Management's Discussion and Analysis of the Results of Operations

The following discussion and analysis of our financial condition and results of
operations should be read together with our financial statements and the related
notes and the other financial information included elsewhere in this Quarterly
Report and with our audited consolidated financial statements (and notes
thereto) for the year ended December 31, 2021

included in our Annual Report on Form 10-K filed with the SEC, particularly
those under "Risk Factors."  This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
various factors, including those discussed below and elsewhere in this Quarterly
Report. Additionally, many of these risks and uncertainties are currently
elevated by and may or will continue to be elevated by the COVID-19 pandemic. We
undertake no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this report or to reflect actual
outcomes.

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, assumptions, estimates,
intentions and future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control, and which may
cause our actual results, performance or achievements to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may," "can,"
"anticipate," "assume," "should," "indicate," "would," "believe," "contemplate,"
"expect," "seek," "estimate," "continue," "plan," "point to," "project,"
"predict," "could," "intend," "target," "potential" and other similar words and
expressions of the future.

There are a number of important factors that could cause the actual results to
differ materially from those expressed in any forward-looking statement made by
us. These factors include, but are not limited to:

? our lack of operating history and history of operating losses;

our current and future capital requirements and our ability to satisfy our

? capital needs, including our ability to access financing that may be

unavailable due to contractual limitations under the Securities Purchase

Agreement (as defined below);

? the dilutive effect of our outstanding convertible securities:

our ability to successfully complete required clinical trials of our products

? and obtain approval from the U.S. Food and Drug Administration ("FDA") or other

regulatory agents in different jurisdictions;

the potential impact of outbreaks of communicable diseases, including the

? COVID-19 pandemic, and adverse global conditions, including political and

economic uncertainty on our business, financial conditions, and results of

operations, including on our clinical development plans and timelines;

? the outcome, costs and timing of clinical trial results for our current or

future product candidates;

? our ability to maintain or protect the validity of our patents and other

intellectual property;

? the volatility of the price of our common stock;

? our ability to retain key executives;

? our ability to internally develop new inventions and intellectual property;

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? acceptance of our products in our industry;

? the emergence and effect of competing or complementary products, including the

ability of our existing and future products to compete effectively;

? the accuracy of our estimates regarding expenses and capital requirements; and

? our ability to adequately support growth.

Trademarks

This Quarterly Report on Form 10-Q includes trademarks, service marks, and trade
names owned by us or other companies. All trademarks, service marks, and trade
names included in this Quarterly Report on Form 10-Q are the property of their
respective owners. Solely for convenience, the trademarks and trade names in
this report may be referred to without the ® and ™ symbols, but such references
should not be construed as any indicator that their respective owners will not
assert, to the fullest extent under applicable law, their rights thereto.

ADDITIONAL NOTES

Timber Pharmaceuticals, Inc. and its consolidated subsidiaries are referred to

? herein as "Timber," the "Company," "we," "us," and "our," unless the context

indicates otherwise.

? Amounts and percentages throughout this Quarterly Report on Form 10-Q may

reflect rounding adjustments and consequently totals may not appear to sum.

Overview

Timber Pharmaceuticals, Inc. ("Timber", the "Company", "we", "us") is a
clinical-stage biopharmaceutical company focused on the development and
commercialization of treatments for orphan dermatologic diseases. Our
investigational therapies have proven mechanisms-of-action backed by decades of
clinical experience and well-established CMC (chemistry, manufacturing and
control) and safety profiles. We are initially focused on developing
non-systemic treatments for rare dermatologic diseases including congenital
ichthyosis ("CI"), facial angiofibromas ("FAs") in tuberous sclerosis complex
("TSC"), and other sclerotic skin diseases. Our lead late-stage program is
TMB-001. TMB-003 is our earliest stage program.

TMB-001

TMB-001, a patented topical formulation of isotretinoin using our patented IPEG™
delivery system, completed its Phase 2b clinical trial (the CONTROL study) in
the fourth quarter of 2021, for the treatment of moderate to severe subtypes of
CI, a group of rare genetic keratinization disorders that lead to dry,
thickened, and scaling skin. This study demonstrated a clinically meaningful
reduction in targeted and overall severity of CI along with a favorable safety
profile.  A prior Phase 1/2 study involving 19 patients with CI demonstrated
safety and a signal of preliminary efficacy of TMB-001, as well as minimal
systemic absorption.  The U.S. Food and Drug Administration ("FDA") (through its
Orphan Products Grant program) awarded us a $1.5 million grant to support
clinical trials evaluating TMB-001.

On October 7, 2021, we announced the completion of our Phase 2b trial in CI. The
Phase 2b CONTROL study was a randomized, double-blind, vehicle-controlled study
designed to assess the efficacy and safety of two concentrations of TMB-001
(0.05% and 0.1% isotretinoin) for the treatment of two distinct subtypes of
moderate-to-severe CI (X-linked recessive and lamellar ichthyosis) in patients
(n=33) three years old or older. Subjects applied TMB-001 twice daily for 12
weeks. The primary endpoint was the reduction of targeted ichthyosis severity,
determined by a 50 percent or greater reduction in the validated Visual Index
for Ichthyosis Severity ("VIIS") scaling score (or VIIS-50), a clinically
meaningful change. Secondary endpoints included reduction in overall ichthyosis
severity, as measured by a two-point improvement using the (IGA) scale, also
considered to be a clinically relevant improvement. The study was not designed
or powered for statistical analysis of the endpoints and was intended to provide
information for future development.

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Top-line results including descriptive statistics are described below:

In the per protocol (the "PP") population, 100 percent (nominal p= 0.04) and 40

? percent (nominal p= ns) of patients treated with TMB-001 0.05% and 0.1%,

respectively, achieved VIIS-50 compared to 40 percent in the vehicle group.

In the intent to treat (the "ITT") population, 64 percent (nominal p= 0.17) and

? 40 percent (nominal p= ns) of patients treated with TMB-001 0.05% and 0.1%,

respectively, achieved VIIS-50 compared to 33 percent in the vehicle group.

In the PP population, 100 percent (nominal p= 0.002) and 60 percent

? (nominal p=ns) of patients treated with TMB-001 0.05% and 0.1%, respectively,

achieved a ?2 point improvement in the IGA at week 12 compared to 10 percent in

the vehicle group.

