Signal management

SCOPUS BIOPHARMA INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

The following discussion and analysis of our unaudited condensed consolidated
financial condition and results of operations should be read in conjunction with
the audited consolidated financial statements and accompanying notes included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2021,
as filed with the Securities and Exchange Commission ("SEC") on April 15, 2022,
as amended on May 2, 2022 (collectively, the "2021 Form 10-K"), and certain
other reports filed with the SEC as may be set forth below.

Forward-looking statements

This quarterly report on Form 10-Q ("Quarterly Report") and other reports filed
by Scopus BioPharma Inc. (the "Company") from time to time with the SEC
(collectively, the "Filings") contains forward-looking statements within the
meaning of the federal securities laws. All statements contained in this
Quarterly Report, other than statements of historical fact, including statements
regarding our future operating results and financial position, our business
strategy and plans, potential growth or growth prospects, future research and
development, sales and marketing and general and administrative expenses, and
our objectives for future operations, are forward-looking statements. Words such
as "believes," "may," "will," "estimates," "potential," "continues,"
"anticipates," "intends," "expects," "could," "would," "projects," "plans,"
"targets," and variations of such words and similar expressions are intended to
identify forward-looking statements.

We have based these forward-looking statements largely on our current
expectations and projections about future events and trends that we believe may
affect our financial condition, results of operations, business strategy,
short-term and long-term business operations and objectives, and financial
needs. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including those described in the "Risk Factors"
described in our 2021 Form 10-K. Readers are urged to carefully review and
consider the various disclosures made in this Quarterly Report and in other
documents we file from time to time with the SEC that disclose risks and
uncertainties that may affect our business. Moreover, we operate in a very
competitive and rapidly changing environment. New risks emerge from time to
time. It is not possible for us to predict all risks, nor can we assess the
impact of all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements we may make. Unless otherwise stated
in this Quarterly Report, "we", "us", "our", "Company", "Scopus" and "Scopus
BioPharma" refer to Scopus BioPharma Inc. and its subsidiaries.

You should not rely upon forward-looking statements as predictions of future
events. The events and circumstances reflected in the forward-looking statements
may not be achieved or occur. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, performance, or achievements. In addition, the forward-looking
statements in this Quarterly Report are made as of the date of this filing, and
we do not undertake, and expressly disclaim any duty, to update such statements
for any reason after the date of this Quarterly Report or to conform statements
to actual results or revised expectations, except as required by law.

Insight

We are a biopharmaceutical company developing transformational therapeutics for
serious diseases with significant unmet medical need. We are currently focusing
our development efforts on our immuno-oncology programs. Duet BioTherapeutics,
our majority-owned subsidiary ("Duet"), integrates the management and clinical
development of the immunotherapy assets of Scopus and Olimmune Inc. (the "Duet
Platform"). Duet, formerly Olimmune, was acquired by Scopus in June 2021.

The Duet Platform relies on a novel approach to immuno-oncology with a suite of
bifunctional oligonucleotides that activate antigen-presenting cells ("APCs")
within the tumor microenvironment, while alleviating tumor immunosuppression to
jump-start T cell-mediated immune responses. The unique mechanism-of-action of
these synthetic oligonucleotides comes from simultaneously targeting two
intracellular immune pathways - signal transducer and activator of transcription
3 ("STAT3"), a master immune checkpoint inhibitor, and toll-like receptor 9
("TLR9"). The targeted inhibition of STAT3 reawakens immune cells and allows for
the full potential of TLR9-driven innate and adaptive immune responses.

