Tryp Therapeuatics (TRYPF) Coverage Report

INVESTMENT RISKS Risks to our rating and price target include but are not limited to: Financing risks . Tryp has not generated any revenues from collaboration and licensing agreements or product sales to date and continues to incur research and development and other expenses. Their prior losses, combined with expected future losses, have had, and will continue to have an adverse effect on our shareholders’ deficit and working capital, and their future success is subject to significant uncertainty. As they have not begun generating revenue, it is extremely difficult to make accurate predictions and forecasts of their finances and this is compounded by the fact that they intend to operate in the psychedelic industry, which is a relatively new and rapidly transforming industry. For the foreseeable future, Tryp expects to continue to incur losses, which will increase significantly from recent historical levels as they expand their drug development activities, seek regulatory approvals for their drug candidates and begin to commercialize them if they are approved by the FDA, the EMA or comparable foreign authorities. Given their lack of current cash flow, they will need to raise additional capital; however, it may be unavailable to them or, even if capital is obtained, may cause dilution or place significant restrictions on their ability to operate their business. Even if they succeed in developing and commercializing one or more drug candidates, they may never become profitable. Historically, the Company’s sole source of funding has been loans from related parties and private placements. There is substantial doubt about the company’s ability to continue as a going concern. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. The Company’s financial liabilities are comprised of trade and other payables, shareholder loan, which are classified as current on the condensed interim statement of financial position. Clinical development risk. Tryp relies, and will continue to rely, predominantly, on third parties to manufacture their preclinical and clinical drug supplies and their business, financial condition and results of operations could be harmed if those third parties fail to provide them with sufficient quantities of drug product, or fail to do so at acceptable quality levels, prices, or timelines. They have not yet demonstrated our ability to successfully complete any clinical trials, obtain marketing approvals, manufacture a commercial-scale drug or arrange for a third party to do so on their behalf, or enter into agreements with third parties to conduct sales, marketing and distribution activities necessary for successful commercialization. The development process is expensive, can take many years and has an uncertain outcome. Failure can occur at any stage of the process. They may experience numerous unforeseen events during, or because of, the development process that could delay or prevent approval and commercialization of our current or future drug candidates, any of which may be exacerbated by unforeseen impacts related to the ongoing Covid-19 pandemic. The company is significantly dependent on the success of their PFN™ program and drug candidates that are based on this program. A failure of any of these drug candidates in clinical development would adversely affect business and may require the company to discontinue development of other drug candidates that are based on their PFN™ program. Regulatory risk . Tryp’s drug candidates that are based on the PFN™ program will be subject to controlled substance laws and regulations in the territories where the drug will be marketed and failure to comply with these laws and regulations, or the cost of compliance with these laws and regulations, may adversely affect the results of their business operations, both during clinical development and post approval, and their financial condition. Therapeutic candidates containing controlled substances are subject to DEA regulations relating to manufacturing, storage, distribution, and physician prescription procedures. They are subjected to DEA registration and inspection of facilities, state- Michael Higgins 212.409.2074 Tryp Therapeutics, Inc. (TRYPF) Page 37