In the ITT population, 55 percent (nominal p= 0.02) and 40 percent

? (nominal p=ns) of patients treated with TMB-001 0.05% and 0.1%, respectively,

achieved a ?2 point improvement in the IGA at week 12 compared to 8 percent in

the vehicle group.

TMB-001 was generally well tolerated with a similar incidence of adverse events

? (Aes) across treatment groups. The most frequent Aes were local adverse effects

common for such topical treatments. There were no treatment-related serious

adverse events (SAE).

On February 3, 2022, we announced the successful completion of an End-of-Phase 2
meeting with the FDA that resulted in a clear path to progress to a pivotal
Phase 3 study for TMB-001. The clinical development program for TMB-001 includes
a Phase 3 study with an efficacy arm and a maximum use pharmacokinetic arm as
well as a smaller bridging study required to bridge to the oral reference
product. Based on FDA feedback at the End-of-Phase 2 meeting, we  initiated a
pivotal Phase 3 study of TMB-001 in the second quarter of 2022.

On March 25, 2022, we announced a late-breaking presentation of a sub-analysis
of the Company's Phase 2b CONTROL study that evaluated TMB-001 was made by a
third party at the American Academy of Dermatology 2022 Annual Meeting. The
sub-type analysis found that TMB-001 0.05% demonstrated a substantially greater
proportion of patients achieving VIIS-50 and ?2-grade IGA improvement compared
with vehicle regardless of subtype.  Among enrolled patients (TMB-001 0.05%
[n=11], 0.1% [n=10], and vehicle [n=12]), 55% had autosomal recessive CI
lamellar ichthyosis (ARCI-LI) and 45% % X-linked recessive ichthyosis (XLRI)
subtypes.

On April 7, 2022, we received a notice of allowance from the Korean Intellectual
Property Office for a patent application covering TMB-001 (Application Number:
10-2018-7014948). Additional patents are pending for TMB-001 in several other
countries.

On April 28, 2022, we announced the FDA granted Fast Track designation to TMB-001 for the treatment of XLRI and ARCI-LI.

On May 31, 2022, we announced that the U.S. Food and Drug Administration (FDA)
has granted Breakthrough Therapy designation to TMB-001, a topical isotretinoin
formulated using the Company's patented IPEG™ delivery system, for the treatment
of CI.

On June 2, 2022, we filed a divisional Korean patent application covering claims to additional subject matter in view of the Korean Patent Application Number:

10-2018-7074948 to issue on June 3, 2022.

On June 3, 2022, TMB-001 Korean Patent Application Number: 10-2018-7074948 was issued as Korean Patent Number: 10-2406880.

On June 23, 2022, we announced that the first four patients have been enrolled in the pivotal Phase 3 ASCEND clinical trial.

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On June 30, 2022, we received a notice of allowance from the United States Patent and Trademark Office for a patent application covering TMB-001 (Application Number: 16/875,710) covering claims to the uses and methods of treating congenital ichthyosis and administering isotretinoin.

On July 13, 2022, we paid the issue fee for the allowed TMB-001 Application Number: 16/875,710 and we filed a US continuation patent application covering claims to additional subject matter.

TMB-002

TMB-002, a proprietary topical formulation of rapamycin, is currently being
evaluated in a Phase 2b clinical trial for the treatment of FAs in TSC, a
multisystem genetic disorder resulting in the growth of hamartomas in multiple
organs. TSC results from dysregulation in the mTOR pathway, and as a topical
mTOR inhibitor, TMB-002, marketed under the brand name Pascomer, may address FAs
in TSC without the level of systemic absorption of an oral agent.  As of April
30, 2022, recruitment had been finalized on the TMB-002 Phase 2b trial with a
total of 114 consented (108 randomized) patients.

On March 17, 2021, we announced that AFT Pharmaceuticals Limited ("AFT"), our
development partner for TMB-002, entered into a license and supply agreement
with Desitin Arzneimittel GmbH ("Desitin") for Pascomer for the treatment of FAs
associated with TSC in Europe. Pursuant to our licensing and development
agreement, we are entitled to receive 50% of the economics (royalties and
milestones) in any licensing transaction that AFT executes outside of North
America, Australia, New Zealand, and Southeast Asia.

On April 4, 2022, Nobelpharma America LLC ("Nobelpharma") announced that the FDA
has approved HYFTOR™ (sirolimus topical gel) 0.2% as the first topical treatment
indicated for FAs associated with TSC in adults and children six (6) years of
age or older.  The approval of this program in the United States and the
protection granted under the Orphan Drug Act represent a major shift in the
commercial opportunity and environment for TMB-002.  As TMB-002 is intended for
treatment of the same indication, we do not intend to proceed with a pivotal
Phase 3 clinical trial of TMB-002 in FAs at this time.

On July 23, 2022, we provided written notice to AFT of our decision to terminate
the AFT License Agreement, dated as of July 5, 2019, by and between the
Subsidiary and AFT (the "AFT License Agreement") because we believe there is no
longer a commercially reasonable path to approval and commercialization for
TMB-002 in the United States for FAs associated with TSC. Additionally,
following the receipt and analysis of topline data for the Phase II Clinical
Trial (as defined in the AFT License Agreement) it was determined that the study
failed to meet its primary efficacy endpoint. Under the AFT License Agreement,
we were required to provide 120 days' prior written notice of termination to AFT
which was waived by AFT on July 25, 2022 (the "Termination Date"). On the
Termination Date, the rights and licenses to TMB-002 reverted to AFT, among
other things, as set forth in the AFT License Agreement.

TMB-003

The earliest stage product in our pipeline is TMB-003, a proprietary formulation
of Sitaxsentan, a new chemical entity in the U.S., which is a selective
endothelin-A receptor antagonist.  It is currently in preclinical development as
a locally applied formulation for the treatment of sclerotic skin diseases.

The

two disease areas under consideration include Lichen Sclerosis a rare chronic disease of vulvae and perianal areas, and Localized Scleroderma, a chromic connective tissue disease that also affects other organ systems.

On January 12, 2021, we announced that the FDA has granted orphan drug
designation for TMB-003, our locally delivered formulation of Sitaxsentan, for
the treatment of Systemic Sclerosis.  We are considering pursuing additional
orphan drug designations in other indications in the future.

BPX-01 and BPX-04

In connection with the merger with BioPharmX Corporation ("BioPharmX") on May
18, 2020, we acquired the BPX-01 and BPX-04 assets. BPX-01 is a Phase 3 ready
topical minocycline for the treatment of inflammatory lesions of acne vulgaris.
BPX-04 is a Phase 3 ready topical minocycline for the treatment of
papulopustular rosacea. On September 15,

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2020, we announced that we had received a notice of allowance from the U.S.
Patent and Trademark Office (USPTO) for a Company patent application covering
BPX-01 and BPX-04 (U.S. Patent Application No.: 16/514,459) and the application
subsequently issued on January 5, 2021, as US 10,881,672.  We are seeking to
monetize these assets through a license, co-development, or sale.

The Merger, Reverse Stock Split, and Name Change

On May 18, 2020, BioPharmX completed its business combination with Timber
Pharmaceuticals LLC, a Delaware limited liability company ("Timber Sub"), in
accordance with the terms of the Agreement and Plan of Merger and
Reorganization, dated as of January 28, 2020 (the "Merger Agreement"), by and
among BioPharmX, Timber Sub and BITI Merger, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Merger Sub"), as amended by Amendment
No. 1 thereto made and entered into as of March 24, 2020 (the "First Amendment")
and Amendment No. 2 thereto made and entered into as of April 27, 2020 (the
"Second Amendment") (the Merger Agreement, as amended by the First Amendment and
the Second Amendment, the "Amended Merger Agreement"), pursuant to which Merger
Sub merged with and into Timber Sub, with Timber Sub surviving as a wholly-owned
subsidiary of the Company (the "Merger"). In connection with, and immediately
prior to the completion of, the Merger, BioPharmX effected a reverse stock split
of the Company's common stock, par value $0.001 per share, at a ratio of
1-for-12 (the "Reverse Stock Split"). Immediately after completion of the
Merger, BioPharmX changed its name to "Timber Pharmaceuticals, Inc." and the
officers and directors of Timber Sub became the officers and directors of the
Company.

Under the terms of the Amended Merger Agreement, BioPharmX issued shares of
common stock to the holders of common units of Timber Sub. Immediately after the
Merger, there were approximately 11,849,031 shares of common stock outstanding
(after the Reverse Stock Split). Pursuant to the terms of the Amended Merger
Agreement, the former holders of common units of Timber Sub (including the
Investors, as defined below, but excluding Value Appreciation Rights of Timber
Sub ("VARs"), as defined below) owned in the aggregate approximately 88.5% of
the outstanding common stock, with the Company's stockholders immediately prior
to the Merger owning approximately 11.5% of the outstanding common stock. The
number of shares of common stock issued to the holders of common units of Timber
Sub for each common unit of Timber Sub outstanding immediately prior to the
Merger was calculated using an exchange ratio of approximately 629.57 shares of
common stock for each Timber Sub unit. In addition, the 584 VARs that were
outstanding immediately prior to Merger became denoted and payable in 367,670
shares of common stock at the Effective Time of the Merger (the "Effective
Time"). Further, the holder of the 1,819,289 preferred units of Timber Sub
outstanding immediately prior to the Merger received 1,819 shares of the newly
created convertible Series A preferred stock (the "Series A Preferred Stock") at
the Effective Time.

Private Placement of Common Stock and Warrants

In connection with the Merger Agreement, on March 27, 2020, Timber Sub and
BioPharmX entered into a securities purchase agreement (the "Securities Purchase
Agreement"), with certain accredited investors (the "Investors") pursuant to
which, among other things, Timber Sub issued to the Investors shares of Timber
units immediately prior to the Merger and BioPharmX issued to the Investors
warrants to purchase shares of BioPharmX common stock on the tenth trading day
following the consummation of the Merger (the "Investor Warrants") in a private
placement transaction for an aggregate purchase price of approximately $25
million (which amount is comprised of (x) a $5 million credit with respect to
the Bridge Notes and (y) $20 million in cash from the Investors) (the "Purchase
Price"). We issued to the Investors 8,384,764 Series A Warrants to purchase
shares of common stock ("Series A Warrants") and 7,042,175 Series B Warrants to
purchase shares of common stock ("Series B Warrants"). The Series A Warrants
have a 5-year term and an exercise price of $2.7953, subject to the number of
shares and exercise price being reset based on our stock price after the Merger.
The Series A Warrants were initially exercisable into 8,384,764 shares of common
stock issued to the Investors, subject to certain adjustments. The Series B
Warrants had an exercise price per share of $0.001, were exercisable upon
issuance and were initially convertible into 7,042,175 shares of common stock in
the aggregate.

In addition, pursuant to the terms of the Securities Purchase Agreement, on
May 22, 2020, we issued to the Investors warrants to purchase 413,751 shares of
common stock (the "Bridge Warrants") which had an exercise price of $2.2362 per
share, which was revised to $0.31 per share as a result of the November 2021
offering.

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On November 19, 2020, we entered into a Warrant Waiver Agreement with each of
the warrant holders which modified the terms of the original agreement and
eliminated further resets. The aggregate number of Series A Warrants issued was
fixed at 20,178,214 and the warrant exercise price was fixed at $1.16. The
aggregate number of Series B Warrants was fixed at 22,766,777. The exercise
price of the Series B Warrants remained unchanged.

In addition, certain restrictions contained in the Warrant Agreement and Securities Purchase Agreement were modified including restrictions on our ability to issue additional equity securities in connection with a financing and our ability to complete a fundamental transaction. Subject to certain restrictions detailed in the Warrant Waiver Agreement, we are now able to complete an equity financing or a fundamental transaction at any time after April 30, 2021. However, we remain restricted with respect to conducting variable rate transactions until May 18, 2023.

Further, in connection with the Warrant Waiver Agreement we agreed to
immediately register 11,383,389 shares of common stock issuable upon exercise of
the Series B Warrants. The warrant holders have additional demand registration
rights as described in the Warrant Waiver Agreement. As of March 4, 2021, the
Series B Warrants were exercised in full. As of June 30, 2022, 16,701,824 shares
of common stock remain issuable upon exercise of the Series A Warrants.

