What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-13 · 239 added, 162 removed, 324 unchanged (55% of the section changed)

20 unchanged sentences

Stockholders' Equity:

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized and 0 shares issued and outstanding

Common stock, $ 0.001 par value, 75,000,000 shares authorized and 40,032,481

and 27,927,217 shares issued and outstanding, respectively

Preferred stock, $ 0.001 par value, 5,000,000 shares

authorized and 0 shares issued and outstanding

Common stock, $ 0.001 par

value, 75,000,000 shares

authorized and 40,032,481

and 27,927,217 shares issued and outstanding,

Additional paid-in capital

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Total Liabilities and Stockholders' Equity

See accompanying notes to the unaudited financial

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Operations

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Three Months Ended June 30, 2022

Three Months Ended June 30, 2021

Ended June 30, 2022

Ended June 30, 2021

Operating expenses:

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( 3,811,320 )

( 6,346,114 )

( 7,420,977 )

Other expenses:

3 unchanged sentences

$ ( 3,813,673 )

Loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

See accompanying notes to the unaudited financial

$ ( 6,350,291 )

$ ( 7,427,077 )

Loss per share - basic

Loss per share - diluted

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Stockholders’

For the three months ended March 31, 2022 and

Statements of Stockholders' Equity

For the six months ended June 30, 2022 and 2021

Stockholders'

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( 37,767,260 )

Stock-based compensation

( 3,565,952 )

Balance June 30, 2022

$ ( 41,333,212 )

Balance December 31, 2020

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( 24,559,747 )

See accompanying notes to the unaudited financial

Common stock issued for cash and subscription receivable, net

Stock-based compensation

( 3,813,673 )

Balance June 30, 2021

$ ( 28,373,420 )

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Cash Flows

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Six Months Ended June 30, 2022

Six Months Ended June 30, 2021

Cash Flows from Operating Activities:

3 unchanged sentences

Stock-based compensation

Loss on disposal of fixed assets

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses

( 1,839,800 )

Accounts payable

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Cashless exercise of warrants

See accompanying notes to the unaudited financial

Common stock issued for subscription receivable

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

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financial statements not misleading.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the

final results that may be expected for the year ending December 31, 2022.

For more complete financial information, these unaudited financial

statements should be read in conjunction with the audited financial statements for the period ended December 31, 2021 included in our

Form 10-K filed with the SEC on March 3, 2022 (“Form 10-K”).

Notes to the financial statements which would substantially duplicate

the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative

of the final results that may be expected for the year ending December 31, 2022.

For more complete financial information, these unaudited

financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2021 included

in our Form 10-K filed with the SEC on March 3, 2022 (“Form 10-K”).

Notes to the financial statements which would substantially

duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K,

have been omitted.

Liquidity and Going Concern - These financial statements have

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liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents.

Periodically,

the Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000.

The amount in excess

of the FDIC insurance as of March 31, 2022 was $ 12,190,498 .

Periodically, the

Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000.

The amount in excess of

the FDIC insurance as of June 30, 2022 was $ 8,708,880 .

The Company has not experienced losses on these accounts and management believes,

based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Stock-based Compensation - Employee and non-employee share-based

compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service

period for stock options and restricted stock units.

Restricted Stock Units (“RSUs”) -

Our RSUs vest over four years from the date of grant.

The fair value of RSUs is the market price of our common stock

at the date of grant.

Performance Units (“PUs”) -

The PUs vest based on our performance against predefined share price targets and the achievement of Positive Interim, Clinical

Data as defined by the Board.

Loss Per Common Share - Basic loss per common share is computed

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excludes common stock equivalents, because their inclusion would be anti-dilutive.

For the three months ended March 31, 2022 and 2021,

the Company’s potentially dilutive shares and options, which were not included in the calculation of net loss per share, included

warrants to purchase 16,925,504 and 5,130,240 common shares, and options for 2,864,736 and 2,736,736 common shares, respectively.

For the six months ended June 30, 2022 and 2021, the

Company’s potentially dilutive shares and options, which were not included in the calculation of net loss per share, included warrants

to purchase 16,925,504 and 5,130,240 common shares, unvested restricted stock units of 285,625 and 0 common shares, unvested performance

units of 856,875 and 0 common shares, and options for 2,864,736 and 2,811,736 common shares, respectively.

Note 3 – Note Payable

8, 2021, the Company entered into a short-term note payable for an aggregate of $ 425,990 , bearing interest at 3.3 % per year to finance

certain insurance policies.

Principal and interest payments related to the note will be repaid over a 11-month period with the final

payment due on September 30, 2022 .

As of March 31, 2022 and December 31, 2021, the Company’s note payable balance was $ 272,572

and $ 387,794 , respectively.

On November 8, 2021, the Company entered into a short-term note payable

for an aggregate of $ 425,990 , bearing interest at 3.3 % per year to finance certain insurance policies.

Principal and interest payments

related to the note will be repaid over a 11-month period with the final payment due on September 30, 2022 .

As of June 30, 2022 and December

31, 2021, the Company’s note payable balance was $ 156,397 and $ 387,794 , respectively.

Note 4 – Equity

Company engaged H.C.

Wainwright & Co., LLC (“Wainwright”), to act as placement agent related to the Securities

Purchase Agreement described below.

The Company agreed to pay Wainwright an aggregate fee equal to 7.0% of the gross proceeds

received by the Company from the sale of the securities in the transaction.

The Company will also issue to Wainwright or its

designees warrants to purchase up to 5.0% of the aggregate number of shares of Common Stock sold in the transactions (the

“Placement Agent Warrants”), or 605,263

Wainwright & Co., LLC (“Wainwright”), to act as placement agent related to the Securities Purchase

Agreement described below.

The Company agreed to pay Wainwright an aggregate fee equal to 7.0% of the gross proceeds received by the Company

from the sale of the securities in the transaction.

The Company also issued to Wainwright or its designees warrants to purchase up

to 5.0% of the aggregate number of shares of Common Stock sold in the transactions (the “Placement Agent Warrants”), or 605,263

Placement Agent Warrants.

The Placement Agent Warrants have substantially the same terms as the Common Warrants, except that the

Placement Agent Warrants have an exercise price equal to 125% of the offering price, or $1.1875 per share.

The Company also paid

Wainwright $ 50,000 for non-accountable

expenses and $ 10,000 for

legal fees and expenses.

On January 5, 2022, the Company entered

into a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional investors for the sale by the

Company of (i) 9,489,474 shares (the “Shares”) of the Company’s common stock, (ii) pre-funded warrants (the

“Pre-Funded Warrants”) to purchase up to an aggregate of 2,615,790 shares of common stock and (iii) warrants to

purchase up to an aggregate of 12,105,264 shares of common stock (the “Common Warrants” and, collectively with the

Pre-Funded Warrants, the “Warrants”), in a private placement offering.

The combined purchase price of one share of

common stock (or one Pre-Funded Warrant) and the accompanying Common Warrant is $0.95.

The Placement Agent Warrants have substantially the same terms as the Common Warrants, except that the Placement

Agent Warrants have an exercise price equal to 125% of the offering price, or $1.1875 per share.

The Company also paid Wainwright $ 50,000

for non-accountable expenses and $ 10,000 for legal fees and expenses.

On January 5, 2022, the Company entered into

a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional investors for the sale by the Company

of (i) 9,489,474 shares (the “Shares”) of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to an aggregate of 2,615,790 shares of common stock and (iii) warrants to purchase up to an aggregate

of 12,105,264 shares of common stock (the “Common Warrants” and, collectively with the Pre-Funded Warrants, the “Warrants”),

in a private placement offering.

The combined purchase price of one share of common stock (or one Pre-Funded Warrant) and the accompanying

Common Warrant is $0.95.

Subject to certain ownership limitations, the Warrants are exercisable

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purchase more than 750,000 shares of common stock) in a single year.

During the three months ended March 31, 2022 and 2021, the Company

recognized $ 336,685 and $ 418,053 of stock-based compensation, respectively, related to outstanding stock options.

At March 31, 2022, the

Company had $ 2,222,762 of unrecognized expenses related to outstanding options.

During the six months ended June 30, 2022 and 2021, the Company recognized

$ 605,657 and $ 875,039 of stock-based compensation, respectively, related to outstanding stock options.

At June 30, 2022, the Company had

$ 1,854,997 of unrecognized expenses related to outstanding options.

The following table summarizes the stock option

activity for the three months ended March 31, 2022:

activity for the six months ended June 30, 2022:

Schedule of Stock Option Activity

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Outstanding, December 31, 2021

Outstanding, March 31, 2022

Exercisable, March 31, 2022

As of March 31, 2022, the outstanding stock options have a

weighted average remaining term of 7.52 years

and the aggregate intrinsic value of options vested and outstanding were $ 81,400 .

As of March 31, 2022, there were 60,500 awards

remaining to be issued under the 2017 Plan and 2,074,764 awards

remaining to be issued under the 2020 Plan.

Outstanding, June 30, 2022

Exercisable, June 30, 2022

As of June 30, 2022, the outstanding stock options have a

weighted average remaining term of 7.27 years and the aggregate intrinsic value of options vested and outstanding were $ 81,400 .

of June 30, 2022, there were no awards remaining to be issued under the 2017 Plan and 992,764 awards remaining to be issued

under the 2020 Plan.

Stock Warrants

During the three months ended March 31, 2022, the Company received

During the six months ended June 30, 2022, the Company received $ 2,616

in cash proceeds from the exercise of 2,615,790 warrants previously issued at an exercise price of $ 0.001 .

following table summarizes the stock warrant activity for the three months ended March 31, 2022 :

The following table summarizes the stock warrant

activity for the six months ended June 30, 2022:

Schedule of warrants activity

1 unchanged sentence

Outstanding, December 31, 2021

Outstanding, March 31, 2022

Exercisable, March 31, 2022

As of March 31, 2022, the outstanding and exercisable warrants have

Outstanding, June 30, 2022

Exercisable, June 30, 2022

As of June 30, 2022, the outstanding and exercisable warrants have

a weighted average remaining term of 4.01 years and have no aggregate intrinsic value.

Restricted Stock Units

On April 28, 2022, the Compensation Committee approved cash bonuses

totaling $ 213,000 to the officers of the Company.

In addition, the officers and employees were awarded a total of 285,625 Restricted Stock

Units that partially vest over 4 years.

The Company valued the RSUs based on the stock price at grant which total $ 95,399 .

During the six months ended June 30, 2022, the Company recognized $ 5,962

of stock-based compensation, related to outstanding stock RSUs.

At June 30, 2022, the Company had $ 89,437 of unrecognized expenses

related to outstanding RSUs.

The following table summarizes the RSUs activity

for the six months ended June 30, 2022:

Schedule of restricted stock units activity

Weighted-Average Grant Date Fair Value

Non-vested, December 31, 2021

Non-vested, June 30, 2022

Performance Units

On April 28, 2022, the Compensation Committee

approved, the officers and employees were awarded a total of

For awards granted in 2022, they vest as follows:

(i) 285,625 of the PU grant will vest if within 24 months from

issuance the average the closing price of the Company’s common stock over a ten trading day period exceeds $2.00 (subject to

pro rata adjustment for stock splits or similar events), (ii) 285,625 of the PU grant will vest if within 36 months from issuance

the average the closing price of the Company’s common stock over a ten trading day period exceeds $4.00 (subject to pro rata

adjustment for stock splits or similar events) and (iii) 285,625 of the PU grant will vest if within 24 months from issuance the

Company achieves “Positive Interim, Clinical Data” as defined by the Board of Directors.

To the extent that the market

and/or “Positive Interim Clinical Data” conditions are not met, the applicable portions of the PUs will not vest and

will be cancelled.

The fair value at grant date of these performance units was $ 169,663 .

Compensation expense is recognized ratably during the period the PUs are expected to vest or when “Positive Interim

Clinical Data” is achieved.

The fair value of each performance unit with market

conditions (vesting terms (i) and (ii)) is estimated at the date of grant using a Monte Carlo simulation with the following assumptions:

underlying stock price $ 0.33 , hurdle prices ranging from $ 2.00 -$ 4.00 , expected terms ranging from 2 - 3 years, cost of equity 18.7 % and

risk-free rate of 2.8 %.

During the six months ended June 30, 2022, the Company recognized $ 7,309

for vesting term (i), $ 4,596 for vesting term (ii) and $ 0 for vesting term (iii), related to outstanding stock PUs.

At June 30, 2022,

the Company had $ 157,758 of unrecognized expenses related to PUs.

The following table summarizes the PUs activity

for the six months ended June 30, 2022:

Schedule of performance units activity

Weighted-Average Grant Date Fair Value

Non-vested, December 31, 2021

Non-vested, June 30, 2022

Note 5 – Commitments and Contingencies

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On February 6, 2021, the compensation committee of the board of directors set Mr.

Climaco’s 2021 annual base salary

to $ 525,000 .

Climaco’s 2021 annual

base salary to $ 525,000 .

On June 28, 2019, we entered into employment letters with Drs.

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Scientific Advisory Board

2021, our compensation committee recommended to our Board and our Board approved the following policy for the Scientific Advisory Board

On July 15, 2021, our Board approved the following compensation policy

for the Scientific Advisory Board members.

The Scientific Advisory board consists of Dr.

Waldemar Priebe, a significant shareholder and related party, and Dr.

Waldemar Priebe, a significant shareholder and

related party, and Dr.

Each scientific advisory board member shall receive annual cash compensation of $68,600.

During the three month months ended March 31,

2022, the Company paid $ 48,684 related to the Scientific Advisory Board compensation.

As of March 31, 2022, the Company has accrued $ 48,684

related to the Scientific Advisory Board compensation.

six month months ended June 30, 2022, the Company paid $ 65,834 related to the Scientific Advisory Board compensation.

June 30, 2022, the Company has accrued $ 65,834 related to the Scientific Advisory Board compensation.

WP744 Portfolio (Berubicin)

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and significant shareholder.

Pursuant to this agreement, the Company obtained a worldwide exclusive license to the chemical compound

commonly known as WP744.

Pursuant to this agreement, the Company obtained a worldwide exclusive license to the chemical compound commonly

known as WP744.

In exchange for these rights, the Company agreed to pay consideration to HPI as follows:

(i) a royalty of 2%

of net sales of any product utilizing WP744 for a period of ten years after the first commercial sale of such;

and (ii) $100,000 upon

beginning Phase II clinical trials (paid in 2021);

and (iii) $200,000 upon the approval by the FDA of a New Drug Application for any

product utilizing WP744;

and (iv) a series of quarterly development payments totaling $750,000 beginning immediately after the Company’s

raise of $7,000,000 of investment capital.

In addition, the Company issued 200,000 shares of the Company’s common stock valued

at $0.045 per share to HPI upon execution of the agreement.

On November 13, 2019, the Company closed its IPO, thereby fulfilling all

conditions precedent and completing the acquisition of the intellectual property discussed in the HPI agreement.

During the three months

ended March 31, 2022 and 2021, the Company recognized $ 87,500

related to this agreement.

Unrelated to this agreement, from time to time, the Company purchases pharmaceutical products from

HPI which are necessary for the manufacturing of Berubicin API and drug product in related party transactions which are reviewed and

approved by the Company’s audit committee based upon the standards of providing superior pricing and time to delivery than that

available from unrelated third parties.

During the three months ended March 31, 2022 and 2021, the Company expensed $ 41,075

and $ 385,000

respectively related to the purchase of pharmaceutical products from HPI.

(i) a royalty of 2% of net sales

of any product utilizing WP744 for a period of ten years after the first commercial sale of such;

and (ii) $100,000 upon beginning Phase

II clinical trials (paid in 2021);

and (iii) $200,000 upon the approval by the FDA of a New Drug Application for any product utilizing

and (iv) a series of quarterly development payments totaling $750,000 beginning immediately after the Company’s raise of

$7,000,000 of investment capital.

In addition, the Company issued 200,000 shares of the Company’s common stock valued at $0.045

per share to HPI upon execution of the agreement.

On November 13, 2019, the Company closed its IPO, thereby fulfilling all conditions

precedent and completing the acquisition of the intellectual property discussed in the HPI agreement.

During the six months ended June

30, 2022 and 2021, the Company recognized $ 175,000 related to this agreement.

Unrelated to this agreement, from time to time,

the Company purchases pharmaceutical products from HPI which are necessary for the manufacturing of Berubicin API and drug product in

related party transactions which are reviewed and approved by the Company’s audit committee based upon the standards of providing

superior pricing and time to delivery than that available from unrelated third parties.

During the six months ended June 30, 2022 and

2021, the Company expensed $ 41,075 and $ 385,000 respectively related to the purchase of pharmaceutical products from HPI.

On August 30, 2018, we entered into a sublicense agreement with WPD

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regulatory approval or commercialization of the licensed products during the three year period immediately following the date of the sublicense

In the event that WPD fails to use commercially reasonable development efforts by the foregoing three-year deadline, we have

the right to terminate this sublicense agreement.

The Company is currently validating WPD expenditures related to this agreement.

In consideration

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Priebe, our founder and largest shareholder.

On February 19, 2021, CNS entered into an Investigational Medicinal

Product Supply Agreement with WPD, a related party.

CNS agreed to sell the Berubicin drug product to WPD at historical cost of manufacturing

without markup so that WPD may conduct the clinical trials contemplated by the sublicense agreement.

WPD agreed to pay CNS the following

(i) an upfront payment of $ 131,073 upon execution of the agreement, (ii), a payment of $ 262,145 upon final batch release

and certification performed by WPD's subcontractor, and (iii) a final payment of $262,145 upon Clinical Trial Application acceptance

by the relevant regulatory authority.

On February 19, 2021, CNS entered into an

Investigational Medicinal Product Supply Agreement with WPD, a related party.

CNS agreed to sell the Berubicin drug product to WPD

at historical cost of manufacturing without markup so that WPD may conduct the clinical trials contemplated by the sublicense

WPD agreed to pay CNS the following payments:

(i) an upfront payment of $ 131,073 upon

execution of the agreement, (ii) a payment of $ 262,145 upon

final batch release and certification performed by WPD's subcontractor, and (iii) a final payment of $262,145 upon Clinical

Trial Application acceptance by the relevant regulatory authority.

All three milestones have been met as of December 31, 2021.

In addition, as of December 31, 2021,

the drug product with a cost of approximately $ 655,000 has been delivered to WPD and is being held at a third party depot.

full amount of approximately $655,000 is now due from WPD.

As of December 31, 2021, CNS has invoiced the three amounts plus pass

through cost for a total of $656,938.

As of March 31, 2022, the Company has received payments for the first and second amounts due for

a total of $ 393,182 .

However, as of March 31, 2022, WPD has not remitted payment for the final invoice and, as such, we have not recorded

a receivable due to the collectability issues.

addition, as of December 31, 2021, the drug product with a cost of approximately $ 655,000

has been delivered to WPD and is being held at a third party depot.

As such, the full amount of approximately $655,000 is now

due from WPD.

As of December 31, 2021, CNS has invoiced the three amounts plus pass through cost for a total of $656,938.

30, 2022, the Company has received payments for the first and second amounts due for a total of $ 393,182 .

However, as of June 30, 2022, WPD has not remitted payment for the final invoice and, as such, we have not recorded a receivable due

to the collectability issues.

The Company is continuing to work with WPD to resolve this situation.

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following the Effective Date and (iii) Commencement of Phase I Study within the five (5) year period following the Effective Date.

the three months ended March 31, 2022 and 2021, the Company paid $ 44,424 and $ 22,902 to UTMDACC related to this agreement, respectively.

7, 2020, pursuant to the WP1244 Portfolio license agreement described above, the Company entered into a Sponsored Research Agreement

with UTMDACC to perform research relating to novel anticancer agents targeting CNS malignancies.

The Company agreed to fund

approximately $1,134,000 over a two-year period.

During the year ended December 31, 2020, the Company paid $ 334,000 and

accrued $ 400,000

related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.

the year ended December 31, 2021, the Company paid $ 800,000 to

UTMDACC related to this agreement.

The Company has no further payment obligations as of March 31, 2022.

The principal investigator

for this agreement is Dr.

Waldemar Priebe, a significant shareholder.

the six months ended June 30, 2022 and 2021, the Company paid $ 44,424 and $ 22,902 to UTMDACC related to this agreement, respectively.

On May 7, 2020, pursuant to the WP1244 Portfolio license agreement

described above, the Company entered into a Sponsored Research Agreement with UTMDACC to perform research relating to novel anticancer

agents targeting CNS malignancies.

The Company agreed to fund approximately $1,134,000 over a two-year period.

During the year ended December

31, 2020, the Company paid $ 334,000 and accrued $ 400,000 related to this agreement in research and development expenses in the Company’s

Consolidated Statements of Operations.

During the year ended December 31, 2021, the Company paid $ 800,000 to UTMDACC related to this

The Company has no further payment obligations as of June 30, 2022.

The principal investigator for this agreement is Dr.

Priebe, a significant shareholder.

Anti-Viral Portfolio

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Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland, Sweden, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland.

Pursuant to the Agreement, the Company agreed to pay WPD the

following payments:

(i) an upfront payment of $ 225,000 to

WPD (paid in April 2020);

and (ii) within thirty days of the verified achievement of the Phase II Milestone, (such verification

shall be conducted by an independent third party mutually acceptable to the parties hereto), the Company will make a payment of

WPD agreed to pay the Company a development fee of 50% of the net sales for any products in the above territories;

that Poland shall not be included as a territory after WPD receives marketing approval for a product in one-half of the countries

included in the agreed upon territories or upon the payment by WPD to the Company of development fees of $ 1.0

Pursuant to the Agreement, the Company agreed to pay WPD the following

(i) an upfront payment of $ 225,000 to WPD (paid in April 2020);

and (ii) within thirty days of the verified achievement

of the Phase II Milestone, (such verification shall be conducted by an independent third party mutually acceptable to the parties hereto),

the Company will make a payment of $ 775,000 to WPD.

WPD agreed to pay the Company a development fee of 50% of the net sales for any products

in the above territories;

provided that Poland shall not be included as a territory after WPD receives marketing approval for a product

in one-half of the countries included in the agreed upon territories or upon the payment by WPD to the Company of development fees of

$ 1.0 million.

The term of the Agreement will expire on the expiration of the sublicense pursuant to which WPD has originally sublicensed

the products.

During the year ended December 31, 2020, the Company paid $ 225,000

related to this agreement.

During the year ended December 31, 2020, the Company paid $ 225,000 related to this agreement.

Nasdaq Capital Markets Listing Qualifications

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listing standards required by Nasdaq, except for the minimum bid price requirement.

The Company intends to monitor the closing

bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which

could include effecting a reverse stock split.

However, there can be no assurance that the Company will be able to regain compliance with

the Bid Price Rule.

Note 6 – Subsequent Events

On April 28, 2022, the Compensation Committee approved cash bonuses

totaling $213,000 to the officers of the Company.

In addition, the officers and employees were awarded a total of 1,142,500 Restricted

Stock Units that partially vest over 4 years, partially vest upon the Company’s common stock price exceeding various closing prices

ranging from $2.00 - $4.00 per share and partially upon the completion of milestones established by the Board.

The Company believes it meets the foregoing requirements and has requested an additional 180 day period.

On July 7, 2022, the Company filed a

Definitive Proxy Statement on Form DEF 14A for its Annual Meeting of Stockholders to be held on July 27, 2022.

The Annual Meeting of Stockholders was adjourned on

July 27, 2022 until August 3, 2022, and then adjourned again until August 16, 2022.

In this Definitive Proxy

Statement, the Company included a proposal to authorize an amendment to the Company’s amended and restated articles of incorporation

to empower the Board of Directors to effect a reverse stock split of the outstanding shares of the Company’s common stock, at a

split ratio of between 1-for-2 and 1-for-30 as determined by the Board of Directors in its sole discretion, prior to the one-year anniversary

of this Annual Meeting.

Assuming this proposal is approved by the Company’s stockholders, the Company intends to monitor the closing

bid price of its common stock and may, if appropriate, effect a reverse stock split of the Company’s common stock, to regain compliance

with the Bid Price Rule in order to avoid being delisted from Nasdaq as well as to provide for additional shares available for issuance

to continue to fund the Company’s clinical research programs.

Notwithstanding the foregoing, there can be no assurance that the

stockholders of the Company will authorize a reverse stock split, nor that the Company will be able to regain compliance with the Bid

Price Rule if a reverse stock split is authorized.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements