What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-22 compared with 2022-03-22 · 503 added, 470 removed, 1083 unchanged (47% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

To the Shareholders and Board of Directors

Xenetic Biosciences, Inc.

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Description of the Matter

As described in Note 1 to the consolidated financial

statements, management believes that the Company has sufficient funding available to it at the date of approval of these financial statements

and that it will be able to continue as a going concern for a period of at least twelve months from the date of these financial statements.

In making this assessment, management has considered the July 2021 private placement that resulted in approximately $11.5 million of net

proceeds, coupled with the Company’s existing resources.

We identified the Company’s assessment of

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which involves judgement and estimation of key variables such as future expected revenue royalty proceeds and costs associated with progressing

XCART technology.

DNase technology.

Auditing the Company’s going concern assessment described above involves a high degree of auditor judgment to

assess the reasonableness of the cash flow forecasts and other assumptions used in the Company’s going concern analysis.

As described in Note 1 to the consolidated financial

statements, management believes that the Company has sufficient funding available to it at the date of approval of these financial statements

and that it will be able to continue as a going concern for a period of at least twelve months from the date of these financial statements.

In making this assessment, management has considered the Company’s existing resources.

How We Addressed the Matter in Our Audit

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Total current liabilities

Other long-term liabilities

Total liabilities

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Common stock, $ 0.001 par value;

50,000,000 shares authorized as of December 31, 2021 and December 31, 2020;

100,000,000 and 50,000,000 shares authorized as of December 31, 2022 and December 31, 2021;

15,193,587 and 13,466,603 shares issued as of December 31, 2022 and December 31, 2021, respectively;

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( 3,743,972 )

Asset impairment charges (Note 6)

( 9,243,128 )

Total operating costs and expenses

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Total other income, net

Loss before income taxes

$ ( 6,552,353 )

$ ( 5,645,179 )

Income tax benefit

$ ( 5,645,179 )

$ ( 10,893,466 )

Basic and diluted net loss per share

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Comprehensive

Stockholders'

Preferred Stock

Value ($0.001)

Accumulated Deficit

Other Comprehensive

Treasury Stock

Stockholders' Equity

Balance as of January 1, 2021

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$ ( 5,281,180 )

Issuance of common stock in registered

direct offering, net of issuance costs

Issuance of common stock and warrants, net of issuance costs

Exercise of pre-funded warrants

Exercise of purchase warrants

Issuance of common stock to vendor

Share-based expense

Issuance of common stock to vendor

Issuance of common stock in connection with warrant buyout

( 5,645,179 )

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$ ( 5,281,180 )

Issuance of common stock and warrants, net of issuance costs

Exercise of pre-funded warrants

Issuance of common stock in connection with purchase of in-process research and development

Exercise of purchase warrants

Share-based expense

Issuance of common stock to vendor

Issuance of common stock in connection with warrant buyout

( 6,552,353 )

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

Asset impairment charges

Deferred income taxes

( 2,918,518 )

Acquired in-process research and development

Amortization of right of use asset

Gain on settlement with vendor

Share-based expense

Changes in operating assets and liabilities:

Prepaid expenses and other assets

Prepaid expenses and other

Other long-term assets

Accounts payable, accrued expenses and other liabilities

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( 4,738,067 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash paid to acquire in-process research and development

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock and warrants

Net proceeds from issuance of common stock

Proceeds from exercise of warrants

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Net change in cash

( 5,146,765 )

Cash at beginning of period

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SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Right of use asset obtained in exchange for lease liability

Issuance of common stock to acquire in-process research and development

Issuance of common stock to vendor

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or the “Company”), incorporated in the state of Nevada and based in Framingham, Massachusetts, is a biopharmaceutical company

focused on progressing XCART ™ , a personalized Chimeric Antigen Receptor (“CAR”) T platform technology engineered

to target patient- and tumor-specific neoantigens.

The Company is initially advancing cell-based therapeutics targeting the unique B-cell

receptor on the surface of an individual patient’s malignant tumor cells, for the treatment of B-cell lymphomas.

The XCART technology,

developed by the Scripps Research Institute (“Scripps Research”) in collaboration with the Shemyakin-Ovchinnikov Institute

of Bioorganic Chemistry, is believed to have the potential to significantly enhance the safety and efficacy of cell therapy for B-cell

lymphomas by generating patient- and tumor-specific CAR T cells.

Additionally, Xenetic is leveraging its proprietary

drug delivery platform, PolyXen ® , by partnering with biotechnology and pharmaceutical companies.

PolyXen is an enabling

platform technology which can be applied to protein or peptide therapeutics.

It employs the natural polymer polysialic acid (“PSA”)

to prolong a drug’s circulating half-life and potentially improve other pharmacological properties.

Xenetic incorporates its patented

and proprietary technologies into drug candidates currently under development with biotechnology and pharmaceutical industry collaborators

to create what the Company believes will be the next-generation biologic drugs with improved pharmacological properties over existing

therapeutics.

focused on advancing innovative immune-oncology technologies addressing hard to treat cancers.

The Company’s proprietary Deoxyribonuclease

(“DNase”) platform is designed to improve outcomes of existing treatments, including immunotherapies, by targeting neutrophil

extracellular traps (“NETs”), which have been implicated in cancer progression and resistance to cancer treatments.

is currently focused on advancing its systemic DNase program into the clinic as an adjunctive therapy for pancreatic carcinoma and locally

advanced or metastatic solid tumors.

XCART ™ is the Company’s personalized Chimeric Antigen Receptor (“CAR”)

T platform technology engineered to target patient specific tumor neoantigens with a demonstrated proof of mechanism in B-cell lymphomas.

Additionally, Xenetic has partnered with biotechnology and pharmaceutical companies to develop its proprietary drug delivery platform,

PolyXen ® , and receives royalty payments under an exclusive license arrangement in the field of blood coagulation disorders.

The Company, directly or indirectly, through its

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Management evaluates whether there are conditions

or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern

within one year after the date that the financial statements are issued.

The Company has incurred substantial losses since its inception

and expects to continue to incur operating losses in the near-term.

These factors raise substantial doubt about its ability to continue

as a going concern.

The Company believes that it has access to capital resources through possible public or private equity offerings,

debt financings, corporate collaborations, related party funding, or other means to continue as a going concern.