November 2021 Offering

On November 2, 2021, we entered into an underwriting agreement with H.C.
Wainwright & Co., LLC, as representative of the several underwriters named in
Schedule I thereto, relating to the public offering, issuance and sale of shares
of our common stock and, to certain investors, pre-funded warrants to purchase
shares of common stock, and accompanying warrants to purchase shares of our
common stock. After giving effect to the sale of additional shares pursuant to
the exercise of the option by H.C. Wainwright & Co., LLC that closed on November
9, 2021, the total number of shares of common stock (or common stock
equivalents) sold by us in the offering was 26,953,125, together with warrants
to purchase up to 26,953,125 shares of common stock issued at the closing on
November 5, 2021, for total gross proceeds of $17.25 million before deducting
underwriting discounts and commissions and other offering expenses, and net
proceeds of approximately $15.8 million. As a result of the offering, the
exercise price of the Bridge Warrants was adjusted to $0.31 per share.

Each share of common stock and pre-funded warrant to purchase one share of
common stock was sold together with a warrant to purchase one share of common
stock. All the securities sold in the offering were sold by us. The public
offering price of each share of common stock and accompanying common warrant was
$0.64 and $0.639 for each pre-funded warrant and accompanying common warrant.
The pre-funded warrants were immediately exercisable at a price of $0.001 per
share of common stock and were exercised in full on November 5, 2021. The
warrants were immediately exercisable at a price of $0.70 per share of common
stock and expire five years from the date of issuance.

Asset Purchase Agreements with Patagonia Pharmaceuticals LLC ("Patagonia")

On February 28, 2019, we acquired the intellectual property rights for a topical
formulation of isotretinoin for the treatment of CI and identified as TMB-001,
formerly PAT-001 including the IPEGTM brand, from Patagonia (the "TMB-001
Acquisition") pursuant to an asset acquisition agreement (the "Asset Acquisition
Agreement").  Zachary Rome, our former director, Executive Vice-President and
Chief Operating Officer serves as President of Patagonia and also maintains an
ownership interest therein.

Under the terms of the TMB-001 Acquisition, we paid a one-time upfront payment
of $50,000 to Patagonia.  Patagonia is entitled to up to $27.0 million of cash
milestone payments relating to certain regulatory and commercial achievements of
the TMB-001 Acquisition, with the first being $4.0 million from the initiation
of a Phase 3 pivotal trial, as agreed with the FDA and defined as the first
patient enrolled in such trial for the product.  In addition, Patagonia is
entitled to net sales earn-out payments ranging from low single digits to
mid-double digits for the program licensed. We are responsible for all
development activities under the license.  The first regulatory and commercial
milestone occurred in June 2022, as the first patient enrolled in the Phase 3
pivotal trial for the product and as such a $4.0 million milestone payment has
been accrued at June 30, 2022. There were no milestone payments accrued at
December 31, 2021, as the potential regulatory and commercial milestones were
not considered probable.

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On July 20, 2022, we entered into an amendment to the Asset Acquisition
Agreement with Patagonia (the "Amendment"). Pursuant to the Amendment, the
Company and Patagonia agreed to extend the time for Company's payment of the
first milestone payment, which became payable in the third quarter of 2022 upon
the Company commencing patient enrollment in its Phase 3 ASCEND clinical trial
in the second quarter of 2022. The first milestone payment is now payable by us
in two tranches, with $2.25 million due by September 1, 2022 and $2.065 million
due by September 1, 2023. Further, we granted Patagonia a security interest in
TMB-001 and certain other assets.

On June 26, 2019, we acquired the intellectual property rights for a locally
administered formulation of Sitaxsentan for the treatment of cutaneous fibrosis
and/or pigmentation disorders, and identified as TMB-003, formerly PAT-S03, from
Patagonia (the "TMB-003 Acquisition").

Upon closing of the TMB-003 Acquisition, we paid a one-time upfront payment of
$20,000 to Patagonia. Patagonia is entitled to up to $10.25 million of cash
milestone payments subject to adjustments relating to certain regulatory and
commercial achievements of TMB-003, with the first being a one-time payment of
$250,000 upon the opening of investigational new drug application ("IND") with
the FDA. In addition, Patagonia is entitled to net sales earn-out payments
ranging from low to mid-single digits for the program licensed. We are
responsible for all development activities under the license. The potential
regulatory and commercial milestones are not yet considered probable, and no
milestone payments have been accrued at June 30, 2022, and December 31, 2021.

Acquisition of License from AFT Pharmaceuticals Limited ("AFT")

On July 5, 2019, we entered into a license agreement with AFT which provides us
with (i) an exclusive license to certain licensed patents, licensed know-how and
AFT trademarks to commercialize Pascomer in the United States, Canada and Mexico
and (ii) a co-exclusive license to develop Pascomer in this territory.
Concurrently, we granted to AFT an exclusive license to commercialize Pascomer
outside of its territory and co-exclusive sublicense to develop and manufacture
the licensed product for commercialization outside of its territory (the "AFT
License Agreement").

The development of Pascomer had been conducted pursuant to a written development
plan, written by AFT and approved by the joint steering committee, which had
been reviewed on at least an annual basis. Aft agreed to perform clinical trials
of Pascomer in the specified territory and perform all CMC (chemistry,
manufacturing and controls) and related activities to support regulatory
approval. We were responsible for all expenses incurred by AFT during the term
of the AFT License Agreement and equally shared all costs and expenses with AFT,
incurred by AFT for development and marketing work performed in furtherance of
regulatory approval and commercialization worldwide, outside of the specified
territory. We were also entitled to receive 50% of the economics (royalties and
milestones) in any licensing transaction that AFT executes outside of North
America, Australia, New Zealand, and Southeast Asia.

Upon closing of the AFT License Agreement, we were obligated to reimburse AFT
for previously spent development costs, subject to certain limitations and were
obligated to pay a one-time, irrevocable and non-creditable upfront payment to
AFT, payable in scheduled installments. AFT was entitled to up to $25.5 million
of cash milestone payments if TMB-002 achieved certain regulatory and commercial
milestones, with the first payment of $1.0 million upon the successful
completion of a Phase 2b trial defined as the achievement of the trial's primary
clinical endpoints. In addition, AFT was entitled to net sales royalties ranging
from high single digits to low double digits for the program licensed. The
potential regulatory and commercial milestones were not yet considered probable,
and no milestone payments have been accrued at June 30, 2022, and December 31,
2021.

On July 22, 2022, we provided written notice to AFT of our decision to terminate
the AFT License Agreement because we believe there is no longer a commercially
reasonable path to approval and commercialization for TMB-002 in the United
States for FAs associated with TSC. Additionally, following the receipt and
analysis of topline data for the Phase II Clinical Trial (as defined in the AFT
License Agreement) it was determined that the study failed to meet its primary
efficacy endpoint. Under the AFT License Agreement, we were required to provide
120 days' prior written notice of termination to AFT which was waived by AFT on
July 25, 2022, or the Termination Date. On the Termination Date, the rights and
licenses to TMB-002 reverted to AFT, among other things, as set forth in the AFT
License Agreement.

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August 2022 Offering

On March 1, 2022, we entered into an engagement agreement, as subsequently
amended on June 30, 2022 (the "Engagement Agreement"), with H.C. Wainwright &
Co., LLC ("Wainwright"), pursuant to which Wainwright agreed to act as the
exclusive placement agent on a reasonable best efforts basis in connection with
a public offering  of our common stock, par value $0.001 per share (the "Common
Stock").

On August 4, 2022, we  announced the pricing of the public offering (the "August
2022 Offering") of (i) 46,583,333 shares (the "Shares") of Common Stock, (ii)
pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an aggregate
of 20,083,334 shares of Common Stock (the "Pre-Funded Warrant Shares") and (iii)
common warrants (the "Common Warrants") to purchase up to an aggregate of
66,666,667 shares of Common Stock (the "Common Warrant Shares" and, together
with the Pre-Funded Warrant Shares, the "Warrant Shares"). Each Share and
Pre-Funded Warrant to purchase one share of Common Stock was sold together with
a Common Warrant to purchase one share of Common Stock. All of the securities
sold in the August 2022 Offering were sold by the Company. The public offering
price of each Share and accompanying Common Warrant was $0.12 and $0.1199 for
each Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrants
were immediately exercisable at a price of $0.0001 per share of Common Stock and
may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full. The Common Warrants are immediately exercisable at a price of $0.12 per
share of Common Stock and will expire five years from the date of issuance. The
Shares and Pre-Funded warrants, and the accompanying Common Warrants, were
issued separately and were immediately separable upon issuance. The August 2022
Offering closed on August 8, 2022. All of the Pre-Funded Warrants were
exercised, and none remain outstanding.

In connection with the August 2022 Offering, on August 4, 2022, we entered into
securities purchase agreements (the "Purchase Agreements") with certain
institutional investors in the Offering (the "Signatories"). The net proceeds to
us from the Offering were approximately $6.9 million, after deducting placement
agent fees and expenses and estimated offering expenses payable by us, excluding
the proceeds, if any, from the exercise of the Common Warrants. We intends to
use the net proceeds from the offering for research and development, including
clinical trials, working capital and general corporate purposes.  Further, the
exercise price of the Bridge Warrants was reduced to the offering price per
share of the August 2022 Offering less the Black Scholes value of the common
warrants issued in the August 2022 Offering.

Corporate History

We have a limited operating history as the Company was formed on February 26,
2019. Since inception, our operations have focused on establishing its
intellectual property portfolio, including acquiring rights to the proprietary
formulations of isotretinoin, rapamycin and Sitaxsentan, as described above,
organizing and staffing the Company, business planning, raising capital, and
conducting clinical trials. Over the past two years. We have financed our
operations with gross proceeds totaling $42.3 million through capital
contributions.

Since inception, we have incurred significant operating losses. For the six
months ended June 30, 2022, our net loss was approximately $12.6 million.  As of
June 30, 2022, we had an accumulated deficit of approximately $41.5 million. We
expect to continue to incur significant expenses and operating losses for the
foreseeable future. We anticipate that our expenses will increase significantly
in connection with our ongoing activities, as we continue to develop the
pipeline of programs.

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Results of Operations

Comparison of the Three Months Ended June 30, 2022, and 2021

                                              Three Months Ended June 30,
                                                 2022              2021           Change $       Change %

Grant revenue                               $             -    $     134,927    $   (134,927)          NA %
Milestone revenue                                         -          253,892        (253,892)          NA
Total revenue                                             -          388,819        (388,819)       (100) %
Research and development                          3,891,500        1,800,100        2,091,400         116 %
Research and Development milestone
expense for Patagonia Pharmaceuticals
LLC                                               4,000,000                -        4,000,000          NA
Selling, general and administrative               1,512,343        1,556,012         (43,669)         (3) %
Loss from operations                            (9,403,843)      (2,967,293)      (6,436,550)         217 %
Interest expense                                   (42,077)                -         (42,077)          NA
Gain (loss) on foreign currency exchange           (50,076)            1,090         (51,166)     (4,694) %
Net (loss) income before provision for
income taxes                                    (9,495,996)      (2,966,203)      (6,529,793)         220 %
Provision for income taxes                                -                -                -          NA
Net (loss) income                               (9,495,996)      (2,966,203)      (6,529,793)         220 %
Cumulative dividends on Series A
preferred stock                                           -         (36,286)           36,286          NA %
Net (loss) income attributable to common
stockholders                                $   (9,495,996)    $ 

(3,002,489) $ (6,493,507) 216 %

Grant and Milestone Revenue

In September 2018, Patagonia was awarded a $1.5 million grant (the "Grant") from
the FDA as part of the Orphan Products Clinical Trials Grants Program of the
Office of Orphan Products Development. The Grant funds were made available in
three annual installments of $500,000 per year, which commenced in September
2018. The Grant was transferred to us pursuant to the TMB-001 Acquisition
Agreement with Patagonia in February 2019.  In March 2020 and March 2021, the
FDA awarded us the second and third tranches of the grant, respectively.

During the three months ended June 30, 2022, and 2021, we recognized no revenues and revenue of $134,927 respectively, from the Grant.

Pursuant to the AFT Licensing and Development Agreement, we are entitled to
receive a significant percentage of the economics (royalties and milestones) in
any licensing transaction that AFT executes outside of North America, Australia,
New Zealand, and Southeast Asia. The transaction with Desitin is included in the
scope of this provision. The Company was entitled to €213,750 related to an
upfront milestone payment paid to AFT by Desitin and recorded approximately $0.3
million during the three months ended June 30, 2021. No revenues were recorded
as there were no milestone payments during the three months ended June 30, 2022.

As the agreement with AFT has been terminated we will no longer receive any royalties or milestones for any transactions under this agreement.

Operating Costs and Expenses

Research and Development Expense

During the three months ended June 30, 2022, and 2021, research and development
expenses were $7.9 and $1.8 million, respectively.  The increase in research and
development expenses of approximately $6.1 million are primarily related to
costs incurred related to our Phase 3 clinical trial of TMB-001 such as CRO
direct and pass-through expenses, and the accrual of the approximately $4.0
million milestone payment due to Patagonia as the first regulatory and
commercial milestone occurred in June 2022, as the first patient enrolled in the
Phase 3 pivotal trial for the product.  Research and development expenses are
expected to continue to significantly increase in 2022 as a result of the Phase
3 trial for TMB-001.

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Research and development costs are expensed as incurred. Costs for certain activities, such as preclinical studies and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators.

General and Administrative Expense

During the three months ended June 30, 2022, general and administrative expenses
were $1.5 million compared to $1.6 million for the three months ended June 30,
2021.  The decrease in general and administrative expenses of approximately $0.1
million was due to a slight decrease in professional fees during the quarter.

Other Income (Expense)

During the three months ended June 30, 2022, other income (expense) included
interest expense of $0.04 million related to the Redeemable Series A Preferred
Stock under redemption, a loss on foreign currency n of approximately $0.05
million due to the strength of the US$ versus the AUD$.  There was de-minimis
other income (expense) for the three months ended June 30, 2021.

Income Taxes

We did not record tax expense for the three-months ended June 30, 2022 and 2021, respectively, due to our loss position and full valuation allowance.

Comparison of the Six Months Ended June 30, 2022 and 2021

                                             Six Months Ended June 30,
                                                2022             2021           Change $       Change %

Grant revenue                              $       83,177    $     175,661    $    (92,484)        (53) %
Milestone revenue                                       -          253,892        (253,892)          NA %
Total revenue                                      83,177          429,553        (346,376)        (81) %
Research and development                        5,410,459        2,649,618        2,760,841         104 %
Research and development milestone
expense for Patagonia Pharmaceuticals
LLC                                             4,000,000                -        4,000,000          NA %
Selling, general and administrative             3,214,738        2,621,401 

        593,337          23 %
Loss from operations                         (12,542,020)      (4,841,466)      (7,700,554)         159 %
Interest expense                                 (96,328)                -         (96,328)          NA %
Other income                                       75,000                -           75,000          NA %
Forgiveness of PPP loan                            37,772                -           37,772          NA %
Gain (loss) on foreign currency
exchange                                         (43,814)            1,003         (44,817)     (4,468) %
Net loss before provision for income
taxes                                        (12,569,390)      (4,840,463)      (7,728,927)         160 %
(Benefit) provision for income taxes                    -                -                -          NA %
Net loss                                     (12,569,390)      (4,840,463)      (7,728,927)         160 %
Cumulative dividends on Series A
preferred stock                                         -         (72,173)           72,173       (100) %
Net loss attributable to common
stockholders                               $ (12,569,390)    $ (4,912,636)    $ (7,656,754)         156 %


Grant and Milestone Revenue

During the six months ended June 30, 2022, and 2021, we recognized revenues of
$83,177 and $175,661 respectively, from the $1.5 million Grant to Patagonia from
the FDA as part of the Orphan Products Clinical Trials Grants Program of the
Office of Orphan Products Development.

Pursuant to the AFT Licensing and Development Agreement, the Company was
entitled to €213,750 related to an upfront milestone payment paid to AFT by
Desitin and recorded approximately $0.3 million during the six months ended June
30, 2021. No revenues were recorded for milestone payments during the six months
ended June 30, 2022.  As the agreement

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with AFT has been terminated we will no longer receive any royalties or milestones for any transactions under this agreement.

Operating Costs and Expenses

Research and Development Expense

During the six months ended June 30, 2022, and 2021, research and development
expenses were $9.4 and $2.6 million, respectively.  The increase in research and
development expenses of $6.8 million are primarily related to costs incurred
related to our Phase 3 clinical trial of TMB-001 such as CRO direct and
pass-through expenses, and the accrual of the approximately $4.0 million
milestone payment due to Patagonia as the first regulatory and commercial
milestone occurred in June 2022, as the first patient enrolled in the Phase 3
pivotal trial for the product.  Research and development expenses are expected
to continue to significantly increase in 2022 as a result of the Phase 3 trial
for TMB-001.

Research and development costs are expensed as incurred. Costs for certain activities, such as preclinical studies and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators.

General and Administrative Expense

During the six months ended June 30, 2022, general and administrative expenses
were approximately $3.2 million compared to $2.6 million for the six months
ended June 30, 2021.  The increase in general and administrative expenses of
approximately $0.6 million was due to an increase in stock-based compensation
costs of $0.4 million due to grants issued in the last six months of 2021 and
the second quarter of 2022 and increased professional and legal fees of $0.2
million during the six month period.

Other Income (Expense)

During the six months ended June 30, 2022, other income (expense) included
interest expense of approximately $0.1 million related to the Redeemable Series
A Preferred Stock under redemption, a gain on the forgiveness of our PPP loan of
approximately $0.04 million and other income of approximately $0.08 million for
fees received from a third party for their access to review certain agreements
related to BPX-01 and BPX-04 and a loss on foreign currency of approximately
$0.04 million due to the strength of the US$ versus the AUD$.  There was
de-minimis other income (expense) for the six months ended June 30, 2021.

Income Taxes

We did not record tax expense for the six months ended June 30, 2022, and 2021, respectively, due to our loss position and full valuation allowance.

Liquidity and Capital Resources

Since inception, we have not generated revenue from product sales and has
incurred net losses and negative cash flows from its operations. At June 30,
2022, we had working capital of approximately $2.7 million, which included cash
of approximately $8.3 million. We reported a net loss of approximately $12.6
million during the six months ended June 30, 2022.

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Cash Flows for the Six Months Ended June 30, 2022 and 2021

                                                       Six Months Ended June 30,
                                                         2022             2021

Cash provided by (used in) continuing operations:
Operating activities                                 $ (8,528,864)    $ (4,202,755)
Investing activities                                       (5,947)         (16,903)
Financing activities                                             -                -
Net decrease in cash and cash equivalents            $ (8,534,811)    $ (4,219,658)


Operating Activities

For the six  months ended June 30 2022, net cash used in operating activities
was $8.5 million, which primarily consisted of our net loss of $12.6 million,
adjusted for non-cash expenses of approximately $0.7 million of stock-based
compensation expense offset by the change in assets and liabilities of $3.2
million, which is primarily due an decrease in prepaid expenses of $0.7 related
to research and development, a decrease in accounts payable of $0.5 million as
payments were made,  and an increase in accrued expenses of approximately $062
million related to research and development expenses, a decrease in the lease
liability of $0.2 million and the recording of the milestone payable due to
Patagonia of approximately  $4.0 million.

