What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-03 · 107 added, 98 removed, 105 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and

analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing

elsewhere in this Form 10-K.

This discussion contains forward-looking statements reflecting our current expectations that involve risks

and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results

and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements

as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.”

Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of

many factors, including those set forth under “Risk Factors” and elsewhere in this Form 10-K.

We are a clinical stage pharmaceutical company

organized as a Nevada corporation in July 2017 to focus on the development of anti-cancer drug candidates for the treatment of brain and

central nervous system tumors, based on intellectual property that we license under license agreements with HPI and UTMDACC and own pursuant

to a collaboration and asset purchase agreement with Reata.

We believe our lead drug candidate, Berubicin,

may be a significant development in the treatment of Glioblastoma and other CNS malignancies, and if approved by the FDA could give Glioblastoma

You should read the following discussion and analysis

of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere

in this Form 10-K.

This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties,

including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results and experience could

differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number

of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.” Actual results and

the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including

those set forth under “Risk Factors” and elsewhere in this Form 10-K.

We are a clinical stage pharmaceutical company organized

as a Nevada corporation in July 2017 to focus on the development of anti-cancer drug candidates for the treatment of brain and central

nervous system tumors, based on intellectual property that we license under license agreements with HPI and UTMDACC and own pursuant to

a collaboration and asset purchase agreement with Reata.

We believe our lead drug candidate, Berubicin, may

be a significant development in the treatment of Glioblastoma and other CNS malignancies, and if approved by the FDA could give Glioblastoma

patients an important new therapeutic alternative to the current standard of care.

22 unchanged sentences

can be shown relative to a randomized control arm.

We do not have manufacturing facilities and all

manufacturing activities are contracted out to third parties.

We do not have manufacturing facilities and all manufacturing

activities are contracted out to third parties.

Additionally, we do not have a sales organization.

4 unchanged sentences

intellectual property rights.

On December 28, 2017, we obtained the rights to

a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from HPI in an agreement we refer

to as the HPI License.

On December 28, 2017, we obtained the rights to a worldwide,

exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from HPI in an agreement we refer to as the HPI

HPI is affiliated with Dr.

Priebe, who controls a majority of our shares.

Under the HPI License we obtained the

exclusive right to develop certain chemical compounds for use in the treatment of cancer anywhere in the world.

In the HPI License we

agreed to pay HPI:

Under the HPI License we obtained the exclusive right

to develop certain chemical compounds for use in the treatment of cancer anywhere in the world.

In the HPI License we agreed to pay HPI:

(i) development fees of $750,000 over a three-year period beginning November 2019;

(ii) a 2% royalty on net sales;

(iii) a $50,000 per year license fee;

(iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon

the approval of an NDA for Berubicin;

(iii) a $50,000 per

year license fee;

(iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of

an NDA for Berubicin;

and (v) 6,667 shares of our common stock.

The patents we licensed from HPI expired in March 2020.

With the Reata Agreement and the HPI License, we

believe we have obtained all rights and intellectual property necessary to develop Berubicin.

As stated earlier, it is our plan to obtain

additional intellectual property covering other compounds which, subject to the receipt of additional financing, may be developed into

drugs for brain and other cancers.

With the Reata Agreement and the HPI License, we believe

we have obtained all rights and intellectual property necessary to develop Berubicin.

As stated earlier, it is our plan to obtain additional

intellectual property covering other compounds which, subject to the receipt of additional financing, may be developed into drugs for

brain and other cancers.

On January 10, 2020, we entered into a Patent and

Technology License Agreement (the “1244 Agreement”) with The Board of Regents of The University of Texas System, an agency

Technology License Agreement (the “WP1244 Agreement”) with The Board of Regents of The University of Texas System, an agency

of the State of Texas, on behalf of The University of Texas M.

Anderson Cancer Center (“UTMDACC”).

Pursuant to the 1244

Pursuant to the WP1244

Agreement, we obtained a royalty-bearing, worldwide, exclusive license to certain intellectual property rights, including patent rights,

1 unchanged sentence

In consideration, we must make payments to UTMDACC including an up-front license fee, annual maintenance

fee, milestone payments and royalty payments (including minimum annual royalties) for sales of licensed products developed under the 1244

The term of the 1244 Agreement expires on the last to occur of:

(a) the expiration of all patents subject to the 1244 Agreement,

fee, milestone payments and royalty payments (including minimum annual royalties) for sales of licensed products developed under the WP1244

The term of the WP1244 Agreement expires on the last to occur of:

(a) the expiration of all patents subject to the WP1244 Agreement,

or (b) fifteen years after execution;

provided that UTMDACC has the right to terminate the 1244 Agreement in the event that we fail to

meet certain commercial diligence milestones.

provided that UTMDACC has the right to terminate the WP1244 Agreement in the event that we fail

to meet certain commercial diligence milestones.

