Forward-Looking Statements



The following section of this Annual Report on Form 10-K entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contains statements that are not statements of historical fact and are
forward-looking statements within the meaning of federal securities laws. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. These statements reflect our current
views with respect to future events and are based on assumptions and subject to
risks and uncertainties. Factors that may cause our actual results to differ
materially from those in the forward-looking statements include those factors
described in "Item 1A. Risk Factors" beginning on page 22 of this Annual Report
on Form 10-K. You should carefully review all of these factors, as well as the
comprehensive discussion of forward-looking statements on page 1 of this Annual
Report on Form 10-K.

Business Overview

We are a clinical-stage specialty pharmaceutical company developing and
commercializing products for the treatment of ophthalmic diseases. We were
formed as a Delaware corporation on December 26, 2004 under the name of EyeGate
Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc.
effective November 8, 2021. We were originally incorporated in 1998 under the
name of Optis France S.A. in Paris, France. At that time, the name of the French
corporation was changed to EyeGate Pharma S.A.S. and became a subsidiary of
EyeGate Pharmaceuticals, Inc. EyeGate Pharma S.A.S. was dissolved effective
December 30, 2020. We have four wholly-owned subsidiaries: Jade
Therapeutics, Inc., Kiora Pharmaceuticals, GmbH (formerly known as Panoptes
Pharma Ges.m.b.H.), Bayon Therapeutics, Inc., and Kiora Pharmaceuticals Pty Ltd
(formerly known as Bayon Therapeutics Pty Ltd).

Our lead product is KIO-301 with an initial focus on patients with later stages
of disease progression due to Retinitis Pigmentosa (any and all sub-forms).
KIO-301 is a potential vision-restoring small molecule that acts as a
"photoswitch" specifically designed to restore vision in patients with inherited
and age-related degenerative retinal diseases. The molecule is specifically
designed to restore the eyes' ability to perceive and interpret light in
visually impaired patients. It selectively enters viable downstream retinal
ganglion cells (no longer receiving electrical input due to degenerated rods and
cones) and is intended to turn them into light sensing cells, capable of
signaling the brain as to the presence or absence of light. We expect to
initiate a Phase 1b clinical trial in third quarter of 2022. On March 17, 2022,
we were granted Orphan Drug Designation by the U.S. FDA for the API in KIO-301.
KIO-301 (formerly known as B-203) was acquired through the Bayon transaction
which closed October 21, 2021.

KIO-101 is a product that focuses on patients with OPRA. KIO-101 is a
next-generation, non-steroidal, immuno-modulatory and small-molecule inhibitor
of Dihydroorotate Dehydrogenase ("DHODH") with what we believe to be
best-in-class picomolar potency and a validated immune modulating mechanism
designed to overcome the off-target side effects and safety issues associated
with commercially available DHODH inhibitors. In the fourth quarter of 2021, we
reported top-line safety and tolerability data from a phase 1b proof-of-concept
("POC") study evaluating KIO-101 in patients with ocular surface inflammation.
We expect to initiate a Phase 2 clinical trial in the second half of 2022.
KIO-101 (formerly known as PP-001) was acquired through the acquisition of
Panoptes Pharma Ges.m.b.H "Panoptes" in the fourth quarter of 2020.

In addition, we are developing KIO-201, for patients undergoing PRK surgery for
corneal wound repair after refractive surgery. KIO-201 is a modified form of the
natural polymer hyaluronic acid, designed to protect the ocular surface to
permit re-epithelialization of the cornea and improve and maintain ocular
surface integrity. KIO-201 has unique properties that help hydrate and protect
the ocular surface.

