What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 259 added, 201 removed, 461 unchanged (50% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Current Assets:

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

Common stock, $ 0.001 par value, 300,000,000 shares authorized and 1,443,274 and

124,306 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 300,000,000 shares authorized and 33,446,403 and 124,306 shares issued and outstanding, respectively

Additional paid-in capital

4 unchanged sentences

( 4,432,115 )

Total Liabilities and Stockholders' Equity (Deficit)

See accompanying notes to

the unaudited financial statements.

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Operations

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Operating expenses:

19 unchanged sentences

Weighted average shares outstanding - diluted

See accompanying notes to the unaudited financial

See accompanying notes to the unaudited financial statements.

Pharmaceuticals, Inc.

1 unchanged sentence

Stockholders' Equity (Deficit)

For the six months

ended June 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023

Stockholders'

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( 4,293,601 )

Common stock issued for cash and warrants, net

Stock-based compensation

Common stock issued for license agreement

( 5,605,934 )

Balance, September 30, 2024

$ ( 81,248,338 )

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 )

See accompanying notes to the unaudited financial statements.

1 unchanged sentence

Statements of Cash Flows

Six Months Ended

June 30, 2024

June 30, 2023

Nine Months Ended

September 30, 2024

September 30, 2023

Cash Flows from Operating Activities:

3 unchanged sentences

Stock-based compensation

Gain on disposal of fixed assets

Common stock issued for license agreement

(Gain) loss on disposal of fixed assets

Changes in operating assets and liabilities:

1 unchanged sentence

Accounts payable and accrued expenses

( 1,806,420 )

Net cash used in operating activities

1 unchanged sentence

( 11,603,678 )

Cash Flows from Investing Activities:

Purchase of property and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

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Reclassification of deferred offering costs to equity

See accompanying notes to the unaudited financial

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

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Note 2 – Summary of Significant Accounting

of Presentation - The accompanying unaudited financial statements of the Company have been prepared in accordance with

accounting principles generally accepted in the United Stated of America (“U.S.

GAAP”) for interim unaudited financial

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting

principles for complete financial statements.

The unaudited financial statements include all adjustments (consisting of normal

recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the final results

that may be expected for the year ending December 31, 2024.

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, 2023 included in

our Form 10-K filed with the SEC on April 1, 2024 (“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.

Basis of Presentation - The accompanying unaudited financial

statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America

GAAP”) for interim unaudited financial information.

Accordingly, they do not include all of the information and footnotes

required by generally accepted accounting principles for complete financial statements.

The unaudited financial statements include all

adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed

financial statements not misleading.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative

of the final results that may be expected for the year ending December 31, 2024.

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, 2023 included

in our Form 10-K filed with the SEC on April 1, 2024 (“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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The amount in excess of

the FDIC insurance as of June 30, 2024 was $ 1,241,559 .

the FDIC insurance as of September 30, 2024 was $ 6,723,124 .

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.

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.

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

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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

by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period.

loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the

dilutive effect of common stock equivalents.

In periods when losses are reported, the weighted-average number of common shares outstanding

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

As of June 30, 2024, the Company’s potentially

dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase 1,551,422

common shares, unvested restricted stock units of 5,475 common shares, unvested performance units of 577 and options for 12,177 common

shares, respectively.

As of June 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 45,399 common shares, unvested restricted stock units of 193 common shares,

unvested performance units of 577 and options for 2,591 common shares, respectively.

Per Common Share - Basic loss per common share is computed by dividing net loss available to common shareholders by the

weighted-average number of common shares outstanding during the period.

Diluted loss per common share is determined using the

weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock

In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock

equivalents, because their inclusion would be anti-dilutive.

As of September 30, 2024, the Company’s potentially dilutive

shares and options, which were not included in the calculation of net loss per share, included warrants to purchase 2,976,422

common shares, unvested restricted stock units of 5,475

common shares, unvested performance units of 192

and options for 12,177

common shares, respectively.

