What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-31 compared with 2020-03-16 · 113 added, 174 removed, 78 unchanged (79% of the section changed)

Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Market for Registrant

s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock began trading on The NASDAQ Capital Market under the symbol GALT effective March 23, 2012.

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As of February 28, 2021, there were 148 shareholders of record of our common stock.

Because shares of our common stock are held by

depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.

Based on information available to us, we believe there are approximately 13,800 non-objecting beneficial owners of our shares of our common stock in addition to the record holders.

have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

The payment of dividends on our common stock will depend on our earnings, financial condition and other

business and economic factors affecting us at such time as the board of directors may consider relevant.

Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.

Based on information available to us, we believe there are approximately 13,800 non-objecting

beneficial owners of our shares of our common stock in addition to the record holders.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

The payment of dividends on our common stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant.

Selected Financial Data

Not applicable.

Management s Discussion and Analysis of Financial

Condition and Results of Operations

s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

In addition to historical information, the following Managements Discussion and Analysis of Financial Condition and Results of Operations

contains forward-looking statements as defined under Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements.

Such statements include, but are not limited

to, statements concerning our anticipated operating results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, anticipate,

estimate, expect, project, intend, plan, believe and would, should, could or may. All statements, other than statements of

historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements, including statements regarding:

plans and expectations

regarding clinical trials;

In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements.

Such statements include, but are not limited to, statements concerning our anticipated operating results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and “would,” “should,” “could” or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements, including statements regarding:

plans and expectations regarding clinical trials;

plans and expectations regarding regulatory approvals;

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potential strategic partnerships;

expectations regarding the

effectiveness of our products;

expectations regarding the effectiveness of our products;

plans for research and development and related costs;

statements about accounting assumptions and estimates;

expectations regarding liquidity and the sufficiency of cash to fund currently planned operations through at

least September 30, 2021;

expectations regarding liquidity and the sufficiency of cash to fund currently planned operations through at least March 31, 2022;

our commitments and contingencies;

and our market risk exposure.

Forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Galectin Therapeutics

operates, and managements beliefs and assumptions.

These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those

expressed or implied by such statements.

Forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions.

These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties are related to and include, without limitation,

our early stage of development,

we have incurred significant operating losses since our inception and cannot assure you that we will generate

revenue or profit,

we have incurred significant operating losses since our inception and cannot assure you that we will generate revenue or profit,

our dependence on additional outside capital,

we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and

distribution of our proposed product candidates,

we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates,

uncertainties related to any litigation, including shareholder class actions and derivative lawsuits filed,

uncertainties related to our technology and clinical trials, including expected dates of availability of clinical

uncertainties related to our technology and clinical trials, including expected dates of availability of clinical data,

we may be unable to demonstrate the efficacy and safety of our developmental product candidates in human trials,

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we are subject to extensive and costly regulation by the U.S.

Food and Drug Administration (FDA) and by foreign

regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing and pricing of such products,

Food and Drug Administration (FDA) and by foreign regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing and pricing of such products,

competition and stock price volatility in the biotechnology industry,

limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein

and from time to time in our SEC reports, and

We caution investors that actual results or business conditions may

differ materially from those projected or suggested in forward-looking statements as a result of various factors including, but not limited to, those described above and in the Risk Factors section of this annual report on Form 10-K.

limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein and from time to time in our SEC reports, and

the impact resulting from the outbreak of COVID-19,

which has delayed and may continue to delay our clinical trial and development efforts, as well as the impact that COVID-19

has on the volatility of the capital market and our ability to access the capital market.

We caution investors that actual results or business conditions may differ materially from those projected or suggested in forward-looking statements as a result of various factors including, but not limited to, those described above and in the Risk Factors section of this annual report on Form 10-K.

We cannot assure you that we have identified all the factors that create uncertainties.

Moreover, new risks emerge from time to time and it is not possible for our management to predict all risks, nor can we

assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements.

Readers should not place undue reliance on

forward-looking statements.

We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated

Moreover, new risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements.

Readers should not place undue reliance on forward-looking statements.

Results of Operations from the Years Ended December 31, 2020 and 2019

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Research and development

We generally categorize research and development expenses as either direct external expenses, comprised of

amounts paid to third party vendors for services, or all other research and development expenses, comprised of employee payroll and general overhead allocable to research and development.

We consider a clinical program to have begun upon acceptance

by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin tracking expenditures by the product candidate.

Clinical program expenses comprise payments to vendors related to preparation

for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient dosing and monitoring, data collection and management, oversight of the trials and reports of results.

Pre-clinical expenses comprise all research and development amounts incurred before human trials begin, including payments to vendors for services related to product experiments and discovery, toxicology,

pharmacology, metabolism and efficacy studies, as well as manufacturing process development for a drug candidate.

We have two product candidates, GR-MD-02 and GM-CT-01;

however only GR-MD-02 is in active development.

We generally categorize research and development expenses as either direct external expenses, comprised of amounts paid to third party vendors for services, or all other research and development expenses, comprised of employee payroll and general overhead allocable to research and development.

We consider a clinical program to have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin tracking expenditures by the product candidate.

Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient dosing and monitoring, data collection and management, oversight of the trials and reports of results.

expenses comprise all research and development amounts incurred before human trials begin and for additional toxicology studies to support advanced development, including payments to vendors for services related to product experiments and discovery, toxicology, pharmacology, metabolism and efficacy studies, as well as manufacturing process development for a drug candidate.

We have two product candidates, belapectin and GM-CT-01;

however only belapectin is in active development.

Our research and development expenses were as follows:

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Clinical programs

Pre-clinical activities

Other research and development expenses:

Payroll and other including stock-based compensation

Clinical programs expenses increased in the year ended December 31, 2019 over the year ended

December 31, 2018 primarily due to costs related to our the NASH-RX clinical trial planning and site start-up and qualification processes globally and preparations

and some preclinical activities incurred in support of the planned clinical program such as development and reproductive toxicity studies, clinical supplies and other supportive activities.

Other research and development expense decreased in the

year ended December 31, 2019 over the year ended December 31, 2018 primarily due to a decrease in non-cash stock-based compensation expense of approximately $1,626,000.

Clinical programs expenses increased in the year ended December 31, 2020 over the year ended December 31, 2019 primarily due to costs related to our the NAVIGATE clinical trial activities and preparations and some preclinical activities incurred in support of the planned clinical program such as development and reproductive toxicity studies, clinical supplies and other supportive activities.

Other research and development expense increased in the year ended December 31, 2020 over the year ended December 31, 2019 primarily due to hiring our Chief Medical Officer in March 2020 and an increase in non-cash

stock-based compensation expense.

General and Administrative Expense

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General and administrative

General and administrative expenses consist primarily of salaries including stock-based compensation, legal

and accounting fees, insurance, investor relations, business development and other office related expenses.

The primary reasons for the decrease for the year ended December 31, 2019, as compared to the same period for 2018, are due to decreased

non-cash stock-based compensation of $1,136,000.

General and administrative expenses consist primarily of salaries including stock-based compensation, legal and accounting fees, insurance, investor relations, business development and other office related expenses.

The primary reasons for the decrease for the year ended December 31, 2020, as compared to the same period for 2019, are due to decreases in legal expenses of $339,000, investor relations expenses of $128,000, and non-cash

stock-based compensation of $82,000 partially offset by an increase in insurance expenses of $331,000.

Other Income and Expense

During the year ended December 31, 2019, other income and expense consisted of $231,000 of interest income offset by amortization of the

warrants issued with a line of credit entered into in December 2017 of $87,000 which is classified as interest expense.

Results of Operations from the

Years Ended December 31, 2018 and 2017

During the year ended December 31, 2020, other income and expense consisted of $66,000 of interest income offset by amortization of the debt discount associated with warrants issued with a line of credit entered into in December 2017 of $87,000 which is classified as interest expense.

Results of Operations from the Years Ended December 31, 2019 and 2018

Research and Development Expense

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Research and development

We generally categorize research and development expenses as either direct external expenses, comprised of

amounts paid to third party vendors for services, or all other research and development expenses, comprised of employee payroll and general overhead allocable to research and development.

We consider a clinical program to

have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin tracking expenditures by the product

oversight of the trials and reports of results.

Pre-clinical expenses comprise all research and development amounts incurred before human trials begin, including payments to vendors for services related to

product experiments and discovery, toxicology, pharmacology, metabolism and efficacy studies, as well as manufacturing process development for a drug candidate.

We have two product candidates, GR-MD-02 and GM-CT-01;

however only GR-MD-02 is

in active development.

expenses comprise all research and development amounts incurred before human trials begin V, including payments to vendors for services related to product experiments and discovery, toxicology, pharmacology, metabolism and efficacy studies, as well as manufacturing process development for a drug candidate.

We have two product candidates, belapectin and GM-CT-01;

however only belapectin is in active development.

Our research and development expenses were as follows:

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Clinical programs

Pre-clinical activities

Other research and development expenses:

Payroll and other including stock-based compensation

Clinical programs expenses decreased primarily due to costs related to our Phase 2 clinical trials during

the year ended December 31, 2018 as compared to the same period in 2017.

Because we completed our NASH-CX Phase 2 trial in 2017, we expected our clinical activities costs to decrease in 2018 absent

additional clinical trials commencing.

Other research and development expenses increased during the year ended December 31, 2018 compared to 2017 primarily due to non-cash stock-based compensation

Clinical programs expenses increased in the year ended December 31, 2019 over the year ended December 31, 2018 primarily due to costs related to our the NAVIGATE clinical trial planning and site start-up

and qualification processes globally and preparations and some preclinical activities incurred in support of the planned clinical program such as development and reproductive toxicity studies, clinical supplies and other supportive activities.

Other research and development expense decreased in the year ended December 31, 2019 over the year ended December 31, 2018 primarily due to a decrease in non-cash

stock-based compensation expense of approximately $1,626,000.

General and Administrative Expense

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General and administrative

General and administrative expenses consist primarily of salaries including stock-based compensation, legal

and accounting fees, insurance, investor relations, business development and other office related expenses.

The primary reasons for the increase for the year ended December 31, 2018, as compared to the same period for 2017, are due to increased

non-cash stock-based compensation of $1,922,000 and increased investor relations/business development expenses of $540,000.

The primary reasons for the decrease for the year ended December 31, 2019, as compared to the same period for 2018, are due to decreased non-cash

stock-based compensation of $1,136,000.

Other Income and Expense

During the year ended December 31, 2018, other income and expense consisted of $38,000 of interest income offset by amortization of the

warrants issued with a line of credit entered into in December 2017 of $336,000 which is classified as interest expense.

Liquidity and Capital

During the year ended December 31, 2019, other income and expense consisted of $231,000 of interest income offset by amortization of the debt discount associated with the warrants issued with a line of credit entered into in December 2017 of $87,000 which is classified as interest expense.

Liquidity and Capital Resources

As described above in the Overview and elsewhere in this Annual Report on Form 10-K,

we are in the development stage and have not generated any revenues to date.

Since our inception on July 10, 2000, we have

financed our operations from proceeds of public and private offerings of debt and equity.

Since our inception on July 10, 2000, we have financed our operations from proceeds of public and private offerings of debt and equity.

As of December 31, 2020, we raised a net total of $197.7 million from these offerings.

December 31, 2019, the Company had $47.5 million of unrestricted cash and cash equivalents available to fund future operations.

In December 2018, the Company announced the extension of its $10 million unsecured line of credit facility

with stockholder and director, Richard E.

At December 31, 2020, the Company had $27.1 million of unrestricted cash and cash equivalents available to fund future operations plus a $10 million unsecured line of credit facility with stockholder and director, Richard E.

The Company has not drawn under the line of credit.

The Company believes there is sufficient cash, including availability of the line of credit, to fund currently planned operations at least through

September 30, 2021.

We will require more cash to fund our operations after September 30, 2021 and believe we will be able to obtain additional financing.

The currently planned operations include costs related to a planned adaptively

designed Phase 2b/3 clinical trial.

While the costs of the trial and general overhead during the first stage of the Phase 3 trial are currently estimated to be approximately $125 million, the costs and timing of such trial are not yet

The Company has not made commitments for such trial that cannot be covered with available cash, but we will require additional funding in order to complete the trial.

However, there can be no assurance that we will be successful in

obtaining such new financing or, if available, that such financing will be on terms favorable to us.

The Company believes there is sufficient cash, including availability of the line of credit, to fund currently planned operations at least through March 31, 2022.

We will require more cash to fund our operations after March 31, 2022 and believe we will be able to obtain additional financing.

The currently planned operations include costs related to our adaptively designed NAVIGATE Phase 2b/3 clinical trial.

Currently, we expect to require an additional approximately $45-$50 million

to cover costs of the trial to reach the planned interim analysis estimated to occur in the second half of 2023 along with drug manufacturing and other scientific support activities and general and administrative costs and further amounts to complete the Phase 3 portion of the trial.

However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that such financing will be on terms favorable to us.

2020 compared to 2019

Net cash used in operations increased by $9,753,000 to $20,601,000 for 2020, as compared to $10,848,000 for 2019.

Cash operating expenses

decreased principally due to increased research and development activities primarily related to our Phase 3 clinical programs.

no equipment purchases or other investing activities in 2018 or 2017.

Net cash provided by financing activities was $50,075,000 during

2019 as compared to $15,379,000 during 2018, due primarily to the transactions described below.

In 2019, we completed an issuance of

common stock and warrants in stockholder rights offering generating $44,889,000 in proceeds and additionally, received $2,930,000 from issuances of common stock through the At the Market issuances, and received $2,650,000 from exercise of common

stock options and warrants.

Cash operating expenses increased principally due to increased research and development activities primarily related to our NAVIGATE clinical trial and associated activities.

There were no equipment purchases or other investing activities in 2020 or 2019.

Net cash provided by financing activities was $263,000 during 2020 as compared to $50,075,000 during 2019, due primarily to the transactions described below.

In 2020, we received proceeds of $44,000 from issuances of common stock through the At the Market issuances and received $219,000 from exercise of common stock options.

In 2019, we completed an issuance of common stock and warrants in stockholder rights offering generating $44,889,000 in proceeds and additionally, received $2,930,000 from issuances of common stock through the At the Market issuances, and received $2,650,000 from exercise of common stock options and warrants.

In 2019, we also paid cash dividends of $394,000 on Series A and C preferred stock.

In 2018, we completed sales of common stock through At the Market issuances totaling $5,603,000.

Additionally, in 2018, we received

proceeds totaling $6,003,000 and $3,773,000 from the exercise of common stock warrants and options, respectively.

2019 compared to 2018

Net cash used in operations decreased by $5,713,000 to $10,179,000 for 2018, as compared to $15,892,000 for 2017.

Cash operating expenses

decreased principally due to decreased research and development activities primarily related to our Phase 2 clinical programs.

no equipment purchases or other investing activities in 2018 or 2017.

Net cash provided by financing activities was $15,379,000 during

2018 as compared to $3,583,000 during 2017, due primarily to the transactions described below.

In 2018, we completed sales of common

stock through At the Market issuances totaling $5,603,000.

Net cash used in operations increased by $669,000 to $10,848,000 for 2019, as compared to $10,179,000 for 2018.

Cash operating expenses decreased principally due to increased research and development activities primarily related to our NAVIGATE clinical trial and associated activities.

There were no equipment purchases or other investing activities in 2018 or 2017.

Net cash provided by financing activities was $50,075,000 during 2019 as compared to $15,379,000 during 2018, due primarily to the transactions described below.

In 2019, we also paid cash dividends of $394,000 on Series A and C preferred stock.

In 2018, we completed sales of common stock through At the Market issuances totaling $5,603,000.

Additionally, in 2018, we received proceeds totaling $6,003,000 and $3,773,000 from the exercise of common stock warrants and options, respectively.

In 2017, we completed a private placement

of common stock with warrants totaling $200,000 and sales of common stock through At the Market issuances totaling $3,383,000.

Operating leases

Effective December 31, 2018, the Company entered into an amendment to its operating lease for office space in Norcross, GA for a term of

thirty-eight months, beginning on January 1, 2019 and ending February 28, 2022 at

a rate of approximately $3,800 per month.

Effective December 31, 2018, the Company entered into an amendment to its operating lease for office space in Norcross, GA for a term of thirty-eight months, beginning on January 1, 2019 and ending February 28, 2022 at a rate of approximately $3,800 per month.

The amended lease provided for free rent for the first two months of the lease and continues the security deposit of $6,000.

In addition to base rental

payments included in the contractual obligations table above, the Company is responsible for our pro-rata share of the operating expenses for the building.

In addition to base rental payments included in the contractual obligations table above, the Company is responsible for our pro-rata

share of the operating expenses for the building.

In October 2012, the Company entered into an operating lease for office and lab space for research and development activities in Natick, MA.

The lease is for a period of one year, beginning on October 1, 2012, for a rate of $15,000 for the term, payable in equal monthly increments.

This lease was continued on a month to month basis from October 1, 2013.

This lease was continued on a month-to-month

basis from October 1, 2013.

We have engaged outside vendors for certain services associated with our clinical trials.

These services are

generally available from several providers and, accordingly, our arrangements are typically cancellable on 30 days notice.

Off-Balance Sheet Arrangements

We have not created, and are not a party to, any special-purpose

or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated into our financial statements.

We do not have any arrangements or

relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.

Contractual Obligations and Commitments

The following table summarizes contractual obligations and commitments as of December 31, 2019:

Payments due by period (in thousands)

Contractual Obligations

Operating Leases

These services are generally available from several providers and, accordingly, our arrangements are typically cancellable on 30 days notice.

Sheet Arrangements

We have not created, and are not a party to, any special-purpose or off-balance

sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated into our financial statements.

We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this

annual report on Form 10-K.

Certain of our accounting policies, however, are critical to the portrayal of our financial position and results of operations and require the application of significant judgment by

our management, which subjects them to an inherent degree of uncertainty.

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this annual report on Form 10-K.

Certain of our accounting policies, however, are critical to the portrayal of our financial position and results of operations and require the application of significant judgment by our management, which subjects them to an inherent degree of uncertainty.

In applying our accounting policies, our management uses its best judgment to determine the appropriate assumptions to be used in the determination of certain estimates.

more significant estimates include stock option and warrant liability valuations and performance vesting features of certain of these instruments, accrued liabilities, deferred income taxes and cash flows.

These estimates are based on our historical

experience, terms of existing contracts, our observance of trends in the industry, information available from other outside sources, and on various other factors that we believe to be appropriate under the circumstances.

We believe that the critical

accounting policies discussed below involve more complex management judgment due to the sensitivity of the methods, assumptions and estimates necessary in determining the related asset, liability, revenue and expense amounts.

Our more significant estimates include stock option valuations and performance vesting features of certain of these instruments, accrued liabilities, deferred income taxes and cash flows.

These estimates are based on our historical experience, terms of existing contracts, our observance of trends in the industry, information available from other outside sources, and on various other factors that we believe to be appropriate under the circumstances.

We believe that the critical accounting policies discussed below involve more complex management judgment due to the sensitivity of the methods, assumptions and estimates necessary in determining the related asset, liability, revenue and expense amounts.

Accrued Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate accrued

This process involves identifying services that third parties have performed on our behalf and estimating the level of service performed and the associated cost incurred on these services as of each balance sheet date in our consolidated

financial statements.

Examples of estimated accrued expenses include professional service fees, such as those arising from the services of attorneys and accountants and accrued

payroll expenses.

In connection with these service fees, our estimates are most affected by our understanding of the status and timing of services provided relative to the actual services

incurred by the service providers.

In the event that we do not identify certain costs that have been incurred or we under- or over-estimate the level of services or costs of such services, our reported expenses for a reporting period could be

understated or overstated.

As part of the process of preparing our consolidated financial statements, we are required to estimate accrued expenses.

Examples of estimated accrued expenses include professional service fees, such as those arising from the services of attorneys and accountants and accrued payroll expenses.

In connection with these service fees, our estimates are most affected by our understanding

of the status and timing of services provided relative to the actual services incurred by the service providers.

The date on which certain services commence, the level of services performed on or before a given date, and the cost of services are often subject to our judgment.

We make these judgments based upon the facts and

circumstances known to us in accordance with accounting principles generally accepted in the U.S.

Research and Development

Costs associated with research and development are expensed as incurred.

Research and development expenses include, among other costs, salaries and other personnel-related costs, and costs incurred by outside laboratories and

other accredited facilities in connection with clinical trials and preclinical studies.

We make these judgments based upon the facts and circumstances known to us in accordance with accounting principles generally accepted in the U.S.

Research and Development Expenses.

Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials and preclinical studies are charged to research and development expense as incurred.

The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received.

Our current NAVIGATE clinical trial is being supported by third-party contract research organizations, or CROs, and other vendors.

We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial.

For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial.

We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs.

We base our estimates on the best information available at the time.

We monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel and based our estimates of clinical trial costs on the best information available at the time.

However, additional information may become available to us which will allow us to make a more accurate estimate in future periods.

In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.

Stock-Based Compensation

compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the service period, which generally represents the vesting period.

For awards that have performance-based vesting conditions the

Company recognizes the expense over the estimated period that the awards are expected to be earned.

Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the service period, which generally represents the vesting period.

For awards that have performance-based vesting conditions the Company recognizes the expense over the estimated period that the awards are expected to be earned.

The Company generally uses the Black-Scholes option-pricing model to calculate the grant date fair value of stock options.

The expense recognized

over the service period is required to include an estimate of the awards that will be forfeited.

Stock options issued to non-employees are accounted for in accordance with the provisions of ASC Subtopic 505-50, Equity-Based Payments to Non-employees, which requires valuing the stock options using an option pricing model (the Company uses Black-Scholes) and measuring such

stock options to their current fair value when they vest.

The expense recognized over the service period is required to include an estimate of the awards that will be forfeited.

Quantitative and Qualitative Disclosures About Market Risk

Due to the nature of our operations, assets and absence of debt, we are not exposed to any significant market risks at December 31, 2019

Due to the nature of our operations, assets and absence of debt, we are not exposed to any significant market risks at December 31, 2020 and 2019.

Financial Statements and Supplementary Data

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity