What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 201 added, 191 removed, 343 unchanged (53% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Current Assets:

6 unchanged sentences

Total noncurrent assets

Liabilities and Stockholders' Equity

Liabilities and Stockholders' Equity (Deficit)

Current Liabilities:

Accounts payable

Accrued expenses

Accounts payable and accrued expenses

Notes payable

2 unchanged sentences

Commitments and contingencies

Stockholders' Equity:

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

Stockholders' Equity (Deficit):

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 4,207,068 and

4 unchanged sentences

( 50,715,677 )

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

Total Stockholders' Equity (Deficit)

( 1,740,752 )

Total Liabilities and Stockholders' Equity (Deficit)

See accompanying notes to the unaudited financial statements.

3 unchanged sentences

Three months ended

Six months ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Nine months ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Operating expenses:

19 unchanged sentences

Weighted average shares outstanding - diluted

See accompanying notes to

the unaudited financial statements

Pharmaceuticals, Inc.

Statements of

Stockholders' Equity

For the six months ended June 30, 2023 and 2022

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Stockholders' Equity (Deficit)

For the nine months ended September 30, 2023 and 2022

Stockholders'

Equity (Deficit)

Balance December 31, 2022

13 unchanged sentences

( 59,668,858 )

Common stock issued for cash, net

Stock-based compensation

( 4,522,795 )

Balance September 30, 2023

$ ( 64,191,653 )

$ ( 1,740,752 )

Balance December 31, 2021

12 unchanged sentences

( 42,159,273 )

Stock-based compensation

( 3,419,553 )

Balance September 30, 2022

$ ( 45,578,826 )

See accompanying notes to the unaudited financial statements.

1 unchanged sentence

Statements of Cash Flows

Six Months Ended

June 30, 2023

June 30, 2022

Nine Months Ended

September 30, 2023

September 30, 2022

Cash Flows from Operating Activities:

6 unchanged sentences

Prepaid expenses and other current assets

Accounts payable

Accrued expenses

Accounts payable and accrued expenses

Net cash used in operating activities

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Cash paid for income taxes

See accompanying notes to the unaudited financial

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

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financial statements not misleading.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative

of the final results that may be expected for the year ending December 31, 2023.

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The amount in excess of

the FDIC insurance as of June 30, 2023 was $ 4,029,251 .

the FDIC insurance as of September 30, 2023 was $ 659,547 .

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

14 unchanged sentences

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

As of June 30, 2023, the Company’s potentially

As of September 30, 2023, the Company’s potentially

dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase 2,268,827

common shares, and options for 128,588 common shares.

As of June 30, 2022, the Company’s potentially dilutive shares and options,

which were not included in the calculation of net loss per share, included warrants to purchase 564,205 common shares, and options for

95,501 common shares.

Accounting Pronouncements - In June 2016, the FASB issued Accounting Standards Update No.

2016-13, Financial

Instruments-Credit Losses:

common shares unvested restricted stock units of 7,144 common shares, unvested performance units of 28,563 and options

for 328,770 common shares, respectively.

For the nine months ended September 30, 2022, the Company’s potentially dilutive

shares and options, which were not included in the calculation of net loss per share, included warrants to purchase 524,000 common

shares, unvested restricted stock units of 9,523 common shares, unvested performance units of 28,563 and options for 93,001

common shares, respectively.

Reclassification

- Certain reclassifications may have been made to our prior year’s

financial statements to conform to our current year presentation.

These reclassifications had no effect on our previously reported results

of operations or accumulated deficit.

Recent Accounting Pronouncements - In June 2016, the FASB

issued Accounting Standards Update No.

2016-13, Financial Instruments-Credit Losses:

Measurement of Credit Losses on Financial Instruments.

ASU 2016-13 requires measurement and recognition

of expected credit losses for financial assets.

In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04,

Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825,

Financial Instruments, or ASU 2016-13.

ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets.

In April 2019, the FASB issued clarification

to ASU 2016-13 within ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives

and Hedging, and Topic 825, Financial Instruments, or ASU 2016-13.

The guidance is effective for fiscal years beginning after December

adopted this standard on January 1, 2023, which had no material impact on the Company’s financial statements.

