PEAR THERAPEUTICS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

This Quarterly Report on Form 10-Q contains forward-looking statements based
upon current expectations that involve risks and uncertainties. Pear's actual
results may differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those set forth in the
"Risk Factors" section included in Part II, Item 1A of this Form 10-Q. All
references to years, unless otherwise noted, refer to our fiscal years, which
end on December 31. For purposes of this section, all references to "we," "us,"
"our," "Pear," or the "Company" refer to Pear Therapeutics, Inc. and its
consolidated subsidiaries.

The following discussion and analysis should also be read in conjunction with
the accompanying consolidated financial statements included in Part I, Item 1 of
this Form 10-Q. This Item 2 generally discusses 2022 and 2021 financial
condition and results of operations and year-to-year comparisons between 2022
and 2021.

Overview

Pear is a commercial-stage healthcare company pioneering a new class of drugs, called PDT, which uses software to treat disease. Our vision is to advance healthcare through the widespread use of PDTs.

Two of our FDA-authorized PDTs are for the treatment of addiction. Our first
product, reSET, is indicated for the treatment of substance use disorder ("SUD")
as a monotherapy. Our second product, reSET-O, is indicated for the treatment of
opioid use disorder ("OUD") in combination with buprenorphine.

Our third product, Somryst, is indicated for the treatment of chronic insomnia.

Operating segments

We operate our business in a single segment and as one reporting unit, which is
how our chief operating decision maker (who is our president and chief executive
officer) reviews financial performance and allocates resources.

Factors Affecting Our Performance and Results of Operations

We believe that our performance and future success depend on many factors that
present significant opportunities for us, but also pose risks and challenges,
including those discussed more fully under the heading "Risk Factors" in Part
II, Item 1A of this Form 10-Q.

Key business indicators

We monitor key non-financial operational performance measures to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. Metrics include the following:

A. The total number of prescriptions in a given period is (a) the imputed number of prescriptions based on revenue recognized under access agreements, plus (b) the number of prescriptions written that are not charged under access agreements.

B. The fill rate in a given period is (a) the number of prescriptions for which a patient begins treatment or for which there is a contractual payment obligation and revenue has been recognized divided by (b) total prescriptions. (The total number of prescriptions multiplied by the fill rate equals the prescriptions filled.)

C.Payment Rate in a given period is (a) the number of prescriptions for which
the company receives payment divided by (b) Fulfilled Prescriptions. (Fulfilled
Prescriptions times Payment Rate equals Paid Prescriptions.)

D. The average selling price, or ASP, during a given period is the average price received by the company per scenario for which the company receives payment.

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                                                        Three Months Ended         Six Months Ended June
Key Performance Operating Metric                          June 30, 2022                  30, 2022

Total Prescriptions                                          11,000+                      20,000+
Fulfillment Rate                                               56%                          57%
Payment Rate                                                   45%                          47%
Average Selling Price (ASP)                                   $1,323                      $1,338


Product Revenue

We generate product revenue from the sale of our three FDA-authorized PDTs:
reSET, reSET-O, and Somryst. We began our efforts to self-commercialize reSET
and reSET-O in Q4 2019 and Somryst in Q4 2020. Sales of our existing products
are expected to reduce our net operating losses over time, but we cannot predict
when we will achieve profitability.

We enter into agreements with health care providers and payors, and state and
local governments, to provide prescriptions which provide for volume-based
discounts and other discounts, and in certain circumstances, value-based rebates
("Access Agreements"). We also enter into arrangements with health care
providers and payors that provide for government-mandated and/or privately
negotiated rebates and discounts with respect to the purchase of our products. A
portion of the product revenue is recognized when the products are made
available to the customer (via Access Agreements) or when a prescription is
fulfilled (via third party reimbursement), and the portion of the product
revenue related to the clinician's access to our proprietary clinician dashboard
is deferred and recognized ratably over the remaining term of the contract (if
purchased via an Access Agreement) or the prescription duration (if purchased
via third party reimbursement).

Product revenues from our three existing FDA-cleared PDTs, as well as potential future product candidates, are and will be impacted by many factors, including the following variables: patient and clinician adoption of PDTs, pricing, reimbursement , contingency management and mixing product.

Patient and Clinician Adoption of PDTs - To continue to grow our business, we
will need to execute on our current business strategy of achieving and
maintaining broad market acceptance of our PDTs by patients and physicians.
Market acceptance and adoption of our PDTs depends on educating patients,
self-insured employers, commercial and government payors, health plans and
physicians, and other government entities, as to the distinct features,
therapeutic benefits, cost savings, and other advantages of our PDTs as compared
to competitive products or other currently available treatment options.

Pricing - In the future, we expect to grow the number of commercially available
PDTs in our product portfolio, offering a broad range of PDTs spanning multiple
price points. PDTs may be subject to competition which may impact our pricing.
In addition, our products may be subject to legislative prescription-pricing
practices. Further, we continue to collect additional data to enhance product
performance and bolster health economics and outcomes research ("HEOR") and
associated cost savings for payors.

Reimbursement - Our payor strategy focuses across all major payor channels,
including employers, Integrated Delivery Networks ("IDNs"), pharmacy benefit
managers ("PBMs"), commercial payors, and government payors, including Medicaid
and Medicare. We expect to increase our number of payors, and the pricing for
such payors may vary as net prices for our products may be reduced by mandatory
discounts or rebates required by government healthcare programs or private
payors and can be subject to customary discounts and rebates. In addition, some
of our products may be subject to certain customer incentive programs. Even if
coverage is provided, the approved reimbursement amount may not be high enough
to allow us to establish or maintain pricing sufficient to achieve
profitability. In the future, as our market access team educates payors on the
clinical attributes of our products, we expect our products to secure favorable
coverage policies and to maximize the covered lives that have reimbursement for
our products.

Contingency management – ​​Costs related to clinically validated rewards that patients earn when they reach their treatment goals under our reSET and reSET-O PDTs are recorded as counterpart revenue.

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Product Mix - Sales of certain products have, or are expected to have, higher
gross margins than others. As a result, our financial performance depends, in
part, on the mix of products we sell during a given period.

Product revenue cost

Cost of product revenue consists primarily of costs that are closely correlated
or directly related to the delivery of our products, including pharmacy costs,
royalties paid under license agreements related to our commercialized products,
amortization of milestone payments capitalized related to commercialized
products, hosting costs, and personnel-related costs, including salaries and
bonuses, employee benefits, and stock-based compensation attributable to
employees in a particular function and associated with our implementation
services. We expect the cost of product revenue to increase as we further
commercialize our products and increase the volume of prescriptions filled.
However, we expect our cost of product revenue to decrease as a percentage of
total revenue over the longer-term subject to the expected revenue growth.

Research and development costs

As of June 30, 2022, we have multiple product candidates in our pipeline. As of
July 25, 2022, we paused most investment in our pipeline in order to conserve
cash, and we expect our R&D expenses will decrease during the second half of
2022.

R&D expenses consist of costs incurred in the performance of R&D activities, which include:

•expenditures incurred in the development of our potato pipeline;

•expenses incurred to improve our products;

•costs related to licensing agreements with third parties, including development and regulatory milestones;

•personnel expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in R&D functions;

•cost of clinical trials;

•expenses incurred in connection with the discovery and development of our PDTs, including in connection with agreements with third parties, such as consultants;

• expenses incurred under agreements with consultants who supplement our internal capabilities, including software development;

•facilities, depreciation and other expenses, which include direct and allocated expenses, such as rent and maintenance of facilities, insurance and other operating costs for space and costs directly related to functions R&D; and

•We capitalize certain software development costs attributable to the
development of our data foundry during the application development stage of the
project and amortize the costs to research and development upon completion over
the expected life of the software.

Each of our product candidates involves technical, clinical, regulatory and business risks, including those more fully described under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q.

We expense R&D costs as incurred and do not track the costs at a project level.
Advance payments made for goods or services to be received in the future for use
in R&D activities are recorded as prepaid expenses. The prepaid amounts are
expensed as the benefits are consumed. In the early phases of development, our
R&D costs are often devoted to product platform and proof-of-concept studies
that are not necessarily allocable to a specific product.

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Selling, general and administrative expenses

Selling, general, and administrative, or SG&A, expenses consist primarily of
compensation for personnel, including stock-based compensation related to
commercial, marketing, executive, finance and accounting, information
technology, corporate and business development, and human resource functions.
Other SG&A expenses include marketing initiatives, market research and analysis,
conferences and trade shows, travel expenses, professional services fees
(including legal, patent, accounting, audit, tax, and consulting fees),
insurance costs, amortization of internal-use software, general corporate
expenses, and allocated facilities-related expenses, including rent and
maintenance of facilities.

We expect general and administrative expenses to decline as we reduce expenses primarily related to personnel costs and certain business efforts related to restructuring activities that began on July 25, 2022.

Interest and other income (expenses), net

Interest expense includes interest due under our Credit Agreement with
Perceptive Credit Holdings III, LP, as administrative agent for the lenders,
which we refer to as the Perceptive Credit Facility, and accretion of the debt
discount on the Perceptive Credit Facility as well as the change in the fair
value of our derivative liabilities and earn-out liabilities that occurred
during the period. We expect interest expense to increase as London Interbank
Offered Rate ("LIBOR") increases. In addition, it includes the accretion of the
interest of the seller financing in connection with the Waypoint asset acquired
in November 2021. See Note 9 in the accompanying notes to the consolidated
financial statements included in Part I, Item 1 of this Form 10-Q for further
information.

Interest income consists of interest earned on cash balances held in
interest-bearing accounts. We expect our interest income will fluctuate based on
the timing and ability to raise additional funds as well as the amount of
expenditures for our commercial products and R&D for our product candidates and
ongoing business operations.

Financial Highlights

Year-over-year product sales increased significantly, primarily due to increased sales of reSET and reSET-O.

We incurred net losses of $18.4 million and $52.6 million for the six months
ended June 30, 2022 and 2021, respectively, representing a period-over-period
decrease of $34.2 million or 65.0%. This decrease was primarily due to a change
in the fair value of the earn-out liabilities of $43.8 million for the six
months ended June 30, 2022, a gain related to the change in fair value of the
Public Warrants and the Private Placement Warrants of $6.7 million for the six
months ended June 30, 2022, compared to a $5.4 million loss for the six months
ended June 30, 2021, related to the Legacy Pear Warrants, and a $4.5 million
increase in total revenue period over period. These increases were partially
offset by an $18.9 million increase in personnel-related expenses, primarily
related to new hires as we expanded from 220 employees on June 30, 2021, to 298
employees on June 30, 2022. Further, we had a $3.1 million increase in costs
related to being a public company and a $2.0 million increase in
marketing-related expenses period over period.

To date, we have funded our operations primarily with proceeds from sales of
Legacy Pear's convertible preferred stock, proceeds as a result of the Business
Combination, payments received in connection with collaboration and license
agreements, product sales, and proceeds from borrowings under various credit
facilities. Since our inception, we have received gross cash proceeds of $175.3
million as a result of the Business Combination (see Note 3 in the accompanying
notes to the consolidated financial statements included in Part I, Item 1 of
this Form 10-Q), and gross cash proceeds of $268.2 million from sales of our
Legacy Pear's convertible preferred stock; we currently have $30.0 million of
debt outstanding under the Perceptive Credit Facility.

Recent Events

Addition to the Russell 2000® Index

The pear will be added to the US Russell Index Series in conjunction with the
September 2022 quarterly review, effective after the US market opens on Monday, September 19, 2022. The Russell 2000® Index is one of the most

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cited performance benchmarks for small-cap companies and is widely used by
investment managers and institutional investors as the basis for index funds and
as a benchmark for active investment strategies. We believe our inclusion in the
Russell 2000® Index will continue to increase overall awareness and exposure of
the Company by introducing us to a wider investor audience.

Downsizing

On July 25, 2022, the Company restructured its operations to narrow its
near-term business focus and reduce its workforce due to the macroeconomic
environment. The Company's restructuring includes external and internal cost
reductions in almost all areas of the Company. The Company focused cost
reductions on pipeline candidates, discovery programs, business development, and
the Company's dual platform in order to prioritize certain of its commercial
efforts. The reduction in workforce will decrease overall headcount by
approximately 25 employees. The Company expects to incur a one-time charge of
approximately $0.9 million in the third quarter of 2022 related to the reduction
in workforce, consisting primarily of one-time severance payments upon
termination of the employees and continued benefits for a specific period of
time with related cash payments expected to be substantially paid out by
September 30, 2022. The Company expects such payments to be the only direct
expense of the reduction in workforce. The Company does not expect to recognize
a stock-based compensation expense for impacted employees related to vested
awards and does not anticipate modifying the affected employees' stock awards in
a manner that would result in additional expenses. The severance-related and
non-cash charges that the Company expects to incur in connection with, or as a
result of, the workforce reduction, are subject to a number of assumptions, and
actual results may differ materially.

Trade suit

On December 3, 2021, we consummated a business combination, pursuant to the
terms of the Business Combination Agreement dated June 21, 2021. Upon the
consummation of the Business Combination, Oz Merger Sub, a newly formed
subsidiary of THMA, merged with and into Pear, with Pear surviving. THMA was
renamed Pear Therapeutics, Inc. ("Pear") and Pear Therapeutics, Inc. was renamed
Pear Therapeutics (US), Inc. ("Legacy Pear"). Legacy Pear is deemed the
accounting predecessor and the post-company successor SEC registrant, which
means Legacy Pear financial statements for previous periods will be disclosed in
this Form 10-Q. Future period reports filed with the SEC will include Pear
Therapeutics, Inc. and its subsidiaries.

The Business Combination was accounted for as a reverse recapitalization. Under
this method of accounting, THMA was treated as the acquired company for
financial statement reporting purposes. The most significant change in the
post-combination company's reported financial position and results was an
increase in cash of $175.0 million. We paid $32.8 million in transaction costs
relating to the business combination. We recorded a liability related to the
Public Warrants and the Private Placement Warrants of $16.5 million and $95.4
million related to the earn-out shares that holders of Legacy Pear Common Shares
and Legacy Pear Preferred Shares prior on the Closing Date who received the
contingent right to receive up to 12,395,625 additional shares of Class A common
stock (the "Earn-Out Shares") upon the achievement of certain earn-out targets.

As a consequence of the Business Combination, we became the successor to an
SEC-registered and Nasdaq-listed company and we have hired additional personnel
and implemented procedures and processes to address public company regulatory
requirements and customary practices. We expect to incur additional annual
expenses as a public company for, among other things, directors' and officers'
liability insurance, director fees, and additional internal and external
accounting and legal and administrative resources, including increased audit and
legal fees over those as a private company.

Economic conditions (impact of COVID-19)

In March 2020, the World Health Organization declared the global outbreak of
COVID-19 to be a pandemic. The pandemic has significantly impacted the economic
conditions in the US, as federal, state and local governments react to the
public health crisis, creating significant uncertainties in the US economy. The
downstream impact of various lockdown orders and related economic pullback
affect our business and our customers to varying degrees. We are closely
monitoring the impact of COVID-19 on all aspects of our business, including how
it is impacting our customers, patients, employees, suppliers, vendors, and
business partners. We are unable to predict the specific

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impact that COVID-19 may have on our business, financial position, and
operations moving forward due to the numerous uncertainties. Any estimates made
herein may change as new events occur and additional information is obtained,
and actual results could differ materially from any estimates made herein under
different assumptions or conditions.

For further details see the information under the heading "Risk Factors" in Part
II, Item 1A in this Form 10-Q. We are unable to predict the full impact that the
COVID-19 pandemic will have on our future results of operations, liquidity, and
financial condition due to numerous uncertainties, including the duration of the
pandemic and the actions that may be taken by government authorities across the
US. The COVID-19 pandemic has also affected global access to capital and caused
significant volatility in financial markets. Significant deterioration of the US
and global economies or rapid increases in inflation could have an adverse
impact on our future liquidity needs. As a result of the COVID -19 pandemic, we
shifted our workforce to a hybrid model in which employees in one of our three
offices work both remotely and onsite, and we anticipate we will continue to use
this model going forward. In addition, our workforce has deep domain knowledge
across a range of healthcare, technology, and general business, which was
partially achieved by having certain of our employees working remotely across
the US. Pear will continue to monitor the performance of its business and assess
the impacts of COVID-19.

Impact of Inflation

We are experiencing rising costs for certain inflation-sensitive operating
expenses such as labor and certain service providers that are heavily dependent
on labor. We do not believe these impacts were material to net income during the
six months ended June 30, 2022 or will be going forward. However, significant
sustained inflation driven by the macroeconomic environment or other factors
could negatively impact our margins, profitability and results of operations in
future periods.

Results of Operations

The tables and comments below present the results for the periods indicated:

                                                       Three Months Ended June 30,                       Change
(in thousands, except percentages)                       2022                 2021                $                  %

Revenue

Product revenue                                    $       2,997          $   1,047          $   1,950                186  %
Collaboration and license revenue                            300                154                146                 95  %
Total revenues                                             3,297              1,201              2,096                175  %
Cost and operating expenses:
Cost of product revenue                                    2,401                727              1,674                230  %
Research and development                                  12,716              7,877              4,839                 61  %
Selling, general, and administrative                      21,000             14,546              6,454                 44  %
Total cost and operating expenses                         36,117             23,150             12,967                 56  %
Loss from operations                                     (32,820)           (21,949)           (10,871)                50  %
Other income (expenses):
Interest and other (expense) income, net                    (343)            (1,018)               675                (66) %
Change in estimated fair value of earn-out
liability                                                 29,163                  -             29,163                     *
Change in estimated fair value of warrant
liabilities                                                9,462             (5,234)            14,696                     *

Total other income (expense)                              38,282             (6,252)            44,534                     *
Net income (loss)                                  $       5,462          $ (28,201)         $  33,663               (119) %


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* Percentage change not significant.

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Product revenue-Product revenue for the three months ended June 30, 2022 was
$3.0 million, compared to $1.0 million for the three months ended June 30, 2021.
The increase of $2.0 million was primarily driven by increased sales of reSET
and reSET-O under Access Agreements.

Collaboration and Licensing Revenue-Collaboration and Licensing Revenue for the Three Months Ended June 30, 2022 has been $0.3 millioncompared to $0.2 million for the three months ended June 30, 2021.

Cost of product revenue-Cost of product revenue for the three months ended June
30, 2022 was $2.4 million, compared to $0.7 million for the three months ended
June 30, 2021. This increase was primarily due to implementation costs
associated with our Access Agreements and minimum royalties related to licensing
agreements for commercialized products, pharmacy and hosting costs for our PDTs.
Cost of product revenue represented 72.8% and 60.5% of total revenue for the
three months ended June 30, 2022 and 2021, respectively. We expect cost of
product revenue to decrease as a percentage of revenue as revenue increases.

Research and development-R&D expenses for the three months ended June 30, 2022
were $12.7 million, compared to $7.9 million for the three months ended June 30,
2021. The increase of $4.8 million was primarily due to an increase of $3.6
million of personnel-related costs as we expanded our R&D staff from 93 on
June 30, 2021, to 132 on June 30, 2022.

Selling, general, and administrative-SG&A expenses for the three months ended
June 30, 2022 were $21.0 million, compared to $14.5 million for the three months
ended June 30, 2021. This increase of $6.5 million was primarily due to further
building out of our commercial operations, and is mainly comprised of the
following increases:

•$4.3 million in personnel-related costs as a result of an increase in headcount
from 117 on June 30, 2021, to 144 on June 30, 2022, primarily in the commercial
team;

•$1.4 million in public company fees, including insurance for our directors and officers;

• $0.8 million in marketing and advertising costs as a result of targeted media and market awareness, education and advocacy initiatives;

•$0.5 million of amortization expense, primarily related to the amortization of software used in our patient support center;

Interest and other (expense) income, net-Interest and other income (expense),
net, was an expense of $0.3 million for the three months ended June 30, 2022,
compared to an expense of $1.0 million for the three months ended June 30, 2021.
This decrease is mainly the result of the gain from the change in the fair value
of the embedded debt derivative recorded during three months ended June 30,
2022.

Change in fair value of earn-out liabilities-For the three months ended June 30,
2022 we recognized a $29.2 million gain as a result of the change in fair value
of the earn-out liabilities.

Change in fair value of warrant liabilities-We recognized a $5.2 million loss
for the three months ended June 30, 2021 related to the Legacy Pear Warrants,
which were exercised in 2021 prior to the Business Combination. For the three
months ended June 30, 2022, we recognized a gain of $9.5 million related to
outstanding the Public Warrants and the Private Placement Warrants.

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                                                        Six Months Ended June 30,                         Change
(in thousands, except percentages)                       2022                  2021                $                  %

Revenue

Product revenue                                    $        5,746          $   1,347          $   4,399                327  %
Collaboration and license revenue                             300                230                 70                 30  %
Total revenues                                              6,046              1,577              4,469                283  %
Cost and operating expenses:
Cost of product revenue                                     3,882              1,465              2,417                165  %
Research and development                                   25,980             15,367             10,613                 69  %
Selling, general, and administrative                       43,745             27,845             15,900                 57  %
Total cost and operating expenses                          73,607             44,677             28,930                 65  %
Loss from operations                                      (67,561)           (43,100)           (24,461)                57  %
Other income (expenses):
Interest and other (expense) income, net                   (1,359)            (2,044)               685                (34) %
Change in estimated fair value of earn-out
liability                                                  43,790                  -             43,790                     *
Change in estimated fair value of warrant
liabilities                                                 6,733             (5,397)            12,130                     *

Loss on issuance of Legacy Pear convertible
preferred stock                                                 -             (2,053)             2,053               (100) %
Total other income (expense)                               49,164             (9,494)            58,658                     *
Net loss                                           $      (18,397)         $ (52,594)         $  34,197                (65) %


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* Percentage change not significant.

Product revenue-Product revenue for the six months ended June 30, 2022, was $5.7
million, compared to $1.3 million for the six months ended June 30, 2021. The
increase of $4.4 million was primarily driven by increased sales of reSET and
reSET-O under Access Agreements.

Collaboration and license revenue-Collaboration and license revenue for the six
months ended June 30, 2022 was $0.3 million, compared to $0.2 million for the
six months ended June 30, 2021.

Cost of product revenue-Cost of product revenue for the six months ended June
30, 2022, was $3.9 million, compared to $1.5 million for the six months ended
June 30, 2021. This increase of $2.4 million was primarily due to implementation
costs associated with our Access Agreements and minimum royalties related to
licensing agreements for commercialized products, pharmacy, and hosting costs
for our PDTs. Cost of product revenue represented 64.2% and 92.9% of total
revenue for the six months ended June 30, 2022 and 2021, respectively. We expect
cost of product revenue to decrease as a percentage of revenue as revenue
increases.

Research and development-R&D expenses for the six months ended June 30, 2022
were $26.0 million, compared to $15.4 million for the six months ended June 30,
2021. The increase of $10.6 million was primarily due to an increase of $8.1
million of personnel-related costs as we continued shifting our software
development work from external to internal resources, and coinciding with an
increase in R&D headcount from 93 on June 30, 2021, to 132 on June 30, 2022.

Selling, general and administrative-SG&A expenses have been $43.7 million and $27.8 million for the six months ended June 30, 2022 and 2021, respectively. The raise of $15.9 million was mainly due to the continued development of our business operations, and mainly includes the following increases:

•$9.0 million in personnel-related costs as a result of an increase in headcount
from 117 on June 30, 2021, to 144 on June 30, 2022, primarily in the commercial
team;

•$3.1 million in public enterprise costs, including insurance for our directors and officers;

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•$2.0 million in marketing and advertising expenses as a result of targeted media and market awareness, education and advocacy initiatives;

•$0.9 million of amortization expense, primarily related to the amortization of software used in our patient support center; and

•$0.9 million in professional fees, including increases in legal and accounting fees due to going public.

Interest and other (expense) income, net-Interest and other income (expense),
net, for the six months ended June 30, 2022 was an expense of $1.4 million
compared to an expense of $2.0 million for the six months ended June 30, 2021.
This decrease is mainly the result of the gain from the change in the fair value
of the embedded debt derivative recorded during three months ended June 30, 2022

Change in fair value of earn-out liabilities-For the six months ended June 30,
2022, we recognized a $43.8 million gain as a result of the change in fair value
of the earn-out liabilities.

Change in fair value of warrant liabilities-We recognized a $5.4 million loss
for the six months ended June 30, 2021 related to the Legacy Pear Warrants,
which were exercised in 2021 prior to the Business Combination. For the six
months ended June 30, 2022, we recognized a gain of $6.7 million related to the
Public Warrants and the Private Placement Warrants.

Loss on issuance of Legacy Pear convertible preferred stock-In February 2021, we
issued shares of Legacy Pear Series D-1 Preferred Stock. The shares were
recorded at their estimated fair market value on the date of issuance. In
connection with the Legacy Pear Series D-1 Preferred Stock, we recorded a loss
of $2.1 million for the six months ended June 30, 2021, which represents the
amount by which the estimated fair value of the shares exceeded the sale price,
net of issuance costs.

Income tax-We did not incur income tax expenses for the six months ended
June 30, 2022 and 2021. Given our lack of prior earnings history, we have a full
valuation allowance primarily related to our net operating loss and R&D credit
carryforwards that we do not consider more likely than not to be realized.

Cash and capital resources

Since our inception, our primary sources of capital have been proceeds from
sales of Legacy Pear convertible preferred stock, payments received in
connection with collaboration agreements, proceeds from borrowings under various
credit facilities, and the Business Combination. See Note 3 in the accompanying
notes to the consolidated financial statements included in Part I, Item 1 of
this Form 10-Q for further information.

We have three commercial products: reSET, reSET-O, and Somryst. The revenue from
the sale of these products at the present time is not sufficient to cover the
operating costs incurred. Our ability to achieve sufficient revenue to cover our
costs is highly dependent on our PDTs achieving and maintaining broad market
acceptance by patients and physicians and obtaining reimbursement from
third-party payors. We have incurred recurring losses from inception and
anticipate net losses and negative operating cash flows for the near future. For
the six months ended June 30, 2022 and 2021, we incurred net operating losses of
$18.4 million and $52.6 million, respectively.

As of June 30, 2022 and December 31, 2021, we had an accumulated deficit of
$266.4 million and $248.0 million, respectively. As of June 30, 2022 and
December 31, 2021, we had outstanding debt of $27.4 million and $27.0 million,
net of debt issuance costs, respectively. Our cash flows may fluctuate and are
difficult to forecast and will depend on many factors. As of June 30, 2022 and
December 31, 2021, we had cash and cash equivalents of $60.2 million and $169.6
million, respectively.

Our primary uses of capital are, and we expect will continue to be for the near
future, funding operating activities, including commercial operations and
product enhancements and development of certain of our product pipeline. We have
in the past and we expect in the future to capitalize labor costs related to the
development of our internal-use software.

                  Pear Therapeutics, Inc. | Form 10-Q |Page 34

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In the future, we will need to raise additional capital to pursue our growth
strategy and support continuing operations. Until such time as we can generate
significant revenue to fund operations, we expect to seek additional capital
from the issuance of equity, debt, or other capital transactions. If sufficient
funds on acceptable terms are not available when needed, we will be required to
significantly reduce our operating expenses further. In July 2022, we
restructured our business operations to narrow our near-term business focus and
decreased our workforce to reduce our operating expenses. We may be unable to
increase our revenue, raise additional funds, or enter into such other
agreements or arrangements when needed on favorable terms, or at all. Despite
our recent restructuring, if we fail to raise capital or enter into such
agreements as and when needed, we may have to significantly delay, further scale
back or discontinue the development and commercialization of more of our product
candidates and other strategic initiatives. We are also subject to various
covenants related to the Perceptive Credit Facility, and given the substantial
doubt about our ability to continue as a going concern, there is a risk that we
may not meet our covenants in the future. As of June 30, 2022 and December 31,
2021, we meet our covenants, however we concluded that the above circumstances
raise substantial doubt about our ability to continue as a going concern.

Cash and cash equivalents

Of the June 30, 2022we have had $60.2 million cash and cash equivalents. Our future capital requirements may differ from those currently anticipated and will depend on a variety of factors, including the timing and magnitude of R&D expenditures and expenditures on other strategic business initiatives, including the expansion of our business operations.

Liquidity risks

We expect to incur substantial additional expenditures in the near term to
support our ongoing activities, including costs related to being a public
company. We expect to continue to incur net losses for the foreseeable future.
Our ability to fund our product development and clinical operations as well as
commercialization of our product candidates will depend on the amount and timing
of cash available to fund operations. Our future liquidity and capital funding
requirements will depend on numerous factors, including:

•the growth of our revenues;

•the possibility of obtaining reimbursement by third-party payment for our current products;

•the amount and timing of sales and other revenue from our product candidates, if approved, including sale price, availability of coverage, and adequate third-party payer reimbursement;

•our business activities, including sales and marketing;

•our R&D efforts;

•the emergence and effect of competing or complementary products;

•the outcome, timing and cost of meeting regulatory requirements established by the FDA or comparable foreign regulatory authorities;

•the progress, timing, scope and costs of our preclinical studies, clinical trials, potential future clinical trials and other related activities;

•the costs of commercialization activities for any of our product candidates
that receive marketing authorization, including the costs and timing of
establishing product sales, marketing and hosting capabilities, or entering into
strategic collaborations with third parties to leverage or access these
capabilities;

• cash requirements related to the development of our programs and our ability and willingness to fund their continued development;

•the cash requirements of any future discovery of product candidates;

• our ability to retain our current employees;

                  Pear Therapeutics, Inc. | Form 10-Q |Page 35

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•the time and cost required to respond to technological and market developments, including other products that may compete with one or more of our product candidates;

•debt service requirements;

•the extent to which we acquire or invest in businesses, products or technologies;

•our ability to reduce or contain certain costs and expenses;

•the impact of the macroeconomic environment; and

•the impact of the COVID-19 pandemic.

A change in the outcome of any of these or other variables with respect to the
development of any of our product candidates could significantly change the
costs and timing associated with the sale of our products or the development of
product candidates. Further, our operating plans may change in the future, and
we may need additional funds to meet operational needs and capital requirements
associated with such operating plans. See the information under the heading
"Risk Factors" included in Part II, Item 1A this Form 10-Q for risks related to
our financial condition.

Because of the numerous risks and uncertainties associated with the development
and commercialization of our product candidates, we are unable to estimate the
amounts of increased capital outlays and operating expenditures associated with
our current and anticipated product development programs.

Funding needs

Please see the risks associated with our substantial capital requirements
explained more fully under the heading "Risk Factors-We will need substantial
additional funding, and if we are unable to raise capital when needed or on
terms favorable to us, our business, financial condition, and results of
operation could be materially and adversely affected" in Part II, Item 1A of
this Form 10-Q.

Debt Financing and Covenants

Borrowings under our secured Perceptive Credit Facility were $30.0 million as of
June 30, 2022 and December 31, 2021; these borrowings were used to extinguish
the former SVB Term Loan and for general business purposes. The Perceptive
Credit Facility matures in June 2025. We are required to pay a variable rate of
interest based upon the one-month LIBOR rate plus 11.0%, subject to a LIBOR
floor of 1.0%. As of June 30, 2022, the annual interest rate was 12.1%. The
Company is required to make interest-only payments until May 31, 2024, after
which point the Company will be required to make monthly payments of principal
equal to 3.0% of the then outstanding principal until maturity on June 30, 2025.

The Perceptive Credit Facility is secured by substantially all of the assets of
the Company, including our intellectual property. The Perceptive Credit Facility
requires the Company to (i) maintain a minimum aggregate cash balance of $5.0
million in one or more controlled accounts, and (ii) as of the last day of each
fiscal quarter commencing with the fiscal quarter ending March 31, 2022, report
revenues for the trailing 12-month period that exceed the amounts that range
from $5.8 million for the fiscal quarter ending March 31, 2022, to $125.0
million for the fiscal quarter ending March 31, 2025. The Perceptive Credit
Facility contains various affirmative and negative covenants that limit the
Company's ability to engage in specified types of transactions. The Company was
in compliance with the covenants under the Perceptive Credit Agreement as of
June 30, 2022.

See Note 7 in the accompanying notes to the consolidated financial statements
included in Part I, Item 1 of this Form 10-Q for further information. In the
future, we may seek to obtain other additional sources of financing, including
incurring term debt or issuing equity or debt securities.

Of the June 30, 2022 and December 31, 2021we have had $0.4 million in an outstanding letter of credit in respect of our property leased to San Francisco, California.

                  Pear Therapeutics, Inc. | Form 10-Q |Page 36

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Contractual obligations, commitments and contingencies

We lease our headquarters in Boston, Massachusetts, under a non-cancelable
operating lease with an expiration date of June 1, 2028. We also lease office
space in San Francisco, California, under a non-cancelable operating lease that
expires on July 31, 2025, and office space in Raleigh, North Carolina, under a
non-cancelable operating lease that expires on May 31, 2026. See Note 8 in the
accompanying notes to the consolidated financial statements included in Part I,
Item 1 of this Form 10-Q for further information.

We enter into agreements in the normal course of business with various vendors,
which are generally cancellable upon notice. Payments due upon cancellation
consist only of payments for services provided or expenses incurred, including
non-cancellable obligations of service providers, up to the date of
cancellation.

In addition, under various licensing agreements to which we are a party, we are
obligated to pay annual license maintenance fees and may be required to make
milestone payments and to pay royalties and other amounts to third parties. The
payment obligations under these agreements are contingent upon future events,
such as our achievement of specified milestones or generating product revenue,
and the amount, timing and likelihood of such payments are not known. Amounts
related to contingent milestone payments are not considered contractual
obligations as they are contingent on the successful achievement of certain
milestones. These contingent milestones may not be achieved. We cannot estimate
or predict when, or if, these amounts will become due. See Note 9 in the
accompanying notes to the consolidated financial statements included in Part I,
Item 1 of this Form 10-Q for further information.

On June 17, 2021, and later amended on August 3, 2021, we entered into a
non-cancelable purchase obligation for a subscription to the Palantir Foundry
cloud platform, including support services, updates, and related professional
services with Palantir for $9.3 million payable over three years, we have paid
$3.0 million and the remaining $6.3 million is due in quarterly installments
starting on October 1, 2022 continuing through September 30, 2024.

See Note 9 in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for more information.

Indemnification of directors and officers

We have entered into indemnification agreements with our directors and certain
officers and employees that will require us, among other things, to indemnify
them against certain liabilities that may arise by reason of their status or
service as directors, officers, or employees. No demands have been made upon us
to provide indemnification under such agreements and there are no claims that we
are aware of that could have a material effect on our condensed consolidated
balance sheets, condensed consolidated statements of operations and
comprehensive loss, condensed consolidated statements of stockholders' equity,
or condensed consolidated statements of cash flows.

Cash flow

The following table provides a summary of cash flow data for each applicable
period:
                                                                             Six Months Ended June 30,
(in thousands)                                                                2022                    2021
Net cash used in operating activities                                $      (66,345)              $ (43,866)
Net cash (used in) provided by investing activities                         (43,807)                  5,503
Net cash provided by financing activities                                       836                  19,682

Net decrease in cash, cash equivalents and restricted cash ($109,316)

              $ (18,681)


Operational activities

Net cash used in operating activities was $66.3 million for the six months ended
June 30, 2022. Net cash used in operating activities consists of a net loss of
$18.4 million, adjusted for non-cash items and the effect of changes in working
capital. Non-cash adjustments primarily include the change in fair value of
earn-out liabilities of

                  Pear Therapeutics, Inc. | Form 10-Q |Page 37

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$43.8 millionthe change in the fair value of liabilities related to warrants $6.7 millionand net increases in operating assets and liabilities (working capital) of
$6.2 millionpartially offset by stock-based compensation of $6.3 million,

Net cash used in operating activities was $43.9 million for the six months ended
June 30, 2021. Net cash used in operating activities consists of a net loss of
$52.6 million, adjusted for non-cash items and the effect of changes in working
capital. Non-cash adjustments that offset the net loss for the period primarily
include the change in fair value of Legacy Pear warrants of $5.4 million, a loss
on the issuance of convertible preferred stock of Legacy Pear of $2.1 million,
and stock-based compensation expense of $1.0 million.

Investing activities

Net cash used in investing activities was $43.8 million for the six months ended
June 30, 2022, and related primarily to the purchase of investments of
$66.0 million, offset by proceeds from the maturity and sale of investments of
$24.0 million.

Net cash from investing activities was $5.5 million for the six months ended June 30, 2021and related mainly to maturities and sales of investments of $12.0 million offset by purchases of equity interests of $5.0 million.

Fundraising activities

Through June 30, 2022, Pear has financed its operations primarily through the
Business Combination, the sale of Legacy Pear convertible preferred stock,
payments received in connection with collaboration agreements, payments received
from product sales, and borrowings under various credit facilities.

Net cash provided by financing activities was $0.8 million for the three and six
months ended June 30, 2022, and related to proceeds from the exercise of stock
options.

Net cash provided by financing activities was $19.7 million for the six months
ended June 30, 2021, and related to net proceeds from the issuance of Legacy
Pear Series D convertible preferred stock of $19.9 million and proceeds of $0.7
million from the exercise of stock options, partially offset by the payment of
deferred offering costs of $0.9 million.

Transactions with related parties

Effective March 15, 2022, we entered into a development agreement with SoftBank
Corp., an entity under common control with SVF II Cobbler (DE) LLC (a greater
than 5% shareholder of Pear), to develop a Japanese-language digital therapeutic
for the treatment of sleep/wake disorders for the Japanese market. See Note 10
in the accompanying notes to the consolidated financial statements included in
Part I, Item 1 of this Form 10-Q for further information.

Recent accounting pronouncements

Refer to the accompanying notes to consolidated financial statements as of and
for the six months ended June 30, 2022 and 2021, included in Part I, Item 1 of
this Form 10-Q for more information regarding recently issued accounting
pronouncements, the timing of their adoption, and its assessment, to the extent
it has made one, of their potential impact on its financial condition and
results of operations.

Significant Accounting Policies and Estimates

The preparation of our consolidated financial statements and related disclosures
in conformity with US generally accepted accounting principles, or US GAAP, and
the Company's discussion and analysis of its financial condition and operating
results require the Company's management to make judgments, assumptions and
estimates that affect the amounts reported. Management bases these estimates on
historical experience and on various other assumptions that it believes are
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying amounts of assets and liabilities. Actual
results may differ materially from these estimates if past experience or other
assumptions do not turn out to be substantially accurate.

                  Pear Therapeutics, Inc. | Form 10-Q |Page 38

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The preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and the related disclosure of contingent assets and
liabilities. We monitor our estimates on an ongoing basis for changes in facts
and circumstances, and material changes in these estimates could occur in the
future. Changes in estimates are recorded in the period in which they become
known.

Our critical accounting policies are those policies which require the most
significant judgments and estimates in the preparation of our condensed
consolidated financial statements. We have determined that our most critical
accounting policies are those relating to Legacy Pear Preferred and Common stock
valuations, revenue recognition, valuation of earn-out liabilities, and
stock-based compensation. There have been no significant changes to our existing
critical accounting policies and significant accounting policies discussed in
the Annual Report on Form 10-K for the year ended December 31, 2021.

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