The following management's discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein. Overview
Kiromic BioPharma, Inc. (together with its subsidiary, "we," "us," "our" or the "Company") is a target discovery and gene-editing company utilizing artificial intelligence and our proprietary neural network platform with a therapeutic focus on immuno-oncology. Our proprietary target discovery engine is called "DIAMOND." We are focused on extending the benefits of immunotherapy by leveraging our proprietary technologies. Our approach seeks to generate a therapeutic immune response in patients by unleashing the demonstrated natural power of a patient's own immune system to recognize tumor-specific peptide sequences presented on cancer cells, known as tumor specific iso-antigens, capable of generating an immunological response and therefore eradicate cancer cells. We are developing our brand of chimeric antigen receptor ("CAR") T cell product candidates known as ALEXIS. Our two product candidates are called ALEXIS-ISO-1 and ALEXIS-PRO-1. ALEXIS-ISO-1 is our allogenic gamma delta CAR-T cell therapy product candidate targeting Isomesothelin (the isoform of Mesothelin). ALEXIS-PRO-1 is our allogeneic gamma delta chimeric T cell therapy product candidate targeting PD-L1. These are designed to treat cancer by capitalizing on the immune system's ability to destroy cancer cells. These product candidates are in the pre-initial new drug ("IND") stages of theUS Food and Drug Administration (the "FDA") clinical trial process. We are currently going through the IND enabling trials process and we expect that first in human dosing in Phase I of clinical trials will commence in the first quarter of 2022. CAR T cell therapy, a form of cancer immunotherapy, has recently emerged as a revolutionary and potentially curative therapy for patients with hematologic cancers, including refractory cancers. In 2017, two autologous anti-CD19 CAR T cell therapies, Kymriah, developed byNovartis International AG , and Yescarta, developed byKite Pharma, Inc. , were approved by the FDA for the treatment of relapsing/remitting B-cell precursor acute lymphoblastic leukemia and relapsing/remitting large B cell lymphoma, respectively. Autologous CAR T cell therapies are manufactured individually for the patient's use by modifying the patient's own T cells outside the body, causing the T cells to express CARs. The entire manufacturing process is dependent on the viability of each patient's T cells and takes approximately two to four weeks. Allogenic T cell therapies involve engineering healthy donor T cells, which we believe will allow for the creation of an inventory of off-the-shelf products that can be delivered to a larger portion of eligible patients throughout the world. We have not generated any revenue from sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not and have never been profitable and have incurred losses in each period since we began principal business operations in 2012.
Trends and Uncertainties-COVID-19
We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict, as the responses that we, other businesses and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic recession. Policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and economy as a whole. The magnitude and overall effectiveness of these actions remain uncertain. The severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company's service providers, suppliers, contract research organizations and our clinical trials, all of which are uncertain and cannot be predicted. As of the date of this report, the extent to which the COVID-19 pandemic may in the future materially impact our financial condition, liquidity or results of operations is uncertain. 28 Table of Contents Recent Developments We have sufficient cash on hand and available liquidity to meet our obligations through the twelve months following the date the condensed consolidated financial statements are issued. After taking into account the Company's cash flow projections, we don't believe we will have sufficient cash on hand or available liquidity to meet our obligations through the twelve months from the date of issuance of the condensed consolidated financial statements for the three months endingSeptember 30, 2021 . Therefore, this condition raises substantial doubt about the Company's ability to continue as a going concern. Management's plans were updated to further finance operations through additional equity or debt financing arrangements, and/or third-party collaboration funding; however, if we are unable to raise additional funding to meet working capital needs, we will be forced to delay or reduce the scope of its research programs and/or limit or cease operations. The negative cash flows and lack of financial resources raised substantial doubt as to our ability to continue as a going concern, and that substantial doubt has not been alleviated.
New Investigational Drug Application Resubmission Announcement
OnDecember 17, 2020 , we filed two investigational new drug applications with theU.S. Food and Drug Administration ("FDA"). The first application was for a Phase 1 clinical trial of intravenously administered allogenic CAR-T for epithelial ovarian carcinoma ("EOC") and malignant pleural mesothelioma ("MPM"). The second application was for a Phase 1 clinical trial of an intrapleural/intraperitoneal administered allogenic CAR-T for EOC and MPM. Since filing the original applications inDecember 2020 , we have had communications with the FDA, and numerous consults with scientific board and clinical advisors regarding resubmission. OnMarch 9, 2021 , we announced that we planned to resubmit the two investigational new drug applications. The revised applications will be for first in-human dosing of our Off-the-Shelf, Allogenic Gamma-Delta T cell therapy for metastatic and progressive locally advanced solid malignancies. InMay 2021 , we resubmitted the two IND applications. The revised IND applications are for first in-human dosing of our Off-the-Shelf, Allogenic Gamma-Delta T cell therapy for metastatic and progressive locally advanced solid malignancies. OnMay 17, 2021 , we announced that the first IND application was for a Phase I clinical trial of our ALEXIS-PRO-1 product candidate. OnMay 24, 2021 , we announced that the second IND application was for a Phase 1 clinical trial of our ALEXIS-ISO-1 product candidate.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors:
? slow or delayed IND applications;
? slow or delayed clinical trial enrollment;
? patent reinforcement and prosecution; and
? changes in laws or the regulatory environment affecting our company.
Emerging Growth Company
We qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
? have an auditor report on our internal controls over financial reporting
pursuant to Section 404(b) of the Sarbanes-Oxley Act;
29 Table of Contents
comply with any requirement that may be adopted by the
? Accounting Oversight Board regarding mandatory audit firm rotation or a
supplement to the auditor's report providing additional information about the
audit and the financial statements (i.e., an auditor discussion and analysis);
? submit certain executive compensation matters to stockholder advisory votes,
such as "say-on-pay" and "say-on-frequency;" and
disclose certain executive compensation related items such as the correlation
? between executive compensation and performance and comparisons of the chief
executive officer's compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed$1.07 billion , (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our common stock that is held by non-affiliates exceeds$700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than$1 billion in non-convertible debt during the preceding three year period.
Components of Results of Operations
Revenue
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales in the foreseeable future. We will record revenue from collaboration agreements, including amounts related to upfront payments, annual fees for licenses of our intellectual property and research and development funding. However, none of those agreements have been executed as of the issuance date of this report.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates. These include the following:
? salaries, benefits and other related costs, including stock-based compensation
expense, for personnel engaged in research and development functions;
expenses incurred under agreements with third parties, including contract
? research organizations and other third parties that conduct preclinical
research and development activities and clinical trials on our behalf;
costs of developing and scaling our manufacturing process and manufacturing
drug products for use in our preclinical studies and future clinical trials,
? including the costs of contract manufacturing organizations, that will
manufacture our clinical trial material for use in our preclinical studies and
potential future clinical trials;
? costs of outside consultants, including their fees and related travel expenses;
? costs of laboratory supplies and acquiring, developing and manufacturing
preclinical study and clinical trial materials;
? license payments made for intellectual property used in research and
development activities; and
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facility-related expenses, which include direct depreciation costs and expenses
? for rent and maintenance of facilities and other operating costs if
specifically, identifiable to research activities.
Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase substantially for the foreseeable future and will comprise a larger percentage of our total expenses as we initiate a Phase 1/2a clinical trial for our ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates and continue to discover and develop additional product candidates. We cannot determine with certainty the duration and costs of future clinical trials of our ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates, or any other product candidate we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of our ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates and any other our product candidate we may develop will depend on a variety of factors, including:
the scope, rate of progress, expense and results of clinical trials of our
? ALEXIS-PRO-1 and ALEXIS-ISO-1 product candidates, as well as of any future
clinical trials of other product candidates and other research and development
activities that we may conduct;
? uncertainties in clinical trial design and patient enrollment rates;
the actual probability of success for our product candidates, including their
? safety and efficacy, early clinical data, competition, manufacturing capability
and commercial viability;
? significant and changing government regulation and regulatory guidance;
? the timing and receipt of any marketing approvals; and
? the expense of filing, prosecuting, defending and enforcing any patent claims
and other intellectual property rights.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to slower than expected patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, business development, operations and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and expenses for rent and maintenance of facilities and other operating costs that are not specifically attributable to research activities. We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support our continued research activities and development of product candidates. We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq andSEC requirements; director and officer insurance costs; and investor and public relations costs. 31 Table of Contents Results of Operations
Comparison of the Three Months Ended
The following table sets forth key components of our results of operations for
the three months ended
Three Months Ended June 30, Increase (Decrease) 2021 2020 $ % Operating expenses: Research and development$ 2,658,100 $ 1,272,300 $ 1,385,800 108.92 % General and administrative 2,314,100 10,094,600 (7,780,500) (77.08) % Total operating expenses 4,972,200 11,366,900 (6,394,700) (56.26) % Loss from operations (4,972,200) (11,366,900) (6,394,700) (56.26) % Other expense Interest expense (2,100) - (2,100) (100.00) % Total other expense (2,100) - (2,100) (100.00) % Net loss$ (4,974,300) $ (11,366,900) $ (6,396,800) (56.28) % Research and development expenses. Our research and development expenses increased by$1,385,800 , or 108.92%, to$2,658,100 for the three months endedJune 30, 2021 , from$1,272,300 for the three months endedJune 30, 2020 . The following table summarizes our research and development expenses by product candidate or development program: Three Months Ended June 30, Increase (Decrease) 2021 2020 $ % Direct research and development expenses by product candidate: ALEXIS-PRO-1$ 7,900 $ 21,500 $ (13,600) (100.00) % ALEXIS-ISO-1 407,400 39,900 367,500 100.00 % Platform development, early-stage research and unallocated expenses: Employee-related costs 929,600 703,200 226,400 32.20 % Laboratory supplies and services 239,000 58,900 180,100 305.77 % Outsourced research and development 746,000 282,100 463,900 164.45 % Laboratory equipment and maintenance 27,500 12,400
15,100 121.77 % Facility-related costs 208,500 99,200 109,300 110.18 % Intellectual Property 88,800 54,300 34,500 63.54 %
Other research and development costs 3,400 800 2,600 325.00 % Total research and development expenses$ 2,658,100 $ 1,272,300
$ 1,385,800 108.92 % As illustrated above, the increase in research and development expenses resulted from (i) a$367,500 increase in ALEXIS-ISO-1 direct research and development costs which primarily included a$289,100 increase in disposables and consumables, and a$44,200 increase in outsourced research and development fees, all of which attributed to Gamma Delta T-Cell manufacturing and in-vivo experimentation; (ii) a$226,400 increase in employee related costs, which primarily included a$365,200 increase in wages, benefits and payroll taxes, offset by reduced stock compensation expenses of$110,800 attributable to research and development employees; (iii) a$463,900 increase in outsourced research and development costs, which primarily included a$532,900 increase in regulatory consulting fees with the offsetting balance resulting from reduced research studies totaling$60,100 , and stock compensation expenses attributed to non-employees compared to the prior period; (iv) a$109,300 increase in facility-related costs, primarily driven by$71,400 increase in allocated depreciation expenses,$5,200 increase in allocated rent expenses, and the remaining increase attributed to repairs, maintenance, and utilities; (v) a$180,100 increase in laboratory supplies in services, which primarily included a$25,000 increase in supplies and a$159,200 increase in spending on disposables and consumables for experimentation, testing, validation of our other key value drivers, with the remaining offsetting balance driven by 32
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reduced postage spending; and (vi) a
These cost increases were primarily incurred to support Gamma Delta T-Cell manufacturing as well as experimentation and validation of our product candidates.
Augmented our research and development team: In the three months ended June
1. 30, 2021 and 2020, our average headcount increased to 21.5 employees from
seven employees allocable to research and development and clinical trials
preparation.
ALEXIS-ISO-1 Manufacturing and Experimentation:
during the three months ended
2. Delta T-Cells in the recently completed GMP facilities. In addition, in-vivo
experimentation costs in the recently completed vivarium facilities
contributed to the increase.
General and administrative expenses. Our general and administrative expenses decreased by$7,780,500 , or 77.08%, to$2,314,100 for the three months endedJune 30, 2021 from$10,094,600 for the three months endedJune 30, 2020 . During the three months endedJune 30, 2021 , the decrease primarily resulted from a decrease in stock compensation expenses of$8,486,700 . That decrease was offset by increased professional services of$130,300 , wages and salaries of$351,700 , and insurance of$142,400 . The decrease in stock compensation expense was driven by theJune 2020 common stock issuances of 722,000 shares to our Chief Financial Officer, and Chief Strategy and Innovation Officer which resulted in$9,386,000 of non-recurring stock compensation expenses. That decrease was offset by expenses related to stock option grant modification totaling$890,700 incurred during the three months endedJune 30, 2021 . . The increase in professional services expenses was primarily driven by an increase of$138,000 from consulting and corporate development fees incurred during the three months endedJune 30, 2021 compared to the same period in the prior year. Employee related expenses were impacted by increases to headcount, and employee salary rates. During the three monthsJune 30, 2021 and 2020, the headcount for employees allocated to general and administrative purposes increased to eight employees from four employees, respectively. In addition, the Chief Executive Officer's salary increased to an annual rate of$504,000 from$280,000 as ofJune 30, 2021 and 2020, respectively. Finally, the increase in insurance costs is driven by our financing arrangement for theDirector and Officer Insurance policy. We entered this policy in November of 2020. The total amount of expense incurred from that policy during the three months endedJune 30, 2021 totaled$135,100 . Interest expense. Interest expense was$2,100 and$0 for the three months endedJune 30, 2021 and 2020, respectively. The increase is entirely driven by cash paid for interest attributed to the financing arrangement for ourDirector and Officer Insurance policy. The total amount financed was$540,500 with an annual interest rate of 4.59%, to be paid over a period of nine months. As ofJune 30, 2021 , the remaining payable balance on the financed amount was$91,600 . Net loss. As a result of the cumulative effect of the factors described above,
our net loss decreased to$4,974,300 during the three months endedJune 30, 2021 compared to$11,366,900 during the three months endedJune 30, 2020 . 33 Table of Contents
Comparison of the Six Months Ended
The following table sets forth key components of our results of operations for
the six months ended
Six Months Ended June 30, Increase (Decrease) 2021 2020 $ % Operating expenses: Research and development$ 4,543,700 $ 2,300,400 $ 2,243,300 97.52 % General and administrative 4,385,100 10,919,200 (6,534,100) (59.84) % Total operating expenses 8,928,800 13,219,600 (4,290,800) (32.46) % Loss from operations (8,928,800) (13,219,600) (4,290,800) (32.46) % Other income (expense) Gain on loan extinguishment 105,800 - 105,800 100.00 % Interest expense (5,800) - (5,800) (100.00) % Total other income (expense) 100,000 -
(22,400) (100.00) % Net loss$ (8,828,800) $ (13,219,600) $ (4,313,200) (32.63) % Research and development expenses. Our research and development expenses increased by$2,243,300 , or 97.52%, to$4,543,700 for the six months endedJune 30, 2021 , from$2,300,400 for the six months endedJune 30, 2020 . The following table summarizes our research and development expenses by product candidate
or development program: Six Months Ended June 30, Increase (Decrease) 2021 2020 $ % Direct research and development expenses by product candidate: ALEXIS-PRO-1$ 33,900 $ 39,400 $ (5,500) (13.96) % ALEXIS-ISO-1 892,100 54,600 837,500 100.00 % Platform development, early-stage research and unallocated expenses: Employee-related costs 1,785,500 1,127,100 658,400 58.42 % Laboratory supplies and services 359,700 125,500 234,200 186.61 % Outsourced research and development 896,000 678,100 217,900 32.13 % Laboratory equipment and maintenance 59,900 26,800
33,100 123.51 % Facility-related costs 364,300 177,900 186,400 104.78 % Intellectual Property 148,800 69,000 79,800 115.65 %
Other research and development costs 3,500 2,000
1,500 75.00 %
Total research and development expenses
As illustrated above, the increase in research and development expenses resulted from (i) a$837,500 increase in ALEXIS-ISO-1 direct research and development costs which primarily included a$673,400 increase in disposables and consumables, a$44,400 increase in outsourced research and development fees, a$25,800 increase in non-capitalizable equipment and maintenance, and a$57,500 increase in supplies, all of which attributed to Gamma Delta T-Cell manufacturing and in-vivo experimentation; (ii) a$658,400 increase in employee related costs, which primarily included a$654,000 increase in wages, benefits and payroll taxes; (iii) a$217,900 increase in outsourced research and development costs, which primarily included a$564,100 increase in regulatory consulting fees with the offsetting balance resulting from reduced stock compensation expenses attributed to non-employees compared to the prior period; (iv) a$186,400 increase in facility-related costs, primarily driven by$132,700 increase in allocated depreciation expenses,$13,500 increase in allocated rent expenses with the remaining amount attributed to repairs, maintenance, and utilities; (v) a$234,200 increase in laboratory supplies in services, which primarily included a$65,600 increase in supplies and a$166,800 increase in spending on disposables and consumables for experimentation, testing, validation of our other key value drivers, with the remaining balance driven by postage spending; and (vi) a$79,800 increase in 34
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intellectual property which consists of increased legal expenses and intellectual property filing primarily attributed to DIAMOND and other technologies currently in development;
These cost increases were primarily incurred to support Gamma Delta T-Cell manufacturing as well as experimentation and validation of our product candidates.
Augmented our research and development team: In the six months ended
1. 2021 and 2020, our average headcount increased to 18.5 employees from 6
employees allocable to research and development and clinical trials preparation.
ALEXIS-ISO-1 Manufacturing and Experimentation:
during the six months ended
2. Delta T-Cells in the recently completed GMP facilities. In addition, in-vivo
experimentation costs in the recently completed vivarium facilities
contributed to the increase.
General and administrative expenses. Our general and administrative expenses decreased by$6,534,100 , or 59.54%, to$4,385,100 for the six months endedJune 30, 2021 from$10,919,200 for the six months endedJune 30, 2020 . During the six months endedJune 30, 2021 , the decrease primarily resulted from a decrease in stock compensation expenses of$7,859,200 . That decrease was offset by increased professional services of$641,700 , wages and salaries of$550,300 , and insurance of$284,700 . The decrease in stock compensation expense was driven by theJune 2020 common stock issuances of 722,000 shares to our Chief Financial Officer, and Chief Strategy and Innovation Officer which resulted in$9,386,000 of non-recurring stock compensation expenses. That decrease was offset by expenses related to stock option grant modification totaling$1,178,300 incurred during the six months endedJune 30, 2021 . The remaining offsetting balance is mainly driven by increased stock compensation expense during the six months endedJune 30, 2021 from amortized expense of executive performance-based restricted stock unit grants. The increase in professional services expenses was driven by an increase of$361,900 from accounting and audit fees and an increase of$279,900 of other consulting and corporate development fees incurred during the six months endedJune 30, 2021 compared to the same period in the prior year. Employee related expenses were impacted by increases to headcount, and employee salary rates. During the six monthsJune 30, 2021 and 2020, the headcount for employees allocated to general and administrative purposes increased to 8 employees from 3.5 employees, respectively. In addition, the Chief Executive Officer's salary increased to an annual rate of$504,000 from$280,000 as ofJune 30, 2021 and 2020, respectively. Finally, the increase in insurance costs is driven by our financing arrangement for theDirector and Officer Insurance policy. We entered this policy in November of 2020. The total amount of expense incurred from that policy during the six months endedJune 30, 2021 totaled$270,200 . Gain on loan extinguishment. Gain on loan extinguishment was$105,800 and$0 for the six months endedJune 30, 2021 and 2020, respectively. During the year endedDecember 31, 2020 , we applied for forgiveness of the SBA Loan in accordance with the terms of the CARES Act. OnFebruary 16, 2021 the SBA granted forgiveness of the SBA Loan and all applicable interest. On the date of forgiveness, the principal and accrued interest totaled$105,800 . 35
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Interest expense. Interest expense was$5,800 and$0 for the six months endedJune 30, 2021 and 2020, respectively. The increase is entirely driven by cash paid for interest attributed to the financing arrangement for ourDirector and Officer Insurance policy. The total amount financed was$540,500 with an annual interest rate of 4.59%, to be paid over a period of nine months. As ofJune 30, 2021 , the remaining payable balance on the financed amount was$91,600 . Net loss. As a result of the cumulative effect of the factors described above, our net loss decreased to$8,828,800 during the six months endedJune 30, 2021 compared to$13,219,600 during the six months endedJune 30, 2020 .
Liquidity and Capital Resources
As ofJune 30, 2021 , we had cash and cash equivalents of$3,070,400 . As ofDecember 31, 2020 we had cash and cash equivalents of$10,150,500 . We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily with proceeds from the sale of our convertible promissory notes, preferred stock, and common stock from the initial public offering. Based on our forecasted expenditures related to our ongoing clinical trials and research and development efforts following the completion of our public offering onJuly 2, 2021 , we determined that we have sufficient cash on hand and available liquidity to meet our obligations through the twelve months following the date the condensed consolidated financial statements are issued. After taking into account our cash flow projections, we do not believe we will have sufficient cash on hand or available liquidity to meet our obligations through the twelve months from the date of issuance of the condensed consolidated financial statements for the three months endingSeptember 30, 2021 . We have incurred significant operating losses since inception, and we expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our product candidates. We expect that our research and development and general and administrative costs will increase. These costs include conducting preclinical studies and clinical trials for our product candidates, contracting with clinical research organizations and building out internal capacity to have product candidates manufactured to support preclinical studies and clinical trials, expanding our intellectual property portfolio and providing general and administrative support for our operations. As a result, substantial doubt exists regarding the going concern assumption on our condensed consolidated financial statements. Therefore, these condition raises substantial doubt about our ability to continue as a going concern. We are seeking significant additional capital funding to develop our platform, additional hiring of scientific professionals, hiring other general and administrative employees, and clinical trials. However, there can be no assurance that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will be favorable. In consideration of our plans, substantial doubt is not alleviated.
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