candidates or future product candidates could significantly change

the costs and timing associated with the development of that product candidate.

Furthermore, our operating plans may change in the future,

and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating

If we raise additional funds by issuing equity securities, our stockholders may experience dilution.

Any future debt financing

into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur

liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation

or asset sale transactions.

Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our

stockholders.

Adequate funding may not be available to us on

acceptable terms or at all.

Our failure to raise capital as and when needed could have a negative impact on our financial condition and

our ability to pursue our business strategies.

If we are unable to raise additional funds when needed, we may be required to delay, reduce,

or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rights

to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit

our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders,

which could materially affect our business and financial condition.

Related Party Payable

We entered into a Service Agreement with Globavir

Biosciences, Inc.

(“Globavir”), a related party (the “Service Agreement”).

Globavir provides administrative and

consulting services and shared office space and other costs in connection with the Company’s drug development programs.

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.

Pursuant to the Service Agreement, the Company paid Globavir $50,000 per month through December 31,

2019 and $10,000 per month commencing on January 1, 2020.

As of December 31, 2020, $9,000 was payable to Globavir for service fees.

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.

Service fee expenses were $120,000 and $148,000

for the years ended December 31, 2020 and 2021, respectively, and were recorded as general and administrative expenses in the statements

of operations.

During the fourth quarter of 2021, after initially determining that future

services under the Service Agreement were no longer required, the Company wrote off the $28,000 remaining prepaid balance due from Globavir

as of December 31, 2021.

During the year ended December 31, 2022, after determining that although a shared office space is no longer

utilized, consulting services continued to be provided, the Company 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, 2022.

Convertible Notes

In January through May 2021, we issued convertible

notes (the “2021 Notes”) in the aggregate principal amount of $1.1 million.

The 2021 Notes bear interest at a rate of 12%

per annum, payable at maturity, and mature between January and May, 2022.

The 2021 Notes shall automatically convert into shares of common

stock upon the closing of a financing pursuant to which we receive gross proceeds of at least $500,000 (a “Qualified Financing”)

or upon a change of control.

The 2021 Notes shall convert into such numbers of shares of common stock equal to the conversion amount divided

by the Conversion Price.

“Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or

conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or

(ii) in the event of a change of control, the price per share reflected in such transaction.

accounted for the 2021 Notes as stock-settled debt and we were accreting the carrying amount of the 2021 Notes to the settlement amount

through maturity.

In July and through November 2020, we issued convertible

notes (the “2020 Notes”) in the aggregate principal amount of $1.3 million.

The 2020 Notes bear interest at a rate of 12%

per annum, payable at maturity, and mature between July and November 2021.

notes (the “2021 Notes”) in the aggregate principal amount of $1,098,000.

The 2021 Notes bear interest at a rate of 12% per

annum, payable at maturity, and mature between January and May, 2022.

The 2021 Notes shall automatically convert into shares of common

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or upon a change of control.

The 2020 Notes shall convert into such numbers of shares of common stock equal to the conversion amount divided

by the Conversion Price.

“Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or

conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or

(ii) in the event of a change of control, the price per share reflected in such transaction.

The 2021 Notes shall convert into such numbers of shares of common stock equal to the conversion amount

divided by the Conversion Price.

“Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per

share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such

financing or (ii) in the event of a change of control, the price per share reflected in such transaction.

We accounted for the 2021 Notes as stock-settled

debt and we were accreting the carrying amount of the 2021 Notes to the settlement amount through maturity.

In July and through November 2020, we issued

convertible notes (the “2020 Notes”) in the aggregate principal amount of $1,290,000.

The 2020 Notes bear interest at a rate

of 12% per annum, payable at maturity, and mature between July and November 2021.

The 2020 Notes shall automatically convert into shares

of common stock upon the closing of a financing pursuant to which we receive gross proceeds of at least $500,000 (a “Qualified

Financing”) or upon a change of control.

The 2020 Notes shall convert into such numbers of shares of common stock equal to the

conversion amount divided by the Conversion Price.

“Conversion Price” means (i) in the event of a Qualified Financing, 70%

of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable)

sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction.

We accounted for the 2020 Notes as stock-settled

debt and we are accreting the carrying amount of the 2020 Notes to the settlement amount through maturity.

As of December 31, 2020, unpaid

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Interest expense, including discount accretion

expense for the 2021 and 2020 Notes was $238,000 and $627,000 for the years ended December 31, 2020 and 2021,

respectively.

As a result of the completion of our IPO on July 15, 2021, approximately

$2.4 million of principal and $191,000 of unpaid accrued interest related to the 2021 and 2020 Notes was converted into shares

of common stock.

The conversion resulted in a loss of $431,000 that is included as loss on debt conversion in the accompanying statements

of operations for the year ended December 31, 2021.

of Cash Flows

following table sets forth the primary sources and uses of cash for each of the periods presented below (in thousands):

expense for the 2021 and 2020 Notes was $238,000 and $627,000 for the years ended December 31, 2020 and 2021, respectively.

As a result of our initial public offering on

July 13, 2021, approximately $2,387,000 of principal and $191,000 of unpaid accrued interest related to the 2021 and 2020 Notes was converted

into shares of common stock.

The conversion resulted in a loss of $431,000 that is included as loss on debt conversion in the accompanying

statements of operations for the year ended December 31, 2021.

Private Placement

On March 3, 2023, we entered into a securities

purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to

which we issued and sold, in a private placement, 30,190 shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share,

which offering will result in up to $130 million in gross proceeds and initial upfront funding of $30 million.

For more information on

the private placement offering, please refer to the section titled “Item 1.

Business – Recent Developments”.

Summary of Cash Flows

The following table sets forth the primary sources

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

Net cash (used in) provided by:

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Net (decrease) increase in cash

Flows from Operating Activities

cash used in operating activities was $5.8 million for the year ended December 31, 2021.

Cash used in operating activities was primarily

due to the use of funds for director and officer insurance premiums, development costs associated with our drug candidates, labor costs,

consulting and accounting services, and other corporate expenditures for investor relations, compliance, and legal services.

a net loss of $10.0 million after including the effect of non-cash adjustments for stock issuance, stock compensation, and a loss

on the conversion of our convertible debt.

Net cash used in operating activities was $1.5 million for the

year ended December 31, 2020.

Cash used in operating activities resulted from a net loss of $2.3 million primarily driven by

the use of funds in our operations to develop our product candidates as well as the deferral of the chief executive officer compensation

Flows from Investing Activities

cash used in investing activities was $29,000 for the year ended December 31, 2021 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.

Flows from Financing Activities

Net cash provided by financing activities was $22.4 million for the

year ended December 31, 2021 and was primarily related to proceeds received from our IPO, net of issuance and deferred offering costs.

In addition, we issued convertible notes to investors for $1.1 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 $1.1 million.

cash provided by financing activities was $1.4 million for the year ended December 31, 2020 and was primarily driven by proceeds received

for convertible notes.

Accounting Policies, Significant Judgments and Use of Estimates

Cash Flows from Operating Activities

Net cash used in operating activities was $15.7

million for the year ended December 31, 2022.

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

and officer insurance premiums, development costs associated with our drug candidates, labor costs, consulting and accounting services,

and other corporate expenditures for investor relations, compliance, and legal services.

We incurred a net loss of $18.1 million

after including the effect of non-cash adjustments for stock compensation.

Net cash used in operating activities was $5.8

million for the year ended December 31, 2021.

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

and officer insurance premiums, development costs associated with our drug candidates, labor costs, consulting and accounting services,

and other corporate expenditures for investor relations, compliance, and legal services.

We incurred a net loss of $10.0 million

after including the effect of non-cash adjustments for stock issuance, stock compensation, and a loss on the conversion of our convertible

Cash Flows from Investing Activities

Net cash used in investing activities was $2,000

for the year ended December 31, 2022 and was due to the purchase of furniture and fixtures for our corporate office.

Net cash used

in investing activities was $29,000 for the year ended December 31, 2021 and was due to the purchase of furniture and fixtures for

our corporate office.

Cash Flows from Financing Activities

Net cash used by financing activities was $471,000

for the year ended December 31, 2022 and was due primarily to payments made pursuant to our financed director and officer insurance policies.

Net cash provided by financing activities was

$22.4 million for the year ended December 31, 2021 and was primarily related to proceeds received from our initial public offering,

net of issuance and deferred offering costs.

In addition, we issued convertible notes to investors for $1.1 million as well as the receipt

of $0.1 million in proceeds from the exercise of options.

Net repayments on loans from our chief executive officer offset the cash inflows

by $1.1 million.

Critical Accounting Policies, Significant

Judgments and Use of Estimates

Our financial statements have been prepared in

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The preparation of these financial statements requires

us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and

liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods.

Our estimates are

based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets

and liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods.

Our estimates

are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results

of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions.

We consider our critical accounting

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

There have been no material changes to our critical accounting policies and estimates during the year ended December 31, 2021 from those

used for the year ended December 31, 2020.

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

and Development

policies and estimates to be related to revenue, research and development and stock-based compensation.

There have been no material changes

to our critical accounting policies and estimates during the year ended December 31, 2022 from those used for the year ended December

The below policies represent our critical accounting policies.

Revenue Recognition

We implemented ASC 606, Revenue from Contracts

with Customers.

This included the development of new policies based on the five-step model provided in the new revenue standard, ongoing

contract review requirements, and gathering of information provided for disclosures.

We recognize revenue from product sales or services

rendered when control of the promised goods are transferred to a counterparty in an amount that reflects the consideration to which we

expect to be entitled in exchange for those goods and services.

To achieve this core principle, we apply the following five steps:

the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction

price to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.

Research and Development

We expense costs when incurred related to the

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candidates or compounds.

We estimate progress achieved on material third party research and development contracts through a combination

of direct and indirect interaction with the service providers as well as internal management assessment.

Research and development expenses

include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory

supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee

benefit costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including

information technology costs and utilities and expenses for issuance of shares pursuant to anti-dilution clause in the purchase of IPR&D

We expense both internal and external research and development expenses as they are incurred.

We account for stock-based compensation for all share-based payments

made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation expense over the requisite

service period on a straight-line basis.

We recognize forfeitures related to stock-based compensation as they occur.

We estimate the fair

value of stock options using the Black-Scholes option-pricing model.

The Black-Scholes model requires the input of subjective assumptions,

including expected common stock volatility, expected dividend yield, expected term, risk-free interest rate, and the estimated fair value

of the underlying common stock on the date of grant.

Stock Valuations

Prior to our IPO, we

were required to periodically estimate the fair value of common stock, with the assistance of an independent third-party valuation expert,

when issuing stock options and computing their estimated stock-based compensation expense.

The assumptions underlying these valuations

represented management’s best estimates, which involved inherent uncertainties and the application of significant levels of management

In order to determine the fair value, we considered, among other things, contemporaneous transactions involving the sale of

our common stock to unrelated third parties, the lack of marketability of our common stock and the market performance of comparable publicly

traded companies.

Subsequent to our IPO, we

determine the fair value of our common stock from closing prices as quoted on the NASDAQ exchange.

April 5, 2012, the JOBS Act was enacted.

Section 107 of the JOBS Act provides that an “emerging growth company” can take

advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting

In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those

standards would otherwise apply to private companies.

have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying

with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act.

As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for

complying with new or revised accounting standards.

Subject to certain conditions set forth in the JOBS Act, as an “emerging

growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s

attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying

with the requirement adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding the communication of critical

audit matters in the auditor’s report on financial statements.

We will remain an “emerging growth company” until the

earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more;

(ii) the last day

of our fiscal year following the fifth anniversary of the date of the completion of our IPO;

(iii) the date on which we have issued more

than $1 billion in nonconvertible debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated

filer under the rules of the SEC.

Accounting Pronouncements

Note 2 to our audited financial statements found elsewhere in this Annual Report on Form 10-K for a description of recent accounting

pronouncements applicable to our financial statements.

Sheet Arrangements

did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, we are not required to provide the information required by this item.

Research and development expenses include fees paid to third parties to conduct certain research and development

activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and

personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research

and product development employees and allocated overheads, including information technology costs and utilities and expenses for issuance

of shares pursuant to anti-dilution clause in the purchase of IPR&D technology.

We expense both internal and external research and

development expenses as they are incurred.

Stock-Based Compensation

We account for stock-based compensation for all

share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation

expense over the requisite service period on a straight-line basis.

We recognize forfeitures related to stock-based compensation as they

We estimate the fair value of stock options using the Black-Scholes option-pricing model.

The Black-Scholes model requires the

input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, and the risk-free

interest rate.

On April 5, 2012, the JOBS Act was enacted.

107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided

in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In other words, an “emerging

growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have chosen to take advantage of the extended

transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until

those standards would otherwise apply to private companies provided under the JOBS Act.

As a result, our financial statements may not

be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.

Subject to certain conditions set forth in the

JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation,

(i) providing an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the

Sarbanes-Oxley Act and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board (“PCAOB”)

regarding the communication of critical audit matters in the auditor’s report on financial statements.

We will remain an “emerging

growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.2

billion or more;

(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public

(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years;

the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Recent Accounting Pronouncements

See Note 2 to our audited financial statements

found elsewhere in this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our financial

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company, we are not required

to provide the information required by this item.

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 7. Management’s Discussion and Analysis