In May 2020, we were granted a loan (the "Loan") from Silicon Valley Bank in the
amount of $0.278 million pursuant to the Paycheck Protection Program (the "PPP")
under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security
Act ("CARES Act"), which was enacted in March 2020. The Loan could have been
prepaid by us at any time prior to maturity with no prepayment penalties. Funds
from the Loan were only permitted to be used for payroll costs, costs used to
continue group health care benefits, mortgage payments, rent, utilities, and
interest on other debt obligations incurred before February 15, 2020
("Qualifying Expenses"). We used the entire Loan amount for Qualifying Expenses.
Under the terms of the PPP, certain amounts of the Loan could be forgiven if
they are used for Qualifying Expenses as described in the CARES Act. In
April 2021, we were notified by the Small Business Administration ("SBA") that
this Loan was forgiven in full.

Throughout our history, we have not generated significant revenue. We have never
been profitable, and from inception through December 31, 2021, our losses from
operations have aggregated $124.734 million. Our Net Loss was approximately
$16.395 million

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and $8.092 million for the twelve months ended December 31, 2021 and 2020,
respectively. We expect to incur significant expenses and increasing operating
losses for the foreseeable future as we continue the development and clinical
trials of and seek regulatory approval for our KIO-101, KIO-201 and KIO-301
product candidates, and any other product candidates we advance to clinical
development. If we obtain regulatory approval for KIO-101, KIO-201 and KIO-301,
we expect to incur significant expenses to create an infrastructure to support
the commercialization of KIO-101, KIO-201 and KIO-301 including sales, marketing
and distribution functions.

The continued spread of the COVID-19 pandemic could adversely impact our
clinical studies. In addition, COVID-19 has resulted in significant governmental
measures being implemented to control the spread of the virus, including
quarantines, travel restrictions, and business shutdowns. COVID-19 has also
caused volatility in the global financial markets and threatened a slowdown in
the global economy, which could negatively affect our ability to raise
additional capital on attractive terms or at all. See "Item 1A. Risk Factors"
above. The extent to which COVID-19 may impact our business will depend on
future developments, which are highly uncertain and cannot be predicted with
confidence, such as the duration of the outbreak, the emergence of new variants,
and the effectiveness of actions to contain and treat COVID-19. We cannot
presently predict the scope and severity of any potential disruptions to our
business, including to our ongoing and planned clinical studies. Any such
shutdowns or other business interruptions could result in material and negative
effects to our ability to conduct our business in the manner and on the
timelines presently planned, which could have a material adverse impact on our
business, results of operation, and financial condition. As of the date of this
report, there have been no material adverse effects to our ongoing business
operations from COVID-19.

We will need additional financing to support our continuing operations. We will
seek to fund our operations through public or private equity, debt financings,
license and development agreements, or other sources, which may include
collaborations with third parties. Adequate additional financing may not be
available to us on acceptable terms, or at all. Our failure to raise capital as
and when needed would have a negative impact on our financial condition and our
ability to pursue our business strategy. These conditions raise substantial
doubt about our ability to continue as a going concern. We will need to generate
significant revenue to achieve profitability, and we may never do so.

Financial Overview

Revenues



To date, we have recognized collaboration revenue from U.S. and foreign
government grants made to Jade and Panoptes, as well as from license agreements
as performance obligations toward milestones were met. See Note 2 to our
financial statements, "Summary of Significant Accounting Policies". We expect to
continue to incur significant operating losses as we fund research and clinical
trial activities relating to our therapeutic assets, consisting of our
photoswitch, DHODH and modified HA-based products, or any other product
candidate that we may develop. There can be no guarantee that the losses
incurred to fund these activities will succeed in generating revenue.

Research and Development Expenses

We expense all research and development expenses as they are incurred. Research and development expenses primarily include:

? non-clinical development, preclinical research, and clinical trial and

regulatory-related costs;

? expenses incurred under agreements with sites and consultants that conduct our

clinical trials;

? expenses related to generating, filing, and maintaining intellectual property;

and

? employee-related expenses, including salaries, bonuses, benefits, travel, and

stock-based compensation expense.




Substantially all of our research and development expenses to date have been
incurred in connection with KIO-201 and our former legacy products. We expect
our research and development expenses to increase for the near future as we
advance KIO-101, KIO-201, KIO-301, and any other product candidate through
clinical development, including the conduct of our planned clinical trials. The
process of conducting clinical trials necessary to obtain regulatory approval is
costly and time consuming. We are unable to estimate with any certainty the
costs we will incur in the continued development of our KIO-101, KIO-201,
KIO-301, and any other product candidate that we may develop. Clinical
development timelines, the probability of success and development costs can
differ materially from expectations.

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We may never succeed in achieving marketing approval for our product candidate.

The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following:

? per patient trial costs;

? the number of sites included in the trials;

? the countries in which the trials are conducted;

? the length of time required to enroll eligible patients;

? the number of patients that participate in the trials;

? the number of doses that patients receive;

? the cost of comparative agents used in trials;

? the drop-out or discontinuation rates of patients;

? potential additional safety monitoring or other studies requested by regulatory

agencies;

? the duration of patient follow-up; and

? the efficacy and safety profile of the product candidate.

We do not expect our product candidates to be commercially available, if at all, for the next several years.

General and Administrative Expenses



General and administrative expenses consist primarily of salaries and related
benefits, including stock-based compensation. Our general and administrative
expenses consisted primarily of payroll expenses for our full-time employees.
Other general and administrative expenses include professional fees for
auditing, tax, patent costs and legal services.

We expect that general and administrative expenses will remain consistent for
the near future until commercialization of our photoswitch, DHODH and modified
HA-based products, which could lead to an increase in these expenses.

Total Other Income (Expense)

Total other income (expense) consists primarily of interest income we earn on interest-bearing accounts, and interest expense incurred on our outstanding financing arrangements.

Critical Accounting Policies and Significant Judgments and Estimates



Our management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which we have prepared in
accordance with accounting principles generally accepted in the United States,
or U.S. GAAP. The preparation of these 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 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
materially from these estimates under different assumptions or conditions.

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While our significant accounting policies are more fully described in Note 2 to
our financial statements appearing elsewhere in this Annual Report on Form 10-K,
we believe that the following accounting policies are the most critical for
fully understanding and evaluating our financial condition and results of
operations.

Business Combinations



We applied the provisions of Accounting Standards Codification ("ASC") Topic
805, "Business Combinations," in the accounting for our acquisitions of Bayon
and Panoptes. It required us to recognize the assets acquired and the
liabilities assumed at their acquisition date fair values, which were determined
using market, income, and cost approaches, or a combination. Goodwill as of the
respective acquisition date was measured as the excess of consideration
transferred over the net of the acquisition date fair value of the assets
acquired and the liabilities assumed. Goodwill is generally the result of
expected synergies of the combined company or an assembled workforce.
Indefinite-lived intangible assets acquired were in-process research and
development. The fair value for these intangible assets was determined using the
income approach. Under the income approach, fair value reflects the present
value of the projected cash flows that are expected to be generated by the
products incorporating the in-process research and development, if successful.

Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the estimated fair
value of the identifiable assets acquired and liabilities assumed in a business
combination. The Company evaluates goodwill for impairment annually or when a
triggering event occurs that could indicate a potential impairment. The
evaluation for impairment includes assessing qualitative factors or performing a
quantitative analysis to determine whether it is more-likely-than-not that the
fair value of net assets is below the carrying amount. The goodwill was related
to the 2021 acquisition of Bayon and 2020 acquisition of Pantones, which
represents the excess of the purchase price over the estimated fair value of the
net assets acquired. For the year ended December 31, 2021, we have a $4.5
million impairment loss related to goodwill.

Intangible assets acquired in a business combination are recognized separately
from goodwill and are initially recognized at fair value at the acquisition
date. The Company tests intangible assets for impairment as of December 31 of
each year or more frequently if indicators of impairment are present. The
authoritative accounting guidance provides an optional qualitative assessment
for any indicators that indefinite-lived intangible assets are impaired. If it
is determined that it is more likely than not that the indefinite-lived
intangible assets are impaired, the fair value of the indefinite-lived
intangible assets is compared with the carrying amount and impairment is
recorded for any excess of the carrying amount over the fair value of the
indefinite-lived intangible assets.