Investing Activities

For the six months ended June 30, 2022, and 2021, net cash used in investing
activities was $0.006 million for purchases of equipment and $0.02 million for
furniture and equipment, respectively.

Financing Activities

For the six months ended June 30, 2022, and 2021, respectively, net cash provided by financing activities was zero.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities,
particularly as we continue the research and development of our pipeline of
programs and begin a Phase 3 trial.  As a result, we expect to continue to incur
significant expenses and increasing operating losses and negative cash flows for
the foreseeable future. Furthermore, we expect to continue to incur costs as a
public company.  Accordingly, we will need to obtain additional funding. If we
are unable to raise capital or otherwise obtain funding when needed or on
attractive terms, we could be forced to delay, reduce or eliminate our research
and development programs or future commercialization efforts.

On July 17, 2020, we entered into an Amended and Restated Registration Rights
Agreement (as amended, the "Registration Rights Agreement") with the Investors.
Pursuant to the Registration Rights Agreement, we agreed to provide certain
demand registration rights to the Investors relating to the registration of the
shares underlying the Investor Warrants and the Bridge Warrants.  In connection
with the entry into the Registration Rights Agreement and pursuant to the
Securities Purchase Agreement, we were restricted from various financing
activities until August 16, 2022. On November 19, 2020, we entered into waiver
agreements with the investors revising the restriction date to April 30, 2021,
except with respect to variable rate transactions. We remain restricted with
respect to conducting variable rate transactions until May 18, 2023.

On July 5, 2019, we entered into the AFT License Agreement which provided us
with (i) an exclusive license to certain licensed patents, licensed know-how and
AFT trademarks to commercialize Pascomer in the United States, Canada and Mexico
and (ii) a co-exclusive license to develop Pascomer in this territory.
 Concurrently, we granted to AFT an exclusive license to commercialize Pascomer
outside of its territory and co-exclusive sublicense to develop and manufacture
the licensed product for commercialization outside of its territory.

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Upon closing of the AFT License Agreement, we were obligated to reimburse AFT
for previously spent development costs, subject to certain limitations and were
obligated to pay a one-time, irrevocable and non-creditable upfront payment to
AFT, payable in scheduled installments. AFT was entitled to up to $25.5 million
of cash milestone payments if TMB-002 achieved certain regulatory and commercial
milestones, with the first payment of $1.0 million upon the successful
completion of a Phase 2b trial defined as the achievement of the trial's primary
clinical endpoints.  In addition, AFT was entitled to net sales royalties
ranging from high single digits to low double digits for the program licensed.

The potential regulatory and commercial milestones were not yet considered probable, and no milestone payments have been accrued at June 30, 2022, or December 31, 2021, respectively.

On July 23, 2022, we provided written notice to AFT of our decision to terminate
the AFT License Agreement because we believe there is no longer a commercially
reasonable path to approval and commercialization for TMB-002 in the United
States for FAs associated with TSC. Additionally, following the receipt and
analysis of topline data for the Phase II Clinical Trial (as defined in the AFT
License Agreement) it was determined that the study failed to meet its primary
efficacy endpoint. Under the AFT License Agreement, we were required to provide
120 days' prior written notice of termination to AFT which was waived by AFT on
July 25, 2022, or the Termination Date. On the Termination Date, the rights and
licenses to TMB-002 reverted to AFT, among other things, as set forth in the AFT
License Agreement.

We have a class of Series A Preferred Stock as to which the holder TardiMed has
demanded redemption.  The redemption price is equal to approximately $2.2
million in the aggregate, at June 30, 2022, and $2.1 million at December 31,
2021, respectively including accumulated and unpaid interest which accrues
compounded at the rate of 8% per annum.  Redemption is subject to certain
limitations under Delaware corporate law due to our current financial condition.
 As a result of the call for redemption, the Series A Preferred Stock was
reclassified as a liability at December 31, 2021.  Dividends continue to accrue
and will be recorded as non-cash interest expense in the Statement of Operations
rather than to additional-paid-in-capital in fiscal 2022.

On July 27, 2022, we entered into a letter agreement (the "Letter Agreement")
with TardiMed, pursuant to which TardiMed agreed to exchange its 1,819 shares of
the Company's Series A Preferred Stock (the "Series A Preferred Stock") plus
accrued dividends for a pre-funded warrant (the "Warrant") to purchase 9,054,132
shares of the Company's common stock, par value $0.001 per share (the "Common
Stock").  The number of shares underlying the Warrant is based on the redemption
price of the Series A Preferred Stock (which had been demanded by TardiMed)
divided by $0.239, the last closing price of the Common Stock prior to the date
the Letter Agreement was executed.

Twenty percent of the Warrant is immediately exercisable upon issuance.
Beginning on September 30, 2022, and then at the end of each subsequent calendar
quarter upon written request of TardiMed, the Company will allow an additional
20% of the initial balance of the Warrant to become exercisable, provided that
only 20% of the initial balance of the Warrant will be exercisable in any given
quarter. The Warrant's exercise price is $0.0001 and may be exercised on a
cashless basis. The Warrant will terminate when exercised in full. On August 3,
2022, 20% of the Warrant was exercised on a cashless basis and 1,809,280 shares
of Common Stock were issued to TardiMed.

Pursuant to the Letter Agreement, TardiMed released and discharged the Company
and its affiliates from any and all claims, rights, demands, actions, suits,
causes of action, liabilities, obligations, damages and costs of any nature
whatsoever that TardiMed has, had or may have against the Company or related
parties in any way arising from or related to the Series A Preferred Stock.

In addition, under the terms of the TMB-001 Acquisition, we paid a one-time
upfront payment of $50,000 to Patagonia. Patagonia is entitled to up to $27.0
million of cash milestone payments relating to certain regulatory and commercial
achievements of the TMB-001 Acquisition, with the first being $4.0 million from
the initiation of a Phase 3 pivotal trial, as agreed with the FDA, and defined
as the first patient enrolled in such trial for the product.  In addition,
Patagonia is entitled to net sales earn-out payments ranging from low single
digits to mid-double digits for the program licensed.  We are responsible for
all development activities under the license. The first regulatory and
commercial milestone occurred in June 2022, and as such the first $4.0 million
milestone payment has been accrued at June 30, 2022. There were no milestone
payments accrued at December 31, 2021. as the potential regulatory and
commercial milestones were not considered probable.

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On July 20, 2022, we entered into the Amendment to the Asset Acquisition Agreement with Patagonia. Pursuant to the

Amendment, we and Patagonia agreed to extend the time for our payment of the first milestone payment, which became

payable in the third quarter of 2022 upon completion of patient enrollment in our Phase 3 ASCEND clinical trial. The first

milestone payment is now payable by us in two tranches, with $2.25 million due by September 1, 2022 and $2.065 million

due by September 1, 2023. Further, we granted Patagonia a security interest in TMB-001 and certain other assets.

On March 1, 2022, we entered into an engagement agreement, as subsequently
amended on June 30, 2022 (the "Engagement Agreement"), with H.C. Wainwright &
Co., LLC ("Wainwright"), pursuant to which Wainwright agreed to act as the
Company's exclusive placement agent on a reasonable best efforts basis in
connection with a public offering  of our common stock, par value $0.001 per
share (the "Common Stock").

On August 4, 2022, the Company announced the pricing of the public offering (the
"August 2022 Offering") of (i) 46,583,333 shares (the "Shares") of Common Stock,
(ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an
aggregate of 20,083,334 shares of Common Stock (the "Pre-Funded Warrant Shares")
and (iii) common warrants (the "Common Warrants") to purchase up to an aggregate
of 66,666,667 shares of Common Stock (the "Common Warrant Shares" and, together
with the Pre-Funded Warrant Shares, the "Warrant Shares"). Each Share and
Pre-Funded Warrant to purchase one share of Common Stock was sold together with
a Common Warrant to purchase one share of Common Stock. All of the securities
sold in the August 2022 Offering were sold by the Company. The public offering
price of each Share and accompanying Common Warrant was $0.12 and $0.1199 for
each Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrants
were immediately exercisable at a price of $0.0001 per share of Common Stock and
may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full. The Common Warrants are immediately exercisable at a price of $0.12 per
share of Common Stock and will expire five years from the date of issuance. The
Shares and Pre-Funded warrants, and the accompanying Common Warrants, were
issued separately and were immediately separable upon issuance. The August 2022
Offering closed on August 8, 2022. All of the Pre-Funded Warrants were
exercised, and none remain outstanding.

In connection with the August 2022 Offering, on August 4, 2022, the Company
entered into securities purchase agreements (the "Purchase Agreements") with
certain institutional investors in the Offering (the "Signatories"). The net
proceeds to the Company from the Offering were approximately $6.9 million, after
deducting placement agent fees and expenses and estimated offering expenses
payable by the Company, excluding the proceeds, if any, from the exercise of the
Common Warrants. The Company intends to use the net proceeds from the offering
for research and development, including clinical trials, working capital and
general corporate purposes.  Further, the exercise price of the Bridge Warrants
was reduced to the offering price per share of the August 2022 Offering less the
Black Scholes value of the common warrants issued in the August 2022 Offering.

We have evaluated whether there are any conditions and events, considered in the
aggregate, that raise substantial doubt about our ability to continue as a going
concern within one year beyond the filing of this Quarterly Report on Form 10-Q.
Based on such evaluation and our current plans, which are subject to change,
management believes that our existing cash and cash equivalents as of June 30,
2022 only are sufficient to satisfy our operating cash needs into the fourth
quarter of 2022.  The Company closed on the August 2022 Offering on August 8,
2022.  As a result, management believes the Company's cash and cash equivalents
will be sufficient only to satisfy our operating cash needs into the second
quarter of 2023.

Our future liquidity and capital funding requirements will depend on numerous factors, including:

? our ability to raise additional funds to finance our operations,

the outcome, costs and timing of clinical trial results for our current or

? future product candidates, including the timing, progress, costs and results of

our Phase 3 clinical trial of TMB-001 for the treatment of CI;

? the outcome, timing and cost of meeting regulatory requirements established by

the FDA and other comparable foreign regulatory authorities;

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? the emergence and effect of competing or complementary products including the

   ability of our existing and future products to compete effectively;


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

property portfolio, including the amount and timing of any payments we may be

? required to make, or that we may receive, in connection with the licensing,

filing, prosecution, defense and enforcement of any patents or other

intellectual property rights;

? the cost and timing of completion of commercial-scale manufacturing activities

if any of our products are approved for commercial sale,

the cost of establishing sales, marketing and distribution capabilities for our

? products in regions where we choose to commercialize our products on our own if

approved for commercial sale

? the initiation, progress, timing and results of the commercialization of our

product candidates, if approved for commercial sale;

? our ability to retain our current employees and the need and ability to hire

additional management and scientific and medical personnel; and

? the terms and timing of any collaborative, licensing or other arrangements that

we have or may establish.

We will need to raise substantial additional funds through one or more of the
following: issuance of additional debt or equity and/or the completion of a
licensing or other commercial transaction for one or more of our product
candidates. If we are unable to maintain sufficient financial resources, our
business, financial condition and results of operations will be materially and
adversely affected. This could affect future development and business activities
and potential future clinical studies and/or other future ventures. There can be
no assurance that we will be able to obtain the needed financing on acceptable
terms or at all. Additionally, equity or convertible debt financings will likely
have a dilutive effect on the holdings of our existing stockholders.

The impact of the worldwide spread of COVID-19 has been unprecedented and
unpredictable. Clinical trial activities, including patient enrollment can be
impacted at any time. We are continuing to assess the effect on our operations
by monitoring the spread of COVID-19 and the actions implemented to combat the
virus throughout the world and our assessment of the impact of COVID-19 may
change.

Critical Accounting Policies and Significant Estimates

Our management's discussion and analysis of financial condition and results of
operations is based on our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States,
or GAAP. The preparation of these financials 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 revenue and expenses incurred during
the reporting periods. On an ongoing basis, we evaluate our estimates and
adjustments, including those related to accrued expenses and share-based
compensation. 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 apparent from other sources. Changes in
estimates are reflected in reported results for the period in which they become
known. Actual results may differ from these estimates under different
assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our latest Annual Report on Form 10-K.

Recently Used and Adopted Accounting Pronouncements

See Note 2 to our financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of recent accounting pronouncements.

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