What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-28 compared with 2023-03-30 · 395 added, 405 removed, 624 unchanged (56% of the section changed)

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have audited the accompanying consolidated balance sheets of Provectus Biopharmaceuticals, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, changes in stockholders’

deficit and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows

for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United

States of America.

(the “Company”) as of December

31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ deficit, and

cash flows for each of the two years in the period ended December 31, 2023, 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 each of the two years in the period

ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Paragraph – Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

fully described in Note 2, the Company has a significant working capital deficit, has incurred significant losses and needs to raise

additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described

in Note 2, the Company has a working capital deficit, has incurred losses from operations, and needs to raise additional funds to meet

its obligations and sustain its operations.

These conditions 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 2.

The consolidated

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

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 audit s .

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

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

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Current Assets:

Cash and cash equivalents

Restricted cash

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Accounts payable

Deposit for Series D-1 Preferred Stock

Unearned grant revenue

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Stockholders’ Deficit:

Preferred stock;

par value $ 0.001 per share;

P referred stock;

par value $ 0.001

shares authorized;

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shares designated;

12,373,247 shares issued and outstanding at December 31,

2022 and December 31, 2021;

aggregate liquidation preference of $ 14,164,889 at December 31, 2022 and December 31, 2021

12,373,247 shares issued and outstanding at December 31, 2023 and 2022;

aggregate liquidation preference of $ 14,164,889

at December 31, 2023 and 2022

Series D-1 Convertible Preferred Stock;

11,241,000 shares designated;

9,746,626 and 9,218,449 shares issued and outstanding at

December 31, 2022 and December 31, 2021, respectively;

aggregate liquidation preference of $ 111,578,880 and $ 105,532,804 at December

31, 2022 and December 31, 2021, respectively

10,361,097 and 9,746,626

shares issued and outstanding at December 31, 2023 and 2022, respectively;

aggregate liquidation preference of $ 118,613,136 and $ 111,578,880

at December 31, 2023 and 2022, respectively

Preferred stock, value

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1,000,000,000 shares authorized;

419,497,119 and 419,447,119 shares issued and

outstanding at December 31, 2022 and December 31, 2021, respectively

419,522,119 and 419,447,119

shares issued and outstanding at December 31, 2023 and 2022, respectively

Additional paid-in capital

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Research and development tax credit

Gain from forgiveness of PPP loan and interest

Interest expense, net

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THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Preferred Stock

Comprehensive

at January 1, 2021

$ 209,923,347

$ ( 240,494,415 )

Balance at January 1, 2022

$ 241,440,106

stock issued upon exercise of warrants

compensation:

of Series B Preferred Stock to Common Stock

of PRH Notes to Series D Preferred Stock

of PRH Notes to Series D1 Preferred Stock

of Series D-1 Preferred Stock to Common stock

Comprehensive

$ ( 246,033,958 )

$ ( 4,187,280 )

Series D-1 Preferred Stock issued for cash

Stock-based compensation:

Conversion of 2021 Notes to Series D-1 Preferred Stock

Comprehensive loss:

at December 31, 2021

( 3,554,683 )

Other comprehensive loss

Balance at December 31, 2022

( 249,588,641 )

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( 6,228,510 )

D-1 Preferred Stock issued for cash

compensation:

of 2021 Notes to Series D-1 Preferred Stock

Comprehensive

Stock-based compensation:

Conversion of 2021 Notes to Series D-1 Preferred Stock

Conversion of 2022 Notes to Series D-1 Preferred Stock

Comprehensive loss:

( 3,101,768 )

comprehensive loss

at December 31, 2022

Other comprehensive loss

Balance at December 31, 2023

$ 244,714,967

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Non-cash lease expense

Gain on forgiveness of PPP Loan and interest

Changes in operating assets and liabilities

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Repayment of short-term note payable

Deposit for purchase of Series D-1 Preferred Stock

Proceeds from exercise of warrants

Net Cash Provided By Financing Activities

Effect of exchange rates on cash, cash equivalents, and restricted cash

Net (Decrease) Increase In Cash, Cash Equivalents, and Restricted Cash

Effect of exchange rates on cash and restricted cash

Net Decrease In Cash and Restricted Cash

( 1,675,235 )

Cash, Cash Equivalents, and Restricted Cash, Beginning of Year

Cash, Cash Equivalents, and Restricted Cash, End of Year

Cash, cash equivalents and restricted cash consisted of the following:

Cash and cash equivalents

Cash and Restricted Cash, Beginning of Period

Cash and Restricted Cash, End of Period

Cash and restricted cash consisted of the following:

Restricted cash

Cash, Cash Equivalents,

and Restricted Cash, End of Year

and Restricted Cash, End of Period

Supplemental Disclosures of Cash Flow Information:

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Non-cash investing and financing activities:

Purchase of insurance policies financed by short-term note payable

$ ( 203,175 )

$ ( 273,347 )

Deposit applied to equity issuances

$ ( 150,000 )

Conversion of non-amended 2017 Notes to Series D Preferred Stock

Conversion of amended 2017 Notes and 2020 Notes to Series D-1 Preferred Stock

Conversion of Series D-1 Preferred Stock to Common stock

Conversion of 2021 Notes to Series D-1 Preferred Stock

Right-of-use asset for lease liability

Right-of-use assets obtained in exchange for operating lease liabilities

Conversion of 2021 Notes and related accrued interest to Series D-1 Preferred Stock

Conversion of 2022 Notes and related accrued interest to Series D-1 Preferred Stock

Purchase of insurance policies financed by short-term note payable

$ ( 306,050 )

$ ( 203,175 )

accompanying notes to consolidated financial statements.

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Business Organization and Nature of Operations

Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus” or “the Company”),

is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases that are based on a class of synthetic

small molecule immuno-modulators called halogenated xanthenes (“HXs”).

Our lead molecule is named rose bengal sodium (“RBS”).

Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiary Provectus Biopharmaceuticals Australia Pty Ltd,

“Provectus” or “the Company”), is a clinical-stage biotechnology company developing immunotherapy medicines

for different diseases that are based on a class of synthetic small molecule immuno-catalysts called halogenated xanthenes

Our lead HX molecule is named rose bengal sodium (“RBS”).

Company’s proprietary, patented, pharmaceutical-grade RBS is the active pharmaceutical ingredient in the drug product candidates

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on the disease being treated and the concentration of the RBS utilized in the treatment.