During the fourth quarter ended December 31, 2021, the Company performed the
annual evaluation of its intangible assets for impairment. The Company
considered the development timelines for its program and noted no qualitative
factors that would indicate potential impairment of its intangible assets. The
Company also performed a quantitative analysis for impairment analysis and based
on this analysis, the fair value of these products was greater than their
carrying value as of December 31, 2021. As a result of this analysis, an
impairment charge of $1.8 million was taken on the intangible assets. The
impairment loss is for KIO-201 and is due to the fact the asset is regulated as
a drug and not a device which is extending development time.

Accrued Research and Development Expenses



As part of the process of preparing financial statements, we are required to
estimate and accrue research and development expenses. This process involves the
following:

communicating with our applicable personnel to identify services that have been

? performed on our behalf and estimating the level of service performed and the

associated cost incurred for the service when we have not yet been invoiced or

otherwise notified of actual cost;

? estimating and accruing expenses in our financial statements as of each balance

sheet date based on facts and circumstances known to us at the time; and

? periodically confirming the accuracy of our estimates with selected service

providers and making adjustments, if necessary.

Examples of estimated research and development expenses that we accrue include:

? fees paid to contract research organizations and investigative sites in

connection with clinical studies;




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fees paid to contract manufacturing organizations in connection with

? non-clinical development, preclinical research, and the production of clinical

study materials; and

? professional service fees for consulting and related services.




We base our expense accruals related to non-clinical development, preclinical
studies, and clinical trials on our estimates of the services received and
efforts expended pursuant to contracts with organizations/consultants that
conduct and manage clinical studies on our behalf. The financial terms of these
agreements vary from contract to contract and may result in uneven payment
flows. Payments under some of these contracts may depend on many factors, such
as the successful enrollment of patients, site initiation and the completion of
clinical study milestones. Our service providers invoice us as milestones are
achieved and monthly in arrears for services performed. In accruing service
fees, we estimate the time period over which services will be performed and the
level of effort to be expended in each period. If we do not identify costs that
we have begun to incur or if we underestimate or overestimate the level of
services performed or the costs of these services, our actual expenses could
differ from our estimates. To date, we have not experienced significant changes
in our estimates of accrued research and development expenses after a reporting
period.

However, due to the nature of estimates, we cannot assure you that we will not
make changes to our estimates in the future as we become aware of additional
information about the status or conduct of our clinical studies and other
research activities.

Stock-Based Compensation



We have issued options to purchase our common stock and restricted stock.
Stock-based compensation cost is measured at the grant date based on the fair
value of the award and is recognized as expense over the requisite
service/vesting period. Determining the appropriate fair value model and
calculating the fair value of stock-based payment awards require the use of
highly subjective assumptions, including the expected life of the stock-based
payment awards and stock price volatility.

We estimate the grant date fair value of stock options and the related
compensation expense, using the Black-Scholes option valuation model. This
option valuation model requires the input of subjective assumptions including:
(1) expected life (estimated period of time outstanding) of the options granted,
(2) volatility, (3) risk-free rate and (4) dividends. In general, the
assumptions used in calculating the fair value of stock-based payment awards
represent management's best estimates, but the estimates involve inherent
uncertainties and the application of management judgment. As a result, if
factors change and we use different assumptions, our stock-based compensation
expense could be materially different in the future.

Recent Accounting Pronouncements



In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU
No. 2016-13 replaces the incurred loss impairment methodology in current GAAP
with a methodology that reflects expected credit losses and requires
consideration of a broader range of reasonable and supportable information to
inform credit loss estimates. The new guidance is effective for smaller
reporting companies in fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years. We do not expect the adoption of this
standard to have a material effect on our Condensed Consolidated Financial
Statements and related disclosures.

