NOMAD POWER SOLUTIONS, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer(s) and principal financial officer(s), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. - 73 - In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the fiscal year ended December 31, 2023, the end of the most recent fiscal year covered by this report. Based on that evaluation, the Company’s management concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). Management’s Annual Report on Internal Control Over Financial Reporting The Company’s management, including its Chief Executive Officer and its Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting is designed to ensure that material information regarding the Company’s operations is made available to management and the Board of Directors to provide them reasonable assurance that the published financial statements are fairly presented. The Company’s management assessed the Company’s internal control over financial reporting based on the Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Company’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and can find it more difficult to properly segregate duties. Smaller reporting companies also tend to utilize general accounting software packages that lack a rigorous set of software controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or deterred on a timely basis. Based on the Company’s evaluation under the framework in COSO, the Company’s management, with the participation of its Chief Executive Officer and its Chief Financial Officer, concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023. Management believes that the consolidated financial statements included in this report fairly present, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the period ended December 31, 2023. - 74 - Auditor’s Report on Internal Control Over Financing Reporting This report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this report. Changes in Internal Control Over Financial Reporting The Company’s management, including its Chief Executive Officer and its Chief Financial Officer, has determined that no change in the Company’s internal control over financial reporting (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) occurred during or subsequent to the period ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION Rule 10b5-1 Plans During the quarter ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” as such term is defined in Item 408(a) of Regulation S-K. As of December 31, 2023, the Company did not have a “Rule 10b5-1 trading arrangement” in effect with respect to its securities. Insider Trading Policy The Company has adopted insider trading policies and procedures governing the purchase, sale, and other disposition of its securities, which has been filed as an exhibit to this report and has been posted to the investor information/governance section of the Company’s corporate website (www.lixte.com). ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. - 75 - PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Executive Officers The following table and text set forth the names of all of our directors and executive officers as of March 1, 2024. The Board of Directors is comprised of only one class. All of the directors will serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. The brief descriptions of the business experience of each director and executive officers and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws are provided herein below. Also provided are the biographies of the members of the Scientific Advisory Committee and our consultants. Our directors and executive officers are as follows: Name Age Position(s) Held with the Company Bastiaan van der Baan 52 President, Chief Executive Officer, and Chairman of the Board of Directors Dr. James S. Miser 76 Chief Medical Officer Robert N. Weingarten 71 Vice President and Chief Financial Officer Eric J. Forman 43 Vice President and Chief Operating Officer Dr. Stephen J. Forman 75 Director Regina Brown 60 Director Dr. Yun Yen 69 Director Dr. René Bernards 71 Director Biographies of Directors and Executive Officers Bastiaan van der Baan Bastiaan (“Bas”) van der Baan was appointed to the Company’s Board of Directors effective June 17, 2022. Effective September 26, 2023, Mr. van der Baan replaced the Company’s founder, Dr. John S. Kovach, as President and Chief Executive Officer. Dr. Kovach passed away on October 5, 2023. Effective October 6, 2023, as a result of the passing of Dr. Kovach, Mr. van der Baan was appointed as Chairman of the Board of Directors. Mr. van der Baan has over 20 years of experience in the biotechnology industry, with a key focus on oncology and diagnostics. He has extensive knowhow in the process of managing a compound from clinical development to reimbursement and commercialization, as well as the establishment of partnerships with the pharmaceutical industry, academic collaborators, distributors, insurance companies and governments to successfully launch new oncology products. Mr. van der Baan was most recently the Chief Clinical Officer of Agendia, an oncology molecular diagnostic company based in Irvine, California and Amsterdam, Netherlands through July 15, 2023. Mr. van der Baan is an independent director of Tethis S.p.A., a Milan, Italy-based developer of a novel platform for liquid biopsy testing. Mr. van der Baan was co-founder of ThromboDx, a liquid biopsy company that was acquired in 2016, Qameleon Therapeutics, a company developing synthetic lethal drug combinations for cancer treatment, and Oncosence, an oncology drug development company using senescence as target for drug development. Mr. van der Baan started his career in 1997 at a specialty chemicals division of Unilever that was acquired by ICI. In 2002, Mr. van der Baan joined Kreatech, a biotechnology company acquired by Leica that specialized in life science reagents for gene expression, DNA and protein analysis. Mr. van der Baan holds a Master’s Degree in Molecular Sciences from the Wageningen University in the Netherlands. Dr. James S. Miser James S. Miser, M.D., was appointed as Chief Medical Officer effective August 1, 2020. Dr. Miser is a pediatric hematologist/oncologist, internationally recognized as an expert in the study and treatment of childhood cancers. His outstanding career includes leadership positions as Clinical Director, Department of Pediatrics, Division of Pediatric Hematology/Oncology, Children’s Hospital and Medical Center and Associate Member, Fred Hutchinson Cancer Research Center, Seattle, Washington; Chairman, Division of Pediatrics, Director, Department of Pediatric Hematology/Oncology, President and Chief Executive Officer, and Chief Medical Officer, at the City of Hope National Medical Center, Duarte, California. Dr. Miser was a member of the Active Staff, Department of Pediatrics at the City of Hope, until 2022, and Chair Professor, College of Medical Sciences and Technology, Taipei Medical University, Taipei, Taiwan. - 76 - Dr. Miser has extensive experience in the clinical development of new anti-cancer drugs for pediatric malignancies, leading many clinical trials at institutional and national cancer study groups. He is expert in the design and monitoring of clinical cancer trials and was a member of the Soft Tissue Sarcoma Strategy Group, and Member of the New Agents Executive and Steering Committee, Vice Chairman for Solid Tumors and Phase II Coordinator for the Children’s Cancer Group and Chairman, Data Monitoring Committee, National Wilms Tumor Society. He has authored more than a 100 peer-reviewed articles dealing primarily with pediatric clinical cancer studies. Robert N. Weingarten Mr. Weingarten was appointed to serve as our Vice President and Chief Financial Officer effective August 12, 2020. Mr. Weingarten is an experienced business consultant and advisor with a consulting practice focusing on accounting and SEC compliance issues. Mr. Weingarten was familiar with the financial and business operations of the Company, as he had provided accounting and financial consulting services to the Company for a number of years prior to his appointment as Vice President and Chief Financial Officer with respect to the preparation of the Company’s consolidated financial statements and certain other financial and compliance matters. Since 1979, Mr. Weingarten has provided such financial consulting and advisory services, has acted as chief financial officer, and has served on the boards of directors of numerous public companies in various stages of development, operation or reorganization. Mr. Weingarten has experience in a variety of industries, including the pharmaceutical industry. Mr. Weingarten has been a Director of Guardion Health Sciences, Inc. since June 2015 and Chairman of its Board of Directors since July 2020. Mr. Weingarten also serves on the audit, compensation, and nominating and corporate governance committees of Guardion Health Sciences, Inc. Previously, Mr. Weingarten served as Lead Director on Guardion’s Board of Directors from January 2017 to March 2020. Mr. Weingarten received a B.A. in Accounting from the University of Washington in 1974, an M.B.A. in Finance from the University of Southern California in 1975, and is a Certified Public Accountant (inactive) in the State of California. Eric J. Forman, J.D. Mr. Forman has led our business development efforts since 2013. Effective as of October 1, 2020, Mr. Forman was appointed as our Chief Administrative Officer, and effective as of November 6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer. In his roles as Chief Administrative Officer and Chief Operating Officer, his responsibilities include overseeing all internal operations, the development of science/business collaborations, and the management of our growing intellectual property portfolio. Prior to his involvement with our company, he served as Counsel and Senior Project Manager at Shore Group Associates managing in-house legal, tax, and regulatory affairs and supervising client relations for financial software and mobile application development teams. As an attorney, Mr. Forman has represented and advised both technology and biotechnology companies, entrepreneurs, non-profits, and start-ups with a focus on intellectual property, licensing, corporate structure and transactions. Mr. Forman earned a B.A. degree Cum Laude from Loyola Marymount University and a J.D. from the Benjamin N. Cardozo School of Law. He has an active law license and is a member of the New York State Bar Association. - 77 - Dr. Stephen J. Forman Stephen J. Forman, M.D., was appointed to our Board of Directors effective May 13, 2016. Dr. Forman is an internationally recognized expert in hematologic malignancies and bone marrow transplantation, and is a leader in preclinical and clinical cancer research. Dr. Forman was appointed to our Board of Directors on May 13, 2016. He is co-editor of Thomas’ Hematopoietic Cell Transplantation, a definitive textbook for clinicians, scientists and health care professionals. Dr. Forman is the Francis and Kathleen McNamara Distinguished Chair in Hematology and Hematopoietic Cell Transplantation at the City of Hope Comprehensive Cancer Center, a position he has held since 1987. In nearly 40 years at the City of Hope, Dr. Forman has been instrumental in advancing the survival rates for patients suffering from cancers of the blood and immune system such as leukemia, lymphoma and myeloma. As Director of the T Cell Immunotherapy Research Laboratory, his current research is focused on cancer immunotherapy, using the body’s own immune system to attack cancer. Pharmacological enhancement of patients’ immune responses to their cancers is of special interest to the Company, as the enzyme target of its lead clinical compound, LB-100, has been reported to be critical to immune function. Much of Dr. Forman’s current work centers on T-cells and their cancer-fighting potential. Dr. Yun Yen Yun Yen, M.D., Ph.D., F.A.C.P., was appointed to our Board of Directors effective August 4, 2018. Dr. Yen is a physician, scientist, innovator, and philanthropist. Dr. Yen was appointed to our Board of Directors on August 4, 2018. He is widely regarded as an expert in ribonucleotide reductase, a critical target in cancer therapy and diagnostics. He is President Emeritus of Taipei Medical University (TMU) and Chair Professor of the Ph.D. Program for Cancer Biology and Drug Discovery. Prior to TMU, Dr. Yen was the Allen and Lee Chao Endowed Chair in Developmental Cancer Therapeutics, Chair of Molecular Pharmacology Department, Associate Director for Translational Research, and Co-Director of the Developmental Cancer Therapeutics Program at the City of Hope NCI-designated Comprehensive Cancer Center, Duarte California. He has published more than 300 peer-reviewed articles, holds over 60 patents, and has commercialized multiple methodologies involving nanoparticles, small and large molecule drugs, biomarkers, stem cells, and medical devices. Dr. Yen has also founded philanthropic organizations aimed at serving the global cancer community and holds membership in numerous professional societies. He serves on the boards of Fulgent Genetics and Tanvex BioPharma Inc. Regina Brown, CPA Regina Brown was appointed to our Board of Directors effective May 11, 2021. Ms. Brown has been a practicing accountant for over thirty years. Her practice has a wide range of clients, varying in size, industry and geographic locations, including large national corporations listed on the New York Stock Exchange, as well as Southern California businesses. Other clients consist of professionals, wholesalers and high net worth individuals. Many of her clients have international and cross-border operations. As a consequence of her depth of experience, she regularly assists other professionals with their client’s issues and performs tax research and analysis in connection with litigation and other matters, including marital dissolution, tax and accounting with respect to mergers and acquisitions, implementation of internal controls, and extensive work in the area of trusts and estates. International tax matters and compliance are also a significant part of her practice. Ms. Brown is a member in good standing of the California Society of CPAs and the American Institute of Certified Public Accountants and has appeared as a speaker before both organizations. Dr. René Bernards Dr. René Bernards was appointed to our Board of Directors effective June 15, 2022. Dr. Bernards is a leader in the field of molecular carcinogenesis, working at the Netherlands Cancer Institute in Amsterdam. His research focuses on identifying effective new drug combinations, new drug targets, and mechanisms of resistance to anti-cancer drugs. He has also co-founded four biotechnology companies to bring his scientific discoveries to clinical oncology practice. He is a member of the Royal Netherlands Academy of Sciences, an International Honorary Member of the American Academy of Arts and Sciences and an International Member of the National Academy of Sciences (USA). Additionally, he is a fellow of the American Association for Cancer Research (AACR). Dr. Bernards has presented new data on the unexpected effectiveness of the Company’s lead clinical compound, LB-100, when given with a variety of standard and investigational anti-cancer compounds that have only modest activity on their own. - 78 - Scientific Advisory Committee The Scientific Advisory Committee was established to advise our management in three areas: human molecular pathology; the clinical management of human brain tumors; and medicinal chemistry. Our objective is to meet with the committee as a group annually. The committee has been apprised of our general objectives and several of the specific challenges and leads for developing improved therapies for human brain tumors. Members of the committee do not serve in any management capacity with us. The committee currently consists of one member, as follows: Dr. Daniel D. Von Hoff Dr. Daniel D. Von Hoff, M.D., is currently Physician in Chief, Distinguished Professor and Director of the Clinical Translational Research Division at the Translational Genomics Research Institute in Phoenix, Arizona. He is also Chief Scientific Officer for US Oncology and for Scottsdale Healthcare’s Clinical Research Institute. He holds an appointment as Professor of Medicine, Mayo Clinic, Scottsdale, Arizona. Dr. Von Hoff is a Fellow of the American College of Physicians. Dr. Von Hoff’s major interest is in the development of new anti-cancer agents, both in the clinic and in the laboratory. He and his colleagues were involved in the beginning of the development of many of the agents that are now used routinely, including mitoxantrone, fludarabine, paclitaxel, docetaxel, gemcitabine, irinotecan, nelarabine, capecitabine and lapatinib. At present, he and his colleagues are concentrating on the development of molecularly targeted therapies, particularly for patients with advanced pancreatic cancer. Dr. Von Hoff has published more than 620 papers, 137 book chapters and over 1,050 abstracts. Dr. Von Hoff received the 2010 David A. Karnofsky Memorial Award from the American Society of Clinical Oncology for his outstanding contributions to cancer research leading to significant improvement in patient care. Dr. Von Hoff was appointed to President Bush’s National Cancer Advisory Board from 2004 to 2010. Dr. Von Hoff is the past President of the American Association for Cancer Research (the world’s largest cancer research organization), a Fellow of the American College of Physicians, and a member and past board member of the American Society of Clinical Oncology. He is a founder of ILEX™ Oncology, Inc. (acquired by Genzyme in 2004 after Ilex had two agents, alemtuzumab and clofarabine, approved by the FDA for patients with leukemia). Dr. Von Hoff is founder and the Editor Emeritus of Investigational New Drugs – The Journal of New Anticancer Agents; and, Editor-in-Chief of Molecular Cancer Therapeutics. He is a co-founder of the AACR/ASCO Methods in Clinical Cancer Research Workshop. Family Relationships Eric Forman, our Vice President and Chief Operating Officer, is the son of board member Dr. Stephen Forman and son-in-law of former board member Gil Schwartzberg, who passed away on October 30, 2022. Julie Forman, the wife of Eric Forman and the daughter of the late Gil Schwartzberg, is Vice President of Morgan Stanley Wealth Management, where the Company’s cash is deposited and the Company maintains a continuing banking relationship. Committees of Our Board of Directors Our Board of Directors directs the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board of Directors and its standing committees. We have a standing audit committee and compensation committee. The Board of Directors serves in place of a nominating and corporate governance committee. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues. - 79 - Audit Committee Our audit committee is responsible for, among other things: ● approving and retaining the independent auditors to conduct the annual audit of our financial statements; ● reviewing the proposed scope and results of the audit; ● reviewing and pre-approving audit and non-audit fees and services; ● reviewing accounting and financial controls with the independent auditors and our financial and accounting staff; ● reviewing and approving transactions between us and our directors, officers and affiliates; ● establishing procedures for complaints received by us regarding accounting matters; ● overseeing internal audit functions, if any; and ● preparing the report of the audit committee that the rules of the SEC require to be included in our annual meeting proxy statement. Our audit committee currently consists of Regina Brown, Dr. Yun Yen and Dr. René Bernards, with Ms. Brown serving as chair. Our Board of Directors has determined that each of the committee members meet the definition of an “independent director,” as defined under Nasdaq rules, and that they each meet the independence standards under Rule 10A-3 of the Exchange Act. Each member of our audit committee meets the financial literacy requirements of the Nasdaq rules. In addition, our Board of Directors has determined that Ms. Brown qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. Our Board of Directors has adopted a written charter for the audit committee, which is available on our corporate website at www.lixte.com. Compensation Committee Our compensation committee is responsible for, among other things: ● reviewing and recommending the compensation arrangements for executive management; ● establishing and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals; ● administering our stock incentive plans; and ● preparing the report of the compensation committee that the rules of the SEC require to be included in our annual meeting proxy statement. Our compensation committee currently consists of Dr. Yun Yen, Regina Brown and Dr. René Bernards, with Dr. Yen serving as chair. Our Board of Directors has determined that each of the three committee members meet the definition of an “independent director”, as defined under Nasdaq rules. Our Board of Directors has adopted a written charter for the compensation committee, which is available on our corporate website at www.lixte.com. - 80 - Nominating and Corporate Governance Although our Board of Directors serves in place of a nominating and corporate governance committee, our independent directors on the Board of Directors are responsible for, among other things: ● nominating members of the Board of Directors; ● developing a set of corporate governance principles applicable to the Company; and ● overseeing the evaluation of our Board of Directors. Our Board of Directors may adopt resolutions addressing, among other things, the nomination process, as may be necessary in the future. Code of Ethics Our Board of Directors has adopted a code of ethics covering all of our executive officers and key employees. A copy of our code of ethics will be furnished without charge to any person upon written request. Requests should be sent to: Secretary, Lixte Biotechnology Holdings, Inc., 680 East Colorado Boulevard, Suite 180, Pasadena, California 91101. Limitations on Liability and Indemnification Matters Our Certificate of Incorporation contains provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for: ● any breach of the director’s duty of loyalty to the corporation or its stockholders; ● any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; ● unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or ● any transaction from which the director derived an improper personal benefit. This limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. Our Certificate of Incorporation provides that we are authorized to indemnify our directors and officers to the fullest extent permitted by Delaware law. Our Amended and Restated Bylaws provide that we are required to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. Our Amended and Restated Bylaws also provide that, upon satisfaction of certain conditions, we are required to advance expenses incurred by a director or executive officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of their actions in that capacity, regardless of whether we would otherwise be permitted to indemnify them under the provisions of Delaware law. Our Amended and Restated Bylaws also provide our Board of Directors with discretion to indemnify our other officers and employees when determined appropriate by our Board of Directors. We have entered into agreements to indemnify our directors, executive officers and other employees as determined by the Board of Directors. With certain exceptions, these agreements provide for indemnification for related expenses, including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers. We have obtained customary directors and officers liability insurance. The limitation of liability and indemnification provisions in our Certificate of Incorporation and Amended and Restated Bylaws may discourage stockholders from bringing a lawsuit against our directors for an alleged breach of their fiduciary duty. These provisions may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification. Compliance with Section 16(a) of the Securities Exchange Act of 1934, as Amended Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers and persons who own more than 10% of a registered class of the Company’s equity securities to file various reports with the Securities and Exchange Commission concerning their holdings of, and transactions in, securities of the Company. Copies of these filings are required to be furnished to the Company. To the Company’s knowledge, based solely on its review of the copies of the Section 16(a) reports furnished to the Company and any written representations to the Company that no other reports were required, the Company believes that all individual filing requirements applicable to a director, officer, or beneficial owner of more than 10% of the Company’s common stock were complied with under Section 16(a) of the Exchange Act during the year ended December 31, 2023, except as follows: Bas van der Baan was late in filing his Form 4 in connection with his appointment as President and Chief Executive Officer on September 26, 2023. - 81 - ITEM 11. EXECUTIVE COMPENSATION OFFICER AND DIRECTOR COMPENSATION Summary Compensation Table The table set forth below presents the compensation awarded to, earned by, or paid to our named executive officers for the years ended December 31, 2023, 2022 and 2021. OFFICER COMPENSATION TABLE Executive Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($)(1) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Bas van der Baan (6) 2023 40,639 - - 403,066 - - - 443,705 2022 - - - - - - - - 2021 - - - - - - - - John S. Kovach (2) 2023 190,860 - - - - - - 190,860 2022 250,000 - - 65,640 - - - 315,640 2021 250,000 - - - - - - 250,000 James S. Miser (3) 2023 175,000 - - - - - - 175,000 2022 175,000 - - 65,640 - - - 240,640 2021 166,667 - - - - - - 166,667 Robert N. Weingarten (4) 2023 175,000 - - - - - - 175,000 2022 175,000 - - 65,640 - - - 240,640 2021 156,667 - - - - - - 156,667 Eric J. Forman (5) 2023 200,000 - - - - - - 200,000 2022 178,819 - - 65,640 - - - 244,459 2021 156,667 - - - - - - 156,667 (1) Consists of grant date fair value of option award calculated pursuant to the Black-Scholes option-pricing model. (2) John S. Kovach was the President and Chief Executive Officer from inception through September 26, 2023. Effective July 15, 2020, the Company entered into an employment agreement with Dr. Kovach. On November 6, 2022, Dr. Kovach was awarded an option grant for 20,000 shares of common stock, exercisable for a period of five years at $20.00 per share and valued at $3.282 per share. The employment agreement with Dr. Kovach terminated upon his death on October 5, 2023. (3) James S. Miser has been the Chief Medical Officer since August 1, 2020. In connection with his employment agreement, Dr. Miser was awarded an option grant for 8,334 shares of common stock, exercisable for a period of five years at $71.40 per share and valued at $68.718 per share. On November 6, 2022, Dr. Miser was awarded an option grant for 20,000 shares of common stock, exercisable for a period of five years at $20.00 per share and valued at $3.282 per share. (4) Robert N. Weingarten has been the Vice President and Chief Financial Officer since August 12, 2020. In connection with his employment agreement, Mr. Weingarten was awarded an option grant for 5,833 shares of common stock, exercisable for a period of five years at $71.40 per share and valued at $68.718 per share. On November 6, 2022, Mr. Weingarten was awarded an option grant for 20,000 shares of common stock, exercisable for a period of five years at $20.00 per share and valued at $3.282 per share. (5) Eric J. Forman was the Chief Administrative Officer from July 15, 2020 to November 6, 2020. In connection with his employment agreement, Mr. Forman was awarded an option grant for 5,833 shares of common stock, exercisable for a period of five years at $71.40 per share and valued at $68.718 per share. Effective November 6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer. On November 6, 2022, Mr. Forman was awarded an option grant for 20,000 shares of common stock, exercisable for a period of five years at $20.00 per share and valued at $3.282 per share. (6) Bas van der Baan has been President and Chief Executive Officer since September 26, 2023. In connection with his employment agreement, Mr. van der Baan was awarded an option grant for 250,000 shares of common stock exercisable for a period of five years at $1.95 per share and valued at $1.612 per share. There were no option exercises by officers during the years ended December 31, 2023, 2022 or 2021. - 82 - Outstanding Equity Awards at December 31, 2023 The table set forth below presents information regarding outstanding stock options held by our named executive officers as of December 31, 2023. NAME GRANT DATE VESTING COMMENCEMENT DATE NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE (#) OPTION EXERCISE PRICE ($) OPTION EXPIRATION DATE Bas van der Baan September 26, 2023 December 31, 2023 20,833 229,167 1.95 September 26, 2028 Dr. John S. Kovach November 6, 2022 November 6, 2022 5,000 - 20.00 October 5, 2024 Dr. James S. Miser August 1, 2020 August 1, 2020 8,334 - 71.40 August 1, 2025 November 6, 2022 November 6, 2022 10,000 10,000 20.00 November 6, 2027 Robert N. Weingarten August 12, 2020 August 12, 2020 5,833 - 71.40 August 12, 2025 November 6, 2022 November 6, 2022 10,000 10,000 20.00 November 6, 2027 Eric J. Forman May 22, 2019 May 22, 2019 1,667 - 66.00 May 22, 2024 August 12, 2020 August 12, 2020 5,833 - 71.40 August 12, 2025 November 6, 2022 November 6, 2022 10,000 10,000 20.00 November 6, 2027 Based on a fair market value of $2.35 per share on December 31, 2023, the intrinsic value attributed to exercisable but unexercised common stock options held by our named executive officers was approximately $8,000 at December 31, 2023. Employment Agreements; Compensation During July and August 2020, the Company entered into one-year employment agreements with its executive officers, consisting of Dr. John S. Kovach, Eric J. Forman, Dr. James S. Miser, and Robert N. Weingarten, payable monthly, as described below. The employment agreements are automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, or by death, or by termination for cause. These employment agreements were automatically renewed for additional one-year periods in July and August 2021, 2022 and 2023. Dr. John Kovach . On July 15, 2020, the Company entered into an employment agreement with Dr. John Kovach to continue to act as the Company’s President, Chief Executive Officer and Chief Scientific Officer, with an annual salary of $250,000, payable monthly. His responsibilities included the oversight of the Company’s entire operations and strategic planning, and to act as the primary contact between the Company’s executive team and the Board of Directors, to whom he reported. Dr. Kovach supervised all scientific endeavors, providing guidance to the Chief Medical Officer. He was the principal spokesperson for the Company. The effective date of the agreement was October 1, 2020 and remained in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or (iii) termination for cause. The employment agreement with Dr. Kovach terminated upon his death on October 5, 2023. - 83 - Eric Forman. On July 15, 2020, as amended on August 12, 2020, the Company entered into an employment agreement with Eric Forman, to act as the Company’s Chief Administrative Officer reporting directly to the Company’s Chief Executive Officer, with an annual salary of $120,000, payable monthly. Effective May 1, 2021, Mr. Forman’s annual salary was increased to $175,000. Effective November 6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer, with an annual salary of $200,000. Mr. Forman’s primary function is to oversee the Company’s internal operations, including IT, licensing, legal, personnel, marketing, and corporate governance. Mr. Forman was also granted stock options to acquire 350,000 shares of the Company’s common stock. The effective date of the employment agreement was October 1, 2020 and remains in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or (iii) termination for cause. Dr. James Miser . On August 1, 2020, the Company entered into an employment agreement with Dr. James Miser, M.D., pursuant to which Dr. Miser was appointed as the Company’s Chief Medical Officer, with an annual salary of $150,000. Effective May 1, 2021, Dr. Miser’s annual salary was increased to $175,000. Under the employment agreement, Dr. Miser plays a leadership role in planning, implementation and oversight of clinical trials. Dr. Miser is responsible for assisting and developing strategic clinical goals and the implementation and safety monitoring of investigational studies. Dr. Miser is the primary medical monitor for all clinical investigational studies and for the oversight of third party CRO monitors. Dr. Miser works closely with the Company’s Chief Executive Officer on the development of specific goals needed to ensure the timely implementation of appropriate clinical studies needed for successful FDA approval of therapeutic products and the clinical development of new drugs. Dr. Miser is required to devote at least 50% of his business time to the Company’s activities. Dr. Miser was also granted stock options to acquire 500,000 shares of the Company’s common stock. The effective date of the agreement was August 1, 2020 and remains in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or (iii) termination for cause. Robert N. Weingarten . On August 12, 2020, the Company entered into an employment agreement with Robert N. Weingarten pursuant to which Mr. Weingarten was appointed as the Company’s Vice-President and Chief Financial Officer, with an annual salary of $120,000. Effective May 1, 2021, Mr. Weingarten’s annual salary was increased to $175,000. Mr. Weingarten was also granted stock options to acquire 350,000 shares of the Company’s common stock. The effective date of the agreement was August 12, 2020 and remains in effect until the earlier of (i) one year from the effective date, automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, (ii) his death, or (iii) termination for cause. Bas van der Baan . Effective September 26, 2023, the Company entered into an employment agreement with Bas van der Baan to act as the Company’s President and Chief Executive Officer and as Vice Chairman of the Board of Directors, with an annual salary of $150,000. Effective October 6, 2023, Mr. van der Baan was appointed as Chairman of the Board of Directors upon the death of Dr. Kovach on October 5, 2023. Mr. van der Baan’s annual salary may be increased from time to time at the sole discretion of the Board of Directors. In addition, Mr. van der Baan will be eligible to receive an annual bonus as determined at the sole discretion of the Board of Directors. Mr. van der Baan was also granted stock options to acquire 250,000 shares of the Company’s common stock. The term of the employment agreement is for three years and is automatically renewable for additional one-year periods unless terminated by either party, subject to early termination provisions as described in the employment agreement. Policies and Practices – Option Grants Directors. The Company has a comprehensive compensation program for its non-officer directors for their service on the Board of Directors. This program, as amended, has been in place since April 9, 2021. The Company, with the input and advice of its Compensation Committee, has issued only stock options to its officers and directors. Equity compensation for directors under this compensation program is as follows: Appointment of new directors – The Company grants options to purchase 25,000 shares of common stock, exercisable for a period of five years, at the closing market price on the date of grant, vesting 50% on the grant date and the remaining 50% vesting 12.5% on the last day of each calendar quarter beginning in the quarter immediately subsequent to the date of the grant until fully vested, subject to continued service. At the discretion of the Board of Directors, for a nominee to the Board of Directors who is restricted by their respective institution or employer from receiving equity-based compensation, in lieu of the grant of such stock options, the Company may elect to pay a one-time cash fee of $100,000 to such director, payable upfront. Annual grant of options to directors – Effective on the last business day of the month of June, the Company grants options to purchase 10,000 shares of common stock, exercisable for a period of five years, at the closing market price on the date of grant, vesting 12.5% on the last day of each calendar quarter beginning in the quarter immediately subsequent to the date of grant until fully vested, subject to continued service. If any director has served for less than 12 full calendar months on the grant date, the amount of such stock option grant is prorated based on the length of service of such director. At the discretion of the Board of Directors, for a nominee to the Board of Directors who is restricted by their respective institution or employer from receiving equity-based compensation, in lieu of the grant of such stock options, the Company may elect to pay an annual cash fee of $40,000 to such director, payable quarterly. - 84 - Officers. The Company has no specific policy or program with respect to the discretionary grant of options to its officers. The Company granted options to its officers concurrent with their respective appointments during the year ended December 31, 2020. The Company also granted discretionary stock options to its officers during the year ended December 31, 2022. It is the Company’s policy that any such option grants take into account the existence of material non-public information when determining the timing of such a grant and the specific terms of such award. Compensation Clawback Policy The Board of Directors believes that it is in the best interests of the Company and its stockholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. The Board of Directors has therefore adopted a compensation recoupment policy, which provides for the recovery of erroneously awarded incentive compensation from the Company’s executive officers in the event of a triggering event, and which has been filed as an exhibit to this report and has been posted to the investor information/governance section of the Company’s corporate website (www.lixte.com). Consulting Agreements On September 12, 2007, the Company entered into a consulting agreement with Gil N Schwartzberg for Mr. Schwartzberg to provide financial advisory and consulting services to the Company with respect to financing matters, capital structure and strategic development, and to assist management in communications with investors and stockholders. Consideration under this consulting agreement, including amendments thereto, was paid exclusively in the form of stock options. On August 2, 2018, the Company entered into a third amendment to the consulting agreement to extend it to January 28, 2024, as well as to extend the exercise date of previously issued, fully-vested stock options for 66,667 shares of common stock, exercisable at $30.00 per share, from January 28, 2019 to January 28, 2024. Mr. Schwartzberg, who was appointed as a director of the Company effective April 9, 2021, died on October 30, 2022. Accordingly, Mr. Schwartzberg’s unvested stock options ceased vesting effective as of the date of his death, and the expiration date of all vested stock options owned by Mr. Schwartzberg contractually expired on October 30, 2023, one year from the date that his service on the Company’s Board of Directors terminated. Board of Directors Compensation Effective January 6, 2021, in recognition of their service as directors of the Company over the past year, the Company granted stock options to purchase 5,000 shares of common stock to each of Dr. Winson Sze Chun Ho, Dr. Yun Yen, Dr. Stephen Forman, and Dr. Philip Palmedo (an aggregate of 20,000 shares), which were fully vested upon issuance and exercisable for a period of five years at $32.10 per share, which was the approximate fair market value of the Company’s common stock on such date. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $571,312 ($28.566 per share) and was charged to general and administrative costs in the consolidated statement of operations on the grant date. On April 9, 2021, Winson Sze Chun Ho resigned from the Company’s Board of Directors to focus on clinical and preclinical cancer research in academic medicine. Concurrent with his resignation, the Board of Directors appointed Gil Schwartzberg to fill the vacancy created by Dr. Ho’s resignation. In connection with his appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Mr. Schwartzberg was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $32.00 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $753,611 ($30.144 per share), of which $376,800 was attributable to the portion of the stock options fully vested on April 9, 2021 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was being charged to operations ratably from April 9, 2021 through June 30, 2023, although vesting terminated on October 30, 2022, the date that Mr. Schwartzberg died and his service on the Board of Directors terminated. During the years ended December 31, 2022 and 2021, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $126,684 and $500,235, respectively, with respect to these stock options. On May 11, 2021, the Board of Directors appointed Regina Brown to the Board of Directors. In connection with her appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Ms. Brown was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $28.00 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $658,363 ($2.6335 per share), of which $329,188 was attributable to the portion of the stock options fully vested on May 11, 2021 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from May 11, 2021 through June 30, 2023. During the years ended December 31, 2023, 2022 and 2021, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $76,388, $154,042 and $427,944, respectively, with respect to these stock options. - 85 - On June 30, 2021, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total of 50,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $30.30 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $1,421,095 ($28.4225 per share), which was charged to operations ratably from July 1, 2021 through June 30, 2023. During the years ended December 31, 2023, 2022 and 2021, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $211,413, $638,915 and $358,200, respectively, with respect to these stock options. Effective as of June 15, 2022, Dr. René Bernards was appointed to the Company’s Board of Directors. As a new director, in lieu of a grant of stock options, Dr. Bernards received a one-time cash board fee of $100,000, payable immediately, and an annual cash board fee of $40,000, payable quarterly. During the years ended December 31, 2023 and 2022, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $62,500 and $133,873, respectively, with respect to his cash board compensation. On June 17, 2022, the Board of Directors appointed Bas van der Baan to the Board of Directors. In connection with his appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Mr. Baan was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $7.40 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $158,525 ($6.341 per share), of which $79,263 was attributable to the portion of the stock options fully vested on June 17, 2022 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options is being charged to operations ratably from June 17, 2022 through June 30, 2024. During the years ended December 31, 2023 and 2022, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $38,885 and $100,249, respectively, with respect to these stock options. On June 30, 2022, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total of 50,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $7.40 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $316,700 ($6.334 per share), which is being charged to operations ratably from July 1, 2022 through June 30, 2024. For the years ended December 31, 2023 and 2022, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $94,881 and $63,777, respectively, with respect to these stock options. On November 6, 2022, the Board of Directors granted to each of the four officers of the Company stock options to purchase 20,000 shares (a total of 80,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $20.00 per share, vesting 25% on issuance and 25% on each anniversary date thereafter until fully vested, subject to continued service. The total fair value of the 80,000 stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $262,560 ($3.282 per share), which is being charged to operations ratably from November 6, 2022 through November 6, 2025. For the years ended December 31, 2023 and 2022, the Company recorded a total charge to general and administrative costs in the consolidated statement of operations of $61,448 and $75,520, respectively, with respect to these stock options. On June 30, 2023, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the four non-officer directors of the Company stock options to purchase 10,000 shares (a total of 40,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $5.88 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $192,593 ($4.8131 per share), which is being charged to operations ratably from July 1, 2023 through June 30, 2025. For the year ended December 31, 2023, the Company recorded a total charge to general and administrative costs in the consolidated statement of operations of $48,464 with respect to these stock options. - 86 - Summary Compensation Table The table set forth below presents the compensation awarded to, earned by or paid to our named directors for the years ended December 31, 2023, 2022 and 2021. DIRECTOR COMPENSATION TABLE Name and Principal Position (2) Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($)(1) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Philip F. Palmedo 2023 - - - - - - - - Director (8) 2022 - - - 63,340 - - 21,148 84,488 2021 - - - 427,047 - - 20,458 447,505 Stephen J. Forman (9) 2023 - - - 48,131 - - 22,500 70,631 Director 2022 - - - 63,340 - - 22,500 85,840 2021 - - - 427,047 - - 16,819 443,866 Winson Sze Chun Ho 2023 - - - - - - - - Director (3) 2022 - - - - - - - - 2021 - - - 142,828 - - - 142,828 Yun Yen (10) 2023 - - - 48,131 - - 30,000 78,131 Director 2022 - - - 63,340 - - 30,000 93,340 2021 - - - 427,047 - - 21,833 448,880 Gil Schwartzberg 2023 - - - - - - - - Director (4) 2022 - - - 63,340 - - 16,630 79,970 2021 - - - 1,037,830 - - 14,556 1,052,386 Regina Brown 2023 - - - 48,131 - - 30,000 78,131 Director (5) 2022 - - - 63,340 - - 30,000 93,340 2021 - - - 942,582 - - 19,167 961,749 René Bernards 2023 - - - - - - 62,500 62,500 Director (6) 2022 - - - - - - 133,873 133,873 2021 - - - - - - - - Bas van der Baan 2023 - - - 48,131 - - 18,478 66,609 Director (7) 2022 - - - 158,525 - - 11,869 170,394 2021 - - - - - - - - (1) Consists of grant date fair value of option award calculated pursuant to the Black-Scholes option-pricing model. - 87 - (2) Dr. John S. Kovach, the founder of the Company, served as Chairman of the Board of Directors until his death on October 5, 2023. Prior to September 26, 2023, Dr. Kovach was also the President, Chief Executive Officer and Chief Scientific Officer of the Company. Dr. Kovach did not receive any separate compensation for his services as a member of the Board of Directors. (3) Resigned as a director of the Company effective April 9, 2021. (4) Appointed as a director of the Company effective April 9, 2021 and died on October 30, 2022. (5) Appointed as a director of the Company effective May 11, 2021. (6) Appointed as a director of the Company effective June 15, 2022. Dr. Bernards received all of his compensation in 2022 and 2023 in the form of cash. (7) Appointed as a director of the Company effective June 17, 2022, and as Chairman of the Board of Directors on October 6, 2023. (8) Did not stand for re-election at the annual meeting of stockholders. Accordingly, his term as a director of the Company ended effective October 7, 2022. (9) Appointed as a director of the Company effective May 13, 2016. (10) Appointed as a director of the Company effective August 4, 2018. Scientific Advisory Committee Compensation On December 24, 2013, the Company entered into an agreement with NDA Consulting Corp. for consultation and advice in the field of oncology research and drug development. As part of the agreement, NDA also agreed to cause its president, Dr. Daniel D. Von Hoff, M.D., to become a member of the Company’s Scientific Advisory Committee. The term of the agreement was for one year and provided for a quarterly cash fee of $4,000. The agreement has been automatically renewed for additional one-year terms on its anniversary date since 2014. Consulting and advisory fees charged to operations pursuant to this agreement were $16,000, $16,000 and $16,000 for the years ended December 31, 2023, 2022 and 2021, respectively, which were included in research and development costs in the consolidated statements of operations. 2020 Stock Incentive Plan Summary On July 14, 2020, the Board of Directors of the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which was subsequently approved by the stockholders of the Company. The 2020 Plan provides for the granting of equity-based awards, consisting of stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards to employees, officers, directors and consultants of the Company and its affiliates, initially for a total of 233,333 shares of the Company’s common stock, under terms and conditions as determined by the Company’s Board of Directors. On October 7, 2022, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 180,000 shares, to a total of 413,333 shares. On November 27, 2023, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 336,667 shares, to a total of 750,000 shares. As of December 31, 2023, unexpired stock options for 495,000 shares were issued and outstanding under the 2020 Plan and 255,000 shares were available for issuance under the 2020 Plan. - 88 - Having an adequate number of shares available for future equity compensation grants is necessary to promote our long-term success and the creation of stockholder value by: ● Enabling us to continue to attract and retain the services of key service providers who would be eligible to receive grants; ● Aligning participants’ interests with stockholders’ interests through incentives that are based upon the performance of our common stock; ● Motivating participants, through equity incentive awards, to achieve long-term growth in our business, in addition to short-term financial performance; and ● Providing a long-term equity incentive program that is competitive as compared to other companies with whom we compete for talent. The 2020 Plan permits the discretionary award of incentive stock options (“ISOs”), non-statutory stock options (“NQSOs”), restricted stock, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), other equity awards and/or cash awards to selected participants. The 2020 Plan will remain in effect until July 14, 2030. The 2020 Plan provides for the reservation of 750,000 shares of common stock for issuance thereunder (the “Share Limit”), and provides that the maximum number of shares that may be issued pursuant to the exercise of ISOs is 750,000 shares (the “ISO Limit”). Key Features of the 2020 Plan Certain key features of the 2020 Plan are summarized as follows: ● If not terminated earlier by our Board of Directors, the 2020 Plan will terminate on July 14, 2030. ● Up to a maximum aggregate of 4,133,333 shares of common stock may be issued under the 2020 Plan. The maximum number of shares that may be issued pursuant to the exercise of ISOs is also 4,133,333. ● The 2020 Plan is administered by the Compensation Committee, which is comprised solely of independent members of our Board of Directors. The Board of Directors may designate a separate committee to make awards to employees who are not officers subject to the reporting requirements of Section 16 of the Exchange Act. ● Employees, consultants and board members are eligible to receive awards, provided that the Compensation Committee has the discretion to determine (i) who shall receive any awards, and (ii) the terms and conditions of such awards. ● Awards may consist of ISOs, NQSOs, restricted stock, RSUs, SARs, other equity awards and/or cash awards. ● Stock options and SARs may not be granted at a per share exercise price below the fair market value of a share of our common stock on the date of grant. ● Stock options and SARs may not be repriced or exchanged without stockholder approval. ● The maximum exercisable term of stock options and SARs may not exceed ten years. ● Awards are subject to recoupment of compensation policies adopted by us. Eligibility to Receive Awards . Employees, consultants and members of our Board of Directors are eligible to receive awards under the 2020 Plan. The Compensation Committee determines, in its discretion, the selected participants who will be granted awards under the 2020 Plan. - 89 - Shares Subject to the 2020 Plan . The maximum number of shares of common stock that can be issued under the 2020 Plan is 4,133,333 shares. The shares underlying forfeited or terminated awards (without payment of consideration), or unexercised awards become available again for issuance under the 2020 Plan. No fractional shares may be issued under the 2020 Plan. No shares will be issued with respect to a participant’s award unless applicable tax withholding obligations have been satisfied by the participant. Administration of the 2020 Plan . The 2020 Plan is administered by the Compensation Committee of the Board of Directors, which consists of independent board members. With respect to certain awards issued under the 2020 Plan, the members of the Compensation Committee also must be “Non-Employee Directors” under Rule 16b-3 of the Exchange Act. Subject to the terms of the 2020 Plan, the Compensation Committee has the sole discretion, among other things, to: ● Select the individuals who will receive awards; ● Determine the terms and conditions of awards (for example, performance conditions, if any, and vesting schedule); ● Correct any defect, supply any omission, or reconcile any inconsistency in the 2020 Plan or any award agreement; ● Accelerate the vesting, extend the post-termination exercise term or waive restrictions of any awards at any time and under such terms and conditions as it deems appropriate, subject to the limitations set forth in the 2020 Plan; ● Permit a participant to defer compensation to be provided by an award; and ● Interpret the provisions of the 2020 Plan and outstanding awards. The Compensation Committee may suspend vesting, settlement, or exercise of awards pending a determination of whether a selected participant’s service should be terminated for cause (in which case outstanding awards would be forfeited). Awards may be subject to any policy that the Board of Directors may implement on the recoupment of compensation (referred to as a “compensation clawback” policy). The members of the Board of Directors, the Compensation Committee and their delegates shall be indemnified by us to the maximum extent permitted by applicable law for actions taken or not taken regarding the 2020 Plan. Types of Awards . Stock Options . A stock option is the right to acquire shares at a fixed exercise price over a fixed period of time. The Compensation Committee determines, among other terms and conditions, the number of shares covered by each stock option and the exercise price of the shares subject to each stock option, but such per share exercise price cannot be less than the fair market value of a share of our common stock on the date of grant of the stock option. The exercise price of each stock option granted under the 2020 Plan must be paid in full at the time of exercise, either with cash, or through a broker-assisted “cashless” exercise and sale program, or net exercise, or through another method approved by the Compensation Committee. Stock options granted under the 2020 Plan may be either ISOs or NQSOs. In order to comply with Treasury Regulation Section 1.422-2(b), the 2020 Plan provides that no more than 4,133,333 shares may be issued pursuant to the exercise of ISOs. SARs . A SAR is the right to receive, upon exercise, an amount equal to the difference between the fair market value of the shares on the date of the SAR’s exercise and the aggregate exercise price of the shares covered by the exercised portion of the SAR. The Compensation Committee determines the terms of SARs, including the exercise price (provided that such per share exercise price cannot be less than the fair market value of a share of our common stock on the date of grant), the vesting and the term of the SAR. Settlement of a SAR may be in shares of common stock or in cash, or any combination thereof, as the Compensation Committee may determine. SARs may not be repriced or exchanged without stockholder approval. - 90 - Restricted Stock . A restricted stock award is the grant of shares of our common stock to a selected participant and such shares may be subject to a substantial risk of forfeiture until specific conditions or goals are met. The restricted shares may be issued with or without cash consideration being paid by the selected participant as determined by the Compensation Committee. The Compensation Committee also will determine any other terms and conditions of an award of restricted stock. RSUs . RSUs are the right to receive an amount equal to the fair market value of the shares covered by the RSU at some future date after the grant. The Compensation Committee will determine all of the terms and conditions of an award of RSUs. Payment for vested RSUs may be in shares of common stock or in cash, or any combination thereof, as the Compensation Committee may determine. RSUs represent an unfunded and unsecured obligation for us, and a holder of a stock unit has no rights other than those of a general creditor. Other Awards . The 2020 Plan also provides that other equity awards, which derive their value from the value of our shares or from increases in the value of our shares, may be granted. In addition, cash awards may also be issued. Substitute awards may be issued under the 2020 Plan in assumption of or substitution for or exchange for awards previously granted by an entity which we may acquire. Limited Transferability of Awards . Awards granted under the 2020 Plan generally are not transferrable other than by will or by the laws of descent and distribution. However, the Compensation Committee may in its discretion permit the transfer of awards other than ISOs. Change in Control . In the event that we are a party to a merger or other reorganization or similar transaction, outstanding 2020 Plan awards will be subject to the agreement pertaining to such merger or reorganization. Such agreement may provide for (i) the continuation of the outstanding awards by us if we are a surviving corporation, (ii) the assumption or substitution of the outstanding awards by the surviving entity or its parent, (iii) full exercisability and/or full vesting of outstanding awards, or (iv) cancellation of outstanding awards either with or without consideration, in all cases with or without consent of the selected participant. The Compensation Committee will decide the effect of a change in control of us on outstanding awards. Amendment and Termination of the 2020 Plan . The Board of Directors generally may amend or terminate the 2020 Plan at any time and for any reason, except that it must obtain stockholder approval of material amendments to the extent required by applicable laws, regulations or rules. - 91 - ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The table set forth below presents certain information regarding beneficial ownership of our common stock (the only class of our voting equity securities issued and outstanding) as of March 1, 2024 by (i) each person or entity who is known by us to own beneficially more than 5% of our outstanding shares of common stock, (ii) each of our directors, and (iii) all of our directors and executive officers as a group. As of March 1, 2024, there were 2,249,290 shares of our common stock issued and outstanding. In computing the number and percentage of shares beneficially owned by a person, shares of common stock that a person has a right to acquire within sixty (60) days of March 1, 2024 pursuant to stock options, warrants, convertible preferred stock or other rights are counted as outstanding, while these shares are not counted as outstanding for computing the percentage ownership of any other person. This table is based upon information supplied by our directors, officers and principal stockholders and reports filed with the Securities and Exchange Commission. Except as noted, the Company’s executive office is reflected as the address of all officers, directors and other stockholders owning more than 5%. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class Officers and Directors Bas van der Baan 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 79,853 (2) 3.4 % Dr. Stephen J. Forman 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 37,919 (3) 1.7 % Dr. Yun Yen 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 38,860 (12) 1.7 % Dr. René Bernards 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 25,000 (6) 1.1 % Regina Brown 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 48,130 (11) 2.1 % Robert N. Weingarten 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 15,833 (7) 0.7 % Eric J. Forman 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 25,997 (5) 1.1 % Dr. James S. Miser 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 18,333 (9) 0.8 % All officers and directors as a group (9 persons) 289,925 11.7 % Other Stockholders Owning More Than 5% John S. Kovach Trust 156,128 (1) 6.9 % 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 Barbara C. H. Kovach 156,128 (1) 6.9 % 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 Alexandra E. Kovach 156,128 (1) 6.9 % 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 John and Barbara Kovach 2015 Trust Glenn L. Krinsky, Trustee 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 133,333 (4) 5.9 % Arthur and Jane Riggs 1990 Irrevocable Trust Jane Riggs, Trustee 4852 Saint Andres Avenue La Verne, California 91750 174,750 (8) 7.5 % Glenn L. Krinsky 680 East Colorado Boulevard, Suite 180 Pasadena, California 91101 147,499 (10) 6.6 % (1) Includes 154,018 shares of common stock and stock warrants to purchase 2,110 shares of common stock owned by the John S. Kovach Trust dated September 22, 2015. The primary beneficiary of the trust is Barbara C. H. Kovach. Barbara C. H. Kovach and Alexandra E. Kovach are co-trustees of the trust and have the exclusive right to control the investment of the assets of the trust. (2) Includes 11,000 shares of common stock and stock options to purchase 68,853 shares of common stock owned by Bas van der Baan. - 92 - (3) Includes 375 shares of common stock and stock options to purchase 28,334 shares of common stock owned by Dr. Stephen Forman. Also includes 7,105 shares of common stock and stock warrants to purchase 2,105 shares of common stock owned by the Stephen Forman Living Trust dated 12/16/98. Stephen Forman is trustee of the trust and holds voting and dispositive power over the common stock and common stock warrants owned by the trust. (4) Includes 133,333 shares of common stock transferred by John S. Kovach and his wife, Barbara C.H. Kovach, as grantors, to the John and Barbara Kovach 2015 Trust, an irrevocable trust dated July 6, 2015. The primary beneficiaries of the trust are the two adult daughters of John and Barbara Kovach. Glenn L. Krinsky is the trustee of the trust. (5) Includes stock options to purchase 17,500 shares of common stock owned by Eric J. Forman. Eric Forman is the husband of Julie (Schwartzberg) Forman, and the son-in-law of Gil and Debbie Schwartzberg. Also includes the following: - 7,971 shares of common stock and stock warrants to purchase 526 shares of common stock owned by the Eric Forman Revocable Trust. Excludes the following, as to which Eric Forman disclaims beneficial ownership or control: - 31,842 shares of common stock and stock options to purchase 47,240 shares of common stock owned by the Julie Schwartzberg Trust, as to which Julie (Schwartzberg) Forman is the trustee and beneficiary. - 14,286 shares of common stock owned by the Schwartzberg Trust fbo Julie Forman, dtd 3/3/23, as to which Julie Forman is the trustee. - 6,972 shares of common stock and common stock warrants to purchase 5,263 shares of common stock owned by the Julie Forman Inherited IRA. - 8,708 shares of common stock owned by the Julie Forman 2015 Trust, an irrevocable trust, the beneficiaries of which are the minor children of Eric and Julie Forman, as to which Scott Forman, brother of Eric Forman, as trustee, has voting, dispositive and investment control. - 9,000 shares of common stock owned by each of the Savannah Sterling Trust, Amanda Sterling Trust, Daniel Sterling Trust and Charles Sterling Trust, as to which Julie Forman is the trustee. (6) Consists of 25,000 shares of common stock. (7) Consists of stock options to purchase 15,833 shares of common stock. (8) Includes 101,833 shares of common stock and 72,917 shares of common stock issuable upon conversion of 350,000 shares of Series A Convertible Preferred Stock owned by the Arthur and Jane Riggs 1990 Irrevocable Trust dated November 18, 1990. Jane Riggs is the trustee of the Arthur and Jane Riggs 1990 Irrevocable Trust. The shares of Series A Convertible Preferred Stock were acquired on March 17, 2015 and January 15, 2016, are non-voting, and are immediately convertible into common stock. (9) Consists of stock options to purchase 18,333 shares of common stock. (10) Includes 14,166 shares of common stock owned by Glenn L. Krinsky. Also includes 133,333 shares of common stock owned by the John and Barbara Kovach 2015 Trust, as to which Glenn L. Krinsky, as trustee, has voting, dispositive and investment control. (11) Includes 630 shares of common stock and stock options to purchase 47,500 shares of common stock. (12) Includes 5,263 shares of common stock, stock warrants to purchase 5,263 shares of common stock and stock options to purchase 28,334 shares of common stock. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE (a) Related Party Transactions During the years ended December 31, 2023, 2022 and 2021, there were no transactions, either directly or indirectly, between the Company and any of its officers, directors or affiliates, including their family members, except as described elsewhere in this document. (b) Director Independence The Company considers that Dr. Yun Yen, Regina Brown and Dr. René Bernards are each an “independent director,” as defined under Nasdaq rules and by Rule 10A-3 of the Exchange Act. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Weinberg & Company, P.A. acted as our independent registered public accounting firm for the fiscal years ended December 31, 2023 and 2022 and for the interim periods in such fiscal years. The following table shows the fees that were incurred by us for audit and other services provided by Weinberg & Company, P.A. for the years ended December 31, 2023 and 2022. Years Ended December 31, 2023 2022 Audit Fees (1) $ 120,640 $ 111,806 Audit-Related Fees (2) — — Tax Fees (3) 32,860 28,553 Other Fees (4) — — Total $ 153,500 $ 140,359 (1) Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements included in our Annual Reports on Form 10-K and the review of our interim financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided in connection with statutory or regulatory filings, excluding those fees included in Other Fees. (2) Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under Audit Fees. (3) Tax fees represent fees for professional services related to tax compliance, tax advice and tax planning. (4) Other fees represent fees incurred with respect to our Registration Statements on Form S-3 and Form S-8. All audit and audit-related services, tax services and other services rendered by Weinberg & Company, P.A. during the fiscal years ended December 31, 2023 and 2022 were pre-approved by either our Audit Committee or by our Board of Directors. The Board of Directors has adopted a pre-approval policy that provides for the pre-approval of all services performed for us by our independent registered public accounting firm. - 93 - PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) List of documents filed as part of this report: (1) Financial Statements Reference is made to the Index to Consolidated Financial Statements on page F-1, where these documents are listed. (2) Financial Statement Schedules The financial statement schedules have been omitted because the required information is not applicable, or not present in amounts sufficient to require submission of the schedules, or because the information is included in the financial statements or notes thereto. (3) Exhibits See (b) below. (b) Exhibits: A list of exhibits required to be filed as part of this Annual Report on Form 10-K is set forth in the Index to Exhibits, which is presented elsewhere in this document, and is incorporated herein by reference. ITEM 16. FORM 10-K SUMMARY None - 94 - INDEX TO EXHIBITS Exhibit Number Description of Document 1.1 Underwriting Agreement, dated as of November 25, 2020, between the Company and WestPark Capital, Inc. and WallachBeth, LLC, filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on November 27, 2020 and incorporated herein by reference. 