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 45,399

common shares, unvested restricted stock units of 193

common shares, unvested performance units of 577

and options for 6,598

common shares, respectively.

Note 3 – Note Payable

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related to the note will be repaid over an 11-month period with the final payment due on October 8, 2024 .

As of June 30, 2024 the Company’s

note payable balance was $ 123,248 .

As of September 30, 2024 the

Company’s note payable balance was $ 31,187 .

Note 4 – Equity

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with A.G.P./Alliance Global Partners (“AGP”) and Maxim Group LLC (“Maxim” and collectively with AGP, the “Placement

Agents”) (the “Placement Agreement”) for the public offering by the Company of (i) 44,314

shares (the “Shares”) of the Company’s common stock, par value $ 0.001

per share (the “Common Stock”) (ii) pre-funded warrants to purchase 222,354

Agents”) (the “Placement Agreement”) for the public offering by the Company of (i) 44,314 shares (the “Shares”)

of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (ii) pre-funded warrants to purchase

222,354 shares of Common Stock (the “Pre-Funded Warrants”);

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shares of Common Stock (the “Series B Warrants”, and together with the Series A Warrants, the “Common Warrants)).

The Common Warrants and Pre-Funded Warrants are collectively referred to herein as the (“Warrants”).

The combined purchase

price of one share of Common Stock and accompanying Common Warrants was $ 15.00

and the combined purchase price of one Pre-Funded Warrant and accompanying Common Warrants was $ 14.95 .

In connection with the offering, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with

certain institutional investors that participated in the offering.

Common Warrants and Pre-Funded Warrants are collectively referred to herein as the (“Warrants”).

The combined purchase price

of one share of Common Stock and accompanying Common Warrants was $15.00 and the combined purchase price of one Pre-Funded Warrant and

accompanying Common Warrants was $14.95.

In connection with the offering, the Company entered into a Securities Purchase Agreement (the

“Purchase Agreement”) with certain institutional investors that participated in the offering.

As of April 1, 2024, 44,094

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The closing of the sales of these securities occurred on February 1, 2024.

net proceeds to the Company from the offering were $ 3,331,000 ,

after deducting the placement agents’ fees and other offering expenses.

The net proceeds

to the Company from the offering were $ 3,331,000 , after deducting the placement agents’ fees and other offering expenses.

On June 14, 2024, the Company entered into securities purchase agreements

with institutional investors for the sale by the Company of 336,000

shares of the Company’s common stock and pre-funded warrants to purchase 30,000

shares of common stock in lieu thereof (the “June 14 Pre-Funded Warrants”) in a registered direct offering.

In a concurrent

private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 366,000

with institutional investors for the sale by the Company of 336,000 shares of the Company’s common stock and pre-funded warrants

to purchase 30,000 shares of common stock in lieu thereof (the “June 14 Pre-Funded Warrants”) in a registered direct offering.

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 366,000

shares of common stock (the “June 14 Common Warrants”).

The combined purchase price of one share of common stock (or

pre-funded warrant in lieu thereof) and accompanying June 14 Common Warrant was $ 3.75 .

The closing of this offering and private placement occurred on June 17, 2024.

The combined purchase price of one share of common stock (or pre-funded

warrant in lieu thereof) and accompanying June 14 Common Warrant was $3.75.

The closing of this offering and private placement occurred

on June 17, 2024.

Subject to certain ownership limitations, each of the June 14 Common

Warrants is immediately exercisable, has an exercise price of $3.62 per share, and expire five years from the date of issuance.

Subject to certain ownership limitations, each June 14 Pre-Funded

Warrant is exercisable into one share of common stock at a price per share of $ 0.001

(as adjusted from time to time in accordance with the terms thereof).

The gross proceeds to the Company from the offering was

approximately $ 1.37

million, resulting in net proceeds, after payment of commissions and expenses, received by the Company of $ 1,203,259 .

