Exhibit 99.1

PAINREFORM LTD. Condensed UNAUDITED FINANCIAL STATEMENTS

AS OF MARCH 31, 2021

U.S. DOLLARS IN THOUSANDS

INDEX

	Page
Condensed Unaudited  Balance Sheets	F-2
Condensed Unaudited Statements of Comprehensive Loss	F-3
Condensed Unaudited Statement of Changes in Convertible Preferred Shares and Shareholders’ Equity (Deficit)	F-4
Condensed Unaudited Statements of Cash Flows	F-5
Notes to Condensed Unaudited Financial Statements	F-6 - F-12

PAINREFORM LTD.

CONDENSED UNAUDITED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

	As of March 31,			As of December 31,
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	19,424		$	15,677
Restricted cash		13			13
Prepaid clinical trial expenses and deferred clinical trial costs		1,294			1,294
Prepaid expenses and other current assets		601			807
Total current assets		21,332			17,791
Property and equipment, net		22			10
Total assets	$	21,354		$	17,801
Liabilities and shareholders’ deficit
Current liabilities:
Trade payables	$	159		$	720
Other accounts payable and accrued expenses		582			241
Total current liabilities		741			961
Non-current liabilities:
Provision for uncertain tax positions		213			220
Total non-current liabilities		213			220
Shareholders’ deficit:
Ordinary shares, NIS 0.03 par value; Authorized: 16,666,667 shares as of March 31, 2021 and December 31, 2020, respectively; Issued and outstanding: 10,062,383 and 8,758,037 shares as of March 31, 2021 and December 31, 2020, respectively;		90			78
Additional paid-in capital		38,832			33,023
Accumulated deficit		(18,522	)		(16,481	)
Total shareholders’ equity (deficit)		20,400			16,620
Total liabilities and shareholders’ equity (deficit)	$	21,354		$	17,801

(*) Less than $1.

The accompanying notes are an integral part of the financial statements.

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 PAINREFORM LTD.

CONDENSED UNAUDITED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except share and per share data)

	For the Three Months Ended March 31,
	2021			2020
Operating expenses:
Research and development expenses	$	(1,029	)	$	(24	)
General and administrative expenses		(1,010	)		(108	)
Operating loss		(2,039	)		(132	)
Financial expense, net		(2	)		(1,164	)
Net loss and comprehensive loss	$	(2,041	)	$	(1,296	)
Basic and diluted net loss per share	$	(0.23	)	$	(2.76	)
Weighted average number of shares of ordinary share used in computing basic and diluted net loss per share		9,051,148			576,556

The accompanying notes are an integral part of the financial statements.

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 PAINREFORM LTD.

CONDESNED UNAUDITED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

U.S. dollars in thousands (except share data)

	Convertible preferred shares (Temporary equity)				Ordinary shares				Additional paid-in capital		Accumulated deficit			Total shareholders’ equity (deficit)
	Number		Amount		Number		Amount
Balance as of January 1, 2020		2,954,267	$	6,621		576,556	$	5	$	180	$	(12,428	)	$	(12,243	)
Share-based compensation		—		—		—		—		16		—			16
Operating lease provided by controlling shareholder		—		—		—		—		8		—			8
Net loss and comprehensive loss		—		—		—		—		—		(1,296	)		(1,296	)
Balance as of March  31, 2020		2,954,267	$	6,621		576,556	$	5	$	204	$	(13,724	)	$	(13,515	)
Balance as of January 1, 2021		-	$	-		8,758,037	$	78	$	33,023	$	(16,481	)	$	16,620
Share issuance under Private Investment in Pubic Equity ("PIPE"), net		—		—		1,304,346		12		3,045		—			3,057
Warrants issued under Private Investment in Pubic Equity, net		—		—		—		—		2,497		—			2,497
Share-based compensation to employees and directors		—		—		—		—		164		—			164
Share-based compensation to service providers		—		—		—		—		103		—			103
Net loss and comprehensive loss		—		—		—		—		—		(2,041	)		(2,041	)
Balance as of March 31, 2021		—	$	—		10,062,383	$	90	$	38,832	$	(18,522	)	$	20,400

(*) Represents amount less than $1

The accompanying notes are an integral part of the financial statements.

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PAINREFORM LTD.

CONDENSED UNAUDITED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	For the Three Months Ended March 31,
	2021			2020
Cash flows from operating activities
Net loss	$	(2,041	)	$	(1,296	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1			-
Operating lease provided by controlling shareholder		-			8
Share-based compensation to employees		164			16
Share-based compensation to service providers		103			-
Interest expense and amortization of discount on convertible notes		-			362
Revaluation of derivative warrant liability		-			802
Change in:
Other current and non-current assets		206			(58	)
Trade payables		(561	)		23
Other accounts payable		334			(72	)
Net cash used in operating activities		(1,794	)		(215	)
Cash flows from investing activities
Purchase of property and equipment		(13	)		-
Net cash used in investing activities		(13	)		-
Cash flows from financing activities
Proceeds from issuance of ordinary shares under Private Investment  in Public Equity, net		5,554			-
Net cash provided by financing activities		5,554			-
Change in cash, cash equivalents and restricted cash		3,747			(215	)
Cash, cash equivalents and restricted cash at the beginning of the year		15,677			941
Cash, cash equivalents and restricted cash at the end of the year	$	19,424		$	726

(*) Represents amount less than $1

The accompanying notes are an integral part of the financial statements.

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:- GENERAL

a. The Company was incorporated and started business operations in November 2007. The Company is a clinical stage specialty pharmaceutical company focused on the reformulation of established therapeutics. The Company’s proprietary extended-release drug-delivery system is designed to provide an extended period of post-surgical pain relief without the need for repeated dose administration while reducing the potential need for the use of opiates.

b. Since its inception, the Company has devoted substantially all of its efforts to research and development, clinical trials, and capital raising activities. The Company is still in its development and clinical stage and has not yet generated revenues. The Company has incurred losses of $2,041 and $1,296 for the periods ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company’s accumulated deficit was $18,522. The Company has funded its operations to date primarily through equity financing. Additional funding will be required to complete the Company’s research and development and clinical trials, to attain regulatory approvals, to begin the commercialization efforts of the Company’s product and to achieve a level of sales adequate to support the Company’s cost structure. On September 3, 2020, the Company closed an IPO of 2,500,000 units at a price of $8.00 per unit for gross proceeds of approximately $20,000 (net proceeds of approximately $17.3 million after deducting underwriting discounts and commissions and other offering expenses). Refer to Note 1(d). On March 11, 2021, the Company closed a private placement  of 1,304,346 ordinary shares and accompanying warrants to purchase an aggregate of up to 652,173 ordinary shares at a combined purchase price of $4.60 per share and accompanying warrant resulting in gross proceeds of $6,000. Based on the Company's current operating plan, the Company believes that its existing capital resources will be sufficient to fund operations for at least one year after the date the financial statements are issued.

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:- GENERAL (Cont.)

c. The Company effected a 1-for-3 reverse split  of the Company’s ordinary shares and convertible preferred shares on July 6, 2020. All issued and outstanding ordinary shares and convertible preferred shares and related per share amounts contained in these financial statements have been retroactively adjusted to reflect this reverse share split for all periods presented.

d. On September 3, 2020, the Company closed its IPO of 2,500,000 units at a price of $8.00 per unit. Each unit consisted of one ordinary share and one warrant to purchase one ordinary share. The ordinary shares and warrants were immediately separable from the units and were issued separately. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $8.80 per share. On October 5, 2020, the underwriters exercised their over-allotment option and were issued warrants to purchase 375,000 ordinary shares in return for net amount of $3. The Company received gross proceeds of approximately $20,000 (net proceeds of approximately $17.3 million after deducting underwriting discounts and commissions and other offering expenses).

e. On March 11, 2021, the Company closed a private placement of 1,304,346 ordinary shares and accompanying warrants to purchase an aggregate of up to 652,173 ordinary shares at a combined purchase price of $4.60 per share and accompanying warrant resulting in gross proceeds of $6,000.The warrants are exercisable immediately at an exercise price of $4.60 per share and expire five and a half years from the issuance date.
In connection with the private placement, the Company also entered into a registration rights agreement, dated as of March 8, 2021 with the purchasers in the offering pursuant to which the Company filed a registration statement SEC on April 1, 2021 to register the resale of the ordinary shares and the ordinary shares issuable upon exercise of the warrants, of which such registration statement was declared effective on April 9, 2021.
The Company paid the placement agents of the private placement a cash placement fee equal to $390 and an expense reimbursement of $40. The Company also issued to the placement agents warrants to purchase 52,173 ordinary shares, at an exercise price of $5.06 per ordinary share and a term expiring on March 8, 2026.

f. Public health epidemics or outbreaks could adversely impact the Company’s business. In late 2019, a novel strain of COVID-19, also known as coronavirus, was reported in Wuhan, China. While initially the outbreak was largely concentrated in China, it rapidly spread across the globe, including in Israel and the United States. The extent to which COVID-19 pandemic impacts the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. In particular, the continued spread of the coronavirus globally, could adversely impact the Company’s operations and workforce, including other Company’s research and clinical trials and its ability to raise capital, which in turn could have an adverse impact on the Company's business, financial condition and results of operation.

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies that have been applied in the preparation of the unaudited condensed financial statements are identical to those that were applied in preparation of the Company’s most recent annual financial statements in connection with its Annual Report on Form 20-F, except for the following:

- In August 2020, the FASB issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This guidance will be effective for the Company on January 1, 2022 and is not expected to have a material impact on the Company’s financial statements and disclosures.

- ASC Topic 740, "Income Taxes", was amended to simplify the accounting for income taxes to improve consistency of accounting methods and remove certain exceptions. The amendment is effective for the Company beginning January 1, 2021. The Company believes the adoption of the amendment is not expected to have a material impact on the Company’s financial statements and disclosures. 

NOTE 3:- UNAUDITED CONDENSED FINANCIAL STATEMENTS

The accompanying balance sheet as of March 31, 2021, the statements of comprehensive loss, the statements of cash flows and the statement of changes in convertible preferred shares and shareholders’ equity for the three months ended March 31, 2021 and 2020, are unaudited.

The accompanying unaudited financial statements have been prepared in a condensed format and include the unaudited financial operations of the Company as of March 31, 2021 and for the three months period then ended, in accordance with U.S. GAAP, relating to the preparation of financial statements for interim periods.

Accordingly, the accompanying unaudited financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete set of financial statements. These unaudited financial statements should be read in conjunction with the audited financial statements and the accompanying notes of the Company for the year ended December 31, 2020 included in the Company's Annual report on Form 20-F filed with the SEC on March 18, 2021.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the year ended December 31, 2021.

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 4:- LOSS PER SHARE

Basic loss per share is computed by dividing the loss for the period applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. 

For the periods ended March 31, 2021 and 2020, all outstanding share options, convertible notes, and warrants have been excluded from the calculation of the diluted net loss per share as all such securities are anti-dilutive for all years presented.

The loss and the weighted average number of shares used in computing basic and diluted net loss per share is as follows:

	Three Months ended March 31,
	2021			2020
Numerator:
Net loss applicable to shareholders of ordinary shares	$	(2,041	)	$	(1,296	)
Interest accrued on convertible preferred shares		-			(295	)
Total loss attributed to ordinary shares		(2,041	)		(1,591	)
Denominator:
Shares of ordinary share used in computing basic and diluted net loss per share		9,051,148			576,556
Net loss per share of ordinary share, basic and diluted	$	(0.23	)	$	(2.76	)

NOTE 5:- FAIR VALUE MEASUREMENTS

In August and December, 2019, the Company issued warrants related to its convertible notes (refer to Note 5(b)). As the warrants did not meet the US GAAP criteria for equity classification, they were classified as liabilities and measured at fair value on the issuance date and in each reporting date with changes in fair value recognized as finance expenses in the statements of comprehensive loss. Following the Company’s IPO on September 3, 2020, whereby the exercise price of the warrants became fixed and there were no other features that resulted in liability classification, the warrants were reclassified to equity.

A summary of significant unobservable inputs (Level 3 inputs) used in measuring the warrants issued as of March 31, 2020 is as follows:

Exercise price	$	6.72
Expected volatility		75	%
Risk free rate		0.29	%
Expected life (years)		5
Dividend yield		0	%

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 5:- FAIR VALUE MEASUREMENTS (Cont.)

The following table presents changes in the fair value of the derivative warrant liability recorded in respect of the warrants:

Balance as of December 31, 2019	$	447
Changes in fair value		802
Balance as of March 31, 2020	$	1,249

NOTE 6:- SHAREHOLDERS’ EQUITY (DEFICIT)

a. Warrants and warrants units

The following table summarizes the warrants and warrants units outstanding as of March 31, 2021:

Type	Issuance Date	Number of warrants	Exercise price	Exercisable through
August 2019 warrants	August 22, 2019	205,268	$6.72 (*)	August 22, 2024
December 2019 warrants	December 9, 2019	92,321	$6.72 (*)	December 8, 2024
Warrants to bridge financing placement agent	December 9, 2019	55,785	$6.72 (*)	December 8, 2024
Warrants to underwriters	September 3, 2020	125,000	$10.00	September 1, 2025
Warrants to underwriters	October 5, 2020	375,000	$8.80	September 3, 2025
IPO warrants (note 1d)	September 3, 2020	2,812,170	$8.80	September 3, 2025
PIPE warrants (note 1e)	March 11, 2021	652,173	$4.60	September 10, 2026
Warrants to PIPE placement agent (note 1e)	March 11,2021	52,173	$5.06	March 8, 2026

(*) Each warrant is exercisable into one IPO unit consisting of one share and one IPO warrant.

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 6:- SHAREHOLDERS’ EQUITY (DEFICIT) (Cont.)

b. Share-based compensation:

Share options outstanding and exercisable to employees and directors under the 2008 Plan as of March 31, 2021 and December 31, 2020 were as follows:

	Number of options		Weighted average exercise price		Weighted average remaining contractual life
Options outstanding as of December 31, 2020		153,882	$	0.24		3.25
Options outstanding as of March  31, 2021		153,882	$	0.24		3.00
Options exercisable as of March 31, 2021		153,882	$	0.24		3.00

Share options outstanding and exercisable to employees and directors under the 2019 Plan as of March 31, 2021 and December 31, 2020, were as follows:

	Number of options		Weighted average exercise price		Weighted average remaining contractual life
Options outstanding as of December 31, 2020		219,456	$	2.62		8.56
Options outstanding as of March 31, 2021		920,404	$	3.96		9.43
Options exercisable as of March 31, 2021		206,665	$	2.57		8.30

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 PAINREFORM LTD.

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 7:- FINANCIAL EXPENSES, NET

	Three Months ended March 31,
	2021		2020
Interest expense and amortization of discount on convertible notes		-		362
Bank fees		2		-
Change in fair value of derivative warrant liability		-		802
Total financial expenses, net	$	2	$	1,164

(*) Represents amount less than $1

NOTE 8:- CLINICAL TRIALS

On November 13, 2020 (the "First Agreement Execution Date"), the Company entered into a Master Clinical Research Organization Agreement (the "First Agreement"), and on December 3, 2020, the Company entered into a Master Clinical Trial Agreement (the "Second Agreement") both with Lotus Clinical Research as the Company's clinical research organization for the Company's planned Phase 3 trials of PRF-110, which are expected to take place in 2021.

Under the First Agreement, the first milestone payment of $581 was made on December 28, 2020. A second milestone payment of $145 was made on March 1, 2021.

During the three months period ended March 31, 2021 the Company recognized costs in the amount of $145 under the First Agreement, reflecting the progress in the clinical trials.

Under the First Agreement, as of March 31, 2021, a total of $581 was accounted for as prepaid clinical trial expenses.

Under the Second Agreement, a non-refundable deposit  of $710 was made on January 12, 2021. As of March 31, 2021, this payment was accounted for as  prepaid clinical trial expenses.

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