CervoMed Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The term “disclosure controls and procedures” means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial officer do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management ’ s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our Chief Executive Officer and Senior Vice President, Finance, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020. Attestation Report of the Independent Registered Public Accounting Firm This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. As a "smaller reporting company" (as such term is defined in Rule 12b-2 of the Exchange Act), pursuant to Section 989G of the Dodd-Frank Act, we are exempt from the requirement subjecting management’s report to attestation by our independent registered public accounting firm. Change in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting that occurred during our fourth quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. 62 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 of Form 10-K will be set forth in the Proxy Statement and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 of Form 10-K will be set forth in the Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 12 of Form 10-K will be set forth in the Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 13 of Form 10-K will be set forth in the Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by Item 14 of Form 10-K will be set forth in the Proxy Statement and is incorporated herein by reference. 63 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 1. Our financial statements are included in Part II – Item 8. Financial Statements and Supplementary Data of this Annual Report. 2. All financial statement schedules have been omitted from this Item 15 as the required information is not applicable, is not present in amounts sufficient to require submission of such schedules, or because the information required is included in our financial statements or the related notes included in Part II – Item 8. Financial Statements and Supplementary Data of this Annual Report. 3. The exhibits set forth in the following "Index to Exhibits" are filed with, furnished with, and/or incorporated herein by reference, as described thereon. A copy of any of such exhibit will be furnished at a reasonable cost, upon receipt from any person of a written request for any such exhibit. Such request should be sent to Diffusion Pharmaceuticals Inc., 1317 Carlton Avenue, Suite 200, Charlottesville, Virginia 22902, Attention: General Counsel. 64 INDEX TO EXHIBITS Exhibit No. Description Method of Filing 3.1 Certificate of Incorporation of Diffusion Pharmaceuticals Inc., as amended Incorporated by reference to Exhibit 3.1 to the registrant’s annual report on Form 10-K for the year ended December 31, 2019 3.2 Bylaws of Diffusion Pharmaceuticals Inc., as amended Incorporated by reference to Exhibit 3.4 to the registrant’s annual report on Form 10-K for the year ended December 31, 2015 4.1 Form of 2017 Private Placement Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on March 15, 2017 4.2 Form of 2018 Common Stock Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on January 19, 2018 4.3 Form of 2018 Underwriter's Warrant Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on January 22, 2018 4.4 Form of May 2019 Common Stock Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on May 28, 2019 4.5 Form of May 2019 Placement Agent’s Warrant Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on May 28, 2019 4.6 Form of November 2019 Series I Common Stock Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on November 13, 2019 4.7 Form of November 2019 Series II Common Stock Warrant Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on November 13, 2019 4.8 Form of November 2019 Pre-Funded Common Stock Warrant Incorporated by reference to Exhibit 4.3 to the registrant’s current report on Form 8-K filed on November 13, 2019 4.9 Form of November 2019 Placement Agent’s Warrant Incorporated by reference to Exhibit 4.4 to the registrant’s current report on Form 8-K filed on November 13, 2019 4.10 Form of December 2019 Common Stock Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on December 13, 2019 4.11 Form of December 2019 Placement Agent’s Warrant Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on December 13, 2019 4.12 Form of May 2020 Common Stock Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on May 8, 2020 4.13 Form of May 2020 Placement Agent's Warrant (In Respect of Exercise Transaction) Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K filed on May 8, 2020 4.14 Form of May 2020 Placement Agent's Warrant (In Respect of Offering Transaction) Incorporated by reference to Exhibit 4.3 to the registrant’s current report on Form 8-K filed on May 20, 2020 4.15 Form of February 2021 Underwriter's Warrant Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed on February 18, 2021 4.16 Description of Securities Incorporated by reference to Exhibit 4.12 to the registrant's annual report on 10-K for the year ended December 31, 2019 10.1 Employment Agreement dated as of September 8, 2020 by and between Robert J. Cobuzzi, Jr., Ph.D. and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.2 to the registrant’s current report on Form 8-K filed on September 9, 2020 65 10.2 Amended and Restated Employment Agreement, dated as of September 21, 2018, by and between William Karl Hornung and Diffusion Pharmaceuticals Inc. * Incorporated by reference to Exhibit 10.2 to the registrant's Current Report on Form 8-K filed September 27, 2018 10.3 Employment Agreement, dated as of October 19, 2020, by and between Christopher D. Galloway, M.D. and Diffusion Pharmaceuticals Inc. * Incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed October 20, 2020 10.4 Employment Agreement, dated as of September 23, 2020, by and between William Elder and Diffusion Pharmaceuticals Inc. * Incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed September 25, 2020 10.5 Employment Agreement, dated as of September 6, 2016, by and between David G. Kalergis and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on September 8, 2016 10.6 Separation Agreement dated as of September 8, 2020 by and between David G. Kalergis and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on September 9, 2020 10.7 Employment Agreement, dated as of October 18, 2016, by and between John L. Gainer and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.18 to the registrant’s annual report on Form 10-K/A filed on April 28, 2017 10.8 Separation Agreement, dated as of March 12, 2020, by and between John L. Gainer and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on March 18, 2020 10.9 Consulting Agreement, dated as of March 12, 2020, by and between John L. Gainer and Diffusion Pharmaceuticals Inc.* Incorporated by reference to Exhibit 10.2 to the registrant’s current report on Form 8-K filed on March 18, 2020 10.1 Diffusion Pharmaceuticals Inc. 2015 Equity Incentive Plan** Incorporated by reference to Appendix C to the registrants definitive proxy statement on Schedule 14A filed on June 10, 2016 10.11 Amendment No. 1 to Diffusion Pharmaceuticals Inc. 2015 Equity Incentive Plan Incorporated by reference to Appendix B to the registrants definitive proxy statement on Schedule 14A filed on June 10, 2016 10.12 Form of Stock Option Award Agreement* Incorporated by reference to Exhibit 10.5 to the registrant’s annual report on Form 10-K for the year ended December 31, 2017 10.13 Form of Diffusion Pharmaceuticals LLC Stock Option Award Agreement* Incorporated by reference to Exhibit 10.24 to the registrant’s annual report on Form 10-K for the year ended December 31, 2015 10.14 Form of Indemnification Agreement between Diffusion Pharmaceuticals Inc. and each of its Directors and Officers* Incorporated by reference to Exhibit 10.3 to the registrant’s annual report on Form 10-K for the year ended December 31, 2015 10.15 Form of Securities Purchase Agreement, dated as of May 18, 2020, by and among Diffusion Pharmaceuticals Inc. and the purchasers party thereto Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on May 20, 2020 10.16 Lease Agreement, dated March 31, 2017, by and between Diffusion Pharmaceuticals Inc. and One Carlton LLC Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on March 15, 2017 21.1 Subsidiaries of Diffusion Pharmaceuticals Inc. Filed herewith 23.1 Consent of KPMG LLP, independent registered public accounting firm Filed herewith 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a) Filed herewith 31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and SEC Rule 13a-14(a) Filed herewith 66 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith 101 The following materials from the registrant’s annual report on Form 10-K for the year ended December 31, 2020, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements Filed herewith * Indicates a management contract or compensatory plan or arrangement. ITEM 16. FORM 10-K SUMMARY None. 67 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: March 16, 2021 DIFFUSION PHARMACEUTICALS INC. By: /s/ Robert J. Cobuzzi, Jr., Ph.D. Robert J. Cobuzzi, Jr., Ph.D. President, Chief Executive Officer, and Director (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name and Signature Title Date /s/ Robert J. Cobuzzi, Jr., Ph.D. President, Chief Executive Officer, and Director March 16, 2021 Robert J. Cobuzzi, Jr., Ph.D. (Principal Executive Officer) /s/ William K. Hornung Chief Financial Officer March 16, 2021 William K. Hornung (Principal Financial and Accounting Officer) /s/ David G. Kalergis Chairman of the Board March 16, 2021 David G. Kalergis /s/ Robert Adams Director March 16, 2021 Robert Adams /s/ Jane Hollingsworth Director March 16, 2021 Jane Hollingsworth /s/ John L. Gainer, Ph.D. Director March 16, 2021 John L. Gainer, Ph.D. /s/ Mark T. Giles Director March 16, 2021 Mark T. Giles /s/ Alan Levin Director March 16, 2021 Alan Levin 68