On May 7, 2020, pursuant to the WP1244 Portfolio

10 unchanged sentences

As such, WP1874 will be the primary focus in our development efforts of the WP1244 portfolio.

This agreement was extended and expired

on March 31, 2023.

Results of Operations for the Year Ended December 31, 2022 Compared

1 unchanged sentence

General and Administrative Expense

General and administrative expense was $4,680,840

for the year ended December 31, 2021 compared to $4,392,873 for 2020.

General and administrative expense was $5,967,052 for

the year ended December 31, 2022 compared to $4,680,840 for 2021.

The change is attributable to an increase of approximately $1,096,000

for stock-based compensation, an increase of $200,000 in employee compensation and taxes, an increase of $57,000 in insurance expenses,

and an increase of $11,000 in other corporate expenses.

These changes were offset by a decrease of $373,000 in communications expenses

and a decrease of $42,000 in travel expenses in 2021.

in professional expenses, $315,000 in employee compensation, $334,000 related to the write off of deferred offering costs and $84,000

in other general and administrative expenses.

These changes were offset by decreases of $502,000 in stock-based compensation and advertising

and marketing of $41,000.

Research and Development Expense

Research and development expense was $9,346,453

for the year ended December 31, 2021 compared to $5,061,734 for 2020.

The expenses incurred during the year were related to drug development

cost and contract labor related to the dosing of patients.

We expect to incur increased research and development costs in the future as

our product development activities expand.

Research and development expense was $9,300,055 for

the year ended December 31, 2022 compared to $9,805,075 for 2021.

The decrease in research and development expenses during the period

was mainly attributed to the timing of drug development expenses (significant manufacturing activity occurred in the prior year period

with much less occurring in the current year, and this lower level of manufacturing activity is expected to continue throughout this year),

as well as a credit to research and development expense for the funds collected from WPD Pharmaceuticals related to their purchase of

Berubicin drug product for their clinical trials, partially offset by an increase in contract research organization (CRO) expenses related

to continued progress with our Berubicin clinical trial.

Our CRO expenditures are primarily for labor related to activating selected trial

sites, managing patient enrollment processes, collecting and managing data from patient treatments throughout the trial, processing reimbursement

to the sites for patient treatment, and assisting with necessary submissions to amend the IND.

CRO expenditures are expected to remain

relatively consistent with the year-to-date run-rate throughout the remainder of the trial as site activation efforts and the associated

costs thereof transition into reimbursing clinical trial sites for patient treatment costs as site and patient enrollment increases.

expect to incur increased research and development costs in the future as we continue our clinical trial.

Interest Expense

Interest expense was $9,285 and $3,264 for the

years ended December 31, 2021 and 2020, respectively.

The increase in interest expense was the result of the payoff of our note payable

issued in October 2020 bearing interest at the rate of 4.25% per annum and the Company entering into a new note payable issued in November

2021 bearing interest at the rate of 3.3% per annum.

The net loss for the year ended December 31, 2021

was $14,036,578 compared to $9,457,871 for 2020.

The change in net loss is primarily attributable to increased research and development

Interest expense was $7,027 and $9,285 for the years

ended December 31, 2022 and 2021, respectively.

The net loss for the year ended December 31, 2022 was

$15,274,134 compared to $14,495,200 for 2021.

The change in net loss is primarily attributable to decreased research and development costs.

Liquidity and Capital Resources

On December 31, 2021, we had cash of $5,004,517

and we had working capital of $5,341,884.

On December 31, 2022, we had cash of $10,055,407 and

we had working capital of $7,644,386.

We have historically funded our operations from proceeds from debt and equity sales.

In January 2022, we completed a financing

with several institutional investors for the sale of (i) 9,489,474 shares of common stock, (ii) 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 combined purchase price of one share of common stock (or one pre-funded warrant) and accompanying common warrant was $0.95.

proceeds from the private placement were approximately $11.5 million, before deducting the placement agent’s fees and other offering

We believe that the proceeds from this issuance

and our cash on hand are sufficient to fund our planned operations into, but not beyond, 2023.

Our plan of operations is

primarily focused on completing a Phase II clinical trial for Berubicin.

We estimate that we will require additional financing of approximately

$12 - $16 million to complete the trial, approximately $4.0 million to support near-term WP1244/WP1874 preclinical work, plus such additional

working capital to fund our operations during the pendency of the trial.

Our current expectation is that our cash on hand is sufficient

to fund our operations into the first quarter of 2023.

The timing and costs of clinical trials are difficult to predict and trial plans

may change in response to evolving circumstances and as such the foregoing estimates may prove to be inaccurate.

In January 2022, we completed a financing with

several institutional investors for the sale of (i) 316,316 shares of common stock, (ii) pre-funded warrants to purchase up to an aggregate

of 87,193 shares of common stock and (iii) warrants to purchase up to an aggregate of 403,509 shares of common stock.

The combined purchase

price of one share of common stock (or one pre-funded warrant) and accompanying common warrant was $28.50.

The gross proceeds from the

private placement were approximately $11.5 million, before deducting the placement agent’s fees and other offering expenses.

In November 2022, we completed a financing with

an institutional investor for the sale of (i) 147,000 shares of common stock, (ii) pre-funded warrants to purchase up to an aggregate

of 1,742,764 shares of common stock and (iii) warrants to purchase up to an aggregate of 1,889,764 shares of common stock.

purchase price of one share of common stock (or one pre-funded warrant) and accompanying common warrant was $3.175.

The gross proceeds

from the offering were approximately $5.98 million, before deducting the placement agent’s fees and other offering expenses.

We believe that our cash on hand is sufficient to fund

our planned operations into, but not beyond, the third quarter of 2023.

Our plan of operations is primarily

focused on completing a clinical trial for Berubicin.

We estimate that we will require additional financing of approximately $8 to $12

million to complete the Phase 2 trial for Berubicin (taking into account our cash on hand as of December 31, 2022 of approximately $10.1

million), approximately $5.0 million to support near-term WP1244/WP1874 preclinical work, plus such additional working capital to fund

our operations during the pendency of the trial.

Our current expectation is that our cash on hand is sufficient to fund our operations

into the third quarter of 2023.

The timing and costs of clinical trials are difficult to predict and trial plans may change in response

to evolving circumstances and as such the foregoing estimates may prove to be inaccurate.

We will need to raise additional

11 unchanged sentences

Cash used in investing activities

Net cash used in operating activities was $5,748

and $17,945 for the years ended December 31, 2021 and 2020 and included payments for furniture and equipment.

Net cash used in investing activities

was $4,422 and $5,748 for the years ended December 31, 2022 and 2021 and included payments for furniture and equipment.

Cash provided by financing activities

3 unchanged sentences

stock during the year ended December 31, 2022.

On December 28, 2020, we closed a follow-on offering

of 5,750,000 shares of common stock at a price to the public of $2.00 per share (including a full over-allotment option).

Each share issued

included 0.5 warrants to purchase a common share at a price of $2.20.

Off-balance Sheet Arrangements

6 unchanged sentences

JOBS Act Accounting Election

The Jumpstart Our Business Startups Act of 2012,

or the JOBS Act, exempts an “emerging growth company” such as us from being required to comply with new or revised financial

The Jumpstart Our Business Startups Act of 2012, or

the JOBS Act, exempts an “emerging growth company” such as us from being required to comply with new or revised financial

accounting standards until private companies are required to comply with the new or revised financial accounting standards.

12 unchanged sentences

We consider critical accounting policies to

be those that require more significant judgments and estimates in the preparation of our financial statements, including the following:

long lived assets;

intangible assets valuations;

and income tax valuations.

Management relies on historical experience and other assumptions

believed to be reasonable in making its judgment and estimates.

Actual results could differ materially from those estimates.

Management believes its application of accounting

policies, and the estimates inherently required therein, are reasonable.

These accounting policies and estimates are periodically reevaluated,

and adjustments are made when facts and circumstances dictate a change.

be those that require more significant judgments and estimates in the preparation of our financial statements.

relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates.

Actual results could

differ materially from those estimates.

Management believes its application of accounting policies,

and the estimates inherently required therein, are reasonable.

These accounting policies and estimates are periodically reevaluated, and

adjustments are made when facts and circumstances dictate a change.

Quantitative and Qualitative Disclosure About Market Risk.

We are a smaller reporting company as defined by

Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

We are a smaller reporting company as defined by Rule

12b-2 of the Exchange Act and are not required to provide the information required under this item.

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-K

Item 7. Management’s Discussion and Analysis