Secondly, multivariate immune signaling, activation,

Second, multivariate immune signaling, activation,

and response may follow that may manifest as stimulatory, inhibitory, or both.

Company believes that it is the first entity to advance an RBS formulation into clinical trials for the treatment of a disease, such

as those trials reported on the clinical trials registry ClinicalTrials.gov.

Company believes that it is the first and only entity to date to successfully, reproducibly, and consistently make pharmaceutical-grade

RBS at a purity of nearly 100%.

Company’s small molecule HX medical science platform comprises a number of different drug product candidates and preclinical pharmaceutical-grade

RBS formulations using different concentrations and delivered by different routes of administration specific to each disease area and/or

as those trials reported on the clinical trials registry at ClinicalTrials.gov.

Company believes that it is the first and only entity to date to make pharmaceutical-grade RBS successfully, reproducibly, and consistently

at a purity of nearly 100%.

Company’s small molecule HX medical science platform comprises several different drug product candidates and preclinical pharmaceutical-grade

RBS formulations using different concentrations delivered by different routes of administration specific to each disease area and/or

The Company’s HX medical science platform includes clinical development programs in oncology, dermatology, and ophthalmology;

proof-of-concept in vivo drug discovery programs in oncology, hematology, wound healing, and animal health;

and preclinical in

vitro drug discovery programs in infectious diseases and tissue regeneration and repair.

Risks and Uncertainties

The Company’s activities are subject to significant

risks and uncertainties, including failing to successfully develop and license or commercialize the Company’s prescription drug

Severe acute respiratory syndrome (“SARS”)

coronavirus (“CoV”) 2 (“SARS-CoV-2”) was first identified in late-2019 and subsequently declared a global pandemic

by the World Health Organization on March 11, 2020.

As a result of the SARS-CoV-2 pandemic, many companies have experienced disruptions

of their operations and the markets they serve.

The Company has taken several temporary precautionary measures intended to help ensure

the well-being of its employees and contractors and to minimize business disruption.

The Company considered the impact of SARS-CoV-2 pandemic

on its business and operational assumptions and estimates, and determined there were no material adverse impacts on the Company’s

results of operations and financial position at December 31, 2022.

The full extent of the SARS-CoV-2 pandemic impacts

on the Company’s operations and financial condition is uncertain.

The Company has experienced slower than normal enrollment and

treatment of patients, and a prolonged SARS-CoV-2 pandemic could have a material adverse impact on the Company’s business and financial

results, including the timing and ability of the Company to raise capital, initiate and/or complete current and/or future preclinical

studies and/or clinical trials, disrupt the Company’s regulatory activities, and/or have other adverse effects on the Company’s

clinical development.

in vivo proof-of-concept programs in oncology, hematology, wound healing, and animal health;

and in vitro drug discovery

programs in infectious diseases and tissue regeneration and repair.

and Uncertainties

date, the Company has not generated any revenues or profits from planned principal operations.

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Liquidity and Going Concern

Company’s cash and restricted cash were $ 1,431,707 at December 31, 2022 which includes $ 1,410,102 of restricted cash resulting

from a grant received from the State of Tennessee.

The Company’s working capital deficiency was $ 6,293,198 and $ 4,258,679 as of

December 31, 2022 and 2021, respectively.

The decline in working capital is primarily driven by lower cash on hand and higher accounts

Company’s cash and restricted cash were $ 1,026,799

at December 31, 2023 which includes $ 950,223

of restricted cash resulting from a grant received from the State of Tennessee.

The Company’s working capital deficiency was

$ 7,652,098 and $ 6,293,198

as of December 31, 2023 and 2022, respectively.

The decline in working capital is primarily driven by lower cash on hand and higher

convertible notes outstanding.

The Company continues to incur significant operating losses.

Management expects that significant on-going operating expenditures

will be necessary to successfully implement the Company’s business plan and develop and market its products.

These circumstances

raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated

financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a going concern will depend

upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug products, and to raise additional

Management expects that significant

on-going operating expenditures will be necessary to successfully implement the Company’s business plan and develop and market

its products.

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within

one year after the date that these consolidated financial statements are issued.

Implementation of the Company’s plans and its

ability to continue as a going concern will depend upon the Company’s ability to develop PV-10, PH-10, and/or any other

halogenated xanthene-based drug products, and to raise additional capital.

Company plans to access capital resources through possible public or private equity offerings, including the 2022 Financing (as defined

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If the Company is unable to raise sufficient capital, it will not be able to pay its obligations as they become due.

Under ASC Subtopic 205-40, Presentation of Financial

Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events

raise substantial doubt about its ability to meet future financial obligations as they become due within one year after the date that

these financial statements are issued.

The accompanying consolidated financial statements have been prepared on the basis that we will

continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business.

However, since the Company’s inception we have had a history of recurring net losses from operations, recurring use of cash in operating

activities and declining working capital.

The accompanying financial statements have been prepared

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

GAAP”), which contemplate

continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.

The financial statements do not include any adjustment that might become necessary should the Company be unable to continue as a going

primary business objective of management is to build the Company into a commercial-stage biotechnology company;

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dilution to stockholders.

These factors raise substantial doubt about our ability to continue as a going concern.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that

may be necessary should we be unable to continue as a going concern.

Our consolidated financial statements included elsewhere in this Annual Report on Form 10-K have been prepared in

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

GAAP”), which contemplate

our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.

carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent

realizable or settlement values.

Significant Accounting Policies

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assets, stock-based compensation, accrued liabilities and the valuation allowance related to the Company’s deferred tax assets.

and Cash Equivalents

Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

December 31, 2022 and 2021, the Company’s cash equivalents consisted of Treasury bills of $ 0 and $ 42,594 , respectively.

cash consists of a grant award of $ 2,500,000 received in cash from the State of Tennessee less payments to vendors for expenses and deposits

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Concentrations

cash equivalents, and restricted cash are maintained at financial institutions and, at times, balances may exceed federally insured limits

of $ 250,000 , although the Company seeks to minimize this through treasury management.

The Company has never experienced any losses related

to these balances although no assurance can be provided that it will not experience any losses in the future.

As of December 31, 2022

and 2021, the Company had cash, cash equivalent, and restricted cash balances in excess of FDIC insurance limits of $ 1,181,707 and $ 2,856,942 ,

respectively.

and restricted cash are maintained at financial institutions and, at times, balances may exceed federally insured limits of $ 250,000 ,

although the Company seeks to minimize this through treasury management.

The Company has never experienced any losses related to these

balances although no assurance can be provided that it will not experience any losses in the future.

As of December 31, 2023 and 2022,

the Company had cash and restricted cash balances in excess of FDIC insurance limits of $ 776,799 and $ 1,181,707 , respectively.

and Furnishings, net

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31, 2023 and 2022.

Party Receivables

estimates the reserve for uncollectibility based on existing economic conditions, the financial conditions of the current and former

employees, and the amount and age of past due receivables.

Receivables are considered past due if full payment is not received by the

contractual due date.

Past due amounts are generally written off against the reserve for uncollectibility only after all collection attempts

have been exhausted.

See Note 8, Short-term Receivables.

revenue is recognized when qualifying costs are incurred and there is reasonable assurance that the conditions of the grant have been met.

Cash received from grants in advance of incurring qualifying costs is recorded as unearned grant revenue and recognized as grant revenue

when qualifying costs are incurred.

estimates expected credit losses immediately based on existing economic conditions in addition to current and future economic conditions

Receivables are considered past due if full payment is not received by the contractual date.

Past due amounts are generally

written off against the reserve for uncollectibility only after all collection attempts have been exhausted.

As of December 31,

2023 and 2022, there was no allowance for uncollectible amounts.

revenue is recognized when qualifying costs are incurred and there is reasonable assurance that the conditions of the grant have been

Cash received from grants in advance of incurring qualifying costs is recorded as unearned grant revenue and recognized as grant

revenue when qualifying costs are incurred.

and Development

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lab supplies and pharmaceutical preparations, insurance, rent and utilities, and depreciation and amortization.

The Company expenses all costs as incurred in connection

with patent applications (including direct application fees, and the legal and consulting expenses related to making such applications)

and such costs are included in general and administrative expenses in the accompanying statements of operations and comprehensive loss.

The Company adopted ASC 842 effective January 1, 2019

and applied the available practical expedients to the existing lease which expired on June 30, 2022.

The Company applied the standard

to the current lease agreement in the same manner.

The most significant impact upon adoption was the recognition of ROU assets and lease

liabilities for operating leases.

Company expenses all costs as incurred in connection with patent applications (including direct application fees, and the legal and consulting

expenses related to making such applications) and such costs are included in general and administrative expenses in the accompanying

statements of operations and comprehensive loss.

The Company leases properties under operating

For leases in effect upon adoption of Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”

at January 1, 2020 and for any leases commencing thereafter, the Company recognizes a liability to make lease payments, the “lease

liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”.

The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing

The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives

received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct

costs, and any impairment of the right-of-use-asset.

Operating lease expense consists of a single lease cost calculated so that the remaining

cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease

liability, and any impairment of the right-of-use asset.

Company accounts for income taxes under the liability method in accordance with Accounting Standards Codification (“ASC”)

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as a discount to the host instrument.

the instrument is determined to not be a derivative liability, the Company then evaluates for the existence of a beneficial conversion

feature by comparing the commitment date fair value to the effective conversion price of the instrument.

Company applies the accounting standards for distinguishing liabilities from equity when determining the classification and measurement

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Company’s reporting currency is the United States Dollar.

The functional currencies of the Company’s operating

subsidiaries are their local currencies (United States Dollar and Australian Dollar).

Australian Dollar denominated assets and

liabilities of $ 17,373 and $ 383,447 at December 31, 2022 and $ 22,053 and $ 407,851 at December 31, 2021, respectively) are translated

into the United States Dollar at the balance sheet date, and net expense accounts of $ 4,503 and $ 85,052 for the years ended December

31, 2022 and 2021, respectively) are translated at a weighted average exchange rate for the years then ended.

Equity is translated

at historical rates and the resulting foreign currency translation adjustments are included as a component of accumulated other

comprehensive loss (“AOCL”), which is a separate component of stockholders’ deficit.

The functional currencies of the Company’s operating subsidiaries

are their local currencies (United States Dollar and Australian Dollar).

Australian Dollar denominated assets and liabilities of $ 13,916

and $ 389,540 at December 31, 2023 and $ 17,373 and $ 383,447 at December 31, 2022, respectively) are translated into the United States

Dollar at the balance sheet date, and net expense accounts of $ 9,763 and $ 4,503 for the years ended December 31, 2023 and 2022, respectively)

are translated at a weighted average exchange rate for the years then ended.

Equity is translated at historical rates and the resulting

foreign currency translation adjustments are included as a component of accumulated other comprehensive loss (“AOCL”), which

is a separate component of stockholders’ deficit.

Therefore, the U.S.

value of the non-equity translated items in the Company’s consolidated financial statements will fluctuate from period to

period, depending on the changing value of the U.S.

dollar versus these currencies.

dollar value of the non-equity translated items in the Company’s

consolidated financial statements will fluctuate from period to period, depending on the changing value of the U.S.

dollar versus these

Company engages in foreign currency denominated transactions with its Australian subsidiary.

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historical public market closing prices.

Issued Accounting Standards

August 2020, FASB issued Accounting Standards Update (“ASU”) No.

2020-06, “Debt—Debt with Conversion and Other

Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for

Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”).

Under ASU 2020-06, the

embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that

are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in

Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long

as no other features require bifurcation and recognition as derivatives.

The new guidance also requires the if-converted method to be

applied for all convertible instruments.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim

periods within those fiscal years, with early adoption permitted.

Adoption of the standard requires using either a modified retrospective

or a full retrospective approach.

The Company plans to adopt ASU 2020-06 on January 1, 2023 and does not believe the adoption will have

a material impact on the Company’s consolidated financial statements or disclosures.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued

ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” These amendments require a public

entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods

all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Public entities with a single

reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280.

is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15,

2024, with early adoption permitted.

Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU

to have any material effects on its financial condition, results of operations or cash flows.

The Company is currently evaluating any

new disclosures that may be required upon adoption of ASU 2023-07.

In December 2023, the FASB issued

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this update address investor requests

for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation

and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for the Company on December 15, 2024, with early adoption permitted.

Since this new ASU addresses

only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation

or cash flows.

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.

Adopted Accounting Pronouncements

October 2020, the FASB issued ASU 2020-10 “Codification Improvements” , which improves consistency by amending the

Codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions

in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology.

The guidance is effective for the Company beginning in the first quarter of fiscal year 2022 with early adoption permitted.

adopted this standard on January 1, 2022 and it did not have a material effect on its consolidated financial statements.

May 3, 2021, the FASB issued 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

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding

equity-classified written call options (such as warrants) that remain equity classified after modification or exchange.

This standard

is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Issuers should

apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard.

Early adoption

is permitted, including adoption in an interim period.

If an issuer elects to adopt the new standard early in an interim period, the

guidance should be applied as of the beginning of the fiscal year that includes that interim period.

The Company adopted this standard

on January 1, 2022 and it did not have a material effect on its consolidated financial statements.

November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which increases the transparency of government

assistance including the disclosure of (1) the type of assistance, (2) an entity’s accounting for the assistance, and (3) the effect

of the assistance on an entity’s financial statements.

The amendments in this update are effective for the Company in the financial

statements issued for annual periods beginning after December 15, 2021.

The Company adopted this standard on January 1, 2022 and it did

not have a material effect on its consolidated financial statements.

August 2020, FASB issued Accounting Standards Update (“ASU”) No.

2020-06, “Debt—Debt with Conversion and

Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ” (“ASU 2020-06”).

ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with

conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial

premiums accounted for as paid-in capital.

Consequently, a convertible debt instrument will be accounted for as a single liability

measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives.

The new guidance

also requires the if-converted method to be applied for all convertible instruments.

ASU 2020-06 is effective for fiscal years

beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.

the standard requires using either a modified retrospective or a full retrospective approach.

The Company adopted ASU 2020-06 on

January 1, 2023, using the modified retrospective approach and it did not have a material impact on its consolidated financial

statements and disclosures.

Other Accrued Expenses

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following summarizes convertible note activity during the years ended December 31, 2023 and 2022:

of Convertible Notes Payable

Amended 2017 Notes

Balance at January 1, 2021

( 2,712,000 )

( 17,355,000 )

( 5,025,000 )

( 25,092,000 )

Balance at December 31, 2021

Schedule of Convertible Notes Payable

Non-Related Party

Related Party

Balance as of January 1, 2022

( 1,260,000 )

Balance at December 31, 2022

Balance as of December 31, 2022

Convertible notes payable, beginning balance

Balance as of December 31, 2023

Convertible notes payable, ending balance

Non-Related Party

Related Party

Balance as of January 1, 2022

Balance as of December 31, 2022

Convertible notes payable, beginning balance

Balance as of December 31, 2023

Convertible notes payable, ending balance

August 13, 2021, the Board approved a Financing Term Sheet (the “2021 Term Sheet”), which set forth the terms under which

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of Series D-1 Preferred Stock at a price per share equal to $ 2.862 .

The Series D-1 Preferred Stock is convertible into ten ( 10 )

shares of common stock;

The Series D-1 Preferred Stock is convertible into ten ( 10 ) shares

of common stock;

the event the Company conducts a qualified equity or debt financing and the Company receives gross proceeds in the aggregate amount

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terms as those investors.

embedded conversion options associated with the 2021 Notes do not require bifurcation and treatment as a derivative liability and they

do not represent a beneficial conversion feature because the effective conversion price is not at a discount to the commitment date market

embedded conversion options associated with the 2021 Notes do not require bifurcation and treatment as a derivative liability.

September 20, 2022, the Board approved the closure of the 2021 Financing.

As of December 31, 2022, the Company had received 2021 Notes

(defined above) aggregate proceeds of $ 2,335,000 , of which $ 525,000 is from related party investors (an officer and director of the Company).

Through December 31, 2023, the Company received aggregate proceeds

of $ 2,335,000 ,

of which $ 525,000

is from related party investors (an officer and

director of the Company), in connection with the 2021 Notes.

For the years ended December 31, 2023 and 2022, the Company recorded interest

expense of $ 46,189

and $ 147,340 ,

respectively, related to the 2021 Notes.

September 20, 2022, the Board approved a Financing Term Sheet (the “2022 Term Sheet”), which set forth the terms under which

the Company will use its best efforts to arrange for financing of a maximum of $ 5,000,000 (the “2022 Financing”), which amounts

the Company will use its best efforts to arrange for financing of a maximum of $ 5,000,000

(the “2022 Financing”), which amounts

will be obtained in several tranches.

As of December 31, 2022, the Company had received proceeds of $ 752,500 from 2022 Notes, (defined

below), of which $ 677,500 was from a related party investor (a Company director) in connection with the 2022 Financing.

Through December 31, 2023, the Company received proceeds of $ 3,227,500 ,

of which $ 2,352,500

was from a related party investor (a Company

director) in connection with the 2022 Notes.

For the years ended December 31, 2023 and 2022, the Company recorded interest expense of

$ 159,466 and $ 9,514 , respectively, related to the 2022 Notes.

to the 2022 Term Sheet, the 2022 Notes (defined below) will convert into shares of the Company’s Series D-1 Preferred Stock twelve

months after the issue date of a 2022 Note, subject to certain exceptions.

2022 Financing will be in the form of an unsecured convertible loans from the investors (the “2022 Note Investors”) and evidenced

2022 Financing will be in the form of unsecured convertible loans from the investors (the “2022 Note Investors”) and evidenced

by convertible promissory notes (individually, a “2022 Note” and collectively, the “2022 Notes”).

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Series D-1 Preferred Stock twelve (12) months after the issue date of a 2022 Note.

embedded conversion options associated with the 2022 Notes do not require bifurcation and treatment as a derivative liability and they

do not represent a beneficial conversion feature because the effective conversion price is not at a discount to the commitment date market

Conversions of 2017 and 2020 Notes into Preferred Stock

following summarizes the conversion activity during the year ended December 31, 2021:

of Conversion of Notes into Preferred Stock

2021 Conversions Into Preferred Stock

Amended 2017 Notes

Principal converted

Accrued interest converted

Total converted

Conversion price

fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D and Series D-1 Preferred Shares.

2017 Notes originally provided that they were convertible into a new series of preferred stock at a price per share equal to $ 0.2862

(the “Original Conversion Price”).

In order to ensure that the Company had sufficient authorized shares of preferred stock

into which the 2017 Notes would convert, yet keep the economic terms of the 2017 Notes substantially equivalent, on February 26, 2019,

the Company entered into amendments (the “Amendments”) to the 2017 Notes (as amended, the “Amended 2017 Notes”)

with a large majority of the holders of 2017 Notes to increase the conversion price by 10 times from $ 0.2862 to $ 2.862 (the “New

Conversion Price”) and to change the conversion ratio by providing that one share of Preferred Stock would be convertible into

10 shares of common stock (the “New Conversion Ratio”).

The impact of the Amendments was to reduce by 10 times the number

of shares of preferred stock into which the 2017 Notes would convert, while keeping the economic terms the same.

2020 Notes had substantially similar terms to the Amended 2017 Notes, including being convertible into preferred stock at the New Conversion

Price, with the Preferred Stock being convertible into Common Stock at the New Conversion Ratio.

order to (i) address the fact that a small minority of the holders of 2017 Notes did not execute the Amendments and (ii) ensure economic

fairness for all of the holders of the 2017 Notes and 2020 Notes, on June 17, 2021, the Company designated two separate series of preferred

stock into which the 2017 Notes and 2020 Notes would convert:

(i) the Company’s Series D Convertible Preferred Stock, par value

$ 0.001 per share was designated for the holders of 2017 Notes who did not execute the Amendments and (ii) the Company’s Series

D-1 Preferred Stock, par value $ 0.001 per share was designated for issuance upon the conversion of Amended 2017 Notes, 2020 Notes, 2021

Notes, and 2022 Notes.

June 20, 2021, principal and interest in the aggregate amount of $ 3,541,222 , representing all of the outstanding non-amended 2017 Notes,

was converted into 12,373,247 shares of Series D Convertible Preferred Stock at the Original Conversion Price of $ 0.2862 .

June 20, 2021, principal and interest in the aggregate amount of $ 27,031,858 , representing all of the outstanding Amended 2017 Notes

and outstanding 2020 Notes was converted into 9,440,594 shares of Series D-1 Convertible Preferred Stock at the New Conversion Price

Any fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D and Series D-1

Preferred Shares.

See Note 9, Stockholders’ Deficit for additional information on the Series D and Series D-1 Preferred Stock.

a result of the conversion of the 2017 Notes and 2020 Notes into convertible preferred stock, all the security interests of these Notes

in the Company’s intellectual property were released.

embedded conversion options associated with the 2022 Notes do not require bifurcation and treatment as a derivative liability.

Conversions of 2021 Notes into Preferred Stock

following summarizes the conversion activity during the year ended December 31, 2022:

Schedule of Conversion of Notes into Preferred Stock

Principal converted

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on the Series D-1 Preferred Stock.

Conversions of 2021 Notes into Preferred Stock

following summarizes the conversion activity during the year ended December 31, 2023:

Principal converted

Accrued interest converted

Total converted

Conversion price

the year ended December 31, 2023, principal and interest in the aggregate amount of $ 945,464 ,

owed in connection with the 2021 Notes were converted into 330,354

shares of Series D-1 Preferred Stock at the Conversion Price of $ 2.862

Any fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D-1 Preferred Shares.

Note 9, Stockholders’ Deficit for additional information on the Series D-1 Preferred Stock.

Conversions of 2022 Notes into Preferred Stock

following summarizes the conversion activity during the year ended December 31, 2023:

Principal converted

Accrued interest converted

Total converted

Conversion price

the year ended December 31, 2023, principal and interest in the aggregate amount of $ 813,098 ,

owed in connection with the 2022 Notes were converted into 284,117

shares of Series D-1 Preferred Stock at the Conversion Price of $ 2.862

Any fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D-1 Preferred Shares.

Note 9, Stockholders’ Deficit for additional information on the Series D-1 Preferred Stock.

Notes Payable

April 20, 2020, the Company received a $ 62,500 loan under the CARES Act PPP (the “PPP Loan”).

The PPP provides for loans

to qualifying businesses for amounts of up to 2.5 times certain of the borrower’s average monthly payroll expenses.

2021, the Company applied for forgiveness of the PPP Loan.

On June 2, 2021, the Company was awarded full forgiveness of the PPP Loan

and accrued interest.

During the year ended December 31, 2021, the Company recognized a gain on forgiveness of the PPP loan of $ 62,500

and interest of $ 594 .

Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies.

As of December 31, 2023

and December 31, 2021, the balance of the note payable was $ 239,394 and $ 238,452 , respectively.

and December 31, 2022, the balance of the note payable was $ 277,815

and $ 239,394 ,

respectively.

For the years ended December 31, 2023 and 2022, the Company recorded interest expense of $ 5,650 and $ 3,409 , respectively,

related to the notes payable.

Related Party Transactions

the years ended December 31, 2022 and 2021, the Company paid Mr.

Bruce Horowitz (Capital Strategists) consulting fees of $ 169,600 and

the years ended December 31, 2023 and 2022, the Company accrued Capital Strategists consulting fees of $ 254,400 and

respectively, for services rendered.

The total amount owed to Capital Strategists as of December 31, 2023 and 2022 were

and $ 212,000 ,

respectively.

Bruce Horowitz, the Managing Director of Capital Strategists, previously served as both the Chief Operating Officer and a director

of the Company until March 25, 2024.

Director fees for Mr.

Horowitz for the year ending December 31, 2022 and 2021 were $ 75,000

Horowitz for the years ending December 31, 2023 and 2022 were $ 75,000

and $ 75,000 , respectively.

1 unchanged sentence

Horowitz as of December 31, 2023 and 2022 were $ 431,250 and $ 356,250 , respectively.

Total amount owed to Capital Strategists as of December 31, 2022 and 2021 were $ 212,000 and $ 127,200 , respectively.

Horowitz serves

as both COO and a Director.

Note 5 and Note 8 for details of other related party transactions.

Note 5 for details of other related party transactions.

fees during the years ended December 31, 2023 and 2022 were $ 385,000 and $ 385,000 , respectively.

2 unchanged sentences

Short-term Receivables

at December 31, 2022 and 2021, include the Australian VAT tax credit and approximately $ 2,100,000 that is owed from Peter Culpepper,

the former Interim Chief Executive Officer of the Company.

The Company has established a reserve of approximately $ 2,100,000 as of December

31, 2022 and 2021, which represents the amount Culpepper owes to the Company under the Derivative Lawsuit Settlement (excluding the amount

of attorneys’ fees incurred in enforcing the terms of the Derivative Lawsuit Settlement).

at December 31, 2023 and 2022, include the Australian VAT tax credit and approximately $ 2,100,000

that is owed from Peter Culpepper, the former Interim Chief Executive Officer of the Company.

The Company has established a reserve

of approximately $ 2,100,000

as of December 31, 2023 and 2022, which represents the amount Culpepper owes to the Company in connection with a derivative lawsuit

settlement (excluding the amount of attorneys’ fees incurred in enforcing the terms of the derivative lawsuit

Stockholders’ Deficit

of December 31, 2022, the Company was authorized to issue 1,000,000,000 shares of common stock, $ 0.001 par value, and 25,000,000 shares

of preferred stock, $ 0.001 par value.

The holders of the Company’s common stock are entitled to one vote per share.

The preferred

stock is designated as follows:

12,374,000 shares to Series D Convertible Preferred Stock (the “Series D Preferred Stock”),

and 11,241,000 shares of Series D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”) and 1,385,000 shares undesignated.

B Preferred Stock

August 25, 2016, the Company filed the Series B Certificate of Designation with the Delaware Secretary of State.

The Series B Certificate

of Designation provides for the issuance of the Series B Preferred Stock with a par value of $ 0.001 per share and a stated value of $ 25.00

The Series B Preferred Stock has no voting rights.

The holders of Series B Preferred Stock are entitled to receive cumulative

dividends at the rate of 8 % per annum of the stated value per share, until the fifth anniversary of the date of issuance of the Series

B Preferred Stock, at which time the Series B Preferred Stock automatically converts into common stock at the adjusted conversion price

of $ 0.0533 .

the year ended December 31, 2021, 100 shares of outstanding Series B Preferred Stock automatically converted, at the fifth-year anniversary

of their issuance, into 65,666 shares of common stock, which represents $ 3,500 ($ 2,500 of stated value plus $ 1,000 of cumulative dividends)

divided by the adjusted conversion price.

On March 30, 2022, the Company filed a Certificate of Elimination with the State of Delaware

eliminating the Series B Preferred Stock.

of December 31, 2023, the Company was authorized to issue 1,000,000,000

shares of common stock, $ 0.001

par value, and 25,000,000

shares of preferred stock, $ 0.001

The holders of the Company’s

common stock are entitled to one vote per share.

The preferred stock is designated as follows:

12,374,000 shares to Series D Convertible Preferred Stock (the “Series

D Preferred Stock”), and 11,241,000 shares of Series D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”)

and 1,385,000 shares undesignated.

D and Series D-1 Preferred Stock

The preferred stock is designated as

shares are designated as Series D Convertible Preferred Stock (the “Series D Preferred Stock”), 11,241,000

shares are designated as Series D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”).

rights, preferences and privileges of the Series D Preferred Stock and Series D-1 Preferred Stock (collectively, the “D-Series

Preferred Stock”) are set forth in their respective Certificates of Designation.

The Board of Directors of the Company

approved each of the Certificates of Designation on June 14, 2021, and each Certificate of Designation was filed with the Delaware

Secretary of State on June 17, 2021.

The Series D Certificate of Designation established and designated 12,374,000

shares of Series D Preferred Stock.

The Series D-1 Certificate of Designation was established and initially designated 9,441,000

shares of Series D-1 Preferred Stock.

June 20, 2021, the Company issued 12,373,247 shares of Series D Preferred Stock upon the conversion of all of the outstanding 2017 Notes

at the Original Conversion Price of $ 0.2862 and issued 9,440,594 shares of Series D-1 Preferred Stock upon the conversion of all outstanding

Amended 2017 Notes and 2020 Notes at the New Conversion Price of $ 2.862 .

See Note 5, Convertible Notes Payable for additional information

on the conversion.

the year ended December 31, 2021, a holder of 222,145 shares of Series D-1 Preferred Stock voluntarily converted the Preferred Stock

into 2,221,450 shares of common stock.

March 30, 2022, the Company amended the Certificate of Designation filed with the Delaware Secretary of State to increase the authorized

shares of Series D-1 Preferred Stock to 11,241,000 shares.

the year ended December 31, 2021, the Company received consideration of $ 150,000 from an investor in exchange for an aggregate of 52,411

shares of restricted Series D-1 Preferred Stock that were issued during the first quarter of 2022.

the fourth quarter of 2022, the Company issued 475,766 shares of Series D-1 Preferred Stock upon the automatic conversion of $ 1,260,000

of principal and $ 101,640 accrued interest outstanding on the 2021 Notes.

Series D Preferred Stock and the Series D-1 Preferred Stock rank pari passu with each other.

11 unchanged sentences

If a Company Event occurs within two years of June 20, 2021 (the “Date of Issuance”), the holders

of D-Series Preferred Stock will receive, for each share of D-Series Preferred Stock, an amount in cash equal to the Original Issue

Price (as defined in the respective Certificates of Designation) multiplied by four.

If a Company Event occurs from and after the second

anniversary of the Date of Issuance, the holders of D-Series Preferred Stock will receive, for each share of D-Series Preferred Stock,

an amount in cash equal to the Original Issue Price multiplied by six.

of D-Series Preferred Stock will receive, for each share of D-Series Preferred Stock, an amount in cash equal to the Original Issue Price

(as defined in the respective Certificates of Designation) multiplied by four.

If a Company Event occurs from and after the second anniversary

of the Date of Issuance, the holders of D-Series Preferred Stock will receive, for each share of D-Series Preferred Stock, an amount

in cash equal to the Original Issue Price multiplied by six.

The Original Issue Price for the Series D Preferred Stock is $ 0.2862 , and

the Original Issue Price for the Series D-1 Preferred Stock is $ 2.862 .

and the Original Issue Price for the Series D-1 Preferred Stock is $ 2.862 .

of shares of D-Series Preferred Stock will vote together with the holders of common stock as a single class.

14 unchanged sentences

of common stock upon the fifth anniversary of the date of issuance.

the year ended December 31, 2021, the Company received consideration of $ 150,000 from an investor in exchange for an aggregate of 52,411

shares of restricted Series D-1 Preferred Stock that were issued during the first quarter of 2022.

the year ended December 31, 2022, the Company issued 475,766 shares of Series D-1 Preferred Stock upon the automatic conversion of $ 1,260,000

of principal and $ 101,640 accrued interest outstanding on the 2021 Notes.

the year ended December 31, 2023, the Company issued 330,354 shares of Series D-1 Preferred Stock upon the automatic conversion of $ 875,000

of principal and $ 70,464 accrued interest outstanding on the 2021 Notes.

the year ended December 31, 2023, the Company issued 284,117 shares of Series D-1 Preferred Stock upon the automatic conversion of $ 752,500

of principal and $ 60,598 accrued interest outstanding on the 2022 Notes.

Stock Issuances

1 unchanged sentence

a grant date fair value of $ 3,025 for services.

the year ended December 31, 2021, the Company issued 2,221,450 shares of common stock upon the voluntary conversion of Series D-1 Preferred

the year ended December 31, 2021, the Company issued 65,666 shares of common stock upon automatic conversion of Series B Preferred Stock.

the year ended December 31, 2023, the Company issued an aggregate of 25,000 shares of immediately vested restricted common stock with

7 unchanged sentences

within the meaning of Section 422 of the Internal Revenue Code or options which are not incentive stock options.

The stock options are

exercised over a period determined by the Board of Directors (through its Compensation Committee), but generally no longer than 10

years after the date they are granted.

As of December 31, 2022, there were 16,587,500 shares available for issuance under the 2017 Equity

Compensation Plan.

Vested stock options are

exercisable over a period determined by the Board of Directors (through its Compensation Committee), but generally no longer than 10 years

after the date they are granted.

As of December 31, 2023, there were 16,587,500 shares available for issuance under the 2017 Equity Compensation

were no stock options granted during the years ended December 31, 2023 and 2022.

following table summarizes option activity during the year ended December 31, 2022 and 2021:

of Option Activity

Exercise Price

following table summarizes option activity during the years ended December 31, 2023 and 2022:

Schedule of Option Activity

Weighted Average Exercise Price

Weighted Average Remaining Life in Years

Outstanding and exercisable at January 1, 2022

( 1,175,000 )

Outstanding and exercisable at December 31, 2022

2 unchanged sentences

following table summarizes information about stock options outstanding at December 31, 2023:

of Stock Options Outstanding

Schedule of Stock Options Outstanding

Options Outstanding

3 unchanged sentences

Exercise Price

the year ended December 31, 2022, the Company did not issue any warrants.

On August 30, 2021, a total of 68,723,698 of August 2016 warrants

the year ended December 31, 2021, holders of warrants exercised warrants to purchase 18,052,966 shares of common stock at a price of

$ 0.053 per share.

In connection with the exercises, the Company received cash proceeds of $ 962,223 and issued 18,052,966 shares of common

the year ended December 31, 2021, the Company issued 25,000 three-year immediately vested warrants to an advisory board member to purchase

an aggregate of 25,000 shares of common stock with exercise price of $ 0.28620 per share.

The warrants had an aggregate grant date fair

value of $ 488 , which was recognized immediately within stock compensation in general and administrative expenses.

applying the Black-Scholes option pricing model to warrants granted, the Company used the following assumptions:

of Assumption of Warrants

For the Years Ended

Contractual terms (years)

Expected volatility

Risk-free interest rate

Expected dividend

following table summarizes warrant activity during the year ended December 31, 2022 and 2021:

of Warrant Activity

Weighted Average

Exercise Price

were no warrants granted during the years ended December 31, 2023 and 2022.

following table summarizes warrant activity during the years ended December 31, 2023 and 2022:

Schedule of Warrant Activity

Number of Warrants

Weighted Average Exercise Price

Weighted Average Remaining Life in Years

Outstanding and exercisable at January 1, 2022

( 18,052,966 )

( 68,723,698 )

Outstanding and exercisable at December 31, 2022

2 unchanged sentences

following table summarizes information about warrants outstanding at December 31, 2023:

of Warrants Outstanding

Schedule of Warrants Outstanding

Warrants Outstanding

5 unchanged sentences

domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2023 and 2022 are as follows:

of Domestic and Foreign Loss Before Income Taxes

Schedule of Domestic and Foreign Loss Before Income Taxes

Years ended December 31

5 unchanged sentences

income tax provision (benefit) consists of the following:

of Income Tax Provision (Benefit)

Schedule of Income Tax Provision (Benefit)

Years ended December 31

2 unchanged sentences

reconciliations between the statutory federal income tax rate and the Company’s effective tax rate are as follows:

of Statutory Federal Income Tax Rate and Effective Tax Rate

Schedule of Statutory Federal Income Tax Rate and Effective Tax Rate

Years Ended December 31

6 unchanged sentences

Expiration of warrants and options

Conversion of accrued interest to preferred stock

Miscellaneous

1 unchanged sentence

components of the Company’s deferred income taxes are summarized below:

of Components of Deferred Income Taxes

Schedule of Components of Deferred Income Taxes

Deferred Tax Assets:

15 unchanged sentences

Change in valuation allowance

$ ( 704,628 )

valuation allowance against deferred tax assets is required if, based on the weight of available evidence, it is more likely than not

15 unchanged sentences

Federal NOLS totaling $ 20.1 million do not expire.

of Net Operating Loss

Schedule of Net Operating Loss

$ 164,214,371

25 unchanged sentences

Total expense for operating

leases for the year ended December 31, 2021 was $ 86,545 , of which, $ 57,697 was included within research and development and $ 28,848 was

included within general and administrative expenses on the consolidated statements of operations.

leases for the year ended December 31, 2022 was $ 63,066 , of which, $ 42,044 was included within research and development and $ 21,022

was included within general and administrative expenses on the consolidated statements of operations.

of December 31, 2023, the Company had no leases that were classified as a financing lease.

2 unchanged sentences

summary of the Company’s right-of-use assets and liabilities is as follows:

of Right-of-use Assets and Liabilities

Schedule of Right-of-use Assets and Liabilities

For The Years Ended

7 unchanged sentences

Operating leases

5.0 % - 8.0 %

minimum payments under the non-cancellable lease as of December 31, 2023 were as follows:

of Future Minimum Payments Under Non-cancellable Lease

Total future minimum lease payments

Schedule of Future Minimum Payments Under Non-cancellable Lease

Total lease payments

amount representing imputed interest

Present value of lease liability

current portion

Lease liability, non-current portion

401(K) Profit Sharing Plan

4 unchanged sentences

in 2023 or 2022.

October 25, 2021, the Company received a grant award of $ 2,500,000 from the State of Tennessee for the study of animal cancers and dermatological

disorders for the period October 15, 2021 to June 30, 2022 (the “Tennessee Grant” or “Grant”).

The Tennessee

Grant was pre-funded;

therefore, the funds do not need to be used in full by June 30, 2022.

The Tennessee Grant was provided as reimbursement

of research and development expenses related to the development of animal health drug products.

The Company has elected gross presentation

of the Tennessee Grant income earned and the related research and development expenses with Grant income presented as Grant revenue in

the period in which it is earned, and qualifying costs presented as research and development expenses included in the Company’s

statement of operations, in the period that such costs are incurred.

As of December 31, 2022, $ 1,510,958 has been recorded as unearned

Grant revenue liability on the accompanying audited consolidated balance sheets.

The Company recorded $ 989,042 and $ 0 of Grant revenue

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

October 25, 2021, the Company received a grant award of $ 2,500,000 from

the State of Tennessee for the study of animal cancers and dermatological disorders for the period October 15, 2021 to June 30, 2022

(the “Tennessee Grant” or “Grant”).

The Tennessee Grant was pre-funded;

therefore, the funds do not need to

be used in full by June 30, 2022.

The Tennessee Grant was provided as reimbursement of research and development expenses related to

the development of animal health drug products.

The Company has elected gross presentation of the Tennessee Grant income earned and

the related research and development expenses, with Grant income presented as Grant revenue in the period in which it is earned, and

qualifying costs presented as research and development expenses included in the Company’s statement of operations in the

period that such costs are incurred.

As of December 31, 2023, $ 953,248 has

been recorded as unearned Grant revenue liability on the accompanying audited consolidated balance sheets.

The Company recorded

$ 557,710 and

Grant revenue during the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2022, $ 1,510,958 has been

recorded as unearned Grant revenue liability on the accompanying audited consolidated balance sheets.

License Transactions

5 unchanged sentences

RBS for the treatment of bacterial, fungal, and viral infections of the eye.

The Company completed the arrangements of this collaboration

during the third quarter of 2022, whereby the Company paid $5,000 for the option that expires on May 31, 2023;

agreed to pay up to $10,000

of new UM patent expenses for this IP during the period of the option and up to $25,000 of past UM patent expenses for this IP;

into a sponsored research agreement with UM on September 16, 2022 to study the combination of OBC’s PDAT and TOP PV-305, a formulation

of the Company’s pharmaceutical-grade RBS, for the treatment of infectious keratitis.

Company completed the arrangements of this collaboration during the third quarter of 2022, whereby the Company paid $5,000 for the option

that expires on May 31, 2023;

agreed to pay up to $10,000 of new UM patent expenses for this IP during the period of the option and up

to $25,000 of past UM patent expenses for this IP;

and entered into a sponsored research agreement with UM on September 16, 2022 to study

the combination of OBC’s PDAT and TOP PV-305, a formulation of the Company’s pharmaceutical-grade RBS, for the treatment

of infectious keratitis.

Commitments, Contingencies and Litigation

Company may, from time to time, be involved in litigation arising in the ordinary course of business or which may be expected to be covered

Company may, from time to time, be involved in litigation arising in the ordinary course of business which may be expected to be covered

by insurance.

6 unchanged sentences

Notes Payable

to December 31, 2022, the Company entered into a 2022 Note with a related party investor (a Company Director) in the aggregate principal

amount of $ 600,000 .

Preferred Stock

Subsequent to December 31, 2022, the Company issued

an aggregate of 18,872 shares of Series D-1 Convertible Preferred Stock upon automatic conversion of a 2021 Note.

to December 31, 2023, the Company entered into 2022 Notes with non-related party investors in the aggregate principal amount of $ 153,000 .

to December 31, 2023, the Company entered into a 2022 Note with a related party investor (a director of the Company) in the aggregate

principal amount of $ 815,000 .

Subsequent to December 31, 2023, the Company paid back $ 75,000 against a 2021 Note with a related party investor

(an officer of the Company).

to December 31, 2023, principal and interest in the aggregate amount of $ 648,162 representing 2022 Notes were converted into 226,474 shares

of Series D-1 Convertible Preferred Stock upon automatic conversion of the 2022 Notes.

Horowitz – Resignation and Termination Agreement

March 25, 2024, Bruce Horowitz resigned from the Board and as the Company’s Chief Operating Officer.

Horowitz, through

counsel, had requested that the Company pay him $ 977,000 ,

representing $ 508,000

for amounts owed under the Independent Contractor Agreement, dated as of April 19, 2017, by and between Mr.

Horowitz and the

Company, as amended by Amendment No.

1, dated as of May 9, 2017, and Amendment No.

2, dated as of May 8, 2019 (the “Horowitz

Agreement”), and $ 469,000

for accrued director fees.

On March 25, 2024, the Company and Mr.

Horowitz entered into an Independent Contractor and Director Fee

Termination Agreement and Release (the “Termination Agreement”) to resolve Mr.

Horowitz’s claims and terminate the

Horowitz Agreement.

The Termination Agreement provides, among other things, for the Company to pay Mr.

Horowitz an initial payment

within two business days of the Termination Agreement and a discounted second payment in the amount of $ 258,000

so long as it is paid prior to June 30, 2024, after which the amount of the second payment is $ 500,000 .

The Company has paid the initial payment of $ 250,000 .

Rodrigues – Appointment and Independent Contractor Agreement

March 25, 2024, the Board retained Dominic Rodrigues as the Company’s chief operations consultant pursuant to an Independent Contractor

Agreement entered into with Mr.

In this role, Mr.

Rodrigues will serve as the Company’s principal executive officer

and will be paid $ 20,000 per calendar month.

License Transactions

On March 21, 2024, the Company entered into an exclusive

worldwide license for UM’s IP.

Details of the license agreement are reported in the Company’s

Current Report on Form 8-K filed with the Commission on March 27, 2024.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data