What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-11 compared with 2022-11-09 · 194 added, 245 removed, 115 unchanged (79% of the section changed)

ITEM 2 – MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within

the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the

Securities Act of 1933, as amended.

All statements contained in this Quarterly Report other than statements of historical fact, including

statements regarding our future results of operations and financial position, our business strategy and plans, future revenues, projected

costs, prospects and our objectives for future operations, are forward-looking statements.

These forward-looking statements include, but

are not limited to, statements concerning:

the anticipated effects and duration of the novel coronavirus, or COVID-19, global pandemic

and the responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business,

results of operations and financial condition;

the uncertainty due to the conflict between Russia and Ukraine and associated sanctions

imposed by the United States (“U.S.”) and other countries in response;

our plans to develop our proposed drug candidates;

This report contains forward-looking statements

within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A

of the Securities Act of 1933, as amended.

All statements contained in this Quarterly Report other than statements of historical fact,

including statements regarding our future results of operations and financial position, our business strategy and plans, future revenues,

projected costs, prospects and our objectives for future operations, are forward-looking statements.

These forward-looking statements

include, but are not limited to, statements concerning:

the lingering effects of the coronavirus, or COVID-19, global pandemic and the

responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business, results

of operations and financial condition;

anticipated effects of geopolitical events, including the conflict between Russia and Ukraine and

associated sanctions imposed by the United States (“U.S.”) and other countries in response;

our plans to develop our proposed

drug candidates;

our expectations regarding the nature, timing and extent of clinical trials and proposed clinical trials;

our expectations regarding the

timing for proposed submissions of regulatory filings, including but not limited to, any Investigational New Drug filing or any New Drug

our expectations

regarding the timing for proposed submissions of regulatory filings, including but not limited to, any Investigational New Drug filing

or any New Drug Application;

the nature, timing and extent of collaboration arrangements;

the expected results pursuant to collaboration arrangements,

including the receipts of future payments that may arise pursuant to collaboration arrangements;

the outcome of our plans to obtain regulatory

approval of our drug candidates;

the expected results pursuant to collaboration

arrangements, including the receipts of future payments that may arise pursuant to collaboration arrangements;

the outcome of our plans

to obtain regulatory approval of our drug candidates;

the outcome of our plans for the commercialization of our drug candidates;

our plans to address certain

markets, engage third party manufacturers, and evaluate additional drug candidates for subsequent commercial development along with the

likelihood and extent of competition to our drug candidates;

our plans to advance innovative immune-oncology technologies addressing hard

to treat oncology indications;

expectations regarding our Deoxyribonuclease (“DNase”) oncology platform, such as regarding

to address certain markets, engage third party manufacturers, and evaluate additional drug candidates for subsequent commercial development

along with the likelihood and extent of competition to our drug candidates;

our plans to advance innovative immune-oncology technologies

addressing hard to treat oncology indications;

expectations regarding our Deoxyribonuclease (“DNase”) platform, such as regarding

the DNase platform being in development for the treatment of solid tumors and being aimed at improving outcomes of existing treatments,

including immunotherapies, by targeting Neutrophil Extracellular Traps (“NETs”) and our expectations to prioritize our efforts

and resources on this newly acquired technology;

and resources on this newly licensed technology;

the development of the XCART ™ Chimeric Antigen Receptor (“CAR”)

T cell technology and plans to develop cell-based therapeutics by targeting the unique B cell receptor on the surface of an individual

patient’s malignant tumor cells for the treatment of B-cell lymphomas;

T cell (“XCART”) technology and plans to develop cell-based therapeutics by targeting the unique B cell receptor on the surface

of an individual patient’s malignant tumor cells for the treatment of B-cell lymphomas;

and our expectations regarding our PolyXen ®

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to be materially different from those expressed or implied by forward-looking statements.

The Management’s Discussion and Analysis of

Financial Condition and Results of Operations (the “MD&A”) should be read together with our condensed consolidated financial

statements and related notes included elsewhere in this Quarterly Report.

This Quarterly Report, including the MD&A, contains trend

analysis and other forward-looking statements.

Any statements in this Quarterly Report that are not statements of historical facts are

forward-looking statements.

These forward-looking statements made herein are based on our current expectations, involve a number of risks

and uncertainties and should not be considered as guarantees of future performance.

Some factors that could cause

actual results to differ materially include without limitation:

The Management’s Discussion and Analysis

of Financial Condition and Results of Operations (the “MD&A”) should be read together with our condensed consolidated

financial statements and related notes included elsewhere in this Quarterly Report.

This Quarterly Report, including the MD&A, contains

trend analysis and other forward-looking statements.

Any statements in this Quarterly Report that are not statements of historical facts

are forward-looking statements.

These forward-looking statements made herein are based on our current expectations, involve a number of

risks and uncertainties and should not be considered as guarantees of future performance.

Some factors that could

cause actual results to differ materially include without limitation:

unexpected costs, charges or expenses resulting from the transaction with CLS Therapeutics LTD (“CLS”) and the licensing of the DNase platform;

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our failure to meet the continued listing requirements of the Nasdaq Capital Market;

our need to raise additional working capital in the future for the purpose of further developing our DNase technology and to continue as a going concern;

our need to raise additional working capital in the future for the purpose of further developing our pipeline and to continue as a going concern;

our ability to finance our business;

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our ability to achieve milestone and other payments associated with our current and future co-development collaborations and strategic arrangements;

our reliance on consultants, advisors, vendors and business partners to conduct work on our behalf;

the impact of new technologies on our drug candidates and our competition;

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other new lines of business that the Company may enter in the future;

general economic and business conditions, as well as inflationary trends;

general economic and business conditions, as well as inflationary trends and financial market instability or disruptions to the banking system due to bank failures;

the impact of natural disasters or public health emergencies, such as the COVID-19 global pandemic, and geopolitical events, such as the Russian invasion of Ukraine, and related sanctions and other economic disruptions or concerns, on our financial condition and results of operations;

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BUSINESS OVERVIEW

We are a biopharmaceutical company focused on advancing

innovative immune-oncology technologies addressing hard to treat cancers.

The Company’s DNase platform is designed to improve outcomes

of existing treatments, including immunotherapies, by targeting NETs.

We licensed the DNase oncology platform in April 2022 and expect

to prioritize our efforts and resources on the development of this newly acquired technology.

Additionally, we have partnered with biotechnology

and pharmaceutical companies to develop our proprietary drug delivery platform, PolyXen, and receive royalty payments under an exclusive

license arrangement in the field of blood coagulation disorders.

We are a biopharmaceutical company focused on

advancing innovative immune-oncology technologies addressing hard to treat cancers.

Our DNase platform is designed to improve outcomes

of existing treatments, including immunotherapies, by targeting NETs, which have been implicated in cancer progression and resistance

to cancer treatments.

We licensed the DNase oncology platform in April 2022 and are focusing the majority of our resources on advancing

our systemic DNase program into the clinic as an adjunctive therapy for pancreatic carcinoma and locally advanced or metastatic solid

We also have a personalized CAR T platform technology, XCART ™ , to develop cell-based therapeutics targeting the

unique B-cell receptor on the surface of an individual patient’s malignant tumor cells, for the treatment of B-cell lymphomas.

Additionally,

we have partnered with biotechnology and pharmaceutical companies to develop our proprietary drug delivery platform, PolyXen, and receive

royalty payments under an exclusive license arrangement in the field of blood coagulation disorders.

We incorporate our patented and proprietary technologies

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a significant amount of our resources to our research and development activities and anticipate continuing to do so for the near future.

To date, none of our drug candidates have received regulatory marketing authorization in the U.S.

To date, none of our drug candidates have received regulatory marketing authorization or approval in the U.S.

by the Food and Drug Administration

(“FDA”) nor in any other territories by any applicable agencies.

We are receiving ongoing royalties pursuant to a license

of our PolyXen technology to an industry partner.

Although we hold a broad patent portfolio, the focus of our internal efforts during

the three and nine months ended September 30, 2022, was on the acquisition and advancing of our DNase oncology platform and on the development

of our XCART platform technology.

Effects of the COVID-19 Pandemic

During March 2020, a global pandemic was declared

by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus, or COVID-19.

The pandemic has

significantly affected economic conditions in the U.S., accelerating during the first half of March 2020 and continuing throughout 2021

and into 2022, as federal, state and local governments reacted to the public health crisis with mitigation measures, creating significant

uncertainties in the U.S.

We continue to evaluate the effects of the COVID-19 pandemic on our business, and while there has been

no significant impact to our operations to date despite social distancing and other measures taken in response to the pandemic, the ultimate

impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the

duration of the pandemic and the related extent of its severity, the pace and rate at which vaccines are administered, and the continued

emergence of new strains of COVID-19, such as the Delta and Omicron variants and any subvariants, as well as its impact on macroeconomic

conditions, which are uncertain and cannot be predicted at this time.

If the global response to contain the COVID-19 pandemic escalates

further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive,

we could experience a material adverse effect on our business, financial condition, results of operations and cash flows.

nor in any other countries or territories by any applicable agencies.

We are receiving ongoing royalties pursuant to a license of our

PolyXen technology to an industry partner.

Although we hold a broad patent portfolio, the focus of our internal efforts during the three

months ended March 31, 2023, was on the licensing and advancement of our DNase platform.

Impact of the Conflict in Ukraine on Our Operations

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RESULTS OF OPERATIONS

Comparison of Quarter Ended September 30, 2022

Comparison of Quarter Ended March 31, 2023

The comparison of our historical results of operations

for the fiscal quarter ended September 30, 2022 to the fiscal quarter ended September 30, 2021 is as follows:

for the fiscal quarter ended March 31, 2023 to the fiscal quarter ended March 31, 2022 is as follows:

Quarter Ended

September 30, 2022

March 31, 2023

Quarter Ended

September 30, 2021

March 31, 2022

Royalty revenue

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Loss from operations

Other income (expense):

Other expense

Interest income, net

Revenue for the three months ended September 30, 2022

increased by $0.1 million, or 18.6%, to $0.4 million from approximately $0.3 million for the three months ended September 30, 2021.

increase represents an increase in royalty revenue related to our sublicense agreement with Takeda Pharmaceuticals Co.

for the three months ended September 30, 2022 as compared to the same period in 2021 as Takeda’s sublicensee continued its worldwide

launch of the product.

Other income:

Interest income

$ (1,593,611 )

Revenue for the three months ended March 31, 2023

increased by $0.2 million, or 55.7%, to $0.6 million from approximately $0.4 million for the three months ended March 31, 2022.

This increase

represents an increase in royalty revenue related to our sublicense agreement with Takeda Pharmaceuticals Co.

as compared to the

same period in 2022.

Research and Development Expenses

Research & development (“R&D”)

expenses for the three months ended September 30, 2022 decreased by $0.4 million, or 48.9% to $0.4 million from $0.8 million in the comparable

quarter in 2021.

The table below sets forth the R&D costs incurred by the Company by category of expense for the quarters ended September

30, 2022 and 2021:

expenses for the three months ended March 31, 2023 decreased by approximately $0.5 million, or 46.0%, to approximately $0.6 million from

approximately $1.1 million in the comparable quarter in 2022.

The table below sets forth the R&D costs incurred by the Company by

category of expense for the quarters ended March 31, 2023 and 2022:

Quarter Ended

Category of Expense

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Outside services and contract research organizations

Salaries and wages

Personnel costs

Share-based expense

Total research and development expense

The decrease in outside services

and contract research organizations expense was primarily due to decreased spending related to our XCART platform technology partially

offset by spending related to our DNase oncology platform during the three months ended September 30, 2022 as compared to the same period

in the prior year.

Costs related to our XCART program were significantly lower for the three months ended September 30, 2022 as compared

to the same period in 2021 as we prioritized our R&D efforts and resources on our newly acquired DNase oncology platform.

The decrease in outside

services and contract research organizations expense was primarily due to decreased spending in connection with our XCART platform technology

which was partially offset by costs related to our initial development efforts associated with our DNase platform.

We licensed the DNase

platform in April 2022 and expect to direct our efforts and resources on the development of this newly acquired technology.

we suspended development of our XCART technology platform.

The decrease in other expense was due to lower consulting costs incurred during

the first quarter of 2023 compared to the same period in 2022.

Consulting costs during the three months ended March 31, 2002 were related

to the licensing of the DNase oncology platform from CLS.

There were no similar consulting costs incurred during the three months ended

March 31, 2023.

General and Administrative Expenses

General and administrative expenses for the three

months ended September 30, 2022 decreased by approximately $82,000, or 8.7%, to approximately $863,000 from approximately $945,000 in

the comparable quarter in 2021.

The decrease was primarily due to a decrease in costs related to our intellectual property during the

three months ended September 30, 2022 compared to the same period in 2021.

Other Expense

Other expense was approximately $1,700 for the three

months ended September 30, 2022 compared to approximately $2,900 of other expense for the same period in 2021.

This decrease in other

expense was primarily related to changes in foreign currency exchange rates during the three months ended September 30, 2022 as compared

to the same period in 2021.

Interest Income

Interest income increased to approximately $45,000

during the three months ended September 30, 2022 as compared to approximately $28,000 for the same period in the prior year.

This increase

is primarily due to higher interest rates on invested funds during the third quarter of 2022 as compared to the same period in the prior

Comparison of Nine Months Ended September 30,

2022 and 2021

The comparison of our historical results of operations

for the nine months ended September 30, 2022 to the nine months ended September 30, 2021 is as follows:

September 30,

Royalty revenue

Operating costs and expenses:

Research and development

General and administrative

Total operating costs and expenses

Loss from operations

Other income (expense):

Other expense

Interest income, net

$ (5,069,818 )

$ (3,803,499 )

Revenue for the nine months ended September 30, 2022

increased by $0.4 million, or 47.3%, to $1.2 million from approximately $0.8 million for the nine months ended September 30, 2021.

increase represents an increase in royalty revenue related to our sublicense agreement with Takeda as compared to the same period in 2021,

as the sublicensee continued its worldwide launch of the product.

Research and Development Expenses

Overall, R&D expenses for the nine months ended

September 30, 2022 increased by $1.6 million, or 84.9% to $3.6 million from $1.9 million in the comparable period in 2021 primarily due

to IPR&D expense of $1.3 million.

During the nine months ended September 30, 2022, the Company expensed $1.3 million of IPR&D

associated with the Company’s licensing of the DNase oncology platform.

There was no similar expense in 2021.

Excluding the $1.3

million of IPR&D expense from total R&D expense of $3.6 million, R&D expenses increased approximately $0.3 million, or 17.5%

to $2.3 million for the nine months ended September 30, 2022, from $1.9 million for the nine months ended September 30, 2021.

below sets forth the R&D costs incurred by us, by category of expense, for the nine months ended September 30, 2022 and 2021:

Nine Months Ended,

Category of Expense

September 30, 2022

September 30, 2021

IPR&D expense

Outside services and contract research organizations

Salaries and wages

Share-based expense

Total research and development expense

The increase in outside services

and contract research organizations expense was primarily due to increased spending in connection with the acquisition and our initial

development efforts related to our DNase oncology platform during the nine months ended September 30, 2022 as compared to the same period

in the prior year.

General and Administrative Expenses

General and administrative expenses for the nine months

ended September 30, 2022 was $2.8 million, increasing slightly by approximately $30,000, or 1.1%, compared to the same period in the prior

The increase was primarily due to an increase in legal costs related to the licensing of the DNase oncology platform from CLS during

the nine months ended September 30, 2022 compared to the same period in 2021, substantially offset by decreased spend on intellectual

property and decreased consulting costs.

Other Expense

Other expense was approximately $2,600 for the nine

months ended September 30, 2022 compared to other expense of approximately $1,800 for the same period in 2021.

This increase in other

expense was primarily related to changes in foreign currency exchange rates during the nine months ended September 30, 2022 as compared

months ended March 31, 2023 increased by approximately $18,000, or 2.0%, to approximately $926,000 from approximately $907,000 in the

comparable quarter in 2022.

The increase was primarily due to an increase in accounting fees during the three months ended March 31, 2023

compared to the same period in 2022.

Other income was approximately $4,500 for the

three months ended March 31, 2023 compared to approximately $200 of other income for the same period in 2022.

This increase in other income

was primarily related to favorable changes in foreign currency exchange rates during the three months ended March 31, 2023 as compared

to the same period in 2022.

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Interest income increased to approximately $54,000

during the nine months ended September 30, 2022 as compared to approximately $71,000 for the same period in the prior year.

during the three months ended March 31, 2023 as compared to approximately $26,000 for the same period in the prior year.

This increase

is primarily due to an increase in interest income on invested funds due to higher interest rates on invested funds during the first nine

months of 2022 compared to the same period in 2021.

This increase was partially offset by a decrease in interest income on the Pharmsynthez

is primarily due to higher interest rates on invested funds during the three months ended March 31, 2023 compared to the same period in

This increase was partially offset by a decrease in interest income on our loan with Pharmsynthez.

Liquidity and Capital Resources

We incurred a net loss of

approximately $5.1 million for the nine months ended September 30, 2022.

We incurred a net loss

of approximately $0.9 million for the three months ended March 31, 2023.

We had an accumulated deficit of approximately $190.0 million

at September 30, 2022, as compared to an accumulated deficit of approximately $182.5 million at December 31, 2021.

Working capital was

approximately $13.1 million at September 30, 2022, and $17.3 million at December 31, 2021, respectively.

During the nine months ended

September 30, 2022, our working capital decreased by $4.2 million primarily due to our net loss for the nine months ended September 30,

2022 and cash used of $0.5 million to obtain a license to the DNase oncology platform.

Our principal source of liquidity consists of cash.

At September 30, 2022, we had approximately $13.8 million in cash and $1.1 million in current liabilities.

At December 31, 2021, we had

approximately $18.2 million in cash and $1.4 million in current liabilities.

at March 31, 2023, as compared to an accumulated deficit of approximately $189.1 million at December 31, 2022.

Working capital was approximately

$12.0 million at March 31, 2023, and $12.6 million at December 31, 2022.

During the three months ended March 31, 2023, our working capital

decreased by $0.6 million primarily due to our net loss for the three months ended March 31, 2023.

Our principal source

of liquidity consists of cash.

At March 31, 2023, we had approximately $12.0 million in cash and $0.9 million in current liabilities.

At December 31, 2022, we had approximately $13.1 million in cash and $1.1 million in current liabilities.

We have historically relied

upon sales of our equity securities to fund our operations.

We evaluate whether there

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We believe that our existing resources will be adequate

to fund our operations into the first quarter of 2024.

However, we anticipate we may need additional capital in the long-term to pursue

our business initiatives.

The terms, timing and extent of any future financing will depend upon several factors, including the achievement

of progress in our clinical development programs, our ability to identify and enter into licensing or other strategic arrangements, our

continued listing on the Nasdaq Stock Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry

and market conditions, many of which are beyond our control.

The capital markets for the biotech industry can be highly volatile, which

make the terms, timing and extent of any future financing uncertain.

On June 3, 2022, we received a written notification (the “Notice”)

from the Listing Qualifications Department of Nasdaq notifying us that the closing bid price for our common stock had been below $1.00

for 30 consecutive business days and that we therefore are not in compliance with the minimum bid price requirement for continued inclusion

on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

The Notice has no immediate

effect on the listing of our common stock on the Nasdaq Capital Market.

Under the Nasdaq Listing Rules, we have 180 calendar days from

the date of the Notice to regain compliance with the Bid Price Requirement.

Accordingly, we have until November 30, 2022 to regain compliance

with the Bid Price Requirement and may be eligible for an additional 180 calendar day compliance period if certain other criteria are

to fund our operations for a period of at least twelve months from the date of these financial statements.

However, we anticipate we may

need additional capital in the long-term to pursue our business initiatives.

The terms, timing and extent of any future financing will

depend upon several factors, including the achievement of progress in our clinical development programs, our ability to identify and enter

into licensing or other strategic arrangements, our continued listing on the Nasdaq Stock Market (“Nasdaq”), and factors related

to financial, economic, geo-political, industry and market conditions, many of which are beyond our control.

The capital markets for the

biotech industry can be highly volatile, which make the terms, timing and extent of any future financing uncertain.

On June 3, 2022, we

received a written notification (the “Notice”) from the Listing Qualifications Department of Nasdaq notifying us that the

closing bid price for our common stock had been below $1.00 for 30 consecutive business days and that we therefore were not in compliance

with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the

“Bid Price Requirement”).

The Notice has no immediate effect on the listing of our common stock on the Nasdaq Capital Market.

Under the Nasdaq Listing Rules, we had a period of 180 calendar days from the date of the Notice to regain compliance with the Bid Price

Accordingly, we had until November 30, 2022 to regain compliance with the Bid Price Requirement and were eligible for an

additional 180 calendar day compliance period if certain other criteria were met.

