UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended SeptemberJune 30, 20212022

OR

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

FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-40652

Indaptus Therapeutics, Inc.

(Exact name of Registrant as specified in its Charter)

Registrant’s telephone number, including area code: +(347)(646) 480 9760427-2727

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of Registrant’s ordinary shares outstanding as of November 11, 2021:August 4, 2022: 8,193,5798,258,597.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

INDAPTUS THERAPEUTICS, INC.

Unaudited Condensed Consolidated Balance Sheets

See accompanying notes to the unaudited condensed consolidated financial statements

INDAPTUS THERAPEUTICS, INC.

Unaudited CondensedConsolidated Statements of Operations and Other Comprehensive Loss

See accompanying notes to the unaudited condensed consolidated financial statements

INDAPTUS THERAPEUTICS, INC.

Unaudited CondensedConsolidated Statements of Stockholders’ Equity (Deficit)

See accompanying notes to the unaudited condensed consolidated financial statements

INDAPTUS THERAPEUTICS, INC.

Unaudited CondensedConsolidated Statements of Stockholders’ Equity (Deficit)Cash Flows

See accompanying notes to the unaudited condensed consolidated financial statements

Unaudited Condensed Consolidated Statements of Cash FlowsINDAPTUS THERAPEUTICS, INC.

Notes to the unaudited condensed consolidated financial statements

NOTE 1: GENERAL

Indaptus Therapeutics, Inc. (“Indaptus”), formerly “Intec Parent Inc.”, was established and incorporated in Delaware on February 24, 2021, as a private Delaware corporation and wholly ownedwholly-owned subsidiary of Intec Pharma Ltd., (“Intec Israel”), a former publicly traded company.

Also, in connection with the Merger, Indaptus changed its name from “Intec Parent, Inc.” to “Indaptus Therapeutics, Inc.”. Following completion of the Merger, shares of Indaptus common stock commenced trading at market open on August 4, 2021, on the Nasdaq Capital Market under the name “Indaptus Therapeutics, Inc.” and under the symbol “INDP”.

In connection with the completion of the Merger, on August 4, 2021, the Company’s board determined to wind down the Accordion Pill business of Intec Israel. The Company expects that the winding down of the Accordion Pill business will be completed by the end of 2021.

For accounting purposes, Decoy is considered to have acquired Indaptus based on the terms of the Merger and an analysis of the criteria outlined in Accounting Standards Codification 805. The Merger has been accounted for as an asset acquisition (reverse merger transaction) rather than a business combination, as the net assets acquired/assumed by Decoy do not meet the definition of a business under U.S. GAAP. Accordingly, the historical financial statements of Decoy became the historical financial statements of the combined company upon the consummation of the Merger and the net assets acquired in connection with the Merger were recorded at their estimated fair market value as of August 3, 2021, the date of completion of the Merger.

Prior to the Merger Decoy’s capitalization was comprised of 732,635 outstanding shares of common stock, par value $0.001 per share (the “Decoy Common Stock”), 314,928 outstanding shares of Decoy preferred stock, par value $0.001 per share that were converted into 314,928 shares of Decoy Common Stock and 288,818 shares of Decoy Common Stock after giving effect to the conversion of Decoy SAFEs (Simple Agreements for Future Equity) into Decoy Common Stock. As of the effective time of the Merger each outstanding share of Decoy Common Stock was converted into 2.654353395 shares of Indaptus common stock, par value $0.01 per share. Accordingly, 1,336,381 shares of Decoy’s Common Stock were converted to 3,547,227 Indaptus’ shares of common stock. In addition, at the effective time of the Merger, each outstanding and unexercised Decoy stock option converted into a stock option exercisable for that number of shares of Indaptus common stock subject to such option and the exercise price being appropriately adjusted to reflect the exchange ratio. Accordingly, 77,639 Decoy’s outstanding options were converted to 206,079 Indaptus stock options. The accompanying unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements give retroactive effect to the exchange ratio for all periods presented. Any difference is recognized as an adjustment to additional paid in capital. F-6 INDAPTUS THERAPEUTICS, INC. On August 3, 2021, immediately prior to the effectiveness of the Merger, Indaptus had 1,858,743 shares of common stock outstanding and a market capitalization of $17.9 million. The estimated fair value of the net assets of Indaptus on August 3, 2021, prior to the Merger, was approximately $8.7 million. The fair value of common stock on the Merger closing date, prior to the Merger, was above the fair value of the Indaptus’ net assets. As Indaptus’ net assets were predominantly composed of cash offset against current liabilities, the fair value of Indaptus’ net assets as of August 3, 2021, prior to the Merger, is considered to be the best indicator of the fair value and, therefore, the estimated preliminary purchase consideration. The following table summarizes the net assets acquired based on their estimated fair values as of August 3, 2021, immediately prior to completion of the Merger: ESTIMATED FAIR VALUE OF ASSETS ACQUIRED           Cash and cash equivalents   $ 16,346,622   Assets held for sale     600,000   Prepaid and other assets     129,791   Accrued liabilities     (8,345,966 ) Acquired net assets   $ 8,730,447   c. In connection with the Merger, on July 23, 2021, Indaptus entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional investor, pursuant to which Indaptus agreed to sell and issue, in a private placement (the “Private Placement”), pre-funded warrants and warrants for total net proceeds of approximately $27.3million, after deducting the placement agent’s fees and other estimated offering expenses payable by Indaptus in the amount of approximately $2.7 million. In September 2021, the pre-funded warrant was fully exercised. Each warrant is exercisable at an exercise price of $11.00 per share and has a term of five and one-half years from the date of issuance. In addition, in connection with the Private Placement, Indaptus issued to the placement agent a warrant to purchase 136,364shares of Indaptus’ common stock at an exercise price of $13.75. For further details see note 6c.   Risks and uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional capital (or financing) to fund operating losses (see below), competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, and dependence on key individuals.   F-5 The COVID-19 pandemic that has spread globally, has resulted in significant financial market volatility and uncertainty in the past year. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies, including by causing disruptions in the supply of its product candidates and the conduct of future clinical trials. TheFor example, the pandemic has caused our good manufacturing practice (“GMP”) process to take longer than expected. In addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to the Company’s product candidates. Additionally, while the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact its short-term and long-term liquidity. AsThe ultimate impact of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impactis highly uncertain and subject to change. While it is unknown how long these conditions will last and what the complete financial effect will be to the Company, capital raise efforts and additional development of the Company’s financial condition, liquidity, or results of operations is uncertain.technologies may be negatively affected.   Going concern and management’s plans The Company has incurred net losses and utilized cash in operations since inception, has an accumulated deficit as of SeptemberJune 30, 2021,2022 of $12.522.9 million, and expects to incur future additional losses as clinical testing and commercialization of the Company’s product candidates will require significant additional financing. Prior to the closing of the Merger, on August 3, 2021, Indaptus closed a private placement to raise gross cash proceeds of $30.0 million. The Company believes it has adequate cash to fund its operations for at least one year after the date of issuance of these unaudited condensed consolidated financial statements. F-7 INDAPTUS THERAPEUTICS, INC.   Management plans to raise additional capital through equity and/or debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening of global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide resulting from the developing conflict between Russia and Ukraine and the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected.   These unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.   NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of SeptemberJune 30, 2021,2022, the consolidated results of operations and changes in stockholders’ equity for the three and nine-monthsix-month periods ended SeptemberJune 30, 2021,2022, and 20202021 and cash flows for the nine-monthsix-month periods ended SeptemberJune 30, 20212022, and 2020.2021.   These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Decoy’sthe Company’s annual financial statements for the year ended December 31, 2020, and their accompanying notes included2021, as filed in the Form S-4 filed with the SEC in connection with the Merger.10-K on March 21, 2022. The condensed consolidated balance sheet data as of December 31, 2020,2021, included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2020,2021, but does not include all disclosures required by US GAAP for annual financial statements.   The results for the nine-monthsix-month period ended SeptemberJune 30, 2021,2022 are not necessarily indicative of the results expected for the year ending December 31, 2021.2022. F-6 Principles of consolidation   Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of Indaptus and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.   Use of estimates The preparation of the unaudited condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. The most significant estimates relate to the determination of the fair value of stock-based compensation and the determination of period-end obligations to certain contract research organizations. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. F-8 INDAPTUS THERAPEUTICS, INC.   Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common stock outstanding during the period. Diluted loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options warrants and pre-funded warrants which are included under the treasury stock method when dilutive.   The following number of stock options, warrants and pre-funded warrants were excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive for the periods presented (share data):  SCHEDULE OF ANTI-DILUTIVE SECURITIES   Weighted average     2022     2021     Three months ended September 30   Nine months ended September 30     For the three and six month periods ended June 30,     2021   2020   2021   2020     2022     2021   Outstanding stock options     237,109       206,079       216,461       206,079       1,605,623       206,079   Warrants and Pre-funded warrants     3,678,244       -       1,230,589       -   Warrants     3,090,787       -   Anti-dilutive securities     3,090,787       -     Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of SeptemberJune 30, 2021,2022 and December 31, 2020,2021, cash and cash equivalents consist primarily of checking and money market deposits. The Company’s cash balances exceed those that are federally insured; however, the Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. To date, the Company has not recognized any losses caused by uninsured balances. Assets held for saleMarketable securities The Company’s investment in marketable securities includes U.S. treasury bonds that are classified as available-for-sale securities pursuant to Accounting Standards Codification (“ASC”) 320 “Investments — Debt Securities”. These investments are recorded at fair value with unrealized gains and losses recorded in Accumulated Other Comprehensive Income (Loss), or AOCI, as a separate component of stockholders’ equity.   F-7 In connection with the Merger, the Company determined certain equipment held for use by pre-Merger Intec Israel was no longer useful to the Company’s operations and entered into an agreement with an unrelated party to sell the equipment. The Company recognizes assets held for sale at estimated fair value. The fair value of the equipment as of September 30, 2021, was approximately $600,000, net of commissions and disposition costs,based on purchase offers that the unrelated party received from certain buyers in November 2021. Property and equipment Property and equipment Property and equipment assets are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company uses an estimated useful life of three years for employee-related computers and other office equipment and five years for furniture. Leasehold improvements are amortized over the shorter of the lease-term or the estimated useful life of the related asset.   Patents The Company expenses patent costs, including related legal costs, as incurred and records such costs within general and administrative expense in the accompanying unaudited condensed consolidated statements of operations.   AccruedResearch and development expenses Research and development expenses include costs directly attributable to the conduct of research and development costs The Company recordsprograms, including the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and development activities, including clinical trials and professional services. All costs associated with research nonclinical and clinical trials, and manufacturing development are expensed as incurred. These costs are a significant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and development activities conducted by third-party service providers, including contract research and manufacturing organizations.   The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which services or materials are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset, which will be amortized or expensed as the contracted services are performed.   F-9 INDAPTUS THERAPEUTICS, INC. Income taxes Research and development expenses Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development expenses consist primarily of fees paid to CROs as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs. General and administrative expenses General and administrative expenses include compensation, employee benefits, and stock-based compensation for executive management, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs, including depreciation, to support the Company’s operations. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. As of SeptemberJune 30, 2021,2022 and December 31, 2020,2021, the Company has recorded a full valuation allowance against its deferred tax assets.   The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses.   Stock-based compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined using the Black-Scholes-Merton (“Black-Scholes”) option pricing model as of the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis. F-8   The Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of options granted by using the Black-Scholes model with the following assumptions:   Expected Volatility—The Company estimated volatility for option grants by evaluating the historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term. Expected Term—The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term.   Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.   Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.   The Company has elected to recognize forfeitures as they occur.   F-10 INDAPTUS THERAPEUTICS, INC. Fair value measurements Fair value measurements Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value and providing disclosures about fair value measurements.   The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:   Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.   Accounting Standards Codification (“ASC”)ASC 820, – Fair Value Measurement, requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value, and defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of SeptemberJune 30, 20212022 and December 31, 2020,2021, the recorded values of cash and cash equivalents, marketable securities, assets held for sale, prepaid expenses, and accounts payable and other current liabilities approximate their fair values due to the short-term nature of these items.   AsNOTE 3: MARKETABLE SECURITIES The Company’s investment in marketable securities included U.S. treasury bonds with maturities of December 31, 2020, the carrying value of outstanding SAFEs approximates the estimated aggregateless than one year. These investments are classified as available-for-sale and are recorded at fair value of the instrumentswith unrealized gains and losses recorded in AOCI. These investments are categorized as the valuation cap provided in the SAFEs is a reasonable approximation of the Company’s enterprise value. On August 3, 2021, the SAFEs converted into common stock of the post-Merger entity. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-13 as of January 1, 2020 with no impact on the financial statements.2.   In December 2019,As of June 30, 2022, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspectsfair value of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basismarketable securities is $18,753,081. As of goodwill. The guidance is effective for fiscal years beginning after December 31, 2020 and interim periods within that year. The2021, the Company adopted ASU 2019-12 on January 1, 2021 with had no material impact to its financial statements or related disclosures. marketable securities.   The unrealized losses for the three and six-month periods ended June 30, 2022 amounted to $17,716 and $26,937 respectively. F-11F-9 INDAPTUS THERAPEUTICS, INC.   NOTE 3:4: PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets are comprised of the following:  SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS   September 30,   December 31,     June 30,   December 31,     2021   2020     2022   2021   Prepaid insurance   $ 1,060,054     $ 6,972     $ 142,588     $ 945,023   Prepaid research and development     79,980       83,550       69,226       127,643   Other receivables     -       21,056   Other prepaid expenses     213,190       3,978       49,070       12,931   Short term deposits     44,445       -   Total prepaid expenses and other current assets   $ 1,397,669     $ 94,500     $ 260,884     $ 1,106,653     NOTE 4:5: ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES Accounts payable and other current liabilities are comprised of the following:  SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES   September 30,   December 31,     June 30,   December 31,     2021   2020     2022   2021   Accounts payable   $ 3,340,766     $ 155,957     $ 2,432,739     $ 2,637,806   Accrued employee costs     1,772,122       -       505,973       1,371,136   Accrued professional fees     200,128       139,871   Accrued research and development     169,308       135,751   Accrued board fees     116,000       125,333   Delaware franchise taxes payable     64,465       -   Other accrued expenses     355,514       7,025       37,421       97,779   Accrued research and development     190,218       63,753   Accrued legal fees     121,564       171,630   Deposit     -       200,000   Total accounts payable and other current liabilities   $ 5,780,184     $ 598,365     $ 3,526,034     $ 4,507,676     NOTE 5:6: STOCK-BASED COMPENSATION In 2018, Decoy adopted the Decoy Biosystems, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan, pursuant to which the board of directors may grant nonstatutory stock options to purchase shares of the Company’s common stock to outside directors and consultants and either nonstatutory or incentive stock options to purchase shares of the Company’s common stock to employees.   In June 2021, the Intec Israel shareholders voted to approve the Indaptus 2021 Stock Incentive Plan, a share optionan equity incentive plan for grants to employees, officers, consultants, directors and other service providers, (the “2021 Plan”), that became effective upon the closing of the Merger. The 2021 Plan provides for up to 1,864,963shares of the Company’s common stock. Immediately after the Merger, all Decoy’s outstanding options under the 2018 Plan were converted to 206,079 options under the 2021 Plan. In addition, immediately after the Merger, all Intec Israel’s outstanding options were converted into 57,701 options of Indaptus under the 2021 Plan. Future awards may be made only under the 2021 Plan.   The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, unrestricted stock awards, stock appreciation rights and other forms of stock-based compensation. The 2021 Plan permits the Company’s board to change the type, terms and conditions of awards as circumstances may change. This flexibility to adjust the type of compensation to be granted is particularly important given current economic and world events.   On January 26, 2022, Indaptus’ board of directors approved a grant of options to purchase 289,200 shares of common stock to executives. The options are exercisable at $4.90 per share, vest over three years, and expire ten years after grant. On February 1, 2022, Indaptus’ board of directors approved a grant of options to purchase 90,000 shares of common stock to a new employee. The options are exercisable at $4.97 per share, vest over three years, and expire ten years after grant. On February 25, 2022, Indaptus’ board of directors approved a grant of options to purchase 60,000 shares of common stock to an executive. The options are exercisable at $4.18 per share, vest over three years, and expire ten years after grant. F-12F-10 INDAPTUS THERAPEUTICS, INC.   On August 4, 2021,June 21, 2022, Indaptus’ board of directors approved a grant of an aggregate of options to purchase 1,049,750 25,000shares of common stock to Indaptus’ directors, executive officersan employee. The options are exercisable at $2.06 per share, vest over four years, and employees as follows:expire ten years SCHEDULE OF OPTIONS GRANTED TO DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES     Number of options granted     Exercise price     Vesting period     Expiration   Executive officers and employees     940,000     $ 8.87       1-3 years       5-10 years   Directors     109,750     $ 8.87       1 year       10 years   after grant.   A summary of the stock option activity during the ninesix months ended SeptemberJune 30, 2021,2022, is presented in the table below:  SCHEDULE OF SHARE BASED-COMPANSATIONBASED COMPENSATION           Weighted average           Shares     Exercise price     Remaining contractual life     Intrinsic value   Outstanding as of January 1, 2021     206,079     $ 2.86       8.2     $ 28,003   Granted     1,049,750     $ 8.87             Options converted upon Merger     57,701     $ 237.10             Forfeited and cancelled     (9,175 )     204.28                   Outstanding as of September 30, 2021     1,304,355     $ 16.49       9.2     $ 1,025,114   Exercisable as of September 30, 2021     238,074     $ 41.83       6.9     $ 1,007,439   Vested and expected to vest September 30, 2021     1,301,486     $ 15.49       9.2     $ 1,025,114             Weighted average             Number of options     Exercise price     Remaining contractual life (in years)     Intrinsic value   Outstanding as of January 1, 2022     1,174,660     $ 17.10       9.1     $ 241,103   Granted     464,200     $ 4.67       9.6     $ -   Exercised     -     $ -       -     $ -   Forfeited and cancelled     (33,237 )   $ 11.46       -     $ -   Outstanding as of June 30, 2022     1,605,623     $ 13.62       8.9     $ 13,750   Exercisable as of June 30, 2022     137,797     $ 77.01       5.7     $ -   Vested and expected to vest June 30, 2022     1,605,623     $ 13.62       8.9     $ 13,750     The Company recognizedfollowing table summarizes the total stock-based compensation expense included in the unaudited condensed consolidated statements of $operations for the periods presented: 795,338 SCHEDULE OF STOCK BASED COMPENSATION EXPENSESand $     2022     2021     2022     2021       For the three months ended June 30,     For the six months ended June 30,       2022     2021     2022     2021   Research and development   $ 214,254     $ 8,280     $ 384,690     $ 16,470   General and administrative     690,141       12,393       1,350,888       24,648   Total stock-based compensation expense   $ 904,395     $ 20,673     $ 1,735,578     $ 41,118   39,208  during the three months ended September 30, 2021 and 2020, respectively. The Company recognized stock-based compensation expense of $836,456 and $116,872 during the nine months ended September 30, 2021, and 2020, respectively. As of SeptemberJune 30, 2021,2022, total compensation cost not yet recognized related to unvested stock options was approximately $6.6 5.9million, which is expected to be recognized over a weighted-average period of 2.2 2.0years.   The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The weighted average inputs used to measure the value of the options granted in August 2021during the six months ended June 30, 2022 are presented in the table below. The weighted average grant date fair value of stock optionoptions issued during the three and ninesix months ended SeptemberJune 30, 2021,2022 was $8.453.78. per share. SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED   August 4, 2021     2022   Stock price   $ 8.87     $ 4.67   Exercise price   $ 8.87     $ 4.67   Expected term     5.5   Expected term (in years)     5.9   Volatility     103.4 %     105.8 % Risk free rate     0.71 %     1.8 % Dividend yield     0.00 %     0.0 %   The following table presents the exercise price of outstanding stock options as of SeptemberJune 30, 2021:2022: SCHEDULE OF EXERCISE PRICE OF OUTSTANDING STOCK OPTIONS Options outstanding Exercise price   Options outstanding 564,925   $0.01 - $8.00     206,079564,925   $8.01 - $16.00     1,049,7501,006,000   $16.0016.01 or higher     48,52634,698   Total     1,304,355 Outstanding options, number of outstanding options at the end of period 1,304,3551,605,623     F-13F-11 INDAPTUS THERAPEUTICS, INC.   NOTE 6:7: CAPITALIZATION a. In August 2018, Decoy entered into the Series Seed Preferred Stock Purchase Agreement (“Series Seed SPA”), under which 835,928 (“Series Seed Preferred”) shares were purchased in exchange for cash considerationAs of $6.0 million. The purchase price of Series Seed Preferred shares was $7.20 per share. In connection with the Merger, all outstanding shares of Series Seed Preferred stock were converted into common stock on August 3,June 30, 2022 and December 31, 2021, the date of closing of the Merger. b. Decoy issued a series of SAFEs with accredited investors between December 2019 and April 2021. The total carrying value of the SAFEs was $1.4 million as of December 31, 2020, and $6.4 million immediately before the Merger. On August 3, 2021, the date of the closing of the Merger, the SAFEs were converted into 766,627 shares ofcommon stock of the Company. As of December 31, 2020, the SAFEs were potentially settleable in cash, and accordingly, the Company presented the instruments as liabilities. had 200,000,000 c. Pre-funded Warrants and Warrants: (1) Immediately after the Merger, all Intec Israel’s warrants were converted into 227,150 warrants of Indaptus, for further details see table below. (2) On July 23, 2021, Indaptus entered into a Purchase Agreement with a certain institutional investor, pursuant to which Indaptus agreed to sell and issue, in a Private Placement, Pre-Funded Warrants to purchase 2,727,237 shares of common stock authorized and warrants to purchase 2,727,2378,258,597 shares of common stock issued and outstanding. b. As of June 30, 2022 and December 31, 2021, there were warrants outstanding to purchase an aggregate of 3,090,787 shares of common stock of Indaptus. As of June 30, 2022, these warrants are exercisable at a purchaseweighted average price of $10.9912.50 per Pre-Funded Warrant and associated warrant. Each pre-funded warrant was exercisable at an exercise price of $their weighted average remaining contractual term is 0.014.5 per share. The Pre-Funded Warrants were exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. Each warrant is exercisable at an exercise price of $11.00years. per share and has a term of five and one-half years from the date of issuance. The Company concluded that the Pre-Funded Warrants and warrants are classified as equity, since they meet all criteria for equity classification. The total net proceeds was approximately $27.3 million, after deducting the placement agent’s fees and other offering expenses payable by Indaptus in the amount of approximately $2.7 million. On August 3, 2021, the Private Placement closed and in September 2021, the Pre-Funded Warrant was fully exercised for consideration of $27,273. In addition, in connection with the Private Placement, Indaptus issued to the placement agent a warrant to purchase 136,364 shares of Indaptus’ common stock at an exercise price of $13.75. The fair value of a warrant to purchase one share of Indaptus’ common stock that was issued to the placement agent was $7.16. The following table summarizes the number of warrants outstanding with exercise price and remaining contractual life for the nine-month period ended September 30, 2021: SUMMARY OF WARRANTS OUTSTANDING WITH EXERCISE PRICE AND REMAINING CONTRACTUAL LIFE           Weighted average       Shares     Exercise price     Remaining contractual life   Outstanding January 1, 2021     -       -       -   Warrants converted upon Merger     227,150     $ 29.8           Warrants issued in the Private Placement     2,863,637     $ 11.1           Outstanding and exercisable as of September 30, 2021     3,090,787     $ 12.5       5.2   As of September 30, 2021, the Company had 200,000,000 shares of common stock authorized and 8,133,243 shares of common stock issued and outstanding. As of December 31, 2020, Decoy had 3,185,224 shares of common stock authorized and 1,944,672 shares of common stock issued and outstanding. NOTE 7:8: COMMITMENTS AND CONTINGENCIES Litigation On July 13, 2022, LTS Lohmann Therapie-System AG (“LTS”) filed a Request for Arbitration with the International Chamber of Commerce, naming as respondent the Company’s subsidiary Intec Israel. The Request alleges that it is entitled to payment of Euro 2 million for reimbursement under a process development agreement following the Company’s discontinuation of the Accordion Pill business. As of the date of issuance of these consolidated financial statements there were no pending legal proceedings againstJune 30, 2022, the Company that are expectedaccrued Euro 2 million (approximately $2.1 million) with respect to have a material adverse effect on cash flows, financial condition or results of operations. its potential obligation to LTS. From time to time, the Company could become involved in additional disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation.   Leases TheOn October 1, 2021, the Company leases office space underentered into a short-termnoncancelable two-year operating lease agreement that automatically renews for successive three-month periods. Eitherapproximately 2,000 square feet of office space in San Diego, California. The base rent is $7,999 per month with an increase of 3% after the Company or the landlord can terminatefirst anniversary of the lease with 60 days written notice, whereuponterm commencement, which was November 1, 2021. The lease liability is measured at a discount rate of 7%. Future minimum annual lease payments under the Company’s noncancelable operating lease agreement termination will be effective the last dayas of the last three-month extension period. The Company accounts for the lease pursuant to the short-term practical expedient available under ASC 842-20.June 30, 2022 are as follows: SUMMARY OF MINIMUM LEASE PAYMENTS     2022   2022   $ 48,472   2023     82,388   Total minimum lease payments     130,860   Less: amount representing interest     (5,048 ) Present value of operating lease liability     125,812   Less: current portion     (97,905 ) Operating lease liability, net of current portion   $ 27,907     The Company recognized rent expense of $6,70148,712 and $9,27212,730 during the threesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively. The Company recognized rent expense of $19,43224,356 and $20,1596,365 during the ninethree months ended SeptemberJune 30, 2022 and 2021, respectively. Total cash payments for the operating lease totaled $47,993and 2020,$12,730 during the six months ended June 30, 2022 and 2021, respectively. F-14 INDAPTUS THERAPEUTICS, INC. NOTE 8:9: SUBSEQUENT EVENTS   The Company evaluated subsequent events from SeptemberJune 30, 2021,2022, the date of these unaudited condensed consolidated financial statements, through November 15, 2021,August 8, 2022, which represents the date the consolidated financial statements were issued, for events requiring recognition or disclosure in the consolidated financial statements for the period ended SeptemberJune 30, 2021. The2022. Except for the matter disclosed in Note 8 the Company concluded that no events have occurred that would require recognition or disclosure in the consolidated financial statements, except as described below:statements.   a. On October 1, 2021, the Company entered into a two-year lease agreement for approximately 1,975 square feet of office space in San Diego, California. The base rent is $7,999 per month and the lease term commenced November 1, 2021. b. In October 2021, options to purchase 60,336 shares ofcommon stocks were exercised for consideration of approximately $180,000. F-15F-12   Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless the context indicates otherwise, in this Quarterly Report on Form 10-Q, the terms “Indaptus,” “Company,” “we,” “us” and “our” refer to Indaptus Therapeutics, Inc. (formerly Intec Parent, Inc. the successor of Intec Pharma Ltd. following the domestication merger) and, where appropriate, its consolidated subsidiaries following the domestication merger and the reverse merger described below. References to “Intec Israel” refer to Intec Pharma Ltd., the predecessor of Indaptus prior to the domestication merger described below, and references to “Decoy” refer to Decoy Biosystems, Inc., the entity acquired by Indaptus in connection with the reverse merger described below.   The following discussion and analysis provides information that we believe to be relevant to an assessment and understanding of our results of operations and financial condition for the periods described. This discussion should be read together with our condensed consolidated financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q. This information should also be read in conjunction with the information contained in Decoy’sour Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 21, 2022, including the consolidated annual financial statements as of December 31, 2020,2021 and their accompanying notes included in the Form S-4 filed with the SEC in connection with the reverse merger.therein. We have prepared our condensed consolidated interim financial statements in accordance with U.S. GAAP.GAAP and Article 10 of SEC Regulation S-X.   This Quarterly Report on Form 10-Q of Indaptus Therapeutics, Inc. contains forward-looking statements about our expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as “believe”, “expect”, “intend”, “plan”, “may”, “should”, “could”, “might”, “seek”, “target”, “will”, “project”, “forecast”, “continue” or “anticipate” or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. These forward-looking statements are based on assumptions and assessments made in light of management’s experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: our plans to develop and potentially commercialize our technology, the timing and cost of our planned investigational new drug application and any clinical trials, the completion and receiving favorable results in any clinical trials, our ability to obtain and maintain regulatory approval of any product candidate, our ability to protect and maintain our intellectual property and licensing arrangements, our ability to develop, manufacture and commercialize our product candidates, the risk of product liability claims, the availability of reimbursement, the influence of extensive and costly government regulation, and our estimates regarding future revenue, expenses capital requirements and the need for additional financing following the recently completed merger. TheseMore detailed information about the risks as well as other risks are discussed inand uncertainties affecting us is contained under the proxy statement/prospectus that washeading “Risk Factors” included in the registration statementour most recent Annual Report on Form S-410-K filed with the SEC on March 21, 2022, and in connectionother filings that we have made and may make with the merger.Securities and Exchange Commission in the future.   Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-4 reverse share split of the ordinary shares of Intec Israel that became effective on July 26, 2021 prior to the domestication merger described below, and also gives effect to a 1-for-20 reverse share split of the ordinary shares of Intec Israel that became effective on October 30, 2020, and all references to ordinary shares outstanding and per share amounts give effect to these reverse share splits. Overview   We are a pre-clinical biotechnology company developing a novel and patented systemically-administered anti-cancer and anti-viral immunotherapy. We have evolved from more than a century of immunotherapy advances. Our approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system activating signals that can be administered safely intravenously. Our patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria, with reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cellular components of innate and adaptive immunity. This approach has led to broad anti-tumor and anti-viral activity, including safe, durable anti-tumor response synergy with each of five different classes of existing agents, including checkpoint therapy, targeted antibody therapy and low-dose chemotherapy in pre-clinical models. Tumor eradication by our technology has demonstrated activation of both innate and adaptive immunological memory and, importantly, does not require provision of or targeting a tumor antigen in pre-clinical models. We have carried out successful GMP manufacturing of our lead clinical candidate, Decoy20, and are currently completingcompleted other IND-enabling studies.For 3 Unlike many competitor products, our technology does not depend on targeting with or to a further descriptionspecific antigen, providing broad applicability across multiple indications. Our product candidates are designed to have a much shorter half-life and produce less systemic exposure than small molecule, antibody or human cell-based therapies, potentially reducing the risk of Indaptus’ business, seenon-specific auto-immune reactions. Our technology produces single agent activity and/or combination therapy-based durable responses of lymphoma, hepatocellular, colorectal and pancreatic tumors and has also produced significant single agent activity against chronic hepatitis B virus (HBV) and chronic human immunodeficiency virus (HIV) infections in pre-clinical models. In May 2022, the section “Business of Decoy”U.S. Food and Drug Administration cleared our Investigational New Drug, or IND, application for a Phase 1 clinical trial in patients with advanced solid tumors where currently approved therapies have failed and plan to commence a Phase 1 clinical trial in the registration statement on Form S-4, as amended (File No. 333-255389)second half of 2022 targeting solid tumors. Target indications include, but not limited to, colorectal, hepatocellular (± HBV), filed with the Securitiesbladder, cervical and Exchange Commission (“SEC”) on May 12, 2021 (the “Registration Statement”).pancreatic carcinoma. Decoy Merger   On August 3, 2021, Indaptus Therapeutics, Inc. (formerly Intec Parent, Inc.), a Delaware corporation (“Indaptus,” “Company,” “we,” “us,” or “our”),we completed itsour merger with Decoy Biosystems, Inc., a Delaware corporation (“Decoy”) following the satisfaction or waiver of the conditions set forth in the Agreement and Plan of Merger (the “Merger Agreement”),Agreement, dated as of March 15, 2021 among the Company, Decoy, Intec Pharma Ltd., an Israeli company and wholly owned subsidiary of the Company (“Intec Israel”),Israel, Domestication Merger Sub Ltd., an Israeli company and a wholly-owned subsidiary of the Company, (“or Domestication Merger Sub”),Sub, and Dillon Merger Subsidiary Inc., a Delaware corporation and wholly owned subsidiary of the Company, (“or Merger Sub”)Sub, pursuant to which Merger Sub merged with and into Decoy, with Decoy surviving as a wholly owned subsidiary of the Company, (the “Merger”)or the Merger, and the business conducted by Decoy became the business conducted by the combined company.   Previously, on July 27, 2021, we, Intec Israel Indaptus and Domestication Merger Sub completed the previously announced domestication merger pursuant to the terms and conditions of the Agreement and Plan ofDomestication Merger and Reorganization, dated April 27, 2021 (the “Domestication Merger Agreement”),Agreement, whereby Domestication Merger Sub merged with and into Intec Israel, with Intec Israel being the surviving entity and a wholly-owned subsidiary of Indaptus (the “Domestication Merger”).ours. At the time of the Domestication Merger, Intec Israel continued to possess all of its assets, rights, powers and property as constituted immediately prior to the Domestication Merger and continued to be subject to all of its debts, liabilities and obligations as constituted immediately prior to the Domestication Merger.   Also, in connection with the Merger, we changed our name from “Intec Parent, Inc.” to “Indaptus Therapeutics, Inc.”.   3 At the effective time of the Merger, each outstanding share of Decoy common stock, par value $0.001 per share (the “Decoy Common Stock”) (including shares issuable upon the conversion of Decoy SAFEs (Simple Agreements for Future Equity) and Decoy preferred stock, par value $0.001 per share, into Decoy Common Stock) converted into 2.654353395 shares of Indaptus common stock, par value $0.01 per share. In addition, at the effective time of the Merger, each outstanding and unexercised Decoy stock option converted into a stock option exercisable for that number of shares of common stock of Indaptus subject to such option and the exercise price being appropriately adjusted to reflect the exchange ratio. Immediately following closing of the Merger there were 5,405,970 shares of Indaptus common stock outstanding, with pre-merger Decoy shareholders owning approximately 65.6% and pre-merger Intec Israel shareholders owning approximately 34.4% of the Company. The figures above do not give effect to shares issuable upon the exercise of outstanding Indaptus warrants or options. Following completion of the Merger, our shares of Indaptus common stock commenced trading at market open on August 4, 2021, on the Nasdaq Capital Market under the name “Indaptus Therapeutics, Inc.” and ticker symbol “INDP” and under the new CUSIP 45339J 105. For accounting purposes, Decoy is considered to have acquired Indaptus based on the terms of the Merger and an analysis of the criteria outlined in Accounting Standards Codification 805. The Merger has been accounted for as an asset acquisition (reverse merger transaction) rather than a business combination, as the net assets acquired/assumed by Decoy do not meet the definition of a business under U.S. GAAP. Accordingly, the historical financial statements of Decoy became the historical financial statements of the combined company upon the consummation of the Merger and the net assets acquired in connection with the Merger were recorded at their estimated fair market value as of August 3, 2021, the date of completion of the Merger.   Winding Down of Accordion Pill Business   In connection with the completion of the Merger, on August 4, 2021, our board of directors determined to wind down the Accordion Pill business of Intec Israel andwhich was completed as of September 30, 2021, we maintain an adequate numberthe date of employees in Israel until the completionissuance of the wind down of the Accordion Pill business.these consolidated financial statements.   In connection with the winding down, we laid off all our employees and we terminated our contracts with counterparties, and the sale of our Accordion Pill related assets, including the termination of the Process Development Agreement dated as of December 17, 2018,process development agreement between Intec Israel and LTS Lohmann Therapie Systeme AG (“LTS”)(LTS), that provided forand the manufacturetermination of AP-CD/LD capsules, as a result of which we expect to pay approximately 2.0 million Euros (approximately $2.3 million) as a termination fee. In addition, on August 5, 2021,the unprotected lease agreement between Intec Israel and its landlord agreed to terminate the Unprotected Lease Agreement with R.M.P.A. Assets Ltd. dated June 2, 2003, as amended, for the lease of offices located in Jerusalem, Israel, as a result of which Intec Israel agreed to the payment of a break-up fee of $600,000. We expect that the winding down of the Accordion Pill business will be substantially complete by the end of 2021.Israel.   Private Placement   In connection with the Merger, on July 23, 2021, (the “Signing Date”),or the Signing Date, we entered into a securities purchase agreement, (the “Purchase Agreement”)or the Purchase Agreement, with a certain institutional investor (the “Purchaser”), pursuant to which we agreed to sell and issue, in a private placement, (the “Private Placement”)or the Private Placement, a pre-funded warrant to purchase up to 2,727,273 shares of the Company’sour common stock, (the “Pre-funded Warrant”)or the Pre-funded Warrant, and a warrant to purchase up to 2,727,273 of our common stock, or the Warrant, at a purchase price of $10.99 per Pre-funded Warrant and associated Warrant, for aggregate gross proceeds to us of approximately $30.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The Warrant has a term of five and one-half years, is exercisable immediately following the issuance date and has an exercise price of $11.00 per share, subject to adjustment as set forth therein. 4   On August 3, 2021, the Private Placement closed and in September 2021, the Pre-Funded Warrants were fully exercised. In addition, we issued to the placement agent a warrant to purchase 136,364 shares of our common stock at an exercise price of $13.75.   In connection with the Purchase Agreement, we entered into a registration rights agreement, (the “Registration Rights Agreement”) with the Purchaser. Pursuant toor the Registration Rights Agreement, we are requiredwith the Purchaser requiring us to file a resale registration statement, (the “Resaleor the Resale Registration Statement”)Statement, with the SEC to register for resale of the shares of our common stock issuable upon exercise of the Pre-Funded Warrant and Warrant, within 30 days of the Signing Date, and to have such Resale Registration Statement declared effective within 45 days after the Signing Date in the event the Resale Registration Statement is not reviewed by the SEC, or 75 days of the Signing Date in the event the Resale Registration Statement is reviewed by the SEC. We will be obligated to pay certain liquidated damages to the Purchaser if we fail to file the Resale Registration Statement when required, fail to cause the Resale Registration Statement to be declared effective by the SEC when required, of if we fail to maintain the effectiveness of the Resale Registration Statement.Warrant. We subsequently filed a registration statement registering for resale the shares of our common stock issuable upon exercise of the Pre-Funded Warrant and Warrant which became effective on September 29, 2021. 4 ResultsComponents of Operations Three months ended September 30, 2021 compared to three months ended September 30, 2020Operating Results   The following tables sets forth our results of operations for the three months ended September 30, 2021 and 2020 and the relative dollar and percentage change between the two quarters.     Three months ended     Change       September 30,     (2021 to 2020)       2021     2020     ($)     %   Operating expenses:                                 Research and development   $ 697,674     $ 1,349,835     $ (652,161 )     -48 % General and administrative     2,670,317       196,578       2,473,739       1258 %                                   Total operating expenses     3,367,991       1,546,413       1,821,578       118 %                                   Loss from operations     (3,367,991 )     (1,546,413 )     (1,821,578 )     118 %                                   Other income, net     827       3,680       (2,853 )     -78 %                                   Net loss   $ (3,367,164 )   $ (1,542,733 )   $ (1,824,431 )     118 % Net loss attributable to common stockholders per share, basic and diluted   $ (0.81 )   $ (0.79 )   $ (0.01 )     2 % Weighted average number of shares used in calculating net loss per share, basic and diluted     4,180,744       1,944,672       2,236,072       115 % Research and DevelopmentOperating Expenses   Research and Development Research and development expenses account for a significant portion of our operating expenses. Research and development expenses consist primarily of fees paid to contract research organizations, (“CROs”)or CROs, and contract manufacturing organizations, (“CMOs”)or CMOs, as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs and CMOs. Research We expect our research and development expenses decreasedto increase substantially for the foreseeable future as we continue to ramp up our clinical development activities and incur expenses associated with hiring additional personnel to support our research and development efforts. Our expenditures on future nonclinical and clinical development programs are subject to numerous uncertainties in the three months ended September 30, 2021 over 2020 primarily astiming and cost to completion. The duration, costs and timing of pre-clinical studies and clinical trials and development of product candidates will depend on a resultvariety of the manufacturing and characterization of Decoy20 during the three months ended September 30, 2020.factors, including: ● the timing and receipt of regulatory approvals; ● the scope, rate of progress and expenses of pre-clinical studies and clinical trials and other research and development activities; ● potential safety monitoring and other studies requested by regulatory agencies; ● significant and changing government regulation.   General and Administrative Expenses   General and administrative expenses include compensation, employee benefits, and stock-based compensation for executive management, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs, including depreciation, to support our operations. General We expect our general and administrative expenses increased significantly into increase substantially for the three months ended September 30, 2021 over 2020foreseeable future as we continue to increase our headcount to support our research and development activities and operations generally, the growth of our business and, if any of our product candidates receive marketing approval, commercialization activities. We also expect to continue to incur additional expenses as a result of increased payroll and related expenses, stock-based compensation expense for stock options issued in August 2021 and professional fees associated with beingoperating as a public company, followingincluding expenses related to compliance with the Merger.rules and regulations of the SEC, additional director and officer insurance expenses, investor relations activities and other administrative and professional services. Other Income, Net Other income includes interest earned on deposits and other items of income, expense, gain and loss that are incidental to the core operations of the Company.   5     Results of Operations Other IncomeThree months ended June 30, 2022 compared to three months ended June 30, 2021   Other incomeThe following tables sets forth our results of operations for the three months ended SeptemberJune 30, 2022 and 2021 and 2020 was comprised of interest earned on deposits. Interest income has not been significant due to low interest rates on balances.the relative dollar and percentage change between the two quarters.       Three months ended     Change     June 30,     (2022 to 2021)     2022     2021     ($)   Operating expenses:                         Research and development   $ 1,506,165     $ 391,118     $ 1,115,047   General and administrative     2,363,095       137,527       2,225,568                             Total operating expenses     3,869,260       528,645       3,340,615                             Loss from operations     (3,869,260 )     (528,645 )     (3,340,615 )                           Other income, net     33,758       13,166       20,592                             Net loss   $ (3,835,502 )   $ (515,479 )   $ 3,320,023   Net loss attributable to common stockholders per share, basic and diluted   $ (0.46 )   $ (0.27 )   $ (0.19 ) Weighted average number of shares used in calculating net loss per share, basic and diluted     8,258,597       1,944,672           Nine months ended September 30, 2021 compared to nine months ended September 30, 2020     Nine months ended     Change       September 30,     (2021 to 2020)       2021     2020     ($)     %   Operating expenses                                 Research and development   $ 1,578,513     $ 2,302,883     $ (724,370 )     -31 % General and administrative     2,932,099       527,830       2,404,269       456 %                                   Total operating expenses     4,510,612       2,830,713       1,679,899       59 %                                   Loss from operations     (4,510,612 )     (2,830,713 )     (1,679,899 )     59 %                                   Other income, net     15,548       16,781       (1,233 )     -7 %                                   Net loss   $ (4,495,064 )   $ (2,813,932 )   $ (1,681,132 )     60 % Net loss attributable to common stockholders per share, basic and diluted   $ (1.67 )   $ (1.45 )   $ (0.22 )     15 % Weighted average number of shares used in calculating net loss per share, basic and diluted     2,692,770       1,944,672       748,098       38 % Research and Development Expenses   ResearchOur research and development expenses consistfor the three months ended June 30, 2022 amounted to approximately $1.5 million, an increase of approximately $1.1 million compared to approximately $390,000 for the three months ended June 30, 2021. This increase was attributable primarily to (i) an increase of fees paid to CROs approximately $520,000 for payroll and CMOs as well asrelated expenses including approximately $210,000 of stock-based compensation expenses, and (ii) an increase of approximately $570,000 for certain employees involved in the planning, managing, and analyzing the workpreparation of the CROsPhase 1 clinical trial and CMOs. ResearchIND submission. We expect our research and development expenses decreased into increase substantially for the nine months ended September 30, 2021 over 2020 as a resultremainder of the manufacturing and characterization of Decoy20 during the nine months ended September 30, 2020.year as we plan to commence a Phase 1 clinical trial.   General and Administrative Expenses   GeneralOur general and administrative expenses include compensation, employee benefits, for the three months ended June 30, 2022 amounted to approximately $2.4 million, an increase of approximately $2.2 million compared to approximately $138,000 for the three months ended June 30, 2021. This increase was attributable primarily to (i) an increase of approximately $1.2 million for payroll and related expenses, including approximately $700,000 of stock-based compensation for, resulting from increased headcount of our executive management, finance administrationteam following the Merger and human resources, facility costs (including rent),(ii) an approximately $900,000 increase in directors and officers’ insurance policy, professional service fees and other general overhead costs, including depreciation, to support our operations. General and administrative expenses increased significantly in the nine months ended September 30, 2021 over 2020 primarily as a result of increased payroll and related expenses, stock-based compensation expense for stock options issued in August 2021 and professional fees associated with being a public company following the Merger.Merger. We expect our general and administrative expenses to increase for the reminder of the year as we continue to support our increasing research and development activities.   Other Income, net   Other income, fornet, increased in the ninethree months ended SeptemberJune 30, 2022 compared to the same period in 2021 and 2020 was comprisedprimarily as a result of interest earned on deposits. Interest income has not been significant due 6 Six months ended June 30, 2022 compared to low interest rates on balances.six months ended June 30, 2021   The following tables sets forth our results of operations for the six months ended June 30, 2022 and 2021 and the relative dollar and percentage change between the two quarters.     Six months ended     Change     June 30,     (2022 to 2021)     2022     2021     ($)   Operating expenses:                         Research and development   $ 2,803,263     $ 880,839     $ 1,922,424   General and administrative     4,468,070       261,782       4,206,288                             Total operating expenses     7,271,333       1,142,621       6,128,712                             Loss from operations     (7,271,333 )     (1,142,621 )     (6,128,712 )                           Other income, net     70,677       14,721       55,956                             Net loss   $ (7,200,656 )   $ (1,127,900 )   $ (6,072,756 ) Net loss attributable to common stockholders per share, basic and diluted   $ (0.87 )   $ (0.58 )   $ (0.29 ) Weighted average number of shares used in calculating net loss per share, basic and diluted     8,258,597       1,944,672           Research and Development Expenses Our research and development expenses for the six months ended June 30, 2022 amounted to approximately $2.8 million, an increase of approximately $1.9 million compared to approximately $900,000 for the six months ended June 30, 2021. This increase was attributable primarily to (i) an increase of approximately $1 million for payroll and related expenses including approximately $370,000 of stock-based compensation, and (ii) an increase of approximately $900,000 for the preparation of the Phase 1 clinical trial and IND submission. We expect our research and development expenses to increase substantially for the remainder of the year as we plan to commence a Phase 1 clinical trial. General and Administrative Expenses Our general and administrative expenses for the six months ended June 30, 2022 amounted to approximately $4.5 million, an increase of approximately $4.2 million compared to approximately $260,000 for the six months ended June 30, 2021. This increase was attributable primarily to (i) an increase of approximately $2.3 million for payroll and related expenses, including approximately $1.3 million of stock-based compensation, resulting from increased headcount of our executive team following the Merger and (ii) an approximately $1.7 million increase in directors and officers’ insurance policy, professional fees and other expenses associated with being a public company following the Merger. We expect our general and administrative expenses to increase for the reminder of the year as we continue to support our increasing research and development activities. Other Income, net Other income, net, increased in the six months ended June 30, 2022 compared to the same period in 2021 primarily as a result of proceeds received in excess of the estimated fair value of assets held for sale and interest earned on deposits. Liquidity and Resources   Since our inception, we have funded our operations primarily through public and private offerings of our equity and debt securities. As of SeptemberJune 30, 2022, we had cash and cash equivalents and marketable securities of approximately $33.0 million. As of December 31, 2021, we had cash and cash equivalents of approximately $41.9 million. As of December 31, 2020, we had cash and cash equivalents of approximately $1.6$39.1 million. 7   In August 2021, we sold a Pre-funded Warrant to purchase 2,727,273 of our common stock and a Warrant to purchase 2,727,273 of our common stock in a private placement. The Warrant is exercisable at an exercise price of $11.00 per share. In September 2021, the Pre-funded Warrant was fully exercised at an exercise price of $0.01 per share. The Pre-funded Warrant and the Warrant were sold together at a combined price of $11.00, including the pre-funded exercise price. The total net proceeds were approximately $27.3 million, after deducting placement agent fees and offering expenses in the amount of approximately $2.7 million. In addition, we issued to the placement agent a warrant to purchase 136,364 shares of our common stock at an exercise price of $13.75.   Net cash used in operating activities was approximately $7.8$6.3 million for the ninesix months ended SeptemberJune 30, 2021,2022, compared with net cash used in operating activities of approximately $2.4$2.1 million for the ninefor the six months ended SeptemberJune 30, 2020.2021. This increase resulted primarily from an increase in our research and development expenses and general and administrative expenses and effects of the Merger and changes in operating assets and liabilities.expenses.   Net cash used in investing activities was approximately $18.6 million for the six months ended June 30, 2022 which was primarily due to the purchase of marketable securities investments during that period. There was an immaterial amount in net cash used in investing activities in the six months ended June 30, 2021. There was no net cash provided by financing activities in the six months ended June 30, 2022. Net cash provided by financing activities was approximately $5.5 million for the ninesix months ended SeptemberJune 30, 2021 was approximately $48.0 million, which was provided byprimarily due to the proceeds received from the closingissuance of the Private Placement in August 2021,a series of proceeds from MergerSimple Agreements for Future Equity and the sale of additional SAFEs during the nine months ended September 30, 2021.(SAFEs) to accredited investors. 6   Current Outlook   Following the Private Placement that closed in August 2021, we believe that we have adequate cash to fund our ongoing activities for more than one year from the date of this Quarterly Report on Form 10-Q.   We are closely monitoring ongoing developments in connection with the COVID-19 pandemic. As of the date of issuance of these condensed consolidated financial statements, the extent to whichultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. While it is unknown how long these conditions will last and what the complete financial effect will be to us, capital raise efforts and additional development of our technologies may materially impact our financial condition, liquidity, or results of operations is uncertain.be negatively affected.   Developing drugs, conducting clinical trials, obtaining commercial manufacturing capabilities and commercializing products is expensive and we will need to raise substantial additional funds to achieve our strategic objectives. We will require significant additional financing in the future to fund our operations, including if and when we progress into additional clinical trials, obtain regulatory approval for one or more of our product candidates, obtain commercial manufacturing capabilities and commercialize one or more of our product candidates. Our future capital requirements will depend on many factors, including, but not limited to:     ● the progress and costs of our preparations for clinical trials and other research and development activities;         ● the scope, prioritization and number of clinical trials and other research and development programs;         ● the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our product candidates;         ● the impact of the COVID-19 pandemic;pandemic and the Russian invasion of Ukraine;         ● the costs of the development and expansion of our operational infrastructure;         ● the costs and timing of obtaining regulatory approval for one or more of our product candidates;         ● the ability of us, or our collaborators, to achieve development milestones, marketing approval and other events or developments under our potential future licensing agreements;         ● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;         ● the costs and timing of securing manufacturing arrangements for clinical or commercial production; 8   ● the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves;         ● the costs of acquiring or undertaking development and commercialization efforts for any future products, product candidates or technology;         ● the magnitude of our general and administrative expenses;         ● market conditions; and         ● any cost that we may incur under future in- and out-licensing arrangements relating to one or more of our product candidates.   7 Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through capital raising. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of or eliminate research or development programs and other operations and make necessary change to our operations to reduce the level of our expenditures in line with available resources.   Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.   Critical Accounting PoliciesEstimates   This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates that affect the reported amounts of our assets, liabilities and expenses. Significant accounting policies employed by us, including the use of estimates, are presented in Decoy’sour annual financial statements for the year ended December 31, 2020,2021, and their accompanying notes included in the Annual Report on Form S-410-K for the year ended December 31, 2021 filed with the SEC in connection with the reverse merger.SEC. We periodically evaluate our estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require our subjective or complex judgments, resulting in the need to make estimates about the effect of matters that are inherently uncertain. If actual performance should differ from historical experience or if the underlying assumptions were to change, our financial condition and results of operations may be materially impacted.   Our critical accounting policies and estimates are disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in Decoy’s financial statements for the year ended December 31, 2020, included in the Form S-4 filed in connection with the reverse merger. There have been no material changes to those policies during the nine months ended September 30, 2021. We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.   Accounting for Research and Development Costs   We record the costs associated with services provided by CROs and CMOs as they are incurred. Though the scope and timing of work are generally based on signed agreements, some judgement is involved in determining periodic expenses because payment flows do not always match the periods over which services and materials are provided to us. As a result, our management is required to make estimates of services received and efforts expended pursuant to agreements established with these third-parties at each period-end date. During the ninethree and six months ended SeptemberJune 30, 2021,2022, we incurred $1.6approximately $1.5 million and $2.8 million, respectively, of research and development expenses. As of SeptemberJune 30, 2021,2022, we recorded an accrued liability of approximately $0.2 million for expenses incurred, but not yet invoiced, and a prepaid expenseexpenses and deposits of $0.1approximately $0.7 million for payments made that relate to future periods. Over or under estimating the services received or efforts expended could cause us to overstate or understate research and development expenses incurred within a reporting period, and related accrued and prepaid expenses.   9 Stock-Based Compensation   We measure and record the expense related to stock-based payment awards based on the fair value of those awards on the date of grant. We use the Black-Scholes-Merton, (“Black-Scholes”)or Black-Scholes, option pricing model to establish the fair market value. We recognize stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis. The Black Scholes model requires that our management make certain estimates regarding the expected stock price volatility, expected term, risk–free interest rate, and dividend yield to derive an estimated fair market value. The use of different assumptions would increase or decrease the related determination of fair market value, increasing or decreasing the compensation expense related to a particular stock-based award.   Recently Issued Accounting Pronouncements   None.   Item 3. Quantitative and Qualitative Disclosures about Market Risk   Not required for smaller reporting companies.   8 Item 4. Disclosure Controls and Procedures   We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports 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 our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management 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 in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.   Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have 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 SeptemberJune 30, 2021.2022. Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of SeptemberJune 30, 2021,2022, these disclosure controls and procedures were effective at the reasonable assurance level.   Changes in Internal Control over Financial Reporting   On August 3, 2021, we consummated the Merger between Indaptus and Decoy. Upon closing, the historical financial statements of Decoy became the historical consolidated financial statements of the registrant and upon consummation of the Merger we reconstituted our board of directors. During the quarter ended September 30, 2021, in connection with the Merger, our board of directors has established an audit committee, we hired a Chief Financial Officer, we integrated our financial reporting processes of the business with Decoy’s processes, and we implemented additional closing procedures to enable our financial reporting process. Other than such changes, thereThere were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended SeptemberJune 30, 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   9 PART II. OTHER INFORMATION   Item 1. Legal Proceedings   From time to time, we may become involved in variousaddition lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. ThereExcept as set forth below, there are currently no pending material legal proceedings, and we are currently not aware of any legal proceedings or claims against us or our property that we believe will have any significant effect on our business, financial position or operating results. None of our officers or directors is a party against us in any legal proceeding.   On July 13, 2022, LTS filed a Request for Arbitration with the International Chamber of Commerce, naming as respondent the Company’s subsidiary Intec Israel. The Request alleges that it is entitled to payment of Euro 2 million for reimbursement under a process development agreement following our discontinuation of the Accordion Pill business. As of June 30, 2022, we accrued Euro 2 million (approximately $2.1 million) with respect to our potential obligation to LTS. 10 Item1A. Risk Factors   Not required for a smaller reporting company.   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   None.   Item 3. Defaults Upon Senior Securities   None.   Item 4. Mine Safety Disclosures   Not applicable.   Item 5. Other Information   None.   Item 6. Exhibits   Exhibit No.   Exhibit Description       3.1   Amended and Restated Certificate of Incorporation of Indaptus Therapeutics, Inc., dated as of July 23, 2021 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2021)       3.2   Amended and Restated Bylaws of Indaptus Therapeutics, Inc., dated as of July 23, 2021 (incorporated herein by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2021)       3.3   Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Indaptus Therapeutics, Inc. dated August 3, 2021 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 6, 2021) 31.1*   Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended       31.2*   Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended       32.1#   Certification of Principal 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 Principal 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*   Inline XBRL Instance Document       101.SCH*   Inline XBRL Taxonomy Extension Schema Document       101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document       101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document       101.LAB*   Inline XBRL Taxonomy Extension Labels Linkbase Document       101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL document and included in Exhibit 101)   * Filed herewith # Furnished herewith   1011   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.     Indaptus Therapeutics, Inc.       Date: November 15, 2021August 8, 2022 By: /s/ Jeffrey A. Meckler     Jeffrey A. Meckler Chief Executive Officer (Principal Executive Officer)       Date: November 15, 2021August 8, 2022 By: /s/ Nir Sassi     Nir Sassi Chief Financial Officer (Principal Financial and Accounting Officer)   1112