On July 28, 2021, the

Company completed a $ 12.5 million private placement of the Company’s common stock, par value $ 0.001 , resulting in approximately

$ 11.5 million of net proceeds to the Company.

The Company believes that this financing, coupled with the Company’s existing resources,

will be adequate to fund the Company’s operations into the second quarter of 2023.

However, the Company anticipates it may need

additional capital in the long-term to pursue its business initiatives.

The terms, timing and extent of any future financing will depend

upon several factors, including the achievement of progress in its clinical development programs, its ability to identify and enter into

licensing or other strategic arrangements, and factors related to financial, economic, geo-political, industry and market conditions,

many of which are beyond its control.

The capital markets for the biotech industry can be highly volatile, which make the terms, timing

and extent of any future financing uncertain.

Impact of COVID-19

During March 2020, a global pandemic was declared

by the World Health Organization related to the outbreak of a novel strain of coronavirus, or COVID-19.

The pandemic has significantly

affected economic conditions in the U.S., accelerating during the first half of March 2020 and continuing throughout 2020 and 2021 and

into 2022, as federal, state and local governments reacted to the public health crisis with mitigation measures, creating significant

or events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern within

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

The Company has incurred substantial losses since its inception and

expects to continue to incur operating losses in the near-term.

These factors raise substantial doubt about its ability to continue as

a going concern.

The Company believes that it has access to capital resources through possible public or private equity offerings, debt

financings, corporate collaborations, related party funding, or other means to continue as a going concern.

The Company believes that

its existing resources will be adequate to fund the Company’s operations for a period of at least twelve months from the date of

these financial statements.

However, the Company anticipates it may need additional capital in the long-term to pursue its business initiatives.

The terms, timing and extent of any future financing will depend upon several factors, including the achievement of progress in its product

development programs, its ability to identify and enter into licensing or other strategic arrangements, its continued listing on the Nasdaq

Stock Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry and market conditions, many of

which are beyond its control.

The capital markets for the biotech industry can be highly volatile, which make the terms, timing and extent

of any future financing uncertain.

On June 3, 2022, the Company received a written notification (the “Notice”) from the Listing

Qualifications Department of Nasdaq notifying the Company that the closing bid price for its common stock had been below $1.00 for 30

consecutive business days and that the Company therefore was not in compliance with the minimum bid price requirement for continued inclusion

on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

The Notice has no immediate

effect on the listing of the Company’s common stock on the Nasdaq Capital Market.

Under the Nasdaq Listing Rules, the Company had

a period of 180 calendar days from the date of the Notice to regain compliance with the Bid Price Requirement.

Accordingly, the Company

had until November 30, 2022 to regain compliance with the Bid Price Requirement and was eligible for an additional 180 calendar day compliance

period if certain other criteria were met.

On December 1, 2022, the Company received a letter from Nasdaq informing it that although the

Company’s common stock had not regained compliance with the minimum $1.00 bid price per share requirement, Nasdaq had determined

that the Company was eligible for an additional 180 calendar day period, or until May 29, 2023, to regain compliance.

Nasdaq’s determination

was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements

for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement, and the Company’s written notice

of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

Risks and Uncertainties

Effects of the COVID-19 Pandemic

During March 2020, a

global pandemic was declared by the World Health Organization related to the outbreak of a novel strain of coronavirus, or COVID-19.

pandemic has significantly affected economic conditions in the U.S., accelerating during the first half of March 2020 and continuing throughout

2021 and 2022, as federal, state and local governments reacted to the public health crisis with mitigation measures, creating significant

uncertainties in the U.S.

The Company continues to evaluate the effects of the COVID-19 pandemic on its business and while there

has been no significant impact to the Company’s operations to date, the Company at this time is uncertain of the impact this event

may have on the Company’s future operations.

The extent to which the COVID-19 pandemic affects our business, operations and financial

results will depend on numerous evolving factors that we may not be able to accurately predict, and such uncertainty is expected to continue

for some time.

has been no significant impact to the Company’s operations to date, the Company at this time remains uncertain of the impact this

event may have on the Company’s future operations.

The extent to which the COVID-19 pandemic affects our business, operations and

financial results will depend on numerous evolving factors that we may not be able to accurately predict, and such uncertainty is expected

to continue for some time.

Impact of the conflict

in Ukraine on Operations

The short and long-term implications of Russia’s

invasion of Ukraine are difficult to predict at this time.

The imposition of sanctions and counter sanctions may have an adverse effect

on the economic markets generally and could impact our business, financial condition, and results of operations.

Summary of Significant Accounting Policies

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of the Company’s fair value measurements.

and concentrations of credit risk

The Company considers all highly liquid investments

with maturities of 90 days or less from the date of purchase to be cash equivalents.

Investments with original maturities of greater than

90 days from the date of purchase but less than one year from the balance sheet date are classified as short-term investments, while investments

with maturities of one year or beyond from the balance sheet date are classified as long-term investments.

Management determines the appropriate

classification of its cash equivalents and investment securities at the time of purchase and re-evaluates such determination as of each

balance sheet date.

The Company maintains cash primarily with one major financial institution that management believes is of high credit

The carrying amount of cash equivalents approximate their fair value due to the short-term nature of these instruments.

with an original maturity of 90 days or less from the date of purchase to be cash equivalents.

Investments with original maturities of

greater than 90 days from the date of purchase but less than one year from the balance sheet date are classified as short-term investments,

while investments with maturities of one year or beyond from the balance sheet date are classified as long-term investments.

determines the appropriate classification of its cash equivalents and investment securities at the time of purchase and re-evaluates such

determination as of each balance sheet date.

The carrying amount of cash equivalents approximate their fair value due to the short-term

nature of these instruments.

Financial instruments that potentially subject

the Company to credit risk consist primarily of cash on deposit with financial institutions, the balances of which frequently exceed federally

insured limits.

On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection

and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

The Company’s cash consisted

primarily of money market funds held at SVB.

On March 12, 2023, the U.S.

Treasury, Federal Reserve and FDIC rolled out emergency measures

to fully protect all depositors of SVB and, on March 13, 2023, we had full access to our cash on deposit with SVB.

As a result, the Company

does not anticipate any losses with respect to such balances.

