What changed in this filing

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Item 9A. Controls and Procedures

2023-03-15 compared with 2022-03-08 · 1059 added, 1060 removed, 1093 unchanged (66% of the section changed)

and Procedures

Controls and Procedures

of Disclosure Controls and Procedures

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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

during the quarter ended December 31, 2022 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

Other Information

Disclosure Regarding

Foreign Jurisdictions that Prevent Inspections

Directors, Executive

Officers And Corporate Governance

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

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

of the Board, Director

Executive Officer and President, Director

Medical Officer

Business Officer

Financial Officer

Technology Officer

Scientific Officer

Development Officer

Chairman of the Board, Director

Chief Executive Officer and President, Director

Chief Medical Officer

Chief Business Officer

Chief Financial Officer

Chief Technology Officer

Theresa Matkovits

Chief Development Officer

Herbert Conrad

Kathryn Corzo

Natasha Giordano

Matthew Wikler

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

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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

held diversified healthcare 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).

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

(2003-2004) 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.

in Psychology from Loyola University in Baltimore.

in Psychology

from Loyola University in Baltimore.

Ferguson, MD was appointed Chief Medical Officer in February 2019.

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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

company, including Vice President of U.S.

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

Cardiovascular Global Medical Affairs, U.S.

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(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.

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.

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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.

Business Officer at Millendo Therapeutics, a public, clinical stage biotech, from 2016 to 2021.

Prior to joining Millendo, Mr.

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

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 North Carolina and a B.A.

from the University of North Carolina and a B.A.

from Harvard College.

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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.

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

She joined the Company after having most recently

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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.

in Biochemistry

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

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

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.

Conrad was the President of the U.S.

in Biochemistry and Molecular Biology from the University of Medicine and

Dentistry of NJ.

Ende has served on our board of directors since April 2017 and was selected to be Chairman of the Board of Directors of our Company

in October, 2022.

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 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.

from 2010 until it was acquired by Sanofi (NSYE:

SNY) in 2011.

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.

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,

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.

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.

See description under “Management.”

Conrad served as our Chairman of the Board from July 2013 until October 2022, and as Chairman of the Board of Matinas BioPharma,

from October 2012 until October 2022.

He continues to serve as a member of our Board of Directors today.

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.

the President of the U.S.

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:

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:

ABUS), Pharmasset, Inc.

Savient Pharmaceuticals, Inc.

(chairman), Savient Pharmaceuticals, Inc.

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

GNVC) (chairman), Sicor,

Inc., Bone Care International, Inc.

(chairman), Sapphire Therapeutics, Inc.

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

Sapphire Therapeutics, Inc.

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

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

HSIC), and he was a Director and Co-Founder

of Reliant Pharmaceuticals.

Pharmasset was acquired by Gilead Sciences, Inc.

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

for $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.

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

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.

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.

Corzo has served on our board of directors since September 2021 and is currently the Chief Operating Officer of bit.bio.

to bit.bio, Ms.

Corzo was a partner at Takeda Ventures, Inc., the corporate investment arm of Takeda Pharmaceutical Company Limited,

and previously Head, Oncology Cell Therapy Development at Takeda Pharmaceutical Company Limited (TSE:

TAK), a global biopharmaceutical

company, a position she has held since 2020.

Prior to joining Takeda, Ms.

Corzo held positions of increasing responsibility at Sanofi

Genzyme, a specialty care global business unit of Sanofi, from 2010 to 2019.

Prior to joining Sanofi, Ms.

Corzo worked at Hoffman –

La Roche, Roche Molecular Systems, Eli Lilly and Syndax from 1989 to 2010, 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.

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.

In addition, Dr.

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.

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.

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

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.

Corzo is qualified to serve on our Board of Directors due to her broad experience in the life

sciences industry.

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

PLXP) since January 2016.

Previously, Ms.

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.

Giordano served as Chief Executive

Officer of ClearPoint Learning, Inc., a privately held learning and training platform company, from May 2015 through November 2015.

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.

Giordano served as the Chief

Executive Officer of Healthcare Corporation of America (NYSE:

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 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.

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 health.

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.

Giordano holds a Bachelor of Science degree in nursing

from Wagner College.

We believe Ms.

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

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 industries.

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

Scibetta is currently the Chief Executive

Officer of ImmuneID, a privately held precision immunology company.

Officer of ImmuneID, Inc., a privately held company that leverages existing antibody

responses to rapidly unveil the complexities of the immune system, thereby revealing pathways leading to precise, transformative therapies.

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.

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 Limited.

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 2015.

Prior to that, 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.

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.

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:

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:

NEPH), Merrimack Pharmaceuticals and Labopharm Inc.

Prior to his executive management

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.

Prior to his executive management 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.

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.

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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 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.

believe in seeking and attracting scientific and clinical leaders in the field of infectious diseases to provide counsel and support

We have established separate Scientific Advisory Boards for MAT2203 and MAT2501 which consist of individuals who are experts

in their chosen fields and recipients of many academic honors and awards.

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

Governance Committee.

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

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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.

Conrad and Natasha Giordano currently serve as members of the Audit Committee, with Mr.

Scibetta serving as its chair.

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

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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.

Kathryn Corzo, James Scibetta and Matthew

Wikler currently serve as members of the Compensation Committee, with Mr.

Scibetta serving as its chair.

All members of the Compensation

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

The Compensation Committee met

six times during 2022.

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

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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.

Herbert Conrad, Kathryn Corzo, Eric Ende, and Natasha Giordano currently serve as members of the Nominating and Corporate

Governance Committee, with Ms.

Giordano serving as its chair.

All members of the Nominating and Corporate Governance Committee are considered

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

Advisory Committee .

The Board of Directors has established a Scientific Advisory Committee consisting of Dr.

Matthew Wikler,

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.

of Business Conduct and Ethics

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or waiver on our website.

Executive Compensation

Compensation Table – 2022

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the two most highly compensated executive officers who were serving as executive officers as of December 31, 2022 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

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.

in all capacities to us for the years ended December 31, 2022 and 2021.

These individuals are our named executive officers for 2022.

Name and Principal Position

All Other Compensation ($)

Chief Executive Officer

Chief Medical Officer

Theresa Matkovits

Chief Development Officer

Amounts reflect the grant

date fair value of option awards granted in 2022 and 2021 in accordance with Accounting Standards Codification Topic 718.

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

Disclosure to Summary Compensation Table

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March 22, 2018, we entered into an employment agreement with Mr.

Under the terms of Mr.

Jabbour’s employment agreement,

Jabbour, as subsequently amended on March 3, 2023.

Under the terms of

Jabbour’s employment agreement, Mr.

Jabbour received a signing bonus of $84,000 and a base salary of $350,000 per year.

Jabbour’s current salary is $598,000.

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

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.

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

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

Jabbour is eligible

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

If we terminate 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’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, and his target annual bonus for the year pro rated to the date of termination.

In addition, the vesting of 50% of his outstanding options issued prior to December 31, 2021 will be accelerated in full upon such termination

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

stock options.

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.

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 18 months of his base salary and 1.5 times his target annual bonus plus 18 months of COBRA benefits.

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

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.

Under the terms

Ferguson which was effective as of February 25, 2019, as subsequently

amended on March 3, 2023.

Under the terms of Mr.

Ferguson’s employment agreement, Mr.

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

Ferguson base salary was $375,000 per year,

and is currently $468,000.

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.

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.

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

If we terminate Mr.

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.

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 issued prior to December 31, 2021 will be accelerated in full

upon such termination.

If we terminate Mr.

Ferguson’s employment without cause during the 12-month period immediately following

a change of control or Mr.

Jabbour resigns with good reason during the 12-month period immediately following a change of control, we

are required to pay him severance of 12 months of his base salary and his target annual bonus plus 12 months of COBRA benefits.

his outstanding options will be vested in full.

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

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.

Matkovits which was effective as of October 15, 2018, as subsequently

amended on March 3, 2023.

Under the terms of Ms.

Matkovits’ employment agreement, Ms.

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

Matkovits’s base salary was $350,000

per year, and is currently $430,000.

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.

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.

If we terminate Ms.

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.

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 issued prior to December 31, 2021 will be accelerated

in full upon such termination.

If we terminate Ms.

Matkovits’s employment without cause during the 12-month period immediately

following a change of control or Matkovits resigns with good reason during the 12-month period immediately following a change of control,

we are required to pay her severance of 12 months of her base salary and her target annual bonus plus 12 months of COBRA benefits.

addition, her outstanding options will be vested in full.

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

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 her employment.

Equity Awards at Fiscal Year-End Table – 2022

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options held as of December 31, 2022.

Option Awards

unexercisable

July 20, 2024

Theresa Matkovits

Equity Compensation Plan

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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”;

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.”

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

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Subject to the 2013 Plan .

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

As of March 3, 2023 the aggregate number of shares of common stock available for issuance in connection

with awards granted under the 2013 Plan is 54,293,819 shares, subject to customary adjustments for stock splits, stock dividends or similar

165 unchanged sentences

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.

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

to receive an annual fee of $8,000 and other members are entitled to receive $4,000.

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

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following table summarizes the annual compensation for our non-employee directors during 2022.

Cash Compensation

Herbert Conrad

Kathryn Corzo

Natasha Giordano

Matthew Wikler

reflect the grant date fair value of stock awards and option awards granted in 2022 in accordance with Accounting Standards Codification

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Committee Interlocks and Insider Participation

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.

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

Kathryn Corzo,

James Scibetta, Chair, 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.

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 February 25, 2022 by:

following table sets forth the number of shares of common stock beneficially owned as of March 3, 2023 by:

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

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Applicable percentage ownership

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

in the following table is based on 217,264,526 shares outstanding as of March 3, 2023.

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

Beneficially Owned

and Executive Officers

that person and exercisable as of, or within 60 days of, March 3, 2023 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.

Name of Beneficial Owner

Number of Shares Beneficially Owned

Percentage of Shares Beneficially Owned

Directors and Executive Officers

Herbert Conrad (2)

Kathryn Corzo (3)

Eric Ende (4)

Natasha Giordano (5)

James Scibetta (6)

Matthew Wikler (7)

Kucinski (10)

Matkovits (13)

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

Theresa Matkovits (12)

Directors and Executive Officers as a group (12 persons) (13)

Includes 5,283,013 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 3,725,887 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,312,023 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 71,328 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 162,211 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

not include 162,209 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,048,690 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 71,328 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 418,138 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

not include 103,318 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,111,190 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 71,328 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 898,690 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

not include 71,328 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,393,500 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 1,244,100 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 301,042 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

not include 1,023,958 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,343,730 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 1,156,270 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 454,681 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

not include 1,045,319 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

Includes 1,474,980 shares of common stock issuable upon exercise of options that are exercisable within sixty days of March 3, 2023.

Does not include 1,125,020 shares of common stock underlying options that are not exercisable within sixty days of March 3, 2023.

See notes (1) through (12).

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following table summarizes information about our equity compensation plans as of December 31, 2022.

Plan Category

Number of Shares

of Common Stock to be Issued upon

3 unchanged sentences

Outstanding Options

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

Number of Options

Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))

Equity compensation plans approved by stockholders(1)

Equity compensation plans not approved by stockholders

amounts shown in this row include securities under the Matinas BioPharma Holdings, Inc.

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LLP, the Company’s independent registered public accounting firm.

Ended December 31,

Years 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.

controls over financial reporting, review of our interim consolidated financial statements, comfort and consent 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.

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(incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 5, 2015).

Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed August 1, 2016 with the Securities and Exchange Commission).

Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed June 19, 2018 with the Securities and Exchange Commission).

Common Stock Specimen (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed March 31, 2017 with the Securities and Exchange Commission).

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1 to Form S-1 filed with the SEC on April 17, 2015).

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).

Description of Securities*

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Employment Agreement, dated December 1, 2020, between Matinas Biopharma Holdings, Inc.

(incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed on March 8, 2022)†*

Employment Agreement, dated December 6, 2021, between Matinas Biopharma Holdings, Inc.

and Thomas Hoover.

of EisnerAmper LLP*

Certification

of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Certification

of Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

1350 Certifications**

(incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed on March 8, 2022)†*

Consulting Agreement, dated August 8, 2022, by and between the Company and Raphael J.

Mannino (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly report on Form 10-Q, filed on November 2, 2022).

Amendment to Employment Agreement, dated March 3, 2023, between Matinas Biopharma Holdings, Inc.

and Jerome Jabbour †*

Amendment to Employment Agreement, dated March 3, 2023, between Matinas Biopharma Holdings, Inc.

and Theresa Matkovits †*

Amendment to Employment Agreement, dated March 3, 2023, between Matinas Biopharma Holdings, Inc.

and Keith Kucinski †*

Amendment to Employment Agreement, dated March 3, 2023, between Matinas Biopharma Holdings, Inc.

and James Ferguson †*

Subsidiaries Index*

Consent of EisnerAmper LLP*

Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Certification of Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Section 1350 Certifications**

following financial information from the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, formatted in XBRL

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and (v) Notes to Consolidated Financial Statements.*

The cover page from this Annual Report on Form 10-K,

formatted as Inline XBRL.

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

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10-K Summary.

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.

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 15, 2023.

BIOPHARMA HOLDINGS, INC.

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on the Financial Statements

have audited the accompanying consolidated balance sheets of Matinas BioPharma Holdings, Inc.

and Subsidiaries as of December 31,

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.

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 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.

We have audited the accompanying consolidated balance

sheets of Matinas BioPharma Holdings, Inc.

and Subsidiaries as of December 31, 2022 and 2021 and the related consolidated statements of

operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, 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, 2022 and 2021, and the results of their operations and

their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of

Basis for Opinion

These 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

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.

We 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 or fraud.

The Company 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.

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, 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.

Our 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

The 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) relates 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.

Accruals and prepaid balance for research and

development expenses

As disclosed in the consolidated statements of operations,

for the year ended December 31, 2022, the Company incurred significant research and development (“R&D”) expenses, which

amounted to approximately $16.7 million.

At December 31, 2022, the Company had accrued $1.2 million for R&D expenses on the consolidated

balance sheet.

The Company also recorded prepaid R&D expense of $2.7 million on the consolidated balance sheet.

A significant amount

of the Company’s R&D expenses are service fees paid to contract research organizations (“CROs) and contract manufacturing organizations

The R&D activities with these CROs and CMOs are documented in contractual agreements and are typically performed

over an extended period.

The amounts recorded on the consolidated balance sheet for such R&D contracts represent the Company’s

estimates of the unpaid and prepaid R&D expenses based on facts and circumstances known to the Company at that time, and are dependent

upon the timely and accurate reporting of CROs and CMOs.

The amount of R&D expense to be recognized under these agreements based on

the Company’s estimate of the progress of work completed during the financial reporting period and involves judgement and estimation.

We 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 significant

judgement and estimation required by management in determining the progress or state of completion of clinical studies or services rendered.

As a result, a high degree of auditor judgement and additional testing were required to evaluate audit evidence relating to estimates

made by management.

Addressing 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 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 over developing its estimate of accrued and prepaid R&D expenses, including the process of estimating the expenses

incurred to date based on the status of the clinical studies;

(ii) we read selected agreements and contract amendments with CROs and CMOs

and evaluating the significant assumptions described above and the methods used in developing the R&D estimates and recalculating

the amounts that were unpaid and prepaid at the balance sheet date, (iii) we confirmed with CROs and CMOs contractual commitments and

amounts completed, paid and unpaid, and (iv) made direct inquiries of the Company research personnel regarding project status, and inspected

invoices received subsequent to year-end and additional documents and correspondence with the CROs and CMOs when used by management to

develop its estimate of R&D expenditures.

EisnerAmper LLP

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Balance Sheets

and cash equivalents

expenses and other current assets

thousands, except for share data)

Current assets:

improvements and equipment - net

lease right-of-use assets - net

research and development

cash - security deposits

Cash and cash equivalents

Marketable debt securities

Restricted cash – security deposit

Prepaid expenses and other current assets

Total current assets

Non-current assets:

AND STOCKHOLDERS’ EQUITY:

expenses and other liabilities

lease liabilities - current

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 deposit

Total non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:

tax liability

lease liabilities - net of current portion

Accounts payable

Accrued expenses and other liabilities

Operating lease liabilities - current

Financing lease liabilities - current

Total current liabilities

Non-current liabilities:

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 )

other comprehensive (loss)/income

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:

liabilities and stockholders’ equity

Common stock par value $ 0.0001 per share, 500,000,000 shares authorized at December 31, 2022 and 2021, respectively;

217,264,526 and 216,269,450 issued and outstanding as of December 31, 2022 and 2021, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

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Statements of Operations and Comprehensive Loss

the Year Ended December 31,

research revenue

and Expenses:

and development

and administrative

thousands, except share and per share data)

For the Year Ended December 31,

Contract Revenue

Costs and Expenses:

from operations

( 24,734,755 )

( 24,206,552 )

of New Jersey net operating loss

$ ( 23,283,415 )

$ ( 22,446,838 )

stock series B accumulated dividends

loss attributable to common shareholders

$ ( 23,679,214 )

$ ( 23,240,280 )

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 )

$ ( 22,217,786 )

Research and development

General and administrative

Total costs and expenses

Loss from operations

Sale of New Jersey net operating loss & tax credits

Other income, net

Preferred stock series B accumulated dividends

Net loss attributable to common shareholders

Net loss attributable to common shareholders per share – basic and diluted

Weighted average common shares outstanding:

Basic and diluted

Other comprehensive loss, net of tax

Net unrealized loss on securities available-for-sale

Other comprehensive loss, net of tax

Comprehensive loss attributable to shareholders

accompanying notes are an integral part of these consolidated financial statements.

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Statements of Changes in Stockholders’ Equity

thousands, except for share data)

(Loss)/Income

Preferred Stock B

Other Comprehensive

Stockholders’

Additional Paid - in

Accumulated Other Comprehensive

Total Stockholders’

(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 B

of common stock in public offering, net of stock issuance costs ($ 3,308,790 )

of common stock in exchange for Options

of common stock in exchange for Warrants

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

of common stock pursuant to the Aquarius Merger

Other comprehensive

comprehensive income loss

Balance, December 31, 2020

$ ( 107,507 )

Stock-based compensation

Issuance of common stock as compensation for services

Issuance of common stock in exchange for preferred stock

Issuance of common stock in public offering, net of stock issuance costs ($ 172,592 )

Issuance of common stock upon exercise of options

Issuance of common stock in exchange for warrants

Issuance of common

stock pursuant to the

Aquarius Merger Agreement

Stock dividends

Other comprehensive loss

Balance, December 31, 2021

$ ( 131,634 )

December 31, 2021

$ ( 131,634 )

Stock-based compensation

Issuance of common stock upon exercise of options

Issuance of common stock pursuant to license agreement amendment

Issuance of common stock in exchange for warrants

Other comprehensive loss

Balance, December 31, 2022

$ ( 152,631 )

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Statements of Cash Flows

the Year Ended December 31,

flows from operating activities:

$ ( 23,283,415 )

$ ( 22,446,838 )

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 )

flows from investing activities:

of marketable securities

( 23,194,600 )

( 72,106,359 )

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 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 )

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

For the Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Loss on disposal of equipment

Stock-based compensation expense

Amortization of operating lease right-of-use assets

Amortization of finance lease right-of-use assets

Amortization of bond discount

Stock issued pursuant to license agreement amendment

Stock issued pursuant to the Aquarius Merger Agreement charged to Research and Development

Changes in operating assets and liabilities:

Operating lease liabilities

Prepaid expenses and other current assets

Accounts payable

Accrued expenses and other liabilities

Net cash used in operating activities

Cash flows from investing activities:

Purchases of marketable debt securities

Proceeds from sales of marketable debt securities

Purchases of leasehold improvements and equipment

Net cash provided by investing activities

Cash flows from financing activities:

Net proceeds from public offering of common stock

Proceeds from exercise of options

Payments of capital lease liability – principal

Net cash provided by financing activities

Net (decrease)/increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental non-cash financing and investing activities:

Unrealized loss on marketable debt securities

Cash exercise of warrants in prepaid expenses and other current assets

Right-of-use asset in exchange from liabilities from an operating lease modification

Right-of-use asset in exchange from liabilities from operating lease

Right-of-use asset in exchange from liabilities from finance leases

Stock dividends issued

Preferred stock conversion into common stock - series B

accompanying notes are an integral part of these consolidated financial statements.

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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.

and “BioPharma”, “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, 2022,

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

the Company had an accumulated deficit of $ 152,631 .

The Company’s net loss for the years ended December 31, 2022 and 2021 was $ 20,997

and $ 23,283 , respectively.

Company has been engaged in developing 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 U.S.

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.

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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).

of December 31, 2021, the Company had cash and cash equivalents of approximately $ 21.0 million, marketable securities of approximately

$ 28.6 million and restricted cash of approximately $ 0.3 million.

The Company believes the cash and cash equivalents and marketable securities

on hand are sufficient to fund planned operations through 2023.

of December 31, 2022, the Company had cash and cash equivalents of $ 6,830 , marketable debt securities of $ 21,933 and restricted cash

The Company believes the cash and cash equivalents and marketable debt securities on hand are sufficient to fund planned operations

into the second quarter of 2024.

3 – Summary of Significant Accounting Policies

of presentation and principles of consolidation

accompanying audited consolidated financial statements include the consolidated accounts of Holdings and its wholly owned subsidiaries,

BioPharma, and Nanotechnologies.

The accompanying consolidated financial statements have been prepared in accordance with accounting

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

GAAP”) and reflect the operations of the Company and

its wholly owned subsidiaries.

accompanying consolidated financial statements include the consolidated accounts of Holdings and its wholly owned subsidiaries, BioPharma,

and Nanotechnologies.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles

generally accepted in the United States (“U.S.

GAAP”) and reflect the operations of the Company and its wholly owned subsidiaries.

All intercompany transactions have been eliminated in consolidation.

March 2020, the World Health Organization declared COVID-19 a global pandemic.

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.

Company has been actively monitoring the COVID-19 pandemic and its impact globally.

The financial results for the year ended December

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

impact of events beyond our control

financial condition and results of operations may be impacted by factors we may not be able to control, such as the COVID-19 or other

pandemic, global supply chain disruptions, global trade disputes and/or political instability.

Increases in interest rates, especially

if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty

and heightening these risks.

Additionally, rising inflation rates may affect us by increasing operating expenses, such as employee-related

costs and clinical trial expenses, negatively impacting our results of operations.

Company’s financial results for the year ended December 31, 2022 were not significantly impacted by COVID-19 or other factors beyond

our control, such as those described above.

However, the Company cannot predict the impact of any of these factors 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 service providers and suppliers to continue to operate and deliver, the ability of the Company to maintain

operations, and any government and/or public actions taken in response to these factors.

preparation of consolidated financial statements in conformity with U.S.

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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.

the assessment of the impairment of goodwill and intangible assets, income tax

valuations and the determination of stock-based compensation.

and geographic information

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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.

debt securities.

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term

treasury bonds that mature within three months of settlement date.

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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.

Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities.

Debt Securities

debt securities, all of which are available-for-sale, consist of U.S.

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

government notes, corporate debt securities

and state and municipal bonds.

Marketable debt 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.

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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.

For a complete disclosure of the Company’s marketable debt securities, see Note 4

– Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities.

Concentration

of credit risk

Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents,

restricted cash and marketable securities.

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.

The Company has not experienced any credit losses associated with its balances in such accounts.

The Company’s financial instruments that are exposed to concentrations

of credit risk consist primarily of cash, cash equivalents, restricted cash and marketable debt securities.

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.

Balances are maintained at U.S.

financial institutions and may from time to time exceed

the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $ 250 per depositor, per insured bank for each account

ownership category.

The Company has not experienced any credit losses associated with its balances in such accounts for the years ended

December 31, 2022 and 2021.

improvements and equipment

and leasehold improvements are stated at cost less accumulated depreciation and amortization.

improvements and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation on equipment is computed using

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by performing a qualitative test for its reporting unit.

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, 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.

As part of the qualitative review, the Company considered relevant events and

circumstances, with an emphasis on the fact that the Company’s fair value, as determined by its market capitalization, is well

in excess of its book value.

Based on the results of the Company’s assessment, it was determined that it is more-likely-than-not

that its goodwill was not impaired during the years ended December 31, 2022 and 2021.

lived intangible assets are composed of in-process research and development (“IPR&D”) and represent projects acquired

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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.

test for goodwill, the Company may perform a qualitative review of its indefinite-lived intangible assets for impairment.

used the qualitative approach and concluded that it was more-likely-than-not that its indefinite-lived assets were no t impaired during

the years ended December 31, 2022 and 2021.

Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 842, “Leases”,

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Additional qualitative and quantitative disclosures are also required.

For a complete disclosure of the Company’s

leases, see Note 8 – Leases.

stock dividends

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.

to provisions detailed more fully in Note 12 - Stockholders’ Equity, shares of Series B Preferred Stock earned dividends at rates

of 10 % , 15 % and 20 % 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 and all Series B Preferred Stock were converted in 2021.

taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating

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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 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.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates in the period

that includes the enactment date.

Company adopted the provisions of ASC 740-10 and has analyzed its filing positions in 2022 and 2021 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, 2022.

the Company incurred net operating losses in every tax year since inception, the 2014 through 2021 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.

examination and adjustments by the Internal Revenue Service for at least three years following the year in which the tax attributes are

Value Measurements

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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.

compensation to employees consist of stock option grants and restricted shares.

The Company accounts for stock-based compensation under

the provisions of ASC 718-10, Compensation – Stock Compensation , which requires all share-based payments to employees, non-employees

and directors, including grants of stock options and restricted shares, to be recognized in the consolidated statements of operations

and comprehensive loss based on their fair values on the date of grant over the requisite service period, which is generally the vesting

period of the respective award.

Forfeitures are accounted for as they occur.

Generally, the Company issues stock option awards with only

service-based vesting conditions and records the expense for these awards using the straight-line method.

The Company classifies stock-based

compensation expense in the same manner in which the awards recipient’s payroll or service provider’s costs are classified.

Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based

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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.

resulting 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

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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

considered its Preferred Stock to be participating securities because the shares included rights to participate in dividends with the

common stock.

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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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):

outstanding stock options and warrants would have an anti-dilutive effect.

The reconciliation of the diluted shares as of December 31,

2022 and 2021 are as follows:

of Anti-dilutive Securities

of December 31,

Stock and accrued dividend upon conversion

As of December 31,

Stock options

to Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects

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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.

The Company had approximately

$ 125 thousand of CFF research grant revenue for the year ended December 31, 2020.

the year ended December 31, 2022, the Company’s revenues primarily consist of contract research revenue from the BioNTech Agreement

to evaluate the combination of mRNA formats utilizing the Company’s proprietary LNC Platform.

For a complete disclosure of the

Company’s Revenue Recognition, see Note 9 – Revenue Recognition, Collaboration Agreements, and Other Research and Development

December 12, 2019, the Company entered into a feasibility study agreement (the “Agreement”) with Genentech, Inc.

(“Genentech”).

This feasibility study 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 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.

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.

This feasibility study involves the development of oral formulations using the Company’s LNC Platform, 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 for three

molecules, or approximately $ 33 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.

are no contract assets associated with this Agreement.

As of December 31, 2022, the Company completed the first and second of the three

molecules and the Company recognized $ 33 of Genentech revenue for the years ended December 31, 2021 and 2020, respectively.

is scheduled to complete performance obligation related to the remaining molecule during 2023.

Collaboration

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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

research and development expenses in the Company’s Statements of Operations and Comprehensive 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, 2022 and 2021, the Company recognized $ 811 and $ 2,179 , 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, Collaboration Agreements, and other Research and Development Agreements.

and development expenses

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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.

adopted accounting pronouncements

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

comprehensive loss

comprehensive loss consists of net gains/(losses) and unrealized losses on marketable debt securities available-for-sale and is presented

in the Consolidated Statements of Operations and Comprehensive Loss.

accounting pronouncements

were no recent accounting pronouncements that impacted the Company or are expected to have a significant effect on its consolidated financial

4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt 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

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term U.S.

debt securities.

Cash and cash equivalents consisted of cash in bank checking and savings accounts, money market funds and short-term

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.

Restricted cash at each

of December 31, 2022 and 2021 of $ 250 represents funds the Company is required to set aside as collateral, primarily for one of the Company’s

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, 2022, December 31, 2021 and December 31, 2020:

(in thousands):

Schedule of Cash, Cash Equivalents and Restricted Cash

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’

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, 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 Marketable Securities

Cash and cash equivalents

Restricted cash included in current/non-current assets

Cash, cash equivalents and restricted cash in the statement of cash flows

Debt Securities

Company has classified its investments in marketable debt securities as available-for-sale and as a current asset.

The Company’s

investments in marketable debt securities are carried at fair value, with unrealized gains and losses included as a separate component

of stockholders’ equity.

Unrealized losses and gains are classified as other comprehensive (loss)/income and costs are determined

on a specific identification basis.

Realized gains and losses from marketable debt securities are recorded in other income, net.

the years ended December 31, 2022 and 2021, the Company recorded unrealized losses of $ 679 and $ 374 , respectively.

As of December 31,

2022 and 2021, the Company had net accumulated unrealized losses of $ 824 and $ 145 , respectively.

Company’s marketable debt securities for the year ended December 31, 2022 consisted of the following:

Schedule of Marketable Securities

Amortized Cost

1 unchanged sentence

Unrealized (Loss)

Amortized Cost

Unrealized (Loss)

Treasury Bonds

Government Notes

Corporate Debt Securities

State and Municipal Bonds

Total marketable securities

of debt securities classified as available-for-sale were as follows at December 31, 2021 (in thousands):

Total marketable debt securities

of debt securities classified as available-for-sale were as follows at December 31, 2022:

Schedule of Maturities of Debt Securities Available-for-sale

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):

Due within one year

Due after one year through five years

Company’s marketable debt securities for the year ended December 31, 2021 consisted of the following:

Unrealized (Loss)

Amortized Cost

1 unchanged sentence

Unrealized (Loss)

Treasury Bonds

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):

Carrying Amount

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.

Corporate Debt Securities

State and Municipal Bonds

Total marketable debt securities

of debt securities classified as available-for-sale were as follows at December 31, 2021:

Due within one year

Due after one year through five years

Company determined that the unrealized (losses) and gains are temporary as of December 31, 2022 and 2021.

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.

5 - Fair Value Measurements

15 unchanged sentences

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):

carrying amounts of cash equivalents, current portion of restricted cash, prepaid expenses and other current assets, accounts payable,

current portion of lease liabilities 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:

Schedule of Fair Value Measurement of Assets and Liabilities

Value Hierarchy

Government Notes

Debt Securities

and Municipal Bonds

Value Hierarchy

Fair Value Hierarchy

December 31, 2022

Marketable Debt Securities:

Treasury Bonds

Government Notes

Debt Securities

and Municipal Bonds

Corporate Debt Securities

Fair Value Hierarchy

December 31, 2021

Marketable Debt Securities:

Government Notes

Corporate Debt Securities

State 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.

Marketable debt securities consisting of U.S.

government notes, corporate debt securities and state and municipal

1 unchanged sentence

6 – Leasehold Improvements and Equipment

improvements and equipment, summarized by major category, consist of the following for the years ended December 31, 2021 and 2020 (in

improvements and equipment, summarized by major category, consist of the following for the years ended December 31, 2022 and 2021:

Schedule of Leasehold Improvements and Equipment

Leasehold improvements

accumulated depreciation and amortization

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.

Leasehold improvements and equipment, net

and amortization expense for the years ended December 31, 2022 and 2021 was $ 337 and $ 244 , respectively.

During the years ended December

31, 2022 and 2021, the Company purchased equipment and leasehold improvements of $ 892 and $ 260 , respectively.

During the year ended December

31, 2022, the Company recorded an asset write-off of $ 7 , including $ 5 of related accumulated depreciation.

During the year ended December

31, 2021, the Company recorded an asset write-off of $ 6 , including $ 4 of related accumulated depreciation.

7 – Accrued Expenses and Other Liabilities

expenses and other liabilities, summarized by major category, consist of the following for years ended December 31, 2021 and 2020 (in

expenses and other liabilities, summarized by major category, consist of the following for years ended December 31, 2022 and 2021:

Schedule of Accrued Expenses

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.

As of December 31,

Payroll and incentives

Deferred revenue *

General and administrative expenses

Research and development expenses

Other deferred liabilities **

December 31, 2022, the balance included $ 688 related to an exclusive research collaboration with BioNTech SE (the “BioNTech

Agreement”) and $ 33 is related to a feasibility study agreement with Genentech, Inc.

(the “Genentech Agreement”).

Both balances are expected to be recognized by March 31, 2023.

At December 31, 2021, the balance of $ 33 was related to the Genentech

(See Note 9 – Revenue

Recognition, Collaboration Agreements, and Other research and Development Agreements).

December 31, 2022 and December 31, 2021, the balances of $ 88 and $ 899 , respectively, related to an award agreement with the Cystic

Fibrosis Foundation (the “CFF Agreement).

(See Note 9 – Revenue Recognition, Collaboration Agreements, and Other Research

and Development Agreements).

Company has various lease agreements 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 will be included in the lease term

when it is reasonably certain that the option will be exercised.

Certain of the Company’s lease agreements contain rent escalation

and finance leases are presented in the Company’s consolidated balance sheets as right-of-use assets from leases, current lease

liabilities and long-term lease liabilities.

The assets and liabilities from our 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

As the Company’s operating leases do not provide implicit rates, the Company has utilized its incremental borrowing rate,

determined based on the long-term borrowing costs of companies with similar credit profiles, to record its lease obligations.

The Company’s

finance leases provide readily determinable implicit rates.

For operating leases, the Company recognizes the minimum rental expense on

a straight-line basis based on the fixed components of a lease arrangement.

The Company will amortize this expense over the term of the

lease beginning with the lease commencement date.

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.

September 23, 2020, the Company entered into an amendment to the Bedminster lease.

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.

a monthly rent of approximately $ 13 , increasing to approximately $ 14 toward the end of the term.

The lease was subsequently amended,

including most recently on September 13, 2022 to provide additional space and to extend the term of the lease until June 30, 2029 at

a monthly rent of approximately of approximately $ 20 , increasing to approximately $ 23 toward the end of the term.

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.

December 15, 2016, the Company entered into a 10-year, 3-month lease of laboratory and manufacturing space in Bridgewater, New Jersey.

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 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 $ 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 $ 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.

The monthly rent started at approximately $ 43 , increasing to approximately $ 64 in the final year.

the lease, the Company provided an initial security deposit of $ 586 which was subsequently reduced and is currently $ 200 at December

Company incurred lease expense for its operating leases of $ 872 and $ 852 for the years ended December 31, 2022 and 2021.

incurred amortization expense on its operating lease right-of-use assets of $ 542 and $ 501 for the years ended December 31, 2022 and 2021,

respectively.

Company incurred interest expense on its finance leases of $ 1 and $ 3 for the years ended December 31, 2022 and 2021, respectively.

Company incurred amortization expense on its finance lease right-of-use assets of $ 19 and $ 36 for the years ended December 31, 2022 and

2021, 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):

finance leases as of December 31, 2022:

Schedule of Maturity of Operating and Finance Leases Liabilities

of Lease Liabilities

Lease Liabilities

undiscounted operating lease payments

Maturity of Lease Liabilities

Operating Lease Liabilities

Finance Lease Liabilities

Total undiscounted operating lease payments

Imputed interest

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

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 leases and

finance leases as of December 31, 2021:

Maturity of Lease Liabilities

Operating Lease Liabilities

Finance Lease Liabilities

Total undiscounted operating lease payments

Imputed interest

value of operating lease liabilities

average remaining lease term in years

average discount rate

9 - Collaboration Agreements, License and Other Research and Development Agreements

Present value of operating lease liabilities

Weighted average remaining lease term in years

Weighted average discount rate

9 – Revenue Recognition, Collaboration Agreements, and Other Research and Development Agreements

Research Collaboration

April 8, 2022, the Company entered into the BioNTech Agreement to evaluate the combination of mRNA formats utilizing the Company’s

proprietary LNC Platform.

Under the terms of the BioNTech Agreement, the Company received an exclusivity fee in the amount of $ 2,750 ,

and BioNTech SE will fund certain of the Company’s research expenses to be incurred under the agreement.

The parties have also

commenced discussions on a potential option to license (“OTL”) agreement for the Company’s LNC Platform.

the agreement begins on the effective date and ends on the earlier of the execution of an OTL agreement by the parties, 12-months after

the effective date and termination of the agreement.

As of December 31, 2022, the parties have not executed an OTL agreement.

Company assessed the BioNTech Agreement under ASC 808 Collaboration Arrangements and ASC 606 Revenue from Contracts with Customers

(“ASC 606”) and concluded that the contract counterparty, BioNTech SE, is a customer based on the arrangement structure.

The Company identified two material promises to deliver under the contract:

(1) grant of an exclusive research license and (2) clinical

research services.

However, given the nature of the promises, the license and research services are not considered to be distinct from

each other within the context of the contract.

The Company therefore concluded that there is one combined performance obligation for

both the license and research services.

$ 2,750 license fee was recorded as deferred revenue and is being recognized over the term of the contract performance obligation period,

which the Company has concluded to be 12 months after the execution of the contract.

The clinical research services are being invoiced

as service revenue is earned on a monthly basis during the term of the contract.

of December 31, 2022, the Company recognized $ 3,188 of contract research revenue from the BioNTech Agreement.

For the year ended December

31, 2022 $ 2,063 of the contract research revenue was recognized from the license fee and $ 1,125 was earned from the monthly clinical

research services performed by the Company.

As of December 31, 2022, $ 688 of the license fee is included in deferred revenue within accrued

Fibrosis Foundation Therapeutics Development Award

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

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.

November 19, 2020, the Company entered into an award agreement (the “CFF Agreement”) with the Cystic Fibrosis Foundation

(“CFF”), pursuant to which it received a Therapeutics Development Award of up to $ 4,234 (the “Award”) (of which

$ 484 had been previously received) to support the preclinical development (the “Development Program”) of the Company’s

MAT2501 product candidate.

On November 19, 2021, the Company and CFF entered into an Amendment to the CFF Agreement which added an additional

milestone payment in the amount of $ 321 .

of December 31, 2022, the Company has received $ 3,635 of the $ 4,555 commitment, inclusive of the Amendment’s additional milestone

payment, and the related deferred liability balances of $ 88 and $ 899 is included in accrued expenses at December 31, 2022 and December

31, 2021, respectively.

During the fourth quarter of 2022, for financial and technical reasons, the Company determined that it was not

commercially reasonable to continue the development of MAT2501 and instead elected to focus existing resources on other initiatives.

As a result, the Company does not anticipate receiving the balance of the commitment.

to the terms of the CFF Agreement, should the Company ceases to use commercially reasonable efforts directed to the development of MAT2501

in the Field, (an “Interruption”) and fail 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.

Following discussion with the CFF in early 2023, the Company does not believe it will have to repay any amounts of Awards received by

the Company to date pursuant to the terms of the CFF Agreement.

The Company is working together with the CFF to wind up the agreement

according to its terms.

the event that the Company chooses to resume development of MAT2501, pursuant 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 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 to two royalty payments to CFF of 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

8 unchanged sentences

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

During the years ended December 31, 2022 and 2021, the Company recognized $ 811 and $ 2,179 , respectively,

as credits to research and development expenses related to the CFF award.

Feasibility Study Agreement

December 12, 2019, the Company entered into a feasibility study agreement (the “Agreement”) with Genentech, Inc.

(“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 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:

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.

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 .

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.

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 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

December 12, 2019, the Company entered into the Genentech Agreement which involves the development of oral formulations using the Company’s

LNC Platform.

Under the terms of the Genentech Agreement, Genentech paid the Company a total of $100 for the development of three molecules,

or approximately $33 per molecule, which is being recognized upon the Company fulfilling its obligations for each molecule under the

Genentech Agreement .

The Company recorded the upfront consideration as deferred revenue, which is included in accrued expenses on the

consolidated balance sheets.

As of December 31, 2021, the Company completed its obligations related to the first and second of the three

During the year ended December 31, 2022, the Company did not complete its obligations related to the remaining molecule but

expects to do so during 2023.

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 certain patents related to the LNC Platform (the “License Agreement”).

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

when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual license fee of

over the term of the License Agreement.

The term of the License Agreement will remain in effect until the expiration of the last-to-expire patent rights

licensed or seven and one-half years from the date of the first commercial sale of a licensed product under this agreement, whichever

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,

2 unchanged sentences

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

costs in clinical development and may require upfront payments and long-term commitments of cash.

Subject to required notice periods

and obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time.

the performance of research and development and manufacturing activities.

Expenditures to these third parties represent significant costs

in clinical development and may require upfront payments and long-term commitments of cash.

Subject to required notice periods and obligations

under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time.

Company is not currently a party to any legal proceedings, and the Company is not aware of any claims or actions pending or threatened

against its business.

In the future, the Company might from time to time become involved in litigation relating to claims arising from

our ordinary course of business.

11 – Income Taxes

10 unchanged sentences

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):

components of the income tax provision are as follows:

of Income Tax Provision

Ended December 31,

expense (benefit):

Year Ended December 31,

Current expense (benefit):

expense (benefit):

Total current expense (benefit):

Deferred expense (benefit):

income tax 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

4 unchanged sentences

of Effective Income Tax Rate Reconciliation

Ended December 31,

at US Statutory Rate

Taxes, net of Federal benefit

Year Ended December 31,

Income at U.S.

Statutory Rate

State Taxes, net of Federal benefit

Permanent Differences

Valuation Allowance

Discrete items

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):

components of the Company’s deferred tax assets (liabilities) for 2022 and 2021 consist of the following:

of Deferred Tax Assets and Liabilities

Ended December 31,

and Amortization

Operating Loss Carry-forwards

Credit Carryforwards

Deferred tax assets

deferred tax asset (liability)

Year Ended December 31,

Share-based Compensation

Depreciation and Amortization

Accrued Liability

Net Operating Loss Carry-forwards

R&D Credit Carryforwards

R&D Section 174 Costs

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

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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.

The tax law changes in the Act did

not have a material impact on the Company’s income tax provision.

increasing the limitation on the amount of deductible interest expense, 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

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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

The valuation allowances were $ 34.4 , $ 31.0 and $ 25.2 as of December 31,

2022, 2021 and 2020, respectively, representing increases of $ 3.4 and $ 5.8 for the years ending December 31, 2022 and 2021, respectively.

of December 31, 2021, the Company had Federal net operating loss carryforwards of $ 38.1 which will begin to expire in 2032 .

the Company has federal net operating loss carryforwards of $ 64.5 which have an indefinite carryforward period.

The Company also had

federal and state research and development tax credit carryforwards of $ 3.8 .

The federal net operating loss and tax credit carryforwards

will expire at various dates beginning in 2032, 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.

of the net operating losses and general business tax credits carryforwards may be subject to a substantial limitation under Sections

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change since the Company’s inception.

of net operating losses (NOLs)

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.

Under the Tax Cuts and Jobs Act of 2017, research

and development costs are no longer fully deductible and are required to be capitalized and amortized for U.S.

tax purposes effective

January 1, 2022.

The mandatory capitalization requirement increases our deferred tax assets.

of net operating losses (NOLs) & tax credits

Company recognized $ 3,491 and $ 1,328 for the years ended December 31, 2022 and 2021, 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 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

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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.

principal, shares of its common stock having an aggregate offering price of up to $ 50,000 , 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;

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.

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 $ 5,753

and net proceeds of $ 5,580 , after deducting BTIG’s commission on gross proceeds.

During 2022, the Company did not sell any shares

of its common stock under the ATM Sales Agreement.

At December 31, 2022, the ATM’s available capacity was $ 44,247 .

February 8, 2022, the Company issued 400,000 unregistered shares of its common stock to Rutgers, The State University of New Jersey (“Rutgers”),

as partial consideration pursuant to the Second Amended and Restated Exclusive License Agreement between the Company and Rutgers.

agreement provides for (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.

There was also a

reduction in the consideration paid to Rutgers in the event of a sublicense to a third party of the exclusive patent rights granted pursuant

to the Agreement.

The Company recorded a $ 291 research and development expense related to the issuance of the 400,000 shares based on

the closing price of the Company’s common stock of $ 0.728 on the date of issuance.

September 3, 2021, the Company issued 1,500,000 unregistered shares of its common stock pursuant to the Agreement and Plan of Merger

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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.

The Company recorded a $ 1,200 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.

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

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

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.

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.

January 1 and June 18, 2021, 143

shares of Series B Preferred Stock were converted by shareholders resulting in the issuance of 286,000

shares of common stock.

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 .

On June 19, 2021, each of the 4,218

remaining shares of Series B Preferred Stock were each automatically converted into 2,000

shares of the Company’s common stock resulting in the issuance of 8,436,000

shares of common stock.

No shares or Series B Preferred stock remained outstanding after the automatic conversion.

accounting of the holders of record of Series B Preferred Stock on June 19, 2021, the Company made dividend payments totaling 1,687,200

shares of common stock.

warrants issued by the Company are exercisable immediately upon issuance and have a five-year term.

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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 December 31, 2022, the Company had outstanding warrants to purchase an aggregate of 238,000 shares of common stock at an exercise

price of $ 0.75 per share, and with an expiration date of June 21, 2023.

A summary of warrants outstanding as of December 31, 2022 and

2021 is presented below, all of which are fully vested:

of Shareholders Equity Warrants Outstanding

at December 31, 2019

Outstanding at December 31, 2020

at January 01, 2021

at December 31, 2021

average exercise price for outstanding warrants is $ 0.55 .

into approximately 115 thousand shares of common stock.

Outstanding at December 31, 2021

Outstanding at December 31, 2022

average exercise price for outstanding warrants is $ 0.56 .

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):

into 400 thousand shares of common stock.

13 – Accumulated Other Comprehensive Income/(Loss)

following table summarizes the changes in accumulated other comprehensive income/(loss) by components during the years ended December

31, 2022 and 2021:

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.

Net Unrealized Gains/(Losses) on Available-for-Sale Securities

Accumulated Other Comprehensive Income/(Loss)

Balance, December 31, 2020

Net unrealized loss on securities available-for-sale

Balance, December 31, 2021

Net unrealized loss on securities available-for-sale

Balance, December 31, 2022

components of accumulated other comprehensive income/(loss) 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, 2021, the Company had 36,952,460 shares of common stock authorized for issuance

under the Plan.

options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights to eligible employees, officers,

non-employee directors and other individual service providers.

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 .

December 31, 2022, the Company had 45,603,238 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.

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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):

Company recognized stock-based compensation expense (options and restricted share grants) in the following expense categories of its

consolidated statements of operations as follows:

of Recognized Stock-Based Compensation

Ended December 31,

and Development

and Administrative

Year Ended December 31,

Research and Development

General and Administrative

following table contains information about the Company’s stock plan at December 31, 2022:

of Equity Compensation Plan by Arrangements

Reserved for Issuance

Issued & Exercised

Available for Grant

Awards Reserved for Issuance

Awards Issued & Exercised

Awards Available for Grant

2013 Equity Compensation Plan (in thousands)

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of Stock Option Activity

Average Exercise Price

Average Contractual Term in Years

at December 31, 2019

Number of Options

Weighted Average Exercise Price

Weighted Average Contractual Term in Years

Outstanding at December 31, 2020

at December 31, 2021

Outstanding at December 31, 2021

Outstanding at December 31, 2022

following table summarizes outstanding options at December 31, 2022, by their exercise price (options in thousands):

of Outstanding Options

of Exercise Prices

Average Exercise Price Per Share

Range of Exercise Prices

Number Outstanding

Weighted Average Exercise Price Per Share

$ 0.41 - $ 0.69

$ 0.73 - $ 0.92

$ 0.93 - $ 1.28

$ 1.36 - $ 3.32

of December 31, 2022, the number of vested shares underlying outstanding options was 19,578,859 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.

The aggregate intrinsic value of in-the-money options outstanding as of December 31, 2022 was $ 90 .

The aggregate intrinsic

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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.

As of December 31, 2022, there was $ 9,997 of total unrecognized share-based compensation.

Such costs are expected to be recognized over a weighted average period of approximately 2.6 years.

outstanding options expire ten years from date of grant.

Options granted to employees prior to 2018 vest in equal monthly installments

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, 2021 and 2020, the Company granted restricted stock awards for 31,769 and 379,385 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.

outstanding options expire ten

date of grant.

Options granted to employees prior to 2018 vest in equal monthly installments 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.

the years ended December 31, 2022 and 2021, the Company granted restricted stock awards for 0 and 31,769 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 $ 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

The Company recorded

the value of these restricted awards as general and administrative expense of $ 0 and $ 100 in the consolidated statement of operations

for the years ended December 31, 2022 and 2021, respectively.

Company recognizes compensation expense for restricted stock awards on a straight-line basis over the applicable service period of the

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.

The following weighted-average assumptions were used to calculate share-based compensation for the comparative periods presented:

Schedule of Stock Option Awards and Restricted Stock Awards

For the Year Ended December 31,

92.1 % - 98.7 %

Risk-free interest rate

1.57 % - 4.32 %

Dividend yield

Expected life

Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting

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

What changed 10-K

Item 9A. Controls and Procedures