Subject to certain ownership limitations, each June 14 Pre-Funded Warrant

is exercisable into one share of common stock at a price per share of $0.001 (as adjusted from time to time in accordance with the terms

The gross proceeds to the Company from the offering was approximately $ 1.37 million , resulting in net proceeds, after payment

of commissions and expenses, received by the Company of $ 1,203,259 .

On June 26, 2024, the Company entered into securities purchase agreements

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by the Company of $ 1,221,154 .

On July 3, 2024, the Company entered into securities purchase agreements

with institutional investors for the sale by the Company of 1,425,000 shares of the Company’s common stock in a registered direct

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate

of 1,425,000 shares of common stock (the “July 3 Common Warrants”).

The combined purchase price of one share of common stock

and accompanying July 3 Common Warrant is $1.39.

The closing of this offering and private placement occurred on July 5, 2024.

Subject to certain ownership limitations, each of the July 3 Common

Warrants is immediately exercisable, has an exercise price of $1.26 per share, and expire five years from the date of issuance.

proceeds to the Company from the offering were approximately $ 1.98 million , before deducting the financial advisor fees and other estimated

offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the Common Warrants.

On July 26, 2024, the Company entered into a Sales Agreement (the “AGP

ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”).

Pursuant to the terms of the AGP ATM Sales Agreement,

the Company originally was permitted to sell from time to time through AGP, as sales agent or principal, shares of the Company’s

common stock, par value $0.001 per share with initial aggregate sales price of up to $5.2 million.

On July 30, 2024, the Company increased

the aggregate sales price of common shares that may be sold under the AGP ATM Sales Agreement to $25.0 million (not including the original

$5.2 million).

As of September 30, 2024, the Company has sold 30,004,761 Shares pursuant to the Agreement for net proceeds of approximately

$ 10.6 million .

Common share issued for license agreement

On July 29, 2024, the Company entered into an Exclusive License Agreement

and Stock Purchase Agreement (collectively, the “Cortice Agreements”) with Cortice Biosciences, Inc.

pursuant to which Cortice granted the Company an exclusive license to the intellectual property rights related to certain patents around

the compound TPI 287 in the United States, Canada, Mexico and Japan.

The term of the license will expire, other than due to a breach of

the Cortice Agreements, at the end of the royalty term with respect to any licensed product in any of the included territories, which

begins upon the first commercial sale in such territory and ends on the latest of (i) ten years after such sale, (ii) the expiration of

regulatory or marketing exclusivity for such licensed product in such country, or (c) the expiration of the last to expire valid patent

claim in such country covering such licensed product.

Pursuant to the Cortice Agreements, the Company agreed to issue

Cortice 573,368

shares of the Company’s common stock upon the closing of the transaction, which occurred on July 29, 2024, and 43,330

shares of Company common stock upon the receipt of shareholder approval of such issuance as required by the rules of the Nasdaq

Stock Market.

The Company also agreed to make milestone payments to Cortice in either cash or shares of Company common stock (at

Cortice’s option) upon:

(i) meeting the primary endpoint a pivotal trial for a licensed product – either $15.0 million

or 411,132 shares of Company common stock;

(ii) FDA acceptance of an New Drug Application for a licensed product – either

$30.0 million or 822,264 shares of Company common stock;

(iii) the first commercial sale in the United States of a licensed product

– either $45.0 million or 1,233,395 shares of Company common stock;

and (iv) the first commercial sale in Japan of a licensed

product – either $10.0 million or 205,566 shares of Company common stock.

The Company’s obligation to pay the above

milestones in Company common stock is subject to the receipt of shareholder approval as required by the rules of the Nasdaq Stock

The Company also agreed to pay Cortice royalties on sales of licensed products of between 3.0%-7.5%.

Finally, to the extent

Cortice is required to pay any milestone payments to the original holder of the intellectual property rights licensed, the Company

has agreed to make such payments to Cortice.

