What changed in this filing

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Item 9A. Controls and Procedures

2023-03-16 compared with 2022-04-01 · 287 added, 233 removed, 624 unchanged (45% of the section changed)

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disclosure controls and procedures as of December 31, 2022, our Chief Executive Officer and our Chief Financial Officer concluded that,

as of such date, our disclosure controls and procedures were not effective due to a material weakness with respect to the lack

of control(s) to review the completeness and accuracy of contracts with a financial reporting

implication and the timely communication of the terms and conditions to the financial reporting function.

Effective internal control

contemplates an appropriate level of review to ensure timely preparation and completeness and accuracy of the financial statements and

as of such date, our disclosure controls and procedures were not effective.

The material weakness

that has been identified relates to the design and implementation of appropriate segregation of duties to separate the roles of authorizing,

initiating, and recording transactions or reviewing transactions for the completeness and accuracy of contracts with financial reporting

implications.

Annual Report on Internal Control Over Financial Reporting

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Based on this assessment,

our management concluded that, as of December 31, 2021, our internal control over financial reporting was not effective due to

a material weakness in our internal controls with respect to the lack of control(s) to

review the completeness and accuracy of contracts with a financial reporting implication and the timely communication of the terms and

conditions to the financial reporting function.

Effective internal control contemplates an appropriate level of review to ensure

timely preparation and completeness and accuracy of the financial statements and disclosures.

our management concluded that, as of December 31, 2022, our internal control over financial reporting was not effective due to a material

weakness in our internal controls with respect to the lack of control(s) to review the completeness

and accuracy of contracts with a financial reporting implication and the timely communication of the terms and conditions to the financial

reporting function.

Effective internal control contemplates an appropriate level of review to ensure timely preparation and completeness

and accuracy of the financial statements and disclosures.

the first half of 2021, vendor invoices were controlled by our Chief Executive Officer who was responsible for the approval and payment

Beginning the second half of 2021, invoices were reviewed by our Chief Financial Officer prior to payment.

Since the second half of 2021, invoices have been reviewed by our Chief Financial Officer prior to payment.

Our Chief Executive

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periods presented.

intend to remediate the material weakness by hiring qualified personnel to address adequate controls over the review of the completeness

and accuracy of contracts.

Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding

internal control over financial reporting.

Management’s report was not subject to attestation by the Company’s registered

public accounting firm pursuant to the exemption provided to issuers that are not “large accelerated filers” nor “accelerated

filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as issuers that are “emerging growth

companies” under the JOBS Act.

have initiated a procedure to remediate the material weakness by reviewing the material contracts on a quarterly basis with the accounting

department and supporting staff.

Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal

control over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting

firm pursuant to the exemption provided to issuers that are not “large accelerated filers” nor “accelerated filers”

under the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as issuers that are “emerging growth companies”

under the JOBS Act.

in Internal Control Over Financial Reporting

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table sets forth the name, age and positions of our executive officers and directors.

following table sets forth the name, age and positions of our executive officers and directors as of March 10, 2023.

Executive Officer and Chairman of the Board of Directors

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Milby has served in various other

positions including, but not limited to, Global Business Director – BioMedical and Global Business Director – Applied BioSciences

of DuPont de Nemours, Inc.;

positions including, but not limited to, Global Business Director - BioMedical and Global Business Director - Applied BioSciences of

DuPont de Nemours, Inc.;

Global Marketing Director of DuPont Crop Protection;

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We believe Mr.

Milby is qualified

to serve as a member of our board of directors because of his extensive experience in the biotechnology industry.

Milby is qualified to

serve as a member of our board of directors because of his extensive experience in the biotechnology industry.

Hess has served as our Chief Financial Officer since June 2021.

In addition, since June 2021, Mr.

Hess has served as a consulting

Chief Financial Officer through Danforth Advisors and TH Advisors for various biotechnology companies.

From August 2014 until June 2021,

Hess served as Chief Financial Officer and Senior Vice President of Finance of Genomind, Inc, a pharmacogenetics company focused

on mental health.

Hess has served as a consulting Chief

Financial Officer through Danforth Advisors and TH Advisors for various biotechnology companies.

From August 2014 until June 2021, Mr.

Hess served as Chief Financial Officer and Senior Vice President of Finance of Genomind, Inc, a pharmacogenetics company focused on mental

From September 2011 until its sale in April 2014, Mr.

Hess served as Chief Financial Officer and Executive Vice President

of Finance of The Keane Organization, a comprehensive provider of unclaimed property services.

Hess served as Chief Financial Officer and Executive Vice President of

Finance of The Keane Organization, a comprehensive provider of unclaimed property services.

Hess also previously served in various

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Hess received his B.S.

in accounting from The Pennsylvania State University and his

MBA from Katz Graduate School of Business, University of Pittsburgh.

He is a Certified Public Accountant in the state of Pennsylvania

and serves on the Board of Directors of Life Sciences Pennsylvania as the audit committee chair.

in accounting from The Pennsylvania State University and his MBA from

Katz Graduate School of Business, University of Pittsburgh.

He is a Certified Public Accountant in the state of Pennsylvania and serves

on the Board of Directors of Life Sciences Pennsylvania as the audit committee chair.

Mazur has served as a member of our board of directors since July 2021.

In addition, since September 2014, Mr.

In addition, since May 2022, Mr.

Mazur has served as Chief Executive

Officer of Citius Pharmaceuticals, Inc.

CTXR) (“Citius”), and since September 2014, Mr.

Mazur has served as Executive

Chairman of the board of directors and Secretary of Citius Pharmaceuticals, Inc.

CTXR) (“Citius”).

serves as the Secretary of Citius’ majority-owned subsidiary, NoveCite, Inc.

Mazur is the co-founder and Vice Chairman of Akrimax

Pharmaceuticals, LLC (“Akrimax”), a privately held pharmaceutical company specializing in producing cardiovascular and general

pharmaceutical products.

Akrimax was founded in September 2008 and has successfully launched prescription drugs while acquiring drugs

from major pharmaceutical companies.

From January 2005 to May 2012, Mr.

Mazur co-founded and served as the Chief Operating Officer of

Triax Pharmaceuticals LLC (“Triax”), a specialty pharmaceutical company producing prescription dermatological drugs.

to joining Triax, he was the founder and, from 1995 to 2005, Chief Executive Officer of Genesis Pharmaceutical, Inc.

a dermatological products company that marketed its products through dermatologists’ offices as well as co-promoting products for

major pharmaceutical companies.

Mazur successfully sold Genesis to Pierre Fabre, a leading pharmaceutical company.

has extensive sales, marketing and business development experience from his tenures at Medicis Pharmaceutical Corporation as Executive

Vice President, ICN Pharmaceuticals, Inc.

as Vice President, Sales and Marketing, Knoll Pharma (a division of BASF), and Cooper Laboratories,

Mazur is a member of the Board of Trustees of Manor College, is a recipient of the Ellis Island Medal of Honor and was previously

the chairman of the board of directors of LMB, Citius’ wholly-owned subsidiary.

Chairman of the board of directors and Secretary of Citius.

Mazur also serves as the Secretary of Citius’ majority-owned subsidiary,

NoveCite, Inc.

Mazur is the co-founder and Vice Chairman of Akrimax Pharmaceuticals, LLC (“Akrimax”), a privately held

pharmaceutical company specializing in producing cardiovascular and general pharmaceutical products.

Akrimax was founded in September

2008 and has successfully launched prescription drugs while acquiring drugs from major pharmaceutical companies.

From January 2005 to

May 2012, Mr.

Mazur co-founded and served as the Chief Operating Officer of Triax Pharmaceuticals LLC (“Triax”), a specialty

pharmaceutical company producing prescription dermatological drugs.

Prior to joining Triax, he was the founder and, from 1995 to 2005,

Chief Executive Officer of Genesis Pharmaceutical, Inc.

(“Genesis”), a dermatological products company that marketed its

products through dermatologists’ offices as well as co-promoting products for major pharmaceutical companies.

successfully sold Genesis to Pierre Fabre, a leading pharmaceutical company.

Mazur has extensive sales, marketing and business development

experience from his tenures at Medicis Pharmaceutical Corporation as Executive Vice President, ICN Pharmaceuticals, Inc.

as Vice President,

Sales and Marketing, Knoll Pharma (a division of BASF), and Cooper Laboratories, Inc.

Mazur is a member of the Board of Trustees

of Manor College, is a recipient of the Ellis Island Medal of Honor and was previously the chairman of the board of directors of LMB,

Citius’ wholly-owned subsidiary.

Mazur received both his B.A.

Temple University and has served in the U.S.

from Temple University and has served in the U.S.

Marine Corps Reserves.

We believe Mr.

Mazur is qualified to serve as a member of our board

of directors because of his extensive experience in the biotechnology industry.

Mazur is qualified to serve as a member of our board of directors because of his extensive experience

in the biotechnology industry.

Bui has served as a member of our board of directors since July 2021.

In addition, since June 2017, she has served as President, Chief

Executive Officer and a member of the board of directors of Khloris Biosciences, Inc., a biotechnology company dedicated to revolutionizing

Executive Officer and Chairman of the board of directors of Khloris Biosciences, Inc., a biotechnology company dedicated to revolutionizing

medical treatment and prevention of cancer and other diseases.

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at Exelixis, Inc., Onyx Pharmaceuticals (acquired by Amgen Inc.) and Intellikine, Inc.

(acquired by Millennium/Takeda in 2012) and has

served as Chief Medical Officer and clinical development lead for multiple biotechnology and pharmaceutical companies.

She has experience

with small molecules, antibodies, dendritic cell vaccines, gene therapies, embryonic stem cells, and cell therapies.

As a clinician,

Bui has previously been clinical attending at Stanford Hospital and UCLA Medical Center, and is the Founder and Chairman of Global

Cancer Research Institute (“GCRI”), a community-based hematology/oncology clinical practice and clinical trial site.

is also the Founder and Chairman of GCRI Foundation, a non-profit organization dedicated to funding clinical research in cancer;

a former Fellow of the Leukemia & Lymphoma Society, Lymphoma Research Foundation and Howard Hughes Medical Institute.

(acquired by Millennium/Takeda) and has served

as Chief Medical Officer and clinical development lead for multiple biotechnology and pharmaceutical companies.

She has experience with

small molecules, antibodies, dendritic cell vaccines, gene therapies, embryonic stem cells, and cell therapies.

As a clinician, Dr.

has previously been clinical attending at Stanford Hospital and UCLA Medical Center, and is the Founder and Chairman of Global Cancer

Research Institute (“GCRI”), a community-based hematology/oncology clinical practice and clinical trial site.

the Founder and Chairman of GCRI Foundation, a non-profit organization dedicated to funding clinical research in cancer;

Fellow of the Leukemia & Lymphoma Society, Lymphoma Research Foundation and Howard Hughes Medical Institute.

Bui received her

in molecular and cell biology, with an emphasis in neurobiology from University of California, Berkeley and her M.D.

David Geffen UCLA School of Medicine.

from the David

Geffen UCLA School of Medicine.

We believe Dr.

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audit committee consists of Lynne Bui and Leonard Mazur, with Leonard Mazur serving as chair.

As permitted under the applicable rules

and regulations of the SEC and Nasdaq, we intend to phase in compliance with the audit committee composition requirements prior to the

end of the one-year transition period.

Our board of directors has affirmatively determined that Lynne Bui and Leonard Mazur each meet

the definition of “independent director” under Nasdaq rules, and that they meet the independence standards under Rule 10A-3.

Each member of our audit committee meets the financial literacy requirements of Nasdaq.

In addition, our board of directors has determined

that Leonard Mazur qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation

Our board of directors has adopted a written charter for the audit committee which is available on our website at www.hillstreambio.com .

Our board of directors has

affirmatively determined that Lynne Bui and Leonard Mazur each meet the definition of “independent director”

under Nasdaq rules, and that they meet the independence standards under Rule 10A-3.

Each member of our audit committee meets the financial

literacy requirements of Nasdaq.

In addition, our board of directors has determined that Leonard Mazur qualifies as an “audit committee

financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

Our board of directors has adopted a written charter

for the audit committee which is available on our website at www.hillstreambio.com .

compensation committee is responsible for, among other things:

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compensation committee consists of Lynne Bui and Leonard Mazur, with Lynne Bui serving as chair.

Our board has determined that Lynne Bui

and Leonard Mazur are each independent directors under Nasdaq rules.

Our board of directors has adopted a written charter for the compensation

committee which is available on our website at www.hillstreambio.com .

Our board has determined

that Lynne Bui and Leonard Mazur are each independent directors under Nasdaq rules.

Our board of directors has adopted

a written charter for the compensation committee which is available on our website at www.hillstreambio.com .

and Governance Committee

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pre-clinical to clinical development.

Our Scientific Advisory Board is currently composed of the following members who receive compensation

in a combination of cash and options to purchase shares of our common stock:

Our Scientific Advisory Board is currently composed of the following members who receive options

to purchase shares of our common stock:

Kufe, MD - Chair of the Scientific Advisory Board;

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Richardson, MD - Dana-Farber Cancer Institute/Harvard University

Kharbanda, PhD - Dana-Farber Cancer Institute

Paul Eder, MD – Yale University/Yale Cancer Center

Weaver, PhD – FemtoDx

Paul Eder, MD – Parthenon Therapeutics

Stone, MD - Dana-Farber Cancer Institute

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Dixon, PhD - Stanford University

Singh, PhD – Indian Institute of Technology Delhi

Diversity Matrix

nominating and corporate governance committee is committed to promoting diversity on our board of directors.

We have surveyed our current

directors and asked each director to self-identify their race, ethnicity, and gender using one or more of the below categories.

of this survey are included in the matrix below.

Diversity Matrix (As of March 10, 2023)

Number of Directors

Gender Identity

Not Disclose Gender

Demographic Background

American or Black

Native or Native American

Hawaiian or Pacific Islander

or More Races or Ethnicities

Not Disclose Demographic Background

of Business Conduct and Ethics

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Executive Officer

fiscal year 2021, in lieu of base salary, Mr.

Milby was compensated with stock options to purchase 18,939 shares of common stock

per month through May 2021.

fiscal year 2022, Mr.

Milby was compensated with stock options to purchase 757,575 shares of common stock as set forth in the employment

See Note 9 to our audited consolidated financial statements for the year ended December 31, 2022 included elsewhere in

this Annual Report on Form 10-K

the aggregate grant date fair value of stock options granted during the fiscal year calculated in accordance with FASB ASC Topic

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fiscal year 2021, in lieu of base salary, Mr.

Milby was compensated with stock options to purchase 7,575 shares of common stock per

Milby was compensated with stock options to

purchase 18,939 shares of common stock per month through May 2021.

Agreement with Randy Milby

January 1, 2019, we entered into an employment agreement with Randy Milby, to serve as our President and Chief Executive Officer.

to the employment agreement, Mr.

Milby received an annual base salary of $200,000;

provided, however, instead of base salary, Mr.

was to receive 75,757 shares of our common stock per year until funding met or exceeded $2,000,000 after which cash compensation would

Milby was also eligible to receive an annual target bonus of up to 100% of the base salary, subject to achievements to be

mutually agreed upon by our board of directors and Mr.

Milby was also entitled to receive an annual grant of stock or stock

options as determined by our board of directors, in its sole discretion, among other bonus payments based upon our capitalization.

January 2020, we amended the employment agreement pursuant to which Mr.

Milby was to receive stock options to purchase 7,575 shares of

common stock per month (at an exercise price based upon the most recent 409A valuation) effective January 1, 2020 until funding met or

exceeded $3,000,000, after which time, cash compensation of $200,000 per year would be paid.

In addition, if Mr.

Milby raised more than

$3,000,000, he would receive a grant of options to purchase up to 757,575 shares of our common stock at an exercise price of $4.88.

Effective January 1, 2021, we further amended the employment agreement such that in lieu of base salary, Mr.

Milby would receive

stock options to purchase 18,939 shares of our common stock per month at an exercise price of $7.822 per share effective January 1, 2021

until funding meets or exceeds $5,000,000, after which time, cash compensation of $300,000 per year would be paid.

The amendment also

provided for a base salary of $435,000 after we received funding greater than $5,000,000, or we completed an initial public offering

or similar transaction as set forth in the employment agreement.

originally entered into an employment agreement with Randy Milby, to serve as our President and Chief Executive Officer, on January 1,

Such employment agreement was subsequently amended, including, but not limited to, on January 1, 2021, to reflect such that in

lieu of base salary, Mr.

Milby would receive stock options to purchase 18,939 shares of our common stock per month at an exercise price

of $7.822 per share effective January 1, 2021 until funding meets or exceeds $5,000,000, after which time, cash compensation of $300,000

per year would be paid.

The amendment also provided for a base salary of $435,000 after we received funding greater than $5,000,000,

or we completed an initial public offering or similar transaction as set forth in the employment agreement.

In addition, if Mr.

Milby raised more than $5,000,000, he would receive

a grant of stock options to acquire 757,575 shares of our common stock with an exercise price based upon the most recent 409A valuation.

Subsequently, on January 20, 2021, we entered into a further amendment to the employment agreement pursuant to which Mr.

receive a base salary of $200,000.

raised more than $5,000,000, he would receive a grant of stock options to acquire 757,575 shares of our common stock with an exercise

price based upon the most recent 409A valuation.

Subsequently, on January 20, 2021, we entered into a further amendment to the employment

agreement pursuant to which Mr.

Milby would receive a base salary of $200,000.

June 1, 2021, we entered into an Amended and Restated Employment Agreement, as amended on September 24, 2021 (the “Amended and

Restated Employment Agreement”), with Randy Milby pursuant to which Mr.

Milby will continue to serve as our President and Chief

Executive Officer.

The term of the Amended and Restated Employment Agreement commenced upon the closing of our initial public offering

and continues for a period of five years and automatically renews for successive one year periods at the end of each term unless either

party provides written notice of their intent not to review at least 60 days prior to the expiration of the then effective term.

to the Amended and Restated Employment Agreement, Mr.

Milby will receive an annual base salary of $485,000, which may be increased from

time to time, and shall be eligible to receive an annual cash bonus equal to 55% of his then base salary based upon the achievement of

Company and individual performance targets established by our board.

In addition, in the first year in which our market capitalization

(as defined in the Amended and Restated Employment Agreement) equals or exceeds (i) $250 million, Mr.

Milby shall receive a cash payment

Milby continues to serve as our President and Chief Executive

The term of the Amended and Restated Employment Agreement commenced upon the closing of our initial public offering and continues

for a period of five years and automatically renews for successive one year periods at the end of each term unless either party provides

written notice of their intent not to review at least 60 days prior to the expiration of the then effective term.

Pursuant to the Amended

and Restated Employment Agreement, Mr.

Milby will receive an annual base salary of $485,000, which may be increased from time to time,

and shall be eligible to receive an annual cash bonus equal to 55% of his then base salary based upon the achievement of Company and

individual performance targets established by our board.

In addition, in the first year in which our market capitalization (as defined

in the Amended and Restated Employment Agreement) equals or exceeds (i) $250 million, Mr.

Milby shall receive a cash payment of $150,000;

(ii) $500 million, Mr.

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and (iii) $1 billion, Mr.

Milby shall receive a cash

payment of $750,000.

Milby shall receive a cash payment of

Furthermore, on January 14, 2022, Mr.

Milby was granted an option to purchase 757,575 shares of our common stock

at an exercise price of $4.00 per share which shall vest over a 48 month period commencing 12 months after the date of grant.

be in addition to any additional equity-based compensation awards we may grant Mr.

Milby was granted an option to purchase 757,575 shares of our common stock at an exercise

price of $4.00 per share which shall vest over a 48 month period commencing 12 months after the date of grant.

This shall be in addition

to any additional equity-based compensation awards we may grant Mr.

Milby from time to time.

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of Securities

of the options vested on the date of grant (June 20, 2018), with the balance of the 15,152 options vesting over a period of 48 months

of the options vested on date of grant (September 20, 2018), with the remaining 7,197 of the options vesting in equal installments

over a period of 48 months.

of the options vested on the one year anniversary of the vesting starting date (July 31, 2019), with the remaining 28,409 of the

of the options vested on the one year anniversary of the vesting starting date (July 31, 2019).

28,409 shares were exercised and

the remaining 4,142 of the options vesting in equal installments over a period of 48 months.

of the options vested on the one year anniversary of the vesting starting date (September 17, 2019), with the remaining 265 of the

options vesting in equal installments over a period of 48 months.

of the options shall vest on the completion of our IPO or a public listing via reverse merger with a public company.

IPO closed on January 14, 2022, at which time 100% of the options vested.

of the options vested on the one year anniversary of the vesting starting date (September 17, 2019), with the remaining 1,420 of

the options vesting in equal installments over a period of 48 months.

of the options vested on the one year anniversary of the vesting starting date (September 19, 2019), with the remaining 1,420 of

the options vesting over a period of 48 equal monthly installments.

of the options vested on the one year anniversary of the vesting starting date (September 19, 2019), with the remaining 265 of the

options vesting over a period of 48 equal monthly installments.

of the options vested on the one year anniversary of the vesting starting date (November 5, 2019), with the remaining 140 of the

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options vesting in equal installments over a period of 48 months.

of the options vested on the one year anniversary of the vesting starting date (December 31, 2019), with the remaining 28,409 of

of the options vested on the one year anniversary of the vesting starting date (December

31, 2019), with the remaining 6,805 of the options vesting in equal installments over a period

of 48 months.

of the options vested on the one year anniversary of the vesting starting date (January 12, 2022), with the remaining 574,573 of

the options vesting in equal installments over a period of 48 months.

Director Compensation

did not compensate our non-employee directors for their service during the fiscal year ended December 31, 2021.

following table presents the total compensation for each person who served as a non-employee member of our board of directors and received

compensation for such service during the fiscal year ended December 31, 2022.

Other than as set forth in the table and described more

fully below, we did not pay any compensation, make any equity awards or non-equity awards to, or pay any other compensation to any of

the non-employee members of our board of directors in 2022.

Fees Earned or

Option Awards

Leonard Mazur

Sireesh Appajosyula

amounts reported do not reflect the amounts actually received by our non-employee directors.

Instead, these amounts reflect the

aggregate grant date fair value of each stock option granted to our non-employee directors during the fiscal year ended December 31,

2022, as computed in accordance with Financial Accounting Standard Board ASC Topic 718 for stock-based compensation transactions.

Assumptions used in the calculation of these amounts are included in Note 6 - Stock-Based Compensation to our audited consolidated

financial statements included elsewhere in this Annual Report on Form 10-K.

As required by SEC rules, the amounts shown exclude the

impact of estimated forfeitures related to service-based vesting conditions.

of January 12, 2022, the closing date of our IPO, our non-employee directors

receive the following annual retainers, to be paid quarterly:

Audit Committee Chair

Audit Committee member

Compensation Committee Chair

Compensation Committee member

Nominating and Corporate Governance Chair

Nominating and Corporate Governance member

(1) Members of the board of director at the time of

the Company’s initial public offering received a one-time fee of $58,958.

In addition, upon initial appointment to the board, directors receive a one-time annual payment of $40,000 and then

subsequent annual payments of $20,000.

board approved a policy pursuant to which each non-employee director who is initially elected or appointed to the board on

any date other than the date of our annual meeting of stockholders will be granted options to purchase up to 50,000 shares of our

common stock.

Such options will vest monthly over a period of one year, subject to continued service on our board.

In addition, each

non-employee director who serves on our board as of the date of any annual meeting of stockholders will be granted an option to

purchase shares of our common stock, with the number of options and vesting period to be determined by our compensation

Stock Incentive Plan

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of any other person shown in the table.

Percentage of ownership is based on 11,364,444 shares of common stock issued and outstanding

as of March 21, 2022.

Percentage of ownership is based on 11,514,144 shares of common stock issued and outstanding as of March

noted otherwise, the address of all listed stockholders is c/o Hillstream BioPharma, Inc., 1200 Route 22 East, Suite 200, Bridgewater,

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and Named Executive Officers:

3,292,965 (1)

1,378,279 (4)(5)

Appajosyula (5)

Named Executive Officers and Directors as a Group (4 persons)

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Pharmaceuticals LLC (5)

843,263 (6)(7)

Circle Capital LLC (9)

668,174 (9)(10)

Represents less than 1%.

(i) 2,937,940 shares of common stock and (ii) 1,139,443 shares of common stock issuable upon exercise of options.

Excludes 780,382 shares of common stock issuable upon exercise of options which are subject to vesting.

Excludes 514,491

shares of common stock issuable upon exercise of options which are subject to vesting.

(i) 123,733 shares of common stock and (ii) 50,00 shares of common stock issuable upon exercise of options.

options to purchase up to 41,668 shares of common stock issuable upon exercise of options which are subject to vesting.

68,277 shares of common stock issuable upon exercise of options.

Excludes options to purchase up to 42,015 shares of

common stock issuable upon exercise of options which are subject to vesting.

(i) 46,210 shares of common stock issuable upon exercise of options, (ii) 284,090 shares of common stock, (iii) 972,222 shares

of common stock held by Highpoint Pharmaceuticals LLC and (iv) 75,757 shares of common stock held by Mercer Lake Group LLC.

options to purchase up to 41,668 shares of common stock issuable upon exercise of options which are subject to vesting.

Appajosyula is the Managing Member of each of Highpoint Pharmaceuticals LLC and Mercer Lake Group LLC and in such capacity has the

right to vote and dispose of the securities held by such entities.

Excludes 662 shares of common stock issuable upon exercise of

options which are subject to vesting.

(i) 87,878 shares of common stock issuable upon exercise of options, (ii) 284,090 shares of common stock, (iii) 972,222 shares of

common stock held by Highpoint Pharmaceuticals LLC and (iv) 7,576 shares of common stock held by Channel BioConsulting LLC.

Appajosyula is the Managing Member of each of Highpoint Pharmaceuticals LLC and Channel BioConsulting LLC and in such capacity has

the right to vote and dispose of the securities held by such entities.

The address of Highpoint Pharmaceuticals LLC is 16192 Coastal

Highway, Lewes, DE 19958.

The address of Mercer Lake Group LLC is 1200 Route 22 East, Suite 2000, Bridgewater, NJ 08807.

The address of Mercer Lake Group LLC is 2 Linden Court, Holmdel, NJ 07733.

Kufe is the Managing Director of Kufe LLC and in such capacity has the right to vote and dispose of the securities held by such entity.

The address of Kufe LLC is 179 Grove Street, Wellesley, MA 02482.

(i) 842,317 shares of common stock held by Kufe LLC and (ii) 1,778 shares of common stock issuable upon exercise

of options held by Donald Kufe.

Excludes options to purchase up to 4,168 shares of common stock issuable upon exercise

of options which are subject to vesting.

(i) 842,317 shares of common stock held by Kufe LLC and (ii) 5,946 shares of common stock issuable upon exercise of options held

by Donald Kufe.

(i) 721,240 shares of common stock and (ii) 3,446 shares of common stock issuable upon exercise of options.

Excludes options to purchase up to 2,084 shares of common stock issuable upon exercise of options which are subject

Laumas is the Managing Member of Bearing Circle Capital LLC and in such capacity has the right to vote and dispose of the securities

held by such entity.

(i) 32,166 shares of common stock and (ii) 636,008 shares of common stock held by Bearing Circle Capital LLC.

Authorized for Issuance Under Equity Compensation Plans

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compensation plans approved by security holder

1,628,813 (1)

compensation plans not approved by security holder

This number includes the following:

92,801 shares subject to outstanding options

granted under the 2017 Plan and 1,536,012 shares subject to outstanding options granted under the 2019 Plan.

The Company will not issue

any additional awards under the 2017 Plan.

This number represents shares available for issuance under the 2019 Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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The convertible promissory notes accrued interest at a rate of 5% per annum.

Unless earlier converted into shares

of Equity Securities (as defined herein), the principal and accrued interest shall be due and payable by the Company on demand by the

holder thereof at any time after the earlier of (i) the Maturity Date (as defined in each note) and (ii) the closing of the Next Equity

Financing (as defined herein).

“Equity Securities” means, subject to certain exceptions, the Company’s common stock,

preferred stock and common stock and preferred stock equivalents.

“Next Equity Financing” means the next sale (or series

of related sales) by the Company of its Equity Securities from which the Company receives gross proceeds of not less than $5,000,000

for notes issued from 2017 through November 2020 and $7,500,000 for notes issued in December 2020 (including the aggregate amount of

debt securities converted into Equity Securities upon conversion or cancellation of promissory notes).

The principal amount of the notes

together with interest accrued thereon will automatically be converted into the type of Equity Securities issued in the Next Equity Financing

upon closing thereof.

The number of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing

the outstanding principal amount together with interest accrued thereon by the lesser of (i) 80% of the price paid per Equity Security

in the Next Equity Financing or (ii) an equity valuation of $25 million for notes issued from 2017 through November 2020 and $50 million

for notes issued in December 2020.

Unless earlier converted into shares of Equity

Securities (as defined herein), the principal and accrued interest shall be due and payable by the Company on demand by the holder thereof

at any time after the earlier of (i) the Maturity Date (as defined in each note) and (ii) the closing of the Next Equity Financing (as

defined herein).

“Equity Securities” means, subject to certain exceptions, the Company’s common stock, preferred stock

and common stock and preferred stock equivalents.

“Next Equity Financing” means the next sale (or series of related sales)

by the Company of its Equity Securities from which the Company receives gross proceeds of not less than $5,000,000 for notes issued from

2017 through November 2020 and $7,500,000 for notes issued in December 2020 (including the aggregate amount of debt securities converted

into Equity Securities upon conversion or cancellation of promissory notes).

The principal amount of the notes together with interest

accrued thereon will automatically be converted into the type of Equity Securities issued in the Next Equity Financing upon closing thereof.

The number of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding

principal amount together with interest accrued thereon by the lesser of (i) 80% of the price paid per Equity Security in the Next Equity

Financing or (ii) an equity valuation of $25 million for notes issued from 2017 through November 2020 and $50 million for notes issued

in December 2020.

September 27, 2020, we agreed to provide our Chief Executive Officer Exchange Notes in exchange for Original Notes which were in default

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common stock.

December 22, 2020, we issued Leonard Mazur, a member of our board of directors, a subordinated convertible promissory note in

the principal amount of $300,000.

The note accrues interest at 5% per annum and, unless earlier converted, matures upon the earlier of

December 31, 2023 and the closing of the Next Equity Financing.

The principal amount of the note together with any accrued interest thereon

will automatically convert into the type of Equity Securities issued in the Next Equity Financing upon the closing thereof.

of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal

amount together with interest accrued thereon by the lesser of (i) 80% of the price paid per Equity Security in the Next Equity Financing

or (ii) an equity valuation of $50 million.

Our IPO qualified as a Next Equity Financing and, on January 14, 2022, the note

was converted into an aggregate of 98,733 shares of our common stock.

December 22, 2020, we issued Leonard Mazur, a member of our board of directors, a subordinated convertible promissory note in the principal

amount of $300,000.

The note accrues interest at 5% per annum and, unless earlier converted, matures upon the earlier of December 31,

2023 and the closing of the Next Equity Financing.

The principal amount of the note together with any accrued interest thereon will automatically

convert into the type of Equity Securities issued in the Next Equity Financing upon the closing thereof.

The number of Equity Securities

to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal amount together with

interest accrued thereon by the lesser of (i) 80% of the price paid per Equity Security in the Next Equity Financing or (ii) an equity

valuation of $50 million.

Our IPO qualified as a Next Equity Financing and, on January 14, 2022, the note was converted into an aggregate

of 98,733 shares of our common stock.

to the Chief Executive Officer

of December 31, 2022 and 2021, we owed our Chief Executive Officer $0 and $200,000, respectively.

The expenses were

comprised of expenses paid by the Chief Executive Officer on behalf of our Company of $55,068 (which was converted into a convertible

promissory note in 2020) and $200,000 for accrued compensation at December 31, 2019.

At December 31, 2021 and 2020, the balance

comprised $200,000 and $200,000, respectively, for accrued compensation.

The expenses were comprised of

expenses paid by the Chief Executive Officer on behalf of our Company of $55,068 (which was converted into a convertible promissory note

in 2020) and $200,000 for accrued compensation at December 31, 2019.

Person Transaction Policy

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Substantially

all of Mayer Hoffman McCann P.C.

(“MHM”) personnel, who work under the control of MHM shareholders, are employees of wholly-owned

all of Mayer Hoffman McCann P.C,’s (“MHM’s”) personnel, who work under the control of MHM shareholders, are employees of wholly-owned

subsidiaries of CBIZ, Inc., which provides personnel and various services to MHM in an alternative practice structure.

The following table sets forth the aggregate fees billed by as described below:

Audit fees consist of fees billed for the professional services rendered to the Company for the audit of the Company’s

annual consolidated financial statements for the years ended December 31, 2021 and 2020, reviews of the quarterly financial statements

during the periods, the issuance of consent and comfort letters in connection with registration statement filings, and all other services

that are normally provided by the accounting firm in connection with statutory and regulatory filings and engagements.

The following

table sets forth the aggregate fees billed by as described below:

Audit fees consist of fees billed for the professional services rendered to us for the audit of our annual consolidated financial

statements for the years ended December 31, 2022 and 2021, reviews of the quarterly financial statements during the periods, the issuance

of consent and comfort letters in connection with registration statement filings, and all other services that are normally provided by

the accounting firm in connection with statutory and regulatory filings and engagements.

Audit-Related

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Policies and Procedures

February 2022, our board of directors approved all audit and permitted

accordance with Sarbanes-Oxley, our audit committee charter requires the

audit committee to pre-approve all audit and permitted non-audit services provided by our independent registered public accounting firm,

including the review and approval in advance of our independent registered public accounting firm’s annual engagement letter and

the proposed fees contained therein.

The audit committee has the ability to delegate the authority to pre-approve non-audit services to

one or more designated members of the audit committee.

If such authority is delegated, such delegated members of the audit committee must

report to the full audit committee at the next audit committee meeting all items pre-approved by such delegated members.

In the fiscal

year ended December 31, 2021, prior to the consummation of our IPO, all of the services performed by our independent registered public

accounting firm were pre-approved by our board of directors.

In February 2022, our board of directors approved all audit and permitted

non-audit services provided by our independent registered public accounting firm.

In the fiscal years ended December 31, 2021 and

2020, all of the services performed by our independent registered public accounting firm were pre-approved by our board of directors.

In the fiscal year ended December 31, 2022, all of the

services performed by our independent registered public accounting firm were pre-approved by the audit committee.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:

Index to Consolidated Financial Statements:

Consolidated Financial Statements:

Report of the Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Changes in Stockholders’ Deficit for the Years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

Notes to the Consolidated Financial Statements

to Consolidated Financial Statements:

Financial Statements:

of the Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the Years Ended December 31, 2022 and 2021

Statements of Changes in Stockholders’ Equity (Deficit) for the Years ended December 31, 2022 and 2021

Statements of Cash Flows for the Years Ended December 31, 2022 and 2021

to the Consolidated Financial Statements

consolidated financial statements required by this Item are included beginning at page F-1.

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with the SEC on December 10, 2021)

of the Registrant’s Securities

Description of the Registrant’s Securities

and Restated Employment Agreement by and between the Company and Randy Milby dated June 1, 2021 (Incorporated by reference to Exhibit

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on Form S-1 filed with the SEC on September 27, 2021)

of Business Conduct and Ethics

of Mayer Hoffman McCann P.C.

Power of Attorney (included on signature page hereto)

BioPharma, Inc.

2019 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement

on Form S-8 filed with the SEC on February 22, 2022)

of Business Conduct and Ethics (Incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed

with the SEC on April 1, 2022)

Consent of Mayer Hoffman McCann P.C.

of Attorney (included on signature page hereto)

Certification

11 unchanged sentences

XBRL Taxonomy Extension Definition Linkbase Document

Page Interactive Data File – the cover

page of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 is formatted in Inline

Page Interactive Data File - the cover page of the Registrant’s Annual Report on Form 10-K for the year ended December 31,

2022 is formatted in Inline XBRL

Filed herewith.

2 unchanged sentences

to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report

on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 1st day of April, 2022.

on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 16th day of March, 2023.

BIOPHARMA, INC.

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Executive Officer (Principal Executive Officer) and Chairman of the Board of Directors

March 16, 2023

Financial Officer

March 16, 2023

Financial and Accounting Officer)

March 16, 2023

Leonard Mazur

March 16, 2023

Sireesh Appajosyula

March 16, 2023

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 9A. Controls and Procedures