Other Information

Net Operating Loss Carryforwards


As of December 31, 2021, we have federal and state income tax net operating loss
("NOL") carryovers of approximately $72.370 million and $51.930 million,
respectively. Federal NOL carryovers as of December 31, 2017 totaling $46.055
million and state NOL carryovers as of December 31, 2021 totaling $49.894
million will expire at various dates through 2041 and state NOL carryovers as of
December 31, 2021 of $2.037 million can be carried forward indefinitely but
limited to offset 80% of taxable income. Federal NOL carryovers generated during
the years ended December 31, 2018 and forward totaling $26.316 million will be
carried forward indefinitely, but their utilization will be limited to 80% of
taxable income. The Company has foreign net operating loss carryforwards of
$9.405 million as of December 31, 2021, which can be carried forward
indefinitely. As of December 31, 2021 we also have federal and state research
and development tax credit carryforwards of approximately $2.456 million and
$0.503 million, respectively, to offset future income taxes, which expire at
various times through 2041.

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Utilization of these net operating loss and tax credit carryforwards may be
subject to a substantial limitation under Sections 382 and 383 of the Internal
Revenue Code of 1986, as amended, or the Code, and comparable provisions of
state, local and foreign tax laws due to changes in ownership of our company
that have occurred previously or that could occur in the future. Under
Section 382 of the Code and comparable provisions of state, local and foreign
tax laws, if a corporation undergoes an "ownership change," generally defined as
a greater than 50% change by value in its equity ownership over a three-year
period, the corporation's ability to use its pre-change net operating loss
carryforwards and other pre-change tax attributes, such as research and
development tax credits, to reduce its post-change income may be limited. We
have not completed a study to determine whether our initial public offering, our
registered direct offering, our follow-on public offerings, and other
transactions that have occurred over the past three years may have triggered an
ownership change limitation. We may also experience ownership changes in the
future as a result of subsequent shifts in our stock ownership. As a result, if
we generate taxable income, our ability to use our pre-change net operating loss
and tax credits carryforwards to reduce U.S. federal and state taxable income
may be subject to limitations, which could result in increased future tax
liability to us. In addition, the TCJA enacted on December 22, 2017 limits the
amount of NOLs that we are permitted to deduct in any taxable year to 80% of our
taxable income in such year. The TCJA also eliminates the ability to carry back
NOLs to prior years but allows NOLs generated after 2017 to be carried forward
indefinitely. As such, there is a risk that due to such items, our existing NOLs
could expire or be unavailable to offset future income.

JOBS Act

Effective December 31, 2020, we are no longer considered an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012.

Results of Operations

Comparison of Years Ended December 31, 2021 and 2020



The following table summarizes the results of our operations for the years ended
December 31, 2021 and 2020:

                                                                  Year Ended December 31,
                                                            2021             2020           Change
Collaboration Revenue                                  $            -    $      12,059    $  (12,059)
Operating Expenses:
Research and Development                                  (5,350,264)      (3,566,045)      1,784,219
General and Administrative                                (5,323,649)      (4,658,769)        664,880
Goodwill Impairment Loss                                  (4,498,234)                -      4,498,234

Intangible Asset Impairment Loss                          (1,770,314)      

         -      1,770,314
Total Operating Expenses                                 (16,942,461)      (8,212,755)      8,705,588
Other Income, Net                                             242,761          132,870        109,891

Loss Before Income Tax Benefit (Expense)                 (16,699,700)      (8,079,885)      8,815,479
Income Tax Benefit (Expense)                                  304,781      

  (12,055)      (316,836)
Net Loss                                               $ (16,394,919)    $ (8,091,940)    $ 8,498,643


Collaboration Revenue. There was no Collaboration Revenue for the year ended
December 31, 2021, compared to $0.012 million for the year ended December 31,
2020. The revenue recognized for the year ended December 31, 2020 related to the
Panoptes acquisition and the accompanying revenue generated from government
funds from the date of its acquisition.