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The Duet Platform is comprised of three distinctive, complementary CpG-STAT3
inhibitors:

? RNA silencing         CpG-STAT3siRNA ("DUET-01")

? Antisense             CpG-STAT3ASO   ("DUET-02")

? CpG-STAT3decoy DNA Binding Inhibitor (“DUET-03”)


An investigational new drug application ("IND") for DUET-01 for a Phase 1
clinical trial, as a monotherapy, for B-cell non-Hodgkin lymphoma ("NHL") was
filed in April 2021. In May 2021, the United States Food and Drug Administration
("FDA") approved this IND. The design of such investigator-sponsored clinical
protocol for DUET-01, including the number of study visits, together with
COVID-related constraints on mobility and travel have caused delays in patient
enrollment. As previously disclosed, the clinical study sponsor publicly
reported a later possible start date for enrollment. The clinical study sponsor
subsequently reported additional delays in such start date. We have engaged in
ongoing discussions with the sponsor regarding enrollment challenges and related
matters. DUET-01 is currently designed for intratumoral delivery. In April 2022,
we entered into a sponsored research agreement ("SRA") relating to research,
currently underway, to evaluate increasing the stability of siRNA-based
molecules, including DUET-01 and potential new chemical entities, to enable
systemic delivery. We believe that systemic delivery may enhance drug candidates
based on siRNA-based molecules. In connection with the SRA, we obtained certain
licensing rights to any intellectual property resulting from the research being
conducted under such agreement. While research relating to CpG-STAT3siRNA
continues pursuant to the SRA, we have begun prioritizing the development of
DUET-02.

DUET-02 is an antisense STAT3 inhibitor ("ASO") designed for systemic delivery.
The STAT3ASO molecule binds directly to the STAT3 mRNA, recruiting ribonuclease
H1 ("RNase H1") to degrade the STAT3 mRNA. The use of ASO permits other chemical
modifications resulting in greater stability in human blood. This allows for
systemic treatment of harder-to-reach solid tumors such as prostate or kidney
cancers. Dose-range finding studies, good laboratory practice ("GLP") toxicology
studies, and good manufacturing process ("GMP") manufacturing of the drug
substance and product are all currently in process. Duet currently anticipates
filing an IND in Q1 2024 and thereafter commencing one or more Phase 1/2
clinical trials for advanced solid malignancies.

DUET-03 uses an alternative to the destruction of mRNA to silence STAT3
activity, such as with DUET-01 and DUET-02, instead targeting the actual STAT3
transcription factor protein. We are also evaluating combination therapies with
checkpoint inhibitors.

On an ongoing basis, we continue to refine, update and enhance our
immuno-oncology pipeline and target indications. We also continually evaluate
the possibilities of additional studies with a view to enhancing, among other
things, the effectiveness and method of delivery of our drug candidates and
identifying additional protections for our intellectual property.

We are currently devoting almost all of our efforts to our immuno-oncology programs. Due to capital constraints and other considerations, we have reduced our efforts related to our non-immuno-oncology assets.

We have no products approved for sale and have not generated any revenue. We expect to continue to incur significant expenses and increase operating losses. We expect all of our expenses to increase significantly, especially as we:

? continue our research and development efforts;

? contract with third-party research organizations to manage our clinical activities and

preclinical trials for our drug candidates;

? outsource the manufacturing of our drug candidates for clinical trials and

preclinical trials;

? seek regulatory approvals for our drug candidates;

? maintain, develop and protect our intellectual property portfolio;

? add operational, financial and management personnel and information systems

support our research and development and regulatory efforts;

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? continue to be engaged in litigation and actions brought by and/or against

certain adverse parties; and

? operate as a public company.

We do not expect to generate revenue from product sales unless and until we
successfully complete development and obtain marketing approval for one or more
of our drug candidates, which we expect will take a number of years and is
subject to significant uncertainty. Accordingly, we will need to raise
additional capital to fund our operations. Until such time, if ever, as we can
generate substantial revenue from product sales, we expect to finance our
operating activities through equity and debt offerings. We may also raise
capital through government or other third-party funding and grants,
collaborations and development agreements, strategic alliances, and licensing
arrangements. However, we may be unable to raise additional funds or enter into
such other arrangements when needed on favorable terms or at all. Moreover, our
ability to raise capital continues to be impeded by limited availability of
authorized common stock. Our failure to raise capital or enter into such other
arrangements as and when needed would impair our ability to develop our drug
candidates and would have a material adverse effect on our financial condition,
including possibly being required to substantially curtail or cease our
operations.

We have incurred net losses in every year since our inception. From inception
(April 18, 2017) until September 30, 2022, we have funded our operations through
the issuance of common stock, warrants, additional investment options ("AIOs")
and convertible notes. As of September 30, 2022, we had an accumulated deficit
of approximately $51.3 million.

Significant Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States
("GAAP"). Our management's discussion and analysis of our financial condition
and results of operations is based on our condensed consolidated financial
statements. The preparation of these condensed consolidated financial statements
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements, as well as the reported
revenues and expenses during the reporting periods. We evaluate these estimates
and judgments on an ongoing basis. We base our estimates on 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 sources. Our actual results may differ from these estimates under
different assumptions or conditions.

Please refer to the information provided under the heading "Critical Accounting
Policies and Estimates" included in our 2021 Form 10-K. There were no material
changes to such policies in the nine months ended September 30, 2022.

Employment Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS
Act, was enacted. Under the JOBS Act, emerging growth companies can delay
adopting new or revised accounting standards issued after the enactment of the
JOBS Act until such time as those standards apply to private companies. We have
irrevocably elected to avail ourselves of this exemption from new or revised
accounting standards, and, therefore, will not be subject to the same new or
revised accounting standards as public companies that are not emerging growth
companies. As a result of this election, our financial statements may not be
comparable to companies that are not emerging growth companies.

As an "emerging growth company," we also rely on exemptions from certain
reporting requirements, including without limitation: (i) providing an auditor's
attestation report on our system of internal controls over financial reporting
pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any
requirement that may be adopted by the PCAOB regarding mandatory audit firm
rotation or a supplement to the auditor's report providing additional
information about the audit and the financial statements, known as the auditor
discussion and analysis. 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 an initial
public offering; (iii) the date on which we have issued more than $1 billion in
non-convertible 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.

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Results of Operations

Three months completed September 30, 2022 Compared to the three months ended September 30, 2021

The following table summarizes our operating results for the three months ended September 30, 2022 and 2021:

                                                  Three Months Ended
(in thousands)                                      September 30,
                                                  2022         2021         Change      % Change
Operating Expenses:
General and Administrative                      $     982    $   2,682    $  (1,700)      (63.4) %
Research and Development                              917           78           839     1,075.6 %
Loss from Operations                              (1,899)      (2,760)         (861)      (31.2) %
Other income (expense):
Interest expense                                        -        (111)           111     (100.0) %
Change in fair value of common stock warrant
liability                                               -        1,470       (1,470)       100.0 %
Total other expense                                     -        1,359       (1,359)       100.0 %
Net Loss                                        $ (1,899)    $ (1,401)    $    (498)        35.6 %


Revenue

We did not have any revenue during the three months ended September 30, 2022 and
2021. Our ability to generate product revenues in the future will depend almost
entirely on our ability to successfully develop, obtain regulatory approval for,
and then successfully commercialize a drug candidate, or enter into
collaborations that provide for payments to us.

Functionnary costs

General and administrative expenses

General and administrative expenses consist primarily of compensation and
benefits to our personnel, including the costs related to our management
services agreements, directors and scientific and senior advisors; professional
fees and services, including accounting and legal services; and expenses related
to obtaining and protecting our intellectual property. We incurred general and
administrative expenses in the three months ended September 30, 2022 and 2021 of
approximately $1.0 million and $2.7 million, respectively, with a decrease of
approximately $1.7 million or 63.4%. This decrease in general and administrative
expenses during the three months ended September 30, 2022 as compared to the
three months ended September 30, 2021 is primarily attributable to a decrease in
legal and accounting fees incurred in connection with or as a result of the
proxy contest and litigation, including legal services provided to the Board and
certain directors and committees thereof, of approximately $1.7 million. Our
general and administrative expenses are likely to increase, including to the
extent we are able to obtain additional financing to enable us to expand our
operations, and may increase materially based upon the activity level of ongoing
litigation in any particular period.

Research and development costs

We recognize research and development expenses as they are incurred. Our
research and development expenses consist of the costs associated with our
acquisition of intellectual property that is classified as in-process research
and development, fees incurred under our agreements with licensors, including
the expenses associated with securities issued in connection with such
agreements, as applicable, and expenses relating to third-party research and
development vendors and consultants. For the three months ended September 30,
2022 and 2021, we incurred research and development expenses of approximately
$0.9 million and $0.1 million, respectively, an increase of approximately $0.8
million or 1,075.6%. The increase in research and development costs during the
three months ended September 30, 2022 as compared to the three months ended
September 30, 2021 is primarily attributable to approximately $0.8 million in
increased patent fees and preclinical expenses incurred in connection with
DUET-02. We anticipate that our research and development expenses, exclusive of
any in-process research and development relating to our acquisitions, will
increase for the foreseeable future as we continue the development of our drug
candidates.

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Other Income (Expense)

Other income (expense) consists of interest expense on our convertible notes and
changes in the fair value of a warrant liability. Interest expense decreased
from $0.1 million for the three months ended September 30, 2021 to $0 for the
three months ended September 30, 2022. Effective July 31, 2021, all of our
convertible notes were either converted into W Warrants or repaid in cash.
Accordingly, we had no further obligations under the convertible notes at any
time from July 31, 2021 through September 30, 2022. Other income related to the
change in fair value of warrant liability was $1,470,163 for the three months
ended September 30, 2021. There was no income or expense related to the warrant
liability during the three months ended September 30, 2022. This income during
the three months ended September 30, 2021 is associated with the decrease of a
liability related to certain warrants issued in August and September 2020 which
were reclassified from equity to warrant liability on June 25, 2021. Until their
reclassification into equity on July 31, 2021, we were required to revalue
warrants classified on our balance sheet as a liability at the end of each
reporting period and reflect a gain or loss from the change in fair value in the
period in which the change occurred. We calculated the fair value of such
warrants using a Monte Carlo daily price simulation.

Net loss

Our net losses were approximately $1.9 million and $1.4 million for the three
months ended September 30, 2022 and 2021, respectively, an increase of
approximately $0.5 million or 35.6%. We anticipate our net losses will continue
as we advance our research and drug development activities and incur additional
general and administrative expenses to meet the needs of our business.

Nine month period ended September 30, 2022 Versus nine months ended September 30, 2021

The following table summarizes our operating results for the nine months ended September 30, 2022 and 2021:

                                                       Nine Months Ended
(in thousands)                                           September 30,
                                                      2022          2021         Change       % Change
Operating Expenses:
General and Administrative                          $   7,943    $    6,228    $     1,715        27.5 %
Research and Development                                1,936        14,888       (12,952)      (87.0) %
Loss from Operations                                  (9,879)      (21,116)       (11,237)      (53.2) %
Other income (expense):
Interest expense                                            -         (775)            775     (100.0) %
Change in fair value of common stock warrant
liability                                                   -         1,456        (1,456)       100.0 %
Total other expense                                         -           681          (681)       100.0 %
Net Loss                                            $ (9,879)    $ (20,435)    $    10,556      (51.7) %


Revenue
We did not have any revenue during the nine months ended September 30, 2022 and
2021. Our ability to generate product revenues in the future will depend almost
entirely on our ability to successfully develop, obtain regulatory approval for,
and then successfully commercialize a drug candidate, or enter into
collaborations that provide for payments to us.

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Operating Expenses

General and administrative expenses

General and administrative expenses consist primarily of compensation and
benefits to our personnel, including the costs related to our management
services agreements, directors and scientific and senior advisors; professional
fees and services, including accounting and legal services; and expenses related
to obtaining and protecting our intellectual property. We incurred general and
administrative expenses in the nine months ended September 30, 2022 and 2021 of
approximately $7.9 million and $6.2 million, respectively, an increase of
approximately $1.7 million or 27.5%. This increase in general and administrative
expenses during the nine months ended September 30, 2022 as compared to the nine
months ended September 30, 2021 is primarily attributable to an increase in
legal and accounting fees and other expenses incurred in connection with or as a
result of the proxy contest and litigation, including legal services provided to
the Board and certain directors and committees thereof, of approximately $2.0
million, and additional $0.4 million of costs and expenses associated with Duet
operations, which were included for the entire nine-month period in 2022 as
compared to only a three-month period following the acquisition of Duet in the
prior year. These increases were offset by a decrease of approximately $0.5
million in compensation expense relating to our officers and directors. Our
general and administrative expenses are likely to increase, including to the
extent we are able to obtain additional financing to enable us to expand our
operations, and may increase materially based upon the activity level of ongoing
litigation in any particular period.

Research and development costs

We recognize research and development expenses as they are incurred. Our
research and development expenses consist of the costs associated with our
acquisition of intellectual property that is classified as in-process research
and development, fees incurred under our agreements with licensors, including
the expenses associated with securities issued in connection with such
agreements, as applicable, and expenses relating to third-party research and
development vendors and consultants. For the nine months ended September 30,
2022 and 2021, we incurred research and development expenses of approximately
$1.9 million and $14.9 million, respectively, a decrease of approximately $13.0
million or 87.0%. The decrease in research and development costs during the nine
months ended September 30, 2022 as compared to the nine months ended September
30, 2021 is primarily attributable to the costs of approximately $8.1 million
(of which approximately $7.7 million were non-cash) associated with the
acquisition of Duet, including upfront costs of the Duet licenses, approximately
$1.5 million of costs associated with the preparation for the Phase I clinical
trial for DUET-01, and approximately $5.1 million of additional non-cash expense
incurred in connection with achievement of a milestone relating to our
acquisition of Bioscience Oncology. These decreases were partially offset by
approximately $1.7 million in increased patent fees and preclinical expenses
incurred in connection with DUET-02. We anticipate that our research and
development expenses, exclusive of any in-process research and development
relating to our acquisitions, will increase for the foreseeable future as we
continue the development of our drug candidates.

Other income (expenses)

Other income (expense) consists of interest expense on our convertible notes and
changes in the fair value of a warrant liability. Interest expense decreased
from $0.8 million for the nine months ended September 30, 2021 to $0 for the
nine months ended September 30, 2022. Effective July 31, 2021, all of our
convertible notes were either converted into W Warrants or repaid in cash.
Accordingly, we had no further obligations under the convertible notes at any
time from July 31, 2021 through September 30, 2022. Other income related to the
change in fair value of warrant liability was $1,455,889 for the nine months
ended September 30, 2021. There was no income or expense related to the warrant
liability during the nine months ended September 30, 2022. This income during
the nine months ended September 30, 2021 is associated with the decrease of a
liability related to certain warrants issued in August and September 2020 which
were reclassified from equity to warrant liability on June 25, 2021. Until their
reclassification into equity on July 31, 2021, we were required to revalue
warrants classified on our balance sheet as a liability at the end of each
reporting period and reflect a gain or loss from the change in fair value in the
period in which the change occurred. We calculated the fair value of such
warrants using a Monte Carlo daily price simulation.

Net loss

Our net losses were approximately $9.9 million and $20.4 million for the nine
months ended September 30, 2022 and 2021, respectively, a decrease of
approximately $10.6 million or 51.7%. We anticipate our net losses will continue
as we advance our research and drug development activities and incur additional
general and administrative expenses to meet the needs of our business.

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Cash and capital resources

We have incurred losses since our inception and, as of September 30, 2022, we
had an accumulated deficit of approximately $51.3 million. We anticipate that we
will continue to incur losses for at least the next several years. Since April
18, 2017 (inception) through September 30, 2022, we have funded our operations
principally with approximately $29.1 million in gross proceeds from the sale of
convertible notes, common stock, warrants and units comprised of common stock
and warrants, the exercise of a portion of such warrants, and units comprised of
common stock and AIOs.

In the nine months ended September 30, 2022we used about $7.7 million operating cash flow, attributable to our net loss of approximately $9.9 millionchanges in operating assets and liabilities of approximately $1.9 millionand about $0.3 million non-cash expenses.

We are party to litigation in several matters as of the date hereof. Litigation
is highly unpredictable and the costs of litigation, including legal fees and
expenses, and the possible liabilities, including monetary damages, to which we
could become subject could be significant. Any such liabilities could have a
material adverse effect on us. Our existing capital resources will not be
sufficient to fully implement our business plan, including the development of
our drug candidates, while also continuing to be subject to or pursuing ongoing
litigation.

We have received deficiency notification letters from the Listing Qualifications
Staff of the Nasdaq Stock Market LLC ("Nasdaq") indicating that we were not in
compliance with certain Nasdaq listing rules relating to maintaining a minimum
market value of listed securities of $50,000,000 (the "MVLS Requirement"), a
minimum market value of publicly held shares of $15,000,000 (the "MVPHS
Requirement"), and a minimum bid price of $1.00 for its common stock (the
"Minimum Bid Price Requirement"). On July 13, 2022, we received an additional
letter from Nasdaq stating that because we had not regained compliance with the
MVLS Requirement as of July 12, 2022, trading of our common stock on Nasdaq
would be suspended on July 22, 2022 and removed from listing and registration,
unless we requested an appeal to a Nasdaq hearings panel by July 20, 2022, which
we requested prior to such deadline. Such hearing occurred on August 25, 2022.
In anticipation of the expiration of the MVPHS Requirement and Minimum Bid Price
Requirement cure periods on August 30, 2022 and October 3, 2022, respectively,
we addressed all three requirements as part of our compliance plan ("Compliance
Plan") during our hearing. By letter dated September 13, 2022, Nasdaq informed
us of the Panel's decision directing that our listing be transferred to the
Nasdaq Capital Market, effective at the open of business on September 15, 2022,
and our common stock will continue to be listed on that market subject to, among
other things, us satisfying the Compliance Plan in full by no later than January
9, 2023. Our listing was transferred to the Nasdaq Capital Market on September
15, 2022 and we are actively working to implement the Compliance Plan. There can
be no assurance that the Company will be able to implement all of the elements
in the Compliance Plan in the time required thereunder. If the Company is in
fact not able to implement the Compliance Plan as required, the Company will be
de-listed from Nasdaq.

Our cash resources are extremely limited. As of September 30, 2022, we had cash
and cash equivalents of $310,821. We have an immediate need for additional
financing. Our ability to raise capital continues to be impeded by limited
availability of authorized common stock and the current price of our common
stock. Further, we are subject to certain Nasdaq requirements relating to, among
other things, the amount and nature of the capital that we can raise. There can
be no assurance that financing will be available to us on a timely basis and on
satisfactory terms, or at all. We are subject to being delisted from Nasdaq if
we are unable to raise the necessary capital in accordance with our Compliance
Plan. Moreover, failure to obtain sufficient financing on satisfactory terms in
the immediate future will have a material adverse effect on us, including
possibly being required to substantially curtail or cease our operations.

Our ability to fund our operations is dependent upon management's plans, which
include raising capital through issuances of debt and equity securities,
securing research and development grants, and controlling our expenses. A
failure to raise sufficient financing and/or control expenses, among other
factors, will adversely impact our ability to meet our financial obligations as
they become due and payable and to achieve our intended business objectives.

This evaluation is further impacted by the ongoing pandemic relating to the
COVID-19 pandemic. While the extent of its impact depends largely on the spread
and duration of the outbreak, the pandemic has and may still result in
disruptions to capital raises, employees, and vendors which has and may still
result in negative impacts to our operational and financial results.

Accordingly, based on the considerations described above, management has concluded that there is significant doubt as to the Company’s ability to continue as a going concern within one year from the date of issue of the condensed consolidated financial statements.

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Future Funding Requirements

We have not generated any revenue. We do not know when, or if, we will generate
any revenue from product sales. We do not expect to generate significant revenue
from product sales unless and until we obtain regulatory approval of and
commercialize any of our drug candidates. At the same time, we expect our
expenses to increase in connection with our ongoing development activities,
particularly as we continue to research, develop, and seek regulatory approval
for, our drug candidates. We expect to incur additional costs associated with
operating as a public company. In addition, subject to obtaining regulatory
approval of any of our drug candidates, we expect to incur significant
commercialization expenses for product sales, marketing, manufacturing and
distribution. We anticipate that we will need substantial additional funding in
connection with our continuing operations.

As a result, we anticipate that we will need substantial additional funding in
connection with our continuing operations to fund future clinical trials and
pre-clinical testing for our drug candidates, our Compliance Plan for Nasdaq,
general and administrative costs and public company and other expenses,
including potential indemnification obligations and legal fees (primarily
related to litigation). We expect to finance our cash needs primarily through
the sale of our debt and equity securities. However, our ability to raise
capital continues to be impeded by limited availability of authorized common
stock and the current price of our common stock. Further, we are subject to
certain Nasdaq requirements relating to, among other things, the amount and
nature of the capital that we can raise. We may also raise capital through
government or other third-party funding and grants, collaborations and
development agreements, strategic alliances and licensing arrangements. Because
of the numerous risks and uncertainties associated with the development and
commercialization of our drug candidates, we are unable to estimate the amounts
of additional capital outlays and operating expenditures necessary to complete
the development of our drug candidates.

Our future capital requirements will depend on many factors, including:

the progress, costs, results and timing of future clinical studies of our drug candidates

? studies and future preclinical trials, and the clinical development of our

drug candidates for other potential indications beyond their initial target

indications;

the willingness of the FDA and the EMA to accept our future drug candidate

? clinical trials, as well as our other clinical trials and

preclinical studies and other work, as a basis for the review and approval of

our drug candidates;

? the outcome, costs, and timing of seeking and obtaining FDA, EMA, and any other

regulatory approvals;

? the number and characteristics of the drug candidates we are looking for, including our

drug candidates in future preclinical development;

? the ability of our drug candidates to progress through clinical development

with success;

? our need to expand our research and development activities;

? litigation costs with certain adverse parties;

? costs associated with securing and establishing marketing and

manufacturing capabilities;

? the costs of acquiring, licensing or investing in companies, products, drugs

candidates and technologies;

our ability to maintain, expand and defend the scope of our licenses

intellectual property portfolio, including the amount and timing of any

? payments we may be required to make or receive in connection with

the licensing, filing, prosecution, defense and enforcement of any patent or

other intellectual property rights;

? our need and ability to hire additional scientific and medical staff

personal;

? the effect of competing technological and business developments;

? our need to set up additional internal systems and infrastructure, including

financial and reporting systems;

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? the duration and spread of the COVID-19 pandemic, and associated operational conditions.

delays and disruptions and increased costs and expenses;

? economic factors, geopolitical risks and sanctions and other terms; and

? the timing and success of any collaboration, license or other agreement in

which we can enter in the future.


Until such time, if ever, as we can generate substantial revenue from product
sales, we expect to finance our cash needs through a combination of debt
financings and equity offerings, government or other third-party funding,
marketing and distribution arrangements and other collaborations, strategic
alliances and licensing arrangements. To the extent that we raise additional
capital through the sale of debt and equity securities, the ownership interests
of our common stockholders will be diluted, and the terms of these securities
may include liquidation or other preferences that adversely affect the rights of
our common stockholders. Debt financing, if available, may involve agreements
that include covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital expenditures or
declaring dividends. If we raise additional funds through government or other
third-party funding, marketing and distribution arrangements or other
collaborations, strategic alliances or licensing arrangements with third
parties, we may have to relinquish valuable rights to our technologies, future
revenue streams, research programs or drug candidates or to grant licenses on
terms that may not be favorable to us.

Off-balance sheet arrangements

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

Recent accounting pronouncements

As previously noted, we, as an emerging growth company, have elected to take
advantage of the benefits of the extended transition period provided for in
Section 7(a)(2)(B) of the Securities Act, for complying with new or revised
accounting standards, which allows us to defer adoption of certain accounting
standards until those standards would otherwise apply to private companies
unless otherwise noted.

Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the
Company's financial statements.

Effect of inflation and price changes

Increased inflation and changes in prices may result in increased operating
costs, including our labor costs and research and development costs, reduced
liquidity, and limitations on our ability to access credit or otherwise raise
debt and equity capital.

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