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Item 9A. Controls and Procedures

2022-03-08 compared with 2021-03-29 · 1632 added, 1871 removed, 521 unchanged (87% of the section changed)

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Controls and Procedures:

of December 31, 2020, under the supervision and with the participation of our principal executive officer and principal financial

officer we have evaluated, the effectiveness of the design and operation of our disclosure controls and procedures (as defined

in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and

procedures were effective at the reasonable assurance level as of December 31, 2020.

disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the

reports that we filed or submitted under the Exchange Act is recorded, processed, summarized and reported within time periods

specified by 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 in our reports filed under the Exchange Act is accumulated and communicated

to our management, including principal executive officer and principal financial officer, as appropriate to allow timely decisions

regarding required disclosure.

disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 9, 2020, management

previously identified a material weakness in our internal controls over financial reporting.

Based on management’s evaluation,

this material weakness was remediated as of December 31, 2020.

of December 31, 2021, under the supervision and with the participation of our principal executive officer and principal financial officer

we have evaluated, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e)

and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Based on that evaluation, our principal

executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable

assurance level as of December 31, 2021.

disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports

that we filed or submitted under the Exchange Act is recorded, processed, summarized and reported within time periods specified by 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 in our reports filed under the Exchange Act is accumulated and communicated to our management,

including principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Report on Internal Control over Financial Reporting:

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control

over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal

financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated

financial statements for external purposes in accordance with generally accepted accounting principles.

Our control over financial

reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately

and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that

our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that

could have a material effect on the consolidated financial statements.

Internal control over

financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements

for external purposes in accordance with generally accepted accounting principles.

Our control over financial reporting includes those

policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions

and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of

financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made

only in accordance with authorizations of our management and directors;

and (3) provide reasonable assurance regarding prevention or

timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated

financial statements.

of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, any projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Also, any projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with policies and procedures may deteriorate.

assessed the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control—Integrated

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Based on this assessment,

management has concluded as of December 31, 2020, our internal control over financial reporting was effective, as management did

not identify any deficiencies in internal control over financial reporting that was determined to be a material weakness.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there

is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be

prevented or detected on a timely basis.

previously identified material weakness during the year ended December 31, 2019 which has been remediated included not having

designed and implemented a sufficient level of formal financial reporting and operating policies and procedures that define how

transactions should have been initiated, processed, recorded and reported, including presentation and disclosure in the consolidated

financial statements.

implemented its remediation plan by enhancing operational procedures related to purchasing, receiving and recording expenditures,

including consulting with our third-party internal auditors throughout the period while formalizing and testing our review procedures.

management has concluded as of December 31, 2021, our internal control over financial reporting was effective, as management did not

identify any deficiencies in internal control over financial reporting that was determined to be a material weakness.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is

a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented

or detected on a timely basis.

in Internal Control Over Financial Reporting:

was no change, except as part of our remediation of the deficiency in internal controls described above, in our internal control

over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15(e) and 15d-15(e)

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that occurred during the period covered

by this report that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

was no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d)

of Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that occurred

during the period ended December 31, 2021 covered by this report that has materially affected or is reasonably likely to materially affect

our internal control over financial reporting.

Regarding Foreign Jurisdictions that Prevent Inspections

Executive Officers And Corporate Governance

directors hold office for one-year terms until the election and qualification of their successors.

Officers are appointed by our

board of directors and serve at the discretion of the board, subject to applicable employment agreements.

The following table

sets forth information regarding our executive officers and the members of our board of directors.

Officers are appointed by our board

of directors and serve at the discretion of the board, subject to applicable employment agreements.

The following table sets forth information

regarding our executive officers and the members of our board of directors.

of the Board, Director

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Medical Officer

Business Officer

Financial Officer

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Development Officer

Chairman of the Board, Director

Jabbour, JD was appointed Chief Executive Officer in March 2018.

He has served as our President since March 2016.

to that he served as our Executive Vice President, Chief Business Officer, General Counsel and Secretary since October 2013 and

as one of our directors from April 2012 until November 2013.

that he served as our Executive Vice President, Chief Business Officer, General Counsel and Secretary since October 2013 and as one of

our directors from April 2012 until November 2013.

Jabbour is also a Co-founder of Matinas BioPharma.

Prior to joining

our management team, he was the Executive Vice President and General Counsel of MediMedia USA, or MediMedia, from 2012 to October

2013, a privately held diversified health care services company.

Prior to MediMedia, he was the Senior Vice President, Head of

Global Legal Affairs of Wockhardt Limited (2008-2012), a global pharmaceutical and biotechnology company, and Senior Counsel and

Assistant Secretary at Reliant (2004-2008).

Prior to joining our management

team, he was the Executive Vice President and General Counsel of MediMedia USA, or MediMedia, from 2012 to October 2013, a privately

held diversified health care services company.

Prior to MediMedia, he was the Senior Vice President, Head of Global Legal Affairs of

Wockhardt Limited (2008-2012), a global pharmaceutical and biotechnology company, and Senior Counsel and Assistant Secretary at Reliant

Earlier in his career, he held positions as Commercial Counsel at Alpharma, Inc.

and as a Corporate Associate at Lowenstein Sandler LLP (1999-2003).

(2003-2004) and as a Corporate Associate

at Lowenstein Sandler LLP (1999-2003).

Jabbour earned his J.D.

from Seton Hall University School

of Law in New Jersey and a B.A.

from Seton Hall University School of Law in New Jersey and a B.A.

in Psychology from Loyola University in Baltimore.

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Medical Affairs, at Amgen (NASDAQ:

AMGN), a multinational biopharmaceutical company.

Ferguson held a number of senior positions at AstraZeneca, a multinational pharmaceutical and biopharmaceutical company,

including Vice President of US Cardiovascular Medical and Scientific External Relations, Therapeutic Area Vice President of Cardiovascular

Global Medical Affairs, U.S.

AMGN), multinational biopharmaceutical company, from 2016

Prior to Amgen Dr.

Ferguson held a number of senior positions at AstraZeneca, a multinational pharmaceutical and biopharmaceutical

company, including Vice President of US Cardiovascular Medical and Scientific External Relations, Therapeutic Area Vice President of

Cardiovascular Global Medical Affairs, U.S.

Development Brand Leader for BRILINTA ® , and Senior Director, Clinical Research.

joining AstraZeneca he was Vice President of Surgical and Critical Care for The Medicines Company.

Before joining AstraZeneca he was Vice President of Surgical and Critical Care for The Medicines Company.

In addition, Dr.

more than 20 years of academic experience as the Associate Director of Clinical Cardiology Research at the Texas Heart Institute,

Co-Director of the Cardiology Fellowship Training Program at St.

Luke’s Episcopal Hospital in Houston, where he was an Associate

Professor of Medicine at Baylor College of Medicine, and a Clinical Assistant Professor at the University of Texas Health Science

Center at Houston.

Ferguson has served on the Editorial Board of numerous peer-reviewed journals and has over 400 publications

and book chapters.

more than 20 years of academic experience as the Associate Director of Clinical Cardiology Research at the Texas Heart Institute, Co-Director

of the Cardiology Fellowship Training Program at St.

Luke’s Episcopal Hospital in Houston, where he was an Associate Professor

of Medicine at Baylor College of Medicine, and a Clinical Assistant Professor at the University of Texas Health Science Center at Houston.

Ferguson has served on the Editorial Board of numerous peer-reviewed journals and has over 400 publications and book chapters.

Ferguson received his B.A.

(cum laude) in Biology from Harvard University, his M.D.

from the University of Pennsylvania School

of Medicine and completed his post-graduate training at the University of Michigan Medical Center, Ann Arbor, Michigan and Beth Israel

Hospital, Boston, Massachusetts.

Hoover, MBA has served as Chief Business Officer since December 2021.

Prior to joining the Company, Mr.

Hoover was the Chief

Business Officer at Millendo Therapeutics, (now Tempest Therapeutics, Inc.) a clinical stage biotech, from 2016 to 2021.

to joining Millendo, Mr.

Hoover was Vice President of New Product Planning and Corporate Development and Licensing at Sunovion Pharmaceuticals

Inc., a global biopharmaceutical company.

Hoover started his pharmaceutical career at GSK in 2001 working in the Global Commercial

Strategy group.

Earlier in his career, Mr.

Hoover worked for The Boston Consulting Group.

Hoover holds a M.B.A.

from the University

of Pennsylvania School of Medicine and completed his post-graduate training at the University of Michigan Medical Center, Ann

Arbor, Michigan and Beth Israel Hospital, Boston, Massachusetts.

of North Carolina and a B.A.

from Harvard College.

Kucinski, MBA, CPA was appointed Chief Financial Officer in January 2019.

He most recently served as Chief Financial

Officer at RemedyOne, a privately held healthcare consulting organization.

He most recently served as Chief Financial Officer

at RemedyOne, a privately held healthcare consulting organization, during 2018.

Prior to that, he served as Vice President & Treasurer

at Par Pharmaceutical Companies, Inc., an operating company of Endo International plc, a leading generics and specialty-branded

pharmaceutical company.

at Par Pharmaceutical Companies, Inc., an operating company of Endo International plc, a leading generics and specialty-branded pharmaceutical

company, from 2009 to 2015.

In addition, Mr.

Kucinski held various roles at Barr Pharmaceuticals, Inc., including Senior Director,

Finance & Corporate Development and Assistant Treasurer & Senior Director, Finance.

Kucinski is a Certified Public

He received his Bachelor of Business Administration in Accounting from the University of Notre Dame and an M.B.A.

in Finance & Management from the Leonard N.

Kucinski held various roles at Barr Pharmaceuticals, Inc., including Senior Director, Finance

& Corporate Development and Assistant Treasurer & Senior Director, Finance.

Kucinski is a Certified Public Accountant.

received his Bachelor of Business Administration in Accounting from the University of Notre Dame and an M.B.A.

in Finance & Management

from the Leonard N.

Stern School of Business at New York University.

Liu, PhD, MBA has serves as Chief Technology Officer since December 2020.

Prior to joining the Company, Dr.

Liu was Director

of Formulation and Delivery at Seqirus USA Inc., a privately held global leader in influenza and pandemic response, from 2017 to 2020.

Prior to joining Seqirus, Dr.

Liu was Director of CMC at Cellics Therapeutics, Inc., a privately held development stage biopharmaceutical

company, in 2017, and Senior Technical Lead at Alcon Inc.

ALC), a global leader in eye care, from 2015 to 2017.

his career, Dr.

Liu held positions at Cellics Therapeutics, Inc., a privately held biotech company, and Allergan.

Liu holds a Ph.D.

in polymer chemistry from the University of Michigan, an M.B.A.

from the University of Massachusetts, Amherst, and a B.S.

from The University

of Science and Technology of China.

Mannino has served as our Chief Scientific Officer since September 2015.

From 1990 until August 2015, Dr.

Mannino was an Associate

Professor of Pathology and Laboratory Medicine at Rutgers University, New Jersey Medical School.

Mannino founded BioDelivery Sciences,

Inc., and served as its President, Chief Executive Officer and Chief Scientific Officer and a member of its Board of Directors from 1995

to 2000, when it was acquired by BioDelivery Sciences International, Inc.

Mannino served as BDSI’s Executive

Vice President and Chief Scientific Officer from 2001 to 2009 and a member of its Board of Directors from 2000 to 2007.

previous experience includes positions as Assistant, then Associate Professor, Albany Medical College (1980 to 1990), and Instructor

then Assistant Professor, Rutgers Medical School (1977 to 1980).

His postdoctoral training was from 1973 to 1976 at the Biocenter in

Basel, Switzerland.

Mannino received his Ph.D.

in Biological Chemistry in 1973 from the Johns Hopkins University, School of Medicine.

Matkovits, PhD has served as Chief Development officer since October 2018.

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served as the Chief Operating Officer of ContraVir Pharmaceuticals (NASDAQ:

CTRV) (now Hepion Pharmaceuticals), a clinical stage

biopharmaceutical company.

CTRV) (now Hepion Pharmaceuticals), a clinical stage biopharmaceutical

company, from 2015 to 2018.

From 2013 to 2015, Dr.

Matkovits served as Global Program Leader at NPS Pharmaceuticals, a specialty

pharmaceutical company that was purchased by Shire in 2015.

Matkovits served as Global Program Leader at NPS Pharmaceuticals, a specialty pharmaceutical

company that was purchased by Shire in 2015.

Prior to her time at NPS, Dr.

Matkovits was Vice President, Innovation

Leader at The Medicines Company.

Matkovits was Vice President, Innovation Leader at The Medicines

Earlier in her career, Dr.

Matkovits held a number of global leadership positions at Novartis

across Global Development and the U.S.

Matkovits held a number of global leadership positions at Novartis across Global Development and

Commercial Organization, including as Head, Strategic Planning and Operations, U.S.

and Drug Regulatory Affairs.

Matkovits began her career at the Roche Institute of Molecular Biology and Organon where she

held positions in clinical development in women’s health and research in the area of infertility.

Matkovits serves on

the Board of Directors of BioSurplus and also serves as an Independent Director of Appili Therapeutics (TSX:

was selected to participate in Women in Bio’s Boardroom Ready Program in 2016.

Medical and Drug Regulatory Affairs.

Matkovits began her career at the Roche Institute of Molecular Biology and Organon where she held positions in clinical development in

women’s health and research in the area of infertility.

Matkovits serves on the Board of Directors of Appili Therapeutics (TSX:

APLIF) and GoodCap Pharmaceuticals, a privately held pharmaceutical company .

Matkovits earned her Ph.D.

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and Molecular Biology from the University of Medicine and Dentistry of NJ.

Liu, PhD, MBA was appointed Chief Technology Officer in December 2020.

Liu has over two decades of experience in the

formulation of small molecules, biologics, and gene therapies.

He joined the Company from Seqirus, a global leader in influenza

vaccine development and pandemic preparedness, where he served as the Director of Formulation and Delivery from 2017 to 2020.

Prior to his time at Seqirus, Dr.

Liu was the CMC Director at Cellics Therapeutics, a privately held biotechnology company based

in San Diego.

His early career focused on ophthalmic drug development at two leading eye care companies, Alcon and Allergan plc.

At Alcon, he led multiple CMC teams as the Senior Technical Lead from 2015 to 2017.

During his time at Allergan, Dr.

a critical role in realizing a paradigm shift for standard glaucoma care, focusing on sustained delivery drug development in his

role as a Principal Scientist.

Previously, he worked on pigment nanoparticle encapsulation at Hewlett-Packard.

in Polymer Chemistry from the University of Michigan, an M.B.A.

from the University of Massachusetts Amherst, and a B.S.

from the University of Science and Technology of China.

Mannino has served as our Chief Scientific Officer since September 2015.

From 1990 until August 2015, Dr.

an Associate Professor of Pathology and Laboratory Medicine at Rutgers University, New Jersey Medical School.

Mannino founded

BioDelivery Sciences, Inc., and served as its President, Chief Executive Officer and Chief Scientific Officer and a member of

its Board of Directors from 1995 to 2000, when it was acquired by BioDelivery Sciences International, Inc.

Mannino served as BDSI’s Executive Vice President and Chief Scientific Officer from 2001 to 2009 and a member of its Board

of Directors from 2000 to 2007.

Mannino’s previous experience includes positions as Assistant, then Associate Professor,

Albany Medical College (1980 to 1990), and Instructor then Assistant Professor, Rutgers Medical School (1977 to 1980).

His postdoctoral

training was from 1973 to 1976 at the Biocenter in Basel, Switzerland.

Mannino received his Ph.D.

in Biological Chemistry

in 1973 from the Johns Hopkins University, School of Medicine.

Conrad has served as our Chairman of the Board since July 2013 and as Chairman of the Board of Matinas BioPharma, Inc.

since October 2012.

October 2012.

He also serves on the board of directors of Celldex Therapeutics, Inc.

CLDX), biopharmaceutical company

focused on the development and commercialization of immunotherapies and other targeted biologics, and as an Advisor to the Seaver

Autism Center at Mount Sinai Hospital.

CLDX), biopharmaceutical company focused

on the development and commercialization of immunotherapies and other targeted biologics, and as an Advisor to the Seaver Autism Center

at Mount Sinai Hospital.

Conrad was the President of the U.S.

Pharmaceuticals Division of Hoffmann-La Roche,

from 1982 until his retirement in 1993.

Prior to that, he held many positions of increasing responsibility at Roche Pharmaceuticals

in the United States.

Pharmaceuticals Division of Hoffmann-La Roche, Inc.

from 1982 until

his retirement in 1993.

Prior to that, he held many positions of increasing responsibility at Roche Pharmaceuticals in the United States.

Conrad previously served on the board of directors of Arbutus Biopharma Corporation (NASDAQ:

Pharmasset, Inc.

(chairman), Savient Pharmaceuticals, Inc.

ABUS), Pharmasset, Inc.

Savient Pharmaceuticals, Inc.

SVNT), Dura Pharmaceuticals, Inc., UroCor, Inc., GenVec, Inc.

GNVC) (chairman), Sicor, Inc., Bone Care International, Inc.

GNVC) (chairman), Sicor,

Inc., Bone Care International, Inc.

(chairman), Sapphire Therapeutics, Inc.

(chairman), the

medical advisory board of Henry Schein Inc.

(chairman), the medical advisory board of Henry Schein Inc.

HSIC), and he was a Director and Co-Founder of Reliant Pharmaceuticals.

was acquired by Gilead Sciences, Inc.

for $11 billion in 2011 and Reliant was acquired by GlaxoSmithKline for $1.65 billion in

Pharmasset was acquired by Gilead Sciences, Inc.

$11 billion in 2011 and Reliant was acquired by GlaxoSmithKline for $1.65 billion in 2007.

He received B.S.

degrees from the Brooklyn College of Pharmacy and an honorary Doctorate in Humane Letters from

Long Island University.

We believe Mr.

Conrad is qualified to serve on our board of directors due to his extensive expertise and

experience in the life sciences industry and his extensive board experience.

LePore has served as our Vice Chairman of the Board since September 5, 2018.

LePore served as chairman, chief executive

officer and president of Par Pharmaceuticals, Inc.

(NYSE:PRX), an operating company of Endo International plc, a generics and

specialty branded pharmaceutical company, from September 2006 until the company’s acquisition by private equity investor

TPG in November 2012.

He remained as chairman of the new company where he led the sale of the company to Endo Pharmaceuticals

LePore began his career with Hoffmann LaRoche.

Later, he founded Boron LePore and Associates, a medical communications

company, which he took public in 1997 and which was eventually sold to Cardinal Health.

He is chairman of the board of directors

of Lannett Company, Inc.

LCI), a pharmaceutical company, and is a trustee of Villanova University.

He previously served

as a member of the board of directors of PharMerica Corporation (NYSE:

PMC) and Innoviva, Inc.

LePore earned

his bachelor’s degree from Villanova University and Master of Business Administration from Fairleigh Dickinson University.

degrees from the

Brooklyn College of Pharmacy and an honorary Doctorate in Humane Letters from Long Island University.

We believe Mr.

LePore is qualified to serve on our board of directors due to his executive leadership and significant experience

in the life sciences industry and his public company board experience.

Conrad is qualified

to serve on our board of directors due to his extensive expertise and experience in the life sciences industry and his extensive board

See description under “Management.”

Kathryn Corzo, RPh, MBA has served

on our board of directors since November 2021.

Corzo is currently the Chief Operating Officer

of bit.bio Ltd, a privately funded company coding human cells to precision engineer the next generation of medicines, a

position she has held since 2021.

Prior to bit.bio, Ms.

Corzo was partner at Takeda Ventures, Inc., the corporate investment arm

of Takeda Pharmaceutical Company Limited, and also served as Head, Oncology Cell Therapy Development at Takeda Pharmaceutical Company

Limited (TSE:

TAK), a global biopharmaceutical company, a position she held since 2020.

Before Takeda, Ms.

Corzo was Vice

President, R&D Myeloma Program Leader at Sanofi Genzyme, a specialty care global business unit of Sanofi, from 2010 to 2019.

1989-2010, Ms.

Corzo worked at Hoffman – La Roche, Roche Molecular Systems, Eli Lilly and Syndax, during which time she held roles

of increasing seniority in operations, global clinical development, medical affairs, business development, market access and brand management

across multiple therapeutic products and indications.

Corzo holds an MBA from Massachusetts Institute of Technology Sloan School

of Management and a Bachelor of Science in Pharmacy from Massachusetts College of Pharmacy.

We believe Ms.

Corzo is qualified to serve

on our Board of Directors due to her broad experience in the life sciences industry.

Ende has served on our board of directors since April 2017.

Ende is president of Ende BioMedical Consulting Group,

a privately-held consulting company which is focused on helping life sciences companies raise capital, identify licensing partners,

and optimize corporate structure as well as analyzing both private and public investment opportunities for clients within the

life sciences industry, a position he has held since 2009.

Ende serves as co-founder, chief executive and chief financial

officer of WellFit Holdings, LLC, a private company focused on developing fitness technologies.

Ende is president of Ende BioMedical Consulting Group, a privately-held

consulting company which is focused on helping life sciences companies raise capital, identify licensing partners, and optimize corporate

structure as well as analyzing both private and public investment opportunities for clients within the life sciences industry, a position

he has held since 2009.

In addition, Dr.

Ende consulted

with Icahn Enterprises in their efforts to appoint board members at Forest Labs, Genzyme, Biogen IDEC, and Amylin.

on the board of directors and as a member of the audit and risk management committee of Genzyme Corp.

GENZ) from 2010

until it was acquired by Sanofi (NSYE:

Ende consulted with Icahn Enterprises in their efforts to appoint board members at Forest Labs,

Genzyme, Biogen IDEC, and Amylin.

Ende served on the board of directors and as a member of the Audit and Risk Management Committee

of Genzyme Corp.

GENZ) from 2010 until it was acquired by Sanofi (NSYE:

SNY) in 2011.

Ende is currently serving on the Technology Transfer Committee of Mount

Sinai Innovation Partners and served as the Chairman of the Unsecured Creditor’s Committee overseeing the bankruptcy of

Through another activist campaign, Dr.

Ende served on the board of directors of Progenics Pharmaceuticals, Inc., an oncology company, from 2019 until it was acquired by Lantheus

Holdings, Inc.

in 2020, as Chair of the Compensation Committee and a member of the Audit and Science Committees.

Ende also serves

on the board of directors of Avadel Pharmaceuticals plc, a biopharmaceutical company, as Chair of the Nomination & Corporate Governance

Committee and a member of the Audit and Compensation Committees and since January 2022 also serves on the board of NeuBase Therapeutics.

Ende is currently serving on the Technology Transfer Committee of Mount Sinai Innovation Partners and served as the Chairman of the

Unsecured Creditor’s Committee overseeing the bankruptcy of Egenix, Inc.

From 2002 through 2008, Dr.

Ende was the senior biotechnology analyst at Merrill Lynch.

Ende was the senior biotechnology

analyst at Merrill Lynch.

From 2000 through 2002, Dr.

Ende was the senior biotechnology analyst at Banc of America Securities and, from 1997 to 2000, he was a biotechnology analyst

at Lehman Brothers.

Ende received an MBA in Finance & Accounting from NYU – Stern Business School in 1997, an MD

from Mount Sinai School of Medicine in 1994, and a BS in Biology and Psychology from Emory University in 1990.

Ende was the senior biotechnology analyst at Banc of America Securities and, from

1997 to 2000, he was a biotechnology analyst at Lehman Brothers.

Ende received an MBA in Finance & Accounting from NYU –

Stern Business School in 1997, an MD from Mount Sinai School of Medicine in 1994, and a BS in Biology and Psychology from Emory University

We believe Dr.

Ende is qualified to serve on our board of directors due to his industry experience, including as president of Ende BioMedical

Consulting Group and as a biotechnology analyst, and his prior public company board experience.

Ende is qualified to serve on our board of directors due to his industry experience, including as president of

Ende BioMedical Consulting Group and as a biotechnology analyst, and his prior public company board experience.

Giordano has served as a member of our board of directors since September 2020.

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Chief Executive Officer and director of PLx Pharma Inc.

PLXP) since January 2016.

PLXP), a late-stage specialty pharmaceutical company, since January

Previously, Ms.

Giordano served as

the Interim Chief Executive Officer of ClearPoint Learning, Inc., a privately held learning and training platform company, from

May 2015 through November 2015.

She also served on the ClearPoint board of directors from December 2009 through November 2015.

Giordano served as Chief Executive Officer of ClearPoint Learning, Inc., a privately held learning and training

platform company, from May 2015 through November 2015.

She also served on the ClearPoint board of directors from December 2009 through

November 2015.

Previously, Ms.

Giordano served as the Chief Executive Officer of Healthcare Corporation of America (NYSE:

HCA), a leading healthcare

provider, from January 2014 through August 2014.

HCA), a leading

healthcare provider, from January 2014 through August 2014.

From June 2009 to August 2012, Ms.

Giordano served as Chief Operating Officer

and then as Chief Executive Officer, President and a member of the board of directors of Xanodyne Pharmaceuticals, Inc., a privately-held

a branded specialty pharmaceutical company with development and commercial capabilities focused on pain management and women’s

Prior to that, she served as President, Americas, for Cegedim Dendrite (formerly Dendrite International Inc.), a global

technology services company, from 2007 to 2008 and as Senior Vice President of the Global Customer Business Unit of Cegedim Dendrite

from 2004 to 2007.

and then as Chief Executive Officer, President and a member of the board of directors of Xanodyne Pharmaceuticals, Inc., a privately-held branded specialty pharmaceutical company with development and commercial capabilities focused on pain management and women’s

Prior to that, she served as President, Americas, for Cegedim Dendrite (formerly Dendrite International Inc.), a global technology

services company, from 2007 to 2008 and as Senior Vice President of the Global Customer Business Unit of Cegedim Dendrite from 2004 to

Giordano holds a Bachelor of Science degree in nursing from Wagner College.

We believe Ms.

qualified to serve as a director due to her extensive experience in commercialization, general management and knowledge of the

pharmaceutical and health care industries.

Giordano is qualified to serve as

a director due to her extensive experience in commercialization, general management and knowledge of the pharmaceutical and health care

Scibetta has served as a member of our board of directors since November 2013.

He is currently Chief Executive Officer

of Maverick Therapeutics, a development stage immune-oncology company.

Prior to Maverick, he was President and Chief Financial

Officer of Pacira Pharmaceuticals, Inc.

PCRX), a specialty pharmaceutical company, a position he has held since October

Scibetta is currently the Chief Executive

Officer of ImmuneID, a privately held precision immunology company.

Prior to ImmuneID, Mr.

Scibetta was Chief Executive Officer of Maverick

Therapeutics, a development stage immune-oncology company, from 2017 until 2021 when it was acquired by Takeda Pharmaceutical Company

Prior to Maverick, he was President and Chief Financial Officer of Pacira Pharmaceuticals, Inc.

PCRX), a specialty

pharmaceutical company, a position he held since October 2015.

Prior to that, Mr.

Scibetta was the Chief Financial Officer of Pacira since 2008.

Prior to joining Pacira in August 2008,

he served as a consultant to Genzyme Corporation following the sale of Bioenvision Inc.

BIVN) to Genzyme in 2007.

2006 to 2007 Mr.

Scibetta was the Chief Financial Officer of Pacira

Biosciences, Inc.

PCRX), a non-opioid pain management and regenerative health solutions company, since 2008.

joining Pacira in August 2008, he served as a consultant to Genzyme Corporation following the sale of Bioenvision Inc.

to Genzyme in 2007.

From 2006 to 2007 Mr.

Scibetta was CFO of Bioenvision.

From 2001 to 2006, he was Executive Vice President and Chief Financial Officer

of Merrimack Pharmaceuticals Inc.

Scibetta has previously served on the board of directors at the following

life sciences companies:

From 2001 to 2006, he was Executive Vice President and Chief

Financial Officer of Merrimack Pharmaceuticals Inc.

Scibetta has previously served on the board of directors at the

following life sciences companies:

NEPH), Merrimack Pharmaceuticals and Labopharm Inc.

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experience, Mr.

Scibetta spent over a decade in investment banking where he was responsible for sourcing and executing transactions

for a broad base of public and private healthcare and life sciences companies.

Scibetta received his Bachelor of Science in

Physics from Wake Forest University and an MBA from the University of Michigan.

Scibetta spent over a decade in investment banking where he was responsible for sourcing and executing transactions for

a broad base of public and private healthcare and life sciences companies.

Scibetta received his Bachelor of Science in Physics from

Wake Forest University and an MBA from the University of Michigan.

We believe Mr.

Scibetta is qualified to serve

on our board of directors because of his extensive management experience in the pharmaceutical industry, his investment banking

experience and his experience as a chief financial officer and audit committee member of several publicly traded companies.

Scibetta is qualified to serve on our board of directors

because of his extensive management experience in the pharmaceutical industry, his investment banking experience and his experience as

a chief financial officer and audit committee member of several publicly traded companies.

Wikler has served as a member of our board of directors since January 2018.

Wikler currently serves as the Principal

of Infectious Disease Technology Development Consulting (IDTD Consulting), a privately-held consulting firm, where he provides

clinical, medical and regulatory strategic insight to companies developing new technologies for the treatment and prevention of

infectious diseases, a position he has held since 2015.

Wikler currently serves as the Principal of

Infectious Disease Technology Development Consulting (IDTD Consulting), a privately-held consulting firm, where he provides clinical,

medical and regulatory strategic insight to companies developing new technologies for the treatment and prevention of infectious diseases,

a position he has held since 2015.

Prior to that from 2012 to 2015, Dr.

Wikler served at The Medicines Company

MDCO), a biopharmaceutical company, as VP, New Business Ventures and VP and Medical Director, Infectious Disease Care.

Wikler served at The Medicines Company (NASDAQ:

MDCO), a biopharmaceutical

company, as VP, New Business Ventures and VP and Medical Director, Infectious Disease Care.

Over the course of his career Dr.

Wikler held senior leaderships positions for a number of pharmaceutical companies, including

as Chief Development Officer of Rib-X Pharmaceuticals, Inc., a privately-held biopharmaceutical company developing new antibiotics

to provide superior coverage, safety and convenience for the treatment of serious and life-threatening infections, President and

Chief Executive Officer of IASO Pharma Inc., a privately-held clinical stage biotechnology company focused on the development

of antibacterial and antifungal therapeutics, the Institute for One World Health, a 501(c)(3) nonprofit drug development organization,

Mpex Pharmaceuticals, Inc., a privately-held company focused on developing and manufacturing therapies for antibiotic resistance

with focus on gram-negative organisms, Peninsula Pharmaceuticals, Inc., a privately held biopharmaceutical company focused on

developing and commercializing antibiotics to treat life-threatening infections (acquired by Johnson & Johnson (NYSE:

ViroPharma Incorporated (NASDAQ:

VPHM), Bristol-Myers Squibb Company (NYSE:BMY), and Ortho-McNeil Pharmaceutical (a division of

Johnson & Johnson).

Wikler began his career at Smith Kline & French/Smith Kline Beecham where he held positions of

increasing responsibilities over ten years.

Wikler held a variety of positions at the FDA, including the Deputy Director of

the Division of Anti-Infective Drug Products.

held senior leaderships positions for a number of pharmaceutical companies, including as Chief Development Officer of Rib-X Pharmaceuticals,

Inc., a privately-held biopharmaceutical company developing new antibiotics to provide expanded coverage, safety and convenience for

the treatment of serious and life-threatening infections, President and Chief Executive Officer of IASO Pharma Inc., a privately-held

clinical stage biotechnology company focused on the development of antibacterial and antifungal therapeutics, the Institute for One World

Health, a 501(c)(3) nonprofit drug development organization, Mpex Pharmaceuticals, Inc., a privately-held company focused on developing

and manufacturing therapies for antibiotic resistance with focus on gram-negative organisms, Peninsula Pharmaceuticals, Inc., a privately

held biopharmaceutical company focused on developing and commercializing antibiotics to treat life-threatening infections (acquired by

Johnson & Johnson (NYSE:

JNJ)), ViroPharma Incorporated (NASDAQ:

VPHM), Bristol-Myers Squibb Company (NYSE:BMY), and Ortho-McNeil

Pharmaceutical (a division of Johnson & Johnson).

Wikler began his career at Smith Kline & French/Smith Kline Beecham where

he held positions of increasing responsibilities over ten years.

Wikler held a variety of positions at the FDA, including the Deputy

Director of the Division of Anti-Infective Drug Products.

Wikler earned a B.A.

in Chemistry from Franklin and Marshall, an M.D.

from Temple University School of Medicine, and his M.B.A.

in Chemistry from Franklin and Marshall College, an

degree from Temple University School of Medicine, and his M.B.A.

from the University of Pennsylvania Wharton School of Business.

his Infectious Diseases Fellowship at the Hospital of the University of Pennsylvania and is a Fellow of the Infectious Diseases

He completed his Infectious Diseases Fellowship at the Hospital of the University of Pennsylvania and is a Fellow of the Infectious Diseases

Society of America.

We believe Dr.

Wikler is qualified to serve on our board of directors because of his extensive management

experience in the pharmaceutical industry and his clinical and regulatory experience in the area of infectious diseases.

Wikler is qualified to serve on our board of directors because of his extensive management experience

in the pharmaceutical industry and his clinical, drug development and regulatory experience.

are no family relationships among any of our directors or executive officers.

Advisory Board

believe in seeking and attracting scientific and clinical leaders in the field of cardiovascular medicine as well as infectious

diseases to provide counsel and support our growth.

We have established two separate Scientific Advisory Board which consist of

individuals who are experts in their chosen fields and recipients of many academic honors and awards.

board of directors has four standing committees — an Audit Committee, a Compensation Committee, a Nominating and Corporate

Governance Committee and a Scientific Advisory Committee.

The Audit Committee oversees and monitors our financial reporting process and internal control system, reviews

and evaluates the audit performed by our registered independent public accountants and reports to the Board any substantive issues

found during the audit.

The Audit Committee is directly responsible for the appointment, compensation and oversight of the work

of our registered independent public accountants.

believe in seeking and attracting scientific and clinical leaders in the field of cardiovascular medicine as well as infectious diseases

to provide counsel and support our growth.

We have established two separate Scientific Advisory Boards for MAT2203 and MAT2501, respectively,

which consist of individuals who are experts in their chosen fields and recipients of many academic honors and awards.

board of directors has four standing committees — an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance

Committee and a Scientific Advisory Committee.

The Audit Committee oversees and monitors our financial reporting process and internal control system, reviews and

evaluates the audit performed by our registered independent public accountants and reports to the Board any substantive issues found

during the audit.

The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of our registered

independent public accountants.

The Audit Committee reviews and approves all transactions with affiliated parties.

James Scibetta, Herbert Conrad, Eric Ende and Natasha Giordano currently serve as members of the Audit Committee, with James Scibetta,

serving as its chairman.

All members of the Audit Committee have been determined to be financially literate and are considered

independent directors as defined under The NYSE American’s listing standards and applicable SEC rules and regulations.

Scibetta qualifies as an audit committee “financial expert” as that term is defined by SEC regulations.

James Scibetta, Herbert

Conrad, Eric Ende and Natasha Giordano currently serve as members of the Audit Committee, with James Scibetta, serving as its chairman.

All members of the Audit Committee have been determined to be financially literate and are considered independent directors as defined

under the NYSE MKT’s listing standards and applicable SEC rules and regulations.

Scibetta qualifies as an audit committee “financial

expert” as that term is defined by SEC regulations.

The Audit Committee met four times during 2021.

Our Board has adopted an Audit

Committee Charter, which is available for viewing at www.matinasbiopharma.com .

The Compensation Committee provides advice and makes recommendations to the Board in the areas of employee salaries,

benefit programs and director compensation.

The Compensation Committee also reviews the compensation of our executive officers, including

our chief executive officer, and makes recommendations in that regard to the Board as a whole.

Eric Ende, Kathryn Corzo, James Scibetta

and Matthew Wikler currently serve as members of the Compensation Committee, with Eric Ende serving as its chairman.

All members of the

Compensation Committee are considered independent directors as defined under the NYSE MKT’s listing standards.

The Compensation

Committee met four times during 2021.

Our Board has adopted an Audit Committee Charter, which is available for viewing at www.matinasbiopharma.com .

The Compensation Committee provides advice and makes recommendations to the Board in the areas of employee

salaries, benefit programs and director compensation.

The Compensation Committee also reviews the compensation of our executive

officers, including our chief executive officer, and makes recommendations in that regard to the Board as a whole.

Patrick LePore, James Scibetta and Matthew Wikler currently serve as members of the Compensation Committee, with Eric Ende serving

as its chairman.

All members of the Compensation Committee are considered independent directors as defined under The NYSE American’s

listing standards.

The Compensation Committee met three times during 2020.

Our Board has adopted a Compensation Committee Charter,

which is available for viewing at www.matinasbiopharma.com .

Our Board has adopted a Compensation Committee Charter, which is available for viewing at www.matinasbiopharma.com .

and Corporate Governance Committee .

The Nominating and Corporate Governance Committee nominates individuals to

be elected to the full Board by our stockholders.

The Nominating and Corporate Governance Committee considers recommendations

from stockholders if submitted in a timely manner in accordance with the procedures set forth in our Bylaws and applies the same

criteria to all persons being considered.

Herbert Conrad, Eric Ende, Patrick LePore and James Scibetta currently serve as members

of the Nominating and Corporate Governance Committee, with Herbert Conrad serving as its chairman.

All members of the Nominating

and Corporate Governance Committee are considered independent directors as defined under The NYSE American’s listing standards.

The Nominating and Corporate Governance Committee met three times during 2020.

Our Board has adopted a Nominating and Corporate

Governance Charter, which is available for viewing at www.matinasbiopharma.com .

The Nominating and Corporate Governance Committee nominates individuals to be elected

to the full Board by our stockholders.

The Nominating and Corporate Governance Committee considers recommendations from stockholders

if submitted in a timely manner in accordance with the procedures set forth in our Bylaws and applies the same criteria to all persons

being considered.

Herbert Conrad, Eric Ende, and James Scibetta currently serve as members of the Nominating and Corporate Governance

Committee, with Herbert Conrad serving as its chairman.

All members of the Nominating and Corporate Governance Committee are considered

independent directors as defined under the NYSE MKT’s listing standards.

The Nominating and Corporate Governance Committee met

four times during 2021.

Our Board has adopted a Nominating and Corporate Governance Charter, which is available for viewing at www.matinasbiopharma.com .

Advisory Committee .

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Chair, and Jerome D.

The primary function of the Scientific Advisory Committee is to assist the Board in undertaking

periodic reviews of our research and development efforts, and clinical trials, and reporting to the Board about developments and

strategy, at such times as the Committee determines to be appropriate.

The primary function of the Scientific Advisory Committee is to assist the Board in undertaking periodic

reviews of our research and development efforts, and clinical trials, and reporting to the Board about developments and strategy, at

such times as the Committee determines to be appropriate.

of Business Conduct and Ethics

have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our

principal executive officer, principal financial and accounting officer, or persons performing similar functions.

A copy of the

code is posted on the corporate governance section of our website, which is located at www.matinasbiopharma.com.

If we make any

substantive amendments to, or grant waivers from, the code of business conduct and ethics for any officer or director, we will

disclose the nature of such amendment or waiver on our website.

Section 16(a) Reports

16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who are beneficial

owners of more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership

with the Securities and Exchange Commission (the “SEC”).

These persons are required by SEC regulations to furnish

us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports

furnished to us and written representations that no other reports were required during the fiscal year ended December 31, 2020,

all reports required to be filed under Section 16(a) were filed on a timely basis.

have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal

executive officer, principal financial and accounting officer, or persons performing similar functions.

A copy of the code is posted

on the corporate governance section of our website, which is located at www.matinasbiopharma.com.

If we make any substantive amendments

to, or grant waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment

or waiver on our website.

Compensation Table – 2021

following table presents information regarding the total compensation awarded to, earned by, or paid to our chief executive officer

and the two most highly-compensated executive officers who were serving as executive officers as of December 31, 2020 for services

rendered in all capacities to us for the years ended December 31, 2020 and December 31, 2019.

These individuals are our named

executive officers for 2020.

following table presents information regarding the total compensation awarded to, earned by, or paid to our chief executive officer and

the two most highly-compensated executive officers who were serving as executive officers as of December 31, 2021 for services rendered

in all capacities to us for the years ended December 31, 2021 and December 31, 2020.

These individuals are our named executive officers

and Principal Position

All Other Compensation ($)

Chief Executive Officer

Chief Medical Officer

Theresa Matkovits

Chief Development Officer

reflect the grant date fair value of option awards granted in 2020 and 2019 in accordance with Accounting Standards Codification

Other Compensation ($)

Executive Officer

Medical Officer

Development Officer

reflect the grant date fair value of option awards granted in 2021 and 2020 in accordance with Accounting Standards Codification Topic

These amounts do not correspond to the actual value that will be recognized by the named executive officers.

Ferguson was reimbursed for relocation costs.

Disclosure to Summary Compensation Table

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In addition, Mr.

Jabbour is eligible to

receive an annual bonus, which is targeted at 50% of his base salary but which may be adjusted by our Compensation Committee based

on his individual performance and our performance as a whole.

Jabbour is also eligible to receive option grants at the discretion

of our Compensation Committee.

Jabbour received an option grant to purchase 1,000,000 shares on March 22, 2018 and is also

eligible to receive additional option grants and equity grants at the discretion of our Compensation Committee.

If we terminate

Jabbour’s employment without cause or Mr.

Jabbour resigns with good reason (absent a change of control), we are required

to pay him severance of up to twelve months of his base salary plus COBRA benefits for twelve months.

In addition, the vesting

of 50% of his outstanding options will be accelerated in full upon such termination and Mr.

Jabbour will be provided with an extension

through two years after the separation date of the exercise period for his vested stock options.

Jabbour is eligible to receive

an annual bonus, which is targeted at 50% of his base salary but which may be adjusted by our Compensation Committee based on his individual

performance and our performance as a whole.

Jabbour is also eligible to receive option grants at the discretion of our Compensation

Jabbour received an option grant to purchase 1,000,000 shares on March 22, 2018 and is also eligible to receive additional

option grants and equity grants at the discretion of our Compensation Committee.

If we terminate Mr.

employment without cause during the 24-month period immediately following a change of control or Mr.

Jabbour resigns with good

reason during the 24-month period immediately following a change of control, we are required to pay him severance of up to 24

months of his base salary and his target annual bonus plus 18 months of COBRA benefits.

In addition, his outstanding options will

be vested in full and Mr.

Jabbour’s employment without

Jabbour resigns with good reason (absent a change of control), we are required to pay him severance of up to twelve months

of his base salary plus COBRA benefits for twelve months.

In addition, the vesting of 50% of his outstanding options will be accelerated

in full upon such termination and Mr.

Jabbour will be provided with an extension through two years after the separation date of the exercise

period for his vested stock options.

Jabbour is also subject to a customary non-disclosure agreement, pursuant to which Mr.

Jabbour has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen months following

termination of his employment.

If we terminate Mr.

Jabbour’s employment without cause during the 24-month period immediately

following a change of control or Mr.

Jabbour resigns with good reason during the 24-month period immediately following a change of control,

we are required to pay him severance of up to 24 months of his base salary and his target annual bonus plus 18 months of COBRA benefits.

In addition, his outstanding options will be vested in full and Mr.

Jabbour will be provided with an extension through two years after

the separation date of the exercise period for his vested stock options.

Jabbour is also subject to a customary non-disclosure agreement,

pursuant to which Mr.

Jabbour has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen

months following termination of his employment.

February 22, 2019, we entered into an employment agreement with Mr.

Ferguson which was effective as of February 25, 2019.

the terms of Mr.

Under the terms

Ferguson’s employment agreement, Mr.

Ferguson receives a base salary of $375,000 per year.

Ferguson is eligible to receive an annual bonus, which is targeted at 35% of his base salary but which may be adjusted by

our Compensation Committee based on his individual performance and our performance as a whole.

Ferguson is also eligible to

receive option grants at the discretion of our Compensation Committee.

In addition, Mr.

eligible to receive an annual bonus, which is targeted at 35% of his base salary but which may be adjusted by our Compensation Committee

based on his individual performance and our performance as a whole.

Ferguson is also eligible to receive option grants at the discretion

of our Compensation Committee.

If we terminate Mr.

Ferguson’s employment without

Ferguson resigns with good reason, we are required to pay him severance of up to twelve months of his base salary

plus benefits.

In addition, the vesting of 50% of his outstanding options will be accelerated in full upon such termination.

Ferguson is also subject to a customary non-disclosure agreement, pursuant to which Mr.

Ferguson has agreed to be subject to a

non-compete during the term of his employment and for a period of eighteen months following termination of his employment.

Ferguson’s employment without cause or Mr.

Ferguson resigns with good reason,

we are required to pay him severance of up to twelve months of his base salary plus benefits.

In addition, the vesting of 50% of his

outstanding options will be accelerated in full upon such termination.

Ferguson is also subject to a customary non-disclosure agreement,

pursuant to which Mr.

Ferguson has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen

months following termination of his employment.

September 25, 2018, we entered into an employment agreement with Ms.

Matkovits which was effective as of October 15, 2018.

the terms of Ms.

Matkovits’ employment agreement, Ms.

Matkovits receives a base salary of $350,000 per year.

Matkovits is eligible to receive an annual bonus, which is targeted at 35% of her base salary but which may be adjusted by

our Compensation Committee based on her individual performance and our performance as a whole.

Matkovits is also eligible

to receive option grants at the discretion of our Compensation Committee.

In addition, Ms.

is eligible to receive an annual bonus, which is targeted at 35% of her base salary but which may be adjusted by our Compensation Committee

based on her individual performance and our performance as a whole.

Matkovits is also eligible to receive option grants at the discretion

of our Compensation Committee.

If we terminate Ms.

Matkovits’ employment without

Matkovits resigns with good reason, we are required to pay her severance of up to twelve months of his base salary

plus benefits.

In addition, the vesting of 50% of her outstanding options will be accelerated in full upon such termination.

Matkovits is also subject to a customary non-disclosure agreement, pursuant to which Ms.

Matkovits has agreed to be subject to

a non-compete during the term of her employment and for a period of eighteen months following termination of his employment.

Matkovits’ employment without cause or Ms.

Matkovits resigns with good reason,

we are required to pay her severance of up to twelve months of his base salary plus benefits.

In addition, the vesting of 50% of her

outstanding options will be accelerated in full upon such termination.

Matkovits is also subject to a customary non-disclosure agreement,

pursuant to which Ms.

Matkovits has agreed to be subject to a non-compete during the term of her employment and for a period of eighteen

months following termination of his employment.

Equity Awards at Fiscal Year-End Table – 2021

following table summarizes, for each of the named executive officers, the number of shares of common stock underlying outstanding

stock options held as of December 31, 2020.

Option Awards

following table summarizes, for each of the named executive officers, the number of shares of common stock underlying outstanding stock

options held as of December 31, 2021.

unexercisable

July 20, 2024

Theresa Matkovits

Equity Compensation Plan

August 2, 2013, our Board of Directors adopted the 2013 Equity Compensation Plan pursuant to the terms described herein.

Equity Compensation Plan was approved by the stockholders on August 7, 2013.

Effective May 8, 2014, upon the approval of our Board

of Directors and our stockholders, we amended and restated our 2013 Equity Compensation Plan, primarily to include “evergreen”

provisions, which state provide that number of shares of common stock available for issuance under the Plan is subject to an automatic

annual increase on January 1 of each year beginning in 2015 equal to 4% of the number of shares of common stock outstanding on

December 31 of the preceding calendar year or a lesser number of shares of common stock determined by the Board of Directors;

to amend the definition of “fair market value”;

and to increase the limits on awards under the Plan.

The 2013 Equity

Compensation Plan, as amended and restated, is referred to herein as the “2013 Plan.”

general purpose of the 2013 Plan is to provide an incentive to our employees, directors, consultants and advisors by enabling

them to share in the future growth of our business.

Our Board of Directors believes that the granting of stock options, restricted

stock awards, unrestricted stock awards and similar kinds of equity-based compensation promotes continuity of management and increases

incentive and personal interest in the welfare of our Company by those who are primarily responsible for shaping and carrying

out our long range plans and securing our growth and financial success.

Compensation Plan was approved by the stockholders on August 7, 2013.

Effective May 8, 2014, upon the approval of our Board of Directors

and our stockholders, we amended and restated our 2013 Equity Compensation Plan, primarily to include “evergreen” provisions,

which provides that the number of shares of common stock available for issuance under the Plan is subject to an automatic

annual increase on January 1 of each year beginning in 2015 equal to 4% of the number of shares of common stock outstanding on December

31 of the preceding calendar year or a lesser number of shares of common stock determined by the Board of Directors;

to amend the definition

of “fair market value”;

and to increase the limits on awards under the Plan.

The 2013 Equity Compensation Plan, as amended

and restated, is referred to herein as the “2013 Plan.”

general purpose of the 2013 Plan is to provide an incentive to our employees, directors, consultants and advisors by enabling them to

share in the future growth of our business.

Our Board of Directors believes that the granting of stock options, restricted stock awards,

unrestricted stock awards and similar kinds of equity-based compensation promotes continuity of management and increases incentive and

personal interest in the welfare of our Company by those who are primarily responsible for shaping and carrying out our long range plans

and securing our growth and financial success.

Board of Directors believes that the 2013 Plan will advance our interests by enhancing our ability to (a) attract and retain employees,

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consultants, directors and advisors for these contributions;

and (c) encourage employees, consultants, directors and advisors

to take into account our long-term interests through ownership of our shares.

and (c) encourage employees, consultants, directors and advisors to take

into account our long-term interests through ownership of our shares.

of the 2013 Equity Compensation Plan

following description of the principal terms of the 2013 Plan is a summary and is qualified in its entirety by the full text of

the 2013 Plan, which is attached as Exhibit 10.1 hereto.

following description of the principal terms of the 2013 Plan is a summary and is qualified in its entirety by the full text of the 2013

Plan, which is attached as Exhibit 10.1 hereto.

Administration .

The 2013 Plan will be administered by the Compensation Committee of our Board of Directors, provided that the entire Board

of Directors may act in lieu of the Compensation Committee on any matter, subject to certain requirements set forth in the 2013

The Compensation Committee may grant options to purchase shares of our common stock, stock appreciation rights, stock units,

restricted shares of our common stock, performance shares, performance units, incentive bonus awards, other cash-based awards

and other stock-based awards.

The Compensation Committee also has broad authority to determine the terms and conditions of each

option or other kind of award, and adopt, amend and rescind rules and regulations for the administration of the 2013 Plan.

to applicable law, the Compensation Committee may authorize one or more reporting persons (as defined in the 2013 Plan) or other

officers to make awards (other than awards to reporting persons, or other officers whom the Compensation Committee has specifically

authorized to make awards).

No awards may be granted under the 2013 Plan on or after the ten year anniversary of the adoption

of the 2013 Plan by our Board of Directors, but awards granted prior to such tenth anniversary may extend beyond that date.

The 2013 Plan will be administered by the Compensation Committee of our Board of Directors, provided that the entire Board of Directors

may act in lieu of the Compensation Committee on any matter, subject to certain requirements set forth in the 2013 Plan.

The Compensation

Committee may grant options to purchase shares of our common stock, stock appreciation rights, stock units, restricted shares of our

common stock, performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards.

Compensation Committee also has broad authority to determine the terms and conditions of each option or other kind of award, and adopt,

amend and rescind rules and regulations for the administration of the 2013 Plan.

Subject to applicable law, the Compensation Committee

may authorize one or more reporting persons (as defined in the 2013 Plan) or other officers to make awards (other than awards to reporting

persons, or other officers whom the Compensation Committee has specifically authorized to make awards).

No awards may be granted under

the 2013 Plan on or after the ten year anniversary of the adoption of the 2013 Plan by our Board of Directors, but awards granted prior

to such tenth anniversary may extend beyond that date.

Eligibility .

Awards may be granted under the 2013 Plan to any person who is an employee, officer, director, consultant, advisor or other

individual service provider of the Company or any subsidiary, or any person who is determined by the Compensation Committee to

be a prospective employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary.

Awards may be granted under the 2013 Plan to any person who is an employee, officer, director, consultant, advisor or other individual

service provider of the Company or any subsidiary, or any person who is determined by the Compensation Committee to be a prospective

employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary.

Subject to the 2013 Plan .

As of March 14, 2021 the aggregate number of shares of common stock available for issuance in

connection with awards granted under the 2013 Plan is 36,952,460 shares, subject to customary adjustments for stock splits, stock

dividends or similar transactions (the “Initial Limit”).

Incentive Stock Options may be granted under the 2013 Plan

with respect to all of those shares.

The number of shares of common stock available for issuance under the 2013 Plan will automatically

increase on January 1st of each year for a period of ten years, commencing on January 1, 2015, in an amount equal to four percent

(4%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year (the “Annual

Notwithstanding the foregoing, the Board of Directors may act prior to the first day of any calendar year, to

provide that there shall be no increase in the share reserve for such calendar year or that the Annual Increase in the share reserve

for such calendar year shall be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding

The number of shares of common stock which may be issued in respect of Incentive Stock Options is equal to the Current

Limit, and will be increased on each January 1, by the Annual Increase for such calendar year.

the extent that any award under the 2013 Plan payable in shares of common stock is forfeited, cancelled, returned to the Company

for failure to satisfy vesting requirements or upon the occurrence of other forfeiture events, or otherwise terminates without

payment being made thereunder, the shares of common stock covered thereby will be available for future grants under the 2013 Plan.

Shares of common stock that otherwise would have been issued upon the exercise of a stock option or in payment with respect to

any other form of award, that are surrendered in payment or partial payment of taxes required to be withheld with respect to the

exercise of such stock option or the making of such payment, will also be available for future grants under the 2013 Plan.

As of February 25, 2022 the aggregate number of shares of common stock available for issuance in connection

with awards granted under the 2013 Plan is 45,603,238 shares, subject to customary adjustments for stock splits, stock dividends or similar

transactions (the “Initial Limit”).

Incentive Stock Options may be granted under the 2013 Plan with respect to all of those

The number of shares of common stock available for issuance under the 2013 Plan will automatically increase on January 1st of

each year for a period of ten years, commencing on January 1, 2015, in an amount equal to four percent (4%) of the total number of shares

of common stock outstanding on December 31st of the preceding calendar year (the “Annual Increase”).

Notwithstanding the

foregoing, the Board of Directors may act prior to the first day of any calendar year, to provide that there shall be no increase in

the share reserve for such calendar year or that the Annual Increase in the share reserve for such calendar year shall be a lesser number

of shares of common stock than would otherwise occur pursuant to the preceding sentence.

The number of shares of common stock which may

be issued in respect of Incentive Stock Options is equal to the Current Limit, and will be increased on each January 1, by the Annual

Increase for such calendar year.

the extent that any award under the 2013 Plan payable in shares of common stock is forfeited, cancelled, returned to the Company for

failure to satisfy vesting requirements or upon the occurrence of other forfeiture events, or otherwise terminates without payment being

made thereunder, the shares of common stock covered thereby will be available for future grants under the 2013 Plan.

Shares of common

stock that otherwise would have been issued upon the exercise of a stock option or in payment with respect to any other form of award,

that are surrendered in payment or partial payment of taxes required to be withheld with respect to the exercise of such stock option

or the making of such payment, will also be available for future grants under the 2013 Plan.

and Conditions of Options .

Options granted under the 2013 Plan may be either “incentive stock options” that

are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)

or “nonqualified stock options” that do not meet the requirements of Section 422 of the Code.

The Compensation Committee

will determine the exercise price of options granted under the 2013 Plan.

The exercise price of stock options may not be less

than the fair market value, on the date of grant, per share of our common stock issuable upon exercise of the option (or 110%

of fair market value in the case of incentive options granted to a ten-percent stockholder).

Options granted under the 2013 Plan may be either “incentive stock options” that are intended

to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or “nonqualified

stock options” that do not meet the requirements of Section 422 of the Code.

The Compensation Committee will determine the exercise

price of options granted under the 2013 Plan.

The exercise price of stock options may not be less than the fair market value, on the

date of grant, per share of our common stock issuable upon exercise of the option (or 110% of fair market value in the case of incentive

options granted to a ten-percent stockholder).

on the date of grant the common stock is listed on a stock exchange or national market system, the fair market value shall generally

be the closing sale price as of such date, or if there were no trades recorded on such date, then the most recent date preceding

such date on which trades were recorded.

If on the date of grant the common stock is traded in an over-the-counter market, the

fair market will generally be the average of the closing bid and asked prices for the shares of common stock as of such date,

or, if there are no closing bid and asked prices for the shares of common stock on such date, then the average of the bid and

asked prices for the shares of common stock on the most recent date preceding such date on which such closing bid and asked prices

are available.

If the common stock is not listed on a national securities exchange or national market system or traded in an over-the-counter

market, the fair market value shall be determined by the Compensation Committee in a manner consistent with Section 409A of the

Internal Revenue Code of 1986, as amended.

Notwithstanding the foregoing, if on the date of grant the common stock is listed on

a stock exchange or is quoted on a national market system, or is traded in an over-the-counter market, then solely for purposes

of determining the exercise price of any grant of a stock option or the base price of any grant of a stock appreciation right,

the Compensation Committee may, in its discretion, base fair market value on the last sale before or the first sale after the

grant, the closing price on the trading day before or the trading day of the grant, the arithmetic mean of the high and low prices

on the trading day before or the trading day of the grant, or any other reasonable method using actual transactions of the common

stock as reported by the exchange or market on which the common stock is traded.

In addition, the determination of fair market

value also may be made using any other method permitted under Treasury Regulation section 1.409A-1(b)(5)(iv).

option may be exercisable for more than ten years from the date of grant (five years in the case of an incentive stock option

granted to a ten-percent stockholder).

Options granted under the 2013 Plan will be exercisable at such time or times as the Compensation

Committee prescribes at the time of grant.

No employee may receive incentive stock options that first become exercisable in any

calendar year in an amount exceeding $100,000.

The Compensation Committee may, in its discretion, permit a holder of a nonqualified

stock option to exercise the option before it has otherwise become exercisable, in which case the shares of our common stock issued

to the recipient will continue to be subject to the vesting requirements that applied to the option before exercise.

be the closing sale price as of such date, or if there were no trades recorded on such date, then the most recent date preceding such

date on which trades were recorded.

If on the date of grant the common stock is traded in an over-the-counter market, the fair market

will generally be the average of the closing bid and asked prices for the shares of common stock as of such date, or, if there are no

closing bid and asked prices for the shares of common stock on such date, then the average of the bid and asked prices for the shares

of common stock on the most recent date preceding such date on which such closing bid and asked prices are available.

If the common stock

is not listed on a national securities exchange or national market system or traded in an over-the-counter market, the fair market value

shall be determined by the Compensation Committee in a manner consistent with Section 409A of the Internal Revenue Code of 1986, as amended.

Notwithstanding the foregoing, if on the date of grant the common stock is listed on a stock exchange or is quoted on a national market

system, or is traded in an over-the-counter market, then solely for purposes of determining the exercise price of any grant of a stock

option or the base price of any grant of a stock appreciation right, the Compensation Committee may, in its discretion, base fair market

value on the last sale before or the first sale after the grant, the closing price on the trading day before or the trading day of the

grant, the arithmetic mean of the high and low prices on the trading day before or the trading day of the grant, or any other reasonable

method using actual transactions of the common stock as reported by the exchange or market on which the common stock is traded.

the determination of fair market value also may be made using any other method permitted under Treasury Regulation section 1.409A-1(b)(5)(iv).

option may be exercisable for more than ten years from the date of grant (five years in the case of an incentive stock option granted

to a ten-percent stockholder).

Options granted under the 2013 Plan will be exercisable at such time or times as the Compensation Committee

prescribes at the time of grant.

No employee may receive incentive stock options that first become exercisable in any calendar year in

an amount exceeding $100,000.

The Compensation Committee may, in its discretion, permit a holder of a nonqualified stock option to exercise

the option before it has otherwise become exercisable, in which case the shares of our common stock issued to the recipient will continue

to be subject to the vesting requirements that applied to the option before exercise.

the option price may be paid in cash or by bank check, or such other means as the Compensation Committee may accept.

in an award agreement or otherwise determined by the Compensation Committee, in its sole discretion, at or after grant, payment

in full or part of the exercise price of an option may be made (a) in the form of shares of common stock that have been held by

the participant for such period as the Compensation Committee may deem appropriate for accounting purposes or otherwise, valued

at the fair market value of such shares on the date of exercise;

(ii) by surrendering to the Company shares of common stock otherwise

receivable on exercise of the option;

(iii) by a cashless exercise program implemented by the Compensation Committee in connection

with the 2013 Plan;

and/or (iv) by such other method as may be approved by the Compensation Committee and set forth in an award

option may be transferred other than by will or by the laws of descent and distribution, and during a recipient’s lifetime

an option may be exercised only by the recipient or the recipient’s guardian or legal representative.

However, the Compensation

Committee may permit the transfer of a nonqualified stock option, share-settled stock appreciation right, restricted stock award,

performance share or share-settled other stock-based award either (a) by instrument to the participant’s immediate family

(as defined in the 2013 Plan), (b) by instrument to an inter vivos or testamentary trust (or other entity) in which the award

is to be passed to the participant’s designated beneficiaries, or (c) by gift to charitable institutions.

The Compensation

Committee will determine the extent to which a holder of a stock option may exercise the option following termination of service.

As set forth in

an award agreement or otherwise determined by the Compensation Committee, in its sole discretion, at or after grant, payment in full

or part of the exercise price of an option may be made (a) in the form of shares of common stock that have been held by the participant

for such period as the Compensation Committee may deem appropriate for accounting purposes or otherwise, valued at the fair market value

of such shares on the date of exercise;

(ii) by surrendering to the Company shares of common stock otherwise receivable on exercise of

(iii) by a cashless exercise program implemented by the Compensation Committee in connection with the 2013 Plan;

by such other method as may be approved by the Compensation Committee and set forth in an award agreement.

option may be transferred other than by will or by the laws of descent and distribution, and during a recipient’s lifetime an option

may be exercised only by the recipient or the recipient’s guardian or legal representative.

However, the Compensation Committee

may permit the transfer of a nonqualified stock option, share-settled stock appreciation right, restricted stock award, performance share

or share-settled other stock-based award either (a) by instrument to the participant’s immediate family (as defined in the 2013

Plan), (b) by instrument to an inter vivos or testamentary trust (or other entity) in which the award is to be passed to the participant’s

designated beneficiaries, or (c) by gift to charitable institutions.

The Compensation Committee will determine the extent to which a

holder of a stock option may exercise the option following termination of service.

Appreciation Rights .

The Compensation Committee may grant stock appreciation rights independent of or in connection with

The Compensation Committee may grant stock appreciation rights independent of or in connection with an option.

The Compensation Committee will determine the terms applicable to stock appreciation rights.

The base price of a stock

appreciation right will be determined by the Compensation Committee, but will not be less than 100% of the fair market value of

a share of our common stock with respect to the date of grant of such stock appreciation right.

The maximum term of any SAR granted

under the 2013 Plan is ten years from the date of grant.

Generally, each SAR stock appreciation right will entitle a participant

upon exercise to an amount equal to:

excess of the fair market value of a share of common stock on the date of exercise of the stock appreciation right over the

base price of such stock appreciation right, multiplied by

The base price of a stock appreciation right

will be determined by the Compensation Committee, but will not be less than 100% of the fair market value of a share of our common stock

with respect to the date of grant of such stock appreciation right.

The maximum term of any SAR granted under the 2013 Plan is ten years

from the date of grant.

Generally, each SAR stock appreciation right will entitle a participant upon exercise to an amount equal to:

excess of the fair market value of a share of common stock on the date of exercise of the stock appreciation right over the base

price of such stock appreciation right, multiplied by

number of shares as to which such stock appreciation right is exercised.

2 unchanged sentences

The Compensation Committee may award restricted common stock and/or stock units under the 2013

Restricted stock awards consist of shares of stock that are transferred to a participant subject to restrictions that

may result in forfeiture if specified conditions are not satisfied.

Stock units confer the right to receive shares of our common

stock, cash, or a combination of shares and cash, at a future date upon or following the attainment of certain conditions specified

by the Compensation Committee.

The Compensation Committee will determine the restrictions and conditions applicable to each award

of restricted stock or stock units, which may include performance-based conditions.

Dividends with respect to restricted stock

may be paid to the holder of the shares as and when dividends are paid to stockholders or at the times of vesting or other payment

of the restricted stock award.

Stock unit awards may be granted with dividend equivalent rights, which may be accumulated and

may be deemed reinvested in additional stock units, as determined by the Compensation Committee in its discretion.

If any dividend

equivalents are paid while a stock unit award is subject to restrictions, the dividend equivalents shall be subject to the same

restrictions on transferability as the underlying stock units, unless otherwise set forth in an award agreement.

Unless the Compensation

Committee determines otherwise, holders of restricted stock will have the right to vote the shares.

Restricted stock awards consist of shares of stock that are transferred to a participant subject to restrictions that may result

in forfeiture if specified conditions are not satisfied.

Stock units confer the right to receive shares of our common stock, cash, or

a combination of shares and cash, at a future date upon or following the attainment of certain conditions specified by the Compensation

The Compensation Committee will determine the restrictions and conditions applicable to each award of restricted stock or

stock units, which may include performance-based conditions.

Dividends with respect to restricted stock may be paid to the holder of

the shares as and when dividends are paid to stockholders or at the times of vesting or other payment of the restricted stock award.

Stock unit awards may be granted with dividend equivalent rights, which may be accumulated and may be deemed reinvested in additional

stock units, as determined by the Compensation Committee in its discretion.

If any dividend equivalents are paid while a stock unit award

is subject to restrictions, the dividend equivalents shall be subject to the same restrictions on transferability as the underlying stock

units, unless otherwise set forth in an award agreement.

Unless the Compensation Committee determines otherwise, holders of restricted

stock will have the right to vote the shares.

Shares and Performance Units .

The Compensation Committee may award performance shares and/or performance units

under the 2013 Plan.

Performance shares and performance units are awards which are earned during a specified performance period

subject to the attainment of performance criteria, as established by the Compensation Committee.

The Compensation Committee will

determine the restrictions and conditions applicable to each award of performance shares and performance units.

The Compensation Committee may award performance shares and/or performance units under the

Performance shares and performance units are awards which are earned during a specified performance period subject to the

attainment of performance criteria, as established by the Compensation Committee.

The Compensation Committee will determine the restrictions

and conditions applicable to each award of performance shares and performance units.

Bonus Awards .

The Compensation Committee may award Incentive Bonus Awards under the 2013 Plan.

Incentive Bonus Awards

may be based upon the attainment of specified levels of Company or subsidiary performance as measured by pre-established, objective

performance criteria determined at the discretion of the Compensation Committee.

Incentive Bonus Awards will be paid in cash or

common stock, as set forth in an award agreement

Incentive Bonus Awards may be

based upon the attainment of specified levels of Company or subsidiary performance as measured by pre-established, objective performance

criteria determined at the discretion of the Compensation Committee.

Incentive Bonus Awards will be paid in cash or common stock, as

set forth in an award agreement

Stock-Based and Cash-Based Awards .

The Compensation Committee may award other types of equity-based or cash-based

awards under the 2013 Plan, including the grant or offer for sale of unrestricted shares of our common stock and payment in cash

or otherwise of amounts based on the value of shares of common stock.

The Compensation Committee may award other types of equity-based or cash-based awards

under the 2013 Plan, including the grant or offer for sale of unrestricted shares of our common stock and payment in cash or otherwise

of amounts based on the value of shares of common stock.

of Certain Corporate Transactions .

The Compensation Committee may, at the time of the grant of an award, provide for the

effect of a change in control (as defined in the 2013 Plan) on any award, including (i) accelerating or extending the time periods

for exercising, vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions

of an award, (iii) providing for the cash settlement of an award for an equivalent cash value, as determined by the Compensation

Committee, or (iv) such other modification or adjustment to an award as the Compensation Committee deems appropriate to maintain

and protect the rights and interests of participants upon or following a change in control.

The Compensation Committee may, in

its discretion and without the need for the consent of any recipient of an award, also take one or more of the following actions

contingent upon the occurrence of a change in control:

(a) cause any or all outstanding options and stock appreciation rights

to become immediately exercisable, in whole or in part;

(b) cause any other awards to become non-forfeitable, in whole or in part;

(d) cancel any award of restricted stock,

stock units, performance shares or performance units in exchange for a similar award of the capital stock of any successor corporation;

(e) redeem any restricted stock, stock unit, performance share or performance unit for cash and/or other substitute consideration

with a value equal to the fair market value of an unrestricted share of our common stock on the date of the change in control;

(f) cancel any option or stock appreciation right in exchange for cash and/or other substitute consideration based on the value

of our common stock on the date of the change in control , and cancel any option or stock appreciation right without any

payment if its exercise price exceeds the value of our common stock on the date of the change in control;

(g) cancel any stock

unit or performance unit held by a participant affected by the change in control in exchange for cash and/or other substitute

consideration with a value equal to the fair market value per share of common stock on the date of the change in control, or (h)

make such other modifications, adjustments or amendments to outstanding awards as the Compensation Committee deems necessary or

The Compensation Committee may, at the time of the grant of an award, provide for the effect

of a change in control (as defined in the 2013 Plan) on any award, including (i) accelerating or extending the time periods for exercising,

vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions of an award, (iii) providing

for the cash settlement of an award for an equivalent cash value, as determined by the Compensation Committee, or (iv) such other modification

or adjustment to an award as the Compensation Committee deems appropriate to maintain and protect the rights and interests of participants

upon or following a change in control.

The Compensation Committee may, in its discretion and without the need for the consent of any

recipient of an award, also take one or more of the following actions contingent upon the occurrence of a change in control:

any or all outstanding options and stock appreciation rights to become immediately exercisable, in whole or in part;

(b) cause any other

awards to become non-forfeitable, in whole or in part;

(d) cancel any award of restricted stock, stock units, performance shares or performance units in exchange for a similar award

of the capital stock of any successor corporation;

(e) redeem any restricted stock, stock unit, performance share or performance unit

for cash and/or other substitute consideration with a value equal to the fair market value of an unrestricted share of our common stock

on the date of the change in control;

(f) cancel any option or stock appreciation right in exchange for cash and/or other substitute

consideration based on the value of our common stock on the date of the change in control , and cancel any option or stock appreciation

right without any payment if its exercise price exceeds the value of our common stock on the date of the change in control;

any stock unit or performance unit held by a participant affected by the change in control in exchange for cash and/or other substitute

consideration with a value equal to the fair market value per share of common stock on the date of the change in control, or (h) make

such other modifications, adjustments or amendments to outstanding awards as the Compensation Committee deems necessary or appropriate.

Termination .

The Compensation Committee may amend the terms of awards in any manner not inconsistent with the 2013 Plan,

provided that no amendment shall adversely affect the rights of a participant with respect to an outstanding award without the

participant’s consent.

In addition, our board of directors may at any time amend, suspend, or terminate the 2013 Plan, provided

that (i) no such amendment, suspension or termination shall materially and adversely affect the rights of any participant under

any outstanding award without the consent of such participant and (ii) to the extent necessary and desirable to comply with any

applicable law, regulation, or stock exchange rule, the 2013 Plan requires us to obtain stockholder consent.

Stockholder approval

is required for any plan amendment that increases the number of shares of common stock available for issuance under the 2013 Plan

or changes the persons or classes of persons eligible to receive awards.

Company has the power and right to deduct or withhold, or require a participant to remit to the Company, the minimum statutory

amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulations to be withheld.

October 2013, we adopted a compensation policy pursuant to which our non-employee directors receive annualized compensation of

$20,000 per year, with an additional $10,000 per year for the Chairman of the Board and the Chair of the Audit Committee, as well

as an additional $5,000 per year for the Chairs of the Compensation and Nomination & Governance Committees.

In addition, our

independent board members will receive an option grant of 150,000 options, with the exception of the Chairman of the Board, who

will be granted 200,000 options.

In August 2014, we revised our compensation policy to provide that directors will receive restricted

stock in lieu of cash fees.

January 2018, we adopted an amended compensation policy for our non-employee directors.

The amended policy provides for the following

The Compensation Committee may amend the terms of awards in any manner not inconsistent with the 2013 Plan, provided

that no amendment shall adversely affect the rights of a participant with respect to an outstanding award without the participant’s

In addition, our board of directors may at any time amend, suspend, or terminate the 2013 Plan, provided that (i) no such amendment,

suspension or termination shall materially and adversely affect the rights of any participant under any outstanding award without the

consent of such participant and (ii) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange

rule, the 2013 Plan requires us to obtain stockholder consent.

Stockholder approval is required for any plan amendment that increases

the number of shares of common stock available for issuance under the 2013 Plan or changes the persons or classes of persons eligible

to receive awards.

Company has the power and right to deduct or withhold, or require a participant to remit to the Company, the minimum statutory amount

to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulations to be withheld.

maintain a policy pursuant to which our non-employee directors receive annualized compensation.

The policy provides for the following

compensation amounts payable in cash, or upon election by such non-employee director, in shares of unrestricted common stock:

(i) each non-employee director, other than the chairman of the board is entitled to receive an annual fee of $50,000, (ii) the

chairman of the board is entitled to receive an additional annual fee of $25,000, (iii) the chair of our audit committee is entitled

to receive an annual fee from us of $15,000 and other members of our audit committee are entitled to receive $7,500;

chair of our compensation committee is entitled to receive an annual fee from us of $10,000 and other members of our compensation

committee are entitled to receive $6,000;

and (v) the chair of our nominating and corporate governance committee is entitled to

receive an annual fee from us of $7,500 and other members are entitled to receive $4,000.

In addition, In September 2018, our

Board approved an additional annual fee of $20,000 for our vice chair.

of the date of each annual meeting of the shareholders, each non-employee director will receive an option grant to purchase shares

of our common stock valued at $80,000 as determined by the Black Scholes method on the date of grant under our existing equity

incentive plan, or any other equity incentive plan we may adopt in the future, which shall vest in twelve equal monthly installments.

non-employee director is entitled to receive an annual fee of $50,000;

(ii) the chairman of the board is entitled to receive an additional

annual fee of $25,000;

(iii) the vice chair, if one is appointed, is entitled to receive an additional annual fee of $20,000;

chair of our audit committee is entitled to receive an annual fee of $15,000 and other members of our audit committee are entitled to

receive $7,500;

(v) the chair of our compensation committee is entitled to receive an annual fee of $10,000 and other members of our

compensation committee are entitled to receive $6,000;

(vi) the chair of our nominating and corporate governance committee is entitled

to receive an annual fee of $7,500, increasing to $8,000 on January 1, 2022, and other members are entitled to receive

and (vii) the chair of our scientific advisory committee is entitled to receive an annual fee of $7,500, increasing to

$8,000 on January 1, 2022.

of the date of each annual meeting of the shareholders, each non-employee director will receive an option grant to purchase shares of

our common stock valued at $80,000 as determined by the Black Scholes method on the date of grant under our existing equity incentive

plan, or any other equity incentive plan we may adopt in the future, which shall vest in twelve equal monthly installments.

fees under the director compensation policy are paid on a quarterly basis in arrears and no per meeting fees are paid.

may be paid in unrestricted shares of common stock at the election of the director.

We also reimburse non-employee directors for

reasonable expenses incurred in connection with attending board of director and committee meetings.

All fees may be

paid in unrestricted shares of common stock at the election of the director.

We also reimburse non-employee directors for reasonable

expenses incurred in connection with attending board of director and committee meetings.

Compensation Table – 2021

following table summarizes the annual compensation for our non-employee directors during 2021.

Cash Compensation

Herbert Conrad

Natasha Giordano

Matthew Wikler

reflect the grant date fair value of stock awards and option awards granted in 2020 in accordance with Accounting Standards

Codification Topic 718.

reflect the grant date fair value of stock awards and option awards granted in 2021 in accordance with Accounting Standards Codification

These amounts do not correspond to the actual value that will be recognized by the directors.

Committee Interlocks and Insider Participation

Compensation Committee of the Board of Directors is currently, and was for the last fiscal year, composed of the following four

non-employee directors:

Eric Ende, Chair, Patrick G.

LePore, James Scibetta and Matthew Wikler.

No member of the Compensation

Committee is or was formerly an officer or an employee of the Company during the last fiscal year.

In addition, no executive officer

of the Company serves on the compensation committee or board of directors of a company for which any of the Company’s directors

serve as an executive officer.

Compensation Committee of the Board of Directors is currently composed of the following four non-employee directors:

Eric Ende, Chair,

Kathryn Corzo, James Scibetta and Matthew Wikler, with Ms.

Corzo replacing Mr.

LePore on the committee following the Company’s

last Annual Shareholder meeting.

No member of the Compensation Committee is or was formerly an officer or an employee of the Company

during the last fiscal year.

In addition, no executive officer of the Company serves on the compensation committee or board of directors

of a company for which any of the Company’s directors serve as an executive officer.

Please see Item 13.

Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters.

following table sets forth the number of shares of common stock beneficially owned as of March 14, 2021 by:

following table sets forth the number of shares of common stock beneficially owned as of February 25, 2022 by:

of our stockholders who is known by us to beneficially own 5% or more of our common stock;

6 unchanged sentences

This power may be sole or shared and direct or indirect.

Applicable percentage

ownership in the following table is based on 204,276,412 shares outstanding as of March 14, 2021.

In computing the number of shares

beneficially owned by a person and the percentage ownership of that person, shares of common stock that are subject to options

or warrants held by that person and exercisable as of, or within 60 days of, March 14, 2021 are counted as outstanding.

shares, however, are not counted as outstanding for the purposes of computing the percentage ownership of any other person(s).

Except as may be indicated in the footnotes to this table and pursuant to applicable community property laws, each person named

in the table has sole voting and dispositive power with respect to the shares of common stock set forth opposite that person’s

Unless indicated below, the address of each individual listed below is c/o Matinas BioPharma Holdings, Inc., 1545 Route

206 South, Suite 302, Bedminster, NJ 07921.

Applicable percentage ownership

in the following table is based on 216,864,526 shares outstanding as of February 25, 2022.

In computing the number of shares beneficially

owned by a person and the percentage ownership of that person, shares of common stock that are subject to options or warrants held by

that person and exercisable as of, or within 60 days of, February 25, 2022 are counted as outstanding.

These shares, however, are not

counted as outstanding for the purposes of computing the percentage ownership of any other person(s).

Except as may be indicated in the

footnotes to this table and pursuant to applicable community property laws, each person named in the table has sole voting and dispositive

power with respect to the shares of common stock set forth opposite that person’s name.

Unless indicated below, the address of

each individual listed below is c/o Matinas BioPharma Holdings, Inc., 1545 Route 206 South, Suite 302, Bedminster, NJ 07921.

of Beneficial Owner

1 unchanged sentence

Beneficially Owned

Capital, LLC (1)

and Executive Officers

2 unchanged sentences

and Executive Officers as a group (13 persons) (14)

Based solely on information contained in a Schedule 13G/A filed on February 16, 2021.

Shared voting and dispositive power of the

shares is held by Boxer Capital, LLC, Boxer Asset Management Inc.

and Joe Lewis.

The address for each reporting person is 11682

El Camino Real, Suite 320, San Diego, CA 92130.

Includes (i) 15 convertible preferred shares if converted to 30,000 common shares, and (ii) 2,705,243shares of common stock issuable

upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 2,657,257 shares of common

stock underlying options that are not exercisable within sixty days of March 14, 2021.

Includes (i) 100 convertible preferred shares if converted to 200,000 common shares, and (ii) 1,098,727 shares of common stock

issuable upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 51,085 shares of

common stock underlying options that are not exercisable within sixty days of March 14, 2021.

Includes (i) 12 convertible preferred shares if converted to 24,000 common shares, and (ii) 835,394 shares of common stock issuable

upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 51,085 shares of common stock

underlying options that are not exercisable within sixty days of March 14, 2021.

Includes 63,982 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 223,935 shares of common stock underlying options that are not exercisable within sixty days of March 14, 2021.

Includes 444,666 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 14,

Does not include 63,584 shares of common stock underlying options that are not exercisable within sixty days of March 14,

Includes (i) 12 convertible preferred shares if converted to 24,000 common shares, and (ii) 897,894 shares of common stock issuable

upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 51,085 shares of common stock

underlying options that are not exercisable within sixty days of March 14, 2021.

Includes (i) 6 convertible preferred shares if converted to 12,000 common shares, and (ii) 660,394 shares of common stock issuable

upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 76,085 shares of common stock

underlying options that are not exercisable within sixty days of March 14, 2021.

Includes 439,601 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 14,

Does not include 985,399 shares of common stock underlying options that are not exercisable within sixty days of March 14,

Includes 475,534 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 14,

Does not include 899,466 shares of common stock underlying options that are not exercisable within sixty days of March 14,

Does not include 600,000 shares of common stock underlying options that are not exercisable within sixty days of March 14, 2021.

Includes (i) 10 convertible preferred shares if converted to 20,000 common shares, and (ii) 781,879 shares of common stock issuable

upon exercise of options that are exercisable within sixty days of March 14, 2021.

Does not include 353,121 shares of common stock

underlying options that are not exercisable within sixty days of March 14, 2021.

Includes 590,637 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 14,

Does not include 884,363 shares of common stock underlying options that are not exercisable within sixty days of March 14,

Includes 3,668,750 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 3,351,850 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 1,195,253 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 45,441 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 25,245 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 156,518 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 931,920 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 45,441 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 197,398 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 181,401 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 994,420 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 45,441 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 779,837 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 47,524 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 738,022 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 1,274,578 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Does not include 850,000 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 773,959 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 1,101,041 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 194,792 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 680,208 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 919,376 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 490,624 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

Includes 913,022 shares of common stock issuable upon exercise of options that are exercisable within sixty days of February 25, 2022.

Does not include 1,061,978 shares of common stock underlying options that are not exercisable within sixty days of February 25, 2022.

See notes (1) through (13).

1 unchanged sentence

following table summarizes information about our equity compensation plans as of December 31, 2021.

Plan Category

Number of Shares

Common Stock to be Issued upon

of Common Stock to be Issued upon

Exercise of Outstanding Options

2 unchanged sentences

Outstanding Options

Number of Options

Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column

Equity compensation plans approved by stockholders(1)

Equity compensation plans not approved by stockholders

Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column

compensation plans approved by stockholders(1)

compensation plans not approved by stockholders

amounts shown in this row include securities under the Matinas BioPharma Holdings, Inc.

1 unchanged sentence

Plan (the “2013 Plan”).

accordance with the “evergreen” provision in our 2013 Plan, an additional 8,004,537 shares were automatically

made available for issuance on the first trading day of 2021, which represents 4% of the number of shares outstanding on December

these shares are excluded from this calculation.

accordance with the “evergreen” provision in our 2013 Plan, an additional 8,650,778 shares were automatically made available

for issuance on the first trading day of 2022, which represents 4% of the number of shares outstanding on December 31, 2021;

shares are excluded from this calculation.

Relationships, Related Transactions, And Director Independence

Relationships and Related Party Transactions

than compensation arrangements for our named executive officers and directors, there has been no transaction or series of similar

transactions, since January 1, 2020, to which we were a party or will be a party, in which:

amounts involved exceeded or will exceed the lesser of (i) $120,000 and (ii) one percent of the average of our total assets

at year-end for the last two completed fiscal years;

of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family

of the foregoing persons, had or will have a direct or indirect material interest.

than compensation arrangements for our named executive officers and directors, there has been no transaction or series of similar transactions,

since January 1, 2021, to which we were a party or will be a party, in which:

amounts involved exceeded or will exceed the lesser of (i) $120,000 and (ii) one percent of the average of our total assets at year-end

for the last two completed fiscal years;

of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the

foregoing persons, had or will have a direct or indirect material interest.

Indemnification

entered into indemnification agreements with our directors and executive officers.

The indemnification agreements provide for

indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection

with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations.

The indemnification

agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment

or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee

is ultimately found not to be entitled to indemnification by us.

The indemnification agreement set forth procedures for making

and responding to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply

to any dispute between us and an indemnitee arising under the Indemnification Agreements.

The indemnification agreements provide for indemnification

against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection with threatened, pending

or completed actions, suits or other proceedings, subject to certain limitations.

The indemnification agreements also provide for the

advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or other adjudication, provided that

the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately found not to be entitled to

indemnification by us.

The indemnification agreement set forth procedures for making and responding to a request for indemnification

or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between us and an indemnitee arising under

the Indemnification Agreements.

and Procedures for Related Party Transactions

have adopted a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5%

5% of any class of our common stock, any members of the immediate family of any of the foregoing persons and any firms, corporations

or other entities in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in

which such person has a 5% or greater beneficial ownership interest, which we refer to collectively as related parties, are not

permitted to enter into a transaction with us without the prior consent of our board of directors acting through the audit committee

or, in certain circumstances, the chairman of the audit committee.

Any request for us to enter into a transaction with a related

party, in which the amount involved exceeds $100,000 and such related party would have a direct or indirect interest must first

be presented to our audit committee, or in certain circumstances the chairman of our audit committee, for review, consideration

and approval.

In approving or rejecting any such proposal, our audit committee, or the chairman of our audit committee, is to

consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable

than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the benefits

to us, the availability of other sources of comparable products or services and the extent of the related party’s interest

in the transaction.

of any class of our common stock, any members of the immediate family of any of the foregoing persons and any firms, corporations or

other entities in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such

person has a 5% or greater beneficial ownership interest, which we refer to collectively as related parties, are not permitted to enter

into a transaction with us without the prior consent of our board of directors acting through the audit committee or, in certain circumstances,

the chairman of the audit committee.

Any request for us to enter into a transaction with a related party, in which the amount involved

exceeds $100,000 and such related party would have a direct or indirect interest must first be presented to our audit committee, or in

certain circumstances the chairman of our audit committee, for review, consideration and approval.

In approving or rejecting any such

proposal, our audit committee, or the chairman of our audit committee, is to consider the material facts of the transaction, including,

but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party

under the same or similar circumstances, the extent of the benefits to us, the availability of other sources of comparable products or

services and the extent of the related party’s interest in the transaction.

on information requested from and provided by each of our directors, our board of directors has determined that Messrs.

Conrad, Eric Ende, Patrick LePore, James Scibetta, Matthew Wikler and Ms.

Natasha Giordano are “independent directors”

as such term is defined in the rules of The NYSE American’s corporate governance requirements and Rule 10A-3 promulgated

under the Securities Exchange Act of 1934, as amended.

Herbert Conrad,

Eric Ende, James Scibetta, Matthew Wikler and Mses.

Kathryn Corzo and Natasha Giordano are “independent directors” as such

term is defined in the rules of the NYSE MKT’s corporate governance requirements and Rule 10A-3 promulgated under the Securities

Exchange Act of 1934, as amended.

Accounting Fees And Services

1 unchanged sentence

LLP, the Company’s independent registered public accounting firm.

Years Ended December 31,

(in thousands)

Fees consist of fees billed for professional services rendered for the audit of our annual financial statements, audit of

internal controls over financial reporting, review of our interim consolidated financial statements and comfort letters.

Ended December 31,

Audit-Related Fees

Fees consist of fees billed for professional services rendered for the audit of our annual financial statements, audit of internal

controls over financial reporting, review of our interim consolidated financial statements and comfort letters.

Audit-Related Fees consist of fees billed

for professional services rendered for assurance related services that are reasonably related to the performance of the audit or review

of our financial services.

Fees are for tax-related services related primarily to tax consulting and tax planning.

Audit Committee pre-approves all auditing services and any non-audit services that the independent registered public accounting

firm is permitted to render under Section 10A (h) of the Exchange Act.

The Audit Committee may delegate the pre-approval to one

of its members, provided that if such delegation is made, the full Audit Committee must be presented at its next regularly scheduled

meeting with any pre-approval decision made by that member.

Audit Committee pre-approves all auditing services and any non-audit services that the independent registered public accounting firm

is permitted to render under Section 10A (h) of the Exchange Act.

The Audit Committee may delegate the pre-approval to one of its members,

provided that if such delegation is made, the full Audit Committee must be presented at its next regularly scheduled meeting with any

pre-approval decision made by that member.

And Financial Statement Schedules

22 unchanged sentences

Form of 2016 Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-1 filed with the SEC on November 2, 2016).

of Securities*

Description of Securities*

Matinas BioPharma Holdings, Inc.

11 unchanged sentences

(incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed on March 31, 2015).

Employment Agreement, dated September 1, 2015, between Matinas Biopharma Holdings, Inc.

and Raphael J.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2015).

Lease Agreement, dated as of December 15, 2016, by and between CIP II/AR Bridgewater Holdings LLC, and Matinas BioPharma Holdings, Inc.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2017).

Therapeutic Development Award Agreement, dated November 19, 2020, between Matinas BioPharma Holdings, Inc.

and the Cystic Fibrosis Foundation.*

Employment Agreement, dated March 22, 2018, between the Company and Jerome D.

Jabbour (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on March 27, 2018).

Employment Agreement, dated October 15, 2018, between Matinas Biopharma Holdings, Inc.

and Theresa Matkovits (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 15, 2018).

Employment Agreement, dated January 3, 2019, between Matinas Biopharma Holdings, Inc.

and Keith Kucinski (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2019).

Employment Agreement, dated February 25, 2019, between Matinas Biopharma Holdings, Inc.

Ferguson III (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2019).

At-The-Market Sales Agreement, dated July 2, 2020, between Matinas BioPharma Holdings, Inc.

and BTIG, LLC (incorporated herein by reference to Exhibit 1.01 to the Company’s Current Report on Form 8-K filed with the SEC on July 2, 2020).

Therapeutic Development Award Agreement, dated November 19, 2020, between Matinas BioPharma Holdings, Inc.

and the Cystic Fibrosis Foundation (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed on March 29, 2021).

Employment Agreement, dated December 1, 2020, between Matinas Biopharma Holdings, Inc.

Employment Agreement, dated December 6, 2021, between Matinas Biopharma Holdings, Inc.

and Thomas Hoover.

of EisnerAmper LLP*

4 unchanged sentences

1350 Certifications**

following financial information from the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, formatted

in XBRL (eXtensible Business Reporting Language), is filed electronically herewith:

(i) Consolidated Balance Sheets as of

December 31, 2020 and 2019;

(ii) Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December

31, 2020 and 2019;

(iii) Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December

31, 2020 and 2019;

(iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019;

and (v) Notes

to Consolidated Financial Statements.*

treatment has been requested for certain provisions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities

Exchange Act of 1934, as amended.

following financial information from the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, formatted in XBRL

(eXtensible Business Reporting Language), is filed electronically herewith:

(i) Consolidated Balance Sheets as of December 31, 2021

(ii) Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021 and 2020;

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2021 and 2020;

(iv) Consolidated

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

and (v) Notes to Consolidated Financial Statements.*

The cover page from this Annual Report on Form 10-K,

formatted as Inline XBRL.

treatment has been requested for certain provisions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange

Act of 1934, as amended.

a management contract or compensation plan, contract or arrangement.

10-K Summary.

to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf

by the undersigned, thereunto duly authorized, in the city of Bedminster, State of New Jersey on March 29, 2021.

to the requirements of Section 13 or 15(d) of the Securities Act, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized, in the city of Bedminster, State of New Jersey on March 8, 2022.

BIOPHARMA HOLDINGS, INC.

1 unchanged sentence

Financial Officer

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Executive Officer and Director

3 unchanged sentences

Herbert Conrad

Chairman of the Board

Kathryn Corzo

Natasha Giordano

5 unchanged sentences

and Subsidiaries as of December 31,

31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and

cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the consolidated financial position of the Company as of December 31, 2020 and 2019, and the consolidated results of their operations

and their cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles

generally accepted in the United States of America.

2021 and 2020 and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity,

and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to

as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2021, and the results of their operations and their cash flows for each of the

years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United

States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements

that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that

are material to the consolidated financial statements and (ii) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken

as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit

matter or on the accounts or disclosures to which it relates.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

for research and development expenses

disclosed in the consolidated statements of operations, for the year ended December 31, 2020, the Company incurred significant

research and development (“R&D”) expenses, which amounted to approximately $14.4 million.

At December 31, 2020,

the Company had accrued $1.4 million for R&D expenses on the consolidated balance sheet.

A large amount of the Company’s

R&D expenses are service fees paid to contract research organizations (“CROs).

The R&D activities with these CROs

are documented in contractual agreements and are typically performed over an extended period, and there may be several milestones

of the services in one agreement.

Therefore, the allocation of the service expenses based on the progress of the R&D projects

and the milestones completed for the appropriate financial reporting period involved judgement and estimation.

identified management’s estimate of accruals for R&D expenses as a critical audit matter due to the significance of

these expenses to the financial statements and the subjectivity involved in estimating the progress of the R&D projects and

service fees accrued for the completion of milestones by the CROs.

As a result, auditor judgement and additional testing were

required to perform procedures and evaluate audit evidence related to the accruals for R&D expenses.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the

consolidated financial statements.

Our audit procedures related to the accruals for R&D expenses included the following, among

others, (i) we obtained an understanding of management’s process and evaluated the design of controls related to the accrual

process for R&D expenses;

(ii) we read selected research agreements to evaluate whether the progress and the completion of

milestones reported by the representatives of the CROs and the corresponding service fees are based on the respective contractual

terms, (iii) we sent confirmations to CROs, on a sample basis, to confirm the amount of the total R&D service fees incurred

for the year and the amounts of outstanding payables under the terms of the contracts, and (iv) we selected projects from the

open contract list at year end and made inquiries of the Company research personnel regarding the project status, and we also

inspected invoices received subsequent to year-end and additional documents and correspondence with the CROs, supporting management’s

estimate of R&D expenditures.

disclosed in the consolidated statements of operations, for the year ended December 31, 2021, the Company incurred significant research

and development (“R&D”) expenses, which amounted to approximately $14.6 million.

At December 31, 2021, the Company had

accrued $1.3 million for R&D expenses on the consolidated balance sheet.

A large amount of the Company’s R&D expenses are service

fees paid to contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”).

activities with these CROs and CMOs are documented in contractual agreements and are typically performed over an extended period, and

there may be several milestones of the services in one agreement.

Therefore, the allocation of the service expenses based on the progress

of the R&D projects and the milestones completed for the appropriate financial reporting period involved judgement and estimation.

identified management’s estimate of accruals for R&D expenses as a critical audit matter due to the significance of these expenses

to the financial statements and the subjectivity involved in estimating the progress of the R&D projects and service fees accrued

for the completion of milestones by the CROs and CMOs.

As a result, auditor judgement and additional testing were required to perform

procedures and evaluate audit evidence related to the accruals for R&D expenses.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

Our audit procedures related to the accruals for R&D expenses included the following, among others, (i) we

obtained an understanding of management’s process and evaluated the design of controls related to the accrual process for R&D

(ii) we read selected research agreements to evaluate whether the progress and the completion of milestones reported by the

representatives of the CROs and CMOs and the corresponding service fees are based on the respective contractual terms, (iii) we sent

confirmations to CROs and CMOs, on a sample basis, to confirm the amount of the total R&D service fees incurred for the year and

the amounts of outstanding payables under the terms of the contracts, and (iv) we selected projects from the open contract list at year

end and made inquiries of the Company research personnel regarding the project status, and we also inspected invoices received subsequent

to year-end and additional documents and correspondence with the CROs and CMOs, supporting management’s estimate of R&D expenditures.

EisnerAmper LLP

2 unchanged sentences

Balance Sheets

and cash equivalents

expenses and other current assets

current assets

Cash and cash equivalents

Marketable securities

Restricted cash

Prepaid expenses and other current assets

Total current assets

improvements and equipment - net

lease right-of-use assets - net

research and development

cash - security deposits

non-current assets

Leasehold improvements and equipment - net

Operating lease right-of-use assets - net

Finance lease right-of-use assets - net

In-process research and development

Restricted cash - security deposits

Total non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY:

AND STOCKHOLDERS’ EQUITY:

expenses and other liabilities

lease liabilities - current

current liabilities

Accounts payable

Accrued expenses and other liabilities

Operating lease liabilities - current

Financing lease liabilities - current

Total current liabilities

tax liability

lease liabilities - net of current portion

non-current liabilities

Deferred tax liability

Operating lease liabilities - net of current portion

Financing lease liabilities - net of current portion

Total non-current liabilities

Total liabilities

Stockholders’ equity:

Series B Convertible preferred stock, stated value $ 1,000 per share, 8,000

shares authorized as of December 31, 2020 and 2019, respectively;

4,361 and 4,577 shares issued and outstanding as of December

31, 2020 and 2019, respectively;

(liquidation preference - $ 4,361,000 at December 31, 2020)

Common stock par value $ 0.0001 per share, 500,000,000 shares authorized at

December 31, 2020 and 2019, respectively;

200,113,431 and 163,156,984 issued and outstanding as of December 31, 2020 and 2019,

Additional paid-in capital

Accumulated deficit

Stockholders’

B Convertible preferred stock, stated value $ 1,000 per share, 8,000 shares authorized as of December 31, 2021 and 2020, respectively;

0 and 4,361 shares issued and outstanding as of December 31, 2021 and 2020, respectively

stock par value $ 0.0001 per share, 500,000,000 shares authorized at December 31, 2021 and 2020, respectively;

216,269,450 and 200,113,431

issued and outstanding as of December 31, 2021 and 2020, respectively

paid-in capital

( 131,634,208 )

( 107,507,193 )

Accumulated other comprehensive income/(loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

other comprehensive (loss)/income

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Statements of Operations and Comprehensive Loss

For the Year Ended December

Contract research revenue

the Year Ended December 31,

research revenue

and Expenses:

and development

and administrative

costs and expenses

Research and development

General and administrative

Total costs and expenses

Loss from operations

from operations

( 24,734,755 )

( 24,206,552 )

Sale of New Jersey net operating loss

Other income, net

of New Jersey net operating loss

$ ( 23,283,415 )

$ ( 22,446,838 )

Preferred stock series A accumulated dividends

Preferred stock series B accumulated dividends

Net loss attributable to common shareholders

stock series B accumulated dividends

loss attributable to common shareholders

$ ( 23,679,214 )

$ ( 23,240,280 )

Net loss attributable to common shareholders per share

- basic and diluted

Weighted average common shares outstanding:

Basic and diluted

Other comprehensive income/(loss), net of tax

Net unrealized gain/(loss) on securities available-for-sale

Reclassification of realized gain on securities

available-for-sale to net loss

Other comprehensive income/(loss), net of tax

Comprehensive loss attributable to shareholders

loss attributable to common shareholders per share – basic and diluted

average common shares outstanding:

comprehensive (loss)/income, net of tax

unrealized (loss)/gain on securities available-for-sale

Reclassification

of realized gain on securities available-for-sale to net loss

comprehensive (loss)/income, net of tax

Comprehensive

loss attributable to shareholders

$ ( 23,657,086 )

3 unchanged sentences

Statements of Changes in Stockholders’ Equity

Income/(Loss)

Convertible Preferred Stock A

(Loss)/Income

Preferred Stock B

1 unchanged sentence

Stockholders’

Income/(Loss)

(Loss)/Income

December 31, 2019

$ 113,427,897

$ ( 84,377,555 )

of common stock as compensation for services

of common stock in exchange for preferred shares A

of common stock in exchange for preferred shares B

2 unchanged sentences

of common stock in exchange for Warrants

comprehensive loss

December 31, 2019

comprehensive income

of common stock pursuant to the Aquarius Merger

of common stock pursuant to the Aquarius Merger, shares

( 22,446,838 )

December 31, 2020

$ 167,192,003

$ ( 107,507,193 )

of common stock as compensation for services

of common stock in exchange for preferred shares B

( 3,797,705 )

of common stock in public offering, net of stock issuance costs ($ 172,592 )

of common stock in public offering, net of stock issuance costs

of common stock in exchange for Options

of common stock in exchange for Warrants

comprehensive income

of common stock pursuant to the Aquarius Merger

Other comprehensive

comprehensive income loss

( 23,283,415 )

December 31, 2021

$ 184,251,138

$ ( 131,634,208 )

$ ( 145,499 )

accompanying notes are an integral part of these consolidated financial statements.

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the Year Ended December 31,

Cash flows from operating activities:

$ ( 22,446,838 )

flows from operating activities:

$ ( 23,283,415 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Stock-based compensation expense

Loss on disposal of equipment

Amortization of operating lease right-of-use assets

Amortization of finance lease right-of-use assets

Amortization of bond discount

Realized gain on sale of marketable securities

Changes in operating assets and liabilities:

Operating lease liabilities

Prepaid expenses and other current assets

$ ( 22,446,838 )

Accounts payable

Accrued expenses and other liabilities

Net cash used in operating activities

to reconcile net loss to net cash used in operating activities:

and amortization

on disposal of equipment

compensation expense

of operating lease right-of-use assets

of finance lease right-of-use assets

of bond discount

gain on sale of marketable securities

issued pursuant to the Aquarius Merger Agreement charged to Research and Development

in operating assets and liabilities:

lease liabilities

expenses and other current assets

expenses and other liabilities

cash used in operating activities

( 15,223,455 )

( 17,367,836 )

Cash flows from investing activities:

Purchases of marketable securities

flows from investing activities:

of marketable securities

( 23,194,600 )

( 72,106,359 )

Proceeds from sales of marketable securities

Purchases of leasehold improvements and equipment

Net cash used in investing activities

from sales of marketable securities

of leasehold improvements and equipment

cash provided by/(used in) investing activities

( 40,666,952 )

flows from financing activities:

proceeds from public offering of common stock

from exercise of warrants

from exercise of options

of capital lease liability – principal

cash provided by financing activities

increase/(decrease) in cash, cash equivalents and restricted cash

( 9,987,957 )

Cash flows from financing activities:

Net proceeds from public offering of common stock

Proceeds from exercise of warrants

Proceeds from exercise of options

Payments of capital lease liability - principal

Payments of note payable

Net cash provided by financing activities

Net (decrease)/increase in cash, cash equivalents and restricted cash

cash equivalents and restricted cash at beginning of period

cash equivalents and restricted cash at end of period

non-cash financing and investing activities:

(loss)/gain on marketable securities

$ ( 373,671 )

Cash, cash equivalents and restricted cash at beginning

Cash, cash equivalents and restricted cash at end

Supplemental non-cash financing and investing activities:

Unrealized gain (loss) on marketable securities

Cashless exercise of warrants

Stock dividends issued

Non-Cash prepaid from exercise of options

Preferred stock conversion into common stock - series B

Unearned restricted stock grants

Stock dividends accrual

Right-of-use assets obtained in exchange for liabilities

Preferred stock conversion into common stock - series A

exercise of warrants

dividends issued

prepaid from exercise of options

stock conversion into common stock - series B

restricted stock grants

asset in exchange from liabilities from operating lease

accompanying notes are an integral part of these consolidated financial statements.

Note 1 – Description of Business

1 – Description of Business

BioPharma Holdings Inc.

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(“BioPharma”), and Matinas BioPharma Nanotechnologies, Inc.

(“Nanotechnologies,” formerly

known as Aquarius Biotechnologies, Inc.), its operating subsidiaries (“Nanotechnologies”, and together with “Holdings”

and “BioPharma”, “the Company” or “we” or “our” or “us”).

is a clinical-stage biopharmaceutical company with a focus on identifying and developing novel pharmaceutical products.

(“Nanotechnologies,” formerly known

as Aquarius Biotechnologies, Inc.), its operating subsidiaries (“Nanotechnologies”, and together with “Holdings”

and “BioPharma” or “the Company”).

The Company is a clinical-stage biopharmaceutical company with a focus on

identifying and developing novel pharmaceutical products.

2 – Liquidity and Plan of Operations

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Through December 31, 2021,

2020, the Company had an accumulated deficit of approximately $ 107.5 million.

The Company’s net loss for the years ended

December 31, 2020 and 2019 were approximately $ 22.4 million and $ 17.4 million, respectively.

Company has been engaged in developing LYPDISO (formerly MAT-9001), its lead product candidate, as well as its lipid nanocrystal

(“LNC”) platform delivery technology and a pipeline of associated product candidates since 2011.

To date, the Company

has not obtained regulatory approval for any of its product candidates nor generated any revenue from product sales and the Company

expects to incur significant expenses to complete development of its product candidates.

The Company may never be able to obtain

regulatory approval for the marketing of any of its product candidates in any indication in the United States or internationally

and there can be no assurance that the Company will generate revenues or ever achieve profitability.

the Company had an accumulated deficit of approximately $ 131.6

The Company’s net loss for

the years ended December 31, 2021 and 2020 were approximately $ 23.3

million and $ 22.4

million, respectively.

Company has been engaged in developing LYPDISO (formerly MAT9001) as well as its lipid nanocrystal (“LNC”) platform delivery

technology and a pipeline of associated product candidates, including MAT2203 and MAT2501, since 2011.

To date, the Company has not obtained

regulatory approval for any of its product candidates nor generated any revenue from product sales, and the Company expects to incur

significant expenses to complete development of its product candidates.

The Company may never be able to obtain regulatory approval for

the marketing of any of its product candidates in any indication in the United States or internationally and there can be no assurance

that the Company will generate revenues or ever achieve profitability.

the Company obtains Food and Drug Administration (“FDA”) approval for one or more of its product candidates, the Company

expects that its expenses will continue to increase once the Company reaches commercial launch.

The Company also expects that

its research and development expenses will continue to increase as it moves forward with additional clinical studies for its current

product candidates and development of additional product candidates.

As a result, the Company expects to continue to incur substantial

losses for the foreseeable future, and that these losses will be increasing.

continue to fund operations, on March 19, 2019, the Company completed an underwritten public offering of common stock, generating

gross cash proceeds of $ 30.0 million and net proceeds of approximately $ 27.8 million.

On March 28, 2019, additional shares were

sold pursuant to an over-allotment option granted to the underwriters of the public offering, resulting in additional net proceeds

to the Company of approximately $ 2.3 million.

In addition, on January 14, 2020, the Company completed an underwritten public offering

of common stock, generating gross cash proceeds of approximately $ 50.0 million and net proceeds of approximately $ 46.7 million.

The Company also expects that its research

and development expenses will continue to increase as it moves forward with additional clinical studies for its current product candidates

and development of additional product candidates.

As a result, the Company expects to continue to incur substantial losses for the foreseeable

future, and that these losses will be increasing.

continue to fund operations, during January 2021, the Company sold 3,023,147 shares of common stock under its At-The-Market Sales Agreement

with BTIG, LLC, generating gross proceeds of approximately $ 5.8 million and net proceeds of approximately $ 5.6 million.

on January 14, 2020, the Company completed an underwritten public offering of 32,600,000 shares of common stock, generating gross cash

proceeds of approximately $ 50.0 million and net proceeds of approximately $ 46.7 million.

(See Note 12 – Stockholders’ Equity).

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$ 28.6 million and restricted cash of approximately $ 0.3 million.

During January 2021, the Company sold 3,023,147 shares of common

stock under its At-The-Market Sales Agreement with BTIG, LLC, generating gross proceeds of approximately $ 5.8 million and net

proceeds of approximately $ 5.6 million.

The Company believes the cash and cash equivalents and marketable securities on hand are

sufficient to fund planned operations into 2024.

The Company believes the cash and cash equivalents and marketable securities

on hand are sufficient to fund planned operations through 2023.

3 – Summary of Significant Accounting Policies

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

GAAP”) and reflect the operations of the Company

and its wholly owned subsidiaries.

GAAP”) and reflect the operations of the Company and

its wholly owned subsidiaries.

All intercompany transactions have been eliminated in consolidation.

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This contagious disease outbreak, which has continued

to spread, and any related adverse public health developments, has adversely affected workforces, economics, and financial markets

globally, potentially leading to an economic downturn.

to spread, and any related adverse public health developments, has adversely affected workforces, economics, and financial markets globally,

potentially leading to an economic downturn.

Company has been actively monitoring the COVID-19 pandemic and its impact globally.

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31, 2021 were not significantly impacted by COVID-19.

However, the Company cannot predict the impact of the progression of the

COVID-19 pandemic on future results or the Company’s ability to raise capital due to a variety of factors, including but

not limited to the continued good health of Company employees, the ability of suppliers to continue to operate and deliver, the

ability of the Company to maintain operations, any further government and/or public actions taken in response to the pandemic

and ultimately the length of the pandemic.

However, the Company cannot predict the impact of the progression of the COVID-19

pandemic on future results or the Company’s ability to raise capital due to a variety of factors, including but not limited to

the continued good health of Company employees, the ability of suppliers to continue to operate and deliver, the ability of the Company

to maintain operations, any further government and/or public actions taken in response to the pandemic and ultimately the length of the

preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of

revenue and expenses during the reporting period.

GAAP requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and

expenses during the reporting period.

Actual results could differ from those estimates.

items subject to such estimates and assumptions include, but are not limited to, the assessment of the impairment of goodwill

and intangible assets, level 3 fair value measurement of financial instruments, income tax valuations, the determination of stock-based

compensation, contingent consideration and research and development expenses.

items subject to such estimates and assumptions include, but are not limited to, the Company’s research and development expenses,

the assessment of the impairment of goodwill and intangible assets, level 3 fair value measurement of financial instruments, income tax

valuations, the determination of stock-based compensation and contingent consideration.

and geographic information

segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the

chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company views its operations and manages its business in one operating and reporting segment.

segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief

operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company views

its operations and manages its business in one operating and reporting segment.

cash equivalents and restricted cash

Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be

cash and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified

as marketable securities.

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds

and short-term U.S.

Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash

and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term U.S.

treasury bonds that mature within three months of settlement date.

The Company presents restricted cash with

cash and cash equivalents in the Consolidated Statements of Cash Flows.

Restricted cash represents funds the Company is required

to set aside to cover building operating leases and other purposes.

For a complete disclosure of the Company’s cash, cash

equivalents and restricted cash, see Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Securities.

The Company presents restricted cash with cash and cash equivalents

in the Consolidated Statements of Cash Flows.

Restricted cash represents funds the Company is required to set aside to cover building

operating leases and other purposes.

For a complete disclosure of the Company’s cash, cash equivalents and restricted cash, see

Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Securities.

securities, all of which are available-for-sale, consist of U.S.

treasury bonds and corporate debt securities.

Marketable securities

are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income/(loss), except

for losses from impairments which are determined to be other-than-temporary.

Realized gains and losses and declines in value judged

to be other-than-temporary are included in the determination of net loss and are included in other income, net.

Fair values are

based on quoted market prices at the reporting date.

Interest and dividends on available-for-sale securities are included in other

For a complete disclosure of the Company’s marketable securities, see Note 4 – Cash, Cash Equivalents,

Restricted Cash and Marketable Securities.

treasury bonds, U.S.

government notes, corporate debt securities and

state and municipal bonds.

Marketable securities are carried at fair value, with unrealized gains and losses reported as accumulated

other comprehensive (loss)/income, except for losses from impairments which are determined to be other-than-temporary.

Realized gains

and losses and declines in value judged to be other-than-temporary are included in the determination of net loss and are included in

other income, net.

Fair values are based on quoted market prices at the reporting date.

Interest and dividends on available-for-sale

securities are included in other income, net.

For a complete disclosure of the Company’s marketable securities, see Note 4 –

Cash, Cash Equivalents, Restricted Cash and Marketable Securities.

Concentration

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restricted cash and marketable securities.

Our investment policy is to invest only in institutions that meet high credit quality

standards and establishes limits on the amount and time to maturity of investments with any individual counterparty.

The Company’s investment policy is to invest only in institutions that meet high credit

quality standards and establishes limits on the amount and time to maturity of investments with any individual counterparty.

are maintained at U.S.

financial institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”)

up to regulatory limits.

financial institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to

regulatory limits.

The Company has not experienced any credit losses associated with its balances in such accounts.

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and leasehold improvements are stated at cost less accumulated depreciation and amortization.

Depreciation on equipment is computed

using the straight-line method over the estimated useful lives of the assets, which range from three to ten years.

costs associated with leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life

of the asset or the remaining term of the lease.

Depreciation on equipment is computed using

the straight-line method over the estimated useful lives of the assets, which range from three to ten years .

Capitalized costs associated

with leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or the remaining

term of the lease.

and other intangible assets

is recorded when consideration paid for an acquired entity exceeds the fair value of the net assets acquired.

Goodwill is not

amortized but rather is assessed for impairment at least annually on a reporting unit basis, or more frequently when events and

circumstances indicate the goodwill may be impaired.

GAAP provides that we have the option to perform a qualitative assessment

to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

determine this is the case, we perform further analysis to identify and measure the amount of goodwill impairment loss to be recognized,

Goodwill is not amortized

but rather is assessed for impairment at least annually on a reporting unit basis, or more frequently when events and circumstances indicate

the goodwill may be impaired.

GAAP provides that the Company has the option to perform a qualitative assessment to determine whether

it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

If the Company determine this is

the case, the Company can perform further analysis to identify and measure the amount of goodwill impairment loss to be recognized, if

reporting unit is an operating segment, or one level below an operating segment.

Historically, we conducted our business in a

single operating segment and reporting unit.

Historically, the Company has conducted its business

in a single operating segment and reporting unit.

For the years ended December 31, 2021 and 2020, the Company assessed goodwill impairment

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As part of the qualitative review, the Company considered its cash position

and its ability to obtain additional financing in the near term to meet its operational and strategic goals and substantiate the

value of its business.

Based on the results of the Company’s assessment, it was determined that it is more-likely-than-not

that the fair value of the reporting unit is greater than its carrying amount.

There were no impairments of goodwill during the

years ended December 31, 2020 and 2019.

If a nonrecurring fair value measurement for a goodwill impairment was required, sufficient

information will be provided to permit reconciliation of the fair value of the asset categorized within the fair value hierarchy

as level 3 to the amounts presented in the statement of financial position.

and its ability to obtain additional financing in the near term to meet its operational and strategic goals and substantiate the value

of its business.

Based on the results of the Company’s assessment, it was determined that it is more-likely-than-not that the fair

value of the reporting unit is greater than its carrying amount.

There were no impairments of goodwill during the years ended December

31, 2021 and 2020.

If a nonrecurring fair value measurement for a goodwill impairment was required, sufficient information will be provided

to permit reconciliation of the fair value of the asset categorized within the fair value hierarchy as level 3 to the amounts presented

in the statement of financial position.

lived intangible assets are composed of in-process research and development (“IPR&D”) and represent projects acquired

in a business combination that have not reached technological feasibility or that lack regulatory approval at the time of acquisition.

These IPR&D assets are reviewed for impairment annually, or sooner if events or changes in circumstances indicate that the

carrying amount of the asset may not be recoverable, and upon establishment of technological feasibility or regulatory approval.

An impairment loss, if any, is calculated by comparing the fair value of the asset to its carrying value.

If the asset’s

carrying value exceeds its fair value, an impairment loss is recorded for the difference and its carrying value is reduced accordingly.

Similar to the impairment test for goodwill, the Company may perform a qualitative approach for testing indefinite-lived intangible

assets for impairment.

The Company used the qualitative approach and concluded that it was more-likely-than-not that its indefinite-lived

assets were not impaired during the years ended December 31, 2020 and 2019.

February 2016, the Financial Accounting Standards Board (the “FASB”) established Accounting Standards Codification

(“ASC”) Topic 842, “Leases”, by issuing Accounting Standards Update (“ASU”) No.

2016-02, which

requires lessees to now recognize operating leases on the balance sheet and disclose key information about leasing arrangements.

ASC Topic 842 was subsequently amended by ASU No.

2018-01, Land Easement Practical Expedient for Transition to Topic 842;

2018-10, Codification Improvements to Topic 842, Leases;

2018-11, Targeted Improvements .

The new standard

establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the

balance sheet for all leases with a term longer than 12 months.

Leases will be classified as either finance or operating, with

classification affecting the pattern and classification of expense recognition in the income statement.

Lessor accounting under

the new standard is substantially unchanged.

These IPR&D assets are reviewed for impairment annually, or sooner if events or changes in circumstances indicate that the carrying

amount of the asset may not be recoverable, and upon establishment of technological feasibility or regulatory approval.

An impairment

loss, if any, is calculated by comparing the fair value of the asset to its carrying value.

If the asset’s carrying value exceeds

its fair value, an impairment loss is recorded for the difference and its carrying value is reduced accordingly.

Similar to the impairment

test for goodwill, the Company may perform a qualitative approach for testing indefinite-lived intangible assets for impairment.

Company used the qualitative approach and concluded that it was more-likely-than-not that its indefinite-lived assets were not impaired

during the years ended December 31, 2021 and 2020.

Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 842, “Leases”,

establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance

sheet for all leases with a term longer than 12 months.

Leases will be classified as either finance or operating, with classification

affecting the pattern and classification of expense recognition in the income statement.

Lessor accounting under the new standard is

substantially unchanged.

Additional qualitative and quantitative disclosures are also required.

Company adopted the new standard on January 1, 2019 using the modified retrospective transition method, which applies the provisions

of the standard at the effective date without adjusting the comparative periods presented.

The Company adopted the following practical

expedients and accounting policies elections related to this standard:

lease accounting policy election allowing lessees to not recognize ROU assets and liabilities for leases with a term of 12

months or less;

option to not separate lease and non-lease components in the Company’s lease contracts;

package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing

contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii)

not reassessing the capitalization of initial direct costs for any existing leases.

of this standard resulted in the recognition of operating lease right-of-use assets and corresponding lease liabilities of approximately

$ 4.2 million and approximately $ 4.5 million, respectively, on the consolidated balance sheet as of January 1, 2019.

the Company reclassified $ 0.2 million from leasehold improvements & equipment to finance lease right-of-use assets in connection

with the adoption of ASC Topic 842.

The Company’s accounting for finance leases remained substantially unchanged.

related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 8, Leases.

stock dividends

to automatic conversion on July 29, 2019, shares of Series A Preferred Stock earned dividends at a rate of 8.0 % once per year

on the first, second and third anniversary of July 29, 2016, which was paid to the holders of such Series A Preferred Stock in

the form of shares of the Company’s common stock when converted.

In addition, and subject to provisions detailed more fully

in Note 12, Stockholders’ Equity, shares of Series B Preferred Stock earn dividends at rates of 10 %, 15 % and 20 % once per

year on the first, second and third anniversary, respectively, of June 19, 2018.

Dividends are payable to holders of the Series

B Preferred Stock in the form of shares of the Company’s common stock.

Preferred stock dividends do not require declaration

by the Board of Directors and are accrued annually as of the date the dividend is earned in an amount equal to the applicable

rate of the stated value.

conversion feature of convertible preferred stock

Company accounts for the beneficial conversion feature on its convertible preferred stock in accordance with ASC 470-20, Debt

with Conversion and Other Options .

The Beneficial Conversion Feature (“BCF”) of convertible preferred stock is

normally characterized as the convertible portion or feature that provides a rate of conversion that is below market value or

in-the-money when issued.

The Company records a BCF related to the issuance of convertible preferred stock when issued.

are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

determine the effective conversion price, the Company first allocates the proceeds received to the convertible preferred stock

and then uses those allocated proceeds to determine the effective conversion price.

If the convertible instrument is issued in

a basket transaction (i.e., issued along with other freestanding financial instruments), the proceeds should first be allocated

to the various instruments in the basket.

Any amounts paid to the investor when the transaction is consummated (e.g., origination

fees, due diligence costs) represent a reduction in the proceeds received by the issuer.

The intrinsic value of the conversion

option is measured using the effective conversion price for the convertible preferred stock on the proceeds allocated to that

The effective conversion price represents proceeds allocable to the convertible preferred stock divided by the number

of shares into which it is convertible.

The effective conversion price is then compared to the per share fair value of the underlying

shares on the commitment date.

BCF is recognized by allocating the intrinsic value of the conversion option to additional paid-in capital, resulting in a discount

on the convertible preferred stock.

This discount is accreted from the date on which the BCF is first recognized through the earliest

conversion date for instruments that do not have a stated redemption date.

The intrinsic value of the BCF is recognized as a deemed

dividend on convertible preferred stock over the period specified in the guidance.

to provisions detailed more fully in Note 12, Stockholders’

Equity, shares of Series B Preferred Stock earned dividends at rates of 10 % ,

once per year on the first, second and third

anniversary, respectively, of June 19, 2018.

The dividends were paid when earned to the holders of the Series B Preferred Stock in the

form of shares of the Company’s common stock.

taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating

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are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced

by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred

tax assets will not be realized.

Deferred tax assets are reduced by a

valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets

will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates.

Company adopted the provisions of Accounting Standard Codification 740-10 and has analyzed its filing positions in 2020 and 2019

in jurisdictions where it may be obligated to file returns.

The Company believes that its income tax filing position and deductions

will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.

Therefore, no reserves for uncertain income tax positions have been recorded.

The Company’s policy is to recognize interest

and/or penalties related to income tax matters in income tax expense.

The Company had no accrual for interest or penalties as

of December 31, 2020.

the Company incurred net operating losses in every tax year since inception, the 2014 through 2019 income tax returns are subject

to examination and adjustments by the IRS for at least three years following the year in which the tax attributes are utilized.

Company adopted the provisions of Accounting Standard Codification 740-10 and has analyzed its filing positions in 2021 and 2020 in jurisdictions

where it may be obligated to file returns.

The Company believes that its income tax filing position and deductions will be sustained

on audit and does not anticipate any adjustments that will result in a material change to its financial position.

Therefore, no reserves

for uncertain income tax positions have been recorded.

The Company’s policy is to recognize interest and/or penalties related to

income tax matters in income tax expense.

The Company had no accrual for interest or penalties as of December 31, 2021.

the Company incurred net operating losses in every tax year since inception, the 2014 through 2020 income tax returns are subject to

examination and adjustments by the IRS for at least three years following the year in which the tax attributes are utilized.

Value Measurements

defined in ASC 820 “Fair Value Measurement”, fair value measurements should be disclosed separately by three levels

of the fair value hierarchy.

For assets and liabilities recorded at fair value, it is the Company’s policy to maximize the

use of observable inputs (quoted prices in active markets) and minimized the use of unobservable inputs (the Company’s assumptions)

when developing fair value measurements, in accordance with the established fair value hierarchy.

For a complete disclosure of

the Company’s fair value measurements, see Note 5 – Fair Value Measurements.

compensation to employees consist of stock option grants and restricted shares that are recognized in the consolidated statement

of operations based on their fair values at the date of grant.

Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50,

Equity-Based Payments to Non-Employees based upon the fair-value of the underlying instrument.

The equity instruments,

consisting of stock options granted to consultants, are valued using the Black-Scholes valuation model.

The Company calculates

the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of restricted stock based

upon the estimated fair value or the common stock.

The amount of stock-based compensation recognized during a period is based

on the value of the portion of the awards that are ultimately expected to vest.

defined in ASC 820 “Fair Value Measurement”, fair value measurements should be disclosed separately by three levels of the

fair value hierarchy.

For assets and liabilities recorded at fair value, it is the Company’s policy to maximize the use of observable

inputs (quoted prices in active markets) and minimized the use of unobservable inputs (the Company’s assumptions) when developing

fair value measurements, in accordance with the established fair value hierarchy.

For a complete disclosure of the Company’s fair

value measurements, see Note 5 – Fair Value Measurements.

compensation to employees consist of stock option grants and restricted shares that are recognized in the consolidated statement of operations

based on their fair values at the date of grant.

Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based

Payments to Non-Employees based upon the fair-value of the underlying instrument.

The equity instruments, consisting of stock options

granted to consultants, are valued using the Black-Scholes valuation model.

The Company calculates the fair value of option grants utilizing

the Black-Scholes pricing model and estimates the fair value of restricted stock based upon the estimated fair value or the common stock.

The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately

expected to vest.

The Company accounts for forfeitures as they occur.

The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only

the unvested portion of the surrendered stock option or warrant.

resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line

basis over the requisite service period of the award.

The term “forfeitures” is distinct from “cancellations”

or “expirations” and represents only the unvested portion of the surrendered stock option or warrant.

resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis

over the requisite service period of the award.

and diluted net loss per common share

loss per share information is determined using the two-class method, which includes the weighted-average number of shares of common

stock outstanding during the period and other securities that participate in dividends (a “participating security”).

The Company considered its Preferred Stock to be participating securities because they included rights to participate in dividends

with the common stock.

loss per share information is determined using the two-class method, which includes the weighted-average number of shares of common stock

outstanding during the period and other securities that participate in dividends (a “participating security”).

considered its Preferred Stock to be participating securities because they included rights to participate in dividends with the common

the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net income attributable

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to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the Preferred Stock.

are not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses.

with net income attributable to common stockholders, the Company would allocate net income first to preferred stockholders based

on dividend rights under the Company’s certificate of incorporation and then to preferred and common stockholders based

on ownership interests.

Diluted net loss per share attributable to common stockholders is computed using the more dilutive of

(1) the two-class method or (2) the if-converted method.

Net losses are

not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses.

In periods with

net income attributable to common stockholders, the Company would allocate net income first to preferred stockholders based on dividend

rights under the Company’s certificate of incorporation and then to preferred and common stockholders based on ownership interests.

Diluted net loss per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2)

the if-converted method.

the years ended December 31, 2021 and 2020, diluted earnings per common share is the same as basic earnings per common share because,

as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise

of all outstanding stock options, warrants and conversion of preferred stock, would have an anti-dilutive effect.

The reconciliation

of the diluted shares as of December 31, 2020 and 2019 are as follows (in thousands):

Schedule of Antidilutive Securities

As of December 31,

Stock options

Preferred Stock and accrued dividend upon conversion

to Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that

reflects the consideration to which the entity expects to be intitled in exchange for those goods or services.

To achieve this

core principle, Topic 606 outlines a five-step process for recognizing revenue from customer contracts that includes i) identification

of the contract with a customer, ii) identification of the performance obligations in the contract, iii) determining the transaction

price, iv) allocating the transaction price to the separate performance obligations in the contract, and v) recognizing revenue

associated with performance obligations as they are satisfied.

contract inception, the Company assesses the goods or services promised within each contract and assess whether each promised

good or service is distinct and determine those that are performance obligations.

The Company then recognizes as revenue the amount

of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

the years ended December 31, 2020 and 2019, the Company’s revenues primarily consist of a research grant to provide research

and development services to the Cystic Fibrosis Foundation (“CFF”).

The grant contract has a single performance obligation

that is recognized over time as the services are performed.

as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise of all

outstanding stock options, warrants and conversion of preferred stock, would have an anti-dilutive effect.

The reconciliation of the

diluted shares as of December 31, 2021 and 2020 are as follows (in thousands):

of Anti-dilutive Securities

of December 31,

Stock and accrued dividend upon conversion

to Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects

the consideration to which the entity expects to be entitled in exchange for those goods or services.

To achieve this core principle,

Topic 606 outlines a five-step process for recognizing revenue from customer contracts that includes i) identification of the contract

with a customer, ii) identification of the performance obligations in the contract, iii) determining the transaction price, iv) allocating

the transaction price to the separate performance obligations in the contract, and v) recognizing revenue associated with performance

obligations as they are satisfied.

contract inception, the Company assesses the goods or services promised within each contract and assess whether each promised good or

service is distinct and determine those that are performance obligations.

The Company then recognizes as revenue the amount of the transaction

price that is allocated to the respective performance obligation when the performance obligation is satisfied.

the years ended December 31, 2020, the Company’s revenues primarily consist of a research grant to provide research and development

services to the Cystic Fibrosis Foundation (“CFF”).

The grant contract has a single performance obligation that is recognized

over time as the services are performed.

There are no contract assets or liabilities associated with this grant.

As certain contract performance obligations in this contract were completed, it was the Company’s only contract with revenue

from a customer for 2019 and disaggregation of revenue is not required.

The Company had approximately $ 125.0 thousand and $ 89.8

thousand of CFF research grant revenue for the years ended December 31, 2020 and 2019, respectively.

The Company had approximately

$ 125 thousand of CFF research grant revenue for the year ended December 31, 2020.

December 12, 2019, the Company entered into a feasibility study agreement (the “Agreement”) with Genentech, Inc.

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which enables the development of a wide range of difficult-to-deliver molecules.

Under the terms of the Agreement, Genentech paid

the Company a total of $ 100 .0 thousand for three molecules, or approximately $ 33.3

thousand per molecule, which will be recognized

upon the Company fulfilling its obligations for each molecule under the Agreement.

The Agreement has a single performance obligation

that is recognized over time as the services are performed.

Under the terms of the Agreement, Genentech paid the

Company a total of $ 100 thousand for three molecules, or approximately $ 33 thousand per molecule, which will be recognized upon the Company

fulfilling its obligations for each molecule under the Agreement.

The Agreement has a single performance obligation that is recognized

over time as the services are performed.

There are no contract assets or liabilities associated with this Agreement.

As certain Agreement performance obligations in this agreement were completed, disaggregation of revenue is not required.

December 31, 2020, the Company completed the first of three molecules and the Company recognized approximately $ 33.3

thousand of revenue for the year ended

December 31, 2020.

The Company is scheduled to complete the remaining two molecules during 2021.

As certain Agreement

performance obligations in this agreement were completed, disaggregation of revenue is not required.

As of December 31, 2021, the Company

completed the first and second of the three molecules and the Company recognized approximately $ 33 thousand of Genentech revenue for

the years ended December 31, 2021 and 2020, respectively.

The Company is scheduled to complete the remaining molecule during 2022.

Collaboration

Company assess whether its collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808)

based on whether they involve joint operating activities and whether both parties have active participation in the arrangement

and are exposed to significant risks and rewards.

To the extent that the arrangement falls within the scope of Topic 808, the

Company will apply by analogy the unit of account guidance under Topic 606 to identify distinct performance obligations, and then

determine whether a customer relationship exists for each distinct performance obligation.

If the Company determines a performance

obligation within the arrangement is with a customer, the Company applies the guidance in Topic 606.

If a portion of a distinct

bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of

Topic 606, and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature

or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election.

Company assess whether its collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808) based

on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed

to significant risks and rewards.

To the extent that the arrangement falls within the scope of Topic 808, the Company will apply by analogy

the unit of account guidance under Topic 606 to identify distinct performance obligations, and then determine whether a customer relationship

exists for each distinct performance obligation.

If the Company determines a performance obligation within the arrangement is with a

customer, the Company applies the guidance in Topic 606.

If a portion of a distinct bundle of goods or services within an arrangement

is not with a customer, then the unit of account is not within the scope of Topic 606, and the recognition and measurement of that unit

of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational,

and consistently applied accounting policy election.

terms of such arrangements typically include payments to the Company for one or more of the following:

up-front fees;

and regulatory payments;

development and

regulatory payments;

product supply services;

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profit-sharing arrangements;

royalties on certain products if they are successfully commercialized.

As part of the accounting for these arrangements, the Company

develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified

in the contract.

These key assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement

rates for personnel costs, discount rates and probabilities of technical and regulatory success.

and royalties

on certain products if they are successfully commercialized.

As part of the accounting for these arrangements, the Company develops assumptions

that require judgment to determine the standalone selling price for each performance obligation identified in the contract.

assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount

rates and probabilities of technical and regulatory success.

License Fees:

If the license to the Company’s intellectual property is determined to be distinct from the other performance

obligations identified in the arrangement, the Company would recognize revenues from nonrefundable up-front fees allocated to

the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which

generally would occur at or near the inception of the contract.

For licenses that are bundled with other promises, the Company

would utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance

obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes

of recognizing revenues from nonrefundable up-front fees.

The Company will evaluate the measure of progress at the end of each

reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

obligations identified in the arrangement, the Company would recognize revenues from nonrefundable up-front fees allocated to the license

when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which generally would occur

at or near the inception of the contract.

For licenses that are bundled with other promises, the Company would utilize judgment to assess

the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or

at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenues from nonrefundable

up-front fees.

The Company will evaluate the measure of progress at the end of each reporting period and, if necessary, adjust the measure

of performance and related revenue recognition.

and Development Milestone Payments:

At the inception of each arrangement that includes development milestone payments, the

Company will evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in

the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur,

the associated milestone value is included in the transaction price.

Milestone payments that are not within the Company’s

or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty

associated with the approvals has been resolved.

The transaction price is then allocated to each performance obligation, on a

relative standalone selling price basis, for which the Company will recognize revenue as or when the performance obligations under

the contract are satisfied.

At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving

such development and regulatory milestones and any related variable consideration constraint, and if necessary, adjust our estimate

of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis.

At the inception of each arrangement that includes development milestone payments, the Company

will evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction

price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the associated milestone

value is included in the transaction price.

Milestone payments that are not within the Company’s or the licensee’s control,

such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been

The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which

the Company will recognize revenue as or when the performance obligations under the contract are satisfied.

At the end of each subsequent

reporting period, the Company re-evaluates the probability of achieving such development and regulatory milestones and any related variable

consideration constraint, and if necessary, adjust the Company’s estimate of the overall transaction price.

Any such adjustments

are recorded on a cumulative catch-up basis.

and Development Cost Reimbursements:

The Company’s collaboration arrangements may include promises of future clinical

development and drug safety services, as well as participation on certain joint committees.

When such services are provided to

a customer or partner, and they are distinct from the licenses provided to the Company’s collaboration partners, these promises

are accounted for as a separate performance obligation which the Company estimates using internal development costs incurred and

projections through the term of the arrangements.

The Company records revenues for these services as the performance obligations

are satisfied over time based on measure of progress.

However, if the Company concludes that its collaboration partner is not

a customer for those collaborative research and development activities, it presents such payments as a reduction of research and

development expenses.

The Company’s collaboration arrangements may include promises of future clinical development

and drug safety services, as well as participation on certain joint committees.

When such services are provided to a customer or partner,

and they are distinct from the licenses provided to the Company’s collaboration partners, these promises are accounted for as a

separate performance obligation which the Company estimates using internal development costs incurred and projections through the term

of the arrangements.

The Company records revenues for these services as the performance obligations are satisfied over time based on

measure of progress.

However, if the Company concludes that its collaboration partner is not a customer for those collaborative research

and development activities, it presents such payments as a reduction of research and development expenses.

and Development Arrangement:

Under the terms of our research and development agreement with the Cystic Fibrosis Foundation

Therapeutics, Inc.

(“CFF Agreement”), the Company did not account for this arrangement in accordance with Topic 606.

However, the Company has determined that it is a partner under a collaboration agreement as it shares in the risks and rewards

that would be received if the product is successful and commercialized.

Therefore the funds received under the terms of this agreement

will be recorded as reimbursements of research and development costs and reduce the research and development expenses in the Company’s

Statements of Operations and Comprehensive Income/(Loss).

The Company records the reimbursements for certain materials and other

research and development costs associated with the agreement when it is probable that a significant reversal in the amount of

cumulative costs have been recognized.

As of December 31, 2020, the Company recognized approximately $ 73.4 thousand of reimbursed

research and development costs associated with the CFF Agreement.

For a complete disclosure of the CFF Agreement, see Note 9 –

Collaboration Agreements, License and other Research and Development Agreements.

Under the terms of our research and development agreement with the CFF Agreement, the Company did not

account for this arrangement in accordance with Topic 606.

However, the Company has determined that it is a partner under a collaboration

agreement as it shares in the risks and rewards that would be received if the product is successful and commercialized.

Therefore the

funds received under the terms of this agreement will be recorded as reimbursements of research and development costs and reduce the

research and development expenses in the Company’s Statements of Operations and Comprehensive Income/(Loss).

The Company records

the reimbursements for certain materials and other research and development costs associated with the agreement when it is probable that

a significant reversal in the amount of cumulative costs have been recognized.

As of December 31, 2021 and 2020, the Company recognized

approximately $ 2.2 million and $ 0.1 million, respectively, of reimbursed research and development costs associated with the CFF Agreement.

For a complete disclosure of the CFF Agreement, see Note 9 – Collaboration Agreements, License and other Research and Development

and development expenses

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portfolio, including the following:

research and development expenses incurred under arrangements with third parties, such as contract research organizations

(“CROs”) and other vendors and contract manufacturing organizations (“CMOs”) for the production of

drug substance and drug product;

research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”)

and other vendors and contract manufacturing organizations (“CMOs”) for the production of drug substance and drug product;

employee-related

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and development expenses also include costs of acquired product licenses and related technology rights where there is no alternative

future use, costs of prototypes used in research and development, consultant fees and amounts paid to certain of our collaborative

future use, costs of prototypes used in research and development, consultant fees and amounts paid to certain of our collaborative partners.

research and development expenses are charged to operations as incurred in accordance with FASB ASC Topic 730, Research and Development.

The Company accounts for non-refundable advance payments for goods and services that will be used in future research and development

activities as expenses when the service has been performed or when the goods have been received, rather than when the payment

activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made.

Research and Development Expenses

part of the process of preparing our financial statements, the Company is required to estimate its accrued expenses.

involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating

the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or

otherwise notified of the actual cost.

Certain of the Company’s service providers invoice the Company monthly in arrears

for services performed or when contractual milestones are met.

The Company makes estimates of its accrued expenses as of each

balance sheet date in its financial statements based on facts and circumstances known to the Company at that time.

periodically confirms the accuracy of its estimates with the service providers and adjust if necessary.

The significant estimates

in the Company’s accrued research and development expenses are related to expenses incurred with respect to CROs, CMOs and

other vendors in connection with research and development and manufacturing activities.

Company bases its expense related to CROs and CMOs on its estimates of the services received and efforts expended pursuant to

quotations and contracts with such vendors that conduct research and development and manufacturing activities on its behalf.

financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment

There may be instances in which payments made to the Company’s vendors will exceed the level of services provided

and result in a prepayment of the applicable research and development or manufacturing expense.

In accruing service fees, the

Company estimates the time period over which services will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from its estimate, the Company adjust the accrual

or prepaid expense accordingly.

Although the Company does not expect its estimates to be materially different from amounts actually

incurred, the Company’s understanding of the status and timing of services performed relative to the actual status and timing

of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period.

part of the process of preparing the Company’s financial statements, the Company is required to estimate its accrued expenses.

This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf

and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced

or otherwise notified of the actual cost.

Certain of the Company’s service providers invoice the Company monthly in arrears for

services performed or when contractual milestones are met.

The Company makes estimates of its accrued expenses as of each balance sheet

date in its financial statements based on facts and circumstances known to the Company at that time.

The Company periodically confirms

the accuracy of its estimates with the service providers and adjust if necessary.

The significant estimates in the Company’s accrued

research and development expenses are related to expenses incurred with respect to CROs, CMOs and other vendors in connection with research

and development and manufacturing activities.

Company bases its expense related to CROs and CMOs on its estimates of the services received and efforts expended pursuant to quotations

and contracts with such vendors that conduct research and development and manufacturing activities on its behalf.

The financial terms

of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances

in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the applicable

research and development or manufacturing expense.

In accruing service fees, the Company estimates the time period over which services

will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level

of effort varies from its estimate, the Company adjust the accrual or prepaid expense accordingly.

Although the Company does not expect

its estimates to be materially different from amounts actually incurred, the Company’s understanding of the status and timing of

services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that

are too high or too low in any particular period.

There have been no material changes in estimates for the periods presented.

fees and other direct costs incurred in obtaining and protecting patents are also expensed as incurred and are included in general

and administrative expenses in the consolidated statements of operations.

fees and other direct costs incurred in obtaining and protecting patents are also expensed as incurred and are included in general and

administrative expenses in the consolidated statements of operations.

comprehensive income/(loss)

comprehensive income/(loss) consists of net gains/(losses) and unrealized losses on marketable securities available-for-sale and

is presented in the Consolidated Statements of Operations.

comprehensive income/(loss) consists of net gains/(losses) and unrealized losses on marketable securities available-for-sale and is presented

in the Consolidated Statements of Operations.

adopted accounting pronouncements

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)

2016-13, “Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”.

The standard represents a significant change to the impairment model for most financial assets that are measured at amortized

costs and certain other instruments from an incurred loss model to an expected loss model which will be based on an estimate of

current expected credit loss (“CECL”) and provides targeted improvements on evaluating impairment and recording credit

losses on available-for-sale debt securities through an allowance account.

The guidance is effective for public entities in fiscal

years beginning after December 15, 2019, including interim periods within those fiscal years.

The adoption did not have a material

impact on our consolidated financial statements.

November 2019, the FASB Issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit

The amendments in this standard represent changes to clarify, correct errors in, or improve the Codification.

amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications.

This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The adoption did not have a material impact on our consolidated financial statements.

August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which

will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements.

removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those

fiscal years, beginning after December 15, 2019.

The adoption did not have a material impact on our consolidated financial statements.

November 2018, the FASB issued ASU 2018-18, “Collaboration Arrangements (Topic 808):

Clarifying the Interaction between

Topic 808 and Topic 606”, to clarify when ASC 606 should be used for collaborative arrangements when the counterparty is

The Guidance precludes an entity from presenting consideration from a transaction in a collaborative arrangement as

revenue from the contracts with the customers if the counterparty is not a customer for that transaction.

The guidance is effective

for public entities in fiscal years beginning after December 15, 2019, and interim period therein.

The adoption did not

have a material impact on our consolidated financial statements in 2020, see Note 9 – Collaboration Agreements, License

and other Research and Development Agreements.

accounting pronouncements not yet adopted

December 2019, the FASB Issued ASU 2019-12, “Income Taxes, (Topic 740):

Simplifying the Accounting for Income Taxes”.

This standard removes certain exceptions to the general principles and improves consistent application of and simplify GAAP for

other areas of Topic 740 by clarifying and amending existing guidance.

This standard is effective for fiscal years, and interim

periods within those fiscal years, beginning after December 15, 2020.

The Company is currently evaluating the impact this standard

will have on its consolidated financial statements.

December 2019, the FASB Issued Accounting Standard Update 2019-12, “Income Taxes, (Topic 740):

Simplifying the Accounting

for Income Taxes”.

This standard removes certain exceptions to the general principles and improves consistent application of and

simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

This standard is effective for fiscal years,

and interim periods within those fiscal years, beginning after December 15, 2020.

The Company adopted the new standard effective January

1, 2021 with no material impact on the Company’s consolidated financial statements.

4 – Cash, Cash Equivalents, Restricted Cash and Marketable Securities

Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be

cash and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified

as marketable securities.

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds

and short-term U.S.

Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash

and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term U.S.

treasury bonds that mature within three months of settlement date.

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Company presents restricted cash with cash and cash equivalents in the Consolidated Statements of Cash Flows.

Restricted cash

represents funds the Company is required to set aside to cover building operating leases and other purposes.

following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets

to the total of the amounts in the Consolidated Statements of Cash Flows as of December 31, 2020, December 31, 2019 and December

Restricted cash represents

funds the Company is required to set aside to cover building operating leases and other purposes.

following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to

the total of the amounts in the Consolidated Statements of Cash Flows as of December 31, 2021, December 31, 2020 and December 31, 2019

(in thousands):

Schedule of Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents

Restricted cash included in current/long term assets

Cash, cash equivalents and restricted cash in the statements of cash flows

and cash equivalents

cash included in current/long term assets

cash equivalents and restricted cash in the statements of cash flows

Company has classified its investments in marketable securities as available-for-sale and as a current asset.

The Company’s

investments in marketable securities are carried at fair value, with unrealized gains and losses included as a separate component

of stockholders’ equity.

Unrealized gains and losses are classified as other comprehensive income (loss) and costs are determined

on a specific identification basis.

The Company’s investments

in marketable securities are carried at fair value, with unrealized gains and losses included as a separate component of stockholders’

Unrealized gains and losses are classified as other comprehensive (loss)/income and costs are determined on a specific identification

Realized gains and losses from our marketable securities are recorded in other income, net.

For the years ended December 31, 2020 and 2019, the Company recorded unrealized gains/(losses) of approximately $ 237.5 thousand

and $ 0.9 thousand, respectively, and reclassed approximately $ 8.5 thousand to net loss from operations from the sale of certain

securities during 2020.

As of December 31, 2020 and 2019, the Company had net accumulated unrealized gains of approximately $ 228.2

thousand and net accumulated unrealized losses of approximately $ 0.9 thousand, respectively.

For the years ended December 31, 2021

and 2020, the Company recorded unrealized (losses)/gains of approximately ($ 374 ) thousand and $ 238 thousand, respectively, and reclassed

approximately $ 0 and $ 9 thousand to net realized loss from operations from the sale of certain securities during 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the Company had net accumulated unrealized losses of approximately $ 145 thousand and net accumulated

unrealized gains of approximately $ 228 thousand, respectively.

following tables summarizes the Company’s marketable securities for the year ended December 31, 2021 consisted of the following

(in thousands):

Summary of Cash, Cash Equivalents and Marketable Securities

Summary of Marketable Securities

Amortized Cost

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Unrealized (Loss)

Treasury Bonds

Government Notes

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Schedule of Maturities of Debt Securities Available-for-sale

Due within one year

Due after one year through five years

following tables summarizes the Company’s cash, cash equivalents and marketable securities for the year ended December 31,

2019 consisted of the following (in thousands):

Summary of Cash, Cash Equivalents and Marketable Securities

Carrying Amount

within one year

after one year through five years

following tables summarizes the Company’s marketable securities for the year ended December 31, 2020 consisted of the following

(in thousands):

Amortized Cost

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Unrealized (Loss)

Cash and cash equivalents

Treasury Bonds

Corporate Debt Securities

Total marketable securities

Total cash, cash equivalents and marketable securities

Government Notes

Debt Securities

and Municipal Bonds

marketable securities

of debt securities classified as available-for-sale were as follows at December 31, 2020 (in thousands):

Schedule of Maturities of Debt Securities Available-for-sale

Carrying Amount

Due within one year

Due after one year through five years

Company determined that the unrealized gains and (losses) are deemed to be temporary as of December 31, 2020.

Unrealized gains

and (losses) generally are the result of increases in the risk premiums required by market participants rather than an adverse

change in cash flows for a fundamental weakness in the credit quality of the issuer or underlying assets.

The Company has the

ability and intent to hold these investments until maturity.

The Company does not consider the investment in marketable securities

to be other-than-temporarily impaired at December 31, 2020.

within one year

after one year through five years

Company determined that the unrealized (losses) and gains are deemed to be temporary as of December 31, 2021 and 2020.

Unrealized (losses)

and gains generally are the result of increases in the risk premiums required by market participants rather than an adverse change in

cash flows for a fundamental weakness in the credit quality of the issuer or underlying assets.

The Company has the ability and intent

to hold these investments until maturity.

The Company does not consider the investment in marketable securities to be other-than-temporarily

impaired at December 31, 2021 and 2020.

5 - Fair Value Measurements

Company uses the fair value hierarchy to measure the value of its financial instruments.

The fair value hierarchy is based on

inputs to valuation techniques that are used to measure fair value that are either observable or unobservable.

Observable inputs

reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent

sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions.

for fair value measurements for each level within the hierarchy is described below:

The fair value hierarchy is based on inputs

to valuation techniques that are used to measure fair value that are either observable or unobservable.

Observable inputs reflect assumptions

market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable

inputs reflect a reporting entity’s pricing based upon its own market assumptions.

The basis for fair value measurements for each

level within the hierarchy is described below:

1 – Quoted prices for identical assets or liabilities in active markets.

2 – Quoted prices for identical or similar assets and liabilities in markets that are not active;

or other model-derived

valuations whose inputs are directly or indirectly observable or whose significant value drivers are observable.

3 – Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are

unobservable and for which assumptions are used based on management estimates.

Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to

the extent possible as well as considers counterparty credit risk in its assessment of fair value.

carrying amounts of certain cash and cash equivalents, current portion of restricted cash, marketable securities, prepaid expenses

and other current assets, accounts payable, current portion of lease liability and accrued expenses approximate fair value due

to the short-term nature of these instruments.

or other model-derived valuations

whose inputs are directly or indirectly observable or whose significant value drivers are observable.

3 – Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable

and for which assumptions are used based on management estimates.

Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent

possible as well as considers counterparty credit risk in its assessment of fair value.

carrying amounts of certain cash and cash equivalents, current portion of restricted cash, marketable securities, prepaid expenses and

other current assets, accounts payable, current portion of lease liability and accrued expenses approximate fair value due to the short-term

nature of these instruments.

summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows (in thousands):

Schedule of Fair Value Measurement of Assets and Liabilities

Fair Value Hierarchy

December 31, 2020

Marketable Securities:

Treasury Bonds

Value Hierarchy

Government Notes

Corporate Debt Securities

State and Municipal Bonds

Fair Value Hierarchy

December 31, 2019

Cash and cash equivalents

Marketable Securities:

Debt Securities

and Municipal Bonds

Value Hierarchy

Treasury Bonds

Corporate Debt Securities

treasury bonds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices for

identical assets in active markets.

Government Notes

Debt Securities

and Municipal Bonds

treasury bonds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical

assets in active markets.

Marketable securities consisting of U.S.

government notes, corporate debt securities and state

and municipal bonds are classified as Level 2 and are valued using quoted market prices in markets that are not active.

government notes, corporate debt securities and state and municipal

bonds are classified as Level 2 and are valued using quoted market prices in markets that are not active.

6 – Leasehold Improvements and Equipment

improvements and equipment, summarized by major category, consist of the following for the years ended December 31, 2020 and 2019

(in thousands):

improvements and equipment, summarized by major category, consist of the following for the years ended December 31, 2021 and 2020 (in

Schedule of Leasehold Improvements and Equipment

Lab equipment

Leasehold improvements

accumulated depreciation and amortization

Leasehold improvements and equipment, net

and amortization expense for the years ended December 31, 2020 and 2019 was approximately $ 231.1 thousand and $ 206 .0 thousand,

respectively.

Due to the adoption of the new lease accounting pronouncement in January 2019 and the reclass of certain right-of-use

assets upon adoption, the Company reclassed $ 559 thousand and $ 72 thousand of assets and related accumulated depreciation, respectively.

In addition, in July 2019, the Company recorded an asset write-off of approximately $ 14 thousand, including $ 7 thousand of related

accumulated depreciation.

improvements and equipment, net

and amortization expense for the years ended December 31, 2021 and 2020 was approximately $ 244 thousand and $ 231 thousand, respectively.

During the years ended December 31, 2021 and 2020, the Company purchased equipment and leasehold improvements of approximately $ 260 thousand

and $ 6 thousand, respectively.

During the year ended December 31, 2021, the Company recorded an asset write-off of approximately $ 6 thousand,

including $ 4 thousand of related accumulated depreciation.

The Company had no asset write-offs during the year ended December 31, 2020.

7 – Accrued Expenses and Other Liabilities

expenses and other liabilities, summarized by major category, consist of the following for years ended December 31, 2020 and 2019

(in thousands):

expenses and other liabilities, summarized by major category, consist of the following for years ended December 31, 2021 and 2020 (in

Schedule of Accrued Expenses

As of December 31,

Payroll and incentives

General and administrative expenses

Research and development expenses

Deferred revenue and other deferred liabilities *

December 31, 2020, approximately $ 576.6 thousand is the remaining balance of the CFF Agreement’s deferred liability

and approximately $ 66.6 thousand is deferred revenue related to the Genentech feasibility study agreement.

The $ 100.0 thousand

of deferred revenue at December 31, 2019 is the upfront payment for the Genentech feasibility study agreement.

Company has various lease agreements with terms up to 10 years , including leases of office space, a laboratory and manufacturing

facility, and various equipment.

of December 31,

and incentives

and administrative expenses

and development expenses

revenue and other deferred liabilities *

December 31, 2021, the balance included approximately $ 899 thousand related to the CFF Agreement’s deferred liability and approximately

$ 33 thousand is deferred revenue related to the Genentech feasibility study agreement.

At December 31, 2020, the balance included

approximately $ 577 thousand related to the CFF Agreement’s deferred liability and approximately $ 67 thousand of deferred revenue

related to the Genentech feasibility study agreement.

Company has various lease agreements with terms up to 10 years , including leases of office space, a laboratory and manufacturing facility,

and various equipment.

Some leases include purchase, termination or extension options for one or more years.

These options

are included in the lease term when it is reasonably certain that the option will be exercised.

These options are included

in the lease term when it is reasonably certain that the option will be exercised.

lease obligations

November 1, 2013, the Company entered into a 7 -year lease for office space in Bedminster, New Jersey which commenced in June,

2014 at a monthly rent of approximately $ 13,000 , increasing to approximately $ 14,000 per month toward the end of the term, which

The Company was obligated to provide an initial security deposit of $ 300,000 to obtain the office lease space.

of December 31, 2020, the total deposit had been returned to the Company.

November 1, 2013, the Company entered into a 7 -year lease for office space in Bedminster, New Jersey which commenced in June 2014 at

a monthly rent of approximately $ 13,000 , increasing to approximately $ 14,000 per month toward the end of the term.

September 23, 2020, the Company entered into an amendment to the Bedminster lease.

Pursuant to the amendment, the Company will

lease an additional 3,034 rentable square feet (“Expansion Premises”).

The amendment becomes effective upon the date

on which the landlord delivers to the Company the Expansion Premises, which is expected to occur in the second quarter of 2021,

and extends the term of the lease for seven years from such date.

There is no renewal option, no security deposit, no residual

value or significant restrictions or covenants other than those customary in such arrangements.

Except as expressly provided,

all other terms, covenants, conditions and agreements as set forth in the lease will remain unchanged and in full force and effect.

The total lease commitment over the seven-year extension period is approximately $ 1.8 million.

December 15, 2016, the Company entered into a 10-year, 3-month lease to consolidate our locations while expanding our laboratory

and manufacturing facilities.

Pursuant to the amendment, the Company leased an additional

3,034 rentable square feet (“Expansion Premises”).

The amendment became effective upon delivery to the Company of the Expansion

Premises, which occurred on August 1, 2021, and extends the term of the lease for seven years from such date.

There is no renewal option,

no security deposit, no residual value or significant restrictions or covenants other than those customary in such arrangements.

as expressly provided, all other terms, covenants, conditions and agreements as set forth in the lease will remain unchanged and in full

force and effect.

December 15, 2016, the Company entered into a 10-year, 3-month lease to consolidate our locations while expanding our laboratory and

manufacturing facilities.

The lease began August 2017.

The monthly rent will start at approximately $ 43,000 increasing to

approximately $ 64,000 in the final year.

To obtain the laboratory and facility site, the Company was obligated to provide an initial

security deposit of $ 586,000 .

This deposit was subsequently reduced to $ 286,000 .

It can be further reduced by $ 86,000 on the next

anniversary of the rent commencement date, after which it will remain at $ 200,000 for the balance of the lease term.

assets and liabilities from operating and finance leases are recognized at the lease commencement date based on the present value

of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when

readily determinable.

The monthly rent will start at approximately $ 43,000 increasing to approximately

$ 64,000 in the final year.

To obtain the laboratory and facility site, the Company was obligated to provide an initial security deposit

of $ 586,000 .

This deposit was subsequently reduced and is currently $ 200,000 at December 31, 2021.

assets and liabilities from operating and finance leases are recognized at the lease commencement date based on the present value of

remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable.

Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Company’s operating leases do not provide an implicit rate that can readily be determined.

Therefore, the Company uses a

discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated

in the Company’s finance leases.

Company incurred lease expense for its operating leases of approximately $ 813.7 thousand for the years ended December 31, 2020

Therefore, the Company uses a discount

rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s

finance leases.

Company incurred lease expense for its operating leases of approximately $ 852 thousand and $ 814 thousand for the years ended December

31, 2021 and 2020.

The Company incurred amortization expense on its operating lease right-of-use assets of approximately $ 501 thousand

and $ 485 thousand for the years ended December 31, 2021 and 2020, respectively.

Company incurred interest expense on its finance leases of approximately $ 6.7 thousand and $ 11.7 thousand for the years ended

December 31, 2020 and 2019, respectively.

The Company incurred amortization expense on its finance lease right-of-use assets of

approximately $ 59.0 thousand and $ 122.8 thousand for the years ended December 31, 2020 and 2019, respectively.

following table presents information about the amount and timing of liabilities arising from the Company’s operating leases,

excluding the Expansion Premises of the amended Bedminster lease which the Company has not taken control of as of December 31,

2020, and finance leases as of December 31, 2020 (in thousands):

Company incurred interest expense on its finance leases of approximately $ 3 thousand and $ 7 thousand for the years ended December 31,

2021 and 2020, respectively.

The Company incurred amortization expense on its finance lease right-of-use assets of approximately $ 36

thousand and $ 59 thousand for the years ended December 31, 2021 and 2020, respectively.

following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and

finance leases as of December 31, 2021 (in thousands):

Schedule of Maturity of Operating and Finance Leases Liabilities

Maturity of Lease Liabilities

Operating Lease Liabilities

Finance Lease Liabilities

Total undiscounted operating lease payments

of Lease Liabilities

Lease Liabilities

undiscounted operating lease payments

Imputed interest

Present value of operating lease liabilities

Weighted average remaining lease term in years

Weighted average discount rate

following table presents information about the amount and timing of liabilities arising from the Company’s operating and

finance leases as of December 31, 2019 (in thousands):

Maturity of Lease Liabilities

Operating Lease Liabilities

Finance Lease Liabilities

Total undiscounted operating lease payments

value of operating lease liabilities

average remaining lease term in years

average discount rate

following table presents information about the amount and timing of liabilities arising from the Company’s operating and finance

leases as of December 31, 2020 (in thousands):

of Lease Liabilities

Lease Liabilities

undiscounted operating lease payments

Imputed interest

Present value of operating lease liabilities

Weighted average remaining lease term in years

Weighted average discount rate

value of operating lease liabilities

average remaining lease term in years

average discount rate

9 - Collaboration Agreements, License and Other Research and Development Agreements

Fibrosis Foundation Therapeutics Development Award

November 19, 2020, the Company entered into an award agreement (the “Agreement”) with Cystic Fibrosis Foundation (“CFF”),

pursuant to which it received a Therapeutics Development Award of up to $ 4.2 million (the “Award”) (of which $ 484,249

had been previously received) to support the preclinical development (the “Development Program”) of the Company’s

MAT2501 product candidate (the “Product”), a lipid nanocrystal oral formulation of the broad-spectrum aminoglycoside

amikacin, for the treatment of pulmonary non-tubercular mycobacteria infections and other pulmonary diseases (the “Field”).

first payment under the Agreement, in the amount of $ 650.0

thousand, became due upon execution of

the Agreement.

The Company invoiced the CFF in November 2020 and payment was subsequently received in February 2021.

31, 2020, the related receivable of $ 650.0

thousand is included in prepaid expenses

and other current assets and the related deferred liability balance of $ 576.6

is included in accrued expense and other current liabilities.

The remainder of the Award will be paid to the Company incrementally

in installments upon the achievement of certain milestones related to the development program and progress of the Development

Program, as set forth in the Agreement.

November 19, 2020, the Company entered into an award agreement (the “Agreement”) with CFF, pursuant to which it received

a Therapeutics Development Award of up to $ 4.2 million (the “Award”) (of which $ 484,249 had been previously received) to

support the preclinical development (the “Development Program”) of the Company’s MAT2501 product candidate (the “Product”),

a LNC oral formulation of the broad-spectrum aminoglycoside amikacin, for the treatment of pulmonary non-tubercular mycobacteria infections

and other pulmonary diseases (the “Field”).

On November 19, 2021, the Company and CFF entered into an Amendment to the Agreement

which added an additional milestone payment in the amount of $ 321 thousand.

The milestone payment was invoiced and the payment was received

in the fourth quarter of 2021.

first payment under the Agreement, in the amount of $ 650 thousand, became due upon execution of the Agreement.

The Company invoiced the

CFF in November 2020 and payment was subsequently received in February 2021.

During 2021, the Company invoiced and received $ 2.5 million

related to Agreement and the related deferred liability balance of $ 899 thousand is included in accrued expense and other current liabilities.

The remainder of the Award will be paid to the Company upon the achievement of certain milestones related to the development program

and progress of the Development Program, as set forth in the Agreement.

the Company ceases to use commercially reasonable efforts directed to the development of MAT2501 in the Field, (an “Interruption”)

and fails to resume the development of the Product after receiving from CFF notice of an Interruption, then the Company must either

repay the amount of the Award actually received by the Company, or grant to CFF (1) an exclusive (even as to the Company), worldwide,

perpetual, sublicensable license under technology developed under the Agreement that covers the Product for use in treating infections

in CF patients (the “CF Field”), and (2) a non-exclusive, worldwide license under certain background intellectual

property covering the Product, to the extent necessary to commercialize the Product in the CF Field.

to the terms of the Agreement, the Company is obligated to make royalty payments to CFF contingent upon commercialization of the

Product in the Field up to a maximum of five (5) times the Award or approximately $ 21.2 million (the “Royalty Cap”),

payable in three equal annual installments following the first commercial sale of the Product, the first of which is due within

90 days following the first commercial sale of the Product.

The Company may also be obligated to make a payment to CFF if the

Company transfers, sells or licenses the Product in the CF Field, or if the Company enters into a change of control transaction

which will be applied against the Royalty Cap.

In addition, the Company is also obligated to make up the two royalty payments

of CFF of the approximately $ 4.2 million each, due in the calendar years in which specific net sales milestones are achieved.

term of the Agreement commenced on November 19, 2020 and expires on the earlier of the date on which the Company has paid CFF

all of the fixed royalty payments set forth therein, the effective date of any license granted to CFF following an Interruption,

or upon earlier termination of the Agreement.

Either CFF or the Company may terminate the agreement for cause, which includes

the Company’s material failure to achieve certain development milestones.

The Company’s payment obligations survive

the termination of the Agreement.

and fails to resume the development of the Product after receiving from CFF notice of an Interruption, then the Company must either repay

the amount of the Award actually received by the Company, or grant to CFF (1) an exclusive (even as to the Company), worldwide, perpetual,

sublicensable license under technology developed under the Agreement that covers the Product for use in treating infections in CF patients

(the “CF Field”), and (2) a non-exclusive, worldwide license under certain background intellectual property covering the

Product, to the extent necessary to commercialize the Product in the CF Field.

to the terms of the Agreement, the Company is obligated to make royalty payments to CFF contingent upon commercialization of the Product

in the Field up to a maximum of five (5) times the Award or approximately $ 21.2 million (the “Royalty Cap”), payable in three

equal annual installments following the first commercial sale of the Product, the first of which is due within 90 days following the

first commercial sale of the Product.

The Company may also be obligated to make a payment to CFF if the Company transfers, sells or licenses

the Product in the CF Field, or if the Company enters into a change of control transaction which will be applied against the Royalty

In addition, the Company is also obligated to make up the two royalty payments of CFF of the approximately $ 4.2 million each, due

in the calendar years in which specific net sales milestones are achieved.

term of the Agreement commenced on November 19, 2020 and expires on the earlier of the date on which the Company has paid CFF all of

the fixed royalty payments set forth therein, the effective date of any license granted to CFF following an Interruption, or upon earlier

termination of the Agreement.

Either CFF or the Company may terminate the agreement for cause, which includes the Company’s material

failure to achieve certain development milestones.

The Company’s payment obligations survive the termination of the Agreement.

Company concluded that the CFF award is in the scope of ASC 808.

Accordingly, as discussed in Note 3, the award amounts received

from CFF upon achievement of certain milestones are recognized as credits to research and development expenses in the period the

Development Program’s expenses are incurred.

During the year ended December 31, 2020, the Company recognized $ 73.4 thousand,

as credits to research and development expenses related to the CFF award.

In addition, the Company concluded under the guidance

in ASC 730 that it does not have an obligation to repay funds received once related research and development expenses are incurred.

Accordingly, as discussed in Note 3, the award amounts received from

CFF upon achievement of certain milestones are recognized as credits to research and development expenses in the period the Development

Program’s expenses are incurred.

During the years ended December 31, 2021 and 2020, the Company recognized $ 2.2 million and $ 0.1

million, respectively, as credits to research and development expenses related to the CFF award.

In addition, the Company concluded under

the guidance in ASC 730 that it does not have an obligation to repay funds received once related research and development expenses are

Feasibility Study Agreement

1 unchanged sentence

(“Genentech”).

This feasibility study agreement will involve the development of oral formulations using the Company’s LNC platform delivery

technology, which enables the development of a wide range of difficult-to-deliver molecules.

Under the terms of the Agreement,

Genentech shall pay to the Company a total of $100.0 thousand for three molecules, or approximately $33.3 thousand per molecule,

which will be recognized upon the Company fulfilling its obligations for each molecule under the Agreement.

On December 13, 2019,

per Genentech’s request, the Company billed Genentech for the total $ 100 thousand and recorded the upfront consideration

as deferred revenue, which is recorded in accrued expenses on the consolidated balance sheets, and will recognize it over the

term of the contract performance obligation period.

As of December 31, 2020, the Company completed the first of three molecules

and the Company recognized approximately $ 33.3 thousand of Genentech revenue for the year ended December 31, 2020.

did not complete any contract performance obligations during 2019.

This feasibility study agreement will involve the development of oral formulations using the Company’s LNC platform delivery technology,

which enables the development of a wide range of difficult-to-deliver molecules.

Under the terms of the Agreement, Genentech shall pay

to the Company a total of $100.0 thousand for three molecules, or approximately $33 thousand per molecule, which will be recognized upon

the Company fulfilling its obligations for each molecule under the Agreement.

On December 13, 2019, per Genentech’s request, the

Company billed Genentech for the total $ 100 thousand and recorded the upfront consideration as deferred revenue, which is recorded in

accrued expenses on the consolidated balance sheets, and will recognize it over the term of the contract performance obligation period.

As of December 31, 2021, the Company completed the first and second of the three molecules and the Company recognized approximately $ 33

thousand of Genentech revenue for the years ended December 31, 2021 and 2020, respectively.

The Company is scheduled to complete the

remaining molecule during 2022.

Research and development agreements

Company has financial obligations resulting from Cooperative Research and Development Agreements (“CRADAs”) entered

into with the with the National Institute of Allergy and Infectious Diseases (“NIH”) as follows:

Company has financial obligations resulting from Cooperative Research and Development Agreements (“CRADAs”) entered into

with the with the National Institute of Allergy and Infectious Diseases (“NIH”) as follows:

February 19, 2016, the Company agreed to provide funds in the amount of $ 200,000 per year under a CRADA to support NIH investigators

in the conduct of clinical research to investigate the safety, efficacy, and pharmacokinetics of LNC platform drug products

in patients with fungal, bacterial, or viral infections.

in the conduct of clinical research to investigate the safety, efficacy, and pharmacokinetics of LNC platform drug products in patients

with fungal, bacterial, or viral infections.

The initial term of the CRADA was three years.

On April 16, 2019,

the Company renewed the CRADA for an additional three years with an annual funding commitment of $ 200,000 .

On April 16, 2019, the Company renewed

the CRADA for an additional three years with an annual funding commitment of $ 200,000 .

April 2, 2019, the Company agreed to provide funds in the amount of $ 157,405 per year under a CRADA to support NIH investigators

in the conduct of clinical research to investigate the safety, efficacy, and pharmacokinetics of LNC platform drug products

in patients with fungal, bacterial, or viral infections.

in the conduct of clinical research to investigate the safety, efficacy, and pharmacokinetics of LNC platform drug products in patients

with fungal, bacterial, or viral infections.

The term of the CRADA is three years.

the acquisition of Aquarius, the Company acquired a license from Rutgers University, The State University of New Jersey (successor

in interest to the University of Medicine and Dentistry of New Jersey) for the LNC platform delivery technology.

The Amended and

Restated Exclusive License Agreement provides for, among other things, the payment of (1) royalties on a tiered basis between

low single digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales milestone

fee of $ 100,000 when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual

license fee of initially $ 10,000 , increasing to the current fee amount of $ 50,000 over the term of the license agreement.

the acquisition of Aquarius, the Company acquired a license from Rutgers University, The State University of New Jersey (successor in

interest to the University of Medicine and Dentistry of New Jersey) for the LNC platform delivery technology.

The Second Amended and

Restated Exclusive License Agreement provides for, among other things, the payment of (1) royalties on a tiered basis between low single

digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales milestone fee of $ 100,000

when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual license fee of $ 50,000

over the term of the license agreement.

10 – Commitments

payment rights

September 12, 2016 the Company conducted a final closing of a private placement offering to accredited investors of shares of

the Company’s Series A Preferred Stock.

As part of this offer, the investors received royalty payment rights if and when

the Company generates sales of its MAT2203 or MAT2501 product candidates.

Pursuant to the terms of the Series A Certificate of

Designation, the Company may be required to pay royalties of up to $ 35 million per year.

If and when the Company obtains FDA or

the European Medicines Agency (“EMA”) approval of MAT2203 and/or MAT2501, which the Company does not expect to occur

before 2023, if ever, and/or if the Company generates sales of such products, or the Company receives any proceeds from the licensing

or other disposition of MAT2203 or MAT2501, the Company is required to pay to the holders of the Series A Preferred Stock, subject

to certain vesting requirements, in the aggregate, a royalty (the “Royalty Payment Rights”) equal to (i) 4.5% of Net

Sales (as defined in the Series A Certificate of Designation), subject in all cases to a cap of $ 25 million per calendar year,

and (ii) 7.5% of Licensing Proceeds (as defined in the Series A Certificate of Designation), subject in all cases to a cap of

$ 10 million per calendar year.

The Royalty Payment Rights will expire when the patents covering the applicable product expire,

which is currently expected to be in 2033 .

Company also has employment agreements with certain employees which require the funding of a specific level of payments, if certain

events, such as a change in control, termination without cause or retirement, occur.

of Aquarius Biotechnologies, Inc.

(now known as Matinas BioPharma Nanotechnologies, Inc.)

to the terms of the merger agreement with Aquarius Biotechnologies, Inc., the Company may be required to issue up to an additional

3,000,000 shares of our common stock upon the achievement of certain milestones.

The milestone consideration consists of (i) 1,500,000

shares issuable upon the dosing of the first patient in a phase III trial sponsored by us for a product utilizing Aquarius’

proprietary LNC platform delivery technology and (ii) 1,500,000 shares issuable upon FDA approval of the first NDA submitted by

us for a product utilizing Aquarius’ proprietary LNC platform delivery technology.

The Company concluded that the contingent

share issuance represented equity settled contingent consideration and have recorded the amounts to equity since inception.

of these milestones have been reached, and accordingly, as of December 31, 2020 no additional shares have been issued.

September 12, 2016 the Company conducted a final closing of a private placement offering to accredited investors of shares of the Company’s

Series A Preferred Stock.

As part of this offer, the investors received royalty payment rights if and when the Company generates sales

of its MAT2203 or MAT2501 product candidates.

Pursuant to the terms of the Series A Certificate of Designation, the Company may be required

to pay royalties of up to $ 35 million per year.

If and when the Company obtains FDA or the European Medicines Agency (“EMA”)

approval of MAT2203 and/or MAT2501, which the Company does not expect to occur before 2023, if ever, and/or if the Company generates

sales of such products, or the Company receives any proceeds from the licensing or other disposition of MAT2203 or MAT2501, the Company

is required to pay to the holders of the Series A Preferred Stock, subject to certain vesting requirements, in the aggregate, a royalty

(the “Royalty Payment Rights”) equal to (i) 4.5% of Net Sales (as defined in the Series A Certificate of Designation), subject

in all cases to a cap of $ 25 million per calendar year, and (ii) 7.5% of Licensing Proceeds (as defined in the Series A Certificate of

Designation), subject in all cases to a cap of $ 10 million per calendar year.

The Royalty Payment Rights will expire when the patents

covering the applicable product expire, which is currently expected to be in 2033 .

Company also has employment agreements with certain employees which require the funding of a specific level of payments, if certain events,

such as a change in control, termination without cause or retirement, occur.

normal business operating agreements

addition, in the course of normal business operations, the Company enters into agreements with contract service providers to assist

in the performance of research & development and manufacturing activities.

addition, in the course of normal business operations, the Company enters into agreements with contract service providers to assist in

the performance of research & development and manufacturing activities.

Expenditures to these third parties represent significant

4 unchanged sentences

Company utilizes the liability method of accounting for deferred income taxes.

Under this method, deferred tax liabilities and

assets are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax

basis of assets and liabilities.

A valuation allowance is established against deferred tax assets when, based on the weight of

available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company’s

policy is to record interest and penalties on uncertain tax positions as income tax expense.

As of December 31, 2020 and 2019,

the Company does not believe any material uncertain tax positions were present.

Accordingly, interest and penalties have not been

accrued due to an uncertain tax position.

Under this method, deferred tax liabilities and assets

are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets

and liabilities.

A valuation allowance is established against deferred tax assets when, based on the weight of available evidence, it

is more likely than not that some or all of the deferred tax assets will not be realized.

The Company’s policy is to record interest

and penalties on uncertain tax positions as income tax expense.

As of December 31, 2021 and 2020, the Company does not believe any material

uncertain tax positions were present.

Accordingly, interest and penalties have not been accrued due to an uncertain tax position.

components of the income tax provision are as follows (in thousands):

Schedule of Income Tax Provision

of Income Tax Provision

Ended December 31,

expense (benefit):

current expense (benefit):

Total current expense (benefit):

expense (benefit):

deferred expense (benefit):

Total deferred expense (benefit):

Total income tax expense (benefit):

income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

income tax expense (benefit):

income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for income tax purposes.

A reconciliation of the statutory U.S.

federal rate to the Company’s

effective tax rate is as follows:

Schedule of Effective Income Tax Rate Reconciliation

Year Ended December 31,

Income at US Statutory Rate

State Taxes, net of Federal benefit

Permanent Differences

Valuation Allowance

Discrete items

Company has no current income taxes payable other than certain state minimum taxes which are included in general and administrative

federal rate to the Company’s effective

tax rate is as follows:

of Effective Income Tax Rate Reconciliation

Ended December 31,

at US Statutory Rate

Taxes, net of Federal benefit

income tax rate

Company has no current income taxes payable other than certain state minimum taxes which are included in general and administrative expenses.

components of the Company’s deferred tax assets (liabilities) for 2021 and 2020 consist of the following (in thousands):

Schedule of Deferred Tax Assets and Liabilities

Year Ended December 31,

Share-based Compensation

Depreciation and Amortization

Accrued Liability

Net Operating Loss Carry-forwards

R&D Credit Carryforwards

ROU Liability

Total Deferred tax assets

Valuation allowance

Net deferred tax asset (liability)

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to

the Internal Revenue Code.

of Deferred Tax Assets and Liabilities

Ended December 31,

and Amortization

Operating Loss Carry-forwards

Credit Carryforwards

Deferred tax assets

deferred tax asset (liability)

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal

Revenue Code.

The changes include but are not limited to:

allowing companies to carryback certain net operating

losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income.

tax law changes in the Act did not have a material impact on the Company’s income tax provision.

assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the

generation of taxable income during the periods in which the temporary differences representing net future deductible amounts

become deductible, and is impacted by the Company’s ability to carryforward losses to years in which the Company has taxable

Due to the Company’s history of losses and lack of other positive evidence to support taxable income, the Company

has recorded a valuation allowance against those deferred tax assets that are not expected to be realized.

The valuation allowance

was approximately $ 25.2 million and approximately $ 19.7 million as of December 31, 2020 and 2019, respectively, representing an

increase of approximately $ 5.5 million.

of December 31, 2020, the Company had Federal net operating loss carryforwards of approximately $ 38.1 million which will begin to expire in 2032 .

In addition, the Company has federal net operating loss carryforwards

of approximately $ 45.0 million which have an indefinite carryforward period.

The Company also

had federal and state research and development tax credit carryforwards of approximately $ 2.3 million.

The federal net operating

loss and tax credit carryforwards will expire at various dates beginning in 2033, if not utilized.

The difference between the

statutory tax rate and the effective tax rate is primarily attributable to the valuation allowance offsetting deferred tax assets.

allowing companies to carryback certain net operating losses, and increasing

the amount of net operating loss carryforwards that corporations can use to offset taxable income.

The tax law changes in the Act did

not have a material impact on the Company’s income tax provision.

assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all

of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of

taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible, and

is impacted by the Company’s ability to carryforward losses to years in which the Company has taxable income.

Due to the Company’s

history of losses and lack of other positive evidence to support taxable income, the Company has recorded a valuation allowance against

those deferred tax assets that are not expected to be realized.

The valuation allowances were approximately $ 31.0

$ 25.2 million

and $ 19.7 million as of December 31, 2021, 2020 and 2019, respectively, representing increases of approximately

$ 5.8 million

and $ 5.5 million for the years ending December 31, 2021 and 2020, respectively.

of December 31, 2021, the Company had Federal net operating loss carryforwards of approximately $ 38.1 million which will begin to expire

In addition, the Company has federal net operating loss carryforwards of approximately $ 63.3 million which have an indefinite

carryforward period.

The Company also had federal and state research and development tax credit carryforwards of approximately $ 3.2 million.

The federal net operating loss and tax credit carryforwards will expire at various dates beginning in 2033, if not utilized.

The difference

between the statutory tax rate and the effective tax rate is primarily attributable to the valuation allowance offsetting deferred tax

of the net operating losses and general business tax credits carryforwards may be subject to a substantial limitation under Sections

382 and 383 of the Internal Revenue Code of 1986 due to changes in ownership of the Company that have occurred previously or that

could occur in the future.

These ownership changes may limit the amount of net operating losses and general business tax credits

carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

In general, an ownership change,

as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the

stock of a corporation by more than 50 percentage points over a three-year period.

The Company has not completed a study to determine

whether it had undergone an ownership change since the Company’s inception

382 and 383 of the Internal Revenue Code of 1986 due to changes in ownership of the Company that have occurred previously or that could

occur in the future.

These ownership changes may limit the amount of net operating losses and general business tax credits carryforwards

that can be utilized annually to offset future taxable income and tax, respectively.

In general, an ownership change, as defined by Section

382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more

than 50 percentage points over a three-year period.

The Company has not completed a study to determine whether it had undergone an ownership

change since the Company’s inception

of net operating losses (NOLs)

Company recognized approximately $ 1.1 million and $ 1.0 million for the years ended December 31, 2020 and 2019, respectively, in

connection with the sale of certain State of New Jersey Net Operating Losses (“NOL”) and Research and Development

(“R&D”) tax credits to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

In addition, the Tax Cuts and Jobs Act, signed into law on December 22, 2017 imposes significant additional limitations on the

deductibility of interest and limits net operating loss (NOL) deductions to 80% of net taxable income for losses arising in taxable

years beginning after December 31, 2017.

This NOL limitation has currently been suspended for years 2018 through 2020 as a result

of the CARES Act.

Company recognized approximately $ 1.3

million and $ 1.1

million for the years ended December 31, 2021

and 2020, respectively, in connection with the sale of certain State of New Jersey Net Operating Losses (“NOL”) and Research

and Development (“R&D”) tax credits to a third party under the New Jersey Technology Business Tax Certificate Transfer

the Tax Cuts and Jobs Act, signed into law on December 22, 2017 imposes significant additional limitations on the deductibility of interest

and limits NOL deductions to 80% of net taxable income for losses arising in taxable years beginning after December 31, 2017 .

This NOL limitation was suspended for years 2018 through 2020 as a result of the CARES Act.

12 – Stockholders’ Equity

1 unchanged sentence

Equity Offering

July 2, 2020, the Company entered into an At-The-Market (“ATM”) Sales Agreement (the “Sales Agreement”)

with BTIG, LLC (“BTIG”), pursuant to which the Company may offer and sell, from time to time, through BTIG, as sales

agent and/or principal, shares of its common stock having an aggregate offering price of up to $ 50,000,000 , subject to certain

limitations on the amount of common stock that may be offered and sold by the Company set forth in the Sales Agreement.

be paid a 3 % commission on the gross proceeds from each sale.

July 2, 2020, the Company entered into an At-The-Market (“ATM”) Sales Agreement (the “Sales Agreement”) with

BTIG, LLC (“BTIG”), pursuant to which the Company may offer and sell, from time to time, through BTIG, as sales agent and/or

principal, shares of its common stock having an aggregate offering price of up to $ 50,000,000 , subject to certain limitations on the

amount of common stock that may be offered and sold by the Company set forth in the Sales Agreement.

BTIG will be paid a 3 % commission

on the gross proceeds from each sale.

The Company may terminate the Sales Agreement at any time;

may terminate the Sales Agreement in certain limited circumstances.

As of December 31, 2020, the Company did not sell any shares

of its common stock under the ATM Sales Agreement.

During January 2021, BTIG sold 3,023,147 shares of the Company’s common

stock generating gross proceeds of approximately $ 5.8 million and net proceeds of approximately $ 5.6 million, after deducting

BTIG’s commission on gross proceeds.

January 14, 2020, the Company closed on an underwritten public offering of 32.3 million shares of its common stock at a purchase

price of $ 1.55 per share.

The Company generated gross proceeds of approximately $ 50.0 million and net proceeds of approximately

$ 46.7 million, after deducting underwriting discounts and commissions and other estimated offering expenses.

In addition, the

Company granted the underwriters a 30-day option to purchase up to approximately 4.8 million additional shares of its common stock

on the same terms and conditions.

No additional shares of the Company’s common stock were sold pursuant to this option.

March 19, 2019, the Company closed an underwritten public offering of its common stock.

This offering was made pursuant to an

underwriting agreement between the Company and BTIG, LLC.

The offering resulted in the sale of 27,272,727 shares to the public

at a price of $ 1.10 per share.

The Company generated gross proceeds of $ 30.0 million.

Net proceeds after deducting underwriting

discounts and commissions and other estimated offering expenses are approximately $ 27.8 million.

In addition, the Company granted

the underwriters a 30-day option (the “option”) to purchase up to an additional 4,090,909 shares of common stock subject

to the same terms and conditions.

On March 28, 2019, an additional 2,199,259 shares were sold pursuant to the option at a price

of $ 1.10 per share, resulting in net proceeds to the Company of approximately $ 2.3 million.

accordance with the Certificate of Incorporation, the Company is authorized to issue 10,000,000 preferred shares at a par value

In connection with a private placement of Series A Preferred Stock, on July 26, 2016, the Company filed the Series

A Certificate of Designation with the Secretary of the State of Delaware to designate the preferences, rights and limitations

of the Series A Preferred Stock.

Pursuant to the Series A Certificate of Designation, the Company designated 1,600,000 shares

of the Company’s previously undesignated preferred shares as Series A Preferred Stock.

In connection with a public offering

of Series B Preferred Stock, on June 19, 2018, the Company filed the Series B Certificate of Designation with the Secretary of

the State of Delaware to designate the preferences, rights and limitations of the Series B Preferred Stock.

Pursuant to the Series

B Certificate of Designation, the Company designated 8,000 shares of the Company’s previously undesignated preferred shares

as Series B Preferred Stock.

BTIG may terminate the Sales Agreement

in certain limited circumstances.

During 2021, BTIG sold 3,023,147 shares of the Company’s common stock generating gross proceeds

of approximately $ 5.8 million and net proceeds of approximately $ 5.6 million, after deducting BTIG’s commission on gross proceeds.

During 2020, the Company did not sell any shares of its common stock under the ATM Sales Agreement.

September 3, 2021, the Company issued 1,500,000 unregistered shares of its common stock pursuant to the Agreement and Plan of Merger

by and among the Company, Saffron Merger Sub, Inc., Aquarius Biotechnologies Inc.

(“Aquarius”), and J Carl Craft, as holder

representative, dated January 19, 2015, as subsequently amended on September 3, 2021 (the “Aquarius Merger Agreement”), to

the holders of Aquarius Biotechnologies Inc., as defined in the Aquarius Merger Agreement.

The shares were issued in place of certain

milestone payments previously included under the Aquarius Merger Agreement upon the achievement of specified development milestones.

The Company recorded a $ 1.2 million research and development expense related to the issuance of the 1,500,000 shares based on the closing

price of the Company’s common stock of $ 0.80 on the date of issuance.

January 14, 2020, the Company closed on an underwritten public offering of 32,260,000

shares of its common stock at a purchase price of $ 1.55

The Company generated gross proceeds of approximately $ 50.0

and net proceeds of approximately $ 46.7

after deducting underwriting discounts and commissions and other estimated offering expenses.

In addition, the Company granted the underwriters

a 30-day option to purchase up to approximately 4.8 million additional shares of its common stock on the same terms and conditions.

additional shares of the Company’s common stock were sold pursuant to this option.

accordance with the Certificate of Incorporation, the Company is authorized to issue 10,000,000 preferred shares at a par value of $ 0.001 .

In connection with a private placement of Series A Preferred Stock, on July 26, 2016, the Company filed the Series A Certificate of Designation

with the Secretary of the State of Delaware to designate the preferences, rights and limitations of the Series A Preferred Stock.

to the Series A Certificate of Designation, the Company designated 1,600,000 shares of the Company’s previously undesignated preferred

shares as Series A Preferred Stock.

In connection with a public offering of Series B Preferred Stock, on June 19, 2018, the Company filed

the Series B Certificate of Designation with the Secretary of the State of Delaware to designate the preferences, rights and limitations

of the Series B Preferred Stock.

Pursuant to the Series B Certificate of Designation, the Company designated 8,000 shares of the Company’s

previously undesignated preferred shares as Series B Preferred Stock.

B Preferred Stock

June 19, 2018, the Company entered into a placement agency agreement with ThinkEquity, a Division of Fordham Financial Management,

Inc., as placement agent, relating to the offering, issuance and sale of up to 8,000 shares of the Company’s Series B Convertible

Preferred Stock, par value $ 0.0001 per share with a stated value of $ 1,000 per share which are convertible into an aggregate of

up to 16,000,000 shares of the Company’s common stock at an initial conversion price of $ 0.50 per share.

The offering also

included up to an additional 7,200,000 shares of common stock issuable upon payment of dividends under the Series B Preferred

The offering closed on June 21, 2018 raising a gross amount of $ 8 million with net proceeds of $ 7.1 million after deducting

issuance costs.

The placement agent received 7 % commission on the gross proceeds, 1 % of the gross proceeds to cover non-accountable

expenses and 240,000 warrants fair valued at approximately $ 89,000 treated as a reduction to gross proceeds, that are exercisable

over a 5 -year period at an exercise price of $ 0.75 per share.

of December 31, 2020 and 2019, there were 4,361 shares 4,577 shares, respectively, of Series B Preferred Stock outstanding.

Subject to the Beneficial Ownership Limitation (defined below), each share of Series B Preferred Stock will be

convertible into shares of the Company’s common stock at any time at the option of the holder at an initial conversion price

of $ 0.50 per share subject to adjustment for reverse splits, stock combinations and similar changes as provided in the Certificate

of Designation.

Based on the current conversion price and number of shares outstanding, the Series B Preferred Stock is convertible

into 8,722,000 shares of common stock.

Dividends will not accrue and will not be paid following optional conversion.

years ended December 31, 2020 and 2019, 216 shares and 242 shares, respectively, of Series B preferred stock were converted into

2021 and prior to June 19, 2021, 143 shares of Series B Preferred Stock were converted by shareholders resulting in the issuance of 286,000

shares of common stock.

Subject to the Beneficial Ownership Limitation described below, each share of Series B Preferred Stock shall automatically

convert into 2,000 shares of the Company’s common stock at an initial conversion price of $0.50 per share upon the earlier

of (i) the first FDA approval of one of our product candidates, (ii) the 36-month anniversary of the of the filing of the Certificate

of Designation for the Series B Preferred Stock with the Secretary of State of Delaware (the “COD Effective Date”

which is June 19, 2018) or (iii) the consent to conversion by holders of at least 50.1 % of the outstanding shares of Series B

Preferred Stock.

In the event the Series B Preferred Stock automatically converts into common stock prior to the 36 month anniversary

of the COD Effective Date, the holder on the date of such conversion shall also be entitled to receive those dividends which would

have been payable after the conversion date, as if the shares of Series B Preferred Stock had remained unconverted and outstanding

through the 36 month anniversary of the COD Effective Date.

Such dividend amount shall be payable as set forth above in shares

of common stock upon such automatic conversion.

Conversion Feature.

The Optional and Automatic conversion features do not contain a BCF as the effective conversion price

for the Series B Preferred Stock at issuance was equal to the fair value of the common stock into which the preferred shares are

convertible into.

Ownership Limitation .

The Company may not affect any optional or automatic conversion of the Series B Preferred Stock, or

issue shares of common stock as dividends and a holder does not have the right to convert any portion of the Series B Preferred

Stock to the extent that, after giving effect to such conversion such holder would beneficially own in excess of the Beneficial

Ownership Limitation, or such holder, together with such holder’s affiliates, and any persons acting as a group together

with such holder or affiliates, would beneficially own in excess of the Beneficial Ownership Limitation.

The “Beneficial

Ownership Limitation” is 4.99% of the number of shares of the Company’s common stock outstanding immediately after

giving effect to the issuance of shares of common stock issuable upon conversion of Series B Preferred Stock held by the applicable

A holder may, prior to issuance of the Series B Preferred Stock or, with 61 days prior notice to us, elect to increase

or decrease the Beneficial Ownership Limitation;

provided, however, that in no event may the Beneficial Ownership Limitation exceed

Value and Dividends:

Subject to the Beneficial Ownership Limitation described above, holders of the Series B Preferred Stock are entitled to receive

dividends payable in the Company’s common stock as follows:

(i) a number of shares of common stock equal to 10% of the shares

of common stock underlying the Series B Preferred Stock then held by such holder on the 12 month anniversary of the COD Effective

Date, (ii) a number of shares of common stock equal to 15% of the shares of common stock underlying the Series B Preferred Stock

then held by such holder on the 24-month anniversary of the COD Effective Date and (iii) a number of shares of common stock equal

to 20% of the shares of common stock underlying the Series B Preferred Stock then held by such holder on the 36-month anniversary

of the COD Effective Date.

In the event a purchaser in this offering no longer holds Series B Preferred Stock as of the 12-month

anniversary, the 24-month anniversary or the 36-month anniversary, such purchaser will not be entitled to receive any dividends

on such anniversary date.

Based on an accounting of the holders of record of Series B Preferred Stock on June 19, 2019 and 2020,

the Company paid the 12-month anniversary dividend payments of 10 % and 15 %, respectively, totaling 946,000 shares and 1,365,600

shares, respectively, of common stock.

the event a fundamental transaction is consummated prior to the automatic conversion of the Series B Preferred Stock, the dividends

will be accelerated and paid to the extent not previously paid.

In addition, holders of Series B Preferred Stock will be entitled

to receive dividends equal, on an as-if-converted to shares of common stock basis, and in the same form as dividends actually

paid on shares of the common stock when, as, and if such dividends are paid on shares of the common stock.

Notwithstanding the

foregoing, to the extent that a holder’s right to participate in any dividend in shares of common stock to which such holder

is entitled would result in such holder exceeding the Beneficial Ownership Limitation, then such holder shall not be entitled

to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the Beneficial

Ownership Limitation shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder’s

beneficial ownership thereof would not result in such holder exceeding the Beneficial Ownership Limitation.

to its Certificate of Designation, the liquidation value of a share of Series B Preferred Stock is equal to the stated value of

$ 1,000 per share (as adjusted for stock splits, stock dividends, combinations or other recapitalizations of the Series A Preferred

Stock) plus any earned but unpaid dividends.

Company has issued two types of warrants:

(i) investor warrants and (ii) placement agent warrants.

All warrants are exercisable

immediately upon issuance and have a five-year term.

The warrants may be exercised at any time in whole or in part upon payment

of the applicable exercise price until expiration.

No fractional shares will be issued upon the exercise of the warrants.

exercise price and the number of shares purchasable upon the exercise of the investor warrants are subject to adjustment upon

the occurrence of certain events, which include stock dividends, stock splits, combinations and reclassifications of the Company’s

capital stock or other similar changes to the equity structure of the Company.

the 20 million investor warrants issued in 2015, the Company may call the warrants at any time the common stock trades above $3.00

for twenty (20) consecutive days following the effectiveness of the registration statement covering the resale of the shares of

common stock underlying the warrants, provided that the warrants can only be called if such registration statement is current

and remains effective at the time of the call and provided further that the Company can only call the investor warrants for redemption,

if it also calls all other warrants for redemption on the terms described above.

The Company did not call any warrants during

the periods ended December 31, 2019 and 2020.

placement agent warrants do not have a redemption feature.

On June 19, 2021, all 4,218 remaining shares of Series B Preferred Stock were automatically converted into 2,000

shares of the Company’s common stock resulting in the issuance of 8,436,000 shares of common stock.

As of December 31, 2021 and

December 31, 2020, there were 0 and 4,361 shares of Series B Preferred stock outstanding, respectively.

to the automatic conversion of Series B Preferred Stock on June 19, 2021, and subject to certain ownership limitations, each share of

Series B Preferred Stock was convertible into shares of the Company’s common stock at any time at the option of the holder at an

initial conversion price of $ 0.50 per share subject to adjustment for reverse splits, stock combinations and similar changes as provided

in the Certificate of Designation.

Based on the conversion price and number of shares outstanding on June 19, 2021, the Series B Preferred

Stock were converted into 8,436,000 shares of common stock.

to certain ownership limitations, holders of the Series B Preferred Stock received dividends paid in the Company’s common stock

(i) a number of shares of common stock equal to 10% of the shares of common stock underlying the Series B Preferred Stock

then held by such holder on June 19, 2019, (ii) a number of shares of common stock equal to 15% of the shares of common stock underlying

the Series B Preferred Stock then held by such holder on June 19, 2020 and (iii) a number of shares of common stock equal to 20% of the

shares of common stock underlying the Series B Preferred Stock then held by such holder on June 19, 2021.

Based on an accounting of the

holders of record of Series B Preferred Stock on June 19, 2021 and 2020, the Company made dividend payments totaling 1,687,200 and 1,365,600

shares of common stock, respectively .

warrants issued by the Company are exercisable immediately upon issuance and have a five-year term.

The warrants may be exercised at

any time in whole or in part upon payment of the applicable exercise price until expiration.

No fractional shares will be issued upon

the exercise of the warrants.

The exercise price and the number of shares purchasable upon the exercise of the warrants are subject to

adjustment upon the occurrence of certain events, which include stock dividends, stock splits, combinations and reclassifications of

the Company’s capital stock or other similar changes to the equity structure of the Company.

The warrants do not have a redemption

They may be exercised on a cashless basis at the holder’s option.

investor warrants and placement agent warrants are classified as equity instruments.

of December 31, 2020, the Company had outstanding warrants to purchase an aggregate of 1,327,810 shares of common stock at exercise

prices ranging from $ 0.50 to $ 0.75 per share.

A summary of warrants outstanding as of December 31, 2020 and 2019 is presented

below, all of which are fully vested (in thousands):

Summary of Shareholders Equity Warrants Outstanding

Outstanding at December 31, 2018

Outstanding at December 31, 2019

Outstanding at January 01, 2020

warrants are classified as equity instruments.

of December 31, 2021, the Company had outstanding warrants to purchase an aggregate of 988,000 shares of common stock at exercise prices

ranging from $ 0.50 to $ 0.75 per share, and with expiration dates between December 31, 2022 and June 21, 2023.

A summary of warrants outstanding

as of December 31, 2021 and 2020 is presented below, all of which are fully vested (in thousands):

of Shareholders Equity Warrants Outstanding

at December 31, 2019

Outstanding at December

at January 01, 2021

at December 31, 2021

average exercise price for outstanding warrants is $ 0.55 .

1 unchanged sentence

average exercise price for outstanding warrants is $ 0.56 .

13 – Accumulated Other Comprehensive Income/(Loss)

following table summarizes the changes in accumulated other comprehensive income/(loss) by components during the years ended December

13 – Accumulated Other Comprehensive (Loss)/Income

following table summarizes the changes in accumulated other comprehensive (loss)/income by components during the years ended December

31, 2021 and 2020 (in thousands):

Schedule of Components of Accumulated Other Comprehensive Income/(Loss)

Net Unrealized (Losses)/Gains

on Available-for-Sale Securities

Accumulated Other Comprehensive

Balance, December 31, 2018

Net unrealized loss on securities available-for-sale

Reclassifications to net loss

Net current period other comprehensive loss

Balance, December 31, 2019

Balance, January 01, 2020

Net unrealized gain on securities available-for-sale

Reclassification of realized gain on securities

available-for-sale to net loss

Net current period other comprehensive income

Balance, December 31, 2020

components of accumulated other comprehensive income/(loss) are net of tax.

of Components of Accumulated Other Comprehensive (Loss)/Income

Unrealized (Losses)/Gains on Available-for-Sale Securities

Other Comprehensive (Loss)/Gain

December 31, 2019

unrealized gain on securities available-for-sale

Reclassification

of realized gain on securities available-for-sale to net loss

current period other comprehensive gain

December 31, 2020

unrealized loss on securities available-for-sale

current period other comprehensive loss

December 31, 2021

components of accumulated other comprehensive (loss)/income are net of tax.

14 – Stock-based Compensation

Company’s Amended and Restated 2013 Equity Compensation Plan (the “Plan”) provides for the granting of incentive

stock options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights.

Options under

the Plan may be granted at prices not less than 100% of the fair value of the shares on the date of grant as determined by the

Compensation Committee of the Board of Directors.

The Compensation Committee determines the period over which the options become

exercisable subject to certain restrictions as defined in the Plan, with the current outstanding options generally vesting over

three or four years.

The term of the options is no longer than ten years.

As of December 31, 2020, the Company had 28,947,923

shares of common stock authorized for issuance under the Plan.

Company’s Amended and Restated 2013 Equity Compensation Plan (the “Plan”) provides for the granting of incentive stock

options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights.

Options under the Plan may

be granted at prices not less than 100% of the fair value of the shares on the date of grant as determined by the Compensation Committee

of the Board of Directors.

The Compensation Committee determines the period over which the options become exercisable subject to certain

restrictions as defined in the Plan, with the current outstanding options generally vesting over three or four years .

The term of the

options is no longer than ten years .

As of December 31, 2021, the Company had 36,952,460 shares of common stock authorized for issuance

under the Plan.

the approval of the Board of Directors and a majority of shareholders, effective May 8, 2014, the Plan was amended and restated.

The amendment provides for an automatic increase in the number of shares of common stock available for issuance under the Plan

each January (with Board approval), commencing January 1, 2015 in an amount up to four percent ( 4 % ) of the total number of shares

of common stock outstanding on the preceding December 31st.

amendment provides for an automatic increase in the number of shares of common stock available for issuance under the Plan each January

(with Board approval), commencing January 1, 2015 in an amount up to four percent ( 4 % ) of the total number of shares of common stock

outstanding on the preceding December 31st.

Company recognized stock-based compensation expense (options and restricted share grants) in its consolidated statements of operations

as follows (in thousands):

Schedule of Recognized Stock-Based Compensation

Year Ended December 31,

Research and Development

General and Administrative

of Recognized Stock-Based Compensation

Ended December 31,

and Development

and Administrative

following table contains information about the Company’s stock plan at December 31, 2020:

Schedule of Equity Compensation Plan by Arrangements

Awards Reserved for Issuance

Awards Issued &

Awards Available for

of Equity Compensation Plan by Arrangements

Reserved for Issuance

Issued & Exercised

Available for Grant

Equity Compensation Plan (in thousands)

1 unchanged sentence

both stock grants and option grants

following table summarizes the Company’ stock option activity and related information for the period from January 1, 2019

to December 31, 2020 (options in thousands):

Schedule of Stock Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Contractual Term in Years

Outstanding at January 1, 2019

Outstanding at December 31, 2019

Outstanding at January 01, 2020

following table summarizes the Company’ stock option activity and related information for the period from January 1, 2020 to December

31, 2021 (options in thousands):

of Stock Option Activity

Average Exercise Price

Average Contractual Term in Years

at December 31, 2019

Outstanding at December

in the issuance of approximately 782 thousand shares of common stock due to certain cashless exercises.

at December 31, 2021

following table summarizes outstanding options at December 31, 2021, by their exercise price (options in thousands):

Schedule of Outstanding Options Exercise Price

Range of Exercise Prices

Number Outstanding

Weighted Average Exercise Price Per Share

$ 0.41 - $ 0.69

$ 0.74 - $ 1.12

of Outstanding Options

of Exercise Prices

Average Exercise Price Per Share

$ 0.74 - $ 1.12

$ 1.24 - $ 1.61

of December 31, 2020, the number of vested shares underlying outstanding options was 13,413,955 at a weighted average exercise

price of $ 1.15 .

of December 31, 2021, the number of vested shares underlying outstanding options was 14,625,397 at a weighted average exercise price

The aggregate intrinsic value of in-the-money options outstanding as of December 31, 2021 was $ 2.5 million.

aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $ 1.36 on December

31, 2020, and the exercise price of options, multiplied by the number of options.

As of December 31, 2020, there was approximately

$ 8.8 million of total unrecognized share-based compensation.

Such costs are expected to be recognized over a weighted average

period of approximately 2.6 years.

The aggregate intrinsic

value is calculated as the difference between the Company’s closing stock price of $ 1.01 on December 31, 2021, and the exercise

price of options, multiplied by the number of options.

As of December 31, 2021, there was approximately $ 11.7 million of total unrecognized

share-based compensation.

Such costs are expected to be recognized over a weighted average period of approximately 2.9 years.

outstanding options expire ten years from date of grant.

1 unchanged sentence

over three years.

Beginning in 2018, options granted to employees vest over four years, with 25 % of the shares vesting on the

first annual anniversary of grant and the remaining shares vesting in 36 equal monthly installments over the following 3 years.

A portion of options granted to consultants vests over four years, with the remaining vesting being based upon the achievement

of certain performance milestones, which are tied to either financing or drug development initiatives.

the years ended December 31, 2020 and 2019, the Company granted restricted stock awards for 379,385 and 441,005 shares of common

stock, respectively.

These awards are typically granted to members of the Board of Directors as payment in lieu of cash fees or

as payment to a vendor pursuant to a consulting agreement.

The Company values restricted stock awards at the fair market value

on the date of grant.

The Company recorded the value of these restricted awards as general and administrative expense of approximately

$ 291.9 thousand and $ 360.1 thousand in the consolidated statement of operations for the years ended December 31, 2020 and 2019,

Beginning in 2018, options granted to employees vest over four years, with 25 % of the shares vesting on the first annual

anniversary of grant and the remaining shares vesting in 36 equal monthly installments over the following 3 years.

A portion of options

granted to consultants vests over four years, with the remaining vesting being based upon the achievement of certain performance milestones,

which are tied to either financing or drug development initiatives .

the years ended December 31, 2021 and 2020, the Company granted restricted stock awards for 31,769 and 379,385 shares of common stock,

respectively.

As of December 31, 2020, there was $ 68.5 thousand of total unrecognized compensation costs related to 100,000 non-vested

restricted stock grants which are expected to be recognized over a weighted-average period of 0.8 years.

Company recognizes compensation expense for stock option awards and restricted stock awards on a straight-line basis over the

applicable service period of the award.

The service period is generally the vesting period, with the exception of awards granted

subject to a vendor’s consulting agreement, whereby the award vesting period and the service period defined pursuant to

the terms of the consulting agreement may be different.

Beginning January 1, 2020, stock options issued to consultants are recorded

at fair value on the date of grant and the award is recognized as an expense on a straight-line basis over the requisite service

The following weighted-average assumptions were used to calculate share-based compensation for the comparative periods

Schedule of Share Based Payment Assumptions

These awards are typically granted to members of the Board of Directors as payment in lieu of cash fees or as payment to

a vendor pursuant to a consulting agreement.

The Company values restricted stock awards at the fair market value on the date of grant.

The Company recorded the value of these restricted awards as general and administrative expense of approximately $ 100 thousand and $ 292

thousand in the consolidated statement of operations for the years ended December 31, 2021 and 2020, respectively.

Company recognizes compensation expense for stock option awards and restricted stock awards on a straight-line basis over the applicable

service period of the award.

The service period is generally the vesting period, with the exception of awards granted subject to a vendor’s

consulting agreement, whereby the award vesting period and the service period defined pursuant to the terms of the consulting agreement

may be different.

Beginning January 1, 2020, stock options issued to consultants are recorded at fair value on the date of grant and

the award is recognized as an expense on a straight-line basis over the requisite service period.

The following weighted-average assumptions

were used to calculate share-based compensation for the comparative periods presented:

of Stock Option Awards and Restricted Stock Awards

the Year Ended December 31,

interest rate

Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and

post-vesting employment termination behavior.

Hence, the Company uses the “simplified method” described in Staff Accounting

Bulletin (SAB) 107 to estimated the expected term of share option grants.

Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting

employment termination behavior.

Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin (SAB)

107 to estimated the expected term of share option grants.

expected stock price volatility assumption is based the Company’s historical stock price volatility.

15 – Subsequent Events

January 2021, the Company sold 3,023,147 shares of its common stock under its ATM Sales Agreement with BTIG, LLC, generating gross

proceeds of approximately $ 5.8 million and net proceeds of approximately $ 5.6 million.

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