The Company adopted this standard on January 1, 2023, which had no material impact on the Company’s financial statements.

Note 3 – Note Payable

3 unchanged sentences

related to the note will be repaid over an 11-month period with the final payment due on October 31, 2023 .

As of June 30, 2023 and December

31, 2022, the Company’s note payable balance was $ 166,396 and $ 409,968 , respectively.

As of September 30, 2023 and

December 31, 2022, the Company’s note payable balance was $ 41,904 and $ 409,968 , respectively.

Note 4 – Equity

3 unchanged sentences

The specific rights of the preferred stock shall be determined by the board of directors.

Pursuant to the terms of the Capital on

Demand™ Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia

Securities, LLC (collectively, the “Agent”), the Company may sell from time to time, through the Agent, shares of the

Company’s common stock with an aggregate sales price of up to $20.0 million.

During the quarter ended June 30, 2023, the

Company sold 659,677

shares of common stock to the Agent for net proceeds of $ 1,969,107 .

Pursuant to the terms of the Capital on Demand™

Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC (collectively,

the “Agent”), the Company may sell from time to time, through the Agent, shares of the Company’s common stock with an

aggregate sales price of up to $20.0 million.

During the nine months ended September 30, 2023, the Company sold 723,406 shares of common

stock to the Agent for net proceeds of $ 2,101,958 .

Stock Options

3 unchanged sentences

awards for up to 66,667 shares of common stock.

In 2020, the Board of Directors of the Company approved the CNS Pharmaceuticals,

the Board of Directors of the Company approved the CNS Pharmaceuticals, Inc.

2020 Stock Plan (the “2020 Plan”).

The 2020 Plan allows for the Board of Directors to grant various forms of incentive

awards for up to 100,000 shares of common stock.

Plan allows for the Board of Directors to grant various forms of incentive awards for up to 100,000

shares of common stock.

The 2020 Plan was amended effective as of August 9, 2023, which was approved by the Company’s

stockholders at the Company’s annual meeting on September 14, 2023.

The amendment increased the 2020 Plan by 745,800 shares

of common stock.

On December 30, 2022, the Board of Directors of the Company appointed

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total fair value of these option grants at issuance was $ 25,820 .

On May 3, 2023, the Board of Directors of the Company appointed

On May 3, 2023, the Board of Directors of the Company appointed Bettina

Cockroft, M.D., M.B.A as an independent member of the Company’s Board of Directors.

Cockroft was granted a

ten-year option to purchase 2,099

shares of Company common stock at an exercise price of $ 1.67

vesting in 36 equal monthly installments succeeding the issuance date.

Cockroft was granted a ten-year option

to purchase 2,099 shares of Company common stock at an exercise price of $ 1.67 vesting in 36 equal monthly installments succeeding the

issuance date.

The total fair value of these option grants at issuance was $ 3,514 .

During the six months ended June 30, 2023 and 2022, the Company recognized

$ 544,248 and $ 605,657 of stock-based compensation, respectively, related to outstanding stock options.

At June 30, 2023, the Company had

$ 803,468 of unrecognized expenses related to outstanding options.

On August 4, 2023, the Board of Directors approved the issuance of

6,500 options to Dr.

The options have a ten-year term at an exercise price of $ 2.27 and vest in 36 equal monthly installments

succeeding the issuance date.

The total fair value of these option grants at issuance was $ 12,771 .

On August 27, 2023, the Board of Directors approved the issuance of

193,690 options to the board of directors.

The options have a ten-year term at an exercise price of $ 1.90 and vest on the first anniversary

date of issuance.

The total fair value of these option grants at issuance was $ 313,846 .

During the nine months ended September 30, 2023 and 2022, the Company

recognized $ 727,864 and $ 877,510 of stock-based compensation, respectively, related to outstanding stock options.

At September 30, 2023,

the Company had $ 940,197 of unrecognized expenses related to outstanding options.

The following table summarizes the stock option

activity for the six months ended June 30, 2023:

activity for the nine months ended September 30, 2023:

Schedule of stock option activity

1 unchanged sentence

Outstanding, December 31, 2022

Outstanding, June 30, 2023

Exercisable, June 30, 2023

As of June 30, 2023, the outstanding stock options have a weighted

average remaining term of 7.20

years and aggregate intrinsic value of options vested and outstanding of $ 8,133 and $ 46,248 , respectively.

As of June 30, 2023,

there were no awards remaining to be issued under the 2017 Plan or the 2020 Plan.

Outstanding, September 30, 2023

Exercisable, September 30, 2023

As of September 30, 2023, the outstanding stock options have a weighted

average remaining term of 8.79 years and aggregate intrinsic value of options vested and outstanding of $ 0 and $ 4,318 , respectively.

of September 30, 2023, there were no awards remaining to be issued under the 2017 Plan and 545,610 awards remaining to be issued under

the 2020 Plan.

Stock Warrants

During the six months ended June 30, 2023, the Company received

$ 725,668 in cash proceeds

from the exercise of 238,958 warrants previously issued at an exercise price of $3.03 and 1,625,000 warrants previously issued at an exercise price of $0.001.

During the nine months ended September 30, 2023, the Company received

$ 725,668 in cash proceeds from the exercise of 238,958 warrants previously issued at an exercise price of $3.03 and 1,625,000 warrants

previously issued at an exercise price of $0.001.

The following table summarizes the stock warrant

activity for the six months ended June 30, 2023:

activity for the nine months ended September 30, 2023:

Schedule of warrants activity

2 unchanged sentences

( 1,863,958 )

Outstanding, June 30, 2023

Exercisable, June 30, 2023

As of June 30, 2023, the outstanding and exercisable warrants have

a weighted average remaining term of 2.75 years and had no aggregate intrinsic value.

Outstanding, September 30, 2023

Exercisable, September 30, 2023

As of September 30, 2023, the outstanding and exercisable warrants

have a weighted average remaining term of 4.02 years and had no aggregate intrinsic value.

Restricted Stock Units

During the six months ended June 30, 2023, the Company recognized $ 11,925

During the nine months ended September 30, 2023, the Company recognized

$ 17,888 of stock-based compensation, related to outstanding RSUs.

At June 30, 2023, the Company had $ 65,587 of unrecognized expenses related

At September 30, 2023, the Company had $ 59,624 of unrecognized expenses related

to outstanding RSUs.

The following table summarizes the RSUs activity

for the six months ended June 30, 2023:

for the nine months ended September 30, 2023:

Schedule of restricted stock units activity

1 unchanged sentence

Non-vested, December 31, 2022

Non-vested, June 30, 2023

Non-vested, September 30, 2023

Performance Units

During the six months ended June 30, 2023, the Company recognized $ 23,810

During the nine months ended September 30, 2023, the Company recognized

$ 28,990 related to outstanding stock PUs.

At June 30, 2023, the Company had $ 110,138 of unrecognized expenses related to PUs.

At September 30, 2023, the Company had $ 104,958 of unrecognized expenses related to PUs.

The following table summarizes the PUs activity

for the six months ended June 30, 2023:

for the nine months ended September 30, 2023:

Schedule of performance units activity

1 unchanged sentence

Non-vested, December 31, 2022

Non-vested, June 30, 2023

Non-vested, September 30, 2023

Note 5 – Commitments and Contingencies

26 unchanged sentences

Climaco’s 2021 annual base salary

to $ 525,000 .

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

Silberman and Picker.

Silberman agreed to commit 50% of her time to our matters and Dr.

Picker agreed to commit 25% of his time to

Picker agreed to commit 25% of his time to our matters.

On March 29, 2023, the Board of Directors approved, based upon the

6 unchanged sentences

member shall receive annual cash compensation of $68,600.

During the six months ended June 30, 2023 and 2022, the Company paid $ 0 and

$ 65,834 related to the Scientific Advisory Board compensation.

As of June 30, 2023, the Company has accrued $ 134,434 related to Dr.

Scientific Advisory Board compensation.

During the nine months ended September 30, 2023 and 2022, the Company paid $ 0

and $ 76,087 related to the Scientific Advisory Board compensation.

As of September 30, 2023, the Company has accrued $ 151,584 related

Hsu’s Scientific Advisory Board compensation.

WP744 Portfolio (Berubicin)

8 unchanged sentences

Company on the development of Berubicin, from time to time.

On December 28, 2017, the Company entered into a Technology

Rights and Development Agreement with Houston Pharmaceuticals, Inc.

On December 28, 2017, the Company entered into a Technology Rights

and Development Agreement with Houston Pharmaceuticals, Inc.

HPI is affiliated with Dr.

Waldemar Priebe,

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

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 6,667 shares of the Company’s

common stock valued at $1.35 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

During the six months ended June 30, 2023 and 2022, the Company recognized $ 25,000

and $ 175,000 ,

respectively, related to this agreement.

Waldemar Priebe, our founder.

Pursuant to this agreement, the Company obtained a worldwide exclusive license to the chemical compound commonly known as WP744.

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

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

In addition, the Company issued 6,667 shares of the Company’s common stock valued at $1.35 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 nine months ended September 30, 2023 and 2022, the Company recognized

$ 37,500 and $ 262,500 , respectively, 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, 2023 and 2022, the Company expensed

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 nine months ended September 30, 2023 and 2022, the Company expensed $ 0 and

$ 41,075 respectively related to the purchase of pharmaceutical products from HPI.

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Priebe, our founder.

On November 21, 2022, CNS entered into an Investigational Medicinal Product

Supply Agreement with Pomeranian Medical University (“PUM”) in Szczecin, Poland.

On November 21, 2022, CNS entered into an Investigational Medicinal

Product Supply Agreement with Pomeranian Medical University (“PUM”) in Szczecin, Poland.

CNS agreed to sell berubicin hydrochloride

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the reference standards were delivered, and the Company recognized $ 1,302 in accounts receivable and as a reduction to research and development

In April 2023, the first batch of berubicin drug product vials were delivered, and the Company recognized $ 196,303

in accounts receivable and as a reduction to research and development expense.

As of June 30, 2023, the outstanding accounts receivable

balance was $ 197,605 , which was collected in full on July 6, 2023.

In April 2023, the first batch of berubicin drug product vials were delivered, and the Company recognized $ 196,303 in accounts

receivable and as a reduction to research and development expense.

As of September 30, 2023, the outstanding accounts receivable balance

of $ 197,605 was collected in full.

On August 31, 2018, the Company entered into a sublicense agreement

27 unchanged sentences

WP1244 Portfolio

On January 10, 2020, Company entered into a Patent and Technology

License Agreement (“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.

On January 10, 2020, Company entered into a Patent and Technology License

Agreement (“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 Agreement, the

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

related to the Company’s recently announced WP1244 drug technology.

In consideration, the Company must make payments to

UTMDACC including an up-front license fee, annual maintenance fee, milestone payments and royalty payments (including minimum annual

royalties) on sales of licensed products developed under the Agreement.

Pursuant to the Agreement, the Company obtained a royalty-bearing,

worldwide, exclusive license to certain intellectual property rights, including patent rights, related to the Company’s recently

announced WP1244 drug technology.

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

maintenance fee, milestone payments and royalty payments (including minimum annual royalties) on sales of licensed products developed

under the Agreement.

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

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

provided that UTMDACC has the

right to terminate this Agreement in the event that the Company fails to meet certain commercial diligence milestones.

commercial diligence milestones are as follows (i) initiated PC toxicology to support filing of Investigational New Drug Application

(“IND”) or New Drug Application (“NDA”) for the Licensed Product within the eighteen (18) month period

following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period following the Effective Date

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

The Company has not met the

commercial diligence milestones required as of the date hereof.

As such, UTMDACC has the right to terminate the Agreement upon

notice to the Company.

As of the date of this report, UTMDACC has not notified of the Company of its intention to terminate the

During the six months ended June 30, 2023 and 2022, the Company paid $ 27,341

and $ 44,424 ,

respectively.

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

or (b) fifteen years after execution;

provided that UTMDACC has the right to terminate this Agreement in the event that the Company fails

to meet certain commercial diligence milestones.

The commercial diligence milestones are as follows (i) initiated PC toxicology to support

filing of Investigational New Drug Application (“IND”) or New Drug Application (“NDA”) for the Licensed Product

within the eighteen (18) month period following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period

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

Company has not met the commercial diligence milestones required as of the date hereof.

As such, UTMDACC has the right to terminate the

Agreement upon notice to the Company.

As of the date of this report, UTMDACC has not notified the Company of its intention to terminate

the Agreement.

During the nine months ended September 30, 2023 and 2022, the Company paid $ 45,092 and $ 49,607 , respectively.

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

1 unchanged sentence

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 December 31, 2021.

The Company agreed to fund approximately $1,134,000 over a two-year period, which has been fully paid

by the Company in 2021.

This agreement was extended and expired on March 31, 2023.

1 unchanged sentence

Waldemar Priebe, our founder.

Anti-Viral Portfolio

On March 20, 2020, the Company entered into a Development Agreement

(“Agreement”) with WPD Pharmaceuticals (“WPD”), a company founded by Dr.

Waldemar Priebe, the founder of the Company.

Pursuant to the Agreement, WPD agreed to use its commercially reasonable efforts in good faith to develop and commercialize certain products

that WPD had previously sublicensed, solely in the field of pharmaceutical drug products for the treatment of any viral infection in humans,

with a goal of eventual approval of in certain territories consisting of:

Germany, Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine,

Romania, Armenia, Azerbaijan, Georgia, Slovakia, Czech Republic, Hungary, Uzbekistan, Kazakhstan, 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 was required to make a

payment of $ 775,000

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

The term of the Agreement stated it would expire on the expiration

of the sublicense pursuant to which WPD has originally sublicensed the products.

In March 2023, the sublicense pursuant to which WPD originally

sublicensed the products was terminated.

As such, the Agreement has been terminated.

6 – Subsequent Events

Pursuant to the terms of the Capital on Demand™

Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC (collectively,

the “Agent”), the Company may sell from time to time, through the Agent, shares of the Company’s common stock with an

aggregate sales price of up to $20.0 million.

Subsequent to the quarter ended on June 30, 2023, the Company sold 58,591 shares

of common stock to the Agent for net proceeds of $124,279.

On August 4, 2023, the Board of Directors approved the issuance of

6,500 options to Dr.

The options have a ten-year term at an exercise price of $2.27 and vest in 36 equal monthly installments

succeeding the issuance date.

This grant is contingent upon shareholder approval of an amendment to our equity compensation

plan to increase the number of shares authorized under the plan to allow for the registration of the shares underlying the options

Note 6 – Subsequent Events

16, 2023, the Company entered into a warrant exercise inducement offer letter (the “Inducement Letter”) with a holder of certain

existing warrants (“Holder”) to receive new warrants to purchase up to a number of shares of common stock equal to 200% (the

“Inducement Warrants”) of the number of warrant shares issued pursuant to the exercise of such certain existing warrants to

purchase shares of common stock (the “Existing Warrants”) pursuant to which the Holder agreed to exercise for cash their Existing

Warrants to purchase up to 1,878,000 shares of the Company’s common stock, at a Reduced Exercise Price (as defined below),

in exchange for the Company’s agreement to issue the Inducement Warrants to purchase up to 3,756,000 shares of the Company’s

common stock (the “Inducement Warrant Shares”).

The Existing Warrants consist of:

(i) warrants, originally issued on December

22, 2020 and amended on December 5, 2022;

(ii) warrants, originally issued on January 10, 2022 and amended on December 5, 2022;

warrants issued on December 5, 2022.

Pursuant to the Inducement Letter, the exercise price for such Existing Warrants was reduced to $1.28

per share (the “Reduced Exercise Price”).

The Company received aggregate gross proceeds of $2,403,840 from the exercise of

the Existing Warrants before deducting financial advisory fees and other expenses payable by it .

Pursuant to the Inducement Letter, although the exercise of the warrants has occurred and full payment of the exercise price has been

made, the Holder has directed that a number of shares be held in abeyance and not yet issued until they direct us to do so.

As such, the shares have not been issued and do not appear in our count of common

shares outstanding.

Pursuant to the terms of the Capital on Demand™ Sales Agreement

with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC (collectively, the “Agent”),

the Company may sell from time to time, through the Agent, shares of the Company’s common stock with an aggregate sales price of

up to $20.0 million.

Subsequent to the quarter ended on September 30, 2023, the Company sold 129,530 shares of common stock to the Agent

for net proceeds of $215,641.

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