Property and Equipment

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Indefinite-Lived Intangible Assets

Acquired indefinite-lived intangible assets consisted

of in-process research and development (“IPR&D”) related to the Company’s business combination with SymbioTec, which

was recorded at fair value on the acquisition date.

At acquisition, we generally determine the fair value of intangible assets, including

IPR&D, using the “income method.” IPR&D intangible assets are considered indefinite-lived intangible assets and are

Assets acquired and liabilities assumed in business

combinations, licensing and other transactions are generally recognized at the date of acquisition at their respective fair values.

acquisition, we generally determine the fair value of intangible assets, including in-process research and development (“IPR&D”),

using the “income method.” Acquired IPR&D intangible assets are considered indefinite-lived intangible assets and are

not amortized until completion or abandonment of the associated research and development efforts.

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excess of the carrying value of the intangible asset over its fair value.

The Company historically had performed its annual impairment

review as of October 1.

The Company determined that IPR&D was impaired during the year ended December 31, 2020.

See Note 6 Indefinite-Lived

Intangible Assets and Other Long-Term Assets .

Intangible assets are highly vulnerable to impairment

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of the assets or asset group may not be fully recoverable.

No such impairments were recorded during the years ended December 31, 2021

Evaluation of recoverability

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cash flows to determine fair value.

No such impairments were recorded during the years ended December 31, 2022 and 2021.

Revenue Recognition

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pre-clinical development, clinical trial and related clinical manufacturing expenses, fees paid to contract research organizations (“CROs”)

and contract manufacturing organizations and other outside expenses.

The Company expenses research and development costs as incurred.

The Company expenses upfront, non-refundable payments made for research and development services as obligations are incurred.

ascribed to intangible assets acquired but which have not met capitalization criteria is expensed as research and development at the time

of acquisition.

and contract manufacturing organizations (“CMOs”) and other outside expenses.

The Company expenses research and development

costs as incurred.

The Company expenses upfront, non-refundable payments made for research and development services as obligations are

The value ascribed to intangible assets acquired but which have not met capitalization criteria is expensed as research and

development at the time of acquisition.

Upfront payments under license agreements are expensed upon receipt of the license.

payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is

determined to be probable of achievement and the related amount is reasonably estimable.

The Company is required to estimate accrued research

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Program managers in connection with overall program management of clinical

CMOs in connection with cGMP manufacturing;

CROs in connection with clinical trials;

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The Company bases its expenses related to research

and development, pre-clinical activities and clinical trials on its estimates of the services received and efforts expended pursuant to

quotes and contracts with multiple research institutions and CROs that conduct and manage clinical trials on the Company’s behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of the

In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort

to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, the

Company adjusts the accrual or prepaid accordingly.

and development, pre-clinical activities, manufacturing and clinical trials on its estimates of the services received and efforts expended

pursuant to quotes and contracts with multiple research institutions, CMOs and CROs that conduct and manage clinical trials on the Company’s

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment

There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment

of the expense.

In accruing service fees, the Company estimates the time period over which services will be performed and the level of

effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate,

the Company adjusts the accrual or prepaid accordingly.

Although it does not expect its estimates to be materially different from amounts

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In addition, the Company has recorded approximately $ 0.3

million and $ 0.2 million of prepayments as a component of prepaid expenses and other current assets as of December 31, 2021 and 2020,

respectively.

million of prepayments as a component of prepaid expenses and other current assets as of December 31, 2022 and 2021, respectively.

Share-based Expense

The Company grants share-based payments in the

form of options and restricted stock units (“RSUs”) to employees and non-employees, Joint Share Ownership Plan (“JSOP”)

awards to employees and agreements to issue common stock in exchange for services provided by non-employees.

form of options and restricted stock units (“RSUs”) to employees and non-employees to purchase shares of the Company’s

common stock, Joint Share Ownership Plan (“JSOP”) awards to employees and agreements to issue common stock in exchange for

services provided by non-employees.

Share-based expense is based on the estimated

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reporting public entities for fiscal years beginning after December 15, 2022, but early adoption is permitted.

We are currently evaluating

the impact of adoption, but we do not anticipate that it will have a material effect on our consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Issuers

Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options – 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 (Topic 815-40) .

The guidance clarifies, among other things, an issuer’s

accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification

or exchange that are not within the scope of another Topic.

The revised guidance requires an exchange of the original instrument for a

new instrument and recognizes the effect on the basis of the substance of the transaction in the same manner as if cash had been paid

as consideration.

ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 but early adoption is permitted.

guidance was adopted on January 1, 2021, and it did not have a material effect on the Company’s consolidated financial statements.

The Company continues to

evaluate the impact of adoption, but we do not anticipate that it will have a material effect on our consolidated financial statements.

Significant Strategic Collaborations

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with its wholly-owned subsidiaries, “Takeda”)

The Company was a party to an exclusive research,

development and license agreement with Takeda related to the development of a novel series of polysialylated blood coagulation factors.

This collaboration with Takeda relied on the Company’s PolyXen technology to conjugate PSA with therapeutic blood-clotting factors,

with the goal of improving the pharmacokinetic profile and extending the active half-life of these biologic molecules.

The agreement granted

Takeda a worldwide, exclusive, royalty-bearing license to the Company’s PSA patented and proprietary technology in combination with

Takeda’s proprietary molecules designed for the treatment of blood and bleeding disorders.

There are no active projects under the

exclusive research, development and license agreement, and the parties mutually terminated the agreement in August 2021.

In October 2017, the Company granted to Takeda

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obligations and all other revenue recognition criteria were met.

The termination of the exclusive research, development and license agreement

had no impact on the Company’s non-exclusive sublicense agreement and the royalties being generated.

Catalent Pharma Solutions LLC (“Catalent”)

On June 30, 2022, the Company entered into a Statement

of Work (the “SOW”) with Catalent to outline the general scope of work, timeline, and pricing pursuant to which Catalent will

provide certain services to the Company to perform cGMP manufacturing of the Company’s recombinant protein, Human DNase I.

agreed to enter into a Master Services Agreement (“MSA”) that will contain terms and conditions to govern the project contemplated

by the SOW and that will supersede the addendum to the SOW containing Catalent's standard terms and conditions.

In addition, in the event

of any conflict between the project-specific terms and conditions set forth in the SOW and the MSA, the MSA terms and conditions shall

The estimated total cost of the project contemplated by the SOW is expected to be up to approximately $5 million (exclusive of

certain fees and potential alternatives) for the manufacturing services over the course of the term of the project with each phase of

the project invoiced separately in connection with the commencement of such phase.

Unless earlier amended or terminated, the manufacturing

services contemplated by the SOW are currently targeted to be completed by the first half of 2024.

The SOW is terminable by the Company

at any time with 30 days' prior written notice to Catalent.

The SOW also contains customary provisions related to, among other things,

confidentiality, warranties, intellectual property and indemnification.

During the year ended December 31, 2022, the Company paid Catalent

approximately $ 0.7 million , of which $ 0.3 million has been recognized as an advance payment and is included in prepaid expenses and other

as of December 31, 2022.

Scripps Research

On May 15, 2020, the Company and Scripps Research

entered into a Research Funding and Option Agreement (the “Scripps Agreement”), pursuant to which the Company has agreed to

provide Scripps Research an aggregate of up to $ 3.0 million to fund research relating to advancing the pre-clinical development of XCART.

The research funding is payable by the Company to Scripps Research on a quarterly basis in accordance with a negotiated budget, which

provides for an initial payment of approximately $ 300,000 on the date of the Scripps Agreement and subsequent quarterly payments of approximately

$ 300,000 over a 27-month period.

Under the Scripps Agreement, Scripps Research has granted the Company a license within the Field (as

defined in the Scripps Agreement) to any Patent Rights or Technology (as defined in the Scripps Agreement) under the terms of that certain

license agreement with Scripps Research, dated February 25, 2019, assigned to the Company on March 1, 2019.

Additionally, the Company

has the option to acquire a worldwide exclusive license to Scripps Research’s rights in the Technology or Patent Rights not already

licensed to the Company, as well as a non-exclusive, royalty-free, non-transferrable license to make and use Scripps Research Technology

(as defined in the Scripps Agreement) solely for the Company’s internal research purposes during the performance of the research

program contemplated by the Scripps Agreement.

The Company has paid $ 2.1 million to Scripps Research under this agreement through December

As of December 31, 2021, and December 31, 2020, approximately $ 0.2 million has been recognized as an advance payment under this

agreement and is included in prepaid expenses and other current assets.

On May 15, 2020, the Company and the Scripps Research

Institute (“Scripps Research”) entered into a Research Funding and Option Agreement (the “Scripps Agreement”),

pursuant to which the Company had agreed to provide Scripps Research an aggregate of up to $3.0 million to fund research relating to advancing

the pre-clinical development of XCART.

The research funding was payable by the Company to Scripps Research on a quarterly basis in accordance

with a negotiated budget, which provided for an initial payment of approximately $300,000 on the date of the Scripps Agreement and subsequent

quarterly payments of approximately $300,000 over a 27-month period.

Under the Scripps Agreement, Scripps Research had granted the Company

a license within the Field (as defined in the Scripps Agreement) to any Patent Rights or Technology (as defined in the Scripps Agreement)

under the terms of that certain license agreement with Scripps Research, dated February 25, 2019, assigned to the Company on March 1,

Additionally, the Company had the option to acquire a worldwide exclusive license to Scripps Research’s rights in the Technology

or Patent Rights not already licensed to the Company, as well as a non-exclusive, royalty-free, non-transferrable license to make and

use Scripps Research Technology (as defined in the Scripps Agreement) solely for the Company’s internal research purposes during

the performance of the research program contemplated by the Scripps Agreement.

During the second quarter of 2022, the parties mutually

agreed to terminate additional funding under the Scripps Agreement.

As a result, Scripps Research agreed to continue to perform work under

the agreement until funding previously advanced was expended.

The Company paid $ 2.4 million to Scripps Research under this agreement through

December 31, 2022.

There were no amounts recognized as an advance payment or accrued under this agreement as of December 31, 2022.

of December 31, 2021, approximately $ 0.2 million had been recognized as an advance payment under this agreement and was included in prepaid

expenses and other.

PJSC Pharmsynthez

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and all of our issued and outstanding Series A Preferred Stock (as defined in Note 11, Stockholders’ Equity ) through SynBio.

During the third quarter of 2019, the Company

entered into a Sponsored Research Agreement with Pharmsynthez (the “SRA”) related to experiments identified by the Company

to support its efforts for initial tech transfer of the XCART methods to a future academic collaborator.

Under the agreement, the Company

made a $ 350,000 payment to Pharmsynthez during the third quarter of 2019, which was refundable on a pro rata basis if the project is terminated

prematurely as a result of Pharmsynthez failing to perform the work.

On June 12, 2020, the Company and Pharmsynthez entered into a Master

Services Agreement (“MSA”) to advance the development of the Company’s XCART technology for B-cell malignancies.

MSA terminated and superseded the SRA.

The Company expensed approximately $ 0.1 million and $ 0.2 million related to work performed under

these agreements during the years ended December 31, 2021 and 2020, respectively.

There were no amounts recorded on the consolidated balance

sheet as of December 31, 2021.

As of December 31, 2020, approximately $ 25,000 was recorded as an advanced payment and included in prepaid

expenses and other assets on the consolidated balance sheet.

Under the MSA, Pharmsynthez agreed to provide

services pursuant to work orders agreed upon by the parties from time to time, which services include, but are not limited to, acting

as the Company’s primary contract research organization to assist in managing collaborations with multiple academic institutions

in Russia and Belarus.

The Company is required to pay reasonable fees, expenses and pass-through costs incurred by Pharmsynthez in providing

the services in accordance with a budget and payment terms set forth in each work order.

Additionally, in the event that a work order

provides for milestone payments, the Company is required to make such payments to Pharmsynthez, or third party service providers designated

by Pharmsynthez, in accordance with the terms set forth in the work order, which milestone payments may be made, at the sole discretion

of the Company, in cash or shares of the Company’s common stock.

On June 12, 2020, the Company and Pharmsynthez

entered into a Master Services Agreement (“Pharmsynthez MSA”) to advance the development of the Company’s XCART technology

for B-cell malignancies.