2.1 Share Exchange Agreement dated as of June 8, 2006 among the Company, John S. Kovach and Lixte Biotechnology, Inc., filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 7, 2006 and incorporated herein by reference. 3.1 Certificate of Incorporation, as filed with the Delaware Secretary of State on May 24, 2005, filed as Exhibit 3.1 to the Company’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on August 3, 2005 and incorporated herein by reference. 3.2 Certificate of Amendment of Certificate of Incorporation, filed as Appendix A to the Company’s Information Statement, as filed with the Securities and Exchange Commission on September 19, 2006 and incorporated herein by reference. 3.3 Certificate of Designations for the Company’s Series A Convertible Preferred Stock, filed as Exhibit 4.01 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 18, 2015 and incorporated herein by reference. 3.4 Certificate of Amendment of Certificate of Designations of the Series A Convertible Preferred Stock, filed as Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 28, 2016 and incorporated herein by reference. 3.5 Amended and Restated Bylaws, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on November 10, 2022 and incorporated herein by reference. 3.6 Certificate of Amendment of Certificate of Incorporation, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on November 27, 2020 and incorporated herein by reference. 3.7 Certificate of Amendment to the Certificate of Incorporation of Lixte Biotechnology Holdings, Inc., filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on June 6, 2023 and incorporated herein by reference. 4.1 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 25, 2020 and incorporated herein by reference. 4.2 Form of Public Warrant included in Unit, filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on November 27, 2020 and incorporated herein by reference. 4.3 Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 20, 2023 and incorporated herein by reference. 4.4 Form of Placement Agent Warrant, filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 20, 2023 and incorporated herein by reference. 10.1 Master Agreement between Lixte Biotechnology Holdings, Inc. and Theradex Systems, Inc. dated January 12, 2010, filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the Securities and Exchange Commission on March 15, 2013 and incorporated herein by reference. 10.2 Materials Cooperative Research and Development Agreement between Lixte Biotechnology Holdings, Inc. and the National Institute of Neurological Disorders and Stroke dated October 18, 2013, filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission on March 21, 2014 and incorporated herein by reference. 10.3 Scientific Advisory Board Agreement between Lixte Biotechnology Holdings, Inc. and NDA Consulting Corp. dated December 24, 2013, filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission on March 21, 2014 and incorporated herein by reference. 10.4 Collaboration Agreement between Lixte Biotechnology Holdings, Inc. and BioPharmaWorks LLC effective September 14, 2015, filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on September 18, 2015 and incorporated herein by reference. 10.5 Collaboration Agreement for an Investigator-Initiated Clinical Trial between Lixte Biotechnology Holdings, Inc. and the Spanish Sarcoma Group as of July 31, 2019 (certain portions of this exhibit have been omitted based on a request for confidential treatment filed by the Company with the Securities and Exchange Commission that was granted on September 19, 2019), filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on August 6, 2019 and incorporated herein by reference. 10.6 Employment Agreement Between the Company and Dr. James Miser, filed as Exhibit 10.03 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 17, 2020 and incorporated herein by reference.+ 10.7 Employment Agreement Between the Company and Robert N. Weingarten, filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on August 18, 2020 and incorporated herein by reference.+ 10.8 Employment Agreement Between the Company and Eric Forman, filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 17, 2020 and incorporated herein by reference.+ 10.9 Amendment to Employment Agreement between the Company and Eric Forman, filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission on March 26, 2021.+ 10.10 Second Amendment to Employment Agreement between the Company and Eric Forman, filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 29, 2023 and incorporated herein by reference.+ 10.11 Lixte Technology Holdings, Inc. 2020 Stock Incentive Plan, filed as Exhibit 10.1 to the Company Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 17, 2020 and incorporated herein by reference.+ 10.12 Lixte Biotechnology Holdings, Inc. 2020 Stock Incentive Plan (as amended), filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on November 28, 2023 and incorporated herein by reference.+ 10.13 Investigator-Initiated Clinical Research Support Agreement between City of Hope National Medical Center and City of Hope Medical Foundation and Lixte Biotechnology Holdings, Inc., filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 22, 2021 and incorporated herein by reference. 10.14 Development Collaboration Agreement by and between Lixte Biotechnology Holdings, Inc. and the Netherlands Cancer Institute, Amsterdam, and Oncode Institute, Utrecht, entered into on October 8, 2021 (certain portions of this Exhibit have been omitted), filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, as filed with the Securities and Exchange Commission on November 10, 2021 and incorporated herein by reference. 10.15 Insider Trading Policy, filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 29, 2023 and incorporated herein by reference. 10.16 Compensation Clawback Policy+* 10.17 Amendment to Contract between Lixte Biotechnology Holdings, Inc. and MRI Global effective April 17, 2022, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, as filed with the Securities and Exchange Commission on May 10, 2023 and incorporated herein by reference. 10.18 Securities Purchase Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 20, 2023 and incorporated herein by reference. 10.19 Employment Agreement between the Company and Bastiaan van der Baan effective September 26, 2023, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on September 27, 2023 and incorporated herein by reference. 10.20 Amendment No. 1 to Development Collaboration Agreement by and between Lixte Biotechnology Holdings, Inc. and the Netherlands Cancer Institute, Amsterdam, and the Oncode Institute, Utrecht, entered into on October 8, 2021, filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on November 9, 2023 and incorporated herein by reference. 10.21 Amendment No. 2 to Development Collaboration Agreement by and between Lixte Biotechnology Holdings, Inc. and the Netherlands Cancer Institute, Amsterdam, and the Oncode Institute, Utrecht, entered into on October 13, 2023 (certain portions of this Exhibit have been omitted), filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on October 17, 2023 and incorporated herein by reference. 10.22 Termination letter between H. Lee Moffitt Cancer Center and Research Institute, Inc. and the Company dated October 4, 2023 and effective as of September 30, 2023, filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on November 9, 2023 and incorporated herein by reference. 10.23 Exclusive Patent License Agreement between Lixte Biotechnology, Inc. and the National Institute of Neurological Disorders and Stroke and the National Cancer Institute, each a component of the National Institute of Health, effective as of February 23, 2024, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on February 26, 2024 and incorporated herein by reference. 21.1 Subsidiaries of the Registrant, filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 29, 2023 and incorporated herein by reference. 23.1 Consent of Weinberg & Company, P.A., Independent Registered Public Accounting Firm* 31.1 Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 101.INS Inline XBRL Instance Document (does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Scheme Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL document and included in Exhibit 101.INS) * Filed herewith. + Indicates a management contract or any compensatory plan, contract or arrangement. - 95 - SIGNATURES In accordance with Section 13 and 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: March 19, 2024 LIXTE BIOTECHNOLOGY HOLDINGS, INC. (Registrant) By: /s/ BASTIAAN VAN DER BAAN Name: Bastiaan van der Baan Title: President and Chief Executive Officer In accordance with the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacity and on the dates indicated. Signature Title Date /s/ BASTIAAN VAN DER BAAN President and Chief Executive Officer March 19, 2024 John S. Kovach /s/ ROBERT N. WEINGARTEN Vice President and Chief Financial Officer March 19, 2024 Robert N. Weingarten /s/ STEPHEN J. FORMAN Director March 19, 2024 Stephen J. Forman /s/ RENE BERNARDS Director March 19, 2024 René Bernards /s/ YUN YEN Director March 19, 2024 Yun Yen /s/ REGINA BROWN Director March 19, 2024 Regina Brown - 96 - LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM) Years Ended December 31, 2023 and 2022 Page Number Report of Independent Registered Public Accounting Firm (PCAOB ID NO. 572 ) F-2 Consolidated Balance Sheets – December 31, 2023 and 2022 F-4 Consolidated Statements of Operations – Years Ended December 31, 2023 and 2022 F-5 Consolidated Statements of Stockholders’ Equity – Years Ended December 31, 2023 and 2022 F-6 Consolidated Statements of Cash Flows – Years Ended December 31, 2023 and 2022 F-7 Notes to Consolidated Financial Statements – Years Ended December 31, 2023 and 2022 F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors Lixte Biotechnology Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Lixte Biotechnology Holdings, Inc. and subsidiary (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ equity and cash flows for 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, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no recurring source of revenue and has experienced negative operating cash flows since inception. The Company has financed its working capital requirements through the recurring sale of its equity securities. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 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. 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. F- 2 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 matters or on the accounts or disclosures to which it relates. Valuation of Stock-Based Compensation As discussed in Note 6 to the financial statements, the Company recognized $773,203 of compensation expense to certain officers, employees and consultants related to stock-based awards. The Company accounts for stock-based compensation for all stock-based awards made to officers, employees and consultants based on estimated fair values. We identified the valuation of stock-based compensation as a critical audit matter because of the subjectivity of the inputs and assumptions that management utilized in determining the fair value of the stock-based awards. This required a high degree of effort and judgement in selecting auditor procedures to evaluate management’s estimates and assumptions as it relates to the determination of the fair values of stock-based compensation. Our audit procedures related to the of the stock-based awards, including the valuation methodology and related assumptions such as the risk-free interest rate, volatility, and dividend yield, consisted of the following, among others: ● We obtained and read the stock-based award agreements ● We evaluated the reasonableness of management’s significant valuation assumptions, and tested the mathematical accuracy of management’s valuation analyses. ● We developed independent estimates for the fair values of the stock-based awards. We have served as the Company’s auditor since 2008. /s/ Weinberg & Company, P.A . Los Angeles, California March 19, 2024 F- 3 LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS December 31, 2023 2022 ASSETS Current assets: Cash $ 4,203,488 $ 5,353,392 Advances on research and development contract services 78,016 147,017 Prepaid insurance 17,116 49,224 Other prepaid expenses 10,000 11,350 Total current assets 4,308,620 5,560,983 Total assets $ 4,308,620 $ 5,560,983 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses, including $ 36,250 and $ 46,982 to related parties at December 31, 2023 and 2022, respectively $ 156,758 $ 230,734 Research and development contract liabilities 157,100 165,022 Total current liabilities 313,858 395,756 Commitments and contingencies - Stockholders’ equity: Preferred Stock, $ 0.0001 par value; authorized – 10,000,000 shares; issued and outstanding – 350,000 shares of Series A Convertible Preferred Stock, $ 10.00 per share stated value, liquidation preference based on assumed conversion into common shares – 72,917 shares 3,500,000 3,500,000 Common stock, $ 0.0001 par value; authorized – 100,000,000 shares; issued and outstanding – 2,249,290 shares and 1,664,706 shares at December 31, 2023 and 2022, respectively 225 166 Additional paid-in capital 48,976,265 45,059,760 Accumulated deficit ( 48,481,728 ) ( 43,394,699 ) Total stockholders’ equity 3,994,762 5,165,227 Total liabilities and stockholders’ equity $ 4,308,620 $ 5,560,983 See accompanying notes to consolidated financial statements. F- 4 LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2023 2022 Revenues $ — $ — Costs and expenses: General and administrative costs: Compensation to related parties, including stock-based compensation of $ 773,203 and $ 1,502,776 for the years ended December 31, 2023 and 2022, respectively 1,718,180 2,547,615 Patent and licensing legal and filing fees and costs 978,244 1,268,308 Other costs and expenses 1,495,712 1,146,289 Research and development costs, including $ 0 and $ 43,264 of stock-based compensation costs to a consultant for the years ended December 31, 2023 and 2022, respectively 898,100 1,349,269 Total costs and expenses 5,090,236 6,311,481 Loss from operations ( 5,090,236 ) ( 6,311,481 ) Interest income 17,486 11,195 Interest expense ( 16,233 ) ( 8,875 ) Foreign currency gain (loss) 1,954 ( 3,374 ) Net loss $ ( 5,087,029 ) $ ( 6,312,535 ) Net loss per common share – basic and diluted $ ( 2.66 ) $ ( 3.99 ) Weighted average common shares outstanding – basic and diluted 1,915,838 1,582,029 See accompanying notes to consolidated financial statements. F- 5 LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years Ended December 31, 2023 and 2022 Shares Amount Shares Par Value Capital Deficit Equity Series A Convertible Preferred Stock Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Par Value Capital Deficit Equity Balance, December 31, 2021 350,000 $ 3,500,000 1,374,706 $ 137 $ 38,372,365 $ ( 37,082,164 ) $ 4,790,338 Proceeds from sale of securities in registered direct equity offering, net of offering costs — — 290,000 29 5,141,355 — 5,141,384 Stock-based compensation — — — — 1,546,040 — 1,546,040 Net loss — — — — — ( 6,312,535 ) ( 6,312,535 ) Balance, December 31, 2022 350,000 3,500,000 1,664,706 166 45,059,760 ( 43,394,699 ) 5,165,227 Balance 350,000 3,500,000 1,664,706 166 45,059,760 ( 43,394,699 ) 5,165,227 Proceeds from sale of securities in registered direct equity offering, net of offering costs — — 180,000 18 3,137,021 — 3,137,039 Exercise of pre-funded common stock warrants — — 403,334 41 — — 41 Exercise of common stock options — — 1,250 — 6,281 — 6,281 Stock-based compensation — — — — 773,203 — 773,203 Net loss — — — — — ( 5,087,029 ) ( 5,087,029 ) Balance, December 31, 2023 350,000 $ 3,500,000 2,249,290 $ 225 $ 48,976,265 $ ( 48,481,728 ) $ 3,994,762 Balance 350,000 $ 3,500,000 2,249,290 $ 225 $ 48,976,265 $ ( 48,481,728 ) $ 3,994,762 See accompanying notes to consolidated financial statements. F- 6 LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2023 2022 Cash flows from operating activities: Net loss $ ( 5,087,029 ) $ ( 6,312,535 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense included in - General and administrative costs 773,203 1,502,776 Research and development costs — 43,264 Changes in operating assets and liabilities: (Increase) decrease in - Advances on research and development contract services 69,001 3,224 Prepaid insurance 32,108 59,805 Other prepaid expenses 1,350 1,350 Increase (decrease) in - Accounts payable and accrued expenses ( 73,976 ) 2,318 Research and development contract liabilities ( 7,922 ) 88,061 Net cash used in operating activities ( 4,293,265 ) ( 4,611,737 ) Cash flows from financing activities: Proceeds from sale of securities in registered direct offering, net of offering costs 3,137,039 5,141,384 Exercise of pre-funded common stock warrants 41 — Exercise of common stock options 6,281 — Net cash provided by financing activities 3,143,361 5,141,384 Cash: Net increase (decrease) ( 1,149,904 ) 529,647 Balance at beginning of period 5,353,392 4,823,745 Balance at end of period $ 4,203,488 $ 5,353,392 Supplemental disclosures of cash flow information: Cash paid for - Interest $ 16,233 $ 8,875 Income taxes $ — $ — See accompanying notes to consolidated financial statements. F- 7 LIXTE BIOTECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2023 and 2022 1. Organization and Basis of Presentation Lixte Biotechnology Holdings, Inc., a Delaware corporation, including its wholly-owned Delaware subsidiary, Lixte Biotechnology, Inc. (collectively, the “Company”), is a clinical-stage biopharmaceutical company dedicated to improving patients’ lives by developing a drug class called Protein Phosphatase 2A inhibitors. The Company’s corporate office is located in Pasadena, California. The Company’s product pipeline is primarily focused on inhibitors of protein phosphatase 2A, used in combination with cytotoxic agents and/or x-ray, immune checkpoint blockers and other cancer therapies. The Company believes that inhibitors of protein phosphatases have significant therapeutic potential for a broad range of cancers. The Company is focusing on the clinical development of a specific protein phosphatase inhibitor, referred to as LB-100, which has been shown to have clinical anti-cancer activity at doses that produce little or no toxicity. The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. The Company has not yet commenced any revenue-generating operations, does not have positive cash flows from operations, relies on stock-based compensation for a substantial portion of employee and consultant compensation, and is dependent on periodic infusions of equity capital to fund its operating requirements. President and Chief Executive Officer Effective September 26, 2023, Bas van der Baan, a director of the Company since June 17, 2022, replaced the Company’s founder, Dr. John S. Kovach, as President and Chief Executive Officer. Dr. Kovach passed away on October 5, 2023. Effective October 6, 2023, Mr. van der Baan was appointed as Chairman of the Board of Directors. Dr. Kovach was also the Company’s Chief Scientific Officer. Nasdaq Listing and Reverse Stock Split The Company’s common stock and the warrants are traded on the Nasdaq Capital Market (“Nasdaq”) under the symbols “LIXT” and “LIXTW”, respectively. On June 2, 2023, the Company effected a 1-for-10 reverse split of its outstanding shares of common stock in order to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq. No fractional shares were issued in connection with the reverse split, with any fractional shares resulting from the reverse split being rounded up to the next whole share. All share and per share amounts and information presented herein have been retroactively adjusted to reflect the reverse stock split for all periods presented. However, there can be no assurances that the Company will be able to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq over time, or that it will be successful in maintaining compliance with any of the other continued listing requirements of Nasdaq. Going Concern For the year ended December 31, 2023, the Company recorded a net loss of $ 5,087,029 and used cash in operations of $ 4,293,265 . At December 31, 2023, the Company had cash of $ 4,203,488 available to fund its operations. Because the Company is currently engaged in various early-stage clinical trials, it is expected that it will take a significant amount of time and resources to develop any product or intellectual property capable of generating sustainable revenues. Accordingly, the Company’s business is unlikely to generate any sustainable operating revenues in the next several years and may never do so. Even if the Company is able to generate revenues through licensing its technology, product sales or other commercial activities, there can be no assurance that the Company will be able to achieve and maintain positive earnings and operating cash flows. At December 31, 2023, the Company’s remaining financial contractual commitments pursuant to clinical trial agreements and clinical trial monitoring agreements not yet incurred aggregated approximately $ 6,344,000 (see Note 8), which are currently scheduled to be incurred through approximately December 31, 2027. F- 8 The Company’s consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has no recurring source of revenue and has experienced negative operating cash flows since inception. The Company has financed its working capital requirements through the recurring sale of its equity securities. Based on the foregoing, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are being issued. In addition, our independent registered public accounting firm has included an explanatory paragraph in their report with respect to this uncertainty that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2023. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional equity capital to fund its research and development activities and to ultimately achieve sustainable operating revenues and profitability. The amount and timing of future cash requirements depends on the pace, design and results of the Company’s clinical trial program, which, in turn, depends on the availability of operating capital to fund such activities. Based on current operating plans, the Company estimates that its existing cash resources at December 31, 2023 will provide sufficient working capital to fund the current clinical trial program with respect to the development of the Company’s lead anti-cancer clinical compound LB-100 through approximately September 30, 2024. However, existing cash resources will not be sufficient to complete the development of and obtain regulatory approval for the Company’s product candidate, which will require that the Company raise significant additional capital. The Company estimates that it will need to raise additional capital to fund its operations by mid-2024 to be able to proactively manage its current business plan during the remainder of 2024 and during 2025. In addition, the Company’s operating plans may change as a result of many factors that are currently unknown and/or outside of the control of the Company, and additional funds may be needed sooner than planned. The Company is considering various strategies and alternatives to obtain the required additional capital. As market conditions present uncertainty as to the Company’s ability to secure additional funds, there can be no assurance that the Company will be able to secure additional financing on acceptable terms, as and when necessary, to continue to conduct operations. If cash resources are insufficient to satisfy the Company’s ongoing cash requirements, the Company would be required to scale back or discontinue its clinical trial program, as well as its licensing and patent prosecution efforts and its technology and product development efforts, or obtain funds, if available, through strategic alliances or joint ventures that could require the Company to relinquish rights to and/or control of LB-100, or to discontinue operations entirely. Reclassifications Certain comparative amounts in 2022 have been reclassified to conform to the current year’s presentation. Such reclassifications, individually and in the aggregate, were not material to the results of operations or financial condition of the Company. 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the financial statements of Lixte Biotechnology Holdings, Inc. and its wholly-owned subsidiary, Lixte Biotechnology, Inc. Intercompany balances and transactions have been eliminated in consolidation. F- 9 Segment Information The Company operates and reports in one segment, which focuses on the utilization of biomarker technology to identify enzyme targets associated with serious common diseases and then designing novel compounds to attack those targets. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the Company’s Chief Operating Decision Maker, which is the Company’s President and Chief Executive Officer. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken, as a whole, under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in the calculation of accruals for clinical trial costs and other potential liabilities, and valuing equity instruments issued for services. Cash Cash is held in a cash bank deposit program maintained by Morgan Stanley Wealth Management, a division of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). Morgan Stanley is a FINRA-regulated broker-dealer. The Company’s policy is to maintain its cash balances with financial institutions in the United States with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”) and/or by the Securities Investor Protection Corporation (the “SIPC”). The Company periodically has cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $ 250,000 and $ 500,000 , respectively. Morgan Stanley Wealth Management also maintains supplemental insurance coverage for the cash balances of its customers. The Company has not experienced any losses to date resulting from this policy. Research and Development Research and development costs consist primarily of fees paid to consultants and contractors, and other expenses relating to the negotiation, design, development, and management of clinical trials with respect to the Company’s clinical compound and product candidate. Research and development costs also include the costs to manufacture compounds used in research and clinical trials, which are charged to operations as incurred. The Company’s inventory of LB-100 for clinical use has been manufactured separately in the United States and in the European Union in accordance with the laws and regulations of such jurisdictions. Research and development costs are generally charged to operations ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, the termination of an agreement, or other information indicates that a different expensing schedule is more appropriate. However, payments for research and development costs that are contractually defined as non-refundable are charged to operations as incurred. Obligations incurred with respect to mandatory scheduled payments under agreements with milestone provisions are recognized as charges to research and development costs in the Company’s consolidated statement of operations based on the achievement of such milestones, as specified in the respective agreement. Obligations incurred with respect to mandatory scheduled payments under agreements without milestone provisions are accounted for when due, are recognized ratably over the appropriate period, as specified in the respective agreement, and are recorded as liabilities in the Company’s consolidated balance sheet, with a corresponding charge to research and development costs in the Company’s consolidated statement of operations. F- 10 Payments made pursuant to contracts are initially recorded as advances on research and development contract services in the Company’s consolidated balance sheet and are then charged to research and development costs in the Company’s consolidated statement of operations as those contract services are performed. Expenses incurred under contracts in excess of amounts advanced are recorded as research and development contract liabilities in the Company’s consolidated balance sheet, with a corresponding charge to research and development costs in the Company’s consolidated statement of operations. The Company reviews the status of its various clinical trial and research and development contracts on a quarterly basis. Prepaid Insurance Prepaid insurance represents the premiums paid for directors and officers insurance coverage and for general liability insurance coverage in excess of the amortization of the total policy premium charged to operations at each balance sheet date. Such amount is determined by amortizing the total policy premium charged on a straight-line basis over the respective policy period. As the policy premiums incurred are generally amortizable over the ensuing twelve-month period, they are recorded as a current asset in the Company’s consolidated balance sheet at each reporting date and appropriately amortized to the Company’s consolidated statement of operations for each reporting period. Patent and Licensing Legal and Filing Fees and Costs Due to the significant uncertainty associated with the successful development of commercially viable products based on the Company’s research efforts and related patent applications, all patent and licensing legal and filing fees and costs related to the development and protection of the Company’s intellectual property are charged to operations as incurred. Patent and licensing legal and filing fees and costs were $ 978,244 and $ 1,268,308 for the years ended December 31, 2023 and 2022, respectively. Patent and licensing legal and filing fees and costs are included in general and administrative costs in the Company’s consolidated statements of operations. Concentration of Risk The Company periodically contracts with vendors and consultants to provide services related to the Company’s operations. Charges incurred for these services can be for a specific period (typically one year) or for a specific project or task. Costs and expenses incurred that represented 10% or more of general and administrative costs or research and development costs for the years ended December 31, 2023 and 2022 are described as follows. General and administrative costs for the years ended December 31, 2023 and 2022 include charges from legal firms and other vendors for general licensing and patent prosecution costs relating to the Company’s intellectual properties representing 23.3 % and 25.6 % of total general and administrative costs, respectively. General and administrative costs for the years ended December 31, 2023 and 2022 also included charges for the fair value of stock options granted to directors and corporate officers representing 18.4 % and 30.3 %, respectively, of total general and administrative costs. Research and development costs for the year ended December 31, 2023 include charges from three vendors and consultants representing 29.9 %, 25.2 % and 13.7 %, respectively, of total research and development costs. Research and development costs for the year ended December 31, 2022 include charges from four vendors and consultants representing 21.0 % , 19.3 % , 15.1 % and 12.1 % , respectively, of total research and development costs. Income Taxes The Company accounts for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, the Company recognizes deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities. F- 11 The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. In the event the Company was to determine that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. The Company is subject to U.S. federal income taxes and income taxes of various state tax jurisdictions. As the Company’s net operating losses have yet to be utilized, all previous tax years remain open to examination by Federal authorities and other jurisdictions in which the Company currently operates or has operated in the past. The Company had no unrecognized tax benefits as of December 31, 2023 and 2022 and does not anticipate any material amount of unrecognized tax benefits through December 31, 2024. The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. The Company had not recorded any liability for uncertain tax positions as of December 31, 2023 or 2022. Subsequent to December 31, 2023, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. Stock-Based Compensation The Company periodically issues common stock and stock options to officers, directors, employees, Scientific Advisory Committee members, contractors and consultants for services rendered. Options vest and expire according to terms established at the issuance date of each grant. Stock grants, which are generally time vested, are measured at the grant date fair value and charged to operations ratably over the vesting period. The Company accounts for stock-based payments to officers, directors, employees, Scientific Advisory Committee members, contractors, and consultants by measuring the cost of services received in exchange for equity awards utilizing the grant date fair value of the awards, with the cost recognized as compensation expense on the straight-line basis in the Company’s financial statements over the vesting period of the awards. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The fair value of stock options granted as stock-based compensation is determined utilizing the Black-Scholes option-pricing model, and is affected by several variables, the most significant of which are the expected life of the stock option, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date, and the estimated volatility of the common stock. Unless sufficient historical exercise data is available, the expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The estimated volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair market value of the common stock is determined by reference to the quoted market price of the Company’s common stock on the grant date. The expected dividend yield is based on the Company’s expectation of dividend payouts and is assumed to be zero. The Company recognizes the fair value of stock-based compensation awards in general and administrative costs and in research and development costs, as appropriate, in the Company’s consolidated statements of operations. The Company issues new shares of common stock to satisfy stock option exercises. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. The Company has determined that the warrants issued in the July 20, 2023 equity financing (see Note 4) meet the requirements for equity classification. This assessment, which requires the use of professional judgment, is conducted when the warrants are issued and at the end each subsequent quarterly period while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. F- 12 Earnings (Loss) Per Share The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) attributable to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., preferred shares, warrants and stock options) as if they had been converted at the beginning of the respective periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the respective periods. Basic and diluted loss per common share was the same for all periods presented because all preferred shares, warrants and stock options outstanding were anti-dilutive. At December 31, 2023 and 2022, the Company excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share 2023 2022 December 31, 2023 2022 Series A Convertible Preferred Stock 72,917 72,917 Common stock warrants 808,365 190,031 Common stock options, including options issued in the form of warrants 552,083 389,479 Total 1,433,365 652,427 Anti-dilutive securities 1,433,365 652,427 Foreign Currency Translation The consolidated financial statements are presented in the United States dollar, which is the functional and reporting currency of the Company. The Company periodically incurs a cost or expense in a foreign jurisdiction denominated in a local currency. The Company purchases the required foreign currency to pay such cost or expense on an as-needed basis. Such cost or expense is converted into United States dollars for financial statement purposes based on the foreign currency conversion rate in effect on the transaction date. The Company purchases the requisite foreign currency to pay such cost or expense on an as-needed basis. Any gain or loss resulting from the purchase of the foreign currency is included as foreign currency gain (loss) in the consolidated statement of operations. During the years ended December 31, 2023 and 2022, the Company incurred various costs and expenses denominated in Euros, which were converted into United States dollars at the average rate of 1.0824 and 1.0538 , respectively. As of December 31, 2023 and 2022, the Company did not hold any currencies other than the United States dollar in its bank accounts, and was not a party to any foreign currency forward or exchange contracts. F- 13 Fair Value of Financial Instruments The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required. Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives. Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges. Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently traded non-exchange-based derivatives and commingled investment funds and are measured using present value pricing models. The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end. The carrying value of financial instruments (consisting of accounts payable and accrued expenses) is considered to be representative of their respective fair values due to the short-term nature of those instruments. Recent Accounting Pronouncements In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 was effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s consolidated financial statements, including their presentation and related disclosures. In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation — Stock Compensation (Topic 718) Presentation of Financial Statements (“ASU 2023-03”). ASU 2023-03 amends the FASB Accounting Standards Codification to include Amendments to SEC Paragraphs pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and SEC Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 — General Revision of Regulation S-X: Income or Loss Applicable to Common Stock. As ASU 2023-03 did not provide any new guidance, there was no transition or effective date associated with its adoption. Accordingly, the Company adopted ASU 2023-03 immediately upon its issuance. The adoption of ASU 2023-03 did not have any impact on the Company’s consolidated financial statements, including their presentation and related disclosures. F- 14 Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statements, including their presentation and related disclosures. 3. Research and Development Costs A summary of research and development costs for the years ended December 31, 2023 and 2022, including costs associated with clinical trials involving the Company’s lead clinical compound LB-100, are summarized below based on the respective geographical regions where such costs have been incurred. Schedule of Research and Development Costs 2023 2022 Years Ended December 31, 2023 2022 United States $ 359,589 $ 350,618 Spain 295,163 626,366 France — 91,532 China 17,198 76,595 Netherlands 226,150 204,158 Total $ 898,100 $ 1,349,269 Research and development costs $ 898,100 $ 1,349,269 4. Stockholders’ Equity Preferred Stock The Company is authorized to issue a total of 10,000,000 shares of preferred stock, par value $ 0.0001 per share. On March 17, 2015, the Company filed a Certificate of Designations, Preferences, Rights and Limitations of its Series A Convertible Preferred Stock with the Delaware Secretary of State to amend the Company’s certificate of incorporation. The Company has designated a total of 350,000 shares as Series A Convertible Preferred Stock, which are non-voting and are not subject to increase without the written consent of a majority of the holders of the Series A Convertible Preferred Stock or as otherwise set forth in the Preferences, Rights and Limitations. The holders of each tranche of 175,000 shares of the Series A Convertible Preferred Stock are entitled to receive a per share dividend equal to 1% of the annual net revenue of the Company divided by 175,000, until converted or redeemed . As of December 31, 2023 and 2022, the Company had 9,650,000 shares of undesignated preferred stock which may be issued with such rights and powers as the Board of Directors may designate. Each share of Series A Convertible Preferred Stock may be converted, at the option of the holder, into 0.20833 shares of common stock (subject to customary anti-dilution provisions) and the Series A Convertible Preferred Stock is subject to mandatory conversion at the conversion rate in the event of a merger or sale transaction resulting in gross proceeds to the Company of at least $ 21,875,000 . The Series A Convertible Preferred Stock has a liquidation preference based on its assumed conversion into shares of common stock. The Series A Convertible Preferred Stock does not have any cash liquidation preference rights or any registration rights. If fully converted, the 350,000 outstanding shares of Series A Convertible Preferred Stock would convert into 72,917 shares of common stock at December 31, 2023 and 2022. Based on the attributes of the Series A Convertible Preferred Stock as previously described, the Company has accounted for the Series A Convertible Preferred Stock as a permanent component of stockholders’ equity. Common Stock The Company is authorized to issue a total of 100,000,000 shares of common stock, par value $ 0.0001 per share. As of December 31, 2023 and 2022, the Company had 2,249,290 shares and 1,664,706 shares, respectively, of common stock issued and outstanding. F- 15 On June 2, 2023, the Company effected a 1-for-10 reverse split of its outstanding shares of common stock. The authorized number of shares of common stock and the par value per share were not affected by the reverse stock split. No fractional shares were issued in connection with the reverse stock split, as all fractional shares were rounded up to the next whole share. All share and per share amounts and information presented herein have been retroactively adjusted to reflect the reverse stock split for all periods presented. Effective March 10, 2023, the Company issued 1,250 shares of common stock upon the exercise of a stock option in the form of a warrant held by a consultant to the Company for 1,250 shares exercisable at $ 5.025 per share for total cash proceeds of $ 6,281 . April 12, 2022 Sale of Common Stock Effective April 12, 2022, the Company completed the sale of 290,000 shares of common stock at a price of $ 20.00 per share in a registered direct offering, generating gross proceeds of $ 5,800,000 . The total cash costs of this offering were $ 658,616 , resulting in net proceeds of $ 5,141,384 . Pursuant to the placement agents’ agreement, the Company granted warrants to the placement agents to purchase 29,000 shares of common stock at an exercise price of $ 20.00 per share exercisable through April 14, 2027. July 20, 2023 Sale of Common Stock and Warrants Effective July 20, 2023, the Company sold 180,000 shares of common stock at a price of $ 6.00 per share and pre-funded warrants to purchase 403,334 shares of common stock at a price of $ 5.9999 per pre-funded warrant to an institutional investor in a registered direct offering. The pre-funded warrants had an exercise price of $ 0.0001 per share, were immediately exercisable upon issuance, and were valid and exercisable until all pre-funded warrants were exercised in full. During the period from July 24, 2023 through August 7, 2023, the 403,334 pre-funded warrants, exercisable at $ 0.0001 per common share, were exercised for total cash proceeds of $ 41 , resulting in the issuance of 403,334 shares of common stock. The pre-funded warrants were determined to be common stock equivalents. In a concurrent private placement to the institutional investor, the Company also sold warrants to purchase 583,334 shares of common stock. Each common warrant had an initial exercise price of $ 6.00 per share, was immediately exercisable upon issuance, and expires five years thereafter on July 20, 2028 . The common warrants and the shares of common stock issuable upon exercise of the common warrants were not registered under the Securities Act of 1933, as amended (the “Securities Act”) and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. The shares of common stock issuable upon exercise of the warrants were subsequently registered for resale on a registration statement on Form S-3 declared effective by the SEC on August 21, 2023. The registered direct offering and the concurrent private placement generated gross proceeds of $ 3,499,964 . The total cash costs of the registered direct offering and the private placement were $ 362,925 , resulting in net proceeds of $ 3,137,039 . Pursuant to the placement agent agreement, the Company granted the placement agent warrants to purchase 35,000 shares of common stock at an exercise price of $ 6.60 per share and expiring on July 20, 2028 . The exercise prices of the warrants issued to the institutional investor (exercisable at $ 6.00 per share) and to the placement agent (exercisable at $ 6.60 per share) are subject to customary adjustments for stock splits, stock dividends, stock combinations, reclassifications, reorganizations, or similar events affecting the Company’s common stock. In addition, the warrants issued to the institutional investor contain a “fundamental transaction” provision whereby in the event of a fundamental transaction (a sale or transfer of assets or ownership of the Company as defined in the warrant agreement) within the Company’s control, the holder of the unexercised common stock warrants would be entitled to receive, in exchange for extinguishment of such warrants, cash consideration equal to a Black-Scholes valuation, as defined in the warrant agreement. If such fundamental transaction is not within the Company’s control, the warrant holder would only be entitled to receive the same form of consideration (and in the same proportion) as the holders of the Company’s common stock, hence these warrants are classified as a component of permanent equity. The Company will account for any such cash payment for a warrant redemption as a distribution from stockholders’ equity, as and when such cash payment is made. F- 16 Common Stock Warrants A summary of common stock warrant activity, including warrants to purchase common stock that were issued in conjunction with the Company’s public offering, during the years ended December 31, 2023 and 2022 is presented below. Schedule of Warrants Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Warrants outstanding at December 31, 2021 311,031 $ 57.720 Issued 29,000 20.000 Exercised — — Expired ( 150,000 ) 60.000 Warrants outstanding at December 31, 2022 190,031 $ 50.161 Issued 618,334 6.034 Exercised — — Expired — — Warrants outstanding at December 31, 2023 808,365 $ 16.407 3.99 Warrants exercisable at December 31, 2022 190,031 $ 50.161 Warrants exercisable at December 31, 2023 808,365 $ 16.407 3.99 At December 31, 2023, the outstanding warrants are exercisable at the following prices per common share: Schedule of Warrants Outstanding and Exercisable Exercise Prices Warrants Outstanding (Shares) $ 6.000 583,334 $ 6.600 35,000 $ 20.000 29,000 $ 37.000 11,331 $ 57.000 149,700 808,365 The warrants exercisable at $ 57.00 per share at December 31, 2023 consist of 1,497,000 publicly-traded warrants pre-split 1-for-10 that were issued as part of the Company’s November 2020 public offering of units and are exercisable for a period of five years thereafter. As a result of the 1-for-10 reverse split of the Company’s common stock effective June 2, 2023, each such publicly-traded warrant currently represents the right to purchase 1/10th of a share of common stock at the original exercise price of $ 5.70 per share. Accordingly, upon exercise, 10 warrants, each exercisable at $ 5.70 , will be required to acquire one share of post-split common stock, which is equivalent to a purchase price of $ 57.00 . F- 17 Based on a fair market value of $ 2.35 per share on December 31, 2023, there was no intrinsic value attributed to exercisable but unexercised common stock warrants at December 31, 2023. Information with respect to the issuance of common stock in connection with various stock-based compensation arrangements is provided at Note 6. 5. Related Party Transactions Related party transactions include transactions with the Company’s officers, directors, and affiliates. Employment Agreements with Officers During July and August 2020, the Company entered into one-year employment agreements with each of its executive officers at that time, consisting of Dr. John S. Kovach, Eric J. Forman, Dr. James S. Miser, and Robert N. Weingarten, payable monthly, as described below. These employment agreements were automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, or by death, or by termination for cause. These employment agreements were automatically renewed for additional one-year periods in July and August 2021, 2022 and 2023. The Company entered into an employment agreement with Dr. Kovach dated July 15, 2020, effective October 1, 2020, to provide for Dr. Kovach to continue to act as the Company’s President, Chief Executive Officer and Chief Scientific Officer, with an annual salary of $ 250,000 . During the years ended December 31, 2023 and 2022, the Company paid $ 190,860 and $ 250,000 , respectively, to Dr. Kovach under this employment agreement, which costs are included in general and administrative costs in the Company’s consolidated statements of operations for such periods. The employment agreement with Dr. Kovach terminated upon his death on October 5, 2023. The Company entered into an employment agreement with Dr. James S. Miser, M.D., effective August 1, 2020 to act as the Company’s Chief Medical Officer, with an annual salary of $ 150,000 . Effective May 1, 2021, Dr. Miser’s annual salary was increased to $ 175,000 . Dr. Miser is required to devote at least 50% of his business time to the Company’s activities. During the years ended December 31, 2023 and 2022, the Company paid $ 175,000 and $ 175,000 , respectively, to Dr. Miser under this employment agreement, which costs are included in general and administrative costs in the Company’s consolidated statements of operations for such periods. The Company entered into an employment agreement with Eric J. Forman effective July 15, 2020, as amended on August 12, 2020, to act as the Company’s Chief Administrative Officer, with an annual salary of $ 120,000 . Mr. Forman is the son-in-law of Gil Schwartzberg (deceased), a former member of the Company’s Board of Directors who died on October 30, 2022 and was a significant stockholder of and consultant to the Company, and is the son of Dr. Stephen Forman, a member of the Company’s Board of Directors. Julie Forman, the wife of Mr. Forman and the daughter of Gil Schwartzberg, is Vice President of Morgan Stanley Wealth Management, at which firm the Company’s cash is on deposit and with which the Company maintains a continuing banking relationship. Effective May 1, 2021, Mr. Forman’s annual salary was increased to $ 175,000 . Additionally, effective November 6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer with an annual salary of $ 200,000 . Effective October 1, 2022, Mr. Forman has been provided a monthly office rent allowance, pursuant to which the Company paid $ 15,571 and $ 937 , respectively, on Mr. Forman’s behalf for the years ended December 31, 2023 and 2022. During the years ended December 31, 2023 and 2022, the Company paid $ 200,000 and $ 178,819 , respectively, to Mr. Forman under this employment agreement, which costs are included in general and administrative costs in the Company’s consolidated statements of operations for such periods. The Company entered into an employment agreement with Robert N. Weingarten effective August 12, 2020 to act as the Company’s Vice President and Chief Financial Officer, with an annual salary of $ 120,000 . Effective May 1, 2021, Mr. Weingarten’s annual salary was increased to $ 175,000 . During the years ended December 31, 2023 and 2022, the Company paid $ 175,000 and $ 175,000 , respectively, to Mr. Weingarten under this employment agreement, which costs are included in general and administrative costs in the Company’s consolidated statements of operations for such periods. F- 18 The Company entered into an employment agreement with Bastiaan van der Baan effective September 26, 2023 to act as the Company’s President and Chief Executive Officer and as Vice Chairman of the Board of Directors, with an annual salary of $ 150,000 . Effective October 6, 2023, Mr. van der Baan was appointed as Chairman of the Board of Directors upon the death of Dr. Kovach on October 5, 2023. Mr. van der Baan’s annual salary may be increased from time to time at the sole discretion of the Board of Directors. In addition, Mr. van der Baan will be eligible to receive an annual bonus as determined at the sole discretion of the Board of Directors. The term of the employment agreement is for three years and is automatically renewable for additional one-year periods unless terminated by either party, subject to early termination provisions as described in the employment agreement. During the year ended December 31, 2023, the Company paid $ 40,639 to Mr. van der Baan under this employment agreement, which costs are included in general and administrative costs in the Company’s consolidated statements of operations for such period. Appointment of Dr. René Bernards to the Board of Directors Effective as of June 15, 2022, Dr. René Bernards was appointed to the Company’s Board of Directors as an independent director. Dr. Bernards is a leader in the field of molecular carcinogenesis and is employed by the Netherlands Cancer Institute in Amsterdam. As a new director, in lieu of a grant of stock options, Dr. Bernards received a one-time cash board fee of $ 100,000 , which was paid upon his appointment to the Board of Directors, and an annual cash board fee of $ 40,000 , payable quarterly. During the years ended December 31, 2023 and 2022, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 62,500 and $ 133,873 , respectively, with respect to his cash board compensation. Previously, on October 8, 2021, the Company had entered into a Development Collaboration Agreement (subsequently amended and extended) with the Netherlands Cancer Institute, Amsterdam, one of the world’s leading comprehensive cancer centers, and Oncode Institute, Utrecht, a major independent cancer research center, to identify the most promising drugs to be combined with LB-100, and potentially LB-100 analogues, to be used to treat a range of cancers, as well as to identify the specific molecular mechanisms underlying the identified combinations (see Note 8). Compensatory Arrangements for Members of the Board of Directors Effective April 9, 2021, the Board of Directors approved a comprehensive cash and equity compensation program for the non-officer directors for their services on the Board of Directors. Effective May 25, 2022, the Board of Directors approved an amendment to the program. Officers who also serve on the Board of Directors are not compensated separately for their service on the Board of Directors. Cash compensation for directors, payable quarterly, is as follows: Base director compensation - $ 20,000 per year Chairman of audit committee – additional $ 10,000 per year Chairman of any other committees – additional $ 5,000 per year Member of audit committee – additional $ 5,000 per year Member of any other committees – additional $ 2,500 per year Equity compensation for directors is as follows: Appointment of new directors – The Company grants options to purchase 25,000 shares of common stock, exercisable for a period of five years , at the closing market price on the date of grant, vesting 50% on the grant date and the remaining 50% vesting 12.5% on the last day of each calendar quarter beginning in the quarter immediately subsequent to the date of the grant until fully vested, subject to continued service . At the discretion of the Board of Directors, for a nominee to the Board of Directors who is restricted by their respective institution or employer from receiving equity-based compensation, in lieu of the grant of such stock options, the Company may elect to pay a one-time cash fee of $ 100,000 to such director, payable upfront. F- 19 Annual grant of options to directors – Effective on the last business day of the month of June, the Company grants options to purchase 10,000 shares of common stock, exercisable for a period of five years , at the closing market price on the date of grant, vesting 12.5% on the last day of each calendar quarter beginning in the quarter immediately subsequent to the date of grant until fully vested, subject to continued service. If any director has served for less than 12 full calendar months on the grant date, the amount of such stock option grant is prorated based on the length of service of such director . At the discretion of the Board of Directors, for a nominee to the Board of Directors who is restricted by their respective institution or employer from receiving equity-based compensation, in lieu of the grant of such stock options, the Company may elect to pay an annual cash fee of $ 40,000 to such director, payable quarterly. Total cash compensation paid to non-officer directors was $ 163,479 and $ 266,020 , respectively, for the years ended December 31, 2023 and 2022. Stock-based compensation granted to members of the Company’s Board of Directors, officers and affiliates is described at Note 6. A summary of related party costs, including compensation under employment and consulting agreements and fees paid to non-officer directors for their services on the Board of Directors, for the years ended December 31, 2023 and 2022, is presented below. Summary of Related Party Costs 2023 2022 Years Ended December 31, 2023 2022 Related party costs: Cash-based $ 944,977 $ 1,044,839 Stock-based 773,203 1,502,776 Total $ 1,718,180 $ 2,547,615 Related party costs $ 1,718,180 $ 2,547,615 6. Stock-Based Compensation The Company periodically issues common stock and stock options as incentive compensation to directors and as compensation for the services of employees, contractors, and consultants of the Company. On July 14, 2020, the Board of Directors of the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which was subsequently approved by the stockholders of the Company. The 2020 Plan provides for the granting of equity-based awards, consisting of stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards to employees, officers, directors and consultants of the Company and its affiliates, initially for a total of 233,333 shares of the Company’s common stock, under terms and conditions as determined by the Company’s Board of Directors. On October 7, 2022, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 180,000 shares, to a total of 413,333 shares. On November 27, 2023, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 336,667 shares, to a total of 750,000 shares. As of December 31, 2023, unexpired stock options for 495,000 shares were issued and outstanding under the 2020 Plan and 255,000 shares were available for issuance under the 2020 Plan. The fair value of a stock option award is calculated on the grant date using the Black-Scholes option-pricing model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect as of the grant date. The expected dividend yield assumption is based on the Company’s expectation of dividend payouts and is assumed to be zero. The estimated volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. Unless sufficient historical exercise data is available, the expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The fair market value of the common stock is determined by reference to the quoted market price of the common stock on the grant date. F- 20 For stock options requiring an assessment of value during the year ended December 31, 2023, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model with the following assumptions: Schedule of Fair Value of Each Option Award Estimated Assumption Risk-free interest rate 4.843 % Expected dividend yield 0 % Expected volatility 138.05 % Expected life 4.0 years For stock options requiring an assessment of value during the year ended December 31, 2022, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model with the following assumptions: For stock options requiring an assessment of value during the year ended December 31, 2022, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model utilizing the following assumptions: Risk-free interest rate 3.03 % to 3.63 % Expected dividend yield 0 % Expected volatility 128.03 % to 153.17 % Expected life 3.5 to 5 years On July 15, 2020, as amended on August 12, 2020, in connection with the employment agreement entered into with Eric J. Forman, Mr. Forman was granted stock options to purchase 5,833 shares of the Company’s common stock. The options can be exercised on a cashless basis. The options are exercisable for a period of five years at an exercise price of $ 71.40 per share, which was equal to the closing market price of the Company’s common stock on the grant date. The options vested 25% on August 12, 2020, 2021 and 2022, respectively, with the final 25% vesting on August 12, 2023 . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 400,855 ($ 68.718 per share), of which $ 100,214 was attributable to the portion of the stock options fully vested on August 12, 2020 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from August 12, 2020 through August 12, 2023. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 61,501 and $ 100,213 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On August 1, 2020, in connection with an employment agreement entered into with Dr. James S. Miser, M.D., Dr. Miser was granted stock options to purchase 8,333 shares of the Company’s common stock. The options can be exercised on a cashless basis. The options are exercisable for a period of five years at an exercise price of $ 71.40 per share, which was equal to the closing market price of the Company’s common stock on the effective date of the employment agreement. The options vested 25% on August 1, 2020, 2021 and 2022, respectively, with the final 25% vesting on August 1, 2023 . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 572,650 ($ 68.718 per share), of which $ 143,163 was attributable to the portion of the stock options fully vested on August 1, 2020 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from August 1, 2020 through August 1, 2023. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 83,544 and $ 143,163 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On August 12, 2020, in connection with the employment agreement entered into with Robert N. Weingarten, Mr. Weingarten was granted stock options to purchase 5,833 shares of the Company’s common stock. The options can be exercised on a cashless basis. The options are exercisable for a period of five years at an exercise price of $ 71.40 per share, which was equal to the closing market price of the Company’s common stock on the grant date. The options vested 25% on August 12, 2020, 2021 and 2022, respectively, with the final 25% vesting on August 12, 2023 . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 400,855 ($ 68.718 per share), of which $ 100,214 was attributable to the portion of the stock options fully vested on August 12, 2020 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from August 12, 2020 through August 12, 2023. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 61,501 and $ 100,213 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. F- 21 On April 9, 2021, the Board of Directors appointed Gil Schwartzberg to fill the vacancy created by a former director’s resignation. In connection with his appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Mr. Schwartzberg was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 32.00 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 753,611 ($ 30.144 per share), of which $ 376,800 was attributable to the portion of the stock options fully vested on April 9, 2021 and was therefore charged to operations on that date. Although the remaining unvested portion of the fair value of the stock options was being charged to operations ratably from April 9, 2021 through June 30, 2023, the vesting of these stock options terminated on October 30, 2022 as a result of the death of Mr. Schwartzberg on that date. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 126,684 for the year ended December 31, 2022 with respect to these stock options. On May 11, 2021, the Board of Directors appointed Regina Brown to the Board of Directors. In connection with her appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Ms. Brown was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five year s at an exercise price of $ 28.00 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 658,363 ($ 26.335 per share), of which $ 329,188 was attributable to the portion of the stock options fully vested on May 11, 2021 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from May 11, 2021 through June 30, 2023. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 76,388 and $ 154,042 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On June 30, 2021, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total of 50,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 30.30 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 1,421,095 ($ 28.423 per share), which was charged to operations ratably from July 1, 2021 through June 30, 2023. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 211,413 and $ 638,915 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On June 17, 2022, the Board of Directors appointed Bas van der Baan to the Board of Directors. In connection with his appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Mr. Baan was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 7.40 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 158,525 ($ 6.341 per share), of which $ 79,263 was attributable to the portion of the stock options fully vested on June 17, 2022 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options is being charged to operations ratably from June 17, 2022 through June 30, 2024. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 38,885 and $ 100,249 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. F- 22 On June 30, 2022, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total of 50,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 7.40 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 316,700 ($ 6.334 per share), which is being charged to operations ratably from July 1, 2022 through June 30, 2024. The Company recorded charges to general and administrative costs in the consolidated statement of operations of $ 94,881 and $ 63,777 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On November 6, 2022, the Board of Directors granted to each of the four officers of the Company stock options to purchase 20,000 shares (a total of 80,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 20.00 per share, vesting 25% on issuance and 25% on each anniversary date thereafter until fully vested, subject to continued service . The total fair value of the 80,000 stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 262,560 ($ 3.282 per share), which is being charged to operations ratably from November 6, 2022 through November 6, 2025. The Company recorded a total charge to general and administrative costs in the consolidated statement of operations of $ 61,448 and $ 75,520 for the years ended December 31, 2023 and 2022, respectively, with respect to these stock options. On November 6, 2022, the Company issued a stock option, in the form of a warrant, to BioPharmaWorks to purchase 10,000 shares of the Company’s common stock, which was fully vested upon issuance and is exercisable for a period of five years at $ 5.025 per share (the closing market price on the issue date). The fair value of the warrant, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 43,264 ($ 4.326 per share) and was charged to general and administrative costs in the consolidated statement of operations on that date. On June 30, 2023, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the four non-officer directors of the Company stock options to purchase 10,000 shares (a total of 40,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $ 5.88 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 192,593 ($ 4.8131 per share), which is being charged to operations ratably from July 1, 2023 through June 30, 2025. The Company recorded a total charge to general and administrative costs in the consolidated statement of operations of $ 48,464 for the year ended December 31, 2023 with respect to these stock options. On September 26, 2023, in connection with the employment agreement entered into with Bas van der Baan, Mr. van der Baan was granted stock options to purchase 250,000 shares of the Company’s common stock. The options can be exercised on a cashless basis. The options are exercisable for a period of five years at an exercise price of $ 1.95 per share, which was equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal increments quarterly over a three-year period commencing on the last day of each calendar quarter commencing October 1, 2023, subject to continued service . The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $ 403,066 ($ 1.612 per share), which is being charged to operations ratably from September 26, 2023 through September 30, 2026. The Company recorded a charge to general and administrative costs in the consolidated statement of operations of $ 35,178 for the year ended December 31, 2023 with respect to these stock options. Dr. Philip Palmedo, a director of the Company since 2006, did not stand for re-election to the Company’s Board of Directors at the Company’s annual meeting of stockholders held on October 7, 2022. Gil Schwartzberg, a former director of the Company, died on October 30, 2022. Dr. John S. Kovach, the Chairman of the Board of Directors and the Company’s President and Chief Executive Officer, and Chief Scientific Officer, died on October 5, 2023. Accordingly, the unvested stock options for each such person ceased vesting effective as of the respective dates that their service to the Company terminated. Furthermore, the expiration date of all vested stock options owned by each such person contractually expired one year from the respective dates that each of their services to the Company terminated. F- 23 A summary of stock-based compensation costs for the years ended December 31, 2023 and 2022 is as follows: Summary of Stock-based Compensation Costs 2023 2022 Years Ended December 31, 2023 2022 Related parties $ 773,203 $ 1,502,776 Non-related parties — 43,264 Total stock-based compensation costs $ 773,203 $ 1,546,040 A summary of stock option activity, including options issued in the form of warrants, during the years ended December 31, 2023 and 2022 is as follows: Summary of Stock Option Activity Including Options Form of Warrants Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Stock options outstanding at December 31, 2021 266,667 $ 37.380 Granted 165,000 13.370 Exercised — — Expired ( 42,188 ) 19.160 Stock options outstanding at December 31, 2022 389,479 29.183 Granted 290,000 2.492 Exercised ( 1,250 ) 5.025 Expired ( 126,146 ) 28.687 Stock options outstanding at December 31, 2023 552,083 $ 15.330 3.84 Stock options exercisable at December 31, 2022 281,979 $ 32.834 Stock options exercisable at December 31, 2023 252,292 $ 28.387 2.89 Total deferred compensation expense for the outstanding value of unvested stock options was approximately $ 670,000 at December 31, 2023, which will be recognized subsequent to December 31, 2023 over a weighted-average period of approximately 26 months. At December 31, 2023, the outstanding common stock options,, including options issued in the form of warrants, are exercisable at the following prices per common share: Schedule of Exercise Prices of Common Stock Options Outstanding and Exercisable Including Options Form of Warrants Exercise Prices Options Outstanding (Shares) Options Exercisable (Shares) $ 1.950 250,000 20,833 $ 5.025 8,750 8,750 $ 5.880 40,000 10,000 $ 7.400 55,000 44,376 $ 20.000 65,000 35,000 $ 20.600 20,000 20,000 $ 28.000 25,000 25,000 $ 30.300 30,000 30,000 $ 32.100 10,000 10,000 $ 60.000 16,667 16,667 $ 66.000 3,333 3,333 $ 71.400 20,000 20,000 $ 120.000 8,333 8,333 552,083 252,292 F- 24 Based on a fair market value of $ 2.35 per share on December 31, 2023, the intrinsic value attributed to exercisable but unexercised common stock options was approximately $ 8,000 at December 31, 2023. Outstanding stock options to acquire 299,791 shares of the Company’s common stock had not vested at December 31, 2023. The Company expects to satisfy such stock obligations through the issuance of authorized but unissued shares of common stock. 7. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of December 31, 2023 and 2022 are as follows: Schedule of Components of Deferred Tax Assets 2023 2022 December 31, 2023 2022 Research credits $ 612,000 $ 574,000 Capitalized research and development 844,000 — Stock-based compensation 1,631,000 2,137,000 Net operating loss carryforwards 8,601,000 8,135,000 Total deferred tax assets 11,688,000 10,846,000 Valuation allowance ( 11,688,000 ) ( 10,846,000 ) Net deferred tax assets $ — $ — In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2023 and 2022, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates. No federal tax provision has been provided for the years ended December 31, 2023 and 2022 due to the losses incurred during such periods. The reconciliation below presents the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rate for the years ended December 31, 2023 and 2022. Schedule of Effective Income Tax Rate 2023 2022 Years Ended December 31, 2023 2022 U. S. federal statutory tax rate ( 21.0 )% ( 21.0 )% State income taxes, net of federal tax benefit ( 6.0 )% ( 6.0 )% Expirations related to stock-based compensation 10.4 % 1.7 % Adjustment to deferred tax asset ( 0.8 )% ( 1.5 )% Change in valuation allowance 17.4 % 26.8 % Effective tax rate 0.0 % 0.0 % F- 25 At December 31, 2023, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $ 28,111,000 and $ 32,617,000 , respectively. Federal net operating losses from tax years preceding 2018, if not utilized earlier, expire through 2038. Federal net operating losses generated in a tax year beginning after 2017 have an indefinite carryforward period. The utilization of federal net operating loss carryforwards is subject to various limitations. The state net operating loss carryovers include approximately $ 19,141,000 that were incurred in the State of New York. New York tax law requires New York net operating loss carryovers from years prior to 2015 to be converted, by applying a formula, into a Prior Net Operating Loss Conversion (PNOLC) subtraction pool. The Company may utilize up to 1/10 of the PNOLC subtraction pool, or $928,313, each year. Unutilized PNOLC amounts carry forward to succeeding years until they expire in 2035. In addition, the full New York net operating losses incurred in post-2015 tax years may be utilized in future tax years. Post-2015 New York net operating losses expire through 2040. The state net operating loss carryovers also include approximately $ 13,476,000 that was incurred in the State of California. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and certain corresponding provisions of state law, if a corporation undergoes an “ownership change”, which is generally defined as a greater than 50% change, by value, in the ownership of its equity over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income might be limited. As the Company’s net operating losses have yet to be utilized, all previous tax years since 2006 remain subject to adjustment by Federal authorities and other jurisdictions in which the Company currently operates or has operated in the past. 8. Commitments and Contingencies Legal Claims The Company may be subject to legal claims and actions from time to time as part of its business activities. As of December 31, 2023 and 2022, the Company was not subject to any threatened or pending lawsuits, legal claims or legal proceedings. Principal Commitments Clinical Trial Agreements At December 31, 2023, the Company’s remaining financial contractual commitments pursuant to clinical trial agreements and clinical trial monitoring agreements not yet incurred, as described below, aggregated $ 6,412,000 , including clinical trial agreements of $ 6,013,000 and clinical trial monitoring agreements of $ 399,000 , which, based on current estimates, are currently scheduled to be incurred through approximately December 31, 2027. The Company’s ability to conduct and fund these contractual commitments is subject to the timely availability of sufficient capital to fund such expenditures, as well as any changes in the allocation or reallocation of such funds to the Company’s current or future clinical trial programs. The Company expects that the full amount of these expenditures will be incurred only if such clinical trial programs are conducted as originally designed and their respective enrollments and duration are not modified or reduced. Clinical trial programs, such as the types that the Company is engaged in, can be highly variable and can frequently involve a series of changes and modifications over time as clinical data are obtained and analyzed, and are frequently modified, suspended or terminated before the clinical trial endpoint is reached. Accordingly, such contractual commitments as discussed herein should be considered as estimates only based on current clinical assumptions and conditions and are typically subject to significant modifications and revisions over time. F- 26 The following is a summary of the contractual clinical trials discussed below as of December 31, 2023: Schedule of Contractual Clinical Trials Description of Clinical Trial Type of Clinical Trial Institution Estimated Start Date Estimated End Date Number of Patients in Trial Study Objective Clinical Update NCT No. Remaining Financial Contractual Commitment LB-100 combined with carboplatin, etoposide and atezolizumab in small cell lung cancer Phase 1b City of Hope and Sarah Cannon March 2021 March 2026 14 to 36 Determine RP2D Three patients entered NCT04560972 $ 2,433,000 LB-100 combined with doxorubicin in sarcoma Phase 1b GEIS June 2023 June 2024 9 to 18 Determine MTD and RP2D One patient entered NCT05809830 3,580,000 LB-100 in high grade gliomas Phase 0 pharmacology study National Cancer Institute January 2019 August 2022 7 Determine the penetration of LB-100 into high grade gliomas after IV injection Closed. No or minimal penetration of LB-100 into high grade gliomas after IV injection NCT03027388 (2) Doxorubicin with or without LB-100 in sarcoma Randomized Phase 2 GEIS July 2024 June 2026 150 Determine efficacy: PFS Clinical trial not yet begun (subject to completion of Phase 1b GEIS clinical trial) NCT05809830 (1) LB-100 combined with dostarlimab in ovarian clear cell carcinoma Phase 1b/2 MD Anderson March 2024 December 2025 21 Determine the survival of patients with ovarian clear cell carcinoma No patients entered at December 31, 2023 NCT06065462 (2) Total $ 6,013,000 (1) The financial contractual commitment of the GEIS Randomized Phase 2 clinical trial is included in the financial contractual commitment of the GEIS Phase 1b trial. . (2) There is no remaining financial contractual commitment associated with this clinical trial. City of Hope. Effective January 18, 2021, the Company executed a Clinical Research Support Agreement with the City of Hope National Medical Center, an NCI-designated comprehensive cancer center, and City of Hope Medical Foundation (collectively, “City of Hope”), to carry out a Phase 1b clinical trial of LB-100, the Company’s first-in-class protein phosphatase inhibitor, combined with an FDA-approved standard regimen for treatment of untreated extensive-stage disease small cell lung cancer (“ED-SCLC”). LB-100 will be given in combination with carboplatin, etoposide and atezolizumab, an FDA-approved standard of care regimen, to previously untreated ED-SCLC patients. The dose of LB-100 will be escalated with the standard fixed doses of the 3-drug regimen to reach a recommended Phase 2 dose (“RP2D”). Patient entry will be expanded so that a total of 12 patients will be evaluable at the RP2D to confirm the safety of the LB-100 combination and to look for potential therapeutic activity as assessed by objective response rate, duration of overall response, progression-free survival and overall survival. F- 27 The clinical trial was initiated on March 9, 2021, with patient accrual expected to take approximately two years to complete. However, as patient accrual was slower than expected, the Company has been seeking to add additional sites to increase the rate of patient accrual. Effective March 6, 2023, the Sarah Cannon Research Institute (“SCRI”), Nashville, Tennessee, joined the City of Hope’s ongoing Phase 1b clinical trial. The Company is continuing its efforts to add additional sites. The addition of SCRI is expected to expedite and expand the accrual of patients to this clinical trial, thus reducing the time required to demonstrate the feasibility, tolerability, and efficacy of adding LB-100 to the current standard treatment regimen. With the addition of SCRI, the Company currently expects that this clinical trial will be completed by March 31, 2026. During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 69,001 and $ 0 , respectively, pursuant to this agreement, which are included in research and development costs in the Company’s consolidated statements of operations. As of December 31, 2023, total costs of $ 447,512 have been incurred pursuant to this agreement. The Company’s aggregate commitment pursuant to this agreement, less amounts previously paid to date, totaled approximately $ 2,433,000 as of December 31, 2023, which is expected to be incurred through March 31, 2026. If a significant number of patients fail during the dose-escalation process, an increase of up to 12 patients would likely be necessary, at an estimated additional cost of approximately $ 800,000 . The Company currently expects that enrollment in this clinical trial will range from approximately 18 to 30 enrollees, with 24 enrollees as the most likely number. Should fewer than 42 enrollees be required, the Company has agreed to compensate City of Hope on a per enrollee basis. If a significant improvement in outcome is seen with the addition of LB-100, this would be an important advance in the treatment of a very aggressive disease. GEIS. Effective July 31, 2019, the Company entered into a Collaboration Agreement for an Investigator-Initiated Clinical Trial with the Spanish Sarcoma Group (Grupo Español de Investigación en Sarcomas or “GEIS”), Madrid, Spain, to carry out a study entitled “Randomized phase I/II trial of LB-100 plus doxorubicin vs. doxorubicin alone in first line of advanced soft tissue sarcoma”. The purpose of this clinical trial is to obtain information with respect to the efficacy and safety of LB-100 combined with doxorubicin in soft tissue sarcomas. Doxorubicin is the global standard for initial treatment of advanced soft tissue sarcomas (“ASTS”). Doxorubicin alone has been the mainstay of first line treatment of ASTS for over 40 years, with little improvement in survival from adding cytotoxic compounds to or substituting other cytotoxic compounds for doxorubicin. In animal models, LB-100 consistently enhances the anti-tumor activity of doxorubicin without apparent increases in toxicity. GEIS has a network of referral centers in Spain and across Europe that have an impressive track record of efficiently conducting innovative studies in ASTS. The Company agreed to provide GEIS with a supply of LB-100 to be utilized in the conduct of this clinical trial, as well as to provide funding for the clinical trial. The goal is to enter approximately 150 to 170 patients in this clinical trial over a period of two to four years. The Phase 1 portion of the study began in the quarter ended June 30, 2023 to determine the recommended Phase 2 dose of the combination of doxorubicin and LB-100. As advanced sarcoma is a very aggressive disease, the design of the Phase 2 portion of the study assumes a median progression-free survival (“PFS”), no evidence of disease progression or death from any cause) of 4.5 months in the doxorubicin arm and an alternative median PFS of 7.5 months in the doxorubicin plus LB-100 arm to demonstrate a statistically significant decrease in relative risk of progression or death by adding LB-100. There is a planned interim analysis of the primary endpoint when approximately 50% of the 102 events required for final analysis is reached. The Company had previously expected that this clinical trial would commence during the quarter ended June 30, 2020. However, during July 2020, the Spanish regulatory authority advised the Company that although it had approved the scientific and ethical basis of the protocol, it required that the Company manufacture new inventory of LB-100 under current Spanish pharmaceutical manufacturing standards. These standards were adopted subsequent to the production of the Company’s existing LB-100 inventory. F- 28 In order to manufacture a new inventory supply of LB-100 for the GEIS clinical trial, the Company engaged a number of vendors to carry out the multiple tasks needed to make and gain approval of a new clinical product for investigational study in Spain. These tasks included the synthesis under good manufacturing practices (GMP) of the active pharmacologic ingredient (API), with documentation of each of the steps involved by an independent auditor. The API was then transferred to a vendor that prepares the clinical drug product, also under GMP conditions documented by an independent auditor. The clinical drug product was then sent to a vendor to test for purity and sterility, provide appropriate labels, store the drug, and distribute the drug to the clinical centers for use in the clinical trials. A formal application documenting all steps taken to prepare the clinical drug product for clinical use was submitted to the appropriate regulatory authorities for review and approval before being used in a clinical trial. As of December 31, 2023, this program to provide new inventory of the clinical drug product for the Spanish Sarcoma Group study, and potentially for subsequent multiple trials within the European Union, had cost approximately $ 1,144,000 . Although the production of new inventory has been completed, nominal trailing costs subsequent to December 31, 2023 may be incurred. On October 13, 2022, the Company announced that the Spanish Agency for Medicines and Health Products (Agencia Española de Medicamentos y Productos Sanitarios or “AEMPS”) had authorized a Phase 1b/randomized Phase 2 study of LB-100, the Company’s lead clinical compound, plus doxorubicin, versus doxorubicin alone, the global standard for initial treatment of advanced soft tissue sarcomas (ASTS). Consequently, this clinical trial commenced during the quarter ended June 30, 2023 and is expected to be completed and a report prepared by December 31, 2026. In April 2023, GEIS completed its first site initiation visit in preparation for the clinical trial at Fundación Jiménez Díaz University Hospital (Madrid). Up to 170 patents will be entered into the clinical trial. The Phase 1b portion of the protocol is expected to be completed by June 30, 2024, at which time the Company expects to have data on both response and toxicity from this portion of the clinical trial, and subject to clinical results, anticipates that it will be able to proceed to a related Phase 2 study. The interim analysis of this clinical trial will be done before full accrual of patients is completed to determine whether the study has the possibility of showing superiority of the combination of LB-100 plus doxorubicin compared to doxorubicin alone. A positive study would have the potential to change the standard therapy for this disease after four decades of failure to improve the marginal benefit of doxorubicin alone. The Company’s agreement with GEIS provides for various payments based on achieving specific milestones over the term of the agreement. During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 268,829 and $ 260,770 , respectively, pursuant to this agreement. Such costs, when incurred, are included in research and development costs in the Company’s consolidated statements of operations. Through December 31, 2023, the Company has paid GEIS an aggregate of $ 684,652 for work done under this agreement through the fourth milestone. The Company’s aggregate commitment pursuant to this agreement, less amounts previously paid to date, totaled approximately $ 3,580,000 as of December 31, 2023, which is expected to be incurred through December 31, 2027. As the work is being conducted in Europe and is paid for in Euros, final costs are subject to foreign currency fluctuations between the United States Dollar and the Euro. Such fluctuations are recorded in the consolidated statements of operations as foreign currency gain or loss, as appropriate. National Cancer Institute Pharmacologic Clinical Trial. In May 2019, the National Cancer Institute (“NCI”) initiated a glioblastoma (“GBM”) pharmacologic clinical trial. This study was being conducted and funded by the NCI under a Cooperative Research and Development Agreement, with the Company responsible for providing the LB-100 clinical compound. Primary malignant brain tumors (gliomas) are very challenging to treat. Radiation combined with the chemotherapeutic drug temozolomide has been the mainstay of therapy of the most aggressive gliomas (glioblastoma multiforme or GBM) for decades, with little further benefit gained by the addition of one or more anti-cancer drugs, but without major advances in overall survival for the majority of patients. In animal models of GBM, the Company’s novel protein phosphatase inhibitor, LB-100, has been found to enhance the effectiveness of radiation, temozolomide chemotherapy treatments and immunotherapy, raising the possibility that LB-100 may improve outcomes of standard GBM treatment in the clinic. Although LB-100 has proven safe in patients at doses associated with apparent anti-tumor activity against several human cancers arising outside the brain, the ability of LB-100 to penetrate tumor tissue arising in the brain was not known. Many drugs potentially useful for GBM treatment do not enter the brain in amounts necessary for anti-cancer action. F- 29 The NCI study was designed to determine the extent to which LB-100 enters recurrent malignant gliomas. Patients having surgery to remove one or more tumors received one dose of LB-100 prior to surgery and had blood and tumor tissue analyzed to determine the amount of LB-100 present and to determine whether the cells in the tumors showed the biochemical changes expected to be present if LB-100 reached its molecular target. As a result of the innovative design of the NCI study, it was believed that data from a few patients would be sufficient to provide a sound rationale for conducting a larger clinical trial to determine the effectiveness of adding LB-100 to the standard treatment regimen for GBMs. Blood and brain tumor tissue were analyzed from seven patients after intravenous infusion of a single dose of LB-100. Results of the investigation demonstrated that there was virtually no entry of LB-100 into the brain tumor tissue. Accordingly, alternative methods of drug delivery will be required to determine if LB-100 has meaningful clinical anti-cancer activity against glioblastoma multiforme and other aggressive brain tumors. MD Anderson Cancer Center Clinical Trial . On September 20, 2023, the Company announced an investigator-initiated Phase 1b/2 collaborative clinical trial to assess whether adding LB-100 to a human programmed death receptor-1 (“PD-1”) blocking antibody of GSK plc (“GSK”), dostarlimab-gxly, may enhance the effectiveness of immunotherapy in the treatment of ovarian clear cell carcinoma (“OCCC”). The clinical trial is being sponsored by The University of Texas MD Anderson Cancer Center (“MD Anderson”) and is being conducted at The University of Texas - MD Anderson Cancer Center. The Company is providing LB-100 and GSK is providing dostarlimab-gxly and financial support for the clinical trial. On January 29, 2024, the Company announced the entry of the first patient into this clinical trial. The Company currently expects that this clinical trial will be completed by July 31, 2025. Moffitt. Effective August 20, 2018, the Company entered into a Clinical Trial Research Agreement with the Moffitt Cancer Center and Research Institute Hospital Inc., Tampa, Florida (“Moffitt”), effective for a term of five years, unless terminated earlier by the Company pursuant to 30 days written notice. Pursuant to the Clinical Trial Research Agreement, Moffitt agreed to conduct and manage a Phase 1b/2 clinical trial to evaluate the toxicity and therapeutic benefit of the Company’s lead anti-cancer clinical compound LB-100 to be administered intravenously in patients with low or intermediate-1 risk myelodysplastic syndrome (“MDS”). In November 2018, the Company received approval from the U.S. Food and Drug Administration for its Investigational New Drug (“IND”) Application to conduct a Phase 1b/2 clinical trial to evaluate the toxicity and therapeutic benefit of LB-100 in patients with low and intermediate-1 risk MDS who have failed or are intolerant of standard treatment. Patients with MDS, although usually older, are generally well except for severe anemia requiring frequent blood transfusions. This Phase 1b/2 clinical trial utilized LB-100 as a single agent in the treatment of patients with low and intermediate-1 risk MDS. The clinical trial began at a single site in April 2019 and the first patient was entered into the clinical trial in July 2019. During the year ended December 31, 2023, the clinical trial was closed. In this clinical trial, single agent LB-100 was used on a new schedule of days 1, 3, and 5 every 3 weeks. Although MTD was not achieved, there was no dose-limiting toxicity on this schedule at doses that were greater than the MTD in the Phase 1 clinical trial of LB-100 on the Monday, Tuesday, Wednesday schedule. During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 16,165 and $ 26,397 , respectively, pursuant to this agreement, which have been included in research and development costs in the Company’s consolidated statements of operations. As of December 31, 2023, total costs of $ 147,239 have been incurred pursuant to this agreement. The Company has decided not to pursue further studies in MDS, as other opportunities have become available (see “Patent and License Agreements - Moffitt” below). Clinical Trial Monitoring Agreements Moffitt. On September 12, 2018, the Company finalized a work order agreement with Theradex Systems, Inc. (“Theradex”), an international contract research organization (“CRO”), to monitor the Phase 1b/2 clinical trial being managed and conducted by Moffitt. The clinical trial began in April 2019 and the first patient was entered into the clinical trial in July 2019. F- 30 The costs of the Phase 1b/2 clinical trial being paid to or through Theradex have been recorded and charged to operations based on periodic documentation provided by the CRO. During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 20,884 and $ 35,403 , respectively, pursuant to this work order. As of December 31, 2023, total costs of $ 148,172 have been incurred pursuant to this work order agreement. As a result of the closure of the Company’s Clinical Trial Research Agreement with Moffitt during the year ended December 31, 2023 (see “Clinical Trial Agreements – Moffitt” above), this work order agreement with Theradex to monitor the Clinical Trial Research Agreement with Moffitt was similarly suspended, although nominal oversight trailing costs subsequent to December 31, 2023 are expected to be incurred relating to the closure of the Moffitt study. City of Hope. On February 5, 2021, the Company signed a new work order agreement with Theradex to monitor the City of Hope investigator-initiated clinical trial in small cell lung cancer in accordance with FDA requirements for oversight by the sponsoring party. Costs under this work order agreement are estimated to be approximately $ 335,000 . During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 20,240 and $ 33,815 , respectively, pursuant to this work order. As of December 31, 2023, total costs of $ 78,681 have been incurred pursuant to this work order agreement. The Company’s aggregate commitment pursuant to this clinical trial monitoring agreement, less amounts previously paid to date, totaled approximately $ 258,000 as of December 31, 2023, which is expected to be incurred through March 31, 2026. GEIS. On June 22, 2023, the Company finalized a work order agreement with Theradex, to monitor the GEIS investigator-initiated clinical Phase I/II randomized trial of LB-100 plus doxorubicin vs. doxorubicin alone in first line of advanced soft tissue sarcomas. The study is expected to be completed by June 30, 2026. Costs under this work order agreement are estimated to be approximately $ 153,000 , with such payments expected to be allocated approximately 72 % to Theradex for services and approximately 28 % for payments for pass-through software costs. During the year ended December 31, 2023, the Company incurred costs of $ 14,862 , pursuant to this work order. As of December 31, 2023, total costs of $ 14,862 have been incurred pursuant to this work order agreement. The Company’s aggregate commitment pursuant to this clinical trial monitoring agreement, less amounts previously paid to date, totaled approximately $ 141,000 as of December 31, 2023, which is expected to be incurred through June 30, 2026. Patent and License Agreements Moffitt. Effective August 20, 2018, the Company entered into an Exclusive License Agreement with Moffitt. Pursuant to the License Agreement, Moffitt granted the Company an exclusive license under certain patents owned by Moffitt (the “Licensed Patents”) relating to the treatment of MDS and a non-exclusive license under inventions, concepts, processes, information, data, know-how, research results, clinical data, and the like (other than the Licensed Patents) necessary or useful for the practice of any claim under the Licensed Patents or the use, development, manufacture or sale of any product for the treatment of MDS which would otherwise infringe a valid claim under the Licensed Patents. The Company was obligated to pay Moffitt a non-refundable license issue fee of $ 25,000 after the first patient was entered into a Phase 1b/2 clinical trial to be managed and conducted by Moffitt. The clinical trial began at a single site in April 2019 and the first patient was entered into the clinical trial in July 2019. The Company was also obligated to pay Moffitt an annual license maintenance fee of $ 25,000 commencing on the first anniversary of the Effective Date and every anniversary thereafter until the Company commences payment of minimum royalty payments. The Company had also agreed to pay non-refundable milestone payments to Moffitt, which could not be credited against earned royalties payable by the Company, based on reaching various clinical and commercial milestones aggregating $ 1,897,000 , subject to reduction by 40% under certain circumstances relating to the status of Valid Claims, as such term is defined in the License Agreement. F- 31 On October 4, 2023, the Company received a counter-signed termination letter dated September 29, 2023 with respect to the Exclusive License Agreement dated August 20, 2018 between the Company and Moffitt, effective September 30, 2023. The Company and Moffitt agreed that no termination fee shall be due or payable by the Company, and Moffitt acknowledged that no payments are owed by the Company under the Agreement. During the year ended December 31, 2023, the Company recorded a credit to operations of $ 9,109 , representing the reversal of obligations previously recorded with respect to the Exclusive License Agreement. During the year ended December 31, 2022, the Company recorded charges to operations of $ 25,000 , in connection with its obligations under the Exclusive License Agreement. Employment Agreements with Officers During July and August 2020, the Company entered into one-year employment agreements with each of its executive officers at that time, consisting of Dr. John S. Kovach, Eric J. Forman, Dr. James S. Miser, and Robert N. Weingarten, which provided for aggregate annual cash compensation of $ 640,000 , payable monthly (see Note 5). These employment agreements were automatically renewable for additional one-year periods unless terminated by either party upon 60 days written notice prior to the end of the applicable one-year period, or by death, or by termination for cause. These employment agreements were automatically renewed for additional one-year periods in July and August 2021, 2022 and 2023. On April 9, 2021, the Board of Directors increased the annual cash compensation of Eric J. Forman, Dr. James S. Miser, and Robert N. Weingarten under the employment agreements, such that the aggregate annual compensation for all officers increased to $ 775,000 , effective May 1, 2021. Effective November 6, 2022, Mr. Forman was promoted to Vice President and Chief Operating Officer, with an annual salary of $ 200,000 . In addition, Mr. Forman is being provided an office allowance of approximately $ 1,500 per month through December 31, 2023. On September 26, 2023, the Company entered into an employment agreement with Bastiaan van der Baan to act as the Company’s President and Chief Executive Officer and as Vice Chairman of the Board of Directors with an annual salary of $ 150,000 . The term of the employment agreement is for three years and is automatically renewable for additional one-year periods unless terminated by either party, subject to early termination as described in the employment agreement. Under the employment agreement, Mr. van der Baan’s annual salary may be increased from time to time at the sole discretion of the Board of Directors. In addition, Mr. van der Baan will be eligible to receive an annual bonus as determined at the sole discretion of the Board of Directors. Mr. van der Baan was appointed as Chairman of the Board of Directors upon the death of Dr. Kovach, who died on October 5, 2023. The aggregate annual cash compensation for all officers was $ 700,000 as of December 31, 2023. Other Significant Agreements and Contracts NDA Consulting Corp. On December 24, 2013, the Company entered into an agreement with NDA Consulting Corp. for consultation and advice in the field of oncology research and drug development. As part of the agreement, NDA also agreed to cause its president, Dr. Daniel D. Von Hoff, M.D., to become a member of the Company’s Scientific Advisory Committee. The term of the agreement was for one year and provided for a quarterly cash fee of $ 4,000 . The agreement has been automatically renewed for additional one-year terms on its anniversary date since 2014. Consulting and advisory fees charged to operations pursuant to this agreement were $ 16,000 and $ 16,000 for the years ended December 31, 2023 and 2022, respectively, which were included in research and development costs in the consolidated statements of operations. BioPharmaWorks . Effective September 14, 2015, the Company entered into a Collaboration Agreement with BioPharmaWorks, pursuant to which the Company engaged BioPharmaWorks to perform certain services for the Company. Those services included, among other things, assisting the Company to commercialize its products and strengthen its patent portfolio; identifying large pharmaceutical companies with a potential interest in the Company’s product pipeline; assisting in preparing technical presentations concerning the Company’s products; consultation in drug discovery and development; and identifying providers and overseeing tasks relating to clinical development of new compounds. F- 32 BioPharmaWorks was founded in 2015 by former Pfizer scientists with extensive multi-disciplinary research and development and drug development experience. The Collaboration Agreement was for an initial term of two years and automatically renews for subsequent annual periods unless terminated by a party not less than 60 days prior to the expiration of the applicable period. In connection with the Collaboration Agreement, the Company agreed to pay BioPharmaWorks a monthly fee of $ 10,000 , subject to the right of the Company to pay a negotiated hourly rate in lieu of the monthly payment and agreed to issue to BioPharmaWorks certain equity-based compensation (see Note 6). The Company recorded charges to operations pursuant to this Collaboration Agreement of $ 120,000 and $ 120,000 for the years ended December 31, 2023 and 2022, respectively, which were included in research and development costs in the consolidated statements of operations. Netherlands Cancer Institute . On October 8, 2021, the Company entered into a Development Collaboration Agreement with the Netherlands Cancer Institute, Amsterdam (“NKI”) (see Note 5), one of the world’s leading comprehensive cancer centers, and Oncode Institute, Utrecht, a major independent cancer research center, for a term of three years. The Development Collaboration Agreement was subsequently modified by Amendment No. 1 thereto. The Development Collaboration Agreement is intended to identify the most promising drugs to be combined with LB-100, and potentially LB-100 analogues, to be used to treat a range of cancers, as well as to identify the specific molecular mechanisms underlying the identified combinations. The Company agreed to fund the study, at an approximate cost of 391,000 Euros and provide a sufficient supply of LB-100 to conduct the study. On October 3, 2023, the Company entered into Amendment No. 2 to the Development Collaboration Agreement with NKI, which provides for additional research activities, extends the termination date of the Development Collaboration Agreement by two years to October 8, 2026, and adds 500,000 Euros (approximately $ 526,000 at October 3, 2023) to the operating budget being funded by the Company. During the years ended December 31, 2023 and 2022, the Company incurred charges in the amount of $ 226,150 and $ 204,158 , respectively, with respect to this agreement, which amounts are included in research and development costs in the Company’s consolidated statements of operations. As of December 31, 2023, total costs of $ 485,556 have been incurred pursuant to this agreement, as amended. The Company’s aggregate commitment pursuant to this agreement, as amended, less amounts previously paid to date, totaled approximately $ 595,000 as of December 31, 2023, which is expected to be incurred through October 8, 2026. As the work is being conducted in Europe and is paid for in Euros, final costs are subject to foreign currency fluctuations between the United States Dollar and the Euro. MRI Global. The Company has contracted with MRI Global for stability analysis, storage and distribution of LB-100 for clinical trials in the United States. On June 10, 2022, the contract was amended to reflect a new total contract price of $ 273,980 for services to be rendered through April 30, 2023. Effective April 17, 2023, the contract was further amended to reflect a new total contract price of $ 326,274 for services to be rendered through April 30, 2024. During the years ended December 31, 2023 and 2022, the Company incurred costs of $ 32,307 and $ 27,702 , respectively, pursuant to this work order. As of December 31, 2023, total costs of $ 248,298 have been incurred pursuant to this contract. The Company’s aggregate commitment pursuant to this contract, less amounts previously paid to date, totaled approximately $ 78,000 as of December 31, 2023. External Risks Associated with the Company’s Business Activities Covid-19 Virus . The global outbreak of the novel coronavirus (Covid-19) in early 2020 led to disruptions in general economic activities throughout the world as businesses and governments implemented broad actions to mitigate this public health crisis. Although the Covid-19 outbreak has subsided, the extent to which the coronavirus pandemic may reappear and impact the Company’s clinical trial programs and capital raising efforts in the future is uncertain and cannot be predicted. Inflation and Interest Rate Risk. The Company does not believe that inflation or increasing interest rates has had a material effect on its operations to date, other than its impact on the general economy. However, there is a risk that the Company’s operating costs could become subject to inflationary and interest rate pressures in the future, which would have the effect of increasing the Company’s operating costs (including, specifically, clinical trial costs), and which would put additional stress on the Company’s working capital resources. F- 33 Supply Chain Issues. The Company does not currently expect that supply chain issues will have a significant impact on its business activities, including its ongoing clinical trials. Potential Recession. There are some indications that the United States economy may be at risk of entering a recessionary period. Although unclear at this time, an economic recession would likely impact the general business environment and the capital markets, which could, in turn, affect the Company. Geopolitical Risk. The geopolitical landscape poses inherent risks that could significantly impact the operations and financial performance of the Company. In the event of a military conflict, supply chain disruptions, geopolitical uncertainties, and economic repercussions may adversely affect the Company’s ability to conduct research, develop, test and manufacture products, and distribute them globally. This could lead to delays in product development, interruptions in the supply of critical materials, and delays in clinical trials, thereby impeding the Company’s clinical development and commercialization plans. Furthermore, the impact of a conflict on global financial markets may result in increased volatility and uncertainty in the capital markets, thereby affecting the valuation of the Company’s publicly-traded shares. Investor confidence, market sentiment, and access to capital may all be negatively influenced. Such geopolitical risks are outside the control of the Company, and the actual effects on the Company’s business, financial condition and results of operations may differ from current estimates. The Company is continuing to monitor these matters and will adjust its current business and financing plans as more information and guidance become available. 9. Subsequent Events The Company performed an evaluation of subsequent events through the date of filing of these consolidated financial statements with the SEC. Other than those matters described below, there were no material subsequent events which affected, or could affect, the amounts or disclosures in the consolidated financial statements. Patent License Agreement Effective February 23, 2024, the Company entered into a Patent License Agreement (the “License Agreement”) with the National Institute of Neurological Disorders and Stroke (“NINDS”) and the National Cancer Institute (“NCI”), each an institute or center of the National Institute of Health (“NIH”). Pursuant to the License Agreement, the Company has licensed exclusively NIH’s intellectual property rights claimed for a Cooperative Research and Development Agreement (“CRADA”) subject invention co-developed with the Company, and the licensed field of use, which focuses on promoting anti-cancer activity alone, or in combination with standard anti-cancer drugs. The scope of this clinical research extends to checkpoint inhibitors, immunotherapy, and radiation for the treatment of cancer. The License Agreement is effective, and shall extend, on a licensed product, licensed process, and country basis, until the expiration of the last-to-expire valid claim of the jointly owned licensed patent rights in each such country in the licensed territory, unless sooner terminated. The License Agreement contemplates that the Company will seek to work with pharmaceutical companies and clinical trial sites (including comprehensive cancer centers) to initiate clinical trials within timeframes that will meet certain benchmarks. Data from the clinical trials will be the subject of various regulatory filings for marketing approval in applicable countries in the licensed territories. Subject to the receipt of marketing approval, the Company would be expected to commercialize the licensed products in markets where regulatory approval has been obtained. The Company is obligated to pay the NIH a non-creditable, non-refundable license issue royalty of $ 50,000 and a first minimum annual royalty of $ 30,000 , within sixty days from the effective date of the Agreement. The first minimum annual royalty may be prorated from the effective date of the License Agreement to the next subsequent January 1. Thereafter, the minimum annual royalty of $ 30,000 is due each January 1 and may be credited against any earned royalties due for sales made in that year. The Company is obligated to pay the NIH, on a country-by-country basis, earned royalties of 2% on net sales of each royalty-bearing product and process, subject to reduction by 50% under certain circumstances relating to royalties paid by the Company to third parties, but not less than 1%. The Company’s obligation to pay earned royalties under the License Agreement commences on the date of the first commercial sale of a royalty-bearing product or process and expires on the date on which the last valid claim of the licensed product or licensed process expires in such country. The Company is obligated to pay the NIH benchmark royalties, on a one-time basis, within sixty days from the first achievement of each such benchmark. The License Agreement defines four such benchmarks, with deadlines of October 1, 2024, 2027, 2029 and 2031, respectively, each with a different specified benchmark payment amount payable within thirty days of achieving such benchmark. The October 31, 2024 benchmark is defined as the dosing of the first patient with a licensed product in a Phase 2 clinical study of such licensed product in the licensed fields of use. The total of all such benchmark payments is $ 1,225,000 . The Company is obligated to pay the NIH sublicensing royalties of 5 % on sublicensing revenue received for granting each sublicense within sixty days of receipt of such sublicensing revenue. F- 34