On December 1, 2022, we received a letter from Nasdaq

informing us that although our common stock had not regained compliance with the minimum $1.00 bid price per share requirement, Nasdaq

had determined that we were eligible for an additional 180 calendar day period, or until May 29, 2023, to regain compliance.

determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other

applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement, and our written

notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

On March 10, 2023, Silicon

Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal

Deposit Insurance Corporation (“FDIC”) as receiver.

We maintained our cash primarily with SVB.

On March 12, 2023, the U.S.

Treasury, Federal Reserve and FDIC rolled out emergency measures to fully protect all depositors of SVB and, on March 13, 2023, we had

full access to our cash on deposit with SVB.

As of March 31, 2023, we have transferred our primary banking relationship to a large financial

institution and all cash on deposit is covered under federally insured limits.

Cash Flows from Operating Activities

Cash flows used in operating activities for the nine

months ended September 30, 2022 totaled approximately $3.9 million, which was primarily due to our net loss for the period, partially

offset by non-cash charges associated with acquired IPR&D and share-based expense.

In addition, current liabilities decreased during

the nine months ended September 30, 2022.

Cash flows used in operating activities for the nine months ended September 30, 2021 totaled

approximately $3.3 million, which was primarily due to our net loss for the period, partially offset by non-cash charges associated with

share-based expense.

Cash flows used in operating activities for the

three months ended March 31, 2023 totaled approximately $1.1 million, which was primarily due to our net loss for the period, partially

offset by non-cash charges associated with share-based expense and principal repayments on the Pharmsynthez Loan.

In addition, prepaid

expenses increased and current liabilities decreased during the three months ended March 31, 2023.

Cash flows used in operating activities

for the three months ended March 31, 2022 totaled approximately $2.1 million, which was primarily due to our net loss for the period offset

by non-cash charges associated with share-based expense.

In addition, prepaid expenses increased and current liabilities decreased during

the three months ended March 31, 2022.

Cash Flows from Investing Activities

Cash flows used in investing activities for the nine

months ended September 30, 2022 totaled $500,000, which represented cash paid to license the DNase oncology platform.

There were no cash

flows from investing activities for the nine months ended September 30, 2021.

There were no cash flows from investing activities

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

Cash Flow from Financing Activities

There were no cash flows from financing activities

for the nine months ended September 30, 2022.

Cash flows from financing activities for the nine months ended September 30, 2021 totaled

approximately $11.5 million representing net proceeds from our private placement in July 2021.

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

Contractual Obligations and Commitments

As of September 30, 2022, there were no material changes

As of March 31, 2023, there were no material changes

in our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31,

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Off Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements

that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition,

revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

We do not have any off-balance sheet financing

arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, change in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Recent Accounting Standards

See Note 3 in our Annual Report on Form 10-K for the

year ended December 31, 2021, filed with the SEC on March 22, 2022, as amended on April 28, 2022, for a discussion of recent accounting

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are

prepared in accordance with U.S.

The preparation of our condensed consolidated financial statements requires us to make estimates,

assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses.

We base our estimates

and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances.

We evaluate our estimates

and assumptions on an ongoing basis.

Our actual results may differ from these estimates.

There have been no material changes in our critical

accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed

with the SEC on March 22, 2022, as amended on April 28, 2022.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

We are not required to provide the information required

by this Item because we are a “smaller reporting company” (as defined in Rule 12b-2 of the Exchange Act).

See Note 3 in our Annual Report on Form 10-K for

the year ended December 31, 2022, filed with the SEC on March 22, 2023, as amended on April 28, 2023, for a discussion of recent accounting

Critical Accounting Estimates

Our condensed consolidated financial statements

are prepared in accordance with U.S.

generally accepted accounting principles.

The preparation of our condensed consolidated financial

statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue,

costs and expenses.

We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable

under the circumstances.

We evaluate our estimates and assumptions on an ongoing basis.

The result of these evaluations forms the basis

for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent

from other sources.

Because future events and their effects cannot be determined with certainty, actual results and outcomes may differ

materially from our estimates, judgments and assumptions.

There have been no material changes in our critical accounting estimates from

those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 22, 2023,

as amended on April 28, 2023.

ITEM 3 – QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

We are not required to provide the information

required by this Item because we are a “smaller reporting company” (as defined in Rule 12b-2 of the Exchange Act).

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