Under the Pharmsynthez MSA, Pharmsynthez agreed to provide services pursuant to work orders agreed upon by the

parties from time to time, which services include, but are not limited to, acting as the Company’s primary contract research organization

to assist in managing collaborations with multiple academic institutions in Russia and Belarus.

The Company was required to pay reasonable

fees, expenses and pass-through costs incurred by Pharmsynthez in providing the services in accordance with a budget and payment terms

set forth in each work order.

Additionally, in the event that a work order provided for milestone payments, the Company was required to

make such payments to Pharmsynthez, or third party service providers designated by Pharmsynthez, in accordance with the terms set forth

in the work order, which milestone payments may be made, at the sole discretion of the Company, in cash or shares of the Company’s

common stock.

The Company and Pharmsynthez executed a work order

on June 12, 2020 (the “Work Order”) under the MSA pursuant to which Pharmsynthez agreed to conduct a Stage 1 study of the

Company’s XCART technology under the research program as set forth in the Work Order.

The activities to be performed under the Work

Order were expected to take approximately 20 months unless earlier terminated in accordance with the MSA.

Under the terms of the Work

Order, the Company paid Pharmsynthez $ 51,000 as an initial payment for trial startup costs, which amount was credited against the amounts

paid under the SRA.

The Work Order provided for additional pass-through costs to be invoiced by Pharmsynthez upon execution of contracts

with third party sites, which were to be further credited against the SRA.

Through December 31, 2021, all costs incurred under the MSA

were credited against the amounts paid under the SRA.

Additionally, the Work Order provided for milestone payments of up to an aggregate

of $ 1,050,000 , or, in the Company’s sole discretion, up to an aggregate of 1,000,000 shares of the Company’s common stock,

to be paid or issued, as applicable, by the Company upon achievement of milestones associated with completion of early stages of the research

program as set forth in the Work Order.

As of December 31, 2021, approximately $ 0.1 million of milestone payments had been made and no

further milestone payments are expected.

on June 12, 2020 (the “Work Order”) under the Pharmsynthez MSA pursuant to which Pharmsynthez agreed to conduct a Stage 1

study of the Company’s XCART technology under the research program as set forth in the Work Order.

The activities to be performed

under the Work Order were expected to take approximately 20 months unless earlier terminated in accordance with the Pharmsynthez MSA.

The Work Order provided for additional pass-through costs to be invoiced by Pharmsynthez upon execution of contracts with third party

Additionally, the Work Order provided for milestone payments of up to an aggregate of $1,050,000, or, in the Company’s sole

discretion, up to an aggregate of 1,000,000 shares of the Company’s common stock, to be paid or issued, as applicable, by the Company

upon achievement of milestones associated with completion of early stages of the research program as set forth in the Work Order.

December 31, 2022, approximately $ 0.1 million of milestone payments had been made and no further milestone payments are expected.

On October 12, 2021, the Company entered into

Amendment Number One to the MSA (the “MSA Amendment”) with Pharmsynthez to, among other things, terminate all work orders

under the MSA.

As a result, no further services were to be performed under the Work Order and any additional services will be covered

by new work orders.

In exchange, the Company entered into a new work order (the “Second Work Order”) simultaneously with the

MSA Amendment.

Under the terms of the Second Work Order, Pharmsynthez shall provide certain enumerated services to support the Company’s

development of its XCART technology upon the written request of the Company, which work may be requested by the Company from time to time.

Amendment Number One to the Pharmsynthez MSA (the “MSA Amendment”) with Pharmsynthez to, among other things, terminate all

work orders under the Pharmsynthez MSA.

As a result, no further services were to be performed under the Work Order and any additional

services will be covered by new work orders.

In exchange, the Company entered into a new work order (the “Second Work Order”)

simultaneously with the MSA Amendment.

Under the terms of the Second Work Order, Pharmsynthez shall provide certain enumerated services

to support the Company’s development of its XCART technology upon the written request of the Company, which work may be requested

by the Company from time to time.

Pursuant to the MSA Amendment and Second Work

Order, upon entry into the Second Work Order, the Company made a one-time $ 40,000 payment to Pharmsynthez, of which $ 21,000 was a one-time

payment in full for all money and other compensation owed by the Company under the Work Order, and the remaining $ 19,000 will be creditable

against any out of pocket costs and expenses incurred by Pharmsynthez on behalf of the Company pursuant to any new work orders initiated

after the effective date of the MSA Amendment, including the Second Work Order.

In August 2011, SynBio, a wholly-owned subsidiary

of Pharmsynthez, and the Company entered into a stock subscription and collaborative development agreement (the “Co-Development

The Company granted an exclusive license to SynBio to develop, market and commercialize certain drug candidates utilizing

molecules based on SynBio’s technology and the Company’s proprietary technologies (PolyXen, OncoHist and ImuXen) in Russia

and CIS, collectively referred to herein as the SynBio Market.

In return, SynBio granted an exclusive license to the Company to use the

preclinical and clinical data generated by SynBio in certain agreed products and to engage in the development of commercial candidates

in any territory outside of the SynBio Market.

SynBio and the Company are each responsible for

funding and conducting their own research and clinical development activities.

There are no milestone or other research-related payments

provided for under the Co-Development Agreement other than fees for the supply of each company’s respective research supplies based

on their technology, which, when provided, are due to mutual convenience and not representative of an ongoing or recurring obligation

to supply research supplies.

Serum Institute of India Limited (“Serum Institute”) has agreed to directly provide the research

supplies to SynBio, where the Company is not liable for any failure to supply the research supplies as a result of any act or fault of

Serum Institute.

Upon successful commercialization of any resultant products, the Company is entitled to receive a 10% royalty on sales

in certain territories and pay royalties to SynBio for sales outside those certain territories, subject to the terms of the Co-Development

Effective December 20, 2021, SynBio assigned the Co-Development Agreement to Pharmsynthez.

Order, upon entry into the Second Work Order, the Company made a one-time $ 40,000

payment to Pharmsynthez, of which $21,000 was a one-time payment in full for all money and other compensation owed by the Company

under the Work Order, and the remaining $19,000 will be creditable against any out of pocket costs and expenses incurred by Pharmsynthez

on behalf of the Company pursuant to any new work orders initiated after the effective date of the MSA Amendment, including the Second

There was no work performed and expense recognized under these agreements during the year ended December 31, 2022.

expensed approximately $ 0.1 million related to work performed under these agreements during the year ended December 31, 2021.

no amounts recorded on the consolidated balance sheet as of December 31, 2022 and December 31, 2021, respectively.

