What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-10 · 89 added, 124 removed, 200 unchanged (52% of the section changed)

111 unchanged sentences

Lomustine is administered orally once every six weeks.

trial will include an interim analysis that will evaluate the comparative effectiveness of these treatments, which is an adaptive design

intended to demonstrate that there are no differences in efficacy between treatments (futility analysis).

Even if Berubicin is approved,

there is no assurance that patients will choose an infusion treatment, as compared to the current standard of care, which requires oral

administration.

trial will include a pre-planned, non-binding interim futility analysis which will be conducted by an independent Data Safety Monitoring

Board (DSMB) to recommend whether this study should continue as planned based on Berubicin showing statistically significant value as

a second-line treatment for patients with glioblastoma compared with Lomustine.

We will conduct this analysis after at least 50% of the

patients in the interim analysis population (30-50% of total expected patients for the trial) can be evaluated as having failed the primary

efficacy endpoint (death).

This recommendation will review the number of deaths on each arm to ensure that the overall survival of patients

receiving Berubicin shows a statistically significant comparability to or is even higher than those receiving Lomustine.

The median survival

of patients receiving second-line treatment for glioblastoma has historically been shown to be approximately 6 months.

We have historically

used this 6 months as an estimate for the median time to a 50% mortality rate.

Taking into account the recent rate of enrollment and the

number of patients that can be adequately assessed for their follow-up outcomes, we are anticipating that the DSMB will be able to perform

this interim analysis and we can release the data during the third quarter of 2023.

Additional analyses that will be provided based on

this data will be comparisons of secondary endpoints, including progression-free survival (PFS), response rates, and safety assessments.

Even if Berubicin is approved, there is no assurance that patients will choose an infusion treatment, as compared to the current standard

of care, which requires oral administration.

We do not have manufacturing facilities and all

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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:

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

Priebe, our founder.

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 a New Drug Application (“NDA”) for Berubicin;

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

(“NDA”) for Berubicin;

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

The patents we licensed

from HPI expired in March 2020.

The patents we licensed from HPI expired in March 2020.

On June 10, 2020, the FDA granted Orphan Drug Designation

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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 UTMDACC.

Pursuant to the 1244 Agreement, we obtained a royalty-bearing, worldwide, exclusive license

to certain intellectual property rights, including patent rights, related to our portfolio of WP1244 drug technology.

Pursuant to the WP1244 Agreement, we obtained a royalty-bearing, worldwide, exclusive

license to certain intellectual property rights, including patent rights, related to our portfolio of WP1244 drug technology.

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 Agreement.

The term of the 1244 Agreement expires on

the last to occur of:

(a) the expiration of all patents subject to the 1244 Agreement, or (b) fifteen years after execution;

that UTMDACC has the right to terminate the 1244 Agreement in the event that we fail to meet certain commercial diligence milestones.

minimum annual royalties) for sales of licensed products developed under the WP1244 Agreement.

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;

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

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

Results of Operations for the Three Months Ended September 30, 2022

Compared to the Three Months Ended September 30, 2021

General and Administrative Expense

General and administrative expense was approximately

$1,211,000 for the three months ended September 30, 2022 compared to approximately $1,235,000 for the comparable period in 2021.

in general and administrative expense was mainly attributable to decreases of approximately $204,000 for stock-based compensation,

$46,000 in advertising and marketing, $32,000 in insurance and $31,000 in other expenses, which were offset by an increase of approximately

$289,000 in legal and professional expenses.

Our general and administrative expenses are expected to remain approximately at these levels

for the remainder of this year.

Research and Development Expense

Research and development expense was approximately

$2,208,000 for the three months ended September 30, 2022 compared to approximately $2,578,000 for the comparable period in 2021.

in research and development expenses during the period were 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 Phase II 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 Q3 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.

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

Phase II clinical trial.

The net loss for the three months ended September

30, 2022 was approximately $3,420,000 compared to approximately $3,814,000 for the comparable period in 2021.

The change in net loss is

attributable to decreases the timing of drug development expenses (significant manufacturing activity occurred in the prior year period

with much less occurring in the current 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 CRO

expenses related to continued progress with our Phase II clinical trial as well as increases in legal and professional fees and other

Results of Operations for the Nine Months Ended September 30, 2022

Compared to the Nine Months Ended September 30, 2021

This agreement was extended and expired

on March 31, 2023.

Results of Operations for the Three Months Ended March 31, 2023

Compared to the Three Months Ended March 31, 2022

General and Administrative Expense

General and administrative expense was approximately

$3,815,000 for the nine months ended September 30, 2022 compared to approximately $3,785,000 for the comparable period in 2021.

in general and administrative expense was mainly attributable to increases of $638,000 in legal and professional fees and $6,000 in other

expenses, which were offset with decreases of approximately $109,000 for employee compensation and taxes, $442,000 in stock-based

compensation and $63,000 in advertising and marketing.

Our general and administrative expenses are expected to remain approximately at

these levels for the remainder of this year.

$1,359,000 for the three months ended March 31, 2023 compared to approximately $1,260,000 for the comparable period in 2022.

in general and administrative expense was mainly attributable to increases of approximately $75,000 for legal and professional expenses,

$37,000 in advertising and marketing, $18,000 in board compensation, $19,000 in travel expenses and $15,000 in other expenses, which were

offset by a decrease of approximately $47,000 in stock compensation and $18,000 in insurance expenses.

Our general and administrative

expenses are expected to remain approximately at these levels for the remainder of this year.

Research and Development Expense

Research and development expense was approximately

$5,951,000 for the nine months ended September 30, 2022 compared to approximately $7,450,000 for the comparable period in 2021.

in research and development expenses during the period were 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 Phase II 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.

We expect to incur increased research and development costs in the

future as we continue our Phase II clinical trial.

The net loss for the nine months ended September

$3,568,000 for the three months ended March 31, 2023 compared to approximately $1,889,000 for the comparable period in 2022.

in research and development expenses during the period were mainly attributed to the timing of research organization (CRO) expenses related

to continued progress with our Phase II 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 current quarter 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.

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

The net loss for the three months ended March 31,

2023 was approximately $4,932,000 compared to approximately $3,152,000 for the comparable period in 2022.

The change in net loss

is attributable to decreases in employee compensation and stock-based compensation, the timing of drug development expenses (significant

manufacturing activity occurred in the prior year period with much less occurring in the current 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 CRO expenses related to continued progress with our Phase II clinical trial as well

as increases in legal and professional fees and other expenses.

The change in net loss is attributable

to an increase in CRO expenses related to continued progress with our Phase II clinical trial, a credit to research and development expense

in the prior year period for the funds collected from WPD Pharmaceuticals related to their purchase of Berubicin drug product for their

clinical trials, as well as increases in legal and professional fees and other expenses.

Liquidity and Capital Resources

On September 30, 2022, we

had cash of approximately $7,027,000 and we had working capital of approximately $7,456,000.

We fund our operations from proceeds from

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.

purchase price of one share of common stock (or one pre-funded warrant) and accompanying common warrant was $0.95.

The gross proceeds

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

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 $13 - $17 million

to complete the trial (taking into account our cash on hand as of September 30, 2022 of approximately $7.0 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 first quarter of 2023.

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 capital in order

to meet our obligations and execute our business plan.

If we are unable to raise sufficient funds, we will be required to develop and

implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional

capital is raised to support further operations.

On March 31, 2023, we had

cash of approximately $5,111,000 and we had working capital of approximately $3,049,000.

We fund our operations from proceeds from equity

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

$15.5 to $19.5 million to complete the Phase 2 trial for Berubicin (taking into account our cash on hand as of March 31, 2023 of approximately

$5.1 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

capital in order to meet our obligations and execute our business plan.

If we are unable to raise sufficient funds, we will be required

to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient

additional capital is raised to support further operations.

There can be no assurance that such a plan will be successful.

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Net cash used in operating activities was approximately

$8,252,000 and $10,302,000 for the nine months ended September 30, 2022 and 2021, respectively, and mainly included payments made for

clinical trial preparation, officer compensation, insurance, marketing and professional fees to our consultants, attorneys and accountants.

Cash used in investing activities

Net cash used by investing activities was approximately

$4,000 for the nine months ended September 30, 2022 and 2021.

The amount used in 2022 and 2021 are related to the purchase of furniture

and equipment.

$4,825,000 and $3,077,000 for the three months ended March 31, 2023 and 2022, respectively, and mainly included payments made for clinical

trial preparation, officer compensation, insurance, marketing and professional fees to our consultants, attorneys and accountants.

Cash provided by financing activities

Net cash provided by financing activities was $10,280,000

for the nine months ended September 30, 2022 related to the sale of common stock and warrants, and from the exercise of warrants, offset

by the repayment of notes payable.

Net cash provided by financing activities was $4,592,000 for the nine months ended September 30, 2021

related to the sale of common stock and exercise of warrants, offset by the repayment of notes payable.

Net cash used in financing activities was

approximately $120,000 for the three months ended March 31, 2023, related to the repayment of notes payable, which were offset by

the exercise of warrants.

Net cash provided by financing activities was approximately $10,513,000 for the three months ended March

31, 2022, related to the sale of common stock and exercise of warrants, which were offset by the repayment of notes

Off-balance Sheet Arrangements

As of September 30, 2022, we did not have any relationships

As of March 31, 2023, we did not have any relationships

with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities,

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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 2. Management’s Discussion and Analysis