UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

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

 For
the fiscal year ended December 31, 2023

 or

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from __________ to __________

 Commission
file number: 001-39102

 TFF
Pharmaceuticals, Inc.

 (Exact
name of registrant as specified in its charter)

 Delaware

 82-4344737

 (State or Other Jurisdiction of
 Incorporation or Organization)

 (I.R.S. Employer
 Identification Number)

 1751
River Run, Suite 400

 Fort
Worth, Texas 76107

 (Address
of principal executive offices)

 (817) 438-6168

 (Registrant's
telephone number, including area code)

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

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common stock: Par value $0.001

 TFFP

 The Nasdaq Capital Market

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

 None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No

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 past 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

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or 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.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 State the aggregate market value of voting and
non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal
quarter: $ 16.5 million.

 The
number of shares of the registrant's common stock outstanding as of March 22, 2024 was 2,519,220.

 DOCUMENTS
INCORPORATED BY REFERENCE

 The
registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days after the end of the fiscal year ended
December 31, 2023. Portions of such proxy statement are incorporated by reference into Part III of this Form 10-K.

 TABLE
OF CONTENTS

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 Signatures

 i

 CAUTIONARY
NOTICE

 This
annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include our expectations, beliefs,
intentions and strategies regarding the future.

 These
and other factors that may affect our financial results are discussed more fully in "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" included in this report. Moreover, we operate in a very
competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for us to predict all risks,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties
and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ
materially and adversely from those anticipated or implied in our forward-looking statements. Although we believe that the expectations
reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance
or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of the forward-looking statements. We caution readers not to place undue
reliance on any forward-looking statements. We do not undertake, and specifically disclaim any obligation, to update or revise such statements
to reflect new circumstances or unanticipated events as they occur, and we urge readers to review and consider disclosures we make in
this and other reports that discuss factors germane to our business. See in particular our reports on Forms 10-K, 10-Q, and 8-K subsequently
filed from time to time with the Securities and Exchange Commission.

 Except
as otherwise indicated, all share and share price in this report gives effect to a reverse stock split effected on December 19, 2023
at a ratio of one for 25.

 ii

 RISK
FACTOR SUMMARY

 Our
business is subject to numerous risks and uncertainties, including those described in "Risk Factors" in this Annual Report
on Form 10-K. These risks include, but are not limited to the following:

 We will need additional financing to execute our business plan and
fund operations, which additional financing may not be available on reasonable terms or at all.

 We are a clinical-stage biopharmaceutical company with limited operating
history.

 We have a history of significant operating losses and anticipate continued
operating losses for the foreseeable future.

 The
 report of our independent registered public accounting firm for the year ended December 31,
 2023 states that due to our lack of revenue from commercial operations, significant losses
 and need for additional capital there is substantial doubt about our ability to continue
 as a going concern.

 Our
 business model is entirely dependent on certain patent rights licensed to us from the University
 of Texas at Austin, and the loss of those license rights would, in all likelihood, cause
 our business, as presently contemplated, to fail.

 Our
 business model includes, in part, the licensing of our TFF Platform to other pharmaceutical
 companies, however technology licensing in the pharmaceutical industry is a lengthy process
 and subject to several risks and factors outside of our control, and we cannot forecast our
 ability to successfully license our technology or the length of time it may take to establish
 a new licensing relationship.

 Unfavorable geopolitical and macroeconomic developments could adversely affect our business, financial condition or results of operations.

 Our
business model also depends on our successful development, regulatory approval and commercialization of our product candidates, which
may never occur. Our TFF TAC and TFF VORI product candidates are currently undergoing Phase 2 clinical trials. In March 2024,
we announced our decision to prioritize clinical development of TFF TAC based on positive Phase 2 data and to evaluate strategic options
for TFF VORI, however, there can be no assurance that the Phase 2 trial for TFF TAC will be successful, we will be successful in finding
a strategic option for TFF VORI or that we will continue clinical development of TFF TAC in support of an approval from the FDA or comparable
foreign regulatory authorities for any indication.

 Success
 in early phases of pre-clinical and clinical trials does not ensure that later clinical trials
 will be successful, and interim results of a clinical trial do not necessarily predict final
 results.

 Our
 business operations could suffer in the event of information technology systems' failures
 or security breaches.

 Our
 success is entirely dependent on our ability to obtain the marketing approval for our product
 candidates by the FDA and the regulatory authorities in foreign jurisdictions in which we
 intend to market our product candidates, of which there can be no assurance.

 Clinical
 testing is expensive, is difficult to design and implement, can take many years to complete
 and is uncertain as to outcome.

 Even
 if we receive regulatory approval for any of our product candidates, we may not be able to
 successfully commercialize the product and the revenue that we generate from its sales, if
 any, may be limited.

 Even
 if we obtain marketing approval for any of our product candidates, we will be subject to
 ongoing obligations and continued regulatory review, which may result in significant additional
 expense. Additionally, our product candidates could be subject to labeling and other restrictions
 and withdrawal from the market and we may be subject to penalties if we fail to comply with
 regulatory requirements or if we experience unanticipated problems with our product candidates.

 Obtaining
 and maintaining regulatory approval of our product candidates in one jurisdiction does not
 mean that we will be successful in obtaining regulatory approval of our product candidates
 in other jurisdictions.

 iii

 Even
 though we may apply for orphan drug designation for a product candidate, we may not be able
 to obtain orphan drug marketing exclusivity.

 Current
 and future legislation may increase the difficulty and cost for us to obtain marketing approval
 of and commercialize our product candidates and affect the prices we may obtain.

 Any
 termination or suspension of, or delays in the commencement or completion of, any necessary
 studies of any of our product candidates for any indications could result in increased costs
 to us, delay or limit our ability to generate revenue and adversely affect our commercial
 prospects.

 We
 will be completely dependent on third parties to manufacture our product candidates for clinical
 and commercial purposes, and the commercialization of our product candidates could be halted,
 delayed or made less profitable if those third parties fail to obtain manufacturing approval
 from the FDA or comparable foreign regulatory authorities fail to provide us with sufficient
 quantities of our product candidates or fail to do so at acceptable quality levels or prices.

 If
 product liability lawsuits are brought against us, we may incur substantial liabilities and
 may be required to limit commercialization of our product candidates.

 Third-party
 coverage and reimbursement and health care cost containment initiatives and treatment guidelines
 may constrain our future revenues.

 It
 is difficult and costly to protect our intellectual property rights, and we cannot ensure
 the protection of these rights.

 Our
 product candidates may infringe the intellectual property rights of others, which could increase
 our costs and delay or prevent our development and commercialization efforts.

 We
 may be subject to claims that we have wrongfully hired an employee from a competitor or that
 we or our employees have wrongfully used or disclosed alleged confidential information or
 trade secrets of their former employers.

 Our business could be adversely affected by conditions in the U.S. and global economies.

 The
 market price of our shares may be subject to fluctuation and volatility. You could lose all
 or part of your investment.

 If
 securities or industry analysts do not continue to publish research or publish inaccurate
 or unfavorable research about our business, our stock price and trading volume could decline.

 Future
 capital raises may dilute your ownership and/or have other adverse effects on our operations.

 If
 we fail to maintain an effective system of internal control over financial reporting, we
 may not be able to accurately report our financial results or prevent fraud.

 We
 may be at an increased risk of securities class action litigation.

 Our
 charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.

 Our
 certificate of incorporation and amended and restated bylaws designate the Court of Chancery
 of the State of Delaware as the sole and exclusive forum for certain litigation that may
 be initiated by our stockholders, which could limit our stockholders' ability to obtain
 a favorable judicial forum for disputes with us or our directors, officers or other employees.

 iv

 PART
I

 Item
1. Business

 Background

 TFF
Pharmaceuticals, Inc. was formed as a Delaware corporation on January 24, 2018 for the purpose of developing and commercializing innovative
drug products based on our patented Thin Film Freezing, or TFF, technology platform. Since our formation, we have focused on the development
of our initial drug candidates, the establishment of strategic relationships with established pharmaceutical companies and certain government
agencies and the pursuit of additional working capital. We have not commenced revenue-producing operations. Unless otherwise indicated,
the terms "TFF Pharmaceuticals," "Company," "we," "us," and "our" refer to
TFF Pharmaceuticals, Inc. and its wholly-owned subsidiaries.

 Overview

 We
are a clinical stage biopharmaceutical company focused on developing and commercializing innovative drug products based on our patented
Thin Film Freezing, or TFF, technology platform. Based on our internal and sponsored testing and studies, we believe that our TFF platform
can significantly improve the solubility of poorly water-soluble drugs, which make up approximately 40% of marketed pharmaceuticals worldwide,
thereby improving the bioavailability and pharmacokinetics of those drugs. We believe that in the case of some new drugs that cannot
be developed due to poor water solubility, our TFF platform has the potential to increase the pharmacokinetic effect of the drug to a
level allowing for its development and commercialization. When administered as an inhaled dry powder for treatment of lung disorders,
we believe the TFF platform formulations can be used to increase efficacy and minimize systemic toxicities and drug-drug interactions.

 As of the date of this report, we have two product candidates in clinical
trials, TFF Tacrolimus Inhalation Powder, or TFF TAC, and TFF Voriconazole Inhalation Powder, or TFF VORI. To date, we have completed
one Phase 1 study in healthy volunteers and one Phase 1b study in patients with asthma exploring the safety, tolerability and pharmacokinetics
of TFF VORI. We have initiated Phase 2 clinical trials of TFF TAC and TFF VORI and, in December 2023, we released positive initial data
from both trials, along with clinical data from our ongoing TFF VORI Expanded Access Program. In March 2024, we announced our decision
to prioritize clinical development of TFF TAC based on positive Phase 2 data and to evaluate strategic options for TFF VORI. We expect
to conclude our Phase 2 clinical trials of TFF VORI in the first half of 2024 and TFF TAC in the second half of 2024.

 We are also actively engaged in the analysis and testing of dry powder
formulations of several drugs and vaccines through parenteral, topical, ocular, pulmonary and nasal applications through feasibility studies
and material transfer agreements with U.S. and international pharmaceutical companies and certain government agencies. We intend to initially
focus on the development of inhaled dry powder drugs for the treatment of pulmonary diseases and conditions. While the TFF platform was
designed to improve solubility of poorly water-soluble drugs generally, the researchers at University of Texas at Austin, or UT, found
that the technology was particularly useful in generating dry powder particles with properties which allow for superior inhalation delivery
to the deep lung, which is an area of high interest in respiratory medicine. We believe that our TFF platform can significantly increase
the number of pulmonary drug products that can be delivered directly to the lung. We intend to design our dry powder drug products for
use with dry powder inhalers, which are generally considered to be the most effective and convenient for patients-friendly of all breath-actuated
inhalers. We plan to focus on developing inhaled dry powder formulations of existing drugs and that will be off-patent by launch and are
suited for lung diseases and conditions, which we believe includes dozens of potential drug candidates, many have a potential market of
over $1 billion.

 We initially intend to directly pursue the development of dry powder
formulations of off-patent drugs through the U.S. Food and Drug Administration's, or FDA's, 505(b)(2) New Drug Application
(NDA) regulatory pathway and in similar regulatory paths in other foreign jurisdictions. The 505(b)(2) pathway contains full reports of
investigations of safety and effectiveness and some of the information required for approval comes from studies not conducted by or for
the NDA applicant. The commercialization of 505(b)(2) products has the potential advantages: significantly lower development costs and
shorter development timelines to approval than traditional new molecular entities. The clinical requirements for a 505(b)(2) drug candidate
can vary widely from product to product and depend primarily on whether the product candidate claims a new indication, provides for a
different route of administration, or claims improved safety compared to the existing approved product, and may include bioequivalence
trials, limited safety and efficacy trials, or full Phase I through III trials. Generally, the clinical requirements for a 505(b)(2) product
candidate may vary depending on the patient population, route of administration, dosing regimen, and other development considerations,
and requires ongoing alignment with the FDA and other applicable health authorities. For example, based on our meetings to date with the
FDA, we believe we need to conduct additional clinical trials beyond the current Phase 2 trials for TFF TAC and TFF VORI prior to filing
for marketing approval for either product.

 TFF
TAC has been awarded orphan drug status. We also believe that in some cases our other dry powder drug products may qualify for the FDA's
orphan drug status.

 We
intend to commercialize our TFF platform and internally developed product candidates through the following means:

 We may out-license our internally developed product candidates, such
as TFF TAC and TFF VORI, or agree to jointly develop such products with a third-party pharmaceutical company;

 Upon
 and subject to receipt of the requisite approvals, we may directly commercialize our internally
 developed product candidates through a combination of our internal direct sales and third-party
 marketing and distribution partnerships; and

 We
 may pursue the licensing of our TFF platform or a joint development arrangement for a particular
 field of use with a third-party pharmaceutical company.

 The
Problem We Address

 Solubility
is an issue that all drugs must address. No matter how active or potentially active a new drug is against a particular molecular target,
if the drug is not available in solution at the site of action, it is most likely not a viable development candidate. Based on independent
third-party studies, at least 75% of drugs under development have poor water solubility, which can prohibit development since most pharmaceutical
companies cannot or will not conduct rigorous preclinical and clinical studies on a molecule that does not have a sufficient pharmacokinetic
profile due to poor water solubility. Water solubility can also be an issue for some marketed drugs. Based on independent third-party
studies, only two-thirds of the drugs on the World Health Organization, or WHO, Essential Drug List were classified as high solubility
and 40% of currently marketed drugs have poor water solubility. A marketed drug with poor water solubility can show performance limitations,
such as incomplete or erratic absorption, poor bioavailability, and slow onset of action. Effectiveness can vary from patient to patient,
and there can be a strong effect of food on drug absorption. Finally, it may be necessary to increase the dose of a poorly soluble drug
to obtain the efficacy required, which can lead to adverse side effects, toxicity issues and increased costs.

 In
addition to water solubility issues generally, certain drugs that target lung conditions and diseases have poor solubility that precludes
them from being delivered by way of inhalation, especially via a breath-actuated inhaler and can only be given orally or intravenously.
Breath-actuated inhalers include dry powder inhalers, metered dose inhalers and some nebulizers. A dry powder inhaler delivers drugs
in a dry powder form directly to the lungs by way of a deep, fast breath on the mouth of the inhaler. A metered dose inhaler uses propellant
to push medication to the lungs. A nebulizer creates a mist that is breathed into the lungs through a mouthpiece. The dry powder inhaler
is generally considered to be the most effective and convenient form of breath-actuated inhaler for all users, other than for those whose
severe condition does not allow them to take a sufficiently deep breath.

 We
believe the primary benefit of a breath-actuated inhaler is its ability to administer a greater portion of the drug dosage directly to
the target site. Dosing directly to the lungs has been shown to allow for better effect with fewer adverse events. It has been shown
that dosing directly to the lungs requires a lower dose of drug, compared to delivery by oral or parenteral routes. While breath-actuated
inhalers allow for a greater portion of the administered drug to reach the treatment site, which should allow for much smaller dosages
compared to oral or intravenous delivery, not all drugs targeting lung conditions and diseases can currently be formulated for use with
a breath-actuated inhaler. We believe there are dozens of these off-patent drugs targeting lung conditions and diseases that can be reformulated
using our TFF platform for delivery by way of breath-actuated inhalers, many of which have a potential market of over $1 billion. This
is the market we intend to initially address through our development of dry powder drugs utilizing our TFF platform.

 Our
Thin Film Freezing Platform

 Our development of dry powder drugs is enabled by technology licensed
to us by the University of Texas at Austin, or UT. Researchers at UT have developed a technology employing a process called Thin Film
Freezing, or TFF. While the TFF platform was designed to improve solubility of poorly water-soluble final drug products generally, the
researchers at UT found that the technology was particularly useful in generating dry powder particles with properties suitable for inhalation
delivery to the deep lung, via dry powder inhaler delivery systems, an area of extreme interest in respiratory medicine. The TFF process
results in a "Brittle Matrix Particle," which exhibits a low bulk density, high surface area, and optionally an amorphous
morphology, allowing the particles to supersaturate when contacting the target site, such as lung tissue. The aerodynamic properties of
the particles are such that the amount of drug deposited to the deep lung may, in some cases, reach ten times that achieved via the oral
route.

 The
TFF process, outlined in the figures below, involves processing a drug or drugs in a solvent system, and it will often include agents
designed to promote dispersion and avoid clumping and excipients to promote adhesion to the target site. The drug solution is then applied
to a cryogenic substrate, such as a liquid nitrogen cooled stainless steel drum. When the drug solution contacts the cryogenic surface
it vitrifies, or flash freezes, resulting in a "drug ice." The solvent system is removed by lyophilization, resulting in
Brittle Matrix Particles, shown in the photographs below, that are highly porous, large surface area, low-density particles. The process
uses industry standard solvents, recognized excipients, a custom-made TFF drum and conventional process equipment.

 We believe our TFF platform is a breakthrough platform technology for
making dry powders from drugs that previously were not candidates for the dry powder inhaler or any breath-actuated inhaler. We believe
our TFF technology opens the way for direct-to-lung delivery of dozens of pharmaceuticals, including the reformulation of existing drugs
into a more safe and convenient inhaled dry powder product. We believe the technology can be used with molecules of all types and works
with existing and off-the-shelf dry powder inhalers without the need for any additional equipment or devices.

 We
believe our TFF platform presents the following high value opportunities:

 Reformulation
 of drugs for lung conditions. Today, many drugs intended for lung conditions are only
 given orally or intravenously due to properties that make them ill-suited for direct delivery
 by inhalers. Given by these routes, typically only a small fraction of the drug reaches the
 lungs, and these drugs may cause unwanted and even deadly side effects. We believe that our
 TFF platform will for the first time allow many of these medications to be formulated into
 the convenient, direct-to-lung dry powder inhaler format, thereby enhancing efficacy and
 reducing or eliminating side effects by directly delivering the drug to the target site.

 Biologics.
 Biopharmaceuticals (or biologics) are by far the fastest growing sector in the pharmaceutical
 industry today. According to GlobalData, the market for biologics was valued at approximately
 $430 billion in 2022 and is expected to reach $720 billion by 2027. Biologics are most commonly
 delivered intravenously, and they can be an especially challenging class of drugs for formulation
 into a dry powder. We believe our TFF platform is uniquely suited to meet many of the challenges
 of biologic formulations, and our UT collaborators have demonstrated, via animal model testing
 and in vitro testing, the effectiveness of the TFF technology to produce dry powder biologics
 with, in some cases, up to 100% activity retained. We intend to explore dry powder forms
 of numerous biological drugs, including drugs intended to treat indications other than lung
 conditions and diseases. We are also pursuing TFF formulations of aluminum salt containing
 vaccines, which by virtue of providing a dry powder formulation would remove the requirement
 for liquid suspension and cold chain.

 Combination
 Drugs. Combination drugs are products with two or more active pharmaceutical ingredients.
 In addition to providing for increased patient compliance with multiple medications, some
 drugs act synergistically and provide for superior benefit when given as a combination. However,
 combining pharmaceutical agents can be challenging, especially for inhalation delivery. Our
 TFF platform has shown the ability to produce fixed dose combinations of many agents in a
 manner that delivers the drugs simultaneously to the site of action in a precise amount.

 The TFF platform was invented and developed by researchers at University
of Texas at Austin, or UT, led by Robert O. Williams, III, Ph. D. UT has granted to us an exclusive worldwide, royalty-bearing license
to the patent rights for the TFF platform in all fields of use. We continue to work with Dr. Williams and his UT team through a series
of Sponsored Research Agreements, or SRAs, with UT. Our SRAs with UT are industry standard sponsored research agreements pursuant to which
UT provides to us certain product formulation, characterization and evaluation services regarding potential product candidates incorporating
our TFF technology in exchange for our payment of UT's expenses and reasonable overhead. The services conducted by UT were carried
out under the direction of Dr. Williams, who is the principal inventor of the TFF technology. The current SRA expires in July 2025 and
is subject to renewal upon mutual agreement of the parties. The SRAs includes customary provisions concerning confidentiality, indemnification
and intellectual property rights, including each party's exclusive ownership of all intellectual property developed solely by them
and the parties' joint ownership of all intellectual property developed jointly. All patented intellectual property rights relating
to the TFF technology developed solely or jointly by UT are subject to our patent license agreement with UT and are included among our
licensed patent rights. Pursuant to those SRAs, Dr. Williams and his team, together with their labs and collaborators, provide expertise
and initial development work, including:

 the
 preliminary development and in vitro evaluation of our drug candidates;

 the
 determination of the key characteristics influencing performance of our product candidates;

 the
 determination of the formulation and manufacturing parameters that influence the key characteristics
 of our product candidates;

 supply
 of bulk dry powders for initial good laboratory practice, or GLP, and non-GLP toxicity studies;

 supportive
 stability for future GLP and GMP studies; and

 the
 evaluation of the in vivo performance of our product candidates in various animal models.

 In
June 2022, we established our own laboratory in Austin, Texas where we undertake certain product formulation, characterization and evaluation
services with regard to potential product candidates. We established our own laboratory to obtain direct ownership over all intellectual
property developed within our laboratory and to address concerns on the part of our partners over potential conflicts with UT.

 Our
Internal Product Candidates

 We
intend to initially focus on the development of inhaled dry powder drugs for the treatment of pulmonary diseases and conditions. Our
dry powder drug product candidates will be designed for use with dry powder inhalers, which are generally considered to be the most effective
of all breath-actuated inhalers. We plan to focus on developing dry powder drugs intended for lung diseases and conditions that are off-patent,
which we believe includes dozens of potential drug candidates, many of which have a potential market of over $1 billion. As of the date
of this report, we have identified and are focusing on two initial drug candidates, each of which are in ongoing Phase 2 clinical
trials.

 Tacrolimus Inhalation Powder, TFF
TAC - For Prophylaxis of Lung Transplant Rejection

 We are developing Tacrolimus Inhalation Powder, TFF TAC, an inhaled
dry powder formulation of tacrolimus, for the prophylaxis of organ rejection in patients receiving lung transplants, in combination with
other immunosuppressants. Prograf (tacrolimus) is currently the first-line calcineurin inhibitor used in the maintenance regimen to prevent
rejection after lung transplantation despite its many significant systemic toxicities. Prograf can be administered as oral capsules, injection
or an oral suspension.

 According to product labeling
and prescribing information for Prograf, serious and otherwise important adverse drug reactions associated with Prograf include lymphoma
and other malignancies, serious infections, new onset diabetes after transplant, nephrotoxicity, neurotoxicity, hyperkalemia, hypertension,
anaphylactic reaction after injection, myocardial hypertrophy, pure red cell aplasia, and thrombotic microangiopathy, including hemolytic
uremic syndrome and thrombotic thrombocytopenic purpura. Of particular concern is nephrotoxicity, which was reported in approximately
52% of kidney transplantation patients and in 40% and 36% of liver transplantation patients receiving Prograf in the U.S. and European
randomized trials, respectively, and in 59% of heart transplantation patients in a European randomized trial.

 Prograf is an off-patent drug and we have developed TFF TAC to be administered
with an oral dry powder inhaler. Because our dry powder version would provide for a high local lung concentration, it is expected that
oral tacrolimus can be stopped or weaned to minimize systemic toxicities while maintaining local lung immune suppression to prevent rejection.
We believe our TFF TAC may have a high likelihood of success in competing in the immunosuppressant market for lung and heart/lung transplants.
TFF TAC has been awarded orphan drug status.

 To date, we have completed
a Phase 1 study in healthy volunteers to assess the safety, tolerability and pharmacokinetics of TFF TAC. As of the date of this report,
a Phase 2 clinical trial of TFF TAC in patients in lung transplant patients is underway. In December 2023, we released positive initial
data from this trial. We expect to conclude our Phase 2 clinical trial of TFF TAC in the second half of 2024.

 Voriconazole
Inhalation Powder, TFF VORI - For the Treatment and Prophylaxis of Invasive Pulmonary Aspergillosis

 We
are developing Voriconazole Inhalation Powder, or TFF VORI, an inhaled dry powder formulation of voriconazole, for the treatment and
prophylaxis of invasive pulmonary aspergillosis, or IPA, a severe fungal pulmonary disease with an overall 84-day all-cause mortality
rate of approximately 30% despite use of standard of care therapy. IPA occurs primarily in patients with severe immunodeficiency, such
as bone marrow and solid organ transplant recipients, and patients with chemotherapy-induced immunodeficiency, hematologic malignancy,
or HIV. To date, the approved antifungals used to treat IPA have been delivered orally or intravenously, where doses required to achieve
efficacy have been associated with systemic toxicities and drug-drug interaction issues, which places a premium on any formulation that
can improve the drugs' efficacy and/or safety and tolerability. Due to the nature of these drugs, it has not been possible to make
formulations for breath-actuated inhalers that might maximize lung concentration while limiting side effects.

 Voriconazole
is an off-patent, first-line drug for the treatment of IPA. It is also used off-label for the prophylaxis of IPA. We believe TFF VORI
represents an opportunity for the treatment and prophylaxis of IPA and other voriconazole responsive pulmonary fungal infections. Direct
delivery of TFF VORI to the lungs has the potential to put the drug exactly where it is needed, while minimizing off target toxic effects.
Voriconazole is currently marketed in Australia, Canada, Europe and the U.S. as VFEND, and is available in several strengths and presentations
for oral delivery or IV infusion. As of the date of this report, the Clinical Practice Guidelines released by the Infectious Diseases
Society of America recommend voriconazole as first-line monotherapy for IPA. However, since the registration of VFEND in Europe and the
U.S. in 2002, several studies have examined the exposure-response relationship with voriconazole. Those studies have identified a relationship
between low voriconazole exposure and higher rates of treatment failure and high voriconazole exposure and higher propensity for neurotoxicity.
Studies have also shown that voriconazole delivered orally or intravenously is associated with a high degree of exposure variability.
In the case of oral delivery, the high degree of variability can be partly explained by the effect of food as high-fat meals decrease
maximum concentrations by 34% to 58%. In addition, voriconazole when delivered orally or intravenously has many serious adverse reactions,
including hepatic toxicity, arrhythmias and QT prolongation, infusion related reactions, visual disturbances, severe cutaneous
adverse reactions, photosensitivity and renal toxicity. Hepatic toxicity, arrythmias and severe cutaneous adverse reactions have been
associated with fatalities. These studies confirm that when administered orally or intravenously, voriconazole provides a narrow therapeutic
window between treatment success and unacceptable treatment toxicity.

 We
believe TFF VORI could be used for the treatment or prophylaxis of IPA and would benefit patients by providing the drug at the site of
invasive fungal infections, while reducing or eliminating the potential serious side effects and fatal toxicities associated with oral
and parenteral voriconazole. We believe the potential enhanced efficacy and/or improved safety and tolerability offered by TFF VORI may
decrease the rate of voriconazole treatment failures and the need for later line therapies with their associated toxicities. We also
believe that the administration of TFF VORI directly to the lungs will remove the variability in exposures due to the effects of food.
In addition, animal and in vitro studies have shown that our TFF prepared dry powder formulation will improve the solubility of voriconazole
compared to oral or intravenous delivery. We believe that the combination of improved solubility and direct-to-lung administration of
TFF VORI will increase exposures in the lung while decreasing systemic exposures and minimizing systemic toxicities and drug-drug interactions.

 To date, we have completed a Phase 1 study in healthy volunteers and
a Phase 1b study in patients with asthma to assess the safety, tolerability and pharmacokinetics of TFF VORI. As of the date of this report,
a Phase 2 clinical trial of TFF VORI in patients with IPA is underway. In December 2023, we released positive initial data from this trial,
along with clinical data from our ongoing TFF VORI Expanded Access Program. In March 2024, we announced our decision to prioritize clinical
development of TFF TAC based on positive Phase 2 data and to evaluate strategic options for TFF VORI. We expect to conclude our Phase
2 clinical trial of TFF VORI in the first half of 2024.

 Other
Potential Dry Powder Products

 Our
business model is to develop proprietary innovative drug product candidates that offer functional or commercial advantages, or both,
to currently available alternatives. In our initial evaluation of the market, we have identified a number of potential drug candidates
that show promise upon initial assessment, including:

 Vaccines.
Vaccines containing aluminum salts make up approximately 35% of all
vaccines. Aluminum salts are incorporated into many vaccine formulations as an adjuvant, which is a substance added to vaccines to enhance
the immune response of vaccinated individuals. A major limitation with these vaccines is that they are fragile and to maintain their efficacy
they must be formulated as liquid suspensions and kept in a cold chain (2 – 8 C) during transport and storage, which is burdensome
and expensive. Also, exposure of the liquid vaccines to either ambient or freezing temperatures will cause a loss of efficacy, including
particle aggregation in the case of freezing. Alternatives to cold chain have been examined, including the introduction of stabilizing
agents in vaccines to prevent aggregation during freezing and the application of novel freezing and drying techniques; however, we believe
that to date none of these techniques have led to an acceptable alternative to cold chain.

 We
have conducted characterization analyses of certain TFF formulated aluminum salt containing vaccines. Our evaluations suggest that aluminum
salt containing vaccines can be successfully converted from liquid suspension into dry powder using our TFF platform and that the dry
powder can later be reconstituted at the time of use without causing particle aggregation or a decrease in immunogenicity. In addition,
the dry powder vaccine did not aggregate after repeated dry-freezing-and-thawing. We believe that the TFF platform may be used to formulate
new vaccines, or to reformulate existing vaccines, that are adjuvanted with aluminum salts into dry vaccine powder without an appreciable
decline in immunogenicity.

 Furthermore, we have formulated
candidate vaccines with non-aluminum adjuvants, including Addavax, and toll-like receptor, or TLR, agonist to boost the immune response.
The exploration of TLR agonist adjuvants with universal influenza antigens was the basis of our June 2023 award of a $2.8 million Direct
to Phase II Small Business Innovation Research, or SBIR, grant from the National Institute of Allergy and Infectious Diseases to continue
development of a novel, pan-flu multivariant mucosal vaccine.

 We have engaged pharmaceutical companies in the vaccine space in discussions
concerning a potential joint development of TFF formulated vaccines. However, we do not intend to pursue the development of our dry powder
formulation of vaccines beyond performance characterization and efficacy data through early animal testing until such time, if ever, as
we obtain a development partner. There can be no assurance, however, that our early testing and development will lead to a commercial
dry powder formulation of vaccines.

 Other
Potential Product Candidates. We have identified a number of additional promising drug candidates for dry powder formulation.
Many of these potential drug candidates are off-patent drugs for which we would directly pursue the development of a dry powder formulation
through the FDA's 505(b)(2) regulatory pathway. We have not commenced meaningful development activities for any of these product
candidates at this time and there can be no assurance that we will pursue any of the product candidates below.

 Candidate

 Intervention

 Indication

 Rapamycin

 Acute

 Lymphangioleiomyomatosis

 Alpha-1-antitrypsin

 Chronic

 Alpha-1antitrypsin
 deficiency

 GM-CSF
 (filgrastim)

 Autoimmune
 pulmonary alveolar proteinosis

 Treprostinil

 Pulmonary
 Arterial Hypertension

 Pembrolizumab
 (Keytruda)

 Acute

 Cancer:
 Non-Small Cell Lung Cancer, Liver, brain, melanoma, metastatic

 Cisplatin

 Acute

 Lung
 or esophageal cancer

 Gemcitabine

 Acute

 Lung
 or esophageal cancer

 Isoniazid/Rifampicin

 Acute

 Tuberculosis

 Amphotericin
 B

 Acute

 Antifungal

 Palivizumab

 Prophylaxis

 Tuberculosis

 Ciprofloxacin

 Acute

 Infection

 Tobramycin

 Acute

 Infection

 Azithromycin

 Acute

 Infection

 Calcium
 channel blockers

 Acute

 Raynaud's
 disease

 Sumatriptin

 Acute

 Migraine

 Stem
 cells

 Lung
 remodeling

 Pneumococcal
 pneumonia; cardiomyopathy

 We
believe that our TFF technology provides a diverse and effective way to develop solutions for lung specific disorders. Many potentially
beneficial drugs for lung diseases and disorders are unable to be dosed in high enough concentrations to provide therapeutic benefit
to the lung due to the systemic nature (oral or IV dosing) of the drug leading to systemic toxicities before the drug reaches therapeutic
levels in the lung. We believe our TFF platform has the potential to take these difficult to formulate drugs and develop products to
be delivered directly to the lung for treatment of lung disorders. This direct dosing to the lung may reduce plasma levels and has the
potential to increase efficacy while reducing side effects.

 Our Initial Intended Regulatory Pathway

 The
505(b)(2) pathway is intended for developing drugs that are based on products that have been previously approved by the FDA or have already
been proven to be safe and effective. A 505(b)(2) product reformulates the known active pharmaceutical ingredient in a new strength or
dosage form, or for a new route of administration. 505(b)(2) products have the advantage of potentially significantly lower development
costs and shorter development timelines versus traditional new molecular entities. We intend to maximize our use of the 505(b)(2) pathway
for our current product candidates.

 A 505(b)(2) new drug application, or NDA, is an application that contains
full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies
not conducted by or for the applicant. This regulatory pathway enables the applicant to rely, in part, on the FDA's findings of
safety and efficacy for an existing product, or published literature, in support of its application. A 505(b)(2) product candidate might
rely on the clinical studies or literature of a previously FDA-approved drug or rely on the literature and physician usage of an FDA-approved
drug for an unapproved use. The clinical requirements for a 505(b)(2) drug candidate can vary widely from product to product depending
primarily on whether the product candidate claims a new indication or claims improved safety compared to the existing approved product,
and may include bioequivalence trials, limited safety and efficacy trials, or full Phase I through III trials. Generally, the clinical
requirement for a new product candidate is typically unknown until the drug sponsor has obtained FDA feedback during the development process.
We believe there is a significant opportunity to pursue dry powder formulations of off-patent drugs using the 505(b)(2) regulatory pathway.

 Because our 505(b)(2) dry powder drug candidates will represent a new
formulation and a new route of administration of an existing drug, we will need to obtain FDA approval of the TFF prepared drug candidate
before we can begin commercialization. However, because we begin our formulation with a drug that has the same active ingredient and that
has previously received FDA approval in another form, we believe that in most cases we should qualify for the FDA's 505(b)(2) regulatory
pathway, which potentially will take less time and expense than the standard FDA approval process. We have obtained the FDA's agreement
that the 505(b)(2) regulatory pathway is applicable for our two initial dry powder drug candidates, TFF TAC and TFF VORI.

 TFF TAC has been awarded orphan drug designation. We also believe that
in some cases our other dry powder drug products may qualify for the FDA's orphan drug designation. Under the Orphan Drug Act, the
FDA may grant orphan designation to a drug intended to treat a rare disease or condition generally affecting fewer than 200,000 individuals
in the United States, or in other limited cases. Orphan drug designation provides for seven years of marketing exclusivity, independent
of patent protection, to the company for the product in that designated orphan disease upon approval. In addition, companies developing
orphan drugs are eligible for certain incentives, including tax credits for qualified clinical testing. Furthermore, an NDA for a product
that has received orphan drug designation is not subject to a prescription drug user fee unless the application includes an indication
other than the rare disease or condition for which the drug was designated.

 Manufacturing

 We have entered into short-term contract manufacturing agreements with
Societal CDMO and Experic, LLC for their provision of certain product testing, development and preclinical and clinical manufacturing
services for our TFF TAC and TFF VORI product candidates. Our agreements with Societal CDMO and Experic include customary provisions concerning
confidentiality, indemnification and intellectual property rights, including our exclusive ownership of all intellectual property developed
severally or jointly relating to our TFF technology. We have not entered into agreements with any contract manufacturers for commercial
supply; however, we believe that Societal CDMO and Experic, among several other manufacturers, have the experience and the capacity to
serve as a commercial contract manufacturer. We believe we will be able to engage a commercial contract manufacturer for our product candidates
in a timely manner at competitive pricing.

 Each of Societal CDMO's and Experic's facilities and services
are conducted in accordance with the FDA's current good manufacturing practices, or cGMPs, regulations. Pursuant to the agreements
with Societal CDMO and Experic, they will support clinical supplies and provide release and stability testing of the respective TFF drug
product candidate. Specific tasks will include:

 Engineering
 review and TFF technology installation;

 Familiarization
 with TFF technology, including powder processing and handling;

 Analytical
 method transfer, development, and validation;

 Conducting
 process development trials and short-term supportive stability analysis;

 Scale-up
 and demonstration batches of the product candidate;

 Manufacture
 and analytical characterization of materials to support toxicology studies, both placebo
 and active;

 Process
 train qualification for cGMP manufacturing;

 Manufacturing
 and release of cGMP batches for clinical trials; and

 Conducting
 formal stability study under the guidelines of International Council for Harmonisation of
 Technical Requirements for Pharmaceuticals for Human Use, or ICH.

 Licenses
and Intellectual Property Rights

 We hold rights to our TFF technology pursuant to a patent license agreement
with the University of Texas at Austin, or UT. UT is the owner of 141 U.S. and international patents and patent applications with claims
covering the TFF platform. Pursuant to the patent license agreement, we hold an exclusive worldwide, royalty-bearing license to the rights
to all current and future patents held by UT relating to the TFF technology, including any divisionals, continuations and extensions,
in all fields of use. The patent license agreement also provides us with a non-exclusive license to all know-how related to the TFF technology.
We have also filed four US and foreign patent applications relating to certain elements of the thin film freezing platform.

 We
are required to pay royalties to UT in the amount of 2% of net sales received by us from the sale of products covered by the licensed
patent rights. We will also be required to make certain milestone payments to UT in connection with the certain regulatory submissions
and approvals and pay fees in connection with any assignments or sublicenses, including:

 $50,000
 upon each approval of an IND for the first indication of each product candidate;

 $100,000
 upon submission of a final Phase II report (or a foreign equivalent) on the first product
 candidate;

 $250,000
 upon submission of a final Phase III report (or a foreign equivalent) on the first product
 candidate;

 $500,000
 upon regulatory approval in the U.S. (or a foreign equivalent) on the first product candidate;
 and

 $500,000
 upon regulatory approval in the U.S. (or a foreign equivalent) on the second product candidate
 or on the second indication of the first product candidate.

 Pursuant
to the UT patent license agreement, UT has agreed to consult with us concerning the development and implementation of a strategy for
the prosecution and maintenance of the licensed patent rights, including any infringement of the licensed patents rights by third parties.
However, UT has retained control and final decision-making authority over such matters. We are responsible for the payment of all fees
and expenses involved in the prosecution and maintenance of the licensed patent rights and are obligated to negotiate in good faith with
UT over the funding and allocation of any recovery involved in any patent infringement action brought to enforce the licensed patent
rights, which are presently scheduled to expire over a period of time commencing in 2023 and ending in 2035.

 The
term of the UT patent license agreement is co-terminus with the licensed patent rights. However, UT has the right to terminate the patent
license agreement, or any part of the licensed patent rights or field of use, in the event of our breach of any provision of the patent
license agreement that remains uncured after UT's written notice of breach and an applicable cure period or in the event we initiate
any proceeding to challenge the validity or scope of the licensed patent rights. The agreement also contains customary representations,
warranties, covenants and indemnities by the parties.

 In
addition to the licensed patent rights, we also rely on our trade secrets, know-how and continuing technological innovation to develop
and maintain our proprietary position. We will vigorously defend our intellectual property to preserve our rights and gain the benefit
of our technological investments.

 Government
Regulations and Funding

 Pharmaceutical
companies are subject to extensive regulation by foreign, federal, state and local agencies, such as the U.S. FDA, and various similar
agencies in most countries worldwide. The manufacture, distribution, marketing and sale of pharmaceutical products are subject to government
regulation in the U.S. and various foreign countries. Additionally, in the U.S., we must follow rules and regulations established by
the FDA requiring the presentation of data indicating that our product candidates are safe and efficacious and are manufactured in accordance
with cGMP regulations. If we do not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing
applications or allow us to manufacture or market our product candidates, and we may be criminally prosecuted. We, our manufacturers
and clinical research organizations, may also be subject to regulations under other foreign, federal, state and local laws, including,
but not limited to, the U.S. Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act and import,
export and customs regulations as well as the laws and regulations of other countries. The U.S. government has increased its enforcement
activity regarding illegal marketing practices domestically and internationally. As a result, pharmaceutical companies must ensure their
compliance with the Foreign Corrupt Practices Act and federal healthcare fraud and abuse laws, including the False Claims Act.

 These
regulatory requirements impact our operations and differ from one country to another, so that securing the applicable regulatory approvals
of one country does not imply the approval of another country. The approval procedures involve high costs and are manpower intensive,
usually extend over many years and require highly skilled and professional resources.

 FDA
Market Approval Process

 The
steps usually required to be taken before a new drug may be marketed in the U.S. generally include:

 completion
 of pre-clinical laboratory and animal testing;

 completion
 of required chemistry, manufacturing and controls testing;

 the
 submission to the FDA of an IND, which must be evaluated and found acceptable by the FDA
 before human clinical trials may commence;

 performance
 of adequate and well-controlled human clinical trials to establish the safety, pharmacokinetics
 and efficacy of the proposed drug for its intended use;

 submission
 and approval of an NDA;

 successful
 pre-approval inspection of the manufacturer and analytical testing facilities; and

 agreement
 with FDA of the label language, including the prescribing information insert.

 Clinical
studies are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter the
study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring safety,
and the efficacy criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must be submitted
to the FDA as part of the IND process.

 Clinical trials are usually conducted in three phases. Phase I clinical
trials are normally conducted in small groups of healthy volunteers to assess safety and tolerability of various dosing regimens and pharmacokinetics.
After a safe dose has been established, in Phase II clinical trials the drug is administered to small populations of patients to look
for initial signs of efficacy via dose ranging studies in treating the targeted disease or condition and to continue to assess safety
and the effective doses to be studied in larger trials in Phase III. In the case of vaccines, the participants are healthy and the signs
of efficacy can be obtained in early Phase I, therefore this Phase is defined as Phase I/II. Phase III clinical trials are usually multi-center,
double-blind controlled trials in hundreds or even thousands of subjects at various sites to assess as fully as possible both the safety
and effectiveness of the drug.

 Clinical
trials must be conducted in accordance with the FDA's good clinical practice, or GCP, requirements. The FDA may order the temporary
or permanent discontinuation of a clinical study at any time or impose other sanctions if it believes that the clinical study is not
being conducted in accordance with FDA requirements or that the participants are being exposed to an unacceptable health risk. An institutional
review board, or IRB, generally must approve the clinical trial design and patient informed consent at study sites that the IRB oversees
and also may halt a study, either temporarily or permanently, for failure to comply with the IRB's requirements, or may impose
other conditions. Additionally, some clinical studies are overseen by an independent group of qualified experts organized by the clinical
study sponsor, known as a data safety monitoring board or committee. This group recommends whether or not a trial may move forward at
designated check points based on access to certain data from the study. The clinical study sponsor may also suspend or terminate a clinical
trial based on evolving business objectives and/or competitive climate.

 As
a product candidate moves through the clinical testing phases, manufacturing processes are further defined, refined, controlled and validated.
The level of control and validation required by the FDA increases as clinical studies progress. We and the third-party manufacturers
on which we rely for the manufacture of our product candidates and their respective components (including the API) are subject to requirements
that drugs be manufactured, packaged and labeled in conformity with cGMPs. To comply with cGMP requirements, manufacturers must continue
to spend time, money and effort to meet requirements relating to personnel, facilities, equipment, production and process, labeling and
packaging, quality control, recordkeeping and other requirements.

 Assuming
completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate
is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment
of a user fee, unless waived. An NDA includes all relevant data available from pertinent nonclinical and clinical studies, including
negative or ambiguous results as well as positive findings, together with detailed information on the chemistry, manufacture, controls
and proposed labeling, among other things. To support marketing approval, the data submitted must be sufficient in quality and quantity
to establish the safety and efficacy of the product candidate for its intended use to the satisfaction of the FDA. The FDA also conducts
a pre-approval inspection of the manufacturer and laboratory prior to approval of the NDA.

 If
an NDA submission is accepted for filing, the FDA begins an in-depth review of the NDA. Under the Prescription Drug User Fee Act, or
PDUFA, the FDA's goal is to complete its initial review and respond to the applicant within ten months of submission, unless the
application relates to an unmet medical need, or is for a serious or life-threatening indication, in which case the goal may be within
six months of NDA submission. However, PDUFA goal dates are not legal mandates and the FDA response often occurs several months beyond
the original PDUFA goal date. Further, the review process and the target response date under PDUFA may be extended if the FDA requests
or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the NDA. The
NDA review process can, accordingly, be very lengthy. During its review of an NDA, the FDA may refer the application to an advisory committee
for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation
of an advisory committee, but it typically follows such recommendations. Data from clinical studies are not always conclusive and the
FDA and/or any advisory committee it appoints may interpret data differently than the applicant.

 After
the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced and tested, it
will either approve commercial marketing of the drug product with prescribing information for specific indications or issue a complete
response letter indicating that the application is not ready for approval and stating the conditions that must be met in order to secure
approval of the NDA. If the complete response letter requires additional data and the applicant subsequently submits that data, the FDA
nevertheless may ultimately decide that the NDA does not satisfy its criteria for approval. The FDA could also approve the NDA with a
Risk Evaluation and Mitigation Strategies, or REMS, plan to mitigate risks, which could include medication guides, physician communication
plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications,
or a commitment to conduct post-marketing testing. Such post-marketing testing may include Phase IV clinical trials and surveillance
to further assess and monitor the product's safety and efficacy after approval. Regulatory approval of products for serious or
life-threatening indications may require that participants in clinical studies be followed for long periods to determine the overall
survival benefit of the drug.

 If
the FDA approves one of our product candidates, we will be required to comply with a number of post-approval regulatory requirements.
We would be required to report, among other things, certain adverse reactions and production problems to the FDA, provide updated safety
and efficacy information and comply with requirements concerning advertising and promotional labeling for any of our product candidates.
Also, quality control and manufacturing procedures must continue to conform to cGMPs after approval, and the FDA periodically inspects
manufacturing facilities to assess compliance with cGMPs, which imposes extensive procedural, substantive and record keeping requirements.
If we seek to make certain changes to an approved product, such as certain manufacturing changes, we may need FDA review and approval
before the change can be implemented.

 While
physicians may use products for indications that have not been approved by the FDA, we may not label or promote the product for an indication
that has not been approved. Securing FDA approval for new indications is similar to the process for approval of the original indication
and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product's safety
and efficacy in the new indication. Even if such studies are conducted, the FDA may not approve any change in a timely fashion, or at
all.

 The
FDA may also require post-marketing testing, or Phase IV testing, as well as risk minimization action plans and surveillance to monitor
the effects of an approved product or place conditions or an approval that could otherwise restrict the distribution or use of the product.

 Section
505(b)(2) New Drug Applications

 We
intend to submit applications for both of our lead therapeutic candidates via the 505(b)(2) regulatory pathway. As an alternate path
for FDA approval of new indications or new formulations of previously-approved products, a company may file a Section 505(b)(2) NDA,
instead of a "stand-alone" or "full" NDA. Section 505(b)(2) of the FDCA was enacted as part of the Drug Price
Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Amendments. Section 505(b)(2) permits the submission
of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for
which the applicant has not obtained a right of reference. Some examples of products that may be allowed to follow a 505(b)(2) path to
approval are drugs that have a new dosage form, strength, route of administration, formulation or indication.

 The
Hatch-Waxman Amendments permit the applicant to rely upon certain published nonclinical or clinical studies conducted for an approved
product or the FDA's conclusions from prior review of such studies. The FDA may require companies to perform additional studies
or measurements to support any changes from the approved product. The FDA may then approve the new product for all or some of the labeled
indications for which the reference product has been approved, as well as for any new indication supported by the Section 505(b)(2) application.
While references to nonclinical and clinical data not generated by the applicant or for which the applicant does not have a right of
reference are allowed, all development, process, stability, qualification and validation data related to the manufacturing and quality
of the new product must be included in an NDA submitted under Section 505(b)(2).

 To
the extent that the Section 505(b)(2) applicant is relying on the FDA's conclusions regarding studies conducted for an already
approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA's
Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book. Specifically, the applicant must certify that: (i) the
required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will
expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed
by the new product. The Section 505(b)(2) application also will not be approved until any non-patent exclusivity, such as exclusivity
for obtaining approval of a new chemical entity, listed in the Orange Book for the reference product has expired. If the Orange Book
certifications outlined above are not accomplished, the Section 505(b)(2) applicant may invest a significant amount of time and expense
in the development of its products only to be subject to significant delay and patent litigation before its products may be commercialized.

 Orphan
Drugs

 Under
the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition affecting fewer than
200,000 individuals in the United States, or in other limited cases. Orphan drug designation (ODD) provides for seven years of market
exclusivity in the orphan designated disease, independent of patent protection, to the company with ODD that brings a particular product
to market. In addition, companies developing orphan drugs are eligible for certain incentives, including tax credits for qualified clinical
testing. In addition, an NDA for a product that has received orphan drug designation is not subject to a prescription drug user fee unless
the application includes an indication other than the rare disease or condition for which the drug was designated.

 To
gain exclusivity, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition
for which it has such designation, the product is entitled to the orphan drug exclusivity, which means that the FDA may not approve any
other applications to market the same active moiety for the same indication for seven years, except in limited circumstances, such as
another drug's showing of clinical superiority over the drug with orphan exclusivity. Competitors, however, may receive approval
of different active moieties for the same indication or obtain approval for the same active moiety for a different indication. In addition,
doctors may prescribe products for off-label uses and undermine our exclusivity. Orphan drug exclusivity could block the approval of
one of our product candidates for seven years if a competitor obtains approval for the same active moiety for the same indication before
we do, unless we are able to demonstrate that our product is clinically superior.

 We
may plan to pursue orphan drug designation and exclusivity for some of our product candidates in the United States, European Union, and
other geographies of interest for specific products. We cannot guarantee that we will obtain orphan drug designation for any products
in any jurisdiction. Even if we are able to obtain orphan drug designation for a product, we cannot be sure that such product will be
approved, that we will be able to obtain orphan drug exclusivity upon approval, if ever, or that we will be able to maintain any exclusivity
that is granted.

 Continuing
Regulatory Compliance

 After
a drug is approved for marketing and enters the marketplace, numerous regulatory requirements continue to apply. These include, but are
not limited to:

 the
 FDA's cGMP regulations require manufacturers, including third party manufacturers,
 to follow stringent requirements for the methods, facilities and controls used in manufacturing,
 processing and packing of a drug product;

 labeling
 regulations and the FDA prohibitions against the promotion of drugs for unapproved uses (known
 as off-label uses), as well as requirements to provide adequate information on both risks
 and benefits during promotion of the drug;

 approval
 of product modifications or use of a drug for an indication other than approved in an NDA;

 adverse
 drug experience regulations, which require us to report information on adverse events during
 pre-market testing and post-approval safety reporting;

 NDA
 quarterly reporting for the first three years, then annual reporting thereafter, of changes
 in chemistry, manufacturing and control or CMC, labeling, clinical studies and findings,
 and toxicology studies from the data submitted in the NDA;

 post-market
 testing and surveillance requirements, including Phase IV trials, when necessary to protect
 the public health or to provide additional safety and effectiveness data for the drug; and

 the
 FDA's recall authority, whereby it can ask, or under certain conditions order, drug
 manufacturers to recall from the market a product that is in violation of governing laws
 and regulation. After a drug receives approval, any modification in conditions of use, active
 ingredient(s), route of administration, dosage form, strength or bioavailability, will require
 a new approval, for which it may be possible to submit a 505(b)(2), accompanied by additional
 clinical data necessary to demonstrate the safety and effectiveness of the product with the
 proposed changes. Additional clinical studies may be required for proposed changes.

 Other
U.S. Healthcare Laws and Compliance Requirements

 For
products distributed in the United States, we will also be subject to additional healthcare regulation and enforcement by the federal
government and the states in which we conduct our business. Applicable federal and state healthcare laws and regulations include the
following:

 The
 federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly
 and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly,
 in cash or in kind, to induce or reward either the referral of an individual for, or the
 purchase, order, or recommendation of, any good or service, for which payment may be made
 under federal healthcare programs such as Medicare and Medicaid;

 The
 Ethics in Patient Referrals Act, commonly referred to as the Stark Law, and its corresponding
 regulations, prohibit physicians from referring patients for designated health services (including
 outpatient drugs) reimbursed under the Medicare or Medicaid programs to entities with which
 the physicians or their immediate family members have a financial relationship or an ownership
 interest, subject to narrow regulatory exceptions, and prohibits those entities from submitting
 claims to Medicare or Medicaid for payment of items or services provided to a referred beneficiary;

 The
 federal False Claims Act imposes criminal and civil penalties, including civil whistleblower
 or qui tam actions, against individuals or entities for knowingly presenting, or causing
 to be presented, to the federal government claims for payment that are false or fraudulent
 or making a false statement to avoid, decrease, or conceal an obligation to pay money to
 the federal government;

 Health
 Insurance Portability and Accountability Act of 1996, imposes criminal and civil liability
 for executing a scheme to defraud any healthcare benefit program and also imposes obligations,
 including mandatory contractual terms, with respect to safeguarding the privacy, security
 and transmission of individually identifiable health information. This statute also prohibits
 knowingly and willfully falsifying, concealing or covering up a material fact or making any
 materially false statement in connection with the delivery of or payment for healthcare benefits,
 items, or services; and

 Analogous
 state laws and regulations, such as state anti-kickback and false claims laws, may apply
 to sales or marketing arrangements and claims involving healthcare items or services reimbursed
 by non-governmental third-party payors, including private insurers, and some state laws require
 pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance
 guidelines and the relevant compliance guidance promulgated by the federal government.

 Reimbursement

 Sales
of our product candidates in the United States may depend, in part, on the extent to which the costs of the product candidates will be
covered by third-party payers, such as government health programs, commercial insurance and managed health care organizations. These
third-party payers are increasingly challenging the prices charged for medical products and services. Additionally, the containment of
health care costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. The
United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment
programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of
price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures,
could further limit our net revenue and results. If these third-party payers do not consider our product candidates to be cost-effective
compared to other available therapies, they may not cover our product candidates after approval as a benefit under their plans or, if
they do, the level of payment may not be sufficient to allow us to sell our product candidates on a profitable basis.

 The
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, imposes new requirements for the distribution and
pricing of prescription drugs for Medicare beneficiaries and includes a major expansion of the prescription drug benefit under Medicare
Part D. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage
of outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage
as a supplement to Medicare Advantage plans. Unlike Medicare Parts A and B, Part D coverage is not standardized. Part D prescription
drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies
which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic
category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part
D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs
of prescription drugs may increase demand for product candidates for which we receive marketing approval. However, any negotiated prices
for our product candidates covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain.
Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage policy
and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar
reduction in payments from non-governmental payers.

 On
February 17, 2009, the American Recovery and Reinvestment Act of 2009 was signed into law. This law provides funding for the federal
government to compare the effectiveness of different treatments for the same illness. A plan for the research will be developed by the
Department of Health and Human Services, the Agency for Healthcare Research and Quality and the National Institutes of Health, and periodic
reports on the status of the research and related expenditures will be made to Congress. Although the results of the comparative effectiveness
studies are not intended to mandate coverage policies for public or private payers, it is not clear how such a result could be avoided
and what if any effect the research will have on the sales of our product candidates, if any such product or the condition that it is
intended to treat is the subject of a study. It is also possible that comparative effectiveness research demonstrating benefits in a
competitor's product could adversely affect the sales of our product candidates. Decreases in third-party reimbursement for our
product candidates or a decision by a third-party payer to not cover our product candidates could reduce physician usage of the product
candidates and have a material adverse effect on our sales, results of operations and financial condition.

 Employees
and Human Capital Resources

 As of the date of this report,
we have 19 employees, including our executive officers, and several consultants providing technical, financial and general administrative
services.

 Our
human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing
and new employees, advisors and consultants. The principal purposes of our equity incentive plans are to attract, retain and reward personnel
through the granting of stock-based compensation awards, in order to increase stockholder value and the success of our company by motivating
such individuals to perform to the best of their abilities and achieve our objectives.

 Available
Information

 Our
website is located at www.tffpharma.com. The information on or accessible through our website is not part of this annual report on Form
10-K. A copy of this annual report on Form 10-K is located at the SEC's Public Reference Room at 100 F Street, NE, Washington,
D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an internet site that contains reports and other information regarding our filings at www.sec.gov.

 Item
1A. Risk Factors

 Investing
in our common stock involves a high degree of risk. Before purchasing our common stock, you should read and consider carefully the following
risk factors as well as all other information contained in this report, including our financial statements and the related notes. Each
of these risk factors, either alone or taken together, could adversely affect our business, operating results and financial condition,
as well as adversely affect the value of an investment in our common stock. There may be additional risks that we do not presently know
of or that we currently believe are immaterial, which could also impair our business and financial position. If any of the events described
below were to occur, our financial condition, our ability to access capital resources, our results of operations and/or our future growth
prospects could be materially and adversely affected and the market price of our common stock could decline. As a result, you could lose
some or all of any investment you may make in our common stock.

 Risks
Related to Our Business

 We will need additional
financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at
all. Our consolidated financial statements have been prepared assuming that we will continue as a going concern. Our ability
to continue as a going concern will require us to obtain additional capital to fund our operations over the twelve months from the date
of this report. As of December 31, 2023, we had total assets of approximately $12.0 million and working capital of approximately $5.2
million. As of December 31, 2023, our liquidity included approximately $5.5 million of cash and cash equivalents. In addition to our
cash on hand at year end, on March 22, 2024, we completed a registered direct offering of 147,500 shares of our common stock for the
gross proceeds of approximately $1.2 million before deducting placement agent fees and other offering expenses. We intend to seek additional
funds through various financing sources, including the sale of our equity and debt securities, licensing fees for our technology and
co-development and joint ventures with industry partners, with a preference toward licensing fees for our technology and co-development
and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable to
us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be
no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory
terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose your
entire investment.

 The report of our independent
registered public accounting firm for the year ended December 31, 2023 states that due to our lack of revenue from commercial operations,
significant losses and need for additional capital, there is substantial doubt about our ability to continue as a going concern.

 We
are a clinical-stage biopharmaceutical company with limited operating history. We are a biopharmaceutical company, formed in January 2018, and have
limited operating history. We have not commenced revenue-producing operations. In 2020 and 2021, we completed Phase I human clinical trials
for our TFF TAC and TFF VORI product candidates and as of the date of this report we have Phase 2 clinical trials underway for both product
candidates. To date, our operations have otherwise consisted of preliminary research and development, drug formulation and characterization
and testing of our initial product candidates. Our limited operating history makes it difficult for potential investors to evaluate our
technology or prospective operations. As a development stage biopharmaceutical company, we are subject to all the risks inherent in the
organization, financing, expenditures, complications and delays involved with a new business. Accordingly, you should consider our prospects
in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development,
especially clinical-stage biopharmaceutical companies such as ours. Potential investors should carefully consider the risks and uncertainties
that a company with a limited operating history will face. In particular, potential investors should consider that we may be unable to:

 successfully
 implement or execute our business plan, or ensure that our business plan is sound;

 successfully
 complete pre-clinical and clinical trials and obtain regulatory approval for the marketing
 of our product candidates;

 successfully
 demonstrate a favorable differentiation between our dry powder candidates and the current
 products on the market;

 our
 ability to commercially license our TFF platform to other pharmaceuticals companies;

 successfully
 contract for the manufacture of our clinical drug products and establish a commercial drug
 supply;

 secure
 market exclusivity and/or adequate intellectual property protection for our product candidates;

 attract
 and retain an experienced management and advisory team; and

 raise
 sufficient funds in the capital markets to effectuate our business plan, including product
 and clinical development, regulatory approval and commercialization for our product candidates.

 Investors
should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. There
can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. If we cannot successfully
execute any one of the foregoing, our business may not succeed and your investment will be adversely affected. You must be prepared to
lose all of your investment.

 We
have a history of significant operating losses and anticipate continued operating losses for the foreseeable future. For the
fiscal years ended December 31, 2023 and 2022, we incurred a net loss of $21.2 million and $31.8 million, respectively. As of December
31, 2023, we had an accumulated deficit of $118.3 million. We expect to continue to incur substantial expenses without any corresponding
revenues unless and until we are able to obtain regulatory approval and successfully commercialize at least one of our product candidates
or enter into one or more commercial license agreements for our TFF platform. However, there can be no assurance we will be able to obtain
regulatory approval for any of our product candidates or enter into a commercial license. Even if we are able to obtain regulatory approval
and subsequently commercialize our product candidates or successfully license our TFF platform, there can be no assurance that we will
generate significant revenues or ever achieve profitability.

 We expect to have significant
research, regulatory and development expenses as we advance our product candidates toward commercialization. As a result, we expect to
incur substantial losses for the foreseeable future, and these losses will be increasing. We are uncertain when or if we will be able
to achieve or sustain profitability. If we achieve profitability in the future, we may not be able to sustain profitability in subsequent
periods. Failure to become and remain profitable may impair our ability to sustain operations and adversely affect our business and our
ability to raise capital. If we are unable to generate positive cash flow within a reasonable period of time, we may be unable to further
pursue our business plan or continue operations, in which case you may lose your entire investment.

 Our
business model is entirely dependent on certain patent rights licensed to us from the University of Texas at Austin, and the loss of
those license rights would, in all likelihood, cause our business, as presently contemplated, to fail. We hold an exclusive worldwide,
royalty bearing license to the patent rights for the TFF platform in all fields of use granted by the University of Texas at Austin,
or UT. Our current business model, which focuses exclusively on the development of drugs using the TFF technology, is based entirely
on the availability of the patent rights licensed to us by UT under the patent license agreement. The patent license agreement requires
us to pay royalties and milestone payments and conform to a variety of covenants and agreements, and in the event of our breach of the
agreement, UT may elect to terminate the agreement. As of the date of this report, we believe we are in compliance with the patent license
agreement and consider our relationship with UT to be excellent. However, in the event of our breach of the patent license agreement
for any reason, and our inability to cure such breach within any cure period or obtain a waiver from UT, we could lose the patent license
agreement, which would result in our loss of all rights to the TFF technology.

 Our business model includes
the licensing of our TFF Platform to other pharmaceutical companies, however, technology licensing in the pharmaceutical industry is a
lengthy process and subject to several risks and factors outside of our control, and we cannot forecast our ability to successfully license
our technology or the length of time it takes to establish a new licensing relationship. Our business model includes the joint
development of dry powder formulations of proprietary drugs owned or licensed by other pharmaceutical companies. As of the date of this
report, we are at various stages of feasibility studies of proprietary drugs owned by multiple U.S. and international pharmaceutical companies.
Our involvement with these pharmaceuticals companies typically begins with our formulation of dry powder versions of one or more proprietary
drugs owned by the pharmaceutical company, followed by a period of feasibility testing and evaluation of the dry powder formulations by
our potential licensee. Assuming the feasibility study is successful, and our dry powder formulation appears to provide the expected benefits,
our ability to convert the successful test into a commercial license of our TFF platform is dependent on a number of risks and factors,
many of which are outside our control, including:

 the
 rate of adoption and incorporation of new technologies, including our TFF platform by members
 of the pharmaceutical industry generally;

 our
 potential licensee's internal evaluation of the economic benefits of marketing a dry
 powder version of a drug that may be currently marketed by the potential licensee, regardless
 of the benefits or advantages of the dry powder version;

 our
 potential licensee's internal budgetary and product development issues, including their
 ability to commit the capital and human resources towards the development and of the dry
 powder product candidate;

 our
 potential licensee's willingness to accept our requirements for upfront fees and ongoing
 royalties; and

 the
 other risks relating to the adoption of our TFF platform discussed through this "Risk
 Factor" section.

 In
addition, we believe that in many cases our potential licensee engages with us in the early-stage feasibility testing as part of their
evaluation of multiple drug and drug delivery options and prior to making any decision or commitment to the development of a dry powder
version of their proprietary drug product. Consequently, even if our TFF platform is successful in early feasibility studies, our potential
licensee may decide, for reasons unrelated to the performance of our TFF platform, not to enter into a license agreement with us. Therefore,
we are unable to predict the degree to which our proposed licensing model will be successful.

 Unfavorable geopolitical
and macroeconomic developments could adversely affect our business, financial condition or results of operations. Our business
could be adversely affected by conditions in the U.S. and global economies, the United States and global financial markets and adverse
geopolitical and macroeconomic developments, including rising inflation rates, the Ukrainian/Russian and Israeli/Palestinian conflicts
and related sanctions, bank failures, and economic uncertainties related to these conditions.

 For
example, inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation
may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit
or otherwise raise capital on acceptable terms, if at all. In response to rising inflation, the U.S. Federal Reserve has raised, and
may again raise, interest rates, which, coupled with reduced government spending and volatility in financial markets, may have the effect
of further increasing economic uncertainty and heightening these risks.

 Additionally,
financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022 and the eruption
of the Israeli/Palestinian conflict in October 2023, including as a result of economic sanctions and export controls against Russia and
countermeasures taken by Russia. The full economic and social impact of these sanctions and countermeasures, in addition to the ongoing
military conflicts in Ukraine and Gaza, which could conceivably expand, remains uncertain; however, both the conflicts and related sanctions
have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, and/or supply chain
continuity, in both Europe and globally, and has introduced significant uncertainty into global markets. While we do not currently operate
in Russia, Ukraine or the Middle East, as the adverse effects of these conflicts continue to develop our business and results of operations
may be adversely affected.

 Our
internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which
could result in a material disruption of our product development programs. Our internal computer systems and those of our current
and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access,
natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system
failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result
in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary
information or other similar disruptions. For example, the loss of clinical trial data could result in delays in our regulatory approval
efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were
to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information,
we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates
could be delayed.

 We
could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of
information maintained in the information systems and networks of our company and our vendors, including personal information of our
employees and study subjects, and company and vendor confidential data. In addition, outside parties may attempt to penetrate our systems
or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information in order
to gain access to our data and/or systems. We may experience threats to our data and systems, including malicious codes and viruses,
phishing and other cyberattack. The number and complexity of these threats continue to increase over time. If a material breach of, or
accidental or intentional loss of data from, our information technology systems or those of our vendors occurs, the market perception
of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged. We could be required
to expend significant amounts of money and other resources to repair or replace information systems or networks. In addition, we could
be subject to regulatory actions and/or claims made by individuals and groups in private litigation involving privacy issues related
to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure
of data, as well as unfair or deceptive practices.

 Although
we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate
threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating
as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the
possibility of these events occurring cannot be eliminated entirely. As we outsource more of our information systems to vendors, engage
in more electronic transactions with payors and patients, and rely more on cloud-based information systems, the related security risks
will increase and we will need to expend additional resources to protect our technology and information systems. In addition, there can
be no assurance that our internal information technology systems or those of our third-party contractors, or our consultants' efforts
to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration
or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security
breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.

 We
currently have no sales and marketing organization. If we are unable to establish satisfactory sales and marketing capabilities or secure
a third-party sales and marketing relationship, we may not be able to successfully commercialize any of our product candidates.
At present, we have no sales or marketing personnel. Upon and subject to initial receipt of the requisite regulatory approvals for one
or more of our drug products, we intend to commercialize our drug products through a combination of our internal direct sales force,
third-party marketing and distribution relationships. In some cases, such as involving the development of combination drugs or the development
of dry powder formulations of patented drugs, we intend to pursue the licensing of our TFF technology or enter into a joint development
arrangement. If we are not successful in recruiting sales and marketing personnel and building a sales and marketing infrastructure or
entering into appropriate collaboration arrangements with third parties, we will have difficulty successfully commercializing our product
candidates, which would adversely affect our business, operating results and financial condition.

 Even
if we enter into third-party marketing and distribution arrangements, we may have limited or no control over the sales, marketing and
distribution activities of these third parties. Our future revenues may depend heavily on the success of the efforts of these third parties.
In terms of establishing a sales and marketing infrastructure, we will have to compete with established and well-funded pharmaceutical
and biotechnology companies to recruit, hire, train and retain sales and marketing personnel. Factors that may inhibit our efforts to
build an internal sales organization or enter into collaboration arrangements with third parties include:

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

 the
 inability of sales personnel to obtain access to or persuade adequate numbers of physicians
 to prescribe any of our product candidates;

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

 unforeseen
 costs and expenses associated with creating an internal sales and marketing organization.

 We
plan to be completely dependent on third parties to manufacture our product candidates, and the commercialization of our product candidates
could be halted, delayed or made less profitable if those third parties fail to obtain manufacturing approval from the FDA or comparable
foreign regulatory authorities fail to provide us with sufficient quantities of our product candidates or fail to do so at acceptable
quality levels or prices. We do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture
our drug candidates for use in our clinical trials or for commercial sales, if any. As a result, we will be obligated to rely on contract
manufacturers, if and when any of our product candidates are approved for commercialization. We have entered into short-term contract
manufacturing agreements with Soceital CDMO and Experic for their provision of certain product testing, development and clinical manufacturing
services for our TFF TAC and TFF VORI product candidates, respectively, and we are currently in discussion with several contract manufacturers
for the commercial supply of any drug candidates we are able to bring to market. However, we have not entered into agreements with any
contract manufacturers for commercial supply and may not be able to engage contract manufacturers for commercial supply of any of our
product candidates on favorable terms to us, or at all, should the need arise.

 The
facilities used by our current and future contract manufacturers to manufacture our product candidates must be approved by the FDA or
comparable foreign regulatory authorities. Such approvals are subject to inspections that will be conducted after we submit a New Drug
Application, or NDA, or Biologics License Application, or BLA, to the FDA or their equivalents to other relevant regulatory authorities.
We will not control the manufacturing process of our product candidates, and will be completely dependent on our contract manufacturing
partners for compliance with Current Good Manufacturing Practices, or cGMPs, for manufacture of both active drug substances and finished
drug products. These cGMP regulations cover all aspects of the manufacturing, testing, quality control, storage, distribution and record
keeping relating to our product candidates. If our contract manufacturers do not successfully manufacture material that conforms to our
specifications and the strict regulatory requirements of the FDA or others, we will not be able to secure or maintain regulatory approval
for product made at their manufacturing facilities. If the FDA or a comparable foreign regulatory authority does not approve these facilities
for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing
facilities, which would significantly impact our ability to develop, manufacture, obtain regulatory approval for or market our product
candidates, if approved. Likewise, we could be negatively impacted if any of our contract manufacturers elect to discontinue their business
relationship with us.

 Our
contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies
for compliance with cGMPs and similar regulatory requirements. We will not have control over our contract manufacturers' compliance
with these regulations and standards. Failure by any of our contract manufacturers to comply with applicable regulations could result
in sanctions being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product
candidates, delays, suspensions or withdrawals of approvals, inability to supply product, operating restrictions and criminal prosecutions,
any of which could significantly and adversely affect our business. In addition, we will not have control over the ability of our contract
manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Failure by our contract manufacturers
to comply with or maintain any of these standards could adversely affect our ability to develop, manufacture, obtain regulatory approval
for or market any of our product candidates, if approved.

 If,
for any reason, these third parties are unable or unwilling to perform we may not be able to locate alternative manufacturers or formulators
or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity
to meet future requirements. If these manufacturers or any alternate manufacturer of finished drug product experiences any significant
difficulties in its respective manufacturing processes for our active pharmaceutical ingredients, or APIs, or finished products or should
cease doing business with us for any reason, we could experience significant interruptions in the supply of any of our product candidates
or may not be able to create a supply of our product candidates at all. Were we to encounter manufacturing difficulties, our ability
to produce a sufficient supply of any of our product candidates might be negatively affected. Our inability to coordinate the efforts
of our third-party manufacturing partners, or the lack of capacity available at our third-party manufacturing partners, could impair
our ability to supply any of our product candidates at required levels. Because of the significant regulatory requirements that we would
need to satisfy in order to qualify a new bulk drug substance or finished product manufacturer, if we face these or other difficulties
with our then current manufacturing partners, we could experience significant interruptions in the supply of any of our product candidates
if we decided to transfer the manufacture of any of our product candidates to one or more alternative manufacturers in an effort to deal
with such difficulties.

 Any
manufacturing problem or the loss of a contract manufacturer could be disruptive to our operations and result in development delays and
lost sales. Additionally, we will rely on third parties to supply the raw materials needed to manufacture our product candidates. Any
such reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced control
over production costs, delivery schedules, reliability and quality. Any unanticipated disruption to the operation of one of our contract
manufacturers caused by problems with suppliers could delay shipment of any of our product candidates, increase our cost of goods sold
and result in lost sales.

 If
product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization
of our product candidates. We will face a potential risk of product liability as a result of the clinical testing of our product
candidates and will face an even greater risk of such liability if we commercialize any of our product candidates. For example, we may
be sued if any product we develop, including any of our product candidates, or any materials that we use in our product candidates allegedly
causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability
claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product,
negligence, strict liability and a breach of warranties. In the U.S., claims could also be asserted against us under state consumer protection
acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required
to limit commercialization of our product candidates. Even successful defense of these claims would require us to employ significant
financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

 decreased
 demand for any of our product candidates or any future products that we may develop;

 injury
 to our reputation;

 failure
 to obtain regulatory approval for our product candidates;

 withdrawal
 of participants in our clinical trials;

 costs
 associated with our defense of the related litigation;

 a
 diversion of our management's time and our resources;

 substantial
 monetary awards to trial participants or patients;

 product
 recalls, withdrawals or labeling, marketing or promotional restrictions;

 the
 inability to commercialize some or all of our product candidates; and

 a
 decline in the value of our stock.

 As
of the date of this report, we have procured insurance coverage for our human clinical trials, which we consider adequate for our current
level of clinical testing and development, however we do not carry product liability insurance. We intend to obtain product liability
insurance at the time we commence commercial sale of our initial product. Our inability to obtain and retain sufficient product liability
insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization
of products we develop. Although we will endeavor to obtain and maintain such insurance in coverage amounts we deem adequate, any claim
that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part,
by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies would also have various exclusions,
and we may be subject to a product liability claim for which we have no coverage. As a result, we may have to pay any amounts awarded
by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not
have, or be able to obtain, sufficient capital to pay such amounts.

 Our
business operations could suffer in the event of information technology systems' failures or security breaches. While we
believe that we have implemented adequate security measures within our internal information technology and networking systems, our information
technology systems may be subject to security breaches, damages from computer viruses, natural disasters, terrorism, and telecommunication
failures. Any system failure or security breach could cause interruptions in our operations in addition to the possibility of losing
proprietary information and trade secrets. To the extent that any disruption or security breach results in inappropriate disclosure of
our confidential information, our competitive position may be adversely affected and we may incur liability or additional costs to remedy
the damages caused by these disruptions or security breaches.

 Sales of counterfeit
versions of our product candidates, as well as unauthorized sales of our product candidates, may have adverse effects on our revenues,
business and results of operations and damage our brand and reputation. Our product candidates may become subject to competition
from counterfeit pharmaceutical products, which are pharmaceutical products sold under the same or very similar brand names and/or having
a similar appearance to genuine products, but which are sold without proper licenses or approvals. Such products divert sales from genuine
products, often are of lower cost and quality (having different ingredients or formulations, for example), and have the potential to damage
the reputation for quality and effectiveness of the genuine product. Obtaining regulatory approval for our product candidates is a complex
and lengthy process. If during the period while the regulatory approval is pending illegal sales of counterfeit products begin, consumers
may buy such counterfeit products, which could have an adverse impact on our revenues, business and results of operations. In addition,
if illegal sales of counterfeits result in adverse side effects to consumers, we may be associated with any negative publicity resulting
from such incidents. Although pharmaceutical regulation, control and enforcement systems throughout the world have been increasingly active
in policing counterfeit pharmaceuticals, we may not be able to prevent third parties from manufacturing, selling or purporting to sell
counterfeit products competing with our product candidates. Such sales may also be occurring without our knowledge. The existence and
any increase in production or sales of counterfeit products or unauthorized sales could negatively impact our revenues, brand reputation,
business and results of operations.

 Risks
Related to Product Regulation

 Our
success is entirely dependent on our ability to obtain the marketing approval for our product candidates by the FDA and the regulatory
authorities in foreign jurisdictions in which we intend to market our product candidates, of which there can be no assurance.
We are not permitted to market our product candidates as prescription pharmaceutical products in the United States until we receive approval
of an NDA from the FDA, or in any foreign countries until we receive the requisite approval from such countries. In the United States,
the FDA generally requires the completion of clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical
development to ensure its quality before an NDA is approved. Of the large number of drugs in development, only a small percentage result
in the submission of an NDA to the FDA and even fewer are eventually approved for commercialization. As of the date of this report, we
have not submitted an NDA to the FDA or comparable applications to other regulatory authorities for any of our product candidates.

 Because our initial dry powder drug candidates, TFF TAC and TFF VORI,
contain active pharmaceutical ingredients from established drugs that are off-patent, we have gained FDA agreement on the 505(b)(2) regulatory
pathway for these product candidates. We believe that our initial drug product candidates will qualify for FDA approval through the FDA's
505(b)(2) regulatory pathway and through similar regulatory paths in other foreign jurisdictions. The clinical requirements for a 505(b)(2)
drug candidate can vary widely from product to product depending primarily on whether the product candidate claims a new indication, provides
for a different route of administration, or claims improved safety compared to the existing approved product, and may include bioequivalence
trials, limited safety and efficacy trials, or full Phase I through III trials. To the extent we claim that our drug product candidates
target a new indication or offer improved safety compared to the existing approved products, and it is our present expectation that we
will do so in many cases, it is likely that we will be required to conduct additional clinical trials, potentially including a full Phase
I through Phase III development program, in order to obtain marketing approval.

 Our
business model is to pursue the development of off-patent drugs for which we would directly pursue the development of a dry powder formulation
through the FDA's 505(b)(2) regulatory pathway; however, not all of our product candidates will target off-patent drugs. For novel
product candidates, we expect to require a full NDA through the FDA's 505(b)(1) regulatory pathway.

 Our
success depends on our receipt of the regulatory approvals described above, and the issuance of such regulatory approvals is uncertain
and subject to a number of risks, including the following:

 the
 demonstration of phase appropriate chemistry, manufacturing, and controls testing;

 the
 results of toxicology studies may not support the filing of an IND and/or NDA for our product
 candidates;

 the
 FDA or comparable foreign regulatory authorities or Institutional Review Boards, or IRB,
 may disagree with the design or implementation of our clinical trials;

 we
 may not be able to provide acceptable evidence of our product candidates' safety and
 efficacy;

 the
 results of our clinical trials may not be satisfactory or may not meet the level of statistical
 or clinical significance required by the FDA, European Medicines Agency, or EMA, or other
 regulatory agencies for us to receive marketing approval for any of our product candidates;

 the
 dosing of our product candidates in a particular clinical trial may not be at an optimal
 level to demonstrate safety and/or efficacy of the product;

 patients
 in our clinical trials may suffer adverse effects for reasons that may or may not be related
 to our product candidates;

 the
 data collected from clinical trials may not be sufficient to support the submission of an
 NDA, BLA or other submission or to obtain regulatory approval in the United States or elsewhere;

 the
 FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes
 or facilities of third-party manufacturers with which we contract for clinical and commercial
 supplies; and

 the
 approval policies or regulations of the FDA or comparable foreign regulatory authorities
 may significantly change in a manner rendering our clinical data insufficient for approval
 of our product candidates.

 The
process of obtaining regulatory approvals is expensive, often takes many years, if approval is obtained at all, and can vary substantially
based upon, among other things, the type, complexity and novelty of the product candidates involved, the jurisdiction in which regulatory
approval is sought and the substantial discretion of the regulatory authorities. Changes in regulatory approval policies during the development
period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for a submitted product application
may cause delays in the approval or rejection of an application. Regulatory approval obtained in one jurisdiction does not necessarily
mean that a product candidate will receive regulatory approval in all jurisdictions in which we may seek approval, but the failure to
obtain approval in one jurisdiction may negatively impact our ability to seek approval in a different jurisdiction. Failure to obtain
regulatory approval for our product candidates for the foregoing, or any other reasons, will prevent us from commercializing our product
candidates, and our ability to generate revenue will be materially impaired.

 Clinical
testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. Our business model depends entirely on the successful development, regulatory
approval and commercialization of our product candidates, which may never occur. In 2020 and 2021, we completed Phase I human clinical
trials for our TFF TAC and TFF VORI product candidates, and in 2022 we initiated Phase 2 clinical trials for both product candidates.
In March 2024, we announced our decision to prioritize clinical development of TFF TAC based on positive Phase 2 data and to evaluate
strategic options for TFF VORI, however, there can be no assurance that the Phase 2 trial for TFF TAC will be successful, we will be successful
in finding a strategic option for TFF VORI or that we will continue clinical development of TFF TAC in support of an approval from the
FDA or comparable foreign regulatory authorities for any indication. We note that most product candidates never reach the clinical development
stage and even those that do commence clinical development have only a small chance of successfully completing clinical development and
gaining regulatory approval. Success in early phases of pre-clinical and clinical trials does not ensure that later clinical trials will
be successful, and interim results of a clinical trial do not necessarily predict final results. A failure of one or more of our clinical
trials for TFF TAC and TFF VORI can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result
of, the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates.
Therefore, our business currently depends entirely on the successful development, regulatory approval and commercialization of our product
candidates, which may never occur.

 Even
if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product and
the revenue that we generate from its sales, if any, may be limited. If approved for marketing, the commercial success of our
product candidates will depend upon each product's acceptance by the medical community, including physicians, patients and health
care payors. The degree of market acceptance for any of our product candidates will depend on a number of factors, including:

 demonstration
 of clinical safety and efficacy;

 relative
 convenience, dosing burden and ease of administration;

 the
 prevalence and severity of any adverse effects;

 the
 willingness of physicians to prescribe our product candidates, and the target patient population
 to try new therapies;

 efficacy
 of our product candidates compared to competing products;

 the
 introduction of any new products that may in the future become available targeting indications
 for which our product candidates may be approved;

 new
 procedures or therapies that may reduce the incidences of any of the indications in which
 our product candidates may show utility;

 pricing
 and cost-effectiveness;

 the
 inclusion or omission of our product candidates in applicable therapeutic and vaccine guidelines;

 the
 effectiveness of our own or any future collaborators' sales and marketing strategies;

 limitations
 or warnings contained in approved labeling from regulatory authorities;

 our
 ability to obtain and maintain sufficient third-party coverage or reimbursement from government
 health care programs, including Medicare and Medicaid, private health insurers and other
 third-party payors or to receive the necessary pricing approvals from government bodies regulating
 the pricing and usage of therapeutics; and

 the
 willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement
 or government pricing approvals.

 If
any of our product candidates are approved, but do not achieve an adequate level of acceptance by physicians, health care payors, and
patients, we may not generate sufficient revenue and we may not be able to achieve or sustain profitability. Our efforts to educate the
medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be
successful.

 In
addition, even if we obtain regulatory approvals, the timing or scope of any approvals may prohibit or reduce our ability to commercialize
our product candidates successfully. For example, if the approval process takes too long, we may miss market opportunities and give other
companies the ability to develop competing products or establish market dominance. Any regulatory approval we ultimately obtain may be
limited or subject to restrictions or post-approval commitments that render our product candidates not commercially viable. For example,
regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve
the price we intend to charge for any of our product candidates, may grant approval contingent on the performance of costly post-marketing
clinical trials, or may approve any of our product candidates with a label that does not include the labeling claims necessary or desirable
for the successful commercialization of that indication. Further, the FDA or comparable foreign regulatory authorities may place conditions
on approvals or require risk management plans or a Risk Evaluation and Mitigation Strategy, or REMS, to assure the safe use of the drug.
Moreover, product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following the initial
marketing of the product. Any of the foregoing scenarios could materially harm the commercial success of our product candidates.

 Even
if we obtain marketing approval for any of our product candidates, we will be subject to ongoing obligations and continued regulatory
review, which may result in significant additional expense. Additionally, our product candidates could be subject to labeling and other
restrictions and withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if
we experience unanticipated problems with our product candidates. Even if we obtain regulatory approval for any of our product
candidates for an indication, the FDA or foreign equivalent may still impose significant restrictions on their indicated uses or marketing
or the conditions of approval, or impose ongoing requirements for potentially costly and time-consuming post-approval studies, including
Phase IV clinical trials, and post-market surveillance to monitor safety and efficacy. Our product candidates will also be subject to
ongoing regulatory requirements governing the manufacturing, labeling, packaging, storage, distribution, safety surveillance, advertising,
promotion, recordkeeping and reporting of adverse events and other post-market information. These requirements include registration with
the FDA, as well as continued compliance with current Good Clinical Practices regulations, or cGCPs, for any clinical trials that we
conduct post-approval. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic
inspections by the FDA and other regulatory authorities for compliance with current cGMPs, requirements relating to quality control,
quality assurance and corresponding maintenance of records and documents.

 The
FDA has the authority to require a REMS as part of an NDA or after approval, which may impose further requirements or restrictions on
the distribution or use of an approved drug, such as limiting prescribing to certain physicians or medical centers that have undergone
specialized training, limiting treatment to patients who meet certain safe-use criteria or requiring patient testing, monitoring and/or
enrollment in a registry.

 With
respect to sales and marketing activities related to our product candidates, advertising and promotional materials must comply with FDA
rules in addition to other applicable federal, state and local laws in the United States and similar legal requirements in other countries.
In the United States, the distribution of product samples to physicians must comply with the requirements of the U.S. Prescription Drug
Marketing Act. Application holders must obtain FDA approval for product and manufacturing changes, depending on the nature of the change.
We may also be subject, directly or indirectly through our customers and partners, to various fraud and abuse laws, including, without
limitation, the U.S. Anti-Kickback Statute, U.S. False Claims Act, and similar state laws, which impact, among other things, our proposed
sales, marketing, and scientific/educational grant programs. If we participate in the U.S. Medicaid Drug Rebate Program, the Federal
Supply Schedule of the U.S. Department of Veterans Affairs, or other government drug programs, we will be subject to complex laws and
regulations regarding reporting and payment obligations. All of these activities are also potentially subject to U.S. federal and state
consumer protection and unfair competition laws. Similar requirements exist in many of these areas in other countries.

 In
addition, if any of our product candidates are approved for a particular indication, our product labeling, advertising and promotion
would be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that
may be made about prescription products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected
in the product's approved labeling. If we receive marketing approval for our product candidates, physicians may nevertheless legally
prescribe our products to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such
off-label uses, we may become subject to significant liability and government fines. The FDA and other agencies actively enforce the
laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses
may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged
improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies
enter into consent decrees of permanent injunctions under which specified promotional conduct is changed or curtailed. If we or a regulatory
agency discover previously unknown problems with a product candidate, such as adverse events of unanticipated severity or frequency,
problems with the facility where the product is manufactured, or we or our manufacturers fail to comply with applicable regulatory requirements,
we may be subject to the following administrative or judicial sanctions:

 restrictions
 on the marketing or manufacturing of the product, withdrawal of the product from the market,
 or voluntary or mandatory product recalls;

 issuance
 of warning letters or untitled letters;

 clinical
 holds;

 injunctions
 or the imposition of civil or criminal penalties or monetary fines;

 suspension
 or withdrawal of regulatory approval;

 suspension
 of any ongoing clinical trials;

 refusal
 to approve pending applications or supplements to approved applications filed by us, or suspension
 or revocation of product license approvals;

 suspension
 or imposition of restrictions on operations, including costly new manufacturing requirements;
 or

 product
 seizure or detention or refusal to permit the import or export of product.

 The
occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue.
Adverse regulatory action, whether pre- or post-approval, can also potentially lead to product liability claims and increase our product
liability exposure.

 Obtaining
and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining
regulatory approval of our product candidates in other jurisdictions. Obtaining and maintaining regulatory approval of our product
candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction,
but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process
in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign
jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures
vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including
additional preclinical studies or clinical trials, as clinical studies conducted in one jurisdiction may not be accepted by regulatory
authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement
before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject
to approval.

 Obtaining
foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and
costs for us and could delay or prevent the introduction of our product candidates in certain countries. If we fail to comply with the
regulatory requirements in international markets and/ or to receive applicable marketing approvals, our target market will be reduced
and our ability to realize the full market potential of our product candidates will be harmed.

 Even
though we may apply for orphan drug designation for a product candidate, we may not be able to obtain orphan drug marketing exclusivity.
 We believe that in some cases our dry powder drug products may qualify for the FDA's orphan drug status. There is no guarantee
that the FDA will grant any future application for orphan drug designation for any of our product candidates, which would make us ineligible
for the additional exclusivity and other benefits of orphan drug designation.

 Under
the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally
a disease or condition that affects fewer than 200,000 individuals in the United States and for which there is no reasonable expectation
that the cost of developing and making a drug available in the United States for this type of disease or condition will be recovered
from sales of the product. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation,
the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does
not convey any advantage in or shorten the duration of regulatory review and approval process. In addition to the potential period of
exclusivity, orphan designation makes a company eligible for grant funding of up to $400,000 per year for four years to defray costs
of clinical trial expenses, tax credits for clinical research expenses and potential exemption from the FDA application user fee.

 If
a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such
designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other applications to market
the same drug for the same indication for seven years, except in limited circumstances, such as (i) the drug's orphan designation
is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another applicant's
product; (iv) the orphan exclusivity holder is unable to assure the availability of a sufficient quantity of drug; or (v) a showing of
clinical superiority to the product with orphan exclusivity by a competitor product. If a drug designated as an orphan product receives
marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity. There can be
no assurance that we will receive orphan drug designation for any of our product candidates in the indications for which we think they
might qualify, if we elect to seek such applications.

 Current
and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates
and affect the prices we may obtain. In the United States and some foreign jurisdictions, there have been a number of legislative
and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval for our product
candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our product candidates. Legislative
and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical
products. We do not know whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations
will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition,
increased scrutiny by the U.S. Congress of the FDA's approval process may significantly delay or prevent marketing approval, as
well as subject us to more stringent product labeling and post-marketing testing and other requirements.

 In
the United States, the Medicare Modernization Act, or MMA, changed the way Medicare covers and pays for pharmaceutical products. The
legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average
sales prices for drugs. In addition, this legislation authorized Medicare Part D prescription drug plans to use formularies where they
can limit the number of drugs that will be covered in any therapeutic class. As a result of this legislation and the expansion of federal
coverage of drug products, we expect that there will be additional pressure to contain and reduce costs. These cost reduction initiatives
and other provisions of this legislation could decrease the coverage and price that we receive for our product candidates and could seriously
harm our business. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage
policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA
may result in a similar reduction in payments from private payors.

 The
Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 or,
collectively, the Health Care Reform Law, is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth
of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance
industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The Health Care Reform Law
revised the definition of "average manufacturer price" for reporting purposes, which could increase the amount of Medicaid
drug rebates to states. Further, the law imposed a significant annual fee on companies that manufacture or import branded prescription
drug products.

 The
Health Care Reform Law remains subject to legislative efforts to repeal, modify or delay the implementation of the law. If the Health
Care Reform Law is repealed or modified, or if implementation of certain aspects of the Health Care Reform Law are delayed, such repeal,
modification or delay may materially adversely impact our business, strategies, prospects, operating results or financial condition.
We are unable to predict the full impact of any repeal, modification or delay in the implementation of the Health Care Reform Law on
us at this time. Due to the substantial regulatory changes that will need to be implemented by Centers for Medicare & Medicaid Services,
or CMS, and others, and the numerous processes required to implement these reforms, we cannot predict which healthcare initiatives will
be implemented at the federal or state level, the timing of any such reforms, or the effect such reforms or any other future legislation
or regulation will have on our business.

 In
addition, other legislative changes have been proposed and adopted in the United States since the Health Care Reform Law was enacted.
We expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that
federal and state governments will pay for healthcare products and services, and in turn could significantly reduce the projected value
of certain development projects and reduce or eliminate our profitability.

 Any
termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates
for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial
prospects. The commencement and completion of clinical studies can be delayed for a number of reasons, including delays related
to:

 the
 FDA or a comparable foreign regulatory authority failing to grant permission to proceed and
 placing the clinical study on hold;

 subjects
 for clinical testing failing to enroll or remain enrolled in our trials at the rate we expect;

 a
 facility manufacturing any of our product candidates being ordered by the FDA or other government
 or regulatory authorities to temporarily or permanently shut down due to violations of cGMP
 requirements or other applicable requirements, or cross-contaminations of product candidates
 in the manufacturing process;

 any
 changes to our manufacturing process that may be necessary or desired;

 subjects
 choosing an alternative treatment for the indications for which we are developing our product
 candidates, or participating in competing clinical studies;

 subjects
 experiencing severe or unexpected drug-related adverse effects;

 reports
 from clinical testing on similar technologies and products raising safety and/or efficacy
 concerns;

 third-party
 clinical investigators losing their license or permits necessary to perform our clinical
 trials, not performing our clinical trials on our anticipated schedule or employing methods
 consistent with the clinical trial protocol, cGMP requirements, or other third parties not
 performing data collection and analysis in a timely or accurate manner;

 inspections
 of clinical study sites by the FDA, comparable foreign regulatory authorities, or IRBs finding
 regulatory violations that require us to undertake corrective action, result in suspension
 or termination of one or more sites or the imposition of a clinical hold on the entire study,
 or that prohibit us from using some or all of the data in support of our marketing applications;

 third-party
 contractors becoming debarred or suspended or otherwise penalized by the FDA or other government
 or regulatory authorities for violations of regulatory requirements, in which case we may
 need to find a substitute contractor, and we may not be able to use some or any of the data
 produced by such contractors in support of our marketing applications;

 one
 or more IRBs refusing to approve, suspending or terminating the study at an investigational
 site, precluding enrollment of additional subjects, or withdrawing its approval of the trial;
 reaching agreement on acceptable terms with prospective contract research organizations,
 or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation
 and may vary significantly among different CROs and trial sites;

 deviations
 of the clinical sites from trial protocols or dropping out of a trial;

 adding
 new clinical trial sites;

 the
 inability of the CRO to execute any clinical trials for any reason; and

 government
 or regulatory delays or "clinical holds" requiring suspension or termination
 of a trial.

 Product
development costs for any of our product candidates will increase if we have delays in testing or approval or if we need to perform more
or larger clinical studies than planned. Additionally, changes in regulatory requirements and policies may occur and we may need to amend
study protocols to reflect these changes. Amendments may require us to resubmit our study protocols to the FDA, comparable foreign regulatory
authorities, and IRBs for reexamination, which may impact the costs, timing or successful completion of that study. If we experience
delays in completion of, or if we, the FDA or other regulatory authorities, the IRB, or other reviewing entities, or any of our clinical
study sites suspend or terminate any of our clinical studies of any of our product candidates, its commercial prospects may be materially
harmed and our ability to generate product revenues will be delayed. Any delays in completing our clinical trials will increase our costs,
slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these
occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead
to, termination or suspension of, or a delay in the commencement or completion of, clinical studies may also ultimately lead to the denial
of regulatory approval of our product candidates. In addition, if one or more clinical studies are delayed, our competitors may be able
to bring competing products to market before we do, and the commercial viability of any of our affected product candidates could be significantly
reduced.

 Third-party
coverage and reimbursement and health care cost containment initiatives and treatment guidelines may constrain our future revenues.
Our ability to successfully market our product candidates will depend in part on the level of reimbursement that government health administration
authorities, private health coverage insurers and other organizations provide for the cost of our product candidates and related treatments.
Countries in which any of our product candidates are sold through reimbursement schemes under national health insurance programs frequently
require that manufacturers and sellers of pharmaceutical products obtain governmental approval of initial prices and any subsequent price
increases. In certain countries, including the United States, government-funded and private medical care plans can exert significant
indirect pressure on prices. We may not be able to sell our product candidates profitably if adequate prices are not approved or coverage
and reimbursement is unavailable or limited in scope. Increasingly, third-party payors attempt to contain health care costs in ways that
are likely to impact our development of products including:

 failing
 to approve or challenging the prices charged for health care products;

 introducing
 reimportation schemes from lower priced jurisdictions;

 limiting
 both coverage and the amount of reimbursement for new therapeutic products;

 denying
 or limiting coverage for products that are approved by the regulatory agencies but are considered
 to be experimental or investigational by third-party payors; and

 refusing
 to provide coverage when an approved product is used in a way that has not received regulatory
 marketing approval.

 Risks
Relating to Our Intellectual Property Rights

 We
are dependent on rights to certain technologies licensed to us. We do not have complete control over these technologies and any loss
of our rights to them could prevent us from selling our product candidates. As noted above, our business model is entirely dependent
on certain patent rights licensed to us by the University of Texas at Austin, or UT. See, " Risk Factors - Risks Relating to
Our Business - Our business model is entirely dependent on certain patent rights licensed to us from the University of Texas at Austin,
and the loss of those license rights would, in all likelihood, cause our business, as presently contemplated, to fail. " Because
we will hold those rights as a licensee, we have limited control over certain important aspects of those patent rights. Pursuant to the
patent license agreement, UT has reserved the right to control all decisions concerning the prosecution and maintenance of all U.S. and
foreign patents, as well as all decisions concerning the enforcement of any actions against potential infringers of the patent rights.
We believe that UT shares a common interest in these matters with us, and UT has agreed to consult with us on the prosecution and enforcement
of possible infringement claims as well as other matters for which UT has retained control. However, there can be no assurance that UT
will agree with our views as to how best to prosecute, maintain and defend the patent rights subject to the patent license agreement.

 It
is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights. Our
commercial success will depend, in part, on our ability to successfully defend the patent rights subject to our patent license agreement
with UT against third-party challenges and successfully enforcing these patent rights against third party competitors. The patent positions
of pharmaceutical companies can be highly uncertain and involve complex legal, scientific and factual questions for which important legal
principles remain unresolved. Changes in either the patent laws or in interpretations of patent laws may diminish the value of our intellectual
property. Accordingly, we cannot predict the breadth of claims that may be allowable or enforceable in the patent applications subject
to the UT patent license agreement. The patents and patent applications relating to our TFF platform and related technologies may be
challenged, invalidated or circumvented by third parties and might not protect us against competitors with similar products or technologies.

 The
degree of future protection afforded by the patent rights licensed to us is uncertain because legal means afford only limited protection
and may not adequately protect our rights, permit us to gain or keep our competitive advantage, or provide us with any competitive advantage
at all. We cannot be certain that any patent application owned by a third party will not have priority over patent applications in which
we hold license rights or that we will not be involved in interference, opposition or invalidity proceedings before United States or
foreign patent offices.

 Additionally,
if UT were to initiate legal proceedings against a third party to enforce a patent covering any of our product candidates, the defendant
could counterclaim that such patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims
alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include alleged failures to meet any of
several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for unenforceability assertions include
allegations that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark
Office, or the U.S. PTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative
bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review
and equivalent proceedings in foreign jurisdictions, e.g. opposition proceedings. Such proceedings could result in revocation or amendment
of UT's patents in such a way that they no longer cover our product candidates or competitive products. The outcome following legal
assertions of invalidity and unenforceability is unpredictable. With respect to validity, for example, we cannot be certain that there
is no invalidating prior art, of which UT and the patent examiner were unaware during prosecution. If a defendant were to prevail on
a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on any
of our product candidates. Such a loss of patent protection would have a material adverse impact on our business.

 In
the future, we may rely on know-how and trade secrets to protect technology, especially in cases in which we believe patent protection
is not appropriate or obtainable. However, know-how and trade secrets are difficult to protect. While we intend to require employees,
academic collaborators, consultants and other contractors to enter into confidentiality agreements, we may not be able to adequately
protect our trade secrets or other proprietary or licensed information. Typically, research collaborators and scientific advisors have
rights to publish data and information in which we may have rights. Enforcing a claim that a third party illegally obtained and is using
any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts are sometimes less willing
to protect trade secrets than patents. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

 If
we fail to obtain or maintain patent protection or trade secret protection for our product candidates or our technologies, third parties
could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate
revenues and attain profitability.

 Our
product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development
and commercialization efforts. Our success depends in part on avoiding infringement of the proprietary technologies of others.
The pharmaceutical industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Identification
of third-party patent rights that may be relevant to our proprietary technology is difficult because patent searching is imperfect due
to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. Additionally,
because patent applications are maintained in secrecy until the application is published, we may be unaware of third-party patents that
may be infringed by commercialization of any of our product candidates or any future product candidate. There may be certain issued patents
and patent applications claiming subject matter that we may be required to license in order to research, develop or commercialize any
of our product candidates, and we do not know if such patents and patent applications would be available to license on commercially reasonable
terms, or at all. Any claims of patent infringement asserted by third parties would be time-consuming and may:

 result
 in costly litigation;

 divert
 the time and attention of our technical personnel and management;

 prevent
 us from commercializing a product until the asserted patent expires or is held finally invalid
 or not infringed in a court of law;

 require
 us to cease or modify our use of the technology and/or develop non-infringing technology;
 or

 require
 us to enter into royalty or licensing agreements.

 Third
parties may hold proprietary rights that could prevent any of our product candidates from being marketed. Any patent-related legal action
against us claiming damages and seeking to enjoin commercial activities relating to any of our product candidates or our processes could
subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market any of our product
candidates or any future product candidates. We cannot predict whether we would prevail in any such actions or that any license required
under any of these patents would be made available on commercially acceptable terms, if at all. In addition, we cannot be sure that we
could redesign our product candidates or any future product candidates or processes to avoid infringement, if necessary. Accordingly,
an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from
developing and commercializing any of our product candidates or a future product candidate, which could harm our business, financial
condition and operating results.

 We
expect that there are other companies, including major pharmaceutical companies, working in the areas competitive to our product candidates
which either has resulted, or may result, in the filing of patent applications that may be deemed related to our activities. If we were
to challenge the validity of these or any issued United States patent in court, we would need to overcome a statutory presumption of
validity that attaches to every issued United States patent. This means that, in order to prevail, we would have to present clear and
convincing evidence as to the invalidity of the patent's claims. If we were to challenge the validity of these or any issued United
States patent in an administrative trial before the Patent Trial and Appeal Board in the U.S. PTO, we would have to prove that the claims
are unpatentable by a preponderance of the evidence. There is no assurance that a jury and/or court would find in our favor on questions
of infringement, validity or enforceability. Even if we are successful, litigation could result in substantial costs and be a distraction
to management.

 We
may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used
or disclosed alleged confidential information or trade secrets of their former employers. As is commonplace in our industry,
we will employ individuals who were previously employed at other pharmaceutical companies, including our competitors or potential competitors.
Although no claims against us are currently pending, we may be subject in the future to claims that our employees or prospective employees
are subject to a continuing obligation to their former employers (such as non-competition or non-solicitation obligations) or claims
that our employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former
employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation
could result in substantial costs and be a distraction to management.

 Our business could be adversely
affected by conditions in the U.S. and global economies. The United States and global financial markets and adverse geopolitical and
macroeconomic developments, including high inflation, the conflicts in Ukraine and the Middle East and related sanctions, bank failures,
and economic uncertainties related to these conditions could adversely affect our business.

 Risks
Related to Owning Our Common Stock

 The
market price of our shares may be subject to fluctuation and volatility. You could lose all or part of your investment. The market
price of our common stock is subject to wide fluctuations in response to various factors, some of which are beyond our control. Since
shares of our common stock were sold in our initial public offering in October 2019 at a price of $125.00 per share, the reported high
and low sales prices of our common stock have ranged from $5.15 to $528.50 through March 22, 2024. The market price of our shares on
the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not
limited to:

 actual
 or anticipated variations in our and our competitors' results of operations and financial
 condition;

 market
 acceptance of our product candidates;

 changes
 in earnings estimates or recommendations by securities analysts, if our shares are covered
 by analysts;

 development
 of technological innovations or new competitive products by others;

 announcements
 of technological innovations or new products by us;

 publication
 of the results of preclinical or clinical trials for our product candidates;

 failure
 by us to achieve a publicly announced milestone;

 delays
 between our expenditures to develop and market new or enhanced products and the generation
 of sales from those products;

 developments
 concerning intellectual property rights, including our involvement in litigation brought
 by or against us;

 regulatory
 developments and the decisions of regulatory authorities as to the approval or rejection
 of new or modified products;

 changes
 in the amounts that we spend to develop, acquire or license new products, technologies or
 businesses;

 changes
 in our expenditures to promote our product candidates;

 our
 sale or proposed sale, or the sale by our significant stockholders, of our shares or other
 securities in the future;

 changes
 in key personnel;

 success
 or failure of our research and development projects or those of our competitors;

 the
 trading volume of our shares; and

 general
 economic and market conditions and other factors, including factors unrelated to our operating
 performance.

 If
securities or industry analysts do not continue to publish research or publish inaccurate or unfavorable research about our business,
our stock price and trading volume could decline. The trading market for our common stock depends in part on the research and
reports that securities or industry analysts publish about us or our business. If industry analysts cease coverage of us, the trading
price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish
inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts
cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common
stock price and trading volume to decline. In addition, independent industry analysts may provide reviews of our product candidates and
our TFF platform's capabilities, as well as those of our competitors, and perception of our offerings in the marketplace may be
significantly influenced by these reviews. We have no control over what these industry analysts report, and because industry analysts
may influence current and potential customers, our brand could be harmed if they do not provide a positive review of our products and
platform capabilities or view us as a market leader.

 Future
capital raises may dilute your ownership and/or have other adverse effects on our operations. If we raise additional capital
by issuing equity securities, our existing stockholders' percentage ownership will be reduced and these stockholders may experience
substantial dilution. If we raise additional funds by issuing debt securities, these debt securities would have rights senior to those
of our common stock and the terms of the debt securities issued could impose significant restrictions on our operations, including liens
on our assets. If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some
rights to our intellectual property or candidate products, or to grant licenses on terms that are not favorable to us.

 We
are an "emerging growth company" under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors. We are an "emerging growth
company," as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not "emerging growth companies"
including, but not limited to:

 not
 being required to comply with the auditor attestation requirements of Section 404 of the
 Sarbanes-Oxley Act;

 reduced
 disclosure obligations regarding executive compensation in our periodic reports and proxy
 statements;

 exemptions
 from the requirements of holding a nonbinding advisory vote on executive compensation and
 stockholder approval of any golden parachute payments; and

 extended
 transition periods available for complying with new or revised accounting standards.

 We
have chosen to take advantage of all of the benefits available under the JOBS Act, including the exemptions discussed above. We cannot
predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common
stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 We
will remain an "emerging growth company" for up to five years, although we will lose that status sooner if our revenues exceed
$1.07 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common
stock that is held by non-affiliates exceeds $700 million as of June 30 in any future year.

 If
we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results or prevent fraud. We are required to provide a report on management's assessment of our internal control over financial
reporting. Once we are neither an emerging growth company nor a non-accelerated filed, we will be required to obtain an attestation from
our independent registered public accounting firm on our internal control report. Effective internal controls over financial reporting
are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed
to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could
cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley
Act, or the subsequent testing by our independent registered public accounting firm when required, may reveal deficiencies in our internal
controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes
to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause
investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common
shares. There is also a risk that neither we nor our independent registered public accounting firm (when applicable in the future) will
be able to conclude within the prescribed timeframe that internal controls over financial reporting is effective as required by Section
404. As a result, investors could lose confidence in our financial and other public reporting, which would harm our business and the
trading price of our common stock.

 We
have not paid dividends in the past and have no immediate plans to pay dividends. We plan to reinvest all of our earnings, to
the extent we have earnings, to cover operating costs and otherwise become and remain competitive. We do not plan to pay any cash dividends
with respect to our securities in the foreseeable future. We cannot assure you that we would, at any time, generate sufficient surplus
cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive
cash dividends on our common stock.

 We
may be at an increased risk of securities class action litigation. Historically, securities class action litigation has often
been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because
biotechnology and pharmaceutical companies have experienced significant stock price volatility in recent years. If we were to be sued,
it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

 Our
charter documents and Delaware law may inhibit a takeover that stockholders consider favorable. The provisions of our second
amended and restated certificate of incorporation, or Certificate, and amended and restated bylaws and applicable provisions of Delaware
law may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions
in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem
to be in their best interests. The provisions in our Certificate and amended and restated bylaws:

 limit
 who may call stockholder meetings;

 do
 not provide for cumulative voting rights; and

 provide
 that all board vacancies may be filled by the affirmative vote of a majority of directors
 then in office, even if less than a quorum.

 In
addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person
who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This restriction lasts for
a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and
may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability
to obtain a control premium could reduce the price of our common stock.

 Our
Certificate and amended and restated bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum
for certain litigation that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable
judicial forum for disputes with us or our directors, officers or other employees. Provisions in our Certificate and amended
and restated bylaws provide that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the
sole and exclusive forum for:

 any
 derivative action or proceeding brought on our behalf;

 any
 action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by
 any of our directors, officers or other employees;

 any
 action asserting a claim against us or any of our directors, officers or other employees
 arising pursuant to any provision of Delaware law or our charter documents; or

 any
 action asserting a claim against us or any of our directors, officers or other employees
 governed by the internal affairs doctrine, but excluding actions to enforce a duty or liability
 created by the Exchange Act or any other claim for which the federal courts have exclusive
 jurisdiction.

 These
exclusive forum provisions do not apply to claims under the Securities Act or the Exchange Act. These exclusive forums provisions, however,
do provide that if no state court located in the State of Delaware has jurisdiction, the federal district court for the District of Delaware
shall be the exclusive forum. By becoming a stockholder in our company, you will be deemed to have notice of and have consented to the
provisions of our Certificate and amended and restated bylaws related to choice of forum, but will not be deemed to have waived our compliance
with the federal securities laws and the rules and regulations thereunder. The choice of forum provisions in our Certificate and amended
and restated bylaws may limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or any of our
directors, officers or other employees, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to
find the choice of forum provision contained in our Certificate and amended and restated bylaws to be inapplicable or unenforceable in
an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business,
results of operations and financial condition.

 Item
1B. Unresolved Staff Comments

 Not

 Item
1C. Cybersecurity

 Risk
Management and Strategy. We employ processes for assessing, identifying, and managing material risks from cybersecurity threats that
are incorporated into our overall risk management system. These items are designed to help protect our information assets from internal
and external threats and protect the integrity and confidentiality of our data. Our system includes procedural and technical safeguards,
response plans, and reviews of our policies. We engage various external entities, including consultants, to improve and enhance our cybersecurity
oversight. We provide all employees and consultants with cybersecurity and prevention training including timely and relevant topics covering
social engineering, phishing, mobile security, and data protection and the need for reporting incidents and suspicious events immediately.
With respect to third parties that assist in our cybersecurity oversight, we obtain reports to assess the security of their systems and
processes. We engage in ongoing monitoring of all third-party providers to ensure compliance with our cybersecurity standards.

 Although
we develop and maintain systems and controls designed to prevent cybersecurity
threats from occurring, and we have a process to identify and mitigate threats, the development
and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change
and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the possibility of these
events occurring cannot be eliminated entirely. As we outsource more of our information systems to vendors, engage in more electronic
transactions with service providers and patients, and rely more on cloud-based information systems, the related security risks will increase
and we will need to expend additional resources to protect our technology and information systems. In addition, there can be no assurance
that our internal information technology systems or those of our third-party contractors, or our consultants' efforts to implement
adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or
loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach,
industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.

 As
of the date of this report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity
incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of
operations, or financial condition.

 Governance.
Our senior management team conducts the regular assessment and management of material risks from cybersecurity threats, including review
with our IT team and third-party service providers. All employees and consultants are directed to report to our senior management any
irregular or suspicious activity that could indicate a cybersecurity threat or incident. The Audit Committee of our Board of Directors
evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers and independent
registered accounting firm.

 Item
2. Properties

 We lease approximately 1,000
square feet of office space in Fort Worth, Texas at the rate of $4,100 per month. The lease has no term and is on a month-to-month basis.
We also lease approximately 3,750 square feet of lab space in Austin, Texas at a current rate of $7,163 per month. The lease agreement
is for three years and expires on May 31, 2025. The lease has an additional three-year option for renewal.

 Item
3. Legal Proceedings

 As
of the date of this report, there are no legal proceedings to which we or our properties are subject. We may be involved, from time to
time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties
and outcomes and are not predictable with assurance.

 Item
4. Mine Safety Disclosures

 Not

 PART
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

 Market
Information

 Our
common stock has traded on the NASDAQ Stock Market under the symbol "TFFP."

 Holders
of Record

 As
of March 22, 2024, there were six holders of record of our common stock.

 Dividend
Policy

 We
have never declared or paid cash dividends on our common stock. We presently intend to retain earnings to finance the operation and expansion
of our business.

 Equity
Compensation Plan Information

 We
have adopted the TFF Pharmaceuticals, Inc. 2018 Stock Incentive Plan ("2018 Plan") providing for the grant of non-qualified
stock options and incentive stock options to purchase shares of our common stock and for the grant of restricted and unrestricted share
grants. We reserved 131,379 shares of our common stock under the 2018 Plan. All officers, directors, employees and consultants to our
company are eligible to participate under the 2018 Plan. The purpose of the 2018 Plan is to provide eligible participants with an opportunity
to acquire an ownership interest in our company.

 In
September 2021, we adopted the TFF Pharmaceuticals, Inc. 2021 Stock Incentive Plan ("2021 Plan"), which was also approved
by our stockholders at our annual meeting of stockholders held on November 4, 2021. The 2021 Plan provides for the grant of non-qualified
stock options and incentive stock options to purchase shares of our common stock, the grant of restricted and unrestricted share awards
and grant of restricted stock units. We reserved 168,000 shares of our common stock under the 2021 Plan. All of our employees and any
subsidiary employees (including officers and directors who are also employees), as well as all of our nonemployee directors and other
consultants, advisors and other persons who provide services to us will be eligible to receive incentive awards under the 2021 Plan.

 The
following table sets forth certain information as of December 31, 2023 about our stock plans under which our equity securities are authorized
for issuance.

 Plan Category

 (a)
 Number of Securities to be

 Issued Upon Exercise of

Outstanding Options

 (b)
 Average Exercise Price of

 Outstanding Options

 (c)
 Number of Securities Remaining

 Available for Future Issuance

 Under Equity Compensation

 Plans (Excluding Securities

 Reflected In Column (a))

 Equity compensation plans approved by security holders

 233,340

 $
 74.63

 46,007

 Equity compensation plans not approved by security holders

 -

 -

 -

 Total

 233,340

 $
 74.63

 46,007

 Unregistered
Sales of Equity Securities and Use of Proceeds

 None.

 Item
6. Reserved

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 We
were formed as a Delaware corporation on January 24, 2018 for the purpose of developing and commercializing innovative drug products
based on our patented Thin Film Freezing, or TFF, technology platform". Since our formation, we have focused on the development
of our initial drug candidates, the establishment of strategic relationships with established pharmaceutical companies for the licensing
of our TFF technology platform and the pursuit of additional working capital. We have not commenced revenue-producing operations.

 Except
as otherwise indicated, all share and share price this report gives effect to a reverse stock split effected on December 19, 2023 at
a ratio of one for 25.

 Since
January 1, 2022, we have engaged in the following financing transactions:

 ATM
Offering. On June 10, 2022, we entered into an Open Market Sale Agreement with Jefferies LLC, as agent, under which we may offer
and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $35.0 million
in an "at-the-market" offering, to or through the agent. From July 2022 through September 30, 2022, we sold 4,160 shares
of our common stock at average price of $149.00 per share resulting in net proceeds of approximately $405,000, after deducting sales
agent commissions and offering expenses. During 2023, we sold 7,062 shares of its common stock through the ATM offering at an average
price of $8.80 per share resulting in net proceeds of approximately $60,000. We terminated our Open Market Sale Agreement with Jefferies LLC in March 2024.

 November
2022 Public Offering. In November 2022, we completed a public offering, selling 371,304 shares of common stock and warrants to purchase
up to 185,652 shares of common stock at an offering price of $28.75 per share. We received gross proceeds of approximately $10,675,000.
In addition, we granted the underwriter a 45-day option to purchase an additional 15% of the number of shares of common stock and warrants
at the public offering price, less underwriting discounts and commissions. The option was exercised in November 2022 and the underwriter
purchased an additional 55,696 shares of common stock and warrants to purchase up to 27,848 shares of common stock and we received additional
gross proceeds of approximately $1,601,251. We received net proceeds of $11,235,626, after deducting underwriting discounts and offering-related
expenses.

 August
2023 Public Offering. On August 17, 2023, we completed a public offering, selling 915,216 shares of common stock, including 119,376
shares of common stock issued pursuant to the full exercise by the underwriter of its over-allotment option, at an offering price of
$6.25 per share. The Company received gross proceeds of approximately $5.7 million. The Company received net proceeds of approximately
$5.1 million, after deducting underwriting discounts and offering-related expenses.

 March 2024 Registered Direct
Offering. On March 22, 2024, we completed a registered direct offering, selling 147,500 shares of common stock and warrants to purchase
up to 147,500 shares of common stock at an offering price of $8.00 per share. The warrants are immediately exercisable upon issuance at
an exercise price of $8.00 per share and will expire five and one-half years following the date of issuance. We received gross proceeds
of approximately $1.2 million before deducting placement agent fees and other offering expenses.

 Results
of Operations

 We were formed in January
2018 and have not commenced revenue-producing operations. To date, our operations have consisted of the development and early-stage testing,
Phase 1 human clinical trials of our initial product candidates and the current Phase 2 clinical trials of our TFF TAC and TFF VORI.
In March 2024, we announced our decision to prioritize clinical development of TFF TAC based on positive Phase 2 data and to evaluate
strategic options for TFF VORI. We do not expect that our deemphasis of the development of TFF VORI will materially impact the trend
in our expenditures on clinical development. We have generated limited grant revenue and non-recurring revenue under feasibility and
material transfer agreements.

 The
following table summarizes our results of operations with respect to the items set forth below for the fiscal years ended December 31,
2023 and 2022 together with the percentage change for those items.

 Years ended December 31,

 2023

 2022

 Increase
 (Decrease)

 Revenue

 $
 733,871

 $
 495,805

 $
 238,066

 %

 Research and development expense

 $
 12,061,422

 $
 18,496,340

 $
 (6,434,918
)

 (35
)%

 General and administrative expense

 10,567,111

 13,796,255

 (3,229,144
)

 (23
)%

 Total operating expense

 $
 22,628,533

 $
 32,292,595

 $
 (9,664,062
)

 (30
)%

 We have entered into feasibility
and material transfer agreements with third parties that provide us with funds in return for certain research and development activities.
On June 23, 2023, we were awarded a Direct to Phase II Small Business Innovation Research, or SBIR, grant of approximately $2.8 million
to continue development of a novel, pan-flu multivariant mucosal vaccine. During the years ended December 31, 2023 and 2022, we recognized
$733,871 and $495,805, respectively, of revenue from the feasibility and material transfer agreements and the SBIR grant. The costs associated
with the feasibility and material transfer agreements and SBIR grant are expensed as incurred and are reflected as a component of research
and development expense.

and development expense was as follows for the years indicated:

 Years ended December 31,

 2023

 2022

 Increase
 (Decrease)

 Manufacturing and related

 $
 4,756,145

 $
 7,870,281

 $
 (3,114,136
)

 (40
)%

 Clinical and preclinical

 2,647,397

 7,509,857

 (4,862,460
)

 (65
)%

 Payroll, stock-based compensation and related

 3,679,251

 2,244,889

 1,434,362

 %

 Other

 978,629

 871,313

 107,316

 %

 Total research and development expense

 $
 12,061,422

 $
 18,496,340

 $
 (6,434,918
)

 (35
)%

and development expense decreased during the year ended December 31, 2023 compared to the year ended December 31, 2022 due to a $4.9
million reduction in clinical and preclinical expenses and a $3.1 million reduction in manufacturing and related expenses, offset by
increases of $1.4 million payroll expense and $0.1 million other research and development expenses. Research and development expenses
during the year ended December 31, 2022 were impacted by the initial set-up costs for the Phase 2 trial of TFF VORI, completion of the
Phase 1 trial of TFF Niclosamide and the suspension of the joint development and collaboration agreement with Augmenta Bioworks, Inc.

and administrative expense was as follows for the years indicated:

 Years ended December 31,

 2023

 2022

 Increase
 (Decrease)

 Payroll, stock-based compensation and related

 $
 4,901,101

 $
 5,495,343

 $
 (594,242
)

 (11
)%

 Insurance and office expense

 2,035,540

 2,856,559

 (821,019
)

 (29
)%

 Professional fees and patent expense

 2,009,770

 2,482,158

 (472,388
)

 (19
)%

 Market research

 624,274

 1,207,569

 (583,295
)

 (48
)%

 Consulting

 562,625

 1,333,541

 (770,916
)

 (58
)%

 Other

 433,801

 421,085

 12,716

 %

 Total general and administrative expense

 $
 10,567,111

 $
 13,796,255

 $
 (3,229,144
)

 (23
)%

 General and administrative
expense decreased during the year ended December 31, 2023 compared to the year ended December 31, 2022 due to decreases of $0.8 million
in insurance and office expenses, $0.8 million in consulting expenses, $0.6 million in payroll related expense, $0.6 million in market
research expenses and $0.5 million in professional fees and patent expenses. The decrease in general and administrative expenses was due
in part to strategic cost reduction efforts implemented by management.

 The
following table summarizes our other income and interest income, net for the years ended December 31, 2023 and 2022 together with the
percentage change for those items.

 Years ended December 31,

 2023

 2022

 Increase
 (Decrease)

 Interest income, net

 $
 266,188

 $
 26,728

 $
 239,460

 %

 Change in fair value of note receivable

 $
 385,243

 $
 -

 $
 385,243

 %

 Interest
income increased during fiscal 2023 due to the interest accrued on the note receivable and increased interest earned on cash equivalents.
Other income during fiscal 2023 is the change in the fair value of the note receivable.

 We
incurred a net loss of $21.2 million and $31.8 million for the fiscal years ended December 31, 2023 and 2022, respectively.

 Financial
Condition

 As of December 31, 2023, we
had total assets of approximately $12.0 million and working capital of approximately $5.2 million. As of December 31, 2023, our liquidity
included approximately $5.5 million of cash and cash equivalents. In addition to our cash on hand at year end, on March 22, 2024, we completed
a registered direct offering of 147,500 shares of our common stock for the gross proceeds of approximately $1.2 million before deducting
placement agent fees and other offering expenses.

 As of the date of this report,
we will need additional capital to fund our operations over the 12 months following the date of this report. We intend to seek additional
funding through various financing sources, including the sale of our equity and/or debt securities, and/or licensing fees for our technology
and co-development and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan
that may enable us to achieve our product development goals with a smaller amount of capital. However, there can be no guarantees that
such funds, including any potential funds through the sale of our equity securities, it will be available on commercially reasonable terms,
if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be
unable to continue operations, in which case you may lose your entire investment. Accordingly, management believes that there is substantial
doubt regarding our ability to continue as a going concern through the next 12 months from the date of this filing.

 Cash
Flows

 The
following table sets forth a summary of our cash flows for the years ended December 31, 2023 and 2022:

 2023

 2022

 Net cash used in operating activities

 $
 (16,038,195
)

 $
 (27,342,160
)

 Cash used in investing activities

 (94,750
)

 (1,551,326
)

 Cash flows provided by financing activities

 5,013,412

 11,751,003

 Effect of exchange rate changes

 (14,669
)

 (39,874
)

 Net change in cash and cash equivalents

 $
 (11,134,202
)

 $
 (17,182,357
)

 The decrease in cash used
in operating activities is primarily a result of a lower net loss during 2023 compared to 2022. The decrease in cash used in investing
activities is related to reduced purchases of property and equipment during 2023 compared to 2022. The financing activities for 2023 consist
of the August 2023 public offering and proceeds from the ATM offering, offset by costs incurred related to the ATM. The financing activities
for 2022 primarily consist of the November 2022 public offering and proceeds from the ATM offering.

 Critical
Accounting Policies and Estimates

 Our
consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America,
or GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, costs and expenses in our consolidated financial statements. We base our estimates
on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates
under different assumptions or conditions.

 While
our significant accounting policies are described in more detail in Note 3 to our consolidated financial statements included herein,
we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our
consolidated financial statements.

 Critical Accounting Policies

 Research and Development Expenses and Related
Prepaid and Accrued Expenses

 As part of the process of
preparing our consolidated financial statements, we are required to estimate our research and development expenses as of each balance
sheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services
that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service
when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our research and development expenses
as of each balance sheet date based on facts and circumstances known to us at that time. The significant estimates in our research and
development expenses include the costs incurred for services performed by our vendors in connection with services for which we have not
yet been invoiced. We base our expenses related to research and development activities on our estimates of the services received and efforts
expended pursuant to quotes and contracts with vendors that conduct research and development on our behalf. The financial terms of these
agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.

 For the majority of our service
providers, payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development
expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended
in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual
or prepaid expense accordingly. Advance payments for goods and services that will be used in future research and development activities
are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

 Although we do not expect
our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed
differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in
any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually
incurred.

 Critical Accounting Estimates

 Stock-Based
Compensation

 We
compute stock-based compensation in accordance with authoritative guidance. We use the Black-Scholes-Merton option-pricing model to determine
the fair value of its stock options. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market
value of our common stock, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others.
These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside our
control.

 As
a result, if other assumptions had been used, stock-based compensation cost, as determined in accordance with authoritative guidance,
could have been materially impacted. Furthermore, if we use different assumptions on future grants, stock-based compensation cost could
be materially affected in future periods.

 For
grants of our common stock, we use the closing stock price on the date of grant as the fair value of the common stock.

 Fair
Value Option - Convertible Note Receivable

 We
have elected to measure our convertible note receivable using the fair value option as permitted under applicable accounting guidance.
Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract
and derivative due to change in the fair value will be reflected in other income (expense), net in the consolidated statements of operations.
Interest accrues on the unpaid principal balance on a quarterly basis and is recognized in interest income in the consolidated statements
of operations.

 The
decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument
and is irrevocable once elected. Pursuant to this guidance, assets and liabilities are measured at fair value based, in part, on general
economic and stock market conditions and those characteristics specific to the underlying investments. The carrying value is adjusted
to estimated fair value at the end of each quarter, required to be reported separately in our consolidated balance sheets from those
instruments using another accounting method.

 To
estimate the fair value of the convertible note receivable requires management to utilize unobservable inputs, such as the equity value
of Augmenta, the timing and probability of future financing events, optional conversion to common stock, and repayment at maturity. If
these estimates were changed, our change in fair value of the convertible note receivable could differ materially.

 Item
7A. Quantitative and Qualitative Disclosures About Market Risk

 Not

 Item
8. Financial Statements and Supplementary Data

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 00688)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022

 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 F- 1

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Stockholders and Board of Directors of

 TFF Pharmaceuticals, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of TFF Pharmaceuticals, Inc. (the "Company") as of December 31, 2023 and 2022, the related consolidated statements
of operations and comprehensive loss, stockholders' equity and cash flows for each of the two years in the period ended December
31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles
generally accepted in the United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has not
generated revenue from commercial operations since inception, has incurred significant losses and needs to raise additional capital to
fund its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ Marcum llp

 Marcum llp

 We have served as the Company's auditor since 2018.

 New York, NY

 F- 2

 TFF

BALANCE SHEETS

 31,

 2023

 2022

 ASSETS

 Current assets:

 Cash
 and cash equivalents

 $
 5,478,113

 $
 16,612,315

 and development tax incentive receivable

 433,852

 186,507

 Prepaid
 assets and other current assets

 1,678,353

 2,226,344

 Total
 current assets

 7,590,318

 19,025,166

 lease right-of use asset, net

 119,529

 196,044

 Property
 and equipment, net

 1,999,781

 3,078,342

 Note
 receivable - Augmenta

 2,310,000

 1,812,975

 Other
 assets

 7,688

 7,688

 Total
 assets

 $
 12,027,316

 $
 24,120,215

 LIABILITIES
 AND STOCKHOLDERS' EQUITY

 Current
 liabilities:

 Accounts
 payable

 $
 958,442

 $
 919,607

 liabilities

 1,285,586

 4,430

 Deferred
 research grant revenue

 101,000

 126,000

 Current
 portion of operating lease liability

 83,512

 80,625

 Total
 current liabilities

 2,428,540

 1,130,662

 lease liability, net of current portion

 31,742

 110,094

 Total
 liabilities

 2,460,282

 1,240,756

 Commitments
 and contingencies (see Note 5)

 Stockholders'
 equity:

 Common stock; $ 0.001 par value, 180,000,000 shares and 45,000,000 authorized as of December 31, 2023 and 2022, respectively; 2,370,000 and 1,447,722 shares issued and outstanding as of December 31, 2023 and 2022, respectively

 2,370

 1,448

 Additional
 paid-in capital

 128,044,509

 120,105,728

 Accumulated
 other comprehensive loss

 ( 148,192
)

 ( 139,295
)

 Accumulated
 deficit

 ( 118,331,653
)

 ( 97,088,422
)

 Total
 stockholders' equity

 9,567,034

 22,879,459

 Total
 liabilities and stockholders' equity

 $
 12,027,316

 $
 24,120,215

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

 F- 3

 TFF

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 Years
 Ended December 31,

 2023

 2022

 CONSOLIDATED STATEMENTS
 OF OPERATIONS

 Revenue

 $
 733,871

 $
 495,805

 expenses:

 and development

 12,061,422

 18,496,340

 and administrative

 10,567,111

 13,796,255

 Total
 operating expenses

 22,628,533

 32,292,595

 Loss
 from operations

 ( 21,894,662
)

 ( 31,796,790
)

 Other
 income (expense):

 Interest
 income, net

 266,188

 26,728

 in fair value of note receivable

 385,243

 -

 Total
 other income, net

 651,431

 26,728

 Net
 loss

 $
)

 $
)

 Net loss per share, basic and diluted

 $
 ( 11.85
)

 $
 ( 26.49
)

 Weighted average common shares outstanding, basic and diluted

 1,792,551

 1,199,191

 STATEMENTS OF COMPREHENSIVE LOSS

 Net
 loss

 $
)

 $
)

 Other
 comprehensive loss:

 currency translation adjustments

 ( 8,897
)

 ( 90,374
)

 Comprehensive
 loss

 $
 ( 21,252,128
)

 $
 ( 31,860,436
)

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

 F- 4

 TFF

STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 Common
 Stock

 Additional

 Paid in

 Accumulated

 Other
 Comprehensive

 Accumulated

 Total

 Stockholders'

 Shares

 Amount

 Capital

 Loss

 Deficit

 Equity

 Balance,
 January 1, 2022

 1,014,870

 $
 1,015

 $
 104,103,325

 $
 ( 48,921
)

 $
 ( 65,318,360
)

 $
 38,737,059

 Sale
 of common stock, net of offering costs

 4,160

 404,551

 -

 -

 404,555

 Sales
 of common stock and warrants through public offering, net of offering costs

 427,000

 11,235,199

 -

 -

 11,235,626

 Issuance
 of common stock for stock option exercises

 1,692

 110,820

 -

 -

 110,822

 Stock-based
 compensation

 -

 -

 4,251,833

 -

 -

 4,251,833

 currency translation adjustment

 -

 -

 -

 ( 90,374
)

 -

 ( 90,374
)

 Net
 loss

 -

 -

 -

 -

)

)

 Balance, December
 31, 2022

 1,447,722

 1,448

 120,105,728

 ( 139,295
)

 ( 97,088,422
)

 22,879,459

 Sales
 of common stock through the at-the-market offering

 7,062

 60,258

 -

 -

 60,265

 Costs
 related to the at-the-market offering

 -

 -

 ( 108,700
)

 -

 -

 ( 108,700
)

 Sales
 of common stock and in public offering, net of offering costs

 915,216

 5,063,807

 -

 -

 5,064,722

 Cash
 paid for fractional shares resulting from reverse stock split

 -

 -

 ( 2,875
)

 -

 -

 ( 2,875
)

 Stock-based
 compensation

 -

 -

 2,926,291

 -

 -

 2,926,291

 currency translation adjustment

 -

 -

 ( 8,897
)

 -

 ( 8,897
)

 Net
 loss

 -

 -

 -

 -

)

)

 Balance,
 December 31, 2023

 2,370,000

 $
 2,370

 $
 128,044,509

 $
 ( 148,192
)

 $
 ( 118,331,653
)

 $
 9,567,034

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

 F- 5

 TFF

STATEMENTS OF CASH FLOWS

 Years
 Ended December 31,

 2023

 2022

 Cash flows from operating activities:

 Net loss

 $
)

 $
)

 Adjustment to reconcile net loss to net cash
 used in operating activities:

 Stock-based compensation

 2,926,291

 4,251,833

 Interest accrued on
 note receivable

 ( 111,782
)

 -

 Change in fair value
 of note receivable

 ( 385,243
)

 -

 Write-off of construction-in-process

 747,348

 -

 Depreciation and amortization

 502,480

 388,221

 Changes in operating
 assets and liabilities:

 Receivable due from collaboration
 agreement

 -

 ( 184,272
)

 Research and development
 tax incentive receivable

 ( 259,797
)

 751,403

 Prepaid assets and other
 current assets

 1,480,729

 181,604

 Accounts payable

 38,382

 ( 577,105
)

 Accrued liabilities

 367,093

 ( 412,480
)

 Deferred revenue

 ( 25,000
)

 76,000

 lease obligation

 ( 75,465
)

 ( 47,302
)

 Net cash used in operating
 activities

 ( 16,038,195
)

 ( 27,342,160
)

 Cash flows from investing activities:

 Purchases
 of property and equipment

 ( 94,750
)

 ( 1,551,326
)

 Net cash used in investing
 activities

 ( 94,750
)

 ( 1,551,326
)

 Cash flows from financing activities:

 Sales of common stock
 through ATM, net of offering costs

 60,265

 404,555

 Payment of offering
 costs in connection with ATM

 ( 108,700
)

 -

 Sale of common stock
 in public offering, net of offering costs

 5,064,722

 -

 Net proceeds from issuances
 of common stock and warrants

 -

 11,235,626

 Proceeds from issuance
 of common stock for stock option exercises

 -

 110,822

 Payments
 to settle fractional shares resulting from reverse stock split

 ( 2,875
)

 -

 Net cash provided by
 financing activities

 5,013,412

 11,751,003

 Effect of exchange rate
 changes on cash and cash equivalents

 ( 14,669
)

 ( 39,874
)

 Net change in cash and cash equivalents

 ( 11,134,202
)

 ( 17,182,357
)

 Cash and cash equivalents
 at beginning of year

 16,612,315

 33,794,672

 Cash and cash equivalents
 at end of year

 $
 5,478,113

 $
 16,612,315

 Supplemental disclosure of non-cash investing
 and financing activities:

 Financing obtained for
 insurance premiums

 $
 914,063

 $
 -

 ROU asset obtained for
 new operating lease

 $
 -

 $
 238,021

 Conversion of collaboration
 receivable to note receivable

 $
 -

 $
 1,812,975

 Purchases of equipment
 included in accounts payable

 $
 -

 $
 13,400

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

 F- 6

 NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 TFF
Pharmaceuticals, Inc. (the "Company") was incorporated in the State of Delaware on January 24, 2018. The Company's
initial focus is on the development of inhaled dry powder drugs to enhance the treatment of pulmonary diseases and conditions. In December
2019, the Company established a wholly owned Australian subsidiary, TFF Pharmaceuticals Australia Pty Ltd ("TFF Australia"),
in order to conduct clinical research. TFF Pharmaceuticals, Inc., along with TFF Australia, are collectively referred to as the "Company".
The Company is in the development stage and is devoting substantially all of its efforts toward technology research and development and
the human clinical trials of its initial product candidates.

 ATM
Offering

 On June 10, 2022, the Company entered into an
Open Market Sale Agreement with Jefferies LLC, as agent, under which the Company may offer and sell, from time to time at its sole discretion,
shares of its common stock having an aggregate offering price of up to $ 35.0 million in an "at-the-market" ("ATM")
offering, to or through the agent. From July 2022 through September 30, 2022, the Company sold 4,160 shares of its common stock at an
average price of $ 149.00 per share resulting in net proceeds of approximately $ 0.4 million, after deducting sales agent commissions and
offering expenses. During 2023, the Company sold 7,062 shares of its common stock through the ATM offering at an average price of $ 8.80
per share resulting in net proceeds of approximately $ 60,000. The Company terminated the Open Market Sale Agreement with Jefferies LLC
in March 2024.

 November
2022 Public Offering

 In November 2022, the Company completed a public
offering ("November 2022 Offering"), selling 371,304 shares of common stock and warrants to purchase up to 185,652 shares
of common stock at an offering price of $ 28.75 per share. The Company received gross proceeds of approximately $ 10.7 million. In addition,
the Company granted the underwriter a 45 -day option to purchase an additional 15 % of the number of shares of common stock and warrants
at the public offering price, less underwriting discounts and commissions. The option was exercised in November 2022 and the underwriter
purchased an additional 55,696 shares of common stock and warrants to purchase up to 27,848 shares of common stock and the Company received
additional gross proceeds of approximately $ 1.6 million. The Company received net proceeds of approximately $ 11.2 million, after deducting
underwriting discounts and offering-related expenses.

 August
2023 Public Offering

 On
August 17, 2023, the Company completed an underwritten public offering ("August 2023 Offering"), selling 915,216 shares of
common stock, including 119,376 shares of common stock issued pursuant to the full exercise by the underwriter of its over-allotment
option, at an offering price of $ 6.25 per share. The Company received gross proceeds of approximately $ 5.7 million. The Company received
net proceeds of approximately $ 5.1 million, after deducting underwriting discounts and offering-related expenses.

 Reverse
Stock Split

December 19, 2023, the Company effected a one-for-25 reverse stock split of its issued and outstanding common shares. Accordingly, all
common share, stock option, per common share and warrant amounts for all periods presented in the consolidated financial statements and
notes thereto have been adjusted retrospectively to reflect this reverse stock split.

 NOTE
2 - GOING CONCERN AND MANAGEMENT'S PLANS

 The
accompanying consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going
concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The consolidated
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of
assets or the amounts of liabilities that may result from uncertainty related to the Company's ability to continue as a going concern.

 F- 7

 For
the years ended December 31, 2023 and 2022, the Company reported a net loss of $ 21.2 million and $ 31.8 million, respectively, and negative
cash from operations of $ 16.0 million and $ 27.3 million, respectively. As of December 31, 2023, the Company had cash and cash equivalents
of approximately $ 5.5 million, a working capital surplus of approximately $ 5.2 million and an accumulated deficit of $ 118.3 million.
The Company has not generated revenues from commercial operations since inception and expects to continue incurring losses for the foreseeable
future and needs to raise additional capital to continue the pursuit of its product development.

 Management
believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from
the date of this filing. Additionally, in view of the Company's expectation to incur significant losses for the foreseeable future
it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company's
access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company's
ability to continue operating as a going concern through the next twelve months from the date of this filing.

 NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis
of Presentation

 The
Company's consolidated financial statements are presented in accordance with accounting principles generally accepted in the United
States of America ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") and
reflect the financial position, results of operations and cash flows for all periods presented.

 Principles
of Consolidation

 The
consolidated financial statements include the accounts of TFF Pharmaceuticals, Inc. and its wholly owned subsidiary, TFF Australia. All
material intercompany accounts and transactions have been eliminated in consolidation.

Currency

 The
currency of TFF Australia, the Company's international subsidiary, is in Australian dollars. Foreign currency denominated assets
and liabilities are translated into U.S. dollars using the exchange rates in effect at each balance sheet date. Results of operations
and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation
of assets and liabilities is included as a separate component of stockholders' equity in accumulated other comprehensive income
(loss).

 Geographic
Concentrations

 The
Company conducts business in the U.S. and Australia. As of December 31, 2023 and 2022, the Company maintained 100 % of its net property
and equipment in the U.S.

 Cash
and Cash Equivalents

 The
Company maintains its operating accounts in financial institutions in the U.S. and in Australia. The balances are insured up to specified
limits. The Company's cash is maintained in checking accounts and money market funds with maturities of less than three months
when purchased, which are readily convertible to known amounts of cash, and which in the opinion of management are subject to insignificant
risk of loss in value. As of December 31, 2023 and 2022, the Company had cash in Australia of AUD$ 285,827 (US$ 194,734) and AUD$ 1,028,616
(US$ 699,977), respectively.

 F- 8

 Property
and Equipment, net

 Property and equipment are stated at cost less
accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the estimated useful
lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software. Assets held
within construction in progress are not depreciated. Construction in progress is related to the construction or development of property
and equipment that have not yet been placed in service for its intended use. As of December 31, 2023 and 2022, approximately $ 0.7 million
and $ 1.5 million, respectively, of the Company's property and equipment consisted of lab equipment that are considered construction
in progress. Expenditures for repairs and maintenance of assets are charged to expense as incurred.

 Leases

 At
the inception of an arrangement, the Company determines whether an arrangement is or contains a lease based on the facts and circumstances
present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. Leases with a term greater than one year are recognized on the consolidated
balance sheets as operating lease right-of-use assets and current and long-term operating lease liabilities, as applicable. The Company
has elected not to recognize on the consolidated balance sheets leases with terms of 12 months or less. The Company typically only includes
the initial lease term in its assessment of a lease arrangement. Options to extend a lease are not included in the Company's assessment
unless there is reasonable certainty that the Company will renew.

lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected
remaining lease term. Certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued rent. The interest
rate implicit in the Company's leases is typically not readily determinable. As a result, the Company utilizes its incremental
borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments
in the same currency, for a similar term, in a similar economic environment.

 Fair
Value Option - Convertible Note Receivable

 The
guidance in Accounting Standards Codification ("ASC") 825, Financial Instruments, provides a fair value option election
that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible
financial assets and liabilities. The Company has elected to measure its convertible note receivable using the fair value option. Under
the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract
and derivative due to change in the fair value will be reflected in other income (expense), net in the consolidated statements of operations.
Interest accrues on the unpaid principal balance on a quarterly basis and is recognized in interest income in the consolidated statements
of operations.

 The
decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument
and is irrevocable once elected. Pursuant to this guidance, assets and liabilities are measured at fair value based, in part, on general
economic and stock market conditions and those characteristics specific to the underlying investments. The carrying value is adjusted
to estimated fair value at the end of each quarter, required to be reported separately in our consolidated balance sheets from those
instruments using another accounting method.

 Fair
Value of Financial Instruments

 Authoritative
guidance requires disclosure of the fair value of financial instruments. The Company measures the fair value of certain of its financial
assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used
to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and
disclosed in one of the following three categories:

 Level
1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.

 F- 9

 Level
2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets
and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.

 Level
3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities.

 Income
Taxes

 In
accordance with authoritative guidance, deferred tax assets and liabilities are recorded for temporary differences between the financial
reporting and tax bases of assets and liabilities using the current enacted tax rate expected to be in effect when the differences are
expected to reverse. A valuation allowance is recorded on deferred tax assets unless realization is considered more likely than not.

 The
Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine
whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not
deemed to meet the "more-likely-than-not" threshold are not recorded as a tax benefit or expense in the current year. The
Company recognizes interest and penalties, if any, related to uncertain tax positions in interest expense. No interest and penalties
related to uncertain tax positions were accrued at either December 31, 2023 or 2022.

 The
Company follows authoritative guidance which requires the evaluation of existing tax positions. The Company files in the federal and
various state jurisdictions. Management has analyzed all open tax years, as defined by the statute of limitations, for all major jurisdictions.
Open tax years are those that are open for examination by taxing authorities. The Company's tax years since its incorporation in
2019 and forward are subject to examination by tax authorities due to the carryforward of unutilized net operating losses and research
and development credits.

 Revenue
Recognition

 Feasibility
Agreements

 The
Company has entered into feasibility and material transfer agreements ("Feasibility Agreements") with third parties that
provide the Company with funds in return for certain research and development activities. Revenue from the Feasibility Agreements is
recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable
conditions under the Feasibility Agreements have been met.

 The
Feasibility Agreements are on a best-effort basis and do not require scientific achievement as a performance obligation. All fees received
under the Feasibility Agreements are non-refundable. The costs associated with the Feasibility Agreements are expensed as incurred and
are reflected as a component of research and development expense in the accompanying consolidated statements of operations.

 Funds
received from the Feasibility Agreements are recorded as revenue as the Company is the principal participant in the arrangement because
the activities under the Feasibility Agreements are part of the Company's development programs. In those instances where the Company
first receives consideration in advance of providing underlying services, the Company classifies such consideration as deferred revenue
until (or as) the Company provides the underlying services. In those instances where the Company first provides the underlying services
prior to its receipt of consideration, the Company records a grant receivable.

 F- 10

 Grants

 The
Company accounts for grants awarded from a government-sponsored entity for research and development related activities that provide for
payments for reimbursed costs, which includes overhead and general and administrative costs, as well as an administrative fee. The Company
recognizes revenue from grants as it performs services under the arrangements. Associated expenses are recognized when incurred as research
and development expense. Revenue and related expenses are presented gross in the consolidated statements of operations.

 Collaborative
Arrangements

 The
Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity
pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success
of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial
success of the activity, the Company accounts for such arrangement as a collaborative arrangement under Accounting Standards Codification
("ASC") 808, Collaborative Arrangements. ASC 808 describes arrangements within its scope and considerations surrounding
presentation and disclosure, with recognition matters subjected to other authoritative guidance, in certain cases by analogy.

 For
arrangements determined to be within the scope of ASC 808 where a collaborative partner is not a customer for certain research and development
activities, the Company accounts for payments received for the reimbursement of research and development costs as a contra-expense in
the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within a collaborative arrangement.
The Company classifies payments owed or receivables recorded as other current liabilities or prepaid expenses and other current assets,
respectively, in the Company's consolidated balance sheets. Please refer to Note 5, "Joint Development Agreement" for
additional details regarding the Company's joint development agreement ("JDA") with Augmenta Bioworks, Inc. ("Augmenta"),
which was suspended as of January 1, 2023.

 If
payments from the collaborative partner to the Company represent consideration from a customer in exchange for distinct goods and services
provided, then the Company accounts for those payments within the scope of ASC 606, Revenue from Contracts with Customers. The
Company does not currently have any collaborative arrangements that are accounted for under ASC 606.

 Research and Development Expenses and Related Prepaid and Accrued
Expenses

 Research and development ("R&D") expenses consist of
costs incurred for R&D of its product candidate and are recorded to operating expenses when incurred. The Company's R&D
expenses consist primarily of costs incurred in performing R&D activities, including personnel-related expenses such as salaries,
stock-based compensation and benefits, as well as facilities costs, dues and subscriptions and external costs of outside vendors engaged
as contract research organization, contract manufacturers, consultants and other third parties to conduct and support our clinical trials.
The Company accrues expenses related to development activities performed by third parties based on an evaluation of services received
and efforts expended pursuant to the terms of the contractual arrangements. Payments under some of these contracts depend on clinical
trial milestones. There may be instances in which payments made to the Company's vendors will exceed the level of services provided
and result in a prepayment of expenses. In accruing service fees, the Company estimates the time period over which services will be performed
and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies
from the estimate, the Company will adjust the accrual or prepaid expense accordingly.

and Development Tax Incentive

 The
Company is eligible to obtain a cash refund from the Australian Taxation Office for eligible research and development expenditures under
the Australian R&D Tax Incentive Program (the "Australian Tax Incentive"). The Company recognizes the Australian Tax
Incentive when there is reasonable assurance that the cash refund will be received, the relevant expenditure has been incurred, and the
consideration can be reliably measured.

 As
the Company has determined that it has reasonable assurance that it will receive the cash refund for eligible research and development
expenditures, the Company records the Australian Tax Incentive as a reduction to research and development expenses as the Australian
Tax Incentive is not dependent on the Company generating future taxable income, the Company's ongoing tax status, or tax position.
At each period end, management estimates the refundable tax offset available to the Company based on available information at the time.
This percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5 % for the years
ended December 31, 2023 and 2022. In addition, the Company is also eligible to receive amounts from the United States Internal Revenue
Service ("IRS") related to research and development tax credits for expenditures.

 F- 11

 The
research and development incentive receivable represents an amount due in connection with the Australian Tax Incentive and from the IRS.
The Company has recorded a research and development tax incentive receivable of $ 433,852 and $ 186,507 as of December 31, 2023 and 2022,
respectively, in the consolidated balance sheets. The Company recorded a reduction to research and development expenses of $ 259,797 and
$ 274,863 during the years ended December 31, 2023 and 2022, respectively.

 Basic
and Diluted Earnings per Common Share

 Basic
net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the
period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive
share equivalents outstanding for the period, determined using the treasury-stock and if-converted methods. Since the Company has had
net losses for all periods presented, all potentially dilutive securities are anti-dilutive.

 For
the years ended December 31, 2023 and 2022, the Company had the following potential common stock equivalents outstanding which were not
included in the calculation of diluted net loss per common share because inclusion thereof would be anti-dilutive:

 Years
 Ended
 December 31,

 2023

 2022

 Stock
 Options

 233,340

 116,362

 Warrants

 248,216

 230,069

 481,556

 346,431

 Use
of Estimates

 The
preparation of condensed consolidated financial statements in conformity with GAAP requires the Company's management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include the
fair value of the convertible note receivable, stock-based compensation and warrants and the valuation allowance against deferred tax
assets. Actual results could differ from those estimates.

 Common
Stock Warrants

 The
Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with
a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies
as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract
if an event occurs and if that event is outside the Company's control), (ii) gives the counterparty a choice of net-cash settlement
or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for
the scope exception. The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting
date to determine whether a change in classification between assets and liabilities is required. The Company evaluated these warrants
to assess their proper classification and determined that the common stock warrants meet the criteria for equity classification in the
consolidated balance sheet. The warrants issued for services provided to the Company are measured at fair value, which the Company determines
using the Black-Scholes-Merton option-pricing model.

 F- 12

 Stock-Based
Compensation

 The
Company computes stock-based compensation in accordance with authoritative guidance. The Company uses the Black-Scholes-Merton option-pricing
model to determine the fair value of its stock options. The Black-Scholes-Merton option-pricing model includes various assumptions, including
the fair market value of the common stock of the Company, expected life of stock options, the expected volatility and the expected risk-free
interest rate, among others. These assumptions reflect the Company's best estimates, but they involve inherent uncertainties based
on market conditions generally outside the control of the Company.

 As
a result, if other assumptions had been used, stock-based compensation cost, as determined in accordance with authoritative guidance,
could have been materially impacted. Furthermore, if the Company uses different assumptions on future grants, stock-based compensation
cost could be materially affected in future periods.

 Recent
Accounting Standards

 In
August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -Contracts in Entity' Own
Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity' Own Equity ("ASU 2020-06"),
which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also
removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and
it simplifies the diluted earnings per share calculation in certain areas. The provisions of ASU 2020-06 are applicable for fiscal years
beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The
Company adopted ASU 2020-06 on January 1, 2023, which did not result in a material impact on its consolidated financial statements.

 F- 13

 TFF

 NOTES

 For

 In
June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments. The ASU amends the impairment model by requiring entities to use a forward-looking approach based on expected losses
to estimate credit losses for most financial assets and certain other instruments that aren't measured at fair value through net
income (loss). For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than
a reduction in carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been
less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective in the first quarter
of 2023 for calendar-year SEC filers that are smaller reporting companies as of the one-time determination date. Early adoption is permitted
beginning in 2019. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its consolidated
financial statements and related disclosures.

 In
October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, Codification Amendments in Response to the SEC's Disclosure
Update and Simplification Initiative, that adds 14 of the 27 identified disclosure or presentation requirements to the Codification,
each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation from its existing regulations
by June 30, 2027. The Company currently complies with these disclosure requirements as applicable under Regulation S-X or Regulation
S-K and will adopt these new standards depending on timing of when they become effective, which is not expected to have a material impact
on its financial position and results of operations.

 In
November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.
This amended guidance applies to all public entities and aims to improve reportable segment disclosure requirements, primarily through
enhanced disclosures about significant segment expenses, to enable investors to develop more decision-useful financial analyses. This
guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December
15, 2024. Early adoption is permitted. The Company is currently analyzing the impact that ASU No. 2023-07 will have on its consolidated
financial statements.

 In
December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This amended
guidance applies to all entities and broadly aims to enhance the transparency and decision usefulness of income tax disclosures. For
public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2024. Early adoption
is permitted for any annual periods for which financial statements have not been issued or made available for issuance. The Company is
currently analyzing the impact that ASU No. 2023-09 will have on its consolidated financial statements.

 The
Company's management does not believe that any other recently issued, but not yet effective, accounting standards if currently
adopted would have a material effect on the consolidated financial statements.

 NOTE
4 - SUPPLEMENTAL FINANCIAL INFORMATION

Liabilities

liabilities consisted of the following:

 31,

 2023

 2022

 compensation

 568,689

 4,430

 Insurance
 premium financing

 716,897

 -

 1,285,586

 4,430

 F- 14

 TFF

 NOTES

 For

 In
October 2023, the Company entered into a short-term note payable of $ 914,063 for the financing of insurance premiums. The note bears
interest at 9.95 % and monthly principal and interest payments of $ 105,819 are paid over a 9-month period. The Company recorded interest
expense of $ 14,475 related to the short-term note payable during the year ended December 31, 2023.

 NOTE
5 - COMMITMENTS AND CONTINGENCIES

Leases

 In
October 2018, the Company entered into a lease agreement for office space in Doylestown, Pennsylvania. The lease commenced on October
15, 2018 and expired on October 31, 2023, as amended. The lease had an additional one-year option for renewal, and the base rent was
$ 37,080 per year. The Company determined that the lease agreement was considered a short-term lease under ASC 842 and did not record
a right-of-use asset or liability. The Company did not renew the lease upon its expiration. The Company rents another office space on
a month-to-month basis with no long-term commitment, which is considered a short-term lease as well. In May 2022, the Company entered
into a lease agreement for lab space in Austin, Texas. The lease commenced on June 1, 2022 and expires on May 31, 2025. The lease has
an additional three-year option for renewal, which the Company has determined it is not reasonably certain to exercise.

 Supplemental
balance sheet information related to leases was as follows:

 December 31,

 2023

 2022

 Operating leases:

 Operating lease right-of-use assets

 $
 119,529

 $
 196,044

 Operating lease liability - current portion

 $
 83,512

 $
 80,625

 Operating lease liability - long-term portion

 31,742

 110,094

 Total operating lease liabilities

 $
 115,254

 $
 190,719

 Supplemental
lease expense related to leases was as follows:

 For
 The Years Ended
 31,

 Lease

 Statement
 of Operations Classification

 2023

 2022

 Operating lease
 cost

 Research and
 development

 $
 89,100

 $
 51,975

 Short-term lease cost

 Research and development

 -

 20,815

 Short-term
 lease cost

 and administrative

 77,210

 83,870

 Total
 lease expense

 $
 166,310

 $
 156,660

 Other
information related to operating leases:

 31,
 2023

 31,
 2022

 Weighted-average remaining
 lease term

 1.4 years

 2.4 years

 Weighted-average
 discount rate

 %

 %

 F- 15

 TFF

 NOTES

 For

 Supplemental
cash flow information related to operating leases was as follows:

 For
 The Years Ended
 December 31,

 2023

 2022

 Cash
 paid for operating lease liabilities

 $
 88,050

 $
 57,300

 Approximate
future minimum lease payments under non-cancellable leases (including short-term leases) are as follows:

 Fiscal
 Year Ending December 31,

 2024

 $
 91,000

 2025

 38,000

 Total
 minimum lease payments

 129,000

 Less:
 Imputed interest

 ( 14,000
)

 Total

 $
 115,000

 Legal

 The
Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters
are subject to many uncertainties and outcomes and are not predictable with assurance. While management believes that such matters are
currently insignificant, matters arising in the ordinary course of business for which the Company is or could become involved in litigation
may have a material adverse effect on its business and financial condition. To the Company's knowledge, neither the Company nor
any of its properties are subject to any pending legal proceedings.

 NOTE
6 - JOINT DEVELOPMENT AGREEMENT

 On
November 2, 2020, the Company and Augmenta entered into the JDA pursuant to which the Company and Augmenta (collectively the "Parties")
agreed to work jointly to develop one or more novel commercial products incorporating Augmenta's human derived monoclonal antibody
for the treatment of patients with COVID-19 and the Company's patented Thin Film Freezing technology platform. Each party retains
full ownership over its existing assets.

 The
Parties will share development costs with each party funding its fifty-percent-share at specified times. In the event that one of the
Parties fails to make its pro rata share payment, the other party may terminate the JDA. In lieu of terminating the JDA, the non-defaulting
party may elect to continue the JDA by paying the delinquent amount and each party's pro rata share of the JDA will automatically
adjust by the amount paid. In addition, in the event Augmenta experienced a default on its required payment, Augmenta had the one-time
right to elect to require the Company to purchase Augmenta's interest in the JDA ("Put Right") for a one-time fee of
$ 500,000. Upon exercise of the Put Right and payment by the Company, Augmenta would grant the Company an exclusive, worldwide, royalty-free,
transferable, sublicensable license to the Augmenta antibody and Augmenta's rights to the property developed under the JDA. The
Company determined that the likelihood of the Put Right being exercised to be remote. The Put Right was eliminated in connection with
a convertible note purchase agreement (see below and Note 7).

 The
JDA is within the scope of ASC 808 as the Company and Augmenta are both active participants in the research and development activities
and are exposed to significant risks and rewards that are dependent on commercial success of the activities of the arrangement. The research
and development activities are a unit of account under the scope of ASC 808 and are not promises to a customer under the scope of ASC
606.

 F- 16

 TFF

 NOTES

 For

 The
Company records its portion of the research and development expenses as the related expenses are incurred. All payments received or amounts
due from Augmenta for reimbursement of shared costs are accounted for as an offset to research and development expense. During the years
ended December 31, 2023 and 2022, the Company recorded research and development expenses of $ 0 and $ 341,840, respectively.

January 1, 2023, the Company and Augmenta entered into a convertible note purchase agreement ("Augmenta Note") in which the
receivable due from Augmenta was converted into a convertible note receivable (see Note 7). The Augmenta Note satisfies Augmenta's
requirement to fund its fifty-percent-share of the development costs under the JDA. In addition, the Company and Augmenta agreed to suspend
the development work under the JDA. The Augmenta Note has a maturity date of January 1, 2026; therefore, the Company has reflected the
amount due under the Augmenta Note as a long-term note receivable as of December 31, 2023 and 2022.

 NOTE
7 - CONVERTIBLE NOTE RECEIVABLE - AUGMENTA

January 1, 2023, the Company and Augmenta entered into the Augmenta Note pursuant to which a receivable due from Augmenta in connection
with the JDA was converted into a convertible note receivable (see Note 5). Under the terms of the Augmenta Note, Augmenta agreed to
pay the principal amount of $ 1,812,975 to the Company. The Augmenta Note accrues interest at a rate of 6 % per annum and has a maturity
date of the earlier of (i) January 1, 2026 ("Maturity Date"), or (ii) upon the occurrence and during the continuance of an
event of default. Accrued interest shall be payable at maturity.

 The
Company has the following optional conversion rights under the Augmenta Note:

 The Company may convert, at any time and at its option, all outstanding principal and accrued and unpaid interest into shares of Augmenta common stock at a price per share equal to an amount obtained by dividing $ 15 million by the number of outstanding shares of Augmenta common stock on a fully diluted basis ("Conversion Price").

 If Augmenta completes a private placement sale of its preferred stock in the amount less than $ 15 million, the Company may convert, at its option, all outstanding principal and accrued and unpaid interest into shares of the same security in such financing at a per share price equal to the lower of the Conversion Price or the price per share sold in the financing.

 In
addition, the outstanding principal and accrued and unpaid interest under the Augmenta Note will automatically convert in the following
scenarios:

 If Augmenta completes a financing with gross proceeds of at least $ 15 million ("Qualified Financing") on or before the Maturity Date, then the outstanding principal and accrued and unpaid interest shall automatically convert into the same security at a price per share equal to the lower of the Conversion Price or the price per share sold in the Qualified Financing.

 If Augmenta completes an underwritten public offering with gross proceeds of at least $ 35 million ("Qualified IPO") on or before the Maturity Date, then the outstanding principal and accrued and unpaid interest shall automatically convert into the same security at a price per share equal to the lower of the Conversion Price or the price per share sold in the Qualified IPO.

 If a change of control occurs prior to the payment in full of the principal amount of the Augmenta Note, then the Company will be paid all outstanding principal and accrued and unpaid interest, plus a premium of 100 % of the outstanding principal.

 The
Company has elected to measure the Augmenta Note at fair value in accordance with ASC 825 (see Note 8).

 F- 17

 TFF

 NOTES

 For

 NOTE
8 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

 The
carrying value of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value because of their short-term
nature. The Augmenta Note is held at fair value.

 The
following table presents the Company's assets and liabilities that are measured at fair value as of December 31, 2023:

 Fair
 value measured as of December 31, 2023

 Quoted

 prices in
 active
 markets

 Significant

 other
 observable
 inputs

 Significant

 unobservable
 inputs

 Total

 (Level
 1)

 (Level
 2)

 (Level
 3)

 Assets

 Augmenta
 Note at fair value

 $
 2,310,000

 $
 -

 $
 -

 $
 2,310,000

 Level
3 Measurement

 The
following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial assets that are measured
at fair value on a recurring basis:

 Fair
 Value
 of Level 3
 Augmenta Note

 Beginning balance, January 1, 2023

 $
 1,812,975

 interest receivable

 111,782

 in fair value

 385,243

 Ending balance, December
 31, 2023

 $
 2,310,000

 The
fair value of the Augmenta Note is measured using Level 3 (unobservable) inputs. The Company determined the fair value for the Augmenta
Note using a probability weighted-scenario valuation model with the assistance of a third-party valuation specialist. The unobservable
inputs include estimates of the equity value of Augmenta and the timing and probability of future financing events, optional conversion
to common stock, and repayment at maturity. The conversion upon a qualified financing scenario valued the Augmenta Note based on a bond
plus call option model. The optional conversion to common stock valued the Augmenta Note based on the present value of common stock,
determined using an adjusted net assets method and option-pricing model, and implied number of common shares upon conversion. The repayment
upon maturity is based on the total principal and accrued interest through the maturity date.

 NOTE
9 - STOCKHOLDERS' EQUITY

 Common
Stock

 ATM
Offering

 From
July 2022 through September 30, 2022, the Company sold 4,160 shares of its common stock through the ATM offering at average price of
$ 149.00 per share resulting in net proceeds of approximately $ 0.4 million, after deducting sales agent commissions and offering expenses.

 F- 18

 TFF

 NOTES

 For

 In
2023, the Company sold 7,062 shares of its common stock through the ATM offering at average price of $ 8.80 per share resulting in net
proceeds of approximately $ 60,000.

 November
2022 Public Offering

 In
November 2022, the Company completed the November 2022 Offering, selling 371,304 shares of common stock and warrants to purchase up to
 185,652 shares of common stock at an offering price of $ 28.75 per share. The Company received gross proceeds of approximately $ 10.7 million.
In addition, the Company granted the underwriter a 45-day option to purchase an additional 15 % of the number of shares of common stock
and warrants at the public offering price, less underwriting discounts and commissions. The option was exercised in November 2022 and
the underwriter purchased an additional 55,696 shares of common stock and warrants to purchase up to 27,848 shares of common stock and
the Company received additional gross proceeds of approximately $ 1.6 million. The Company received net proceeds of approximately $ 11.2
million, after deducting underwriting discounts and offering-related expenses.

 August
2023 Offering

 On
August 17, 2023, the Company completed the August 2023 Offering, selling 915,216 shares of common stock, including 119,376 shares of
common stock issued pursuant to the full exercise by the underwriter of its over-allotment option, at an offering price of $ 6.25 per
share. The Company received gross proceeds of approximately $ 5.7 million. The Company received net proceeds of approximately $ 5.1 million,
after deducting underwriting discounts and offering-related expenses. In connection with the August 2023 Offering, the Company issued
to the underwriter a warrant to purchase 18,304 shares of common stock, exercisable at $ 7.81 per share, commencing on the 180 th
 day following the closing date of the August 2023 Offering and expiring five years from the closing date of the August 2023 Offering.
The classification of the warrants was evaluated and the Company concluded they are considered equity instruments. The warrants were
considered offering costs and netted against additional paid-in capital.

 Stock
Option Exercises

 During
the year ended December 31, 2022, 1,692 shares of common stock were issued in connection with the exercise of stock options for total
proceeds of approximately $ 0.1 million.

 NOTE
10 - WARRANTS

 In
connection with the November 2022 Offering, the Company issued warrants to purchase 213,500 shares of common stock. Each warrant is immediately
exercisable on the date of issuance at an exercise price of $ 32.25 per share and expires five years from the date of issuance. The Company
evaluated these warrants to assess their proper classification and determined that the warrants meet the criteria for equity classification
in the consolidated balance sheet.

 In
connection with the August 2023 Offering, the Company issued warrants to purchase 18,304 shares of common stock. Each warrant is exercisable
commencing on the 180 th day following the closing date of the August 2023 Offering at an exercise price of $ 7.81 per share
and expires five years from the closing date of the August 2023 Offering. The classification of the warrants was evaluated and the Company
concluded they are considered equity instruments. The warrants were considered offering costs and netted against additional paid-in capital.

 F- 19

 TFF

 NOTES

 For

 A
summary of warrant activity for the years ended December 31, 2023 and 2022 is as follows:

 Number
 of
 Shares

 Range
 of
 Exercise Prices

 Average
 Exercise
 Prices

 Average
 Remaining
 Life

 at January 1, 2022

 15,569

 $ 62.50 – 397.50

 144.75

 4.4

 Issued

 214,500

 32.25 - 142.50

 32.75

 -

 Exercised

 -

 -

 -

 -

 at December 31, 2022

 230,069

 32.25 – 397.50

 40.25

 4.4

 Issued

 18,304

 7.81

 7.81

 -

 Expired

 ( 157
)

 62.50

 62.50

 -

 Exercised

 -

 -

 -

 -

 at December 31, 2022

 248,216

 $ 7.81 - $ 397.50

 $
 42.38

 4.4

 The
warrants outstanding at December 31, 2023 had an aggregate intrinsic value of approximately $ 0.

 NOTE
11 - STOCK BASED COMPENSATION

 In
January 2018, the Company's board of directors approved its 2018 Stock Incentive Plan ("2018 Plan"). The 2018 Plan
provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company's common stock,
the grant of restricted and unrestricted share awards and grant of restricted stock units. There are 131,379 shares of common stock reserved
for issuance under the 2018 Plan. All of the Company's employees and any subsidiary employees (including officers and directors
who are also employees), as well as all of the Company's nonemployee directors and other consultants, advisors and other persons
who provide services to the Company will be eligible to receive incentive awards under the 2018 Plan.

 In
September 2021, the Company's board of directors approved its 2021 Stock Incentive Plan ("2021 Plan"), which was also
approved by the stockholders of the Company at the Company's annual meeting of stockholders held on November 4, 2021. The 2021
Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company's common
stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company has 168,000 shares of its
common stock reserved under the 2021 Plan. All of the Company's employees and any subsidiary employees (including officers and
directors who are also employees), as well as all of the Company's nonemployee directors and other consultants, advisors and other
persons who provide services to the Company will be eligible to receive incentive awards under the 2021 Plan.

 The
following table summarizes the stock-based compensation expense recorded in the Company's results of operations during the years
ended December 31, 2023 and 2022 for stock options and warrants:

 Years
 Ended December 31,

 2023

 2022

 and development

 $
 997,339

 $
 908,712

 and administrative

 1,928,952

 3,343,121

 $
 2,926,291

 $
 4,251,833

 As
of December 31, 2023, there was approximately $ 3.8 million of total unrecognized compensation expense related to non-vested share-based
compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of 1.9 years.

 The
Company records compensation expense for awards with graded vesting using the straight-line method. The Company recognizes compensation
expense over the requisite service period applicable to each individual award, which generally equals the vesting term. The Company estimates
the fair value of each option award using the Black-Scholes-Merton option pricing model. Forfeitures are recognized when realized.

 F- 20

 TFF

 NOTES

 For

 The
Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of stock options issued
was estimated using the following assumptions:

 Years
 Ended December 31,

 2023

 2022

 Weighted
 average exercise price

 $
 22.92

 $
 92.75

 Weighted
 average grant date fair value

 $
 15.42

 $
 71.00

 Assumptions

 Expected
 volatility

 92 - 102
 %

 90 - 97
 %

 Expected
 term (in years)

 6.3 - 10.0

 5.3 - 10.0

 Risk-free
 interest rate

 3.44 - 4.81
 %

 2.41 - 4.20
 %

 Expected
 dividend yield

 0.00
 %

 0.00
 %

 The
risk-free interest rate was obtained from U.S. Treasury rates for the applicable periods. The Company's expected volatility was
based upon the historical volatility for industry peers and used an average of those volatilities. The expected life of the Company's
options was determined using the simplified method as a result of limited historical data regarding the Company's activity for
employee awards and the contractual term for nonemployee awards. The dividend yield considers that the Company has not historically paid
dividends, and does not expect to pay dividends in the foreseeable future. The Company uses the closing stock price on the date of grant
as the fair value of the common stock.

 The
following table summarizes stock option activity during the years ended December 31, 2023 and 2022:

 Number
 of
 Shares

 Average
 Exercise
 Prices

 Average
 Remaining
 Contractual
 Term
 (In Years)

 Intrinsic
 Value

 at January 1, 2022

 115,754

 $
 162.00

 8.05

 $
 9,932,413

 Granted

 18,256

 92.75

 -

 -

 Exercised

 ( 1,692
)

 65.50

 -

 -

 Cancelled

 ( 15,955
)

 188.25

 -

 -

 at December 31, 2022

 116,363

 $
 162.00

 7.46

 $
 24,279

 Granted

 138,837

 22.92

 -

 -

 Exercised

 -

 -

 -

 -

 Cancelled

 ( 21,860
)

 142.96

 -

 -

 at December 31, 2023

 233,340

 $
 74.63

 7.66

 $
 -

 Exercisable
 at December 31, 2023

 107,752

 $
 108.51

 6.08

 $
 -

 The
aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair
value of the Company's common stock for those stock options that had strike prices lower than the fair value of the Company's
common stock.

 Option
Modifications

March 21, 2022, one of the members of the Company's board of directors, Dr. Brian Windsor, resigned. As part of his resignation
from the board of directors, modifications were made to Dr. Windsor's vested and non-vested stock option awards including acceleration
of certain non-vested option awards and the extension of the post-termination exercise period of certain stock option awards. During
the year ended December 31, 2022, in accordance with ASC Topic 718, Compensation-Stock Compensation, the Company recorded a one-time,
non-cash incremental compensation expense net of the required reversal of previously recognized compensation attributed to non-vested
shares in the amount of approximately $ 0.3 million, which is included in general and administrative expense in the accompanying consolidated
statements of operations.

 F- 21

 TFF

 NOTES

 For

December 4, 2022, the Company's CEO, Glenn Mattes, resigned. As part of his resignation, modifications were made to certain of
Mr. Mattes' vested stock option awards to extend the post-termination exercise period of these stock option awards. During the
year ended December 31, 2022, in accordance with ASC 718, the Company recorded a one-time, non-cash incremental compensation expense
in the amount of approximately $ 0.2 million, which is included in general and administrative expense in the accompanying consolidated
statements of operations.

 NOTE
12 - INCOME TAXES

 The
Company had no income tax expense due to operating losses incurred for the years ended December 31, 2023 and 2022. The Company accounts
for income taxes in accordance with ASC 740, which requires that the tax benefit of net operating losses, temporary differences and credit
carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not."
Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward
period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets
arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation
allowance.

 The
Company's income tax expense for the years ended December 31, 2023 and 2022 are summarized below:

 31,

 2023

 2022

 Current:

 Federal

 $
 -

 $
 -

 State

 -

 -

 -

 -

 Total
 current

 $
 -

 $
 -

 Deferred:

 Federal

 $
 ( 5,119,585
)

 $
 ( 7,871,979
)

 State

 ( 29,214
)

 -

 ( 25,908
)

 453,410

 in valuation allowance

 5,174,707

 7,418,569

 Total
 deferred

 -

 -

 Income
 tax provision (benefit)

 $
 -

 $
 -

 F- 22

 TFF

 NOTES

 For

 The
Company's deferred tax assets are as follows:

 31,

 2023

 2022

 Deferred tax assets:

 Net
 operating loss carryforwards

 $
 17,989,784

 $
 15,321,270

 and development tax credit

 3,261,950

 2,384,554

 Section 174 amortization

 4,454,248

 3,437,763

 Intangibles

 375,916

 175,334

 Stock
 compensation

 1,527,808

 1,029,447

 Accruals
 and other

 ( 77,399
)

 ( 173
)

 Total
 deferred tax assets

 27,532,307

 22,348,195

 Valuation
 allowances

 ( 27,532,307
)

 ( 22,348,195
)

 Net
 deferred tax assets

 $
 -

 $
 -

 The
effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:

 31,

 2023

 2022

 Statutory
 rate

 21.00
 %

 21.00
 %

 State
 rate

 0.00
 %

 0.00
 %

 ( 0.38
)%

 ( 0.31
)%

 Permanent
 book/tax differences

 ( 0.64
)%

 ( 0.94
)%

 and development credit

 4.13
 %

 5.03
 %

 Changes
 in valuation allowance

 ( 24.11
)%

 ( 24.78
)%

 Total

 -

 -

 As
of December 31, 2023 and 2022, the Company had gross federal income tax net operating loss ("NOL") carryforwards of $ 84,366,128
and $ 71,906,839, respectively, and federal research tax credits of $ 4,349,267 and $ 3,179,405, respectively. The Company has state NOL
carryforwards of approximately $ 841,000, of which approximately $ 790,000 will carryforward indefinitely and the remainder will begin
to expire in 2038. Additionally, the Company had gross foreign income tax net operating loss carryforwards of $ 822,472 and $ 736,112 as
of December 31, 2023 and 2022, respectively. The federal and foreign NOL have an indefinite life while the federal research tax credits
can be carried forward and will expire in 2038 through 2043.

 Utilization
of U.S. net operating losses and tax credit carryforwards may be limited by "ownership change" rules, as defined in Sections
382 and 383 of the Code. Similar rules may apply under state tax laws. The Company is currently conducting a study to-date to assess
whether a limitation would apply under Sections 382 and 383 of the Code as and when it starts utilizing its net operating losses and
tax credits. The Company will continue to monitor activities in the future. In the event the Company previously experienced an ownership
change, or should experience an ownership change in the future, the amount of net operating losses and research and development credit
carryovers available in any taxable year could be limited and may expire unutilized. The consolidated financial statement impact of a
limitation under Sections 382 and 383 would not be material as a result of the full valuation allowance.

 F- 23

 TFF

 NOTES

 For

 The
Inflation Reduction Act ("IRA") was enacted on August 16, 2022. The IRA introduced new provisions including a 15 % corporate
alternative minimum tax for certain large corporations that have at least an average of $ 1 billion adjusted financial statement income
over a consecutive three-tax-year period and a 1 % excise tax surcharge on stock repurchases. The IRA is applicable for tax years beginning
after December 31, 2022 and had no benefit to the consolidated financial statements for any of the periods presented, and the Company
does not expect it to have a direct material impact on its future results of operations, financial condition, or cash flows.

 Due
to the uncertainty surrounding the realization of the benefits of its deferred assets, including NOL carryforwards, the Company has provided
a 100 % valuation allowance on its deferred tax assets at December 31, 2023.

 The
Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, Income Taxes. When uncertain tax positions
exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position
as well as consideration of the available facts and circumstances. As of December 31, 2023, the Company had a reserve for uncertain tax
positions of $ 1,087,317, and no interest or penalties have been charged to the Company for the years ended December 31, 2023 and 2022.
If incurred, the Company will classify any interest and penalties as a component of interest expense and operating expense, respectively.
If recognized, $ 1,087,317 of the reserve for uncertain tax positions would favorably affect the Company's effective tax rate.

 A
reconciliation of the change in the unrecognized tax positions for the year ended December 31, 2023 is as follows:

 Federal
 and State

 Balance
 at December 31, 2022

 $
 794,851

 Additions
 for tax positions related to current year

 292,466

 Decreases
 for tax positions related to prior years

 -

 Balance
 at December 31, 2023

 $
 1,087,317

 NOTE
13 - SBIR GRANT

 On
June 23, 2023, the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, awarded the Company
a Direct to Phase II Small Business Innovation Research ("SBIR") grant of approximately $ 2.84 million to continue development
of a novel, pan-flu multivariant mucosal vaccine using the Company's Thin Film Freezing technology.

 The
purpose of the SBIR grant is to provide funding to support preclinical and IND enabling studies to advance the development of a shelf-stable
dry powder formulation of a novel universal influenza virus vaccine, developed in the laboratory of Dr. Ted Ross at the Cleveland Clinic
(previously of University of Georgia). Funding from the SBIR grant is expected to take place over three years.

 Revenue
from the SBIR grant will be recognized in the period during which the related qualifying services are rendered and costs are incurred,
provided that the applicable conditions under the SBIR grant have been met. The costs associated with the SBIR grant will be expensed
as incurred and will be reflected as a component of research and development expense in the accompanying consolidated statements of operations.

 Funds
received from the SBIR grant will be recorded as revenue as the Company is the principal participant in the arrangement because the activities
under the SBIR grant are part of the Company's development programs. In those instances where the Company first receives consideration
in advance of providing underlying services, the Company will classify such consideration as deferred revenue until (or as) the Company
provides the underlying services. In those instances where the Company first provides the underlying services prior to its receipt of
consideration, the Company will record a grant receivable.

 During
the year ended December 31, 2023, the Company recognized approximately $ 81,000 of revenue related to the SBIR grant. There were no amounts
due to the Company related to the SBIR grant as of December 31, 2023

 NOTE
14 - SUBSEQUENT EVENTS

 The
Company has performed an evaluation of events occurring subsequent to December 31, 2023 through the filing date of this Annual Report.
Based on its evaluation, nothing other than the events described below need to be disclosed.

 On
March 22, 2024, the Company completed a registered direct offering, selling 147,500 shares of common stock and warrants to purchase up
to 147,500 shares of common stock at an offering price of $ 8.00 per share. The warrants are immediately exercisable upon issuance at
an exercise price of $ 8.00 per share and will expire five and one-half years following the date of issuance. The Company received gross
proceeds of approximately $ 1.2 million before deducting placement agent fees and other offering expenses.

 F- 24

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Not

 Item
9A. Controls and Procedures

 (a)
Evaluation of Disclosure Controls and Procedures.

 Our
management, with the participation of our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure
controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act. Based upon that evaluation, our management, including our
chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective as of December
31, 2023 in ensuring all material information required to be filed has been made known in a timely manner.

 (b)
Changes in internal control over financial reporting.

 There
were no changes to our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act that occurred during
the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

 (c)
Management's report on internal controls over financial reporting.

 Our
management is responsible for establishing and maintaining adequate internal controls over financial reporting, as defined under Rule
13a-15(f) under the Exchange Act. Our management has assessed the effectiveness of our internal controls over financial reporting as
of December 31, 2023 based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 Framework) ("COSO"). Our internal control system was designed to provide reasonable
assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.
An internal control material weakness is a significant deficiency, or aggregation of deficiencies, that does not reduce to a relatively
low level the risk that material misstatements in financial statements will be prevented or detected on a timely basis by employees in
the normal course of their work. Our management assessed the effectiveness of our internal control over financial reporting as of December
31, 2023, and based on that evaluation, management concluded that our internal control over financial reporting was effective as of December
31, 2023.

 This
report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities
and Exchange Commission that permit us to provide only management's report in this Annual Report.

 Item
9B. Other Information

 Not

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
information required under this item will be contained in the 2024 Proxy Statement and is hereby incorporated by reference.

 Item
11. Executive Compensation

 The
information required under this item will be contained in the 2024 Proxy Statement and is hereby incorporated by reference.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
information required under this item will be contained in the 2024 Proxy Statement and is hereby incorporated by reference.

 Item
13. Certain Relationships and Related Transactions, and Director Independence

 The
information required under this item will be contained in the 2024 Proxy Statement and is hereby incorporated by reference.

 Item
14. Principal Accountant Fees and Services

 The
information required under this item will be contained in the 2024 Proxy Statement and is hereby incorporated by reference.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules

 (a)
Financial statements

 Reference
is made to the Index and Financial Statements under Item 8 in Part II hereof where these documents are listed.

 (b)
Financial statement schedules

 Financial
statement schedules are either not required or the required information is included in the consolidated financial statements or notes
thereto filed under Item 8 in Part II hereof.

 (c)
Exhibits

 The
exhibits to this Annual Report on Form 10-K are set forth below. The exhibit index indicates each management contract or compensatory
plan or arrangement required to be filed as an exhibit.

 Number

 Exhibit
 Description

 Method
 of Filing

 3.1

 Second
 Amended and Restated Certificate of Incorporation of the Registrant

 from the Registrant's Registration Statement on Form S-1 filed on August 20, 2019.

 3.2

 Certificate
 of Amendment to Second Amended and Restated Certificate of Incorporation of the Registrant

 from the Registrant's Report on Form 10-K filed on March 31, 2023.

 3.3

 Certificate
 of Amendment to Second Amended and Restated Certificate of Incorporation of the Registrant

 from the Registrant's Report on Form 8-K filed on November 22, 2023.

 3.4

 First
 Amended and Restated Bylaws of the Registrant

 from the Registrant's Report on Form 8-K filed on April 6, 2023.

 4.1

 Specimen
 Certificate representing shares of common stock of Registrant

 from the Registrant's Registration Statement on Form S-1 filed on September 27, 2019.

 4.2

 Warrant
 dated October 29, 2019 issued to National Securities Corporation

 from the Registrant's Annual Report on Form 10-K filed on March 27, 2020.

 4.3

 Warrant
 dated November 20, 2019 issued to National Securities Corporation

 from the Registrant's Annual Report on Form 10-K filed on March 27, 2020.

 4.4

 Warrant
 dated August 17, 2023 issued to The Benchmark Company, LLC

 from the Registrant's Quarterly Report on Form 10-Q filed on November 14, 2023.

 4.5

 Description
 of Capital Stock

 from the Registrant's Annual Report on Form 10-K filed on March 10, 2021

 4.6

 Form
 of Warrant issued to investors in November 2022 Follow-On Offering

 from the Registrant's Annual Report on Form 10-K filed on March 31, 2023.

 4.7

 Form of Warrant issued to private placement investors in March 2024 private placement

 Incorporated
 by reference from the Registrant's Current Report on Form 8-K filed on March 22, 2024.

 4.8

 Form
 of Warrant dated March 22, 2024 issued to H.C. Wainwright & Co., LLC

 Incorporated
 by reference from the Registrant's Current Report on Form 8-K filed on March 22, 2024.

 10.1*

 TFF
 Pharmaceuticals, Inc. 2018 Stock Incentive Plan

 Incorporated
 by reference from the Registrant's Registration Statement on Form S-1 filed on August 20, 2019.

 10.2*

 Employment
 Agreement dated February 15, 2019, by and between the Registrant and Kirk Coleman

 from the Registrant's Registration Statement on Form S-1 filed on August 20, 2019.

 10.3*

 TFF
 Pharmaceuticals, Inc. 2021 Stock Incentive Plan

 from the Registrant's Definitive Proxy Statement filed on September 23, 2021

 10.4

 Amended
 and Restated Patent License Agreement dated April 20, 2022 between the Registrant and The University of Texas at Austin, on behalf
 of the Board of Regents of the University of Texas System

 from the Registrant's Quarterly Report on Form 10-Q filed on May 11, 2022.

 10.5*

 Executive
 Employment Agreement Between Zamaneh Mikhak, M.D. and Registrant

 from the Registrant's Annual Report on Form 10-K filed on March 31, 2023.

 10.6*

 Executive
 Employment Agreement Between Harlan Weisman, M.D. and Registrant

 from the Registrant's Annual Report on Form 10-K filed on March 31, 2023.

 21.1

 List
 of Subsidiaries

 from the Registrant's Annual Report on Form 10-K filed on March 27, 2020.

 23.1

 Consent of
 Marcum LLP

 31.1

 Certification under Section 302 of the Sarbanes-Oxley Act of 2002.

 Filed electronically herewith.

 31.2

 Certification under Section 302 of the Sarbanes-Oxley Act of 2002.

 Filed electronically herewith.

 32.1

 Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

 Filed electronically herewith.

 97.1

 TFF Pharmaceuticals, Inc. Executive Officer Clawback Policy

 Filed electronically herewith.

 101.INS

 101.SCH

 101.CAL

 Document.

 101.DEF

 Document.

 101.LAB

 101.PRE

 Document.

 Cover Page Interactive

 *
 Indicates
 management compensatory plan, contract or arrangement.

 Item
16. Form 10-K Summary

 Not
provided.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report
on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

 Date: March 28, 2024

 By:

 /s/
 Harlan Weisman

 Harlan Weisman,

 Chief Executive Officer

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Harlan
 Weisman

 Chief Executive Officer and Director

 Harlan Weisman

 (Principal Executive Officer)

 /s/ Kirk
 Coleman

 Chief Financial Officer

 Kirk Coleman

 (Principal Financial and Accounting Officer)

 /s/ Robert
 S. Mills, Jr.

 Robert S. Mills, Jr.

 /s/ Stephen
 Rocamboli

 Stephen Rocamboli

 /s / Brandi
 Roberts

 Brandi Roberts

 /s/ Catherine
 Lee

 Catherine Lee

 / s/ Michael
 Patane

 Michael Patane

 /s / Thomas
 King

 Thomas King

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