Research and Development Expenses. Research and Development Expenses increased
by $1.784 million or 50% due to development costs for KIO-101, KIO-201 and
KIO-301, as well as personnel related costs from the Panoptes acquisition. These
increases were partially offset by a decrease in costs related to KIO-201, as
well as costs related to the expiration of a prepaid agreement with a research
vendor in the first quarter of 2020.

General and Administrative Expenses. General and Administrative Expenses increased by $0.665 million or 14% due to increases in personnel related costs and professional fees.

Goodwill Impairment Loss. Goodwill Impairment Loss increased by $4.498 million due to the write-off of Goodwill.



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Intangible Asset Impairment Loss. Intangible Asset Impairment Loss increased by
$1.770 million due to the write-down of IPR&D. The intangible asset impairment
loss relates to KIO-201 and is due to the fact the asset is regulated as a drug
and not a device which is extending development time.

Other Income, Net. Other Income, Net increased by $0.110 million or 82% due to
recording a gain of $0.278 million as a result of the full forgiveness of the
Loan under the PPP, as well as contingent consideration expense of $0.030
million as a result of the change in fair value during 2021. These net gains
were partially offset by a gain of $0.114 million recorded in 2020 as a result
of the disposition of a foreign subsidiary.

Income Tax Benefit (Expense). Income Tax Benefit (Expense) was $0.304 million
for the year ended December 31, 2021, compared to $(0.012) million for the year
ended December 31, 2020. The 2021 tax benefit was mainly due to the release of
valuation allowance as a result of the Bayon acquisition. The 2020 tax expense
was a result of an increase in the state blended tax rate, which was applied to
the deferred tax liability balance.

Liquidity and Capital Resources



Since becoming a public company in 2015, we have financed our operations from
several registered offerings and private placements of our securities, payments
from license agreements, and U.S. and foreign government grants. From inception
through April 13, 2022, we have raised a total of approximately $118.6 million
from such sales of our equity and debt securities, both as a public company and
prior to our IPO, as well as approximately $14.9 million in payments received
under our license agreements and government grants and $0.278 million received
pursuant to the Loan under the PPP, which was fully forgiven in April of 2021.

On January 3, 2020, we completed a registered direct offering for 500,000 shares of Common Stock with a purchase price of $10.00 per share. Our total net proceeds from the offering were approximately $4.5 million.


On January 6, 2021, we completed a private placement of 1,531,101 shares of
Common Stock and warrants to purchase up to 1,531,101 shares of Common Stock to
an affiliate of Armistice Capital, LLC, with a combined purchase price per share
and warrant of $5.225. The total net proceeds from the private placement were
approximately $8.0 million. The warrants have an exercise price of $5.225 per
share, subject to adjustments as provided under the terms of the warrants, and
will be exercisable on the six-month anniversary of their issuance date. The
warrants are exercisable for five years from the issuance date.

On August 11, 2021, we completed a registered direct offering for 4,668,844
shares of Common Stock with a purchase price of $2.3025 per share. We also
completed a concurrent private placement of unregistered warrants to purchase up
to an aggregate of 2,334,422 shares of Common Stock at an exercise price of
$2.24 per share that are exercisable immediately upon issuance and will
expire five and one-half years following the date of issuance. The total net
proceeds to us from the offering were approximately $9.8 million.

At December 31, 2021, we had unrestricted cash and cash equivalents totaling approximately $7.855 million.

The following table sets forth the primary sources and uses of cash for the years ended December 31, 2021 and 2020:



                                                 Year Ended December 31,
                                                  2021             2020

Net Cash Used in Operating Activities $ (10,887,672) $ (7,317,169) Net Cash Used in Investing Activities

             (157,020)

(244,438)

Net Cash Provided by Financing Activities $ 17,795,208 $ 4,997,503

Comparison of Years Ended December 31, 2021 and 2020


Operating Activities. During the year ended December 31, 2021, we recorded a net
loss of $16.394 million, which includes a goodwill impairment loss of $4.498
million, an intangible asset impairment loss of $1.770 million, an increase in
tax credits receivable of $0.441 million, a decrease in accounts payable and
accrued expense of $0.270 million, an increase in deferred taxes of $0.252
million, a decrease in contingent consideration of $0.212 million, and an
increase in prepaid expense of $0.157 million, which was partially offset by
non-cash expense for stock-based compensation in the amount of $0.842 million.
During the year ended December 31, 2020, we recorded a net loss of $8.092
million which was partially offset by non-cash expense for stock-based
compensation in the amount of $0.724 million.

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Investing Activities. During the year ended December 31, 2021, net cash used
related to the acquisition of Bayon, as well as the purchase of office furniture
and fixtures. During the year ended December 31, 2020, net cash used mainly
related to acquisition of Panoptes and the dissolution of EyeGate Pharma S.A.S.

Financing Activities. During the year ended December 31, 2021, we received net
proceeds of $9.756 million from the completion of a registered direct offering,
as well as net proceeds of $7.989 million from the completion of a private
placement. These proceeds were partially offset by full forgiveness of the Loan
under the PPP in the amount of $0.278 million. During the year ended
December 31, 2020 we received net proceeds of $4.501 million from the completion
of a registered direct stock offering, $0.278 million of Loan funds from the PPP
and $0.218 million from the exercise of warrants.

Funding Requirements and Other Liquidity Matters



Our KIO-101, KIO-201 and KIO-301 product pipeline is still in various stages of
clinical development. We expect to continue to incur significant expenses and
increasing operating losses for the foreseeable future. We anticipate that our
expenses will increase substantially if and as we:

? seek marketing approval for our KIO-101, KIO-201 or KIO-301 products or any

other products that we successfully develop;

? establish a sales and marketing infrastructure to commercialize our KIO-101,

KIO-201 or KIO-301 products in the United States, if approved; and

add operational, financial and management information systems and personnel,

? including personnel to support our product development and future

commercialization efforts.




Until such time, if ever, as we can generate substantial product revenue, we
expect to finance our cash needs through a combination of equity offerings, debt
financings, collaborations, strategic alliances and licensing arrangements. We
do not have any committed external source of funds. To the extent that we raise
additional capital through the sale of equity or convertible debt securities,
the ownership interest of our Stockholders will be diluted, and the terms of
these securities may include liquidation or other preferences that adversely
affect the rights of a Common Stockholder. 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
collaborations, strategic alliances or licensing arrangements with
pharmaceutical partners, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product candidates,
including our KIO-301, KIO-101 and KIO-201 products, on terms that may not be
favorable to us. If we are unable to raise additional funds through equity or
debt financings when needed, we may be required to delay, limit, reduce or
terminate our product development or future commercialization efforts or grant
rights to develop and market KIO-101, KIO-201 and KIO-301 products, or any other
products that we would otherwise prefer to develop and market ourselves.

Based on our cash on hand at December 31, 2021, we believe we will have
sufficient cash to fund planned operations into July 2022. However, the
acceleration or reduction of cash outflows by management can significantly
impact the timing needed for raising additional capital to complete development
of its products. To continue development, we will need to raise additional
capital through debt and/or equity financing, or access additional funding
through grants. Although we successfully completed our IPO and several
subsequent registered offerings and private placements of our securities,
additional capital may not be available on terms favorable to us, if at all. On
May 13, 2019, the SEC declared effective our registration statement on Form S-3,
registering a total of $50,000,000 of our securities for sale to the public from
time to time in what is known as a "shelf offering". We do not know if our
future offerings, including offerings pursuant to our shelf registration
statement, will succeed. Accordingly, no assurances can be given that management
will be successful in these endeavors. Our recurring losses from operations have
caused management to determine there is substantial doubt about our ability to
continue as a going concern. Our Condensed Consolidated Financial Statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities or any other adjustments that might be necessary should we be unable
to continue as a going concern.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements at December 31, 2021.



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