As of September 30, 2024, there were no accruals related to the milestone payments and

the Company issued 573,368

Shares with a fair value of $ 596,302

pursuant to the Cortice Agreement.

Stock Options

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Of the 5,330 options

issued, 1,750 options vest on the first anniversary or at the time of the 2025 shareholder meeting, whichever occurs first and 3,580 options

vest in 36 equal monthly installments over 3 years .

issued, 1,750 options vest on the first anniversary or at the time of the 2025 shareholder meeting, whichever occurs first and 3,580 options vest in 36 equal monthly installments over 3 years.

The total fair value of these option grants at issuance was $ 58,335 .

During the six months ended June 30, 2024 and 2023, the Company

recognized $ 412,749 and $ 544,248 of stock-based compensation, respectively, related to outstanding stock options.

At June 30, 2024, the

Company had $ 366,400 of unrecognized expenses related to outstanding options.

During the nine months ended September 30, 2024 and 2023, the

Company recognized $ 571,705

and $ 727,864

of stock-based compensation, respectively, related to outstanding stock options.

At September 30, 2024, the Company had $ 207,444

of unrecognized expenses related to outstanding options.

The following table summarizes

the stock option activity for the six months ended June 30, 2024:

the stock option activity for the nine months ended September 30, 2024:

Schedule of stock option activity

1 unchanged sentence

Outstanding, December 31, 2023

Outstanding, June 30, 2024

Exercisable, June 30, 2024

The aggregate fair value of the options measured during the six months

ended June 30, 2024 were calculated using the Black-Scholes option pricing model based on the following assumptions:

Schedule of assumptions

Six Months Ended

June 30, 2024

Outstanding, September 30, 2024

Exercisable, September 30, 2024

The aggregate fair value of the options measured during the nine months

ended September 30, 2024 were calculated using the Black-Scholes option pricing model based on the following assumptions:

Schedule of black-ccholes option assumptions

Nine Months Ended

September 30, 2024

Fair value of common stock on measurement date

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The Company does not expect to pay a dividend in the foreseeable future.

As of June 30, 2024, the outstanding stock options have a weighted

As of September 30, 2024, the outstanding stock options have a weighted

average remaining term of 8.58 years and no aggregate intrinsic value.

As of June 30, 2024, there were no awards remaining to be issued

under the 2017 Plan and 69,973 awards remaining to be issued under the 2020 Plan.

As of September 30, 2024, there were no awards remaining to be

issued under the 2017 Plan and 69,973 awards remaining to be issued under the 2020 Plan.

Stock Warrants

4 unchanged sentences

per share and a new termination date of February 1, 2029.

During the six months ended June 30, 2024, the Company received $ 21,326

During the nine months ended September 30, 2024, the Company received

$ 21,326 in cash proceeds from the exercise of 253,034 warrants previously issued at an exercise price range of $0.001 to $15.00.

The following table summarizes the stock warrant

activity for the six months ended June 30, 2024:

activity for the nine months ended September 30, 2024:

Schedule of stock warrant

1 unchanged sentence

Outstanding, December 31, 2023

Outstanding, June 30, 2024

Exercisable, June 30, 2024

As of June 30, 2024, the outstanding and exercisable warrants have

a weighted average remaining term of 4.22 years and had no aggregate intrinsic value.

Outstanding, September 30, 2024

Exercisable, September 30, 2024

As of September 30, 2024, the outstanding and exercisable

warrants have a weighted average remaining term of 4.35

years and had no aggregate intrinsic value.

Restricted Stock Units

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the RSUs based on the stock price at grant which total $ 69,027 .

During the six months ended June 30, 2024,

During the nine months ended September 30,

2024, the Company recognized $ 36,990 of stock-based compensation, related to outstanding stock RSUs.

At June 30, 2024, the Company had $ 103,123

of unrecognized expenses related to outstanding RSUs.

At September 30, 2024, the Company

had $ 85,699 of unrecognized expenses related to outstanding RSUs.

The following table summarizes

the RSUs activity for the six months ended June 30, 2024:

the RSUs activity for the nine months ended September 30, 2024:

Schedule of RSUs activity

1 unchanged sentence

Non-vested, December 31, 2023

Non-vested, June 30, 2024

Non-vested, September 30, 2024

Performance Units

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price $501, hurdle prices ranging from $3,000 -$6,000, expected terms ranging from 2-3 years, cost of equity 18.7% and risk-free rate

During the six months ended June 30, 2024,

During the nine months ended September 30,

2024, the Company recognized $ 100,362 related to outstanding stock PUs.

At June 30, 2024, the Company had $ 95,399 of unrecognized expenses

related to PUs.

At September 30, 2024, the Company had $ 0 of unrecognized

expenses related to PUs.

The following table summarizes

the PUs activity for the six months ended June 30, 2024:

the PUs activity for the nine months ended September 30, 2024:

Schedule of PUs activity

1 unchanged sentence

Non-vested, December 31, 2023

Non-vested, June 30, 2024

Non-vested, September 30, 2024

Note 5 – Commitments and Contingencies

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the cash compensation program for the Scientific Advisory Board.

As of June 30, 2024, the Company has accrued $ 177,309 related to

As of September 30, 2024, the Company has accrued $ 177,309 related

Hsu’s Scientific Advisory Board compensation.

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of the intellectual property discussed in the HPI agreement.

During the six months ended June 30, 2024 and 2023, the Company recognized

During the nine months ended September 30, 2024 and 2023, the Company recognized

$ 37,500 and $ 37,500 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

from HPI which are necessary for the manufacturing of Berubicin API and drug product 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

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

with Animal Life Sciences, LLC (“ALI”), a related party, pursuant to which we granted ALI an exclusive sublicense, even as

with Animal Life Sciences, LLC (“ALI”), pursuant to which we granted ALI an exclusive sublicense, even as

to us, for the patent rights we licensed pursuant to the HPI License solely for the treatment of cancer in non-human animals through any

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such payments, and to pay us a royalty equal to 1% of such payments.

Waldemar Priebe, our founder, is also the founder and a shareholder

Waldemar Priebe, our founder, is also the founder of ALI.

On June 10, 2020, the FDA granted Orphan Drug Designation (“ODD”)

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WP1244 Portfolio

On January 10, 2020, Company entered into a Patent

and 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.

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

WP1244 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 WP1244 Agreement.

The term of the WP1244 Agreement expires on the last to

(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 this WP1244 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.

The Company has not met the commercial diligence milestones

and has not paid the annual maintenance fee required as of the date hereof.

On April 25, 2024, UTMDACC provided notice to the Company

of its intent to terminate the WP1244 Agreement if the Company fails to pay the annual maintenance fee of $50,000, as well as $1,300 in

On May 25, 2024 the WP1244 Agreement was terminated.

Pursuant to the WP1244 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 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;

provided that UTMDACC has the right to terminate

this WP1244 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.

The Company has not met the commercial diligence milestones and has not paid the annual

maintenance fee required as of the date hereof.

On April 25, 2024, UTMDACC provided notice to the Company of its intent to terminate the

WP1244 Agreement if the Company fails to pay the annual maintenance fee of $50,000, as well as $1,300 in expenses.

On May 25, 2024 the

WP1244 Agreement was terminated.

There are no termination penalty provisions in the Agreement.

six months ended June 30, 2024 and 2023, the Company paid $ 1,994 and $ 27,341 , respectively.

During the nine months ended September

30, 2024 and 2023, the Company paid $52,537 and $45,092, respectively.

Nasdaq Capital Markets Listing Qualifications

On August 17, 2023, the Company was notified by the Listing Qualifications

Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) that the Company was not in compliance with the

minimum $ 2,500,000 stockholders’ equity requirement for continued listing set forth in Listing Rule 5550(b).

On February 27, 2024,

the Staff notified the Company that it did not comply with the $1.00 minimum bid price requirement set forth under Listing Rule 5550(a)(2).

On February 14, 2024, the Company was notified that because it had not regained compliance with the Nasdaq equity requirement, its securities

would be delisted unless it requested a hearing.

On February 21, 2024, the Company requested a hearing, which was held on April 18, 2024.

On May 6, 2024, the Company received notification from the Nasdaq Hearings

Panel (“Panel”) that it had granted an extension until July 15, 2024, which was extended until August 12, 2024 to demonstrate

compliance with Listing Rules 5550(a)(2) and 5550(b).

On July 5, 2024, the Company received a letter from the Nasdaq Staff

notifying the Company that it had regained compliance with Bid Price Rule as a result of the closing bid price of the Company’s

common stock being at $ 1.00 per share or greater for the 20 consecutive business days from June 5, 2024, through July 3, 2024.

the Company is in compliance with the Bid Price Rule.

On August 7, 2024, the Company filed Form 8-K with the SEC indicating

that as of that date, the Company’s shareholders’ equity was above the $ 2.5 million continued listing equity requirement as

set forth in Listing Rule 5550(b)(1).

On September 12, 2024, the Company received a letter from the Staff

of Nasdaq notifying the Company that for the previous 30 consecutive business days the Company’s common stock had not maintained

a closing bid price of $1.00 per share (the “Minimum Bid Price Requirement”) required for continued listing on The Nasdaq

Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).

Normally, a company would be afforded a 180-calendar day period to demonstrate

compliance with the Minimum Bid Price Requirement.

However, pursuant to Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible

for any compliance period specified in Rule 5810(c)(3)(A) because the Company effected one or more reverse stock splits over the prior

two-year period with a cumulative ratio of 250 shares or more to one.

The Company requested a hearing before a Hearings Panel (the “Panel”),

but prior to such hearing, on October 30, 2024 the Panel provided the Company a temporary exception to regain compliance with the Minimum

Bid Price Requirement until March 11, 2025.

The Panel noted that it reserves the right to reconsider the terms of this exception based

on any event, condition or circumstance that exists or develops that would, in the opinion of the Panel, make continued listing of the

Company’s securities on Nasdaq inadvisable or unwarranted.

The Panel notification advised the Company that the Nasdaq Listing and

Hearing Review Council may, on its own motion, determine to review any Panel decision within 45 calendar days after issuance of the written

If the Listing Council determines to review the Panel’s decision in the Company’s matter, it may affirm, modify,

reverse, dismiss or remand the decision to the Panel.

Note 6 – Subsequent Events

On July 3, 2024, the Company entered into securities purchase agreements

with institutional investors for the sale by the Company of 1,425,000 shares of the Company’s common stock in a registered direct

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate

of 1,425,000 shares of common stock (the “July 3 Common Warrants”).

The combined purchase price of one share of common stock

and accompanying July 3 Common Warrant is $1.39.

The closing of this offering and private placement occurred on July 5, 2024.

Subject to certain ownership limitations, each of the July 3 Common

Warrants is immediately exercisable, has an exercise price of $1.26 per share, and expire five years from the date of issuance.

proceeds to the Company from the offering were approximately $1.98 million, before deducting the financial advisor fees and other estimated

offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the Common Warrants.

2024, the Company entered into a Sales Agreement (the “AGP ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”).

Pursuant to the terms of the AGP ATM Sales Agreement, the Company originally was permitted to sell from time to time through AGP, as

sales agent or principal, shares of the Company’s common stock, par value $0.001 per share with initial aggregate sales price of

up to $5.2 million.

On July 30, 2024, the Company increased the aggregate sales price of common shares that may be sold under the AGP

ATM Sales Agreement to $25.0 million (not including the original $5.2 million).

As of August 14, 2024, the Company has sold 28,704,761 Shares

pursuant to the Agreement for net proceeds of approximately $10.5 million.