In August 2011, SynBio and the Company entered

into a stock subscription and collaborative development agreement (the “Co-Development Agreement”).

The Company granted an

exclusive license to SynBio to develop, market and commercialize certain drug candidates utilizing molecules based on SynBio’s technology

and the Company’s proprietary technologies (PolyXen, OncoHist and ImuXen) in Russia and CIS, collectively referred to herein as

the SynBio Market.

In return, SynBio granted an exclusive license to the Company to use the preclinical and clinical data generated by

SynBio in certain agreed products and to engage in the development of commercial candidates in any territory outside of the SynBio Market.

SynBio is solely responsible for funding and conducting

their own research and clinical development activities.

There are no milestone or other research-related payments provided for under the

Co-Development Agreement other than fees for the supply of each company’s respective research supplies based on their technology,

which, when provided, are due to mutual convenience and not representative of an ongoing or recurring obligation to supply research supplies.

Upon successful commercialization of any resultant products, the Company is entitled to receive a 10% royalty on sales in certain territories

and pay royalties to SynBio for sales outside those certain territories, subject to the terms of the Co-Development Agreement.

December 20, 2021, SynBio assigned the Co-Development Agreement to Pharmsynthez.

Through December 31, 2022, Pharmsynthez continued

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first quarter of 2022.

Pharmsynthez has not informed the Company that the registration process has been completed or that production of

the product has commenced.

The Company did not recognize revenue in connection with the Co-Development Agreement during the years ended

December 31, 2021 and 2020.

Pharmsynthez has informed the Company that it had received a response letter indicating certain deficiencies in

the dossier and intends to refile the registration upon correction.

The Company did no t recognize revenue in connection with the Co-Development

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

Serum Institute of India Limited

In August 2011, the Company entered into a collaborative

research and development agreement with Serum Institute providing Serum Institute an exclusive license to use the Company’s PolyXen

technology to research and develop one potential commercial product, Polysialylated Erythropoietin.

Serum Institute is responsible for

conducting all preclinical and clinical trials required to achieve regulatory approvals within the certain predetermined territories at

Serum Institute’s own expense.

Royalty payments are payable by Serum Institute to the Company for net sales to certain customers

in the Serum Institute sales territory.

Royalty payments are payable by the Company to Serum Institute for net sales received by the Company

over the term of the license.

There are no milestone or other research-related payments due under the collaborative arrangement.

research and development agreement with Serum Institute of India Limited (“Serum Institute”) providing Serum Institute an

exclusive license to use the Company’s PolyXen technology to research and develop one potential commercial product, Polysialylated

Erythropoietin.

Serum Institute is responsible for conducting all preclinical and clinical trials required to achieve regulatory approvals

within the certain predetermined territories at Serum Institute’s own expense.

Royalty payments are payable by Serum Institute to

the Company for net sales to certain customers in the Serum Institute sales territory.

There are no milestone or other research-related

payments due under the collaborative arrangement.

Through December 31, 2022, no commercial products

were developed and no royalty revenue or expense was recognized by the Company related to the arrangement, Serum Institute had a share

were developed and no royalty revenue or expense was recognized by the Company related to the arrangement.

Serum Institute had a share

ownership of less than 1% of the total outstanding common stock of the Company as of December 31, 2022 and 2021, respectively.

Licensing Arrangements

Exclusive Sublicense Agreement

On April 26, 2022, the Company entered into an

Exclusive Sublicense Agreement (the “Sublicense Agreement”) with CLS Therapeutics Ltd.

(“CLS”) pursuant to which

the Company received an exclusive license, under certain patent rights and know-how owned or controlled by CLS, to develop and commercialize

pharmaceutical products and methods incorporating DNase enzyme for use in treatment of cancer (the “Sublicensed Products”).

Under the terms of the Sublicense Agreement, the Company will have sole responsibility for, and shall use commercially reasonable efforts

to, among other things, research, develop and obtain marketing approval for the Sublicensed Products in the U.S.

and certain European

markets, and to commercialize such Sublicensed Products in the relevant market once marketing approval is obtained.

In consideration for the license and other rights

granted to the Company under the Sublicense Agreement, the Company issued to CLS 375,000 shares of the Company’s common stock (the

“Sublicense Agreement Shares”), of which 250,000 Sublicense Agreement Shares were issued directly to OPKO Health, Inc.

in lieu of transfer indirectly from CLS to EirGen Pharma Ltd.

(“EirGen”), a wholly owned subsidiary of OPKO, in satisfaction

of certain third-party contractual obligations between CLS and EirGen.

Additionally, the Company is obligated to pay to CLS up to $13,000,000

in cash in potential milestone payments for the achievement of certain clinical and regulatory milestones, as well as issue an additional

950,000 shares of the Company’s common stock to CLS based on the achievement of certain regulatory milestones.

In addition, the

Company is obligated to pay tiered royalties ranging from the mid-single to low-double digits on net sales of licensed products falling

within the scope of the license during the Royalty Term (as defined in the Sublicense Agreement), as well as pay a percentage share in

the low-to-mid teens of certain consideration received by the Company from any sublicensees.

Exclusive License Agreement

On April 26, 2022, the Company entered into an

Exclusive License Agreement (the “License Agreement”) with CLS, pursuant to which the Company received an exclusive license

under certain patent rights and know-how owned or controlled by CLS to develop and commercialize pharmaceutical products and methods incorporating

DNase in conjunction with CAR T therapies (the “Licensed Products”).

Under the terms of the License Agreement, the Company

will have sole responsibility for, and shall use commercially reasonable efforts to, among other things, research, develop and obtain

marketing approval for the Licensed Products in the U.S.

and certain European markets, and to commercialize such Licensed Products in

the relevant market once marketing approval is obtained.

In consideration for the license and other rights

granted to the Company under the License Agreement, the Company paid CLS a one-time fee of $ 500,000 in cash, issued to CLS 500,000 shares

of the Company’s common stock, and is obligated to pay up to $13,000,000 in cash in potential milestone payments for the achievement

of certain clinical and regulatory milestones for each Licensed Product.

In addition, the Company is obligated to pay tiered royalties

ranging from the mid-single to low-double digits on net sales of licensed products falling within the scope of the license during the

Royalty Term (as defined in the License Agreement), as well as pay a percentage share in the mid-teens to low double digits of certain

consideration received by the Company from any sublicensees.

The total consideration for the Sublicense and

License Agreements was approximately $ 1.3 million , which consisted of a $ 0.5 million cash payment and the fair value of the 875,000 common

shares issued of $ 0.8 million utilizing the closing market price of the Company’s stock price at the closing date.

no future alternative use for the sublicense and license, the Company recorded an expense of $ 1.3 million to research and development

expense during the year ended December 31, 2022.

No milestone or other contingent consideration was recognized in 2022 as there were no

development, regulatory or sales milestones that were probable of being achieved as of December 31, 2022.

Patent Assignment and Volition Collaboration

On October 4, 2022, the Company completed a patent

assignment related to its collaboration with Belgian Volition SARL Limited (“Volition”) and CLS.

In connection with the patent

assignment, the Company entered into a Subscription Agreement with CLS Therapeutics, LLC, a Delaware limited liability company (“CLS

LLC ”) on October 12, 2022, pursuant to which the Company agreed to issue to CLS LLC, and CLS LLC agreed to subscribe for, 850,000

shares of the Company’s common stock (the “Shares”) as consideration for the assignment by CLS and its affiliates to

the Company of certain patent rights owned by CLS and its affiliates.

On August 2, 2022, the Company announced a research

and development collaboration with Volition to develop NETs-targeted adoptive cell therapies for the treatment of cancer.

The collaboration

is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q ® technology Test and the

Company’s DNase-Armored CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types of solid

Under the terms of the collaboration agreement, Volition will fund a research program and the two parties will share proceeds

from commercialization or licensing of any products arising from the collaboration.

The total consideration for the patent assignment

was approximately $0.5 million, representing the fair value of the 850,000 common shares issued utilizing the closing market price of

the Company’s stock price at the closing date.

As there was no future alternative use for the patent rights, the Company recorded

an expense of approximately $ 0.5 million to research and development expense for the year ended December 31, 2022.

No milestone or other

contingent consideration was recognized in 2022 as there were no development, regulatory or sales milestones that were probable of being

achieved as of December 31, 2022.

The Company incurred approximately $ 0.6 million

related to consulting, transaction and development costs in connection with the DNase technology for the year ended December 31, 2022.

Property and Equipment, net

Property and equipment, net consists of the following:

Schedule of Property and Equipment, Net

Schedule of property and equipment

Office and computer equipment

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Property and equipment, net

There was no depreciation expense for the year

ended December 31, 2021.

Depreciation expense was approximately $ 1,000 for the year ended December 31, 2020.

Indefinite-Lived Intangible Assets and Other Long-Term Assets

Indefinite-Lived Intangible Assets

The Company’s indefinite-lived intangible

asset, OncoHist, is IPR&D relating to the Company’s business combination with SymbioTec in 2012.

IPR&D is tested for impairment

whenever events or changes in circumstances indicate that the carrying value may not be recoverable, although it is to be tested at least

annually until the project is completed or abandoned.

The Company completed an impairment analysis of the IPR&D during 2020 and concluded

that the following factors indicated that the IPR&D was impaired:

a decision by management to delay indefinitely any further development

of the IPR&D and to not support the underlying intellectual property;

the failure to sell or license the IPR&D to a third party;

and the reduction in market capitalization.

During the year ended December 31, 2020, the Company recorded an asset impairment charge

million, which is presented within operating costs and expenses in the consolidated statements of comprehensive loss, representing

the excess of the IPR&D asset’s carrying value over its estimated fair value.

A reconciliation of the change in the carrying

value of Indefinite-Lived Intangible Assets is as follows:

Schedule of Indefinite-Lived Intangible Assets

Balance as of January 1, 2020

( 9,243,128 )

Balance as of December 31, 2020

Other Long-Term Assets

There was no depreciation expense for the years

ended December 31, 2022 and 2021, respectively.

In October 2022, the Company retired its fully depreciated assets as a result of the relocation

of its corporate office.

In 2016, the Company

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of its deferred tax assets on a quarterly basis.

There was no income tax provision (benefit) for the year ended December 31, 2021, as

the Company has incurred losses to date.

During the year ended December 31, 2020, the Company recognized a deferred tax benefit representing

the reversal of its deferred tax liability related to the impairment of its IPR&D.

There was no income tax provision (benefit) for the years ended December 31, 2022 and

2021, as the Company has incurred losses to date.

The components of loss before income taxes are

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Foreign (Germany)

( 9,357,256 )

Foreign (Switzerland)

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Net benefit for income taxes

$ ( 2,918,518 )

Deferred tax assets

and liabilities reflect the net tax effect of temporary differences between the carrying amount 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 are

Deferred tax assets and

liabilities reflect the net tax effect of temporary differences between the carrying amount 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 are as follows:

Schedule of deferred tax assets and liabilities

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Germany net operating loss carryforwards

Capitalized research and experimental expenditure

state net operating loss carryforwards

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or winding-up of the Company, the holders of common stock are entitled to share ratably in the assets of the Company available for distribution.

Authorized Share

On December 21, 2022,

shareholders of the Company voted to approve an amendment to the Company’s Articles of Incorporation to increase the authorized

shares of common stock to 100,000,000 shares (the “Authorized Share Increase”).

The Company filed a Certificate of Amendment

to the Company’s Articles of Incorporation with the Secretary of the State of Nevada to effect the Authorized Share Increase as

of December 21, 2022.

At the Market (“ATM”) Offering

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the related prospectus, filed with the SEC on October 12, 2021 and declared effective on October 22, 2021, and is currently limited to

a number of shares of up to $4,000,000 of common stock pursuant to General Instruction I.B.6 of Form S-3.

a number of securities it can sell under the ATM Agreement of up to $4 million, provided that the Company may be limited in the amount

of securities that it can sell pursuant to General Instruction I.B.6 of Form S-3.

Pursuant to the ATM Agreement, Wainwright may

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No shares were sold under the ATM Agreement during

the year ended December 31, 2021.

The Company incurred $ 0.1 million of costs associated with the ATM which have been recorded within prepaid

expenses and other current assets on the December 31, 2021 consolidated balance sheet.

the years ended December 31, 2022 and 2021.

The Company incurred $ 0.2 million and $ 0.1 million of costs associated with the ATM during

the twelve months ended December 31, 2022 and 2021, respectively, which have been recorded within prepaid expenses and other on the December

31, 2022 and 2021 consolidated balance sheet.

Private Placement

On July 26, 2021, the Company entered into a

securities purchase agreement in connection with a private placement pursuant to which the Company

issued and sold in a private placement priced at-the-market under Nasdaq rules, (i) 950,000 shares of the Company’s common

stock, par value $ 0.001 per share (ii) warrants to purchase an aggregate of 4,629,630 shares of the Company’s common stock,

with an exercise price of $ 3.30 per share (the “Series A Warrants”) which expire three and one half years from the

earlier of (a) the six month anniversary of the initial exercise date and (b) the date that the registration statement registering

all of the warrant shares underlying the Series A Warrants is declared effective, and (iii) pre-funded warrants to

purchase up to 3,679,630 shares of the Company’s common stock, with an exercise price of $ 0.001 per share (the “Series

B Warrants”) with no expiration (the “Private Placement”), at a purchase price of $2.70 per one share and one

Series A Warrant and $2.699 per one Series B Warrant and one Series A Warrant.

The Private Placement closed on July 28, 2021

resulting in gross proceeds from the Private Placement of approximately $ 12.5 million, before deducting placement agent fees and

offering expenses, and excluding the exercise of any such warrants.

Net proceeds from the Private Placement were $ 11.5

On July 26, 2021, in connection with the Private

Placement, the Company entered into a registration rights agreement pursuant to which the Company filed a registration statement on Form

S-3 to register for resale the shares, as well as the shares of the Company’s common stock issuable upon exercise of the Series

A Warrants and the Series B Warrants, which was declared effective on August 23, 2021.

On July 26, 2021, the Company entered into a securities

purchase agreement in connection with a private placement pursuant to which the Company issued and sold in a private placement priced

at-the-market under Nasdaq rules, (i) 950,000 shares of the Company’s common stock, par value $ 0.001 per share, (ii) warrants to

purchase an aggregate of 4,629,630 shares of the Company’s common stock, with an exercise price of $ 3.30 per share (the “Series

A Warrants”), which expire three and one half years from the earlier of (a) the six month anniversary of the initial exercise date

and (b) the date that the registration statement registering all of the warrant shares underlying the Series A Warrants is declared effective,

and (iii) pre-funded warrants to purchase up to 3,679,630 shares of the Company’s common stock, with an exercise price of $ 0.001

per share (the “Series B Warrants”) with no expiration (the “Private Placement”), at a purchase price of

$2.70 per one share and one Series A Warrant and $2.699 per one Series B Warrant and one Series A Warrant.

The Private Placement closed

on July 28, 2021 resulting in gross proceeds from the Private Placement of approximately $ 12.5 million , before deducting placement agent

fees and offering expenses, and excluding the exercise of any such warrants.

Net proceeds from the Private Placement were $ 11.5 million .

B Warrants were immediately exercisable at a price of $0.001 per share of common stock.

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As a result, no Series B Warrants were outstanding

as of December 31, 2021.

as of December 31, 2022 and 2021.

A Warrants are immediately exercisable at a price of $3.30 per share of common stock.

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the Company’s stock price, a risk free rate of 0.49 %, an expected life of 3.6 years and an expected volatility

No Series A Warrants were exercised during the year ended December 31, 2021.

Registered Direct Offering

On December 10, 2020, the Company entered

into a securities purchase agreement with certain institutional and accredited investors named therein, pursuant to which the

Company agreed to issue and sell, in a registered direct offering, 2,448,980

shares of the Company’s common stock, par value $ 0.001 per share, at an offering price of $ 2.45 per share.

The net proceeds to

the Company from the 2020 offering were approximately $ 5.4 million, after deducting expenses of $ 0.6 million, including the

placement agent’s fees and related offering expenses.

The shares were offered by the Company pursuant to a prospectus

supplement to the Company’s effective shelf registration statement on Form S-3 (Registration No.

333-227572), which was

initially filed with the SEC on September 27, 2018, and was declared effective on October 12, 2018.

The 2020 offering closed on

December 14, 2020.

Authorized Share

On December 4, 2020,

shareholders of the Company voted to approve an amendment to the Company’s Articles of Incorporation to increase the authorized

shares of common stock to 50,000,000 shares (the “Authorized Share Increase”).

The Company filed a Certificate of Amendment

to the Company’s Articles of Incorporation with the Secretary of the State of Nevada to effect the Authorized Share Increase as

of December 4, 2020.

Series A Preferred Stock

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advance notice to the Company, at a rate of twelve shares of Series A Preferred Stock to one share of common stock basis.

Upon 30 days’ prior written notice, the Company may require the holder of any Series A Preferred Stock to convert any or all of

such holder’s Series A Preferred Stock to common stock at a rate of twelve shares of Series A Preferred Stock to one share of common

30 days’ prior written notice, the Company may require the holder of any Series A Preferred Stock to convert any or all of such

holder’s Series A Preferred Stock to common stock at a rate of twelve shares of Series A Preferred Stock to one share of common

The Series A Preferred

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of December 31, 2022 and 2021, there were approximately 1.0 million shares of Series A Preferred Stock issued and outstanding which are

convertible into 80,834 shares of common stock.

There were no Series A Preferred Stock conversions during the years ended December 31,

2021 and 2020.

convertible into approximately 0.1 million shares of common stock.

There were no Series A Preferred Stock conversions during the years

ended December 31, 2022 and 2021.

Series B Preferred Stock

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stock as payment for services.

No collaboration warrants were outstanding as of December 31, 2021.

As of December 31, 2020, collaboration

warrants to purchase 30,307 shares of common stock were outstanding, respectively.

The fair value of these warrants was determined at

each issuance date using the Black-Scholes option pricing model.

The warrants were subject to re-measurement at each reporting period

until the measurement date was reached.

Expense was recognized on a straight-line basis over the expected service period or at the date

of issuance if there is