Table of ~~Common Stock outstanding as~~Contents

Table of ~~February 13, 2018.~~Contents

-i-

PART I.

ITEM 1. FINANCIAL STATEMENTS

~~OHR PHARMACEUTICAL, INC.~~NeuBase Therapeutics, Inc. and Subsidiaries

~~TABLE OF CONTENTS~~

	~~Page~~

~~PART I FINANCIAL INFORMATION~~	3

~~Item 1. Financial Statements (Unaudited)~~	3

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	10

~~Item 3. Quantitative and Qualitative Risk~~	12

~~Item 4. Controls and Procedures~~	12

~~PART II OTHER INFORMATION~~	13

~~Item 1. Legal Proceedings~~	13

~~Item 1A Risk Factors~~	13

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~	26

~~Item 3. Defaults Upon Senior Securities~~	26

~~Item 4. Mine Safety Disclosures~~	26

~~Item 5. Other Information~~	26

~~Item 6. Exhibits~~	26

~~Part I~~

~~FINANCIAL INFORMATION~~

~~Item 1.~~

~~Financial Statements.~~

~~TABLE OF CONTENTS~~	~~PAGE~~

~~Unaudited Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017~~	4
~~Unaudited Consolidated Statements of Operations for the three months ended December 31, 2017 and 2016~~	5
~~Unaudited Consolidated Statements of Cash Flows for the three months ended December 31, 2017 and 2016~~	6
~~Notes to Unaudited Consolidated Financial Statements~~	7

~~OHR PHARMACEUTICAL, INC.~~

Condensed Consolidated Balance Sheets

(Unaudited)

~~(Unaudited)~~

March 31,

September 30,


2022

2021
ASSETS

CURRENT ASSETS




Cash and cash equivalents

$
38,958,116

$
52,893,387
Prepaid insurance

109,762

499,061
Other prepaid expenses and current assets

1,151,979

1,536,186
Total current assets

40,219,857

54,928,634




EQUIPMENT, net

2,429,732

2,463,882




OTHER ASSETS

Investment

0

415,744
Right-of-use asset, operating lease asset

5,883,956

5,945,295
Security deposit

273,215

253,615
Other long-term assets

0

160,423
Total other assets

6,157,171

6,775,077

TOTAL ASSETS

$
48,806,760

$
64,167,593


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES


Accounts payable

$
1,621,243

$
1,807,885
Accrued expenses and other current liabilities

2,702,387

1,747,746
Insurance note payable

0

148,385
Operating lease liabilities

548,011

382,576
Finance lease liabilities

113,564

107,632
Total current liabilities

4,985,205

4,194,224

Long-term operating lease liability

5,608,737

5,794,096
Long-term finance lease liability

49,816

109,500
TOTAL LIABILITIES

10,643,758

10,097,820




COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY




Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2022 and September 30, 2021

0

0
Common stock, $0.0001 par value; 250,000,000 shares authorized; 32,258,657 and 32,721,493 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively

3,225

3,272
Additional paid-in capital

124,780,525

123,034,404
Accumulated deficit

(86,620,748)

(68,967,903)
Total stockholders’ equity

38,163,002

54,069,773

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
48,806,760

$
64,167,593
December 31, September 30,
2017 2017
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 8,724,057 $ 12,801,085
Prepaid expenses and other current assets 100,722 223,278
Total Current Assets 8,824,779 13,024,363

EQUIPMENT, net 60,890 63,757

OTHER ASSETS
Security deposit — 12,243
Intangible assets, net 13,805,484 14,087,602
Goodwill 740,912 740,912
TOTAL ASSETS $ 23,432,065 $ 27,928,877

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 3,598,471 $ 4,827,525
Notes payable — 106,387
Total Current Liabilities 3,598,471 4,933,912
Long-term liabilities 150,000 150,000

TOTAL LIABILITIES 3,748,471 5,083,912

STOCKHOLDERS’ EQUITY
Preferred stock, Series B; 6,000,000 shares authorized, $0.0001 par value, 0 shares issued and outstanding, respectively — —
Common stock; 180,000,000 shares authorized, $0.0001 par value, 56,421,428 and 56,196,428 shares issued and outstanding, respectively 5,642 5,619
Additional paid-in capital 131,917,917 130,927,953
Accumulated deficit (112,239,965 ) (108,088,607 )

Total Stockholders’ Equity 19,683,594 22,844,965
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 23,432,065 $ 27,928,877

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~OHR PHARMACEUTICAL, INC.~~Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
~~(Unaudited)~~

Three Months ended March 31,

Six Months Ended March 31,


2022

2021

2022

2021
OPERATING EXPENSES








General and administrative

$
3,093,713

$
2,721,640

$
6,029,423

$
5,363,110
Research and development

6,835,670

3,174,129

11,204,927

5,194,053
TOTAL OPERATING EXPENSES

9,929,383

5,895,769

17,234,350

10,557,163





LOSS FROM OPERATIONS

(9,929,383)

(5,895,769)

(17,234,350)

(10,557,163)



OTHER INCOME (EXPENSE)



Interest expense

(3,316)

(6,460)

(18,535)

(16,197)
Interest income

3,445

9,466

4,699

9,466
Change in fair value of warrant liabilities

0

90,597

—

720,709
Equity in losses on equity method investment

0

(36,127)

(415,744)

(61,539)
Other income, net

5,225

316,724

11,085

316,724
Total other income (expense), net

5,354

374,200

(418,495)

969,163




NET LOSS

$
(9,924,029)

$
(5,521,569)

$
(17,652,845)

$
(9,588,000)

BASIC AND DILUTED LOSS PER SHARE

$
(0.30)

$
(0.24)

$
(0.54)

$
(0.41)




WEIGHTED AVERAGE SHARES OUTSTANDING:






BASIC AND DILUTED

32,683,263

23,179,646

32,704,724

23,176,877

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

For the Three Months Ended
December 31,
2017 2016
OPERATING EXPENSES

General and administrative $ 1,510,032 $ 1,746,356
Research and development 2,387,731 4,931,144
Depreciation and amortization 284,986 298,435
TOTAL OPERATING LOSS 4,182,749 6,975,935

OTHER INCOME (EXPENSE)
Other income (expense) 31,391 281
Total Other Income (Expense) 31,391 281

LOSS FROM OPERATIONS BEFORE
INCOME TAXES (4,151,358 ) (6,975,654 )

PROVISION FOR INCOME TAXES — —

NET LOSS $ (4,151,358 ) $ (6,975,654 )

BASIC AND DILUTED LOSS PER SHARE  (in dollars per share) $ (0.07 ) $ (0.21 )

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 56,203,765 32,836,505

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
For the Three and Six Months Ended March 31, 2022 and 2021
(Unaudited)

Additional

Total

Common Stock

Paid-In

Stockholders'


Shares

Amount

Capital

Accumulated Deficit

Equity
Balance as of September 30, 2021

32,721,493

$
3,272

$
123,034,404

$
(68,967,903)

$
54,069,773
Stock-based compensation expense

—

—

793,204

—

793,204
Issuance of restricted stock for services

4,441

—

—

—

—
Exercise of stock options

42,250

4

38

—

42
Net loss

—

—

—

(7,728,816)

(7,728,816)
Balance as of December 31, 2021

32,768,184

$
3,276

$
123,827,646

$
(76,696,719)

$
47,134,203
Stock-based compensation expense

—

—

952,828

—

952,828
Forfeiture of common stock

(509,527)

(51)

51

—

—
Net loss

—

—

—

(9,924,029)

(9,924,029)
Balance as of March 31, 2022

32,258,657

$
3,225

$
124,780,525

$
(86,620,748)

$
38,163,002

Additional

Total

Common Stock

Paid-In

Stockholders'


Shares

Amount

Capital

Accumulated Deficit

Equity
Balance as of September 30, 2020

23,154,084

$
2,315

$
74,850,935

$
(43,558,602)

$
31,294,648
Stock-based compensation expense

—

—

1,176,585

—

1,176,585
Issuance of restricted stock for services

1,931

—

—

—

—
Exercise of stock options

21,576

2

112,444

—

112,446
Net loss

—

—

—

(4,066,431)

(4,066,431)
Balance as of December 31, 2020

23,177,591

$
2,317

$
76,139,964

$
(47,625,033)

$
28,517,248
Stock-based compensation expense

—

—

942,108

—

942,108
Issuance of restricted stock for services

2,433

—

—

—

—
Net loss

—

—

—

(5,521,569)

(5,521,569)
Balance as of March 31, 2021

23,180,024

$
2,317

$
77,082,072

$
(53,146,602)

$
23,937,787

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~OHR PHARMACEUTICAL, INC.~~Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

For the Three Months Ended
December 31,
2017 2016
OPERATING ACTIVITIES
Net loss $ (4,151,358 ) $ (6,975,654 )
Adjustments to reconcile net loss to net cash used by operating activities:
Common stock issued for services 135,701 440,052
Stock option expense 629,286 566,573
Depreciation 2,867 15,736
Amortization of intangible assets 282,118 282,699
Changes in operating assets and liabilities
Prepaid expenses and deposits 122,556 247,926
Accounts payable and accrued expenses (1,229,054 ) (507,793)
Security Deposit used 12,243 —

Net Cash Used in Operating Activities (4,195,641 ) (5,930,461 )

INVESTING ACTIVITIES
Purchase of property and equipment — (4,833 )
Net Cash Provided by/ (Used in) Investing Activities — (4,833 )

FINANCING ACTIVITIES
Proceeds for issuance of common stock for cash — 6,846,483
Proceeds from warrants exercised for cash 225,000 118,801
Repayments of short-term notes payable (106,387 ) (87,798 )
Net Cash Provided by/ (Used in) Financing Activities 118,613 6,877,486

NET CHANGE IN CASH (4,077,028 ) 942,192
CASH AT BEGINNING OF PERIOD 12,801,085 12,546,890

CASH AT END OF PERIOD $ 8,724,057 $ 13,489,082

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ 1,770 $ 1,320

Six Months Ended March 31,


2022

2021
Cash flows from operating activities



Net loss

$
(17,652,845)

$
(9,588,000)
Adjustments to reconcile net loss to net cash used in operating activities

Stock-based compensation

1,746,032

2,118,693
Change in fair value of warrant liabilities

0

(720,709)
Depreciation and amortization

372,407

151,418
Loss on marketable securities

30

15,006
Loss on disposal of fixed assets

0

0
Equity in losses on equity method investment

415,744

61,539
Gain on sale of intellectual property

0

(316,724)
Amortization of right-of-use assets

225,952

0
Changes in operating assets and liabilities

Prepaid insurance, other prepaid expenses and current assets

773,506

122,878
Long-term prepaid insurance

0

96,834
Security deposit

(19,600)

(253,565)
Other long-term assets

160,423

0
Accounts payable

(252,612)

436,646
Accrued expenses and other current liabilities

954,641

574,460
Operating lease liability

(184,537)

0
Net cash used in operating activities

(13,460,859)

(7,301,524)
Cash flows from investing activities

Purchase of laboratory and office equipment

(272,287)

(402,890)
Purchase of marketable securities

(14,986,818)

(29,996,904)
Sale of marketable securities

14,986,788

29,981,898
Net cash used in investing activities

(272,317)

(417,896)
Cash flows from financing activities

Principal payment of financed insurance

(148,385)

(138,557)
Principal payment of finance lease liability

(53,752)

0
Proceeds from exercise of stock options

42

112,446
Net cash used in financing activities

(202,095)

(26,111)
Net decrease in cash and cash equivalents

(13,935,271)

(7,745,531)
Cash and cash equivalents, beginning of period

52,893,387

31,992,283
Cash and cash equivalents, end of period

$
38,958,116

$
24,246,752




Supplemental disclosure of cash flow information:

Cash paid for interest

$
0

$
10,400
Cash paid for income taxes

$
0

$
0
Non-cash investing and financing activities:

Purchases of laboratory and office equipment in accounts payable

$
65,970

$
234,104
Preferred shares in DepYmed received as consideration for sale of intellectual property

$
0

$
316,724
Right-of-use asset obtained in exchange for operating lease liabilities

$
164,613

$
0

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~OHR PHARMACEUTICAL, INC.~~

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to ~~Unaudited~~Condensed Consolidated Financial Statements

~~December~~(Unaudited)

1. Organization and Description of Business
NeuBase Therapeutics, Inc. and subsidiaries (the “Company” or “NeuBase”) is developing a modular peptide-nucleic acid (“PNA”) antisense oligo (“PATrOL™”) platform to address genetic diseases, with a single, cohesive approach. The PATrOL™-enabled anti-gene therapies are designed to improve upon current genetic medicine strategies by combining the advantages of synthetic approaches with the precision of antisense technologies. NeuBase plans to use its platform to address diseases which have a genetic source, with an initial focus on Myotonic Dystrophy Type 1 (“DM1”), Huntington’s disease (“HD”) and oncology applications.
NeuBase is a preclinical-stage biopharmaceutical company and continues to develop its clinical and regulatory strategy with its internal research and development team with a view toward prioritizing market introduction as quickly as possible. NeuBase’s programs are NT-0100 in HD, NT-0200 in DM1 and NT-0300 in KRAS-driven cancers:
● The NT-0100 program is a PATrOL™-enabled therapeutic program being developed to target the mutant expansion in the HD messenger ribonucleic acid (“mRNA”). The NT-0100 program includes proprietary PNAs which have the potential to be highly selective for the mutant transcript versus the wild-type transcribed allele and the expectation to be applicable for all HD patients as it directly targets the expansion itself and has the potential to be delivered systemically. PATrOL™-enabled drugs also have the unique ability to open RNA secondary structures and bind to either the primary nucleotide sequences or the secondary and/or tertiary structures.
● The NT-0200 program is a PATrOL™-enabled therapeutic program being developed to target the mutant expansion in the DM1 disease mRNA. The NT-0200 program includes several proprietary PNAs which have the potential to be highly selective for the mutant transcript versus the wild-type transcribed allele and the expectation to be effective for nearly all DM1 patients as it directly targets the expansion itself.
● The NT-0300 program is a PATrOL™-enabled therapeutic program being developed to target the mutated KRAS gene. The program is comprised of candidate compounds that target two activating mutations in the KRAS gene: G12D and G12V. NeuBase believes these candidate compounds, and subsequent further optimized compounds, have the potential to inhibit transcription and/or translation of the oncogenic mutations and slow or stop tumor growth.
NeuBase believes its three aforementioned programs address unmet needs for diseases that currently have no effective therapeutics that target the etiologies of these conditions. NeuBase further believes there is a large opportunity in the U.S. and European markets for drugs in these areas.
Liquidity and Going Concern
The Company has had no revenues from product sales and has incurred operating losses since inception. As of March 31, ~~2017~~
~~NOTE 1 – BASIS OF PRESENTATION~~
2022, the Company had $39.0 million in cash and cash equivalents, and during the six months ended March 31, 2022, incurred a loss from operations of $17.2 million and used $13.4 million of cash in operating activities.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.
The Company’s future liquidity and capital funding requirements will depend on numerous factors, including:
● its ability to raise additional funds to finance its operations;
● its ability to maintain compliance with the listing requirements of The Nasdaq Capital Market (“Nasdaq”)
● the outcome, costs and timing of preclinical and clinical trial results for the Company’s current or future product candidates;
● the extent and amount of any indemnification claims;

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

●

litigation expenses and the extent and amount of any indemnification claims;

●

the emergence and effect of competing or complementary products;

●

its ability to maintain, expand and defend the scope of its intellectual property portfolio, including the amount and timing of any payments the Company may be required to make, or that it may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

●

its ability to retain its current employees and the need and ability to hire additional management and scientific and medical personnel;

●

the trading price of its common stock; and

●

its ability to increase the number of authorized shares outstanding to facilitate future financing events.

The Company will likely need to raise substantial additional funds through issuance of equity or debt or completion of a licensing transaction for one or more of the Company’s pipeline assets. If the Company is unable to maintain sufficient financial resources, its 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. Failure to obtain additional equity or debt financing will have a material, adverse impact on the Company’s business operations. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, any equity financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders.

The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. Accordingly, there are material risks and uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern.

2. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended September 30, 2021 included in the Company’s Annual Report on Form 10-K (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”) on December 23, 2021. The consolidated financial statements include the accounts of ~~Ohr Pharmaceutical, Inc.~~the Company and its ~~subsidiaries (the “Company”).~~wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated during the consolidation process. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and ~~Rule 10-01~~Article 8 of Regulation ~~S-X related to interim period financial statements.~~S-X. Accordingly, ~~these consolidated financial statements do not include~~ certain information and ~~footnotes required by~~footnote disclosures normally included in financial statements prepared in accordance with GAAP ~~for complete financial statements. However, in~~have been condensed or omitted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements for the periods presented reflect all adjustments, ~~(which include~~consisting of only normal, recurring ~~adjustments)~~adjustments, necessary to ~~present~~ fairly state the Company’s financial position, results of operations and cash ~~flows at December 31, 2017, and for all periods presented herein, have been made.~~

~~It is suggested that these~~flows. The unaudited condensed consolidated financial statements ~~be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K~~ for the ~~fiscal year ended September 30, 2017. The results of operations for the quarterly~~interim periods ~~ended December 31, 2017 and 2016~~ are not necessarily indicative of ~~the operating~~ results for the full ~~years.~~year. The preparation of these unaudited condensed consolidated financial statements requires the Company to make estimates and judgments that affect the amounts reported in the financial statements and the accompanying notes. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

~~NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN~~Notes to Condensed Consolidated Financial Statements

(Unaudited)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of ~~revenue and~~ expenses during the reporting period. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to the valuation of stock-based compensation, the valuation of licenses, the fair value of warrant liabilities and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

The Company assesses and updates estimates each period to reflect current information, such as the economic considerations related to the impact that the novel coronavirus disease (“COVID-19”) could have on its significant accounting estimates. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Fair Value Measurements

Fair value measurements are based on the premise that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities on the reporting date.

Level 2 – Pricing inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Pricing inputs are generally unobservable and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require management’s judgment or estimation of assumptions that market participants would use in pricing the assets or liabilities. The fair values are therefore determined using factors that involve considerable judgment and interpretations, including but not limited to private and public comparables, third-party appraisals, discounted cash flow models, and fund manager estimates.

Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could ~~differ~~realize in a current market exchange.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted net loss per share includes the dilutive effect, if any, from ~~those estimates. Estimates subject~~the potential exercise or conversion of securities, such as convertible debt, warrants and stock options that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive.

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following potentially dilutive securities outstanding as of March 31, 2022 and 2021 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

As of March 31,


2022

2021
Common stock purchase options

8,421,475

6,552,884
Common stock purchase warrants

875,312

820,939

9,296,787

7,373,823

Recent Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of this standard as of October 1, 2021, did not impact the Company's consolidated financial statements and related disclosures.
In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance”, which amends disclosures to increase transparency of government assistance, including (i) the types of assistance, (ii) accounting for the assistance and (iii) the effect of the assistance on an entity’s financial statements. The standard is effective for all business entities for annual periods beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

3.  Other Prepaid Expenses and Other Current Assets
The Company’s prepaid expenses and other current assets consisted of the following:

As of March 31,

As of September 30,


2022

2021
Prepaid research and development expense

$
622,237

$
583,267
Prepaid rent

—

172,518
Other prepaid expenses and other current assets

529,742

780,401
Total

$
1,151,979

$
1,536,186

4.  Equipment
The Company’s equipment consisted of the following:

As of March 31,

As of September 30,


2022

2021
Laboratory equipment

$
3,065,478

$
2,737,390
Office equipment

259,978

259,978
Leasehold improvements

10,128

—
Total

3,335,584

2,997,368
Accumulated depreciation

(905,852)

(533,486)
Property, plant and equipment, net

$
2,429,732

$
2,463,882

Depreciation expense for the three months ended March 31, 2022 and 2021 was approximately $0.2 million and $0.08 million, respectively. Depreciation expense for the six months ended March 31, 2022 and 2021 was approximately $0.4 million and $0.15 million, respectively.

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

5.  Investment
The Company owns common and preferred shares of DepYmed Inc. (“DepYmed”), which represents approximately 15% ownership of DepYmed.
The Company accounts for its investment in DepYmed common shares using the equity method of accounting and records its proportionate share of DepYmed’s net income and losses in the accompanying consolidated statements of operations.
The Company accounts for its investment in preferred shares of DepYmed at cost, less any impairment, as the Company determined the preferred stock did not have a readily determinable fair value.
The carrying value of the Company’s investment in DepYmed common shares was reduced to zero, therefore, during the six months ended March 31, 2022, the Company recorded its share of equity losses to the extent of its investment in preferred shares of DepYmed. The Company will continue to monitor the operating results of DepYmed and will record equity in earnings when the equity in earnings exceeds the Company’s previously unrecognized losses.
Equity in losses for the three and six months ended March 31, 2022 was approximately $0.0 million and $0.4 million, respectively. Equity in losses for the three and six months ended March 31, 2021 was approximately $0.04 million and $0.06 million, respectively.
The carrying value of the Company’s total investment in DepYmed is as follows:

As of March 31,

As of September 30,


2022

2021
Carrying value of DepYmed common shares

$
—

$
—

Fair value of DepYmed preferred shares assumed in connection with acquisition of Ohr Pharmaceutical, Inc., a Delaware corporation that completed a Merger with NeuBase Therapeutics (“Ohr”)

—

99,020
DepYmed preferred shares received in sale of intellectual property

—

316,724
Total Investment

$
—

$
415,744

6.  Accrued Expenses and Other Current Liabilities
The Company’s accrued expenses and other current liabilities consisted of the following:

As of March 31,

As of September 30,


2022

2021
Accrued compensation and benefits

$
1,060,905

$
880,707
Accrued consulting settlement

400,000

200,000
Accrued professional fees

78,277

299,557
Accrued research and development

881,981

297,047
Accrued franchise tax

247,092

30,720
Other accrued expenses

34,132

39,715
Total

$
2,702,387

$
1,747,746

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

7.  Notes Payable
Insurance Note Payable
As of September 30, 2021, the Company had the following insurance note payable outstanding:

Stated

Balance at

Balance at

Maturity

Interest

Original

March 31,

September 30,


Date

Rate

Principal

2022

2021
Insurance Note Payable










2021 Insurance Note

January 2022

4.99
%
$
391,625

$
—

$
148,385

8.  Fair Value
As of March 31, 2022 and September 30, 2021, the fair value of warrants measured at fair value was $0. The fair value of the warrant liabilities was determined using level 3 inputs and the Black-Scholes option pricing model. The following assumptions were used in determining the fair value of the warrant liabilities:

As of March 31,

As of September 30,


2022

2021
Remaining contractual term (years)

0.0

0.2 - 0.5
Common stock price volatility

66.4%

60.6% - 62.5%
Risk-free interest rate

0.2%

0.04%
Expected dividend yield

—

—

The change in fair value of the ~~near term include impairment (if any)~~warrant liabilities for the three and six months ended March 31, 2021 was $0.09 million and $0.7 million, respectively.
As of ~~long-lived assets.~~
~~Fair Value of Financial Instruments~~
~~In accordance with ASC 820,~~March 31, 2022 and September 30, 2021, the carrying value of cash and cash equivalents, accounts payable and ~~notes~~the insurance note payable ~~approximates~~approximate fair value due to the short-term ~~maturity~~nature of these instruments. ~~ASC 820 clarifies~~

9.  Stockholders’ Equity
Warrants
Below is a summary of the ~~definition~~Company’s issued and outstanding warrants as of March 31, 2022:

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Warrants
Expiration date

Exercise Price

Outstanding
April 10, 2022

$
20.00

695,312
July 6, 2023

8.73

105,000
September 20, 2024

6.50

75,000

875,312

Weighted

Weighted

Average

Average

Remaining

Exercise

Contractual Life


Warrants

Price

(in years)
Outstanding as of September 30, 2021

895,939

$
18.35

Expired

(20,627)

55.00

Outstanding as of March 31, 2022

875,312

17.49

0.4
Exercisable as of March 31, 2022

875,312

$
17.49

0.4

10.  Stock-Based Compensation
As of March 31, 2022, an aggregate of 6,018,136 shares of common stock were authorized under the Company’s 2019 Stock Incentive Plan (the “2019 Plan”), subject to an “evergreen” provision that will automatically increase the maximum number of shares of common stock that may be issued under the term of the 2019 Plan. As of March 31, 2022, 655,699 common shares were available for future grants under the 2019 Plan. As of March 31, 2022, 291,667 shares of common stock were authorized under the Company’s 2016 Consolidated Stock Incentive Plan (the “2016 Plan”) and 147,041 common shares were available for future grants under the 2016 Plan.
The Company recorded stock-based compensation expense in the following expense categories of its unaudited condensed consolidated statements of operations for the three and six months ended March 31, 2022 and 2021:

Three Months ended March 31,

Six Months Ended March 31,


2022

2021

2022

2021
General and administrative

$
554,661

$
448,880

$
881,792

$
1,291,159
Research and development

398,167

493,228

864,240

827,534
Total

$
952,828

$
942,108

$
1,746,032

$
2,118,693

Stock Options
Below is a table summarizing the options issued and outstanding as of and for the six months ended March 31, 2022:

Weighted

Weighted

Average

Total

Average

Remaining

Aggregate

Exercise

Contractual Life

Intrinsic


Stock Options

Price

(in years)

Value
Outstanding at September 30, 2021

7,397,154

$
3.13




Granted

1,500,365

2.14




Exercised

(42,250)

0.00

Forfeited

(433,794)

5.17

Outstanding at March 31, 2022

8,421,475

2.86

7.3

$
6,377,580
Exercisable as of March 31, 2022

5,370,128

$
2.35

6.1

$
6,143,729

As of March 31, 2022, unrecognized compensation costs associated with the stock options of $4.3 million will be recognized over an estimated weighted-average amortization period of 1.5 years.

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The intrinsic value of options exercised during the six months ended March 31, 2022 and 2021 was $0.1 million and $0.06 million, respectively.
The weighted average grant date fair value ~~prescribes methods for measuring~~of options granted during the six months ended March 31, 2022 and 2021 was $1.40 and $5.32, respectively.
Key assumptions used to estimate the fair value of the stock options granted during the six months ended March 31, 2022 and ~~establishes a fair value hierarchy to classify~~2021 included:

Six Months Ended March 31,


2022

2021
Expected term of options (years)

5.1 - 6.1

5.5 - 7.0
Expected common stock price volatility

73.8% - 77.2%

83% - 83.3%
Risk-free interest rate

1.1% - 2.6%

0.6% - 1.3%
Expected dividend yield

—

—

Restricted Stock
A summary of the ~~inputs used~~changes in ~~measuring fair value~~the unvested restricted stock during the six months ended March 31, 2022 is as follows:

Weighted Average

  Grant Date


Unvested Restricted

Fair Value


Stock

Price
Unvested as of September 30, 2021

0

$
0
Granted

4,441

3.94
Vested

(4,441)

3.94
Unvested as of March 31, 2022

0

0
Total unrecognized expense remaining

$
0


Weighted-average years expected to be recognized over

—



~~Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at~~Restricted Stock Units

Below is a table summarizing the ~~measurement date.~~
~~Level 2 - Inputs are unadjusted quoted prices for similar assets~~restricted stock units granted and ~~liabilities in active markets, quoted prices for identical or similar assets~~outstanding as of and ~~liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.~~
~~Level 3 - Unobservable inputs, where there is little or no market activity~~ for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.six months ended March 31, 2022:

Weighted Average

Grant Date

Restricted Stock

Fair Value


Units

Price
Unvested as of September 30, 2021

10,000

$
5.09
Forfeited

(10,000)

5.09
Unvested as of March 31, 2022

—

—
Total unrecognized expense remaining

$
—

Weighted-average years expected to be recognized over

—

~~There are no assets~~

11.  Commitments and ~~liabilities that are measured and recognized at fair value as of December 31, 2017 and September 30, 2017, on a recurring basis.~~Contingencies
~~Recent Accounting Pronouncements~~
Litigation
The Company has ~~implemented all new relevant accounting pronouncements~~become involved in certain legal proceedings and claims which arise in the normal course of business. The Company believes that an adverse outcome is unlikely, and it cannot reasonably estimate the potential loss at this point. If an unfavorable ruling

Table of Contents

NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

were to occur, there exists the possibility of a material adverse impact on the Company’s results of operations, prospects, cash flows, financial position and brand. Costs associated with the Company’s involvement in legal proceedings are expensed as incurred.

Securities Litigation

On February 14, 2018, plaintiff Jeevesh Khanna, commenced an action in ~~effect~~the Southern District of New York, against Ohr Pharmaceutical, Inc. (“Ohr”), which entered into a merger agreement with NeuBase Therapeutics, Inc. on January 2, 2019 and which merger closed on July 12, 2019, and several of its current and former officers and directors, alleging that they violated federal securities laws between June 24, 2014 and January 4, 2018. On August 7, 2018, the lead plaintiffs, now George Lehman and Insured Benefit Plans, Inc. filed an amended complaint, alleging a putative class period of April 8, 2014 through January 4, 2018. The plaintiffs did not quantify any alleged damages in their complaint, but, in addition to attorneys’ fees and costs, they seek to maintain the action as a class action and to recover damages on behalf of themselves and other persons who purchased or otherwise acquired Ohr common stock during the putative class period and purportedly suffered financial harm as a result. Ohr and the individuals dispute these claims and are defending the matter vigorously. On September 17, 2018, Ohr filed a motion to dismiss the complaint. On September 20, 2019, the district court issued an opinion and order granting the motion to dismiss. On October 23, 2019, the plaintiffs filed a notice of appeal of that order dismissing the action. After full briefing and oral argument, on October 9, 2020, the U.S. Court of Appeals for the Second Circuit issued a summary order affirming the district court’s order granting the motion to dismiss and remanding the action to the district court to make a determination on the record related to plaintiffs’ request for leave to file an amended complaint. On remand, the district court denied plaintiffs’ subsequent request to amend and dismissed with prejudice plaintiffs’ claims. On December 16, 2020, plaintiffs filed a notice of appeal of that order denying plaintiffs leave to amend. On December 16, 2021, the Second Circuit affirmed the decision and order of the district court denying plaintiffs’ motion for leave to amend, thereby dismissing the appeal and action in its entirety. Plaintiffs have neither sought reconsideration of the Second Circuit’s decision nor filed a writ of certiorari for review by the Supreme Court. This matter is now considered closed.

Derivative Lawsuit

On May 3, 2018, plaintiff Adele J. Barke, derivatively on behalf of Ohr, commenced an action against Michael Ferguson, Orin Hirschman, Thomas M. Riedhammer, June Almenoff and Jason Slakter in the Supreme Court, State of New York, alleging that the action was brought in the right and for the benefit of Ohr seeking to remedy their “breach of fiduciary duties, corporate waste and unjust enrichment that occurred between June 24, 2014 and the present.” It does not quantify any alleged damages. On March 30, 2022, plaintiff filed a notice of voluntary dismissal of the complaint in this action. This matter is now considered closed.

Joint Proxy Statement Lawsuit

Following the issuance of the preliminary joint proxy statement/prospectus related to the merger of the Company and Ohr, on March 18, 2019, the Gomez Action was filed by an individual shareholder in the United States District Court for the Southern District of New York against Ohr and its board of directors. The plaintiff in the Gomez Action alleges that the preliminary joint proxy/prospectus statement filed by Ohr with the SEC on March 8, 2019 contained false and misleading statements and omitted material information in violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder, and further that the individual defendants are liable for those alleged misstatements and omissions under Section 20(a) of the Exchange Act. On March 19, 2019, the Barke Action was filed in the United States District Court for the Southern District of New York asserting similar Section 14(a) and Section 20(a) claims against Ohr’s board of directors and additionally naming NeuBase and Ohr Acquisition Corp., but not Ohr, as defendants. On March 20, 2019, the Wheby Action was filed in the United States District Court for District of Delaware asserting similar claims under Section 14(a) and Section 20(a) and naming as defendants Ohr and its board of directors, NeuBase, and Ohr Acquisition Corp. On March 20, 2019, the Lowinger Action was filed in the Court of Chancery of the State of Delaware asserting a breach of fiduciary duty claim against Ohr’s board of directors arising out of the same facts and circumstances regarding certain alleged omissions in the preliminary joint proxy/prospectus statement. On April 4, 2019, the Garaygordobil Action was filed in the United States District Court for the Southern District of New York asserting similar Section 14(a) and Section 20(a) claims against Ohr and its board of directors. Each of the Gomez, Barke, Garaygordobil, and Lowinger Actions have been dismissed, and on July 12, 2019, the Company and Ohr consummated the Merger. On March 23, 2022, plaintiffs in the Wheby Action filed a notice of voluntary dismissal of the complaint and this case was closed.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Disclosures Regarding Forward-Looking Statements
The following should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes that appear elsewhere in this report as well as in conjunction with the Risk Factors section in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the United States Securities and Exchange Commission (“SEC”) on December 23, 2021. This report and our Form 10-K include forward-looking statements made based on current management expectations pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended.
This report includes “forward-looking statements” within the meaning of Section 21E of the Exchange Act. Those statements include statements regarding the intent, belief or current expectations of the Company and its subsidiaries and our management team. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. These risks and uncertainties include but are not limited to those risks and uncertainties set forth in Part II, Item 1A – Risk Factors of this Quarterly Report and in Part I, Item 1A – Risk Factors of our Annual Report on Form 10-K. In light of the significant risks and uncertainties inherent in the forward-looking statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, the inclusion of such statements should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Further, these forward-looking statements reflect our view only as of the date of ~~these financial statements.~~this report. Except as required by law, we undertake no obligations to update any forward-looking statements and we disclaim any intent to update forward-looking statements after the date of this report to reflect subsequent developments. Accordingly, you should also carefully consider the factors set forth in other reports or documents that we file from time to time with the SEC.
Overview
We have designed, built, and validated a new technology platform (a peptide-nucleic acid antisense oligonucleobase platform, which we call PATrOL™) that can uniquely Drug the Genome™ to address the three disease-causing mechanisms (i.e., gain-of-function, change-of-function, or loss-of-function of a gene), without the limitations of early precision genetic medicines. The ~~pronouncements did~~technology is predicated on synthetic peptide-nucleic acid (“PNA”) chemistry and can directly engage the genome in a sequence-specific manner and address root causality of diseases. These compounds operate by temporarily engaging the genome (or single and double-stranded RNA targets, if desired) and interfering with cellular machinery that processes mutant genes to halt their ability to manifest a disease. We have repeatedly demonstrated in proof-of-concept preclinical animal studies the ability to address multiple disease-causing genes, and different causal mechanisms, to resolve the disease state without the limitations of early genetic medicine technologies. As further validation of our PATrOL™ platform’s capabilities, in FY2021, we described data illustrating that our first-in-class platform technology can address various types of causal insults by Drugging the Genome™ in animal models of a variety of human diseases after patient-friendly routes of administration and does so in a well-tolerated manner.
We are developing precision genetic medicines targeting rare, monogenic diseases for which there are no approved therapies, as well as more common genetic disorders, including cancers that are resistant to current therapeutic approaches. Our pipeline includes therapeutic candidates for the treatment of DM1, HD, as well as cancer-driving point mutations in KRAS, G12V and G12D, which are involved in many tumor types and have historically been “undruggable”.
Based on compelling results from in vitro and in vivo preclinical studies, we plan to file an IND application for our DM1 investigational therapy in the fourth quarter of CY2022. The HD program is currently in preclinical development, and in CY2022 we expect to present new preclinical data describing the pharmacology of a candidate compound in the brain after systemic administration and nominate a development candidate. Both are devastating systemic diseases with no effective therapies. Our oncology program was announced in FY2021, together with in vivo activity illustrating allele-selective engagement of mutant KRAS at the DNA and RNA levels, with abrogation of downstream hyperactive signaling through multiple RAS pathway members, resulting in anti-tumor activity. We continue to improve upon our platform while concurrently developing programs, resulting in next-generation compounds that continue to make their way through preclinical development in a parallel manner. We have recently finalized an analysis of the entire known mutational database and selected several additional high-value indications for screening and development.

Table of Contents

We were incorporated under the laws of the State of Delaware on August 4, 2009, as successor to BBM Holdings, Inc. (formerly known as Prime Resource, Inc., which was organized March 29, 2002 as a Utah corporation) pursuant to a reincorporation merger. On August 4, 2009, we reincorporated in Delaware as “Ohr Pharmaceutical, Inc.” On July 12, 2019, we completed the merger with NeuBase Corporation (formerly known as NeuBase Therapeutics, Inc.), a Delaware corporation (the “Merger”), and, upon completion of the Merger, we changed our name to “NeuBase Therapeutics, Inc.” Since the Merger, we have focused primarily on the development of our proprietary peptide-nucleic acid antisense oligo platform and preclinical-stage therapeutic candidates. Our platform technology and all of our therapeutic candidates are in the preclinical development stage. We have not initiated clinical trials for any of our product candidates, nor have any ~~material impact on the financial statements unless otherwise disclosed,~~products been approved for commercial sale, and ~~the Company does~~we have not ~~believe that there are~~generated any ~~other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.~~

~~Going Concern~~

revenue. To date, we have not completed a clinical trial (including a pivotal clinical trial), obtained marketing approval for any product candidates, manufactured a commercial scale product or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization. Drug development is also a highly uncertain undertaking and involves a substantial degree of risk. As a result, we have no meaningful historical operations upon which to evaluate our business and prospects and have not yet demonstrated an ability to obtain marketing approval for any of our product candidates or successfully overcome the ~~Company has no revenue~~risks and uncertainties frequently encountered by companies in the pharmaceutical industry. We also have not generated any revenues from collaboration and licensing agreements or product sales to date and ~~management~~continue to incur research and development and other expenses. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital, and our future success is subject to significant uncertainty.

For the foreseeable future, we expect to continue to incur losses, which we expect will increase significantly from recent historical levels as we expand our drug development activities, seek regulatory approvals for our product candidates and begin to commercialize them if they are approved by the U.S. Food and Drug Administration (the “FDA”), the European Medicines Agency (the “EMA”) or comparable foreign authorities. Even if we succeed in developing and commercializing one or more product candidates, we may never become profitable.

We expect to expend substantial funds in research and development, including preclinical studies and clinical trials for our platform technology and product candidates, and to manufacture and market any product candidates in the event they are approved for commercial sale. We will likely need additional funding to develop or acquire complementary companies, technologies and assets, as well as for working capital requirements and other operating and general corporate purposes. Moreover, an increase in our headcount would dramatically increase our costs in the near and long-term.

Such spending may not yield any commercially viable products. Due to our limited financial and managerial resources, we must focus on a limited number of research programs and product candidates and on specific indications. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Because the successful development of our product candidates is uncertain, we are unable to precisely estimate the actual funds we will require to develop and potentially commercialize them. In addition, we may not be able to generate sufficient revenue, even if we are able to commercialize any of our product candidates, to become profitable

The Company expects ~~continuing~~to incur substantial operating losses and negative cash ~~outflows in~~flows from operations for the foreseeable future. ~~These factors~~Accordingly, there are material risks and uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern. ~~The accompanying consolidated financial statements~~We will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.

In particular, we expect that we will need to obtain additional funding to obtain clinical data from our current pipeline programs. We have ~~been prepared~~based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a ~~going concern basis, which contemplates the realization~~result of ~~assets~~many factors currently unknown to us, and ~~satisfaction of liabilities in the ordinary course of business. Management expects~~we may need to seek additional funds sooner than planned, through public or private equity or debt financings or ~~through collaboration, licensing transactions~~other capital sources, including potentially collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or ~~other sources. The Company~~strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

There can be no assurance that we will be able to raise sufficient additional capital on acceptable terms or at all. If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, we may be ~~unable~~required to ~~obtain equity~~delay, limit or ~~debt financings or enter into collaboration or licensing transactions.~~ eliminate the development of business opportunities, and our ability to achieve our business objectives, our competitiveness, and our business, financial condition and results of operations may be materially adversely affected. In addition, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Table of Contents

Critical Accounting Estimates and Policies

The preparation of financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our unaudited condensed consolidated financial statements doand accompanying notes. Management bases its estimates on historical experience, market and other conditions, and various other assumptions it believes to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, the estimation process is, by its nature, uncertain given that estimates depend on events over which we may not ~~include any adjustments relating~~have control. If market and other conditions change from those that we anticipate, our unaudited condensed consolidated financial statements may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material effect in our unaudited condensed consolidated financial statements. We review our estimates, judgments, and assumptions used in our accounting practices periodically and reflect the ~~recoverability~~effects of revisions in the period in which they are deemed to be necessary. We believe that these estimates are reasonable; however, our actual results may differ from these estimates.

Our critical accounting policies and ~~classification~~estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, and there have been no material changes to such policies or estimates during the six months ended March 31, 2022.

Recent Accounting Pronouncements

Please refer to Note 2, Significant Accounting Policies—Recent Accounting Pronouncements, in Item 1, Financial Statements, for a discussion of ~~recorded asset amounts or~~recent accounting pronouncements.

Results of Operations

Results of operations for the ~~amounts and classification of liabilities that might result~~three months ended March 31, 2022, reflect the following changes from the ~~outcome of this uncertainty.~~three months ended March 31, 2021:

Three Months ended March 31,


2022

2021

Change
OPERATING EXPENSES






General and administrative

$
3,093,713

$
2,721,640

$
372,073
Research and development

6,835,670

3,174,129

3,661,541
TOTAL OPERATING EXPENSES

9,929,383

5,895,769

4,033,614
LOSS FROM OPERATIONS

(9,929,383)

(5,895,769)

(4,033,614)
OTHER INCOME (EXPENSE)

Interest expense

(3,316)

(6,460)

3,144
Interest income

3,445

9,466

(6,021)
Change in fair value of warrant liabilities

—

90,597

(90,597)
Equity in losses on equity method investment

—

(36,127)

36,127
Other income

5,225

316,724

(311,499)
Total other income, net

5,354

374,200

(368,846)
NET LOSS

$
(9,924,029)

$
(5,521,569)

$
(4,402,460)
~~NOTE 3 – INTANGIBLE ASSETS~~
~~Intangible assets at December 31, 2017 and September 30, 2017:~~
December 31, September 30,
2017 2017
License Rights $ 17,712,991 $ 17,712,991
Patent Costs 200,000 200,000
17,912,991 17,912,991
Accumulated Amortization (4,107,507 ) (3,825,389 )
Total Intangible Assets $ 13,805,484 $ 14,087,602

During the three ~~month period~~months ended ~~December~~March 31, ~~2017,~~2022, our operating loss increased by $4.0 million compared to the ~~Company recognized $282,118~~three months ended March 31, 2021. Our net loss increased by $4.4 million for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021. Until we are able to generate revenue from product sales, our management expects to continue to incur net losses.
General and Administrative Expenses
General and administrative expenses consist primarily of legal and professional fees, wages and stock-based compensation. General and administrative expenses increased by $0.4 million for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to increases in ~~amortization expense on~~professional fees, settlement costs, and wage expenses, partially offset by a decrease in stock-based compensation expense.

Table of Contents

Research and Development Expenses

Research and development expenses consist primarily of professional fees, research, development, manufacturing expenses, wages and stock-based compensation. Research and development expenses increased by $3.7 million for the ~~patents~~three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to increases in manufacturing expenses, professional fees, employee headcount, and ~~license rights.~~the ramp up of research and development activities in support of our preclinical programs.

Change in Fair Value of Warrant Liabilities

~~NOTE 4 – NOTES PAYABLE~~

~~On February 28, 2017, the Company entered into a premium financing arrangement for its directors’ and officers’ insurance policy~~Change in ~~the amount~~fair value of $261,326. The financing arrangement bears interest at 7.5% per annum. As of December 31, 2017, the Company had repaid the note in full in the amount of $261,326 of principal and had paid total interest of $9,067.

~~NOTE 5 – EQUITY~~

~~Common Stock Warrants~~

In December 2017, 225,000 shares of common stock were issued in connection with the exercise of warrants issued and sold to various purchasers as part of a registered offering that closed on April 10, 2017. The warrants were exercised at a price of $1.00 per share, and $225,000 in cash was received during the quarter ended December 31, 2017.

~~Below is a table summarizing the warrants issued and outstanding as of December 31, 2017 (“Price”~~warrant liabilities reflects the ~~weighted average exercise price per share):~~

Warrants Price
Outstanding at September 30, 2017 16,178,110 $ 1.23
Granted
Investor warrants — —
Stock-based compensation warrants 250,000 1.00
Exercised
Investor warrants (225,000 ) 1.00
Stock-based compensation warrants — —
Forfeited or expired
Investor warrants — —
Stock-based compensation warrants — —
Outstanding at December 31, 2017 16,203,110 $ 1.23
Exercisable at December 31, 2017 16,078,108 $ 1.23
~~As of December 31, 2017, the warrants have a weighted average remaining term of 4.19 years and have an intrinsic value of $12,212,051.~~
~~Stock Based Compensation~~
The Company’s Consolidated 2016 Stock Plan (“the Plan”) provides for granting stock options and restricted stock awards to employees, directors and consultants of the Company. The Company uses the Black-Scholes pricing model for determiningchanges in the fair value of outstanding warrants, which is primarily driven by changes in our stock ~~options and warrants granted as share based compensation.~~
price. The ~~following assumptions were used to calculate the~~ fair value of ~~the Company's warrants~~warrant liabilities was $0 at March 31, 2022 and ~~options issued~~December 31, 2021, therefore, no change in fair value was recognized during the three months ended ~~December~~March 31, ~~2017:~~
Warrants Options
Expected term 2 years 3.25 to 5 years
Expected volatility 73% 101%
Expected dividends 0% 0%
Risk-free rates 1.73% 1.68%
~~Warrants.~~~~In October 2017, the Company issued~~2022. We recognized a ~~warrant to purchase 250,000 shares~~gain of common stock to a consultant for services to be rendered. The warrant vests in six equal consecutive monthly amounts at the end of each calendar month starting October 31, 2017, at an exercise price of $1.00 per share, for a term of two years$0.09 million from the ~~date of issuance.~~
During the three month period ended December 31, 2017, the Company recognized $152,192 of expense related to warrants granted as stock based compensation. Unamortized expense as of December 31, 2017 for outstanding warrants issued as stock based compensation amounted to $73,569. Refer to the Common Stock Warrants table within this note for information regarding all outstanding warrants.
~~Options.~~In October 2017, the Company granted nonqualified stock options to purchase an aggregate of 1,640,000 shares of common stock to certain directors, employees, executive officers and key consultants. Other than the issuance of a stock option to purchase 80,000 shares of common stock issued to one key consultant, one third of the shares of common stock subject to the stock options became exercisable immediately, and one third of the shares of common stock subject to the stock options will become exercisable on each of October 16, 2018 and October 16, 2019. With respect to the stock option to purchase 80,000 shares of common stock issued to one key consultant, one quarter of the shares of common stock subject to the stock option vested immediately, and the remaining three quarters of the shares of common stock subject to the stock option are exercisable upon the achievements of certain milestoneschange in connection with the Company’s MAKO clinical study. All but one milestone has been achieved. As such, the 20,000 shares of common stock associated with this unmet performance condition have been accounted for as forfeitures and 60,000 shares have vested as of December 31, 2017. The stock options have an exercise price of $0.67 per share and expire on October 15, 2022.

During the three month period ended December 31, 2017, the Company recognized $477,094 of expense related to options granted. Unamortized option expense as of December 31, 2017 for all options outstanding amounted to $599,557. The Company expects to recognize this compensation cost over a weighted-average period of 1.48 years.
~~Below is a table summarizing the Company’s activity for the three month period ended December 31, 2017 (“Price” reflects the weighted average exercise price per share):~~
Options Price
Outstanding at September 30, 2017 2,250,500 $ 5.58
Granted 1,640,000 $ 0.67
Exercised — —
Forfeited or expired (210,666 ) $ 6.38
Outstanding at December 31, 2017 3,679,834 $ 3.34
Exercisable at December 31, 2017 2,174,576 $ 4.51
~~As of December 31, 2017, the outstanding options have a weighted average remaining term of 4.25 years and an intrinsic~~fair value of ~~$2,532,800.~~
~~Restricted Stock.~~ During the three month period ended December 31, 2017, the Company recognized $135,701 of expense related to restricted stock awards. As of December 31, 2017, there was $59,400 of unamortized expense. The Company expects to recognize this compensation cost over a weighted-average period of .03 years.
~~Below is a table summarizing the Company’s activity~~warrant liabilities for the three months ended March 31, 2021.
Equity in Losses on Equity Method Investment
We account for our investment in DepYmed common shares using the equity method of accounting and record our proportionate share of DepYmed’s net income and losses. As of March 31, 2022 and December 31, ~~2017:~~2021, the carrying value of DepYmed common shares was $0 and, as such, the Company did not record its proportionate share of losses during the three months ended March 31, 2022. Equity in losses during the three months ended March 31, 2021 was $0.04 million.
Shares Weighted Average Grant Date Fair Value
Nonvested at September 30, 2017 270,179 $ 4.53
Granted — —
Vested — —
Forfeited — —
Nonvested at December 31, 2017 270,179 $ 4.53
Other Income, net
~~NOTE 6 – COMMITMENTS AND CONTINGENCIES~~We recognized other income of $0.3 million during the three months ended March 31, 2021 related to the sale of certain intellectual property to DepYmed in exchange for shares of Series A-4 preferred stock. Other income recognized during the three months ended March 31, 2022 was not material.
Results of operations for the six months ended March 31, 2022, reflect the following changes from the six months ended March 31, 2021:
~~Legal Proceedings~~


Six Months Ended March 31,


2022

2021

Change
OPERATING EXPENSES






General and administrative

$
6,029,423

$
5,363,110

$
666,313
Research and development

11,204,927

5,194,053

6,010,874
TOTAL OPERATING EXPENSES

17,234,350

10,557,163

6,677,187
LOSS FROM OPERATIONS

(17,234,350)

(10,557,163)

(6,677,187)
OTHER INCOME (EXPENSE)

Interest expense

(18,535)

(16,197)

(2,338)
Interest income

4,699

9,466

(4,767)
Change in fair value of warrant liabilities

—

720,709

(720,709)
Equity in losses on equity method investment

(415,744)

(61,539)

(354,205)
Other income, net

11,085

316,724

(305,639)
Total other (expense) income, net

(418,495)

969,163

(1,387,658)
NET LOSS

$
(17,652,845)

$
(9,588,000)

$
(8,064,845)

During the six months ended March 31, 2022, our operating loss increased by $6.7 million compared to the six months ended March 31, 2021. Our net loss increased by $8.1 million for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021. Until we are able to generate revenue from product sales, our management expects to continue to incur net losses.

Table of Contents

General and Administrative Expenses

General and administrative expenses consist primarily of legal and professional fees, wages and stock-based compensation. General and administrative expenses increased by $0.7 million for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, primarily due to increases in professional fees, settlement costs, and wage expenses, partially offset by a decrease in stock-based compensation expense.

Research and Development Expenses

Research and development expenses consist primarily of professional fees, research, development, manufacturing expenses, wages and stock-based compensation. Research and development expenses increased by $6.0 million for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, primarily due to increases in manufacturing expenses, professional fees, employee headcount, and the ramp up of research and development activities in support of our preclinical programs.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities reflects the changes in the fair value of outstanding warrants, which is primarily driven by changes in our stock price. The fair value of warrant liabilities was $0 at March 31, 2022 and September 30, 2021, therefore, no change in fair value was recognized during the six months ended March 31, 2022. We recognized a gain of $0.7 million from the change in fair value of warrant liabilities for the six months ended March 31, 2021.

Equity in Losses on Equity Method Investment

We account for our investment in DepYmed common shares using the equity method of accounting and record our proportionate share of DepYmed’s net income and losses. As of March 31, 2022 and September 30, 2021, the carrying value of our investment in DepYmed common shares was reduced to zero, therefore, during the six months ended March 31, 2022, we recorded our share of equity losses to the extent of our investment in preferred shares of DepYmed. We will continue to monitor the operating results of DepYmed and will record equity in earnings when the equity in earnings exceeds our previously unrecognized losses. Equity in losses was $0.4 million for the six months ended March 31, 2022, and $0.06 million for the six months ended March 31, 2021.

Other Income, net

We recognized other income of $0.3 million during the six months ended March 31, 2021 related to the sale of certain intellectual property to DepYmed in exchange for shares of Series A-4 preferred stock. There was an immaterial amount of other income recognized during the six months ended March 31, 2022.

Liquidity, Capital Resources and Financial Condition

We have had no revenues from product sales and have incurred operating losses since inception. As of March 31, 2022, we had cash and cash equivalents of $39.0 million. We have historically funded our operations through the sale of common stock and the issuance of convertible notes and warrants.

We expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As a result, we will likely need to raise additional capital through one or more of the following: the issuance of additional debt or equity or the completion of a licensing transaction for one or more of our pipeline assets.

Net working capital decreased from September 30, 2021 to March 31, 2022 by $15.5 million (to $35.2 million from $50.7 million). Our quarterly cash burn has increased compared to prior periods due to increased research and development and corporate activities, and we expect it to continue to increase in future periods.

At present, we have no bank line of credit or other fixed source of capital reserves. Should we need additional capital in the future, we will be primarily reliant upon a private or public placement of our equity or debt securities, or a strategic transaction, for which there can be no warranty or assurance that we may be successful in such efforts. 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. Failure to obtain additional equity or debt

Table of Contents

financing will have a material adverse impact on our business operations. There can be no assurance that we will be able to obtain the financing needed to achieve our goals on acceptable terms or at all. Additionally, any equity financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders.

The Company ~~may~~expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. Accordingly, there are material risks and uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern.

Cash Flow Summary

The following table summarizes selected items in our unaudited condensed consolidated statements of cash flows:

Six Months Ended March 31,


2022

2021
Net cash used in operating activities

$
(13,460,859)

$
(7,301,524)
Net cash used in investing activities

(272,317)

(417,896)
Net cash used in financing activities

(202,095)

(26,111)
Net decrease in cash and cash equivalents

$
(13,935,271)

$
(7,745,531)

Operating Activities
Net cash used in operating activities was approximately $13.4 million for the six months ended March 31, 2022, as compared to approximately $7.3 million for the six months ended March 31, 2021. Net cash used in operating activities in the six months ended March 31, 2022, was primarily the result of our net loss and a decrease in accounts payable, partially offset by stock-based compensation expense, depreciation and amortization expenses, loss on equity method investment, a decrease in prepaid expenses and other current assets and an increase in accrued expenses. Net cash used in operating activities in the six months ended March 31, 2021, was primarily the result of our net loss, the change in the fair value of warrant liabilities and gain on sale of intellectual property, partially offset by stock-based compensation expense, depreciation and amortization expense and the loss on equity method investment.
Investing Activities
Net cash used in investing activities was approximately $0.3 million for the six months ended March 31, 2022, as compared to $0.4 million for the six months ended March 31, 2021. Net cash used in investing activities for the six months ended March 31, 2022 and 2021 was primarily due to the purchase of laboratory and office equipment.
Financing Activities
Net cash used in financing activities was approximately $0.2 million for the six months ended March 31, 2022, as compared to $0.03 million for the six months ended March 31, 2021. Net cash used in financing activities for both the six month periods ended March 31, 2022 and 2021 primarily reflect the principal payments of financed insurance, partially offset by the proceeds received from the exercise of stock options.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarterly period ended March 31, 2022.

Table of Contents

PART II.
ITEM 1. LEGAL PROCEEDINGS
We have become involved in certain legal proceedings and claims which arise in the normal course of business. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on ~~the Company’s~~our results of operations, prospects, cash flows, financial position and brand. Costs associated with the Company’s involvement in legal proceedings are expensed as incurred.
Securities Class Action Lawsuit
On February 14, 2018, plaintiff Jeevesh Khanna, commenced an action in the Southern District of New York, ~~alleging that~~against Ohr Pharmaceutical, Inc. (“Ohr”), which entered into a merger agreement with NeuBase Therapeutics, Inc. on January 2, 2019 and which merger closed on July 12, 2019, and several of its current and former officers and directors, alleging that they violated federal securities laws between June 24, 2014 and January 4, 2018. On August 7, 2018, the lead plaintiffs, now George Lehman and Insured Benefit Plans, Inc. filed an amended complaint, alleging a putative class period of April 8, 2014 through January 4, 2018. The plaintiffs did not quantify any alleged damages in their complaint, but, in addition to ~~attorneys'~~attorneys’ fees and costs, they seek to maintain the action as a class action and to recover damages on behalf of themselves and other persons who purchased or otherwise acquired ~~our~~Ohr common stock during the putative class period and purportedly suffered financial harm as a result. WeOhr and the individuals dispute these claims and ~~intend to defend~~are defending the matter vigorously. On September 17, 2018, Ohr filed a motion to dismiss the complaint. On September 20, 2019, the district court issued an opinion and order granting the motion to dismiss. On October 23, 2019, the plaintiffs filed a notice of appeal of that order dismissing the action. After full briefing and oral argument, on October 9, 2020, the U.S. Court of Appeals for the Second Circuit issued a summary order affirming the district court’s order granting the motion to dismiss and remanding the action to the district court to make a determination on the record related to plaintiffs’ request for leave to file an amended complaint. On remand, the district court denied plaintiffs’ subsequent request to amend and dismissed with prejudice plaintiffs’ claims. On December 16, 2020, plaintiffs filed a notice of appeal of that order denying plaintiffs leave to amend. On December 16, 2021, the Second Circuit affirmed the decision and order of the district court denying plaintiffs’ motion for leave to amend, thereby dismissing the appeal and action in its entirety. Plaintiffs have neither sought reconsideration of the Second Circuit’s decision nor filed a writ of certiorari for review by the Supreme Court. This matter is now considered closed.
Derivative Lawsuit
On May 3, 2018, plaintiff Adele J. Barke, derivatively on behalf of Ohr, commenced an action against Michael Ferguson, Orin Hirschman, Thomas M. Riedhammer, June Almenoff and Jason Slakter in the Supreme Court, State of New York, alleging that the action was brought in the right and for the benefit of Ohr seeking to remedy their “breach of fiduciary duties, corporate waste and unjust enrichment that occurred between June 24, 2014 and the present.” It does not quantify any alleged damages. On March 30, 2022, plaintiff filed a notice of voluntary dismissal of the complaint in this action. This matter is now considered closed.

Table of Contents

Joint Proxy Statement Lawsuit

~~Severance Pay~~

AsFollowing the issuance of ~~December 31, 2017,~~the preliminary joint proxy statement/prospectus related to the merger of the Company ~~agreed to pay a former director severance pay~~and Ohr, on March 18, 2019, the Gomez Action was filed by an individual shareholder in the ~~amount~~United States District Court for the Southern District of ~~$250,000 over a five year period.~~New York against Ohr and its board of directors. The ~~non-current portion~~plaintiff in the Gomez Action alleges that the preliminary joint proxy/prospectus statement filed by Ohr with the SEC on March 8, 2019 contained false and misleading statements and omitted material information in violation of Section 14(a) of the ~~liability is reported as long-term liability~~Exchange Act and SEC Rule 14a-9 promulgated thereunder, and further that the individual defendants are liable for those alleged misstatements and omissions under Section 20(a) of the Exchange Act. On March 19, 2019, the Barke Action was filed in the ~~amount~~United States District Court for the Southern District of ~~$150,000~~New York asserting similar Section 14(a) and Section 20(a) claims against Ohr’s board of directors and additionally naming NeuBase and Ohr Acquisition Corp., but not Ohr, as defendants. On March 20, 2019, the Wheby Action was filed in the ~~consolidated balance sheets.~~United States District Court for District of Delaware asserting similar claims under Section 14(a) and Section 20(a) and naming as defendants Ohr and its board of directors, NeuBase, and Ohr Acquisition Corp. On March 20, 2019, the Lowinger Action was filed in the Court of Chancery of the State of Delaware asserting a breach of fiduciary duty claim against Ohr’s board of directors arising out of the same facts and circumstances regarding certain alleged omissions in the preliminary joint proxy/prospectus statement. On April 4, 2019, the Garaygordobil Action was filed in the United States District Court for the Southern District of New York asserting similar Section 14(a) and Section 20(a) claims against Ohr and its board of directors. Each of the Gomez, Barke, Garaygordobil, and Lowinger Actions have been dismissed, and on July 12, 2019, the Company and Ohr consummated the Merger. On March 23, 2022, plaintiffs in the Wheby Action filed a notice of voluntary dismissal of the complaint and this case was closed.

ITEM 1A. RISK FACTORS
~~NOTE 7 – RELATED PARTY TRANSACTION~~
~~The Contract Research Organization (“CRO”)~~We operate in a dynamic and rapidly changing environment that ~~ran~~involves numerous risks and uncertainties. Certain factors may have a material adverse effect on our clinical trial contracted with Jason S. Slakter, M.D., P.C., d/b/a Digital Angiography Reading Center (“DARC”), a well-known digital reading center, which is owned by Dr. Jason Slakter, Ohr’s CEO, pursuantbusiness, prospects, financial condition and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, in addition to other information contained in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under the caption “Risk Factors” that appear in Item 1A of our ~~related party transactions policy,~~Annual Report on Form 10-K for the year ended September 30, 2021, filed with the review and approval of the Audit Committee, to provide digital reading and imaging services in connection with the clinical study. During the three months ended December 31, 2017, and 2016, the Company’s CRO was invoiced or accrued $731,832 and $152,405 from DARC.

~~NOTE 8 – SUBSEQUENT EVENTS~~
On January 5, 2018, the Company reported topline data from the MAKO study which did not meet its primary efficacy endpoint. The MAKO study evaluated the efficacy and safety of topically administered squalamine in combination with monthly Lucentis® injections for the treatment of wet age-related macular degeneration (“wet-AMD”). The primary efficacy endpoint was the mean visual acuity gain at nine months, using a mixed-effects model for repeated measures (MMRM) analysis. Subjects receiving squalamine combination therapy (n=119) achieved a mean gain of 8.33 letters from baseline versus 10.58 letters from baseline with Lucentis® monotherapy (n=118). There were no differences in the safety profile between the two treatment groups. Based on these results, we have discontinued further development of squalamine and are evaluating strategic alternatives to maximize shareholder value.
~~Item 2.~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~
Our discussion and analysis of the business and subsequent discussion of financial conditions may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical in nature, including statements about beliefs and expectations, are forward-looking statements. Words such as “may,” “will,” “should,” “estimates,” “predicts,” “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying such statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties as described in greater detail in Item IA, Part II, our “Risk Factors” beginning on page 13 of this Report. You are cautioned that these forward-looking statements reflect management’s estimates only as of the date hereof, and we assume no obligation to update these statements, even if new information becomes available or other events occur in the future, except as required by law. Actual future results, events and trends may differ materially from those expressed in or implied by such statements depending on a variety of factors, including, but not limited to those set forth in our filings with theU.S. Securities and Exchange Commission (“SEC”)~~. Specifically,~~ on December 23, 2021. Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition and ~~not in limitation of these factors, we may alter our plans, strategies, objectives or business.~~
~~Company Overview~~
Ohr Pharmaceutical, Inc. (“we,” “us,” “our,” “Ohr,” or the “Company”) is a pharmaceutical company focused on the development of novel therapeutics and delivery technologies for the treatment of ocular disease.
~~Recent Developments~~
On January 5, 2018, the Company reported topline data from the MAKO study which did not meet its primary efficacy endpoint. The MAKO study evaluated the efficacy and safety of topically administered squalamine in combination with monthly Lucentis® injections for the treatment of wet-AMD. The primary efficacy endpoint was the mean visual acuity gain at nine months, using a mixed-effects model for repeated measures (MMRM) analysis. Subjects receiving squalamine combination therapy (n=119) achieved a mean gain of 8.33 letters from baseline versus 10.58 letters from baseline with Lucentis® monotherapy (n=118). There were no differences in the safety profile between the two treatment groups. Based on these results, we have discontinued further development of squalamine and are evaluating strategic alternatives to maximize shareholder value.
The Board of Directors has engaged Roth Capital Markets, LLC, to advise the Board of Directors and management, and to assist in pursuing a range of strategic alternatives including some of the following: License, divestiture, or other monetization of current assets; license or acquisition of additional assets; merger, joint venture, partnership, or other business combination with another entity, public or private. The Board has not set a definitive timetable for completion of this process. There can be no assurance that this process will result in a strategic alternative of any kind. The Company does not intend to disclose developments or provide updates on the progress or status of this process unless it deems further disclosure is appropriate or required.
~~Corporate and Historical Information~~
We are a Delaware corporation that was organized on August 4, 2009, as successor to BBM Holdings, Inc. (formerly Prime Resource, Inc., which was organized March 29, 2002 as a Utah corporation) pursuant to a reincorporation merger. On August 4, 2009, we reincorporated in Delaware as Ohr Pharmaceutical, Inc.
On May 30, 2014, we completed the ophthalmology assets acquisition (the “SKS Acquisition”) of the privately held SKS Ocular LLC and its affiliate, SKS Ocular 1 LLC (“SKS”). Under the terms of the acquisition agreement, in exchange for substantially all the assets of SKS, Ohr made an upfront payment of $3.5 million in cash and issued 1,194,862 shares of Ohr common stock to SKS. In addition, SKS is eligible to receive up to an aggregate of 1,493,577 additional shares of Ohr common stock in three contingent milestone payments, each milestone resulting in the issuance of 497,859 shares of Ohr common stock. Milestone 1 required Ohr to demonstrate a consistent long-term release of a therapeutic agent above threshold therapeutic levels in the targeted ocular tissues of an animal model. Ohr met this milestone in December 2015. Milestone 2 required the completion of a pharmacodynamic study in an animal model showing clinically relevant efficacy from a drug substance released from SKS microparticles within 24 months of the date of the closing of the SKS Acquisition. Ohr achieved the study results in May 2016, and the Board reviewed and approved Milestone 2 in July 2016. Milestone 3 requires, among other things, the approval of an Investigational New Drug Application (“IND”) within three years of the date of the closing of the SKS Acquisition. We did not achieve Milestone 3.

Simultaneous with the SKS Acquisition, Ohr completed a holding company reorganization in which Ohr merged with a wholly-owned subsidiary and a new parent corporation succeeded Ohr as a public holding company under the same name. The business operations of Ohr did not change as a result of the reorganization. The new holding company retained the name “Ohr Pharmaceutical, Inc.” Outstanding shares of the capital stock of the former Ohr Pharmaceutical, Inc. were automatically converted, on a share for share basis, into identical shares of common stock of the new holding company.
~~PRODUCT PIPELINE~~
~~(a)~~ ~~SQUALAMINE LACTATE OPHTHALMIC SOLUTION 0.2%~~
~~Squalamine Lactate Ophthalmic Solution 0.2% (“Squalamine”, also known as OHR-102)~~
Squalamine lactate is a small molecule anti-angiogenic drug with a novel intracellular mechanism of action. The drug acts against the development of aberrant neovascularization by inhibiting multiple protein growth factors of angiogenesis, including vascular endothelial growth factor (“VEGF”), platelet-derived growth factor (“PDGF”) and basic fibroblast growth factor (“bFGF”).
In April 2016, we commenced enrollment in the MAKO study. The study was a multi-center, randomized, double-masked, placebo-controlled clinical trial to evaluate the efficacy and safety of squalamine combination therapy for the treatment of wet-AMD. Subjects were randomized 1:1 to receive topical squalamine lactate ophthalmic solution, 0.2%, (“squalamine”) twice daily (“BID”) and monthly Lucentis® injections (“squalamine combination”) or topical placebo BID and monthly Lucentis® injections (“Lucentis monotherapy”). Eligibility criteria for the study eye included: newly diagnosed with wet-AMD and no previous treatment, occult neovascularization, if present, measured less than 10mm² as assessed by fluorescein angiography, and visual acuity between 20/40 and 20/320. A total of 237 subjects were randomized. Visual acuity was measured monthly using the Early Treatment of Diabetic Retinopathy Study (ETDRS) eye chart. The primary efficacy endpoint was the mean visual acuity gain at nine months, using a mixed-effects model for repeated measures (MMRM) analysis.
On January 5, 2018, the Company reported topline data from the study which did not meet its primary efficacy endpoint. The study evaluated the efficacy and safety of topically administered squalamine in combination with monthly Lucentis® injections for the treatment of wet-AMD. The primary efficacy endpoint was the mean visual acuity gain at nine months, using a mixed-effects model for repeated measures (MMRM) analysis. Subjects receiving squalamine combination therapy (n=119) achieved a mean gain of 8.33 letters from baseline versus 10.58 letters from baseline with Lucentis® monotherapy (n=118). There were no differences in the safety profile between the two treatment groups. Based on the results of operations. Other than the ~~study, we are no longer moving squalamine forward in clinical development.~~
~~(b)~~ ~~SKS SUSTAINED RELEASE OCULAR DRUG DELIVERY PLATFORM TECHNOLOGY~~
The SKS sustained release technology was designed to develop best-in-class drug formulations for ocular disease. The technology employs micro fabrication techniques to create nano, micro and macroparticle drug formulations that can provide sustained and predictable release of a therapeutic drug over a 3-6 month period. The versatility of this delivery technology makes it well suited to potentially deliver hydrophilic or hydrophobic small molecules, as well as proteins with complex structures.
In February 2017, the Company suspended activities at its lab facility in San Diego, CA where research regarding the SKS sustained release technology had been conducted. However, the Company continues to explore applications of its sustained release technology and potential avenues to monetize it.
~~(c)~~ ~~ANIMAL MODEL FOR DRY-AMD~~
As part of the SKS acquisition, we acquired the exclusive rights to an animal model for dry-AMD whereby mice are immunized with a carboxyethylpyrrole (“CEP”) which is bound to mouse serum albumin (“MSA”) as well as the rights to produce and use CEP for research and clinical applications. CEP is produced following ~~the oxidation of docosahexaenoic acid, which is abundant in the photoreceptor outer segments that are phagocytosed by the retinal pigment epithelium (“RPE”). A number of CEP-adducted proteins~~disclosed risk factors, there have been identified in proteomic studies examining the composition of drusen and other subretinal deposits found in the eyes of patients with dry-AMD. Studies have shown that immunization of CEP-MSA can lead to an ophthalmic phenotype very similar to dry-AMD, including deposition of complement in the RPE, thickening of the Bruch’s membrane, upregulation of inflammatory cytokines, and immune cell influx into the eye. Upon immunization with CEP, a marked decrease in contrast sensitivity which precedes a loss of visual acuity, was observed, similar to what occurs in many patients with dry AMD. A collaborator of the Company is currently conducting research on the CEP target to understand its role in undisclosed ocular diseases and potential for use as a diagnostic agent. The Company has not yet monetized this technology.
~~(d)~~ ~~NON-OPHTHALMOLOGY ASSETS~~
Ohr also owns various other compounds in earlier stages of development, including the PTP1b inhibitor trodusquemine and related analogs. On February 26, 2014, we entered into a Joint Venture Agreement and related agreements with Cold Spring Harbor Laboratory (“CSHL”) pursuant to which a joint venture, DepYmed Inc. (“DepYmed”), was formed to further preclinical and clinical development of Ohr’s trodusquemine and analogues as PTP1B inhibitors for oncology and other undisclosed indications. DepYmed licenses research from CSHL and intellectual property from us. Ohr is a passive joint venturer in DepYmed.
~~Liquidity and Sources of Capital~~
The Company has limited working capital reserves with which to continue development of its pharmaceutical products and continuing operations. The Company is reliant, at present, upon its capital reserves for ongoing operations and has no ~~revenues.~~

Net working capital reserves decreased from the end of the Company’s 2017 fiscal year to the end of the first quarter in fiscal year 2018 by $2,864,143 (to $5,226,308 from $8,090,451) primarily due to costs related to the clinical trial. We expect our cash burn to significantly decrease in the remainder of fiscal 2018 as compared to the same periods in 2017 as a result of the completion of the MAKO study. Management has concluded that due to the conditions described above, there is substantial doubt about the Company’s ability to continue as a going concern. The Company does not have a bank line of credit or other fixed source of capital reserves. When it will need additional capital in the future, the Company will be primarily reliant upon private or public placement of its equity or debt securities, or a transaction with a partner, but presently there can be no assurance that the Company will be successful in such efforts. In April 2017, the Company closed a public offering for net proceeds of approximately $12.7 million, and management believes the Company has sufficient capital to meet its planned operating needs through the end of calendar 2018.
~~Results of Operations~~
~~Three Months Ended December 31, 2017 Compared to Three Months Ended December 31, 2016~~
~~Results of operations for the three months ended December 31, 2017 (“2017”) reflect the following~~material changes from the ~~prior period (“2016”).~~
2017 2016 Change
General and administrative $ 1,510,032 $ 1,746,356 $ (236,324 )
Research and development 2,387,731 4,931,144 (2,543,413 )
Depreciation and amortization 284,986 298,435 (13,449 )
Total Operating Expenses 4,182,749 6,975,935 (2,793,186 )

Operating Loss (4,182,749 ) (6,975,935 ) 2,793,186

Other income (expense) 31,391 281 31,110
Net Loss $ (4,151,358 ) $ (6,975,654 ) $ 2,824,296
~~The Company had no net revenues from operations in 2016 or 2017. Accordingly, the Company had no cost of revenue from operations in 2016 or 2017.~~
~~General and administrative expenses from operations remained relatively flat, with a $236,324 decrease when comparing 2017 to 2016.~~
The Company incurred $2,387,731 in research and development expenses in 2017 compared to $4,931,144 in 2016. The decrease is a result of significant upfront costs paid in 2016 related to the MAKO study in wet-AMD.
~~Depreciation and amortization expense remained relatively stable with $298,435 in 2016 and $284,986 in 2017.~~
For the three months ended December 31, 2017, the Company recognized a net loss of $4,151,358 compared to a net loss of $6,975,654 for the same period in 2016. The decrease in net loss is primarily a result of significant upfront costs paid in 2016 that were related to the MAKO study in wet-AMD. Until the Company is able to generate revenues, management expects to continue to incur net losses.
~~Item 3.~~ ~~Quantitative and Qualitative Risk.~~
~~Market~~ risk ~~represents the risk of loss arising from adverse changes in interest rates and foreign exchange rates. The Company does not have any material exposure to interest rate or exchange rate risk.~~
~~Item 4.~~ ~~Controls and Procedures.~~
~~Evaluation of Disclosure Controls and Procedures~~
The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded the Company’s disclosure controls were effective. In designing and evaluating the disclosure controls and procedures, our management, including the Chief Executive Officer and the Chief Financial Officer, recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching our desired disclosure controls objectives.

~~Changes in Internal Control Over Financial Reporting~~
~~During the period covered by this Report there has been no change~~factors previously disclosed in our ~~internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.~~
~~PART~~ II ~~OTHER INFORMATION~~
~~Item 1.~~ ~~Legal Proceedings.~~
On February 14, 2018, plaintiff, Jeevesh Khanna, commenced an action in the Southern District of New York, alleging that several current and former officers violated federal securities laws between June 24, 2014 and January 4, 2018. The plaintiffs did not quantify any alleged damages in their complaint but, in addition to attorneys' fees and costs, they seek to recover damagesAnnual Report on behalf of themselves and other persons who purchased or otherwise acquired our stock during the putative class period and purportedly suffered financial harm as a result. We dispute these claims and intend to defend the matter vigorously.
~~Item 1A.~~ ~~Risk Factors.~~
You should carefully consider the following factors which may affect future results of operations. If any of the adverse events described below actually occur, our business, financial condition and operating results could be materially adversely affected and you may lose part or all of the value of your investment. If you choose to invest in our securities, you should be able to bear a complete loss of your investment.
~~Risks Relating to Our Financial Position and Need for Capital~~
Our business was substantially dependent on the success of squalamine, which recently failed to meet its primary efficacy endpoint in the MAKO Study. We are unable to identify a viable path forward for continued development of this product candidate.
~~To date, we have devoted a substantial portion of our research, development, clinical efforts and financial resources toward the development of squalamine~~Form 10-K for the treatment of wet-AMD. Squalamine was our lead product candidate. On January 5, 2018, we announced topline results from our MAKO Study which did not meet its primary efficacy endpoint. We are unable to identify a viable plan for continued clinical development of this product candidate. Because our business was substantially dependent on the success of squalamine, we have curtailed all of our activities on this program and may be required to liquidate, dissolve or otherwise wind down our operations if we are unable to consummate a strategic alternative.
~~We may not be able to monetize the non squalamine assets, including the SKS sustained release ocular drug delivery platform technology or the non-ophthalmology assets.~~
We may not be able to monetize any or some of the non-squalamine assets, including the SKS sustained release ocular drug delivery platform technology, the animal model for dry AMD or the non-ophthalmology assets, including the PTP1b inhibitor trodusquemine and related analogs. In that event, we may be constrained to write off those assets, in whole or in part.
~~We are subject to securities class action litigation.~~
As a result of our announcement of negative results from the MAKO Study, our stock price declined substantially. On February 14, 2018, a securities class action litigation was brought against us. This litigation could result in substantial costs and a diversion of management’s resources and attention, which could harm our business and the value of our common stock.
If we fail to continue to meet all applicable Nasdaq Capital Market requirements and Nasdaq determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease.
Our common stock is listed on the Nasdaq Capital Market. In order to maintain our listing, we must meet minimum financial and other requirements, including requirements for a minimum amount of capital, a minimum price per share and continued business operations so that we are not characterized as a “public shell company.” If we are unable to comply with Nasdaq’s listing standards, Nasdaq may determine to delist our common stock from the Nasdaq Capital Market. In the event that our common stock is delisted from the Nasdaq Capital Market and is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Markets. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.
On April 6, 2017, we received a notification letter from Nasdaq indicating that the bid price of our common stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under Nasdaq Listing Rule 5550(a). We were provided a period of 180 calendar days, or until October 3, 2017, to regain compliance. At the end of September 2017, the Company determined that it would not be in compliance with the minimum closing bid price requirement by October 3, 2017, which would subject the Company’s common stock to delisting from Nasdaq. As a result, the Company notified Nasdaq and applied for an extension of the cure period, as permitted under the original notification. In the application, the Company indicated that it met the continued listing requirement for market value of publicly-held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum closing bid price, and provided written notice of its intention to cure the deficiency during the second compliance period of an additional 180 days. On October 4, 2017, we received a written notice from Nasdaq that we were granted an additional 180 calendar days, or until April 2, 2018, to regain compliance with the minimum $1.00 bid price per share requirement of the Listing Rules of Nasdaq. On December 15, 2017, the Company received notice from Nasdaq confirming that for the last 10 consecutive business days, from December 1, 2017 to December 14, 2017, the closing bid price of the Company’s common stock had been at $1.00 per share or greater. Accordingly, Nasdaq determined that the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2). Although we have regained Nasdaq compliance, there can be no assurance that we will be able to maintain compliance with the requirements for listing our common stock on the Nasdaq. The failure to maintain our listing on the Nasdaq could have an adverse effect on the market price and liquidity of our shares of common stock.

There is no certainty that we will be able to execute on any strategic alternatives to maximize shareholder value. If we are unable to identify and execute such strategic alternatives, we may be forced to cease operations.
Based on the results of the MAKO study, we began a comprehensive review of strategic alternatives to maximize shareholder value. We have retained Roth Capital Markets, LLC, to advise and assist us in this review. The strategic alternatives that we are exploring, may include some or all of the following: license, divestiture, or monetization of current assets; license or acquisition of additional assets; merger, joint venture, partnership, or other business combination with another entity, public or private. There can be no assurance that this review process will result in a transaction, or that if a transaction does occur, that it will successfully enhance stockholder value. Our expected cash position, net of all liabilities, limits our attractiveness to potential merger candidates and the value that we may receive in such merger, joint venture, partnership, or other business combination scenarios may be less than the current market value of the Company.
~~We have incurred significant losses and anticipate that we will incur additional losses. We might never achieve or sustain revenues.~~
We have experienced significant net losses since our inception. As of December 31, 2017, we had an accumulated deficit of approximately $112 million. We expect to continue to incur net losses. We do not expect to receive, for at least the next several years, any revenues from the commercialization of our product candidates.
The report of our independent registered public accounting firm expresses substantial doubt about the Company’s ability to continue as a going concern. Such “going concern” opinion could impair our ability to obtain financing.
~~Our auditors, MaloneBailey, LLP, have indicated in their report on the Company’s financial statements for the fiscal~~ year ended September 30, ~~2017~~2021.
Risks Related to the Company
Management has determined that ~~conditions exist~~there are factors that raise substantial doubt about our ability to continue as a going concern.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue to operate as a going concern, ~~due~~which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to ~~our recurring losses~~reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from ~~operations. A “going concern” opinion could impair~~uncertainty related to our ability to ~~finance~~continue as a going concern. We have had no revenues from product sales and have incurred operating losses since inception. As of March 31, 2022, we had $39.0 million in cash and cash equivalents and during the six months ended March 31, 2022, incurred a loss from operations of $17.2 million and used $13.4 million of cash in operating activities. Our existing balance of cash and cash equivalents may not be sufficient to enable us to fund our operations ~~through~~for at least the ~~sale~~next twelve months from the date that this Quarterly Report is filed with the SEC. These factors raise substantial doubt about our ability to continue as a going concern within one year from the issuance date of ~~equity, incurring debt, or other financing alternatives.~~this filing. Our ability to continue as a going concern will depend upon the availability and terms of future funding. If we are unable to achieve this goal, our business would be jeopardized and the Company may not be able to continue. If we ceased operations, it is ~~likely that all of our investors would lose their investment.~~
~~As a result of the negative results from the MAKO Study and our limited financial resources, we may not be successful in retaining key employees.~~
Our cash conservation activities may yield unintended consequences, such as reduced employee morale and unwanted attrition. Competition among biotechnology companies for qualified employees is intense, and the ability to retain our key employees is critical to our ability to effectively manage our resources while we seek to identify and implement strategic alternatives. Loss of any of our key employees could have a material adverse effectdependent on ~~our business.~~
~~Risks Related to Our Business and Industry~~
~~We currently do not have, and may never have, any products that generate revenues.~~
We are a development stage pharmaceutical company and currently do not have, and may never have, any products that generate revenues. Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. To date, we have not generated any product revenues from our product candidates. We cannot guarantee that any of our product candidates will ever become marketable products.
~~We are highly dependent upon~~ our ability to raise the required additional ~~capital. Raising~~equity or debt financing to meet short and long-term operating requirements. We may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional ~~capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.~~
~~Until such time, if ever,~~cash, including as ~~we can generate substantial product revenues, we expect to finance our cash needs through~~ a ~~combination~~result of ~~equity offerings, debt financings,~~COVID-19 and ~~partnerships. We do not have any committed external source of funds. To the extent that~~its impacts. If we raise additional ~~capital~~funds through the ~~sale~~issuance of equity or convertible debt securities in the future, the percentage ownership of our ~~stockholders’ ownership interest will~~current stockholders could be ~~diluted,~~reduced, and ~~the terms of these~~such securities ~~may include liquidation~~might have rights, preferences or ~~other preferences that adversely affect our stockholders’ rights as holders of~~privileges senior to our common stock. ~~Debt~~Additional financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise capital through a partnership, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be ~~favorable to us.~~available upon acceptable terms, or at all. If weadequate funds are ~~unable to raise additional funds through equity~~not available or ~~debt financings when needed,~~are not available on acceptable terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves, or cease operations and liquidate.

~~We are highly dependent upon our ability to enter into agreements with collaborative partners to develop, commercialize, and market our products.~~
Our strategy is to seek a strategic commercial partner, or partners, such as large pharmaceutical companies, with extensive experience in the development, commercialization, and marketing of ophthalmic and non-ophthalmic products. To date, we have not entered into any strategic partnerships for any of our products. We face significant competition in seeking appropriate strategic partners, and these strategic partnerships can be intricate and time consuming to negotiate and document. We may not be able to ~~negotiate strategic partnerships on acceptable terms,~~take advantage of prospective business endeavors or ~~at all. We are~~opportunities, which could significantly and materially restrict our operations.
If development of our candidates does not produce favorable results, we and our collaborators, if any, may be unable to ~~predict when, if ever,~~commercialize these products.

Table of Contents

To receive regulatory approval for the commercialization of the PATrOL™ platform, or any product candidates that we may develop, adequate and well-controlled clinical trials must be conducted to demonstrate safety and efficacy in humans to the satisfaction of the FDA, the EMA and comparable foreign authorities. In order to support marketing approval, these agencies typically require successful results in one or more Phase III clinical trials, which our current product candidates have not yet reached and may never reach. The development process is expensive, can take many years and has an uncertain outcome. Failure can occur at any stage of the process. We may experience numerous unforeseen events during, or as a result of, the development process that could delay or prevent commercialization of our current or future product candidates, including the following:

●

preclinical studies conducted with product candidates for potential clinical development to evaluate their toxicology, carcinogenicity and pharmacokinetics and optimize their formulation, among other things, may produce unfavorable results;

●

patient recruitment and enrollment in clinical trials may be slower than we anticipate;

●

clinical trials may produce negative or inconclusive results;

●

costs of development may be greater than we anticipate;

●

the potential advantages of the PATrOL™-enabled anti-gene drug candidates may not materialize and thus would confer no benefits to patients over other parties’ products that may emerge;

●

our product candidates or our PATrOL™ platform may cause undesirable side effects that delay or preclude regulatory approval or limit their commercial use or market acceptance, if approved;

●

collaborators who may be responsible for the development of our product candidates may not devote sufficient resources to these clinical trials or other preclinical studies of these candidates or conduct them in a timely manner; or

●

we may face delays in obtaining regulatory approvals to commence one or more clinical trials.

Additionally, because our technology potentially involves mutation silencing via genome binding and/or editing across multiple cell and tissue types, we are subject to many of the challenges and risks that advanced therapies, such as gene therapies, face, including:

●

regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future;

●

improper modification of a gene sequence in a patient’s genome could lead to lymphoma, leukemia or other cancers, or other aberrantly functioning cells; and

●

the FDA recommends a follow-up observation period of 15 years or longer for all patients who receive treatment using gene therapies, and we may need to adopt and support such an observation period for our product candidates.

Success in early development does not mean that later development will be successful because, for example, product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy despite having progressed through initial clinical trials.

We may license or acquire intellectual property related to our product candidates from universities. Some of our preclinical studies and other analyses with respect to our product candidates may be performed by their original owners or collaborators. As a company, we have limited experience in conducting research on our platform technology and preclinical trials for our product candidates. Since our experience with our platform technology and product candidates is limited, we will ~~enter into~~need to train our existing personnel or hire additional personnel in order to successfully administer and manage our preclinical studies and clinical trials as anticipated, which may result in delays in completing such anticipated preclinical trials and clinical studies.

We currently do not have strategic collaborations in place for clinical development of our platform technology and any ~~strategic partnerships because~~ of our current product candidates. Therefore, in the ~~numerous risks~~future, we or any potential future collaborative partner will be responsible for establishing the targeted endpoints and ~~uncertainties associated with establishing strategic partnerships.~~goals for development of our product candidates. These targeted endpoints and goals may be inadequate to

Table of Contents

demonstrate the safety and efficacy levels required for regulatory approvals. Even if we believe data collected during the development of our product candidates are promising, such data may not be sufficient to support marketing approval by the FDA, the EMA or comparable foreign authorities.

~~While our strategy is to partner with an appropriate party, no assurance~~Further, data generated during development can be ~~given that any third party would be interested~~interpreted in ~~partnering with us. We currently lack~~different ways, and the ~~resources~~FDA, the EMA or comparable foreign authorities may interpret such data in different ways than we or our collaborators. Our failure to ~~conduct clinical trials, to manufacture~~adequately demonstrate the safety and efficacy of our platform technology and any of our product candidates ~~on a large scale,~~would prevent our receipt of regulatory approval, and such failure would ultimately prevent the potential commercialization of these product candidates.

Since we ~~have no sales, marketing~~do not currently possess the resources necessary to independently develop and commercialize our product candidates or ~~distribution capabilities. In the event~~any other product candidates that we ~~are not able~~may develop, we may seek to enter into collaborative agreements to assist in the development and potential future commercialization of some or all of these assets as a ~~collaborative agreement~~component of our strategic plan. Our discussions with ~~a partner or partners,~~potential collaborators, however, may not lead to the establishment of collaborations on ~~commercially reasonable~~acceptable terms, orif at all, weor it may ~~be unable~~take longer than expected to ~~conduct clinical trials, or~~establish new collaborations, leading to ~~commercialize our products,~~development and potential commercialization delays, which would ~~have a material adverse effect upon~~adversely affect our business, ~~prospects,~~ financial condition and results of operations.

If we fail to comply with our obligations in the agreements under which we in-license intellectual property and other rights from third parties or otherwise experiences disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business.

~~Even~~We may enter into license agreements with universities. A license agreement may impose various royalties, sublicensing fees and other obligations on us. If we fail to comply with our obligations under these agreements, or if we ~~succeed~~file for bankruptcy, we may be required to make certain payments to the Licensor, we may lose the exclusivity of our license, or the Licensor may have the right to terminate the license, in ~~securing a partner, the partner collaborators may fail~~which event we would not be able to develop or ~~effectively commercialize~~market products covered by the license. Additionally, the royalties and other payments associated with these licenses could materially and adversely affect our business, financial condition and results of operations.

Pursuant to the terms of our license agreement with CMU (the “CMU License Agreement”), the Licensor has the right to terminate the CMU License Agreement with respect to the program licensed under certain circumstances, including, but not limited to: (i) if we do not pay amounts when due and within the applicable cure periods or (ii) if we file or have filed against us a petition in bankruptcy or make an assignment for the benefit of creditors. In the event the CMU License Agreement is terminated by the Licensor, all licenses (or, in the determination of the Licensor, the exclusivity of such licenses) granted to us by the Licensor will terminate immediately.

In some cases, patent prosecution of our licensed technology may be controlled solely by the licensor. If our licensor fails to obtain and maintain patent or other protection for the proprietary intellectual property we in-license, then we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products using the intellectual property. In certain cases, we may control the prosecution of patents resulting from licensed technology. In the event we breach any of our ~~product candidates or technologies. A partnership involving~~obligations related to such prosecution, we may incur significant liability to our ~~product candidates pose~~licensing partners. Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. Disputes may arise regarding intellectual property subject to a ~~number of risks,~~licensing agreement, including, ~~the following:~~

but not limited to:

●

~~partners may not have sufficient resources or decide not to devote~~ the ~~necessary resources due to internal constraints such as budget limitations, lack~~scope of ~~human resources, or a change in strategic focus;~~rights granted under the license agreement and other interpretation-related issues;

●

~~collaborators may believe~~the extent to which our technology and processes infringe on intellectual property orof the ~~product candidate infringes on~~licensor that is not subject to the ~~intellectual property rights of others;~~licensing agreement;

●

~~partners may dispute their responsibility to conduct development~~the sublicensing of patent and ~~commercialization activities pursuant to the applicable collaboration, including the payment of related costs or the division of any revenues;~~other rights;

●

~~partners may decide to pursue a competitive product developed outside of~~our diligence obligations under the ~~partnership arrangement;~~license agreement and what activities satisfy those diligence obligations;

●

~~partners may not be able to obtain,~~the ownership of inventions and know-how resulting from the joint creation or ~~believe they cannot obtain, the necessary regulatory approvals;~~use of intellectual property by our licensors and us and our collaborators; and

●

~~partners may delay~~ the ~~development or commercialization~~priority of ~~our product candidates in favor~~invention of ~~developing or commercializing another party’s product candidate; or~~patented technology.

●

~~partners may decide to terminate or not to renew the collaboration for these or other reasons.~~

Table of Contents

~~Thus, should the Company be successful in entering into a partnership agreement, the agreements may not lead~~If disputes over intellectual property and other rights that we have in-licensed prevent or impair our ability to ~~development or commercialization of product candidates in the most efficient manner or at all. Partnership agreements are generally terminable without cause~~maintain our current licensing arrangements on ~~short notice. We also face competition in seeking out collaborators. If we are unable to secure new partners that achieve the partner’s objectives and meet our expectations,~~acceptable terms, we may be unable to ~~advance our product candidates~~successfully develop and ~~may not generate meaningful revenues.~~

~~If we are ever in a position to~~ commercialize ~~our product candidates, of which there can be no assurance, we have no experience selling, marketing or distributing products and no internal capability to do so.~~

We currently have no sales, marketing or distribution capabilities and no experience in building a sales force and distribution capabilities. If we are ever in a position to commercialize our product candidates, of which there can be no assurance, we must develop internal sales, marketing and distribution capabilities, which will be expensive and time consuming, or make arrangements with third parties to perform these services. If we decide to market any of our products directly, we must commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and with supporting distribution capabilities. Building an in-house marketing and sales force with technical expertise and distribution capabilities will require significant expenditures, management resources and time. Factors that may inhibit our efforts to commercialize our products directly and without strategic partners include:

●

~~our inability to recruit and retain adequate numbers of effective sales and marketing personnel;~~

●

~~the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products;~~

●

~~the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and~~

●

~~unforeseen costs and expenses associated with creating and sustaining an independent sales and marketing organization.~~

~~We may not be successful in recruiting~~ the sales and marketing personnel necessary to sell our products and even if we do build a sales force, they may not be successful in marketing our products, which would have a material adverse effect on our business and results of operations.

We rely, and expect that we will continue to rely, on third parties to conduct any future clinical trials for us. If such third parties do not successfully carry out their duties or if we lose our relationships with such third parties, our drug development efforts could be delayed.

We are dependent on contract research organizations, third-party vendors and independent investigators for preclinical testing, and clinical trials related to our drug discovery and development efforts, and we will likely continue to depend on them to assist in our future discovery and development efforts. These parties are not our employees, and we cannot control the amount or timing of resources that they devote to our programs. If they fail to devote sufficient time and resources to our drug development programs or if their performance is substandard, it will delay the development and commercialization of ouraffected product candidates. The parties with which we contract for execution of our clinical trials will play a significant role in the conduct of the trials and the subsequent collection and analysis of data. Their failure to achieve their research goals or otherwise meet their obligations on a timely basis could adversely affect clinical development of our product candidates.

~~Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Outside parties may:~~

●

~~have staffing difficulties;~~

●

~~fail to comply with contractual obligations;~~

●

~~experience regulatory compliance issues;~~

●

~~undergo changes in priorities or become financially distressed; or~~

●

~~form relationships with other parties, some of which may be our competitors.~~

These factors may materially adversely affect the willingness or ability of third parties to conduct our clinical trials and may subject us to unexpected cost increases that are beyond our control. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on contract research organizations does not relieve us of our regulatory responsibilities. We and our contract research organizations are required to comply with applicable current Good Laboratory Practice (“CGLP”), current Good Manufacturing Practice (“CGMP”), and current Good Clinical Practice (“CGCP”) regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for any products in clinical development. The FDA enforces these CGCP regulations through periodic inspections of clinical trial sponsors, principal investigators and trial sites. If we ~~or our contract research organizations~~ fail to comply with applicable CGCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure that, upon inspection, the FDA or any comparable foreign regulatory authority will determine that any of our clinical trials comply with CGCP. In addition, our clinical trials must be conducted with product produced under current CGMP, regulations and will require a large number of test subjects. Our failure or the failure of our contract research organizations to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action up to and including civil and criminal penalties.

If our contract research organizations do not successfully carry out their duties or if we were to lose relationships with contract research organizations, our drug development efforts could be delayed or terminated.

If we were to lose relationships with any one or more of these parties, we could experience a significant delay in both identifying another comparable provider and then contracting for its services. We may be unable to retain an alternative provider on reasonable terms, if at all. Even if we locate an alternative provider, it is likely that this provider may need additional time to respondsuch obligations to our ~~needs and~~licensor, such licensor may ~~not provide the same type or level of service as the original provider. In addition, any provider that~~terminate their licenses to us, in which case we retain will be subject to current CGLP and CGCP, other regulatory standards, and similar foreign standards, and we do not have control over compliance with these regulations by these providers. Consequently, if these practices and standards are not adhered to by these providers, the development and commercialization of our product candidates could be delayed, and have a material adverse effect on our business.

Our product candidates may not gain acceptance among physicians, patients, or the medical community, thereby limiting our potential to generate revenues, which will undermine our future growth prospects.

Even if our product candidates are approved for commercial sale by the FDA or other regulatory authorities, including foreign regulatory authorities, the degree of market acceptance of any approved product candidate by physicians, healthcare professionals and third-party payors, and our profitability and growth will depend on a number of factors, including:

●

~~the ability to provide acceptable evidence of safety and efficacy;~~

●

~~pricing and cost effectiveness, which may be subject to regulatory control;~~

●

~~our ability to obtain sufficient third-party insurance coverage or reimbursement;~~

●

~~effectiveness of our or our collaborators’ sales and marketing strategy;~~

●

~~relative convenience and ease of administration;~~

●

~~the prevalence and severity of any adverse side effects; and~~

●

~~availability of alternative treatments.~~

If any product candidate that we develop does not provide a treatment regimen that is at least as beneficial as the current standard of care or otherwise does not provide some additional patient benefit over the current standard of care, that product will not achieve market acceptance and we will not generate sufficient revenues to achieve profitability.

~~We may~~would not be able to ~~continue or fully exploit our partnerships with outside scientific and clinical advisors, which could impair the progress of clinical trials and our research and development efforts.~~

We work with scientific and clinical advisors who are experts in the field of ocular disorders. They advise us with respect to our programs. These advisors are not our employees and may have other commitments that would limit their future availability to us. If a conflict of interest arises between their work for us and their work for another entity, we may lose their services, which may impair our reputation in the industry and delay the development or commercializationmarket products covered by these licenses. The loss of our ~~product candidates.~~

~~We rely completely on third-party manufacturers which may result in delays in clinical trials, regulatory approvals and product introductions.~~

We have no manufacturing facilities and do not have extensive experience in the manufacturing of drugs or in designing drug manufacturing processes. We will have to contract with third-party manufacturers to produce, in collaboration with us, our product candidates for clinical trials. If any of our product candidates are approved by the FDA or other regulatory agencies, including foreign regulatory agencies for commercial sale, we may need to amend our contract with the manufacturer or contract with another third party to manufacture them in larger quantities. If we need to enter into alternative arrangements, it could delay our product development activities. Our reliance on these third parties for development activities will reduce our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations and study and trial protocols. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study and trial plans and protocols, or if there are disagreements between us and these third parties, we will not be able to initiate, or complete, or may be delayed in completing, the clinical trials required to support future approval of our product candidates. In some such cases, we may need to locate an appropriate replacement third-party relationship, which may not be readily available or with acceptable terms, whichlicenses would ~~cause additional delay with respect to the approval of our product candidates and would thereby~~ have a material adverse effect on our business, financial condition ~~results of operations and prospects.~~

We have not entered into long-term agreements with third-party manufacturers or with any alternate suppliers. Although we intend to do so prior to any commercial launch of a product that is approved by the FDA or any comparable foreign regulatory authorities in order to ensure that we maintain adequate supplies of commercial drug product, we may be unable to enter into such agreements or do so on commercially reasonable terms, which could delay a product launch or subject our commercialization efforts to significant supply risk. In addition, reliance on third-party manufacturers entails risks to which we would not be subject to if we manufactured the product candidates ourselves, including:

●

~~the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;~~

●

~~reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities;~~

●

~~termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; and~~

●

disruptions to the operations of manufacturers or suppliers of products and services that are vital to our clinical program caused by conditions unrelated to our business or operations, including regulatory enforcement actions, and bankruptcy of the manufacturer or supplier.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize future product candidates. Some of these events could be the basis for FDA or any comparable foreign regulatory authority action, including injunction, recall, seizure or total or partial suspension of product manufacture.

Contract manufacturers are subject to significant regulatory oversight with respect to manufacturing products. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and may have limited capacity.

Any manufacturers of our product candidates are obliged to operate in accordance with FDA-mandated CGMPs. In addition, the facilities that would be used by contract manufacturers or other third party manufacturers to manufacture our product candidates must be approved by the FDA or other foreign regulatory authority pursuant to inspections that will be conducted after we request regulatory approval from the FDA or other foreign regulatory authority. A failure of any contract manufacturers to establish and follow CGMPs and to document their adherence to such practices may lead to significant delays in clinical trials or in obtaining regulatory approval of product candidates or the ultimate launch of products based on our product candidates into the market. Furthermore, all of our future contract manufacturers are likely to be engaged with other companies to supply and/or manufacture materials or products for such companies, which exposes them to regulatory risks for the production of such materials and products. As a result, failure to satisfy the regulatory requirements for the production of those materials and products may affect the regulatory clearance of the contract manufacturers’ facilities generally. Failure by third-party manufacturers or us to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, failure of the government to grant pre-market approval of drugs, delays, suspension or withdrawal of approvals, seizures or recalls of products, operating restrictions, and criminal prosecutions. Many aspects of the clinical trial and manufacturing process are outside of our control.

The facilities and quality systems of third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of product candidates. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or the associated quality systems for compliance with the regulations applicable to the activities being conducted. If these facilities do not pass a pre-approval plant inspection, FDA approval of the products will not be granted.

The regulatory authorities also may, at any time following approval of a product for sale, audit our manufacturing facilities or those of our third-party manufacturers. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or our third-party manufacturers to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a manufacturing facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

~~Developments by competitors may render our products or technologies obsolete or non-competitive which would have a material adverse effect on our business and results of operations.~~

We compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies and other public and private research organizations. Our drug candidates will have to compete with existing therapies and therapies under development by our competitors. In addition, our commercial opportunities may be reduced or eliminated if our competitors develop and market products that are less expensive, more effective or safer than our drug products. Other companies have drug candidates in various stages of preclinical or clinical development to treat diseases for which we are also seeking to develop drug products. Some of these potential competing drugs are further advanced in development than our drug candidates and may be commercialized earlier. Even if we are successful in developing effective drugs, our products may not compete successfully with products produced by our competitors. Most of our competitors, either alone or together with their collaborative partners, operate larger research and development programs, have larger staffing and facilities, and have substantially greater financial resources than we do, as well as significantly greater experience in:

●

~~developing drugs;~~

●

~~undertaking preclinical testing and human clinical trials;~~

●

~~obtaining FDA and other regulatory approvals, including foreign regulatory approvals, of drugs;~~

●

~~formulating and manufacturing drugs; and~~

●

~~launching, marketing and selling drugs.~~

These organizations also compete with us to attract qualified personnel, acquisitions and joint venture candidates and for other collaborations. Activities of our competitors may impose unanticipated costs on our business which would have a material adverse effect on our business and results of operations.

We ~~depend upon key officers~~may be required to pay royalties and ~~consultants in a competitive market for skilled personnel. If we are unable~~sublicensing fees pursuant to ~~attract and retain key personnel, it could adversely affect our ability to develop and market our products.~~

We are highly dependent upon the principal members of our management team, especially our Chief Executive Officer, Dr. Jason Slakter, and Vice President of Business Development and Chief Financial Officer, Sam Backenroth, as well as our directors and key consultants. A loss of any of these personnel may have a material adverse effect on aspects of our business.

We also depend in part on obtaining the service of scientific personnel and our ability to identify, hire and retain additional personnel. We experience intense competition for qualified personnel, and the existence of non-competitionuniversity licensing agreements, between prospective employees and their former employers may prevent us from hiring those individuals or subject us to suit from their former employers. While we attempt to provide competitive compensation packages to attract and retain key personnel, many of our competitors are likely to have greater resources and more experience than we have, making it difficult for us to compete successfully for key personnel.

In addition, the announcement that we have commenced a review of strategic alternatives may create uncertainty about our prospects as an independent business entity, and make it more difficult to attract and retain qualified executive and other key personnel. The review process may also be costly, time-consuming, divert the attention of management and our employees or result in changes in our management team or our board of directors, all of which could materially and adversely affect our business. In addition, our stock price may experience periods of increased volatility as a result of these activities or related rumors and speculation.

Our employees, partners, independent contractors, principal investigators, consultants, vendors and contract research organizations may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk that our employees, partners, independent contractors, principal investigators, consultants, vendors and contract research organizations may engage in fraudulent or other illegal activity with respect to our business. Misconduct by these employees could include intentional, reckless and/or negligent conduct or unauthorized activity that violates: (1) FDA or any comparable foreign regulatory authority regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA or any comparable foreign regulatory authority; (2) manufacturing standards; (3) federal, state and foreign healthcare fraud and abuse laws and regulations; or (4) laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials, or illegal misappropriation of drug product, which could result in regulatory sanctions and serious harm to our reputation. Any incidents or any other conduct that leads to an employee receiving an FDA or other regulatory authority debarment could result in a loss of business from our partners and severe reputational harm. We have adopted a Code of Business Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect ~~our ability to operate our business, operating results and financial condition.~~

~~Any future acquisitions we make~~the overall profitability for us of ~~companies or technologies may result in disruption to our business or distraction of our management, due to difficulties in assimilating acquired personnel and operations.~~

We may acquire or make investments in complementary businesses, technologies, services or products which complement our pharmaceutical operations if appropriate opportunities arise. From time to time we engage in discussions and negotiations with companies regarding our acquiring or investing in such companies’ businesses, products, services or technologies, in the ordinary course of our business. We cannot be assured that we will be able to identify future suitable acquisition or investment candidates, or if we do identify suitableany product candidates that we ~~will be able~~may seek to ~~make such acquisitions or investments on commercially acceptable terms or at all.~~ commercialize.

If we acquire or invest in another company, we could have difficulty in assimilating that company’s personnel, operations, technology and software. In addition, the key personnel of the acquired company may decide not to work for us. If we make other types of acquisitions, we could have difficulty in integrating the acquired products, services or technologies into our ~~operations. These difficulties could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations. Furthermore,~~sales are covered by a licensing agreement with a university, then we may ~~incur indebtedness or issue equity securities~~be required to pay ~~for any~~royalties on future ~~acquisitions. The issuance~~worldwide net product sales and a percentage of ~~equity securities would be dilutive to our existing stockholders. However, we currently do not have any agreement to enter into any material investment or acquisition transaction.~~

~~Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.~~

We store sensitive data, including intellectual property, our proprietary business information and personally identifiable information of our employees, in our data centers and on our networks. The secure maintenance of this information is critical to our operations. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, and damage our reputation.

~~Our business and operations would suffer in the event of system failures.~~

Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Such an event could cause interruption of our operations. For example, the loss of data from clinical trials for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs. To the extent that any disruption or security breach were to result in a loss of or damage to our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed.

~~Risks Related to FDA, Comparable Foreign Regulatory Authority and Healthcare Regulations~~

~~We face heavy government regulation. FDA regulatory approval and/or comparable foreign regulatory authority’s approval of our products is uncertain.~~

The research, testing, manufacturing and marketing of drug products such as those that we are developing are subject to extensive regulation by federal, state and local government authorities, including the FDA or any comparable foreign regulatory authority. To obtain regulatory approval of a product, we must demonstrate to the satisfaction of the applicable regulatory agency that, among other things, the product is safe and effective for its intended use. In addition, we must show that the manufacturing facilities used to produce the products are in compliance with current Good Manufacturing Practices regulations.

The process of obtaining FDA and other required regulatory approvals, including foreign regulatory approvals and clearances, will require us to expend substantial time and capital. Despite the time and expense expended, regulatory approval is never guaranteed. The number of preclinical and clinical trials that will be required for FDA approval, or any comparable foreign regulatory authority’s approval, varies depending on the drug candidate, the disease or condition for which the drug candidate is in development, and the requirements applicable to that particular drug candidate. The FDA or other foreign health authority can delay, limit or deny approval of a drug candidate for many reasons, including that:

●

~~a drug candidate may not be shown to be safe or effective;~~

●

~~the FDA or any comparable foreign regulatory authority may not approve our manufacturing process;~~

●

~~the FDA or any comparable foreign regulatory authority may interpret data from preclinical and clinical trials in different ways than we do; and~~

●

~~the FDA may not meet, or may extend, the Prescription Drug User Fee Act date with respect to a particular NDA.~~

For example, if certain of our methods for analyzing our trial data are not accepted by the FDA or foreign regulatory authority, we may fail to obtain regulatory approval for our product candidates. Moreover, if and when our products do obtain marketing approval, the marketing, distribution and manufacture of such products would remain subject to extensive ongoing regulatory requirements. Failure to comply with applicable regulatory requirements could result in:

●

~~warning letters;~~

●

~~fines;~~

●

~~civil penalties;~~

●

~~injunctions;~~

●

~~recall or seizure of products;~~

●

~~total or partial suspension of production;~~

●

~~refusal of the government to grant future approvals;~~

●

~~withdrawal of approvals; and~~

●

~~criminal prosecution.~~

~~Any delay or failure by us to obtain regulatory approvals for our product candidates could diminish competitive advantages~~sublicensing fees that we may ~~attain~~earn. These royalty payments and ~~would~~sublicensing fees could adversely affect the ~~marketing~~overall profitability for us of ~~our products. We have not received regulatory approval to market~~ any ~~of our~~ product candidates ~~in any jurisdiction.~~that we may seek to commercialize.

~~Following regulatory approval~~We may infringe the intellectual property rights of ~~any of our drug candidates, we will be subject to ongoing regulatory obligations and restrictions,~~others, which may ~~result in significant expense and limit our ability to commercialize our potential products.~~

With regard to our drug candidates, if any, approved by the FDA or by another regulatory authority, including a foreign regulatory authority, we are held to extensive regulatory requirements over product manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion and record keeping. Regulatory approvals may also be subject to significant limitations on the indicated uses or marketing of the drug candidates. Potentially costly follow-up or post-marketing clinical studies may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest to the regulatory authority. Previously unknown problems with the drug candidate, including adverse events of unanticipated severity or frequency, may result in restrictions on the marketing of the drug, and could include withdrawal of the drug from the market.

~~In addition, the law or regulatory policies governing pharmaceuticals may change. New statutory requirements may be enacted or additional regulations may be enacted that could~~ prevent or delay ~~regulatory approval of~~ our drug ~~candidates. We cannot predict~~development efforts and prevent us from commercializing or increase the ~~likelihood, nature or extent~~costs of adverse government regulation that may arise from future legislation or administrative action, either in the United States or elsewhere. If we are not able to maintain regulatory compliance, we might not be permitted to marketcommercializing our ~~drugs and which could have a material adverse effect on our business and competitive position.~~

~~Healthcare policy changes, including proposals to reform the U.S. healthcare system, may harm our future business.~~

Healthcare costs have risen significantly over the past decade. There have been and continue to be proposals by legislators, regulators and third-party payors to keep these costs down. Certain proposals, if passed, would impose limitations on the prices we will be able to charge for the products that we are developing, or the amounts of reimbursement available for these products from governmental agencies third-party payors. These limitations could in turn reduce the amount of investment into development, and the amount of revenues that we will be able to generate in the future from sales of our products and licenses of our technology.

In March 2010, the U.S. Congress enacted healthcare reform legislation that may significantly impact the pharmaceutical industry. In addition to requiring most individuals to have health insurance and establishing new regulations on health plans, this legislation requires discounts under the Medicare drug benefit program and increased rebates on drugs covered by Medicaid. In addition, the legislation imposes an annual fee, which will increase annually, on sales by branded pharmaceutical manufacturers starting in 2011. The financial impact of these discounts, increased rebates and fees and the other provisions of the legislation on our business is unclear and there can be no assurance that our business will not be materially adversely affected. In addition, these and other ongoing initiatives in the United States have increased and will continue to increase pressure on drug pricing. The announcement or adoption of any government initiatives could have an adverse effect on potential revenues from any product ~~that we may successfully develop.~~

Various healthcare reform proposals have also emerged at the state level. We cannot predict what healthcare initiatives, if any, will be implemented at the federal or state level, or the effect any future legislation or regulation will have on us. However, an expansion in government’s role in the U.S. healthcare industry may lower the future revenues for the products we are developing and adversely affect our future business, possibly materially.

~~Risks Related to Our Intellectual Property~~

~~Our ability to compete may be undermined if we do not adequately protect our proprietary rights.~~

candidates.

Our commercial success depends significantly on ~~obtaining~~our ability to operate without infringing the patents and ~~maintaining proprietary~~other intellectual property rights toof third parties. For example, there could be issued patents of which we are not aware that our current or potential future product candidates infringe.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that others may assert our product candidates and technologies and their uses, as well as successfully defending these rights against third-party challenges. We will be able to most effectively protect our product candidates, technologies, and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, or effectively protected trade secrets, cover them. For example, we have rights under U.S. patents and patent applications 7981876, 8716270, 6262283, 7728157, 20130281420 and 21050342874 to cover the Squalamine formulations, composition of matter, use in combination with other agents, methods of manufacture, and uses. Nonetheless, the issued patents and patent applications covering our technology programs remain subject to uncertainty due to a number of factors, including:

●

~~we may not have been the first to make one or more of the inventions covered by our pending patent applications or issued patents;~~

●

~~we may not have been the first to file patent applications for one or more of our product candidates or the technologies we rely upon;~~

●

~~others may independently develop similar or alternative technologies or duplicate any of our technologies;~~

●

~~our disclosures in a particular patent application may be determined to be insufficient to meet the statutory requirements for patentability;~~

●

~~one or more of our pending patent applications may not result in issued patents;~~

●

~~we may not seek or obtain patent protection in all countries that will eventually provide a significant business opportunity;~~

●

one or more patents issued to us or to our collaborators may not provide a basis for commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties;

●

we may fail to file for patent protection in all of the countries where patent protection will ultimately be necessary or fail to comply with other procedural, documentary, fee payment or other provisions during the patent process in any such country, and we may be precluded from filing at a later date or may lose some or all patent rights in the relevant jurisdiction;

●

~~one or more of our technologies may not be patentable;~~

●

~~others may design around one or more of our patent claims to produce competitive products which fall outside of the scope of our patents;~~

●

~~others may identify prior art which could invalidate our patents; or~~

●

~~changes to patent laws may limit the exclusivity rights of patent holders.~~

Even if we have or obtain patents covering our product candidates or technologies, we may still be barred from making, using and selling one or more of our product candidates or technologies because ofinfringe the patent rights of others. ~~Others have~~Moreover, it is not always clear to industry participants, including us, which patents cover various types of drugs, products or ~~may have filed,~~their methods of use or manufacture. Thus, because of the large number of patents issued and ~~in the future are likely to file,~~ patent applications ~~covering compounds, assays, therapeutic products~~filed in our fields, there may be a risk that third parties may allege they have patent rights encompassing our product candidates, technologies or methods. Furthermore, because the nucleic acid therapeutics intellectual property landscape is still evolving and ~~delivery systems, including sustained release delivery,~~our product candidates have not been through clinical trials or commercialized, it is difficult to conclusively assess our freedom to operate without infringing third party rights. There are numerous companies that ~~are similar or identical to ours. Numerous U.S. and foreign issued patents and~~have pending patent applications ~~owned by others exist~~and issued patents directed to certain aspects of nucleic acid therapeutics. We are aware of third-party competitors in the ~~area~~oligonucleotide therapeutics space, whose patent filings and/or issued patents may include claims directed to targets and/or products related to some of ~~ocular disorders. These could materially affect~~ our ~~ability to develop~~programs. It is possible that at the time that we commercialize our products these third-party patent portfolios may include issued patent claims that cover our product candidates or ~~sell~~critical features of their production or use. Our competitive position may suffer if patents issued to third parties or other third-party intellectual property rights cover, or may be alleged to cover, our ~~products. Because~~product candidates or elements thereof, or methods of manufacture or use relevant to our development plans. In such cases, we may not be in a position to develop or commercialize product candidates unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms.

Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications ~~unknown to us,~~of which we are unaware that may later result in issued patents that our product candidates or ~~technologies~~potential products infringe. For example, pending applications may exist that claim or can be amended to claim subject matter that our product candidates or potential products infringe. ~~These~~Competitors may file continuing patent applications claiming priority to already issued patents in the form of continuation, divisional, or continuation-in-part applications, in order to maintain the pendency of a patent family and attempt to cover our product candidates. We cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pending applications, or that we were the first to invent the technology. Our competitors may have filed, and may in the future file, patent applications covering our products or technology similar to ours. Any such patent application may have priority over ~~one or more~~our patent applications ~~filed by us.~~or patents, which could require us to obtain rights to issued patents covering such technologies.

Third parties may assert that we are employing their proprietary technology without authorization and may sue us for patent or other intellectual property infringement. These lawsuits are costly and could adversely affect our business, financial condition and results of operations and divert the attention of managerial and scientific personnel. If we are sued for patent infringement, we would need to demonstrate that our ~~competitors have prepared~~product candidates, potential products or methods either do not infringe the claims of the relevant patent or that the patent claims are invalid, and ~~filed patent applications~~we may not be able to do this. Proving invalidity is difficult. For example, in the ~~United States that claim technology~~U.S., proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we ~~also claim,~~are

Table of Contents

successful in these proceedings, we may ~~have to participate in interference proceedings required by the United States Patent and Trademark Office to determine priority of invention, which could result in~~incur substantial costs ~~even if we ultimately prevail. Results of interference proceedings are highly unpredictable~~ and ~~may result in us having to try to obtain licenses in order to continue to develop or market certain~~the time and attention of our ~~drug products.~~

Disputes may arise regarding the ownership or inventorship of our inventions. It is difficult to determine how such disputes would be resolved. Others may challenge the validity of our patents. If one or more of our patents are found to be invalid, we will lose the ability to exclude others from making, using or selling the inventions claimed therein.

~~Some of our research collaborators~~management and scientific advisors have rights to publish data and information to which we have rights. Additionally, employees whose positions may be eliminated may seek future employment with our competitors. Each of our employees is required to sign a confidentiality agreement and invention assignment agreement with us at the time of hire. While such arrangements are intended to enable us to better control the use and disclosure of our proprietary property and provide for our ownership of proprietary technology developed on our behalf, they may not provide us with meaningful protection for such property and technology in the event of unauthorized use or disclosure. In addition, technology that we may in-license may become important to some aspects of our business. We generally will not control all of the patent prosecution, maintenance or enforcement of in-licensed technology.

~~We rely on confidentiality agreements that~~personnel could be ~~breached and may be difficult to enforce~~diverted in pursuing these proceedings, which could have a material adverse effect on us. In addition, we may not have sufficient resources to bring these actions to a successful conclusion. If a court holds that any third-party patents are valid, enforceable and cover our ~~business and competitive position.~~

~~Our policy is to enter agreements relating to~~products or their use, the ~~non-disclosure~~holders of confidential information with third parties, including our contractors, consultants, advisors and research collaborators, as well as agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them. However, these agreements can be difficult and costly to enforce. Moreover, to the extent that our contractors, consultants, advisors and research collaborators apply or independently develop intellectual property in connection with any of these patents may be able to block our ~~projects, disputes may arise as~~ability to commercialize our products unless it acquires or obtains a license under the ~~proprietary rights to this type of information. If a dispute arises, a court may determine that~~applicable patents or until the ~~right belongs to~~patents expire.

If a third party ~~and enforcement of our rights can be costly and unpredictable. In addition, we rely on trade secrets and proprietary know-how~~claims that we ~~will seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others. In addition, courts outside the United States~~infringe its intellectual property rights, we may face a number of issues, including, but not limited to: infringement and other intellectual property claims which, regardless of merit, may be ~~less willing~~expensive and time-consuming to ~~protect trade secrets. Despite~~litigate and may divert our management’s attention from our core business; substantial damages for infringement, which we may have to pay if a court decides that the ~~protective measures we employ, we still face~~product candidate or technology at issue infringes on or violates the ~~risk that:~~

●

~~these agreements may be breached;~~

●

~~these agreements may not provide adequate remedies for the applicable type of breach; or~~

●

~~our trade secrets or proprietary know-how will otherwise become known.~~

~~Any breach of our confidentiality agreements or our failure to effectively enforce such agreements would have a material adverse effect on our business~~third party’s rights, and, ~~competitive position.~~

~~If we infringe~~if the ~~rights of third parties,~~court finds that the infringement was willful, we could be ~~prevented from selling products, forced~~ordered to pay treble damages and the patent owner’s attorneys’ fees; a court prohibiting us from developing, manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party licenses its product rights to us, which it is not required to ~~defend against~~do; if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our products; and redesigning our product candidates or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.

We may choose to challenge the patentability of claims in a third party’s U.S. patent by requesting that the USPTO review the patent claims in an ex-parte re-exam, inter partes review or post-grant review proceedings. These proceedings are expensive and may consume our time or other resources. We may choose to challenge a third party’s patent in patent opposition proceedings in the EPO, or other foreign patent office. The costs of these opposition proceedings could be substantial and may consume our time or other resources. If we fail to obtain a favorable result at the USPTO, EPO or other patent office then we may be exposed to litigation ~~which~~by a third party alleging that the patent may be infringed by our product candidates or proprietary technologies.

We may not be able to enter into licensing arrangements or make other arrangements at a reasonable cost or on reasonable terms. Any inability to secure licenses or alternative technology could result in ~~substantial costs and may have a material adverse effect on our business and results of operations.~~

We have not received to date any claims of infringement by any third parties. However, as our product candidates progress into clinical trials and commercialization, if at all, our public profile and thatdelays in the introduction of our product candidates ~~may be raised and generate such claims. Defending against such claims, and occurrence~~or lead to prohibition of ~~a judgment adverse to us, could result in unanticipated costs and may have a material adverse effect on our business and competitive position. If our~~the manufacture or sale of products ~~methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to:~~

●

~~obtain licenses, which may not be available on commercially reasonable terms, if at all;~~

●

~~redesign our products or processes to avoid infringement;~~

●

~~stop using the subject matter claimed in the patents held by others, which could cause us to lose the use of one or more of our drug candidates;~~

●

~~defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of management resources; or~~

●

~~pay damages.~~

~~Any costs incurred in connection with such events or the inability to sell our products may have a material adverse effect on our business and results of operations.~~

~~Intellectual property litigation is increasingly common and increasingly expensive and may result in restrictions on our business and substantial costs, even~~by us. Even if we ~~prevail.~~

Patent and other intellectual property litigation is becoming more common in the pharmaceutical industry. Litigation is sometimes necessary to defend against or assert claims of infringement, to enforce our patent rights, including those we have licensed from others, to protect trade secrets or to determine the scope and validity of proprietary rights of third parties. Currently, no third party is asserting that we are infringing upon their patent rights or other intellectual property, nor are we aware or believe that we are infringing upon any third party’s patent rights or other intellectual property. We may, however, be infringing upon a third party’s patent rights or other intellectual property, and litigation asserting such claims might be initiated in which we would not prevail, or we would not be able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the ~~necessary licenses on reasonable terms, if at all. All such litigation, whether meritorious~~same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or ~~not, as well as litigation initiated by us against third parties, is time-consuming and very expensive to defend or prosecute and to resolve.~~product candidate. In addition, in any such proceeding or litigation, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we ~~infringe the intellectual property rights~~are found to have willfully infringed a patent. A finding of others, we could lose our right to develop, manufacture or sell our products or could be required to pay monetary damages or royalties to license proprietary rights from third parties. An adverse determination in a judicial or administrative proceeding or a failure to obtain necessary licensesinfringement could prevent us from ~~manufacturing~~commercializing our product candidates or ~~selling~~force us to cease some of our ~~products,~~business operations, which could ~~harm~~materially and adversely affect our business, financial condition and ~~prospects.~~

~~A dispute concerning the infringement or misappropriation~~results of ~~our proprietary rights or the proprietary rights of others could be time consuming and costly, and an unfavorable outcome could harm our business.~~

There is significant litigation in our industry regarding patent and other intellectual property rights. While we are not currently subject to any pending intellectual property litigation, and are not aware of any such threatened litigation, we may be exposed to future litigationoperations. Any claims by third parties ~~based on claims~~ that ~~our product candidates, technologies~~we have misappropriated their confidential information or activities infringe the intellectual property rights of others. If our drug development activities are found to infringe any such patents, we may have to pay significant damages or seek licenses to such patents. If our products are found to infringe any such patents, we may have to pay significant damages or seek licenses to such patents. A patentee could prevent us from making, using or selling the patented compounds. We may need to resort to litigation to enforce a patent issued to us, protect our trade secrets or determine the scope and validity of third-party proprietary rights. From time to time, we may hire scientific personnel formerly employed by other companies involved in one or more areas similar to the activities conducted by us. Either we or these individuals may be subject to allegations of trade secret misappropriation or other similar claims as a result of their prior affiliations. If we become involved in litigation, it could consume a substantial portion of our managerial and financial resources, regardless of whether we win or lose. We also may not be able to afford the costs of litigation.

The patent applications of pharmaceutical and biotechnology companies involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our patent position.

The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date. The U.S. Patent and Trademark Office’s standards are uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated or circumvented. U.S. patents and patent applications may also be subject to interference or derivation proceedings, and U.S. patents may be subject to inter partes review, post grant review and ex parte reexamination proceedings in the U.S. Patent and Trademark Office (and foreign patents may be subject to opposition or comparable proceedings in the corresponding foreign patent office), which proceedings could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. Similarly, opposition or invalidity proceedings could result in loss of rights or reduction in the scope of one or more claims of a patent in foreign jurisdictions. Such interference, inter partes review, post grant review and ex parte reexamination and opposition proceedings may be costly. Accordingly, rights under any issued patents may not provide us with sufficient protection against competitive products or processes.

Changes in or different interpretations of patent laws in the United States and foreign countries may permit others to use our discoveries or to develop and commercialize our technology and products without providing any compensation to us or may limit the number of patents or claims we can obtain. In particular, there have been proposals to shorten the exclusivity periods available under U.S. patent law that, if adopted, could substantially harm our business. The product candidates that we are developing are protected by intellectual property rights, including patents and patent applications. If any of our product candidates becomes a marketable product, we will rely on our exclusivity under patents to sell the compound and recoup our investments in the research and development of the compound. If the exclusivity period for patents is shortened, then our ability to generate revenues without competition will be reduced and our business could be materially adversely impacted. The laws of some countries do not protect intellectual property rights to the same extent as U.S. laws, and those countries may lack adequate rules and procedures for defending our intellectual property rights. For example, some countries, including many in Europe, do not grant patent claims directed to methods of treating humans and, in these countries, patent protection may not be available at all to protect our product candidates. In addition, U.S. patent laws may change, which could prevent or limit us from filing patent applications or patent claims to protect our products or technologies or limit the exclusivity periods that are available to patent holders. For example, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was recently signed into law and includes a number of significant changes to U.S. patent law. These include changes to transition from a “first-to-invent” system to a “first-to-file” system and to the way issued patents are challenged. These changes may favor larger and more established companies that have more resources to devote to patent application filing and prosecution. The U.S. Patent and Trademark Office has been in the process of implementing regulations and procedures to administer the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act may affect our ability to obtain, enforce or defend our patents. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will ultimately have on the cost of prosecuting our patent applications, our ability to obtain patents based on our discoveries and our ability to enforce or defend our issued patents.

If we fail to obtain and maintain patent protection and trade secret protection of our product candidates, proprietary technologies and their uses, we could lose our competitive advantage and competition we face would increase, reducing our potential revenues and adversely affecting our ability to attain profitability.

~~Risks Related to our Common Stock~~

~~The market price and volume of our common stock fluctuate significantly and could result in substantial losses for individual investors.~~

The stock market from time to time experiences significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These broad market fluctuations may cause the market price and volume of our common stock to decrease. In addition, the market price and volume of our common stock is highly volatile.

~~Factors that may cause the market price and volume of our common stock to decrease include:~~

●

~~adverse results, termination, reduction, changes or delays in our or our competitors clinical trials;~~

●

~~fluctuations in our results of operations, timing and announcements of our bio-technological innovations or new products or those of our competitors;~~

●

~~developments concerning discussions that we may be in, or enter into, regarding strategic alliances, partnerships, mergers, acquisitions, or similar transactions;~~

●

~~announcements of FDA non-approval of our drug products, or delays in the FDA or other foreign regulatory review process or actions;~~

●

~~adverse actions taken by regulatory agencies with respect to our drug products, clinical trials, manufacturing processes or sales and marketing activities;~~

●

~~any lawsuit involving us or our drug products;~~

●

~~developments with respect to our patents and proprietary rights;~~

●

~~announcements of technological innovations or new products by our competitors;~~

●

~~public concern as to the safety of products developed by us or others;~~

●

~~regulatory developments in the United States and in foreign countries;~~

●

~~changes in stock market analyst recommendations regarding our common stock or lack of analyst coverage;~~

●

~~the pharmaceutical industry conditions generally and general market conditions;~~

●

~~failure of our results of operations to meet the expectations of stock market analysts and investors;~~

●

~~sales of our common stock by our executive officers, directors and five percent stockholders or sales of substantial amounts of our common stock;~~

●

~~changes in status of Nasdaq listing;~~

●

~~changes in accounting principles; and~~

●

~~loss of any of our key scientific or management personnel.~~

~~The market for our common stock is illiquid. Our stockholders may not be able to resell their shares at or above the purchase price paid by such stockholders, or at all.~~

~~Our common stock is quoted on the NASDAQ Capital Market. The market for our securities is illiquid. This illiquidity may be caused by a variety of factors including:~~

●

~~lower trading volume; and~~

●

~~market conditions.~~

There is limited trading in our common stock and our security holders may experience wide fluctuations in the market price of our securities. Such price and volume fluctuations have particularly affected the trading prices of equity securities of many pharmaceutical and biotechnology companies. These price and volume fluctuations often appear to have been unrelated to the operating performance of the affected companies. These fluctuations may have an extremely negative effect on the market price of our securities and may prevent a stockholder from obtaining a market price equal to the purchase price such stockholder paid when the stockholder attempts to sell our securities in the open market. In these situations, the stockholder may be required either to sell our securities at a market price which is lower than the purchase price the stockholder paid, or to hold our securities for a longer period of time than planned. An inactive market may also impair our ability to raise capital by selling shares of capital stock or to recruit and retain managers with equity-based incentive plans.

~~As a “smaller reporting company,” the Company may avail itself of reduced disclosure requirements, which may make the Company’s common stock less attractive to investors.~~

Because the market value of the Company’s common stock as of the end of its most recently completed second fiscal quarter was less than $75 million, the Company is a “smaller reporting company” under applicable SEC rules and regulations. As a “smaller reporting company,” the Company has relied on exemptions from certain disclosure requirements that are applicable to other public companies. The Company may continue to rely on such exemptions for so long as the Company remains a “smaller reporting company.” These exemptions include reduced financial disclosure, reduced disclosure obligations regarding executive compensation, and not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The Company’s reliance on these exemptions may result in the public finding the Company’s common stock to be less attractive and adversely impact the market price of the Company’s common stock or the trading market thereof.

~~We will not pay cash dividends and investors may have to sell their shares in order to realize their investment.~~

We have not paid any cash dividends on our common stock and do not intend to pay cash dividends in the foreseeable future. We intend to use our cash for reinvestment in the development and marketing of our products and services. As a result, investors may have to sell their shares of common stock to realize their investment.

~~Our internal controls over financial reporting may not be effective which~~ could have a ~~significant~~similar material and adverse effect on our business, ~~and reputation.~~

We are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC thereunder (“Section 404”). Section 404 requires us to report on the design and effectiveness of our internal controls over financial reporting. In the past, our management has identified certain “material weaknesses” in our internal controls over financial reporting which we believe have been remediated. However, any failure to maintain effective controls could result in significant deficiencies or material weaknesses,condition and cause us to fail to meet our periodic reporting obligations, or result in material misstatements in our financial statements. We may also be required to incur costs to improve our internal control system and hire additional personnel. This could negatively impact our results of operations.

~~Compliance with changing regulation~~ In addition, any uncertainties resulting from the initiation and continuation of ~~corporate governance and public disclosure may result in additional expenses and divert management’s attention from operating our business, which~~any litigation could have a material adverse effect on our ~~business.~~ability to raise the funds necessary to continue our operations.

~~There have been other changing laws, regulations~~Our product candidates may also require specific formulations to work effectively and ~~standards relating to corporate governance~~efficiently. These formulations may be covered by intellectual property rights held by others. We may develop products containing our compounds and ~~public disclosure in addition to the Sarbanes-Oxley Act, as well as new regulations promulgated~~pre-existing pharmaceutical compounds. These pharmaceutical compounds may be covered by intellectual property rights held by others. We may be required by the ~~Commission~~FDA or comparable foreign regulatory authorities to provide a companion diagnostic test or tests with our product candidates. These diagnostic test or tests may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business operations.

We, or our licensors, may not be able to detect infringement against our owned or in-licensed patents, as the case may be, which may be especially difficult for manufacturing processes or formulation patents. Even if we or our licensors detect infringement by a third party of our owned or in-licensed patents, we or our licensors, as the case may be, may choose not to pursue litigation against or settlement with the third party. If we, or our licensors, later sue such third party for patent infringement, the third party may have certain legal defenses available to it, which otherwise would not be available except for the delay between when the infringement was first detected and ~~rules promulgated by~~when the ~~national securities exchanges. These new~~suit was brought. Such legal defenses may make it impossible for us or ~~changed laws, regulations~~our licensors to enforce our owned or in-licensed patents, as the case may be, against such third party.

Table of Contents

Risks Related to Government Regulation

Preclinical and ~~standards~~clinical trials are ~~subject~~expensive, time-consuming and difficult to ~~varying interpretations~~design and implement, and involve uncertain outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.

All of our product candidates are still in ~~many cases due to~~the preclinical stage, and their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Our board members, Chief Executive Officer and Chief Financial Officer could face an increased risk of ~~personal liability~~failure is high. Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies that support our planned INDs in ~~connection with~~ the ~~performance~~U.S., or similar applications in other jurisdictions. We cannot be certain of ~~their duties. As a result, we may have difficulty attracting~~the timely completion or outcome of our preclinical testing and ~~retaining qualified board members~~studies and ~~executive officers, which could have a material adverse effect on our business. If our efforts to comply with new~~cannot predict if the FDA or ~~changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we may incur additional expenses to comply with standards set by~~other regulatory authorities will accept our proposed clinical programs or ~~governing bodies~~if the outcome of our preclinical testing and studies will ultimately support the further development of our programs. It is also possible that the FDA may require changes to our proposed clinical development programs. For example, the proposed formulation of the NT-0200 development candidate for our DM1 program contains an excipient in quantities that are in excess of current FDA guidance. To address that issue, FDA may require us to reformulate the NT-0200 development candidate to bring the excipient within current guidance and conduct any necessary stability testing of the reformulated candidate product. While we believe reformulation of the NT-0200 development candidate may not be required, we cannot guarantee that FDA will agree. Further, even if we are required by FDA to reformulate the NT-0200 development candidate, we believe we will be able to do so in a timely manner without adversely affecting the expected timing of the fourth quarter of CY2022 for our planned IND filing for our DM1 program. We cannot assure you that this will be the case, however. It is also impossible to predict when or if any of our product candidates will complete clinical trials evaluating their safety and effectiveness in humans or will receive regulatory approval. To obtain the requisite regulatory approvals to market and sell any of our product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our PATrOL™ platform and product candidates are safe and effective in humans for use in each target indication. To date, we have never advanced a product candidate into a clinical trial. Preclinical and clinical testing is expensive and can take many years to complete, and the outcome is inherently uncertain. Failure can occur at any time during the preclinical or clinical trial process. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have ~~a material~~an adverse effect on our business, financial condition and results of ~~operations.~~operations.

~~Delaware law could discourage a change in control, or an acquisition~~Additionally, the results of preclinical studies and future clinical trials of product candidates may not be predictive of the ~~Company~~results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy results despite having progressed through preclinical studies and initial clinical trials. Many companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to adverse safety profiles or lack of efficacy, notwithstanding promising results in earlier studies. Similarly, our future clinical trial results may not be successful for these or other reasons.

This product candidate development risk is heightened by ~~a third party, even if~~any changes in the ~~acquisition would~~anticipated clinical trials compared to the completed clinical trials. As product candidates are developed from preclinical through early to late stage clinical trials towards approval and commercialization, it is customary that various aspects of the development program, such as manufacturing and methods of administration, are altered along the way in an effort to optimize processes and results. While these types of changes are common and are intended to optimize the product candidates for late stage clinical trials, approval and commercialization, such changes carry the risk that they will not achieve these intended objectives.

Any of these changes could make the results of our anticipated clinical trials or other future clinical trials we may initiate less predictable and could cause our product candidates to perform differently, including causing toxicities, which could delay completion of our clinical trials, delay approval of our product candidates, and/or jeopardize our ability to commence product sales and generate revenues.

Risks Related to our Common Stock

If we are unable to continue to meet the standards for continued listing on the Nasdaq Capital Market, our common stock could potentially be ~~favorable~~delisted which could negatively impact the price of our common stock, liquidity and our ability to ~~stockholders.~~

access the capital markets.

The ~~Delaware General Corporation Law contains provisions that may have the effect of making more difficult or delaying attempts by others to obtain control~~listing standards of the ~~Company, even when these attempts~~Nasdaq Capital Market provide that a company, in order to qualify for continued listing, must maintain a minimum stock price of $1.00 and satisfy standards relative to minimum stockholders’ equity, minimum market value of publicly held shares and various additional requirements. If we fail to comply with all listing standards applicable to issuers listed on the Nasdaq Capital Market, our common stock may be in the best interests of stockholders. Delaware law imposes conditions on certain business combination transactions with “interested stockholders.” These provisions and others that could be adopted in the future could deter unsolicited takeovers or delay or prevent changes indelisted. If our ~~control or management, including transactions in which stockholders might otherwise receive a premium for their shares of~~ common stock ~~over then current market prices. These provisions may also limit~~is delisted, it could reduce the ~~ability of stockholders to approve transactions that they may deem to be in their best interests.~~

~~Our Board of Directors has the authority to issue Serial Preferred Stock, which could affect the rights of holders~~price of our common stock and ~~may delay~~the levels of liquidity available to our stockholders. In addition, the delisting of our common stock could materially adversely affect our

Table of Contents

access to the capital markets, and any limitation on liquidity or ~~prevent a takeover that could be~~reduction in the ~~best interests~~price of our ~~stockholders.~~

~~The Board of Directors has~~common stock could materially adversely affect our ability to raise capital. Delisting from the authority to issue up to 9,416,664 shares of Serial Preferred Stock, $.0001 par value per share (the “Serial Preferred Stock”) (after giving effect to the conversion and cancellation of a previous issue of 5,583,336 shares of Series B Preferred),Nasdaq Capital Market could also result in ~~one or more series and to fix the number of shares constituting any such series, the voting powers, designation, preferences and relative participation, optional or~~ other ~~special rights and qualifications, limitations or restrictions thereof,~~negative consequences, including the ~~dividend rights~~potential loss of confidence by suppliers, customers and ~~dividend rate, terms~~employees, the loss of ~~redemption (including sinking fund provisions), redemption price or prices, conversion rights~~institutional investor interest and liquidation preferences of the shares constituting any series, without any further vote or action by the stockholders. 6,000,000 shares of the Serial Preferred Stock, designated the Series B Preferred, have been authorized, 5,583,336 were issued and, as of the date of this filing, all such shares have been converted and no Series B Preferred shares remain issued and outstanding. The issuance of additional Serial Preferred Stock could affect the rights of the holders of Common Stock. For example, such issuance could result in a class of securities outstanding that would have preferential voting, dividend, and liquidation rights over the Common Stock, and could (upon conversion or otherwise) enjoy all of the rights appurtenant to the shares of common stock. The authority possessed by the Board of Directors to issue Serial Preferred Stock could potentially be used to discourage attempts by others to obtain control of the Company through merger, tender offer, proxy contest or otherwise by making such attempts more difficult or costly to achieve. The Board of Directors may issue the Serial Preferred Stock without stockholder approval and with voting and conversion rights which could adversely affect the voting power of holders of common stock. There are no agreements or understandings for the issuance of Serial Preferred Stock and the Board of Directors has no present intention to issue any Serial Preferred Stock.fewer business development opportunities.

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

In October 2017, the Company issued a warrant to purchase 250,000 shares of common stock to a consultant for services to be rendered. The warrant vests in six equal consecutive monthly amounts at the end of each calendar month starting October 31, 2017, at an exercise price of $1.00 per share, for a term of two years from the date of issuance. The warrant was issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

~~Item 3.~~

~~Defaults Upon Senior Securities.~~

~~None.~~

~~Item 4.~~

~~Mine Safety Disclosures.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

~~Item 5.~~

~~Other Information.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~None.~~Not applicable.

~~Item 6.~~

~~Exhibits.~~

~~Exhibit~~	~~Number~~

~~31.1~~	~~Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~31.2~~	~~Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~32.1~~	~~Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002~~
~~32.2~~	~~Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
~~101.INS~~	~~XBRL Instance Document~~
~~101.SCH~~	~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION
Not applicable.

Table of Contents

ITEM 6. EXHIBITS

Incorporated by Reference
Exhibit
Number

Description

Form

File
Number

Filing Date

Exhibit
2.1+

Agreement and Plan of Merger and Reorganization, dated as of January 2, 2019, by and among Ohr Pharmaceutical, Inc., Ohr Acquisition Corp. and NeuBase Therapeutics, Inc.

8-K

001-35963

1/3/2019

2.1

2.2

First Amendment to the Agreement and Plan of Merger and Reorganization, dated as of June 27, 2019, by and among Ohr Pharmaceutical, Inc., Ohr Acquisition Corp. and NeuBase Therapeutics, Inc.

8-K

001-35963

7/3/2019

2.1

3.1

Amended and Restated Certificate of Incorporation of the Company.

8-K

001-35963

7/12/2019

3.1

3.2

Amended and Restated Bylaws of the Company.

8-K

001-35963

9/23/2019

3.1

4.1

Form of Series A Warrant issued to investors pursuant to the Securities Purchase Agreement, dated December 7, 2016, by and among Ohr Pharmaceutical, Inc. and the purchasers listed therein.

8-K

001-35963

12/8/2016

4.1

4.2

Form of Warrant issued to investors pursuant to the Securities Purchase Agreement, dated as of April 5, 2017, by and among Ohr Pharmaceutical, Inc. and the purchasers listed therein.

8-K

001-35963

4/6/2017

4.1

4.3

Form of Common Stock Certificate.

S-8

333-233346

8/16/2019

4.17

31.1*

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS*

XBRL Instance Document.
101.SCH*

XBRL Taxonomy Extension Schema Document.
101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*

XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document.
*Filed herewith.
~~SIGNATURES~~+All schedules and exhibits to the agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
~~Date: February 14, 2018~~
~~OHR PHARMACEUTICAL, INC.~~
~~(Registrant)~~
~~By:~~

~~/s/ Dr. Jason S. Slakter~~

~~Dr. Jason Slakter~~
NeuBase Therapeutics, Inc.
~~Chief Executive Officer~~
Date: May 12, 2022
~~(Principal Executive Officer)~~
~~By:~~ /s/ ~~Sam Backenroth~~ Todd Branning
~~Sam Backenroth~~
Todd Branning
Chief Financial Officer
(Principal Financial and Accounting Officer)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		NBSE		The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ ☒	Smaller reporting company	☒
		Emerging growth company
~~Do not check if smaller reporting company~~			☐


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I.		1

ITEM 1.	FINANCIAL STATEMENTS	1

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19

ITEM 4.	CONTROLS AND PROCEDURES	20

PART II.		21

ITEM 1.	LEGAL PROCEEDINGS	21

ITEM 1A.	RISK FACTORS	22

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	28

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	28

ITEM 4.	MINE SAFETY DISCLOSURES	28

ITEM 5.	OTHER INFORMATION	28

ITEM 6.	EXHIBITS	29

SIGNATURES		30


	March 31,		September 30,
	2022		2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	38,958,116	$	52,893,387
Prepaid insurance		109,762		499,061
Other prepaid expenses and current assets		1,151,979		1,536,186
Total current assets		40,219,857		54,928,634

EQUIPMENT, net		2,429,732		2,463,882

OTHER ASSETS
Investment		0		415,744
Right-of-use asset, operating lease asset		5,883,956		5,945,295
Security deposit		273,215		253,615
Other long-term assets		0		160,423
Total other assets		6,157,171		6,775,077

TOTAL ASSETS	$	48,806,760	$	64,167,593

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,621,243	$	1,807,885
Accrued expenses and other current liabilities		2,702,387		1,747,746
Insurance note payable		0		148,385
Operating lease liabilities		548,011		382,576
Finance lease liabilities		113,564		107,632
Total current liabilities		4,985,205		4,194,224

Long-term operating lease liability		5,608,737		5,794,096
Long-term finance lease liability		49,816		109,500
TOTAL LIABILITIES		10,643,758		10,097,820

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2022 and September 30, 2021		0		0
Common stock, $0.0001 par value; 250,000,000 shares authorized; 32,258,657 and 32,721,493 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively		3,225		3,272
Additional paid-in capital		124,780,525		123,034,404
Accumulated deficit		(86,620,748)		(68,967,903)
Total stockholders’ equity		38,163,002		54,069,773

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	48,806,760	$	64,167,593

	December 31,			September 30,
	2017			2017
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents	$	8,724,057		$	12,801,085
Prepaid expenses and other current assets		100,722			223,278
Total Current Assets		8,824,779			13,024,363

EQUIPMENT, net		60,890			63,757

OTHER ASSETS
Security deposit		—			12,243
Intangible assets, net		13,805,484			14,087,602
Goodwill		740,912			740,912
TOTAL ASSETS	$	23,432,065		$	27,928,877

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	3,598,471		$	4,827,525
Notes payable		—			106,387
Total Current Liabilities		3,598,471			4,933,912
Long-term liabilities		150,000			150,000

TOTAL LIABILITIES		3,748,471			5,083,912

STOCKHOLDERS’ EQUITY
Preferred stock, Series B; 6,000,000 shares authorized, $0.0001 par value, 0 shares issued and outstanding, respectively		—			—
Common stock; 180,000,000 shares authorized, $0.0001 par value, 56,421,428 and 56,196,428 shares issued and outstanding, respectively		5,642			5,619
Additional paid-in capital		131,917,917			130,927,953
Accumulated deficit		(112,239,965	)		(108,088,607	)

Total Stockholders’ Equity		19,683,594			22,844,965
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	23,432,065		$	27,928,877


	Three Months ended March 31,				Six Months Ended March 31,
	2022		2021		2022		2021
OPERATING EXPENSES
General and administrative	$	3,093,713	$	2,721,640	$	6,029,423	$	5,363,110
Research and development		6,835,670		3,174,129		11,204,927		5,194,053
TOTAL OPERATING EXPENSES		9,929,383		5,895,769		17,234,350		10,557,163

LOSS FROM OPERATIONS		(9,929,383)		(5,895,769)		(17,234,350)		(10,557,163)

OTHER INCOME (EXPENSE)
Interest expense		(3,316)		(6,460)		(18,535)		(16,197)
Interest income		3,445		9,466		4,699		9,466
Change in fair value of warrant liabilities		0		90,597		—		720,709
Equity in losses on equity method investment		0		(36,127)		(415,744)		(61,539)
Other income, net		5,225		316,724		11,085		316,724
Total other income (expense), net		5,354		374,200		(418,495)		969,163

NET LOSS	$	(9,924,029)	$	(5,521,569)	$	(17,652,845)	$	(9,588,000)

BASIC AND DILUTED LOSS PER SHARE	$	(0.30)	$	(0.24)	$	(0.54)	$	(0.41)

WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED		32,683,263		23,179,646		32,704,724		23,176,877


	For the Three Months Ended December 31,
	2017			2016
OPERATING EXPENSES

General and administrative	$	1,510,032		$	1,746,356
Research and development		2,387,731			4,931,144
Depreciation and amortization		284,986			298,435
TOTAL OPERATING LOSS		4,182,749			6,975,935

OTHER INCOME (EXPENSE)
Other income (expense)		31,391			281
Total Other Income (Expense)		31,391			281

LOSS FROM OPERATIONS BEFORE
INCOME TAXES		(4,151,358	)		(6,975,654	)

PROVISION FOR INCOME TAXES		—			—

NET LOSS	$	(4,151,358	)	$	(6,975,654	)

BASIC AND DILUTED LOSS PER SHARE (in dollars per share)	$	(0.07	)	$	(0.21	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED		56,203,765			32,836,505


				Additional				Total
	Common Stock			Paid-In				Stockholders'
	Shares	Amount		Capital		Accumulated Deficit		Equity
Balance as of September 30, 2021	32,721,493	$	3,272	$	123,034,404	$	(68,967,903)	$	54,069,773
Stock-based compensation expense	—		—		793,204		—		793,204
Issuance of restricted stock for services	4,441		—		—		—		—
Exercise of stock options	42,250		4		38		—		42
Net loss	—		—		—		(7,728,816)		(7,728,816)
Balance as of December 31, 2021	32,768,184	$	3,276	$	123,827,646	$	(76,696,719)	$	47,134,203
Stock-based compensation expense	—		—		952,828		—		952,828
Forfeiture of common stock	(509,527)		(51)		51		—		—
Net loss	—		—		—		(9,924,029)		(9,924,029)
Balance as of March 31, 2022	32,258,657	$	3,225	$	124,780,525	$	(86,620,748)	$	38,163,002


	As of March 31,
	2022	2021
Common stock purchase options	8,421,475	6,552,884
Common stock purchase warrants	875,312	820,939
	9,296,787	7,373,823


	As of March 31,		As of September 30,
	2022		2021
Prepaid research and development expense	$	622,237	$	583,267
Prepaid rent		—		172,518
Other prepaid expenses and other current assets		529,742		780,401
Total	$	1,151,979	$	1,536,186


			Warrants
Expiration date	Exercise Price		Outstanding
April 10, 2022	$	20.00	695,312
July 6, 2023		8.73	105,000
September 20, 2024		6.50	75,000
			875,312


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise		Contractual Life
	Warrants	Price		(in years)
Outstanding as of September 30, 2021	895,939	$	18.35
Expired	(20,627)		55.00
Outstanding as of March 31, 2022	875,312		17.49	0.4
Exercisable as of March 31, 2022	875,312	$	17.49	0.4


			Weighted Average
			Grant Date
	Unvested Restricted		Fair Value
	Stock		Price
Unvested as of September 30, 2021		0	$	0
Granted		4,441		3.94
Vested		(4,441)		3.94
Unvested as of March 31, 2022		0		0
Total unrecognized expense remaining	$	0
Weighted-average years expected to be recognized over		—


			Weighted Average
			Grant Date
	Restricted Stock		Fair Value
	Units		Price
Unvested as of September 30, 2021		10,000	$	5.09
Forfeited		(10,000)		5.09
Unvested as of March 31, 2022		—		—
Total unrecognized expense remaining	$	—
Weighted-average years expected to be recognized over		—

	Warrants			Price
Outstanding at September 30, 2017		16,178,110		$	1.23
Granted
Investor warrants		—			—
Stock-based compensation warrants		250,000			1.00
Exercised
Investor warrants		(225,000	)		1.00
Stock-based compensation warrants		—			—
Forfeited or expired
Investor warrants		—			—
Stock-based compensation warrants		—			—
Outstanding at December 31, 2017		16,203,110		$	1.23
Exercisable at December 31, 2017		16,078,108		$	1.23

	Warrants		Options
Expected term		2 years		3.25 to 5 years
Expected volatility		73%		101%
Expected dividends		0%		0%
Risk-free rates		1.73%		1.68%

	Shares		Weighted Average Grant Date Fair Value
Nonvested at September 30, 2017		270,179	$	4.53
Granted		—		—
Vested		—		—
Forfeited		—		—
Nonvested at December 31, 2017		270,179	$	4.53

	2017			2016			Change
General and administrative	$	1,510,032		$	1,746,356		$	(236,324	)
Research and development		2,387,731			4,931,144			(2,543,413	)
Depreciation and amortization		284,986			298,435			(13,449	)
Total Operating Expenses		4,182,749			6,975,935			(2,793,186	)

Operating Loss		(4,182,749	)		(6,975,935	)		2,793,186

Other income (expense)		31,391			281			31,110
Net Loss	$	(4,151,358	)	$	(6,975,654	)	$	2,824,296


		Incorporated by Reference
Exhibit Number	Description	Form	File Number	Filing Date	Exhibit
2.1+	Agreement and Plan of Merger and Reorganization, dated as of January 2, 2019, by and among Ohr Pharmaceutical, Inc., Ohr Acquisition Corp. and NeuBase Therapeutics, Inc.	8-K	001-35963	1/3/2019	2.1

2.2	First Amendment to the Agreement and Plan of Merger and Reorganization, dated as of June 27, 2019, by and among Ohr Pharmaceutical, Inc., Ohr Acquisition Corp. and NeuBase Therapeutics, Inc.	8-K	001-35963	7/3/2019	2.1

3.1	Amended and Restated Certificate of Incorporation of the Company.	8-K	001-35963	7/12/2019	3.1

3.2	Amended and Restated Bylaws of the Company.	8-K	001-35963	9/23/2019	3.1

4.1	Form of Series A Warrant issued to investors pursuant to the Securities Purchase Agreement, dated December 7, 2016, by and among Ohr Pharmaceutical, Inc. and the purchasers listed therein.	8-K	001-35963	12/8/2016	4.1

4.2	Form of Warrant issued to investors pursuant to the Securities Purchase Agreement, dated as of April 5, 2017, by and among Ohr Pharmaceutical, Inc. and the purchasers listed therein.	8-K	001-35963	4/6/2017	4.1

4.3	Form of Common Stock Certificate.	S-8	333-233346	8/16/2019	4.17

31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

~~By:~~	~~/s/ Dr. Jason S. Slakter~~
	~~Dr. Jason Slakter~~	NeuBase Therapeutics, Inc.
	~~Chief Executive Officer~~
Date: May 12, 2022	~~(Principal Executive Officer)~~

~~By:~~	/s/ ~~Sam Backenroth~~	Todd Branning
	~~Sam Backenroth~~	Todd Branning
	Chief Financial Officer
	(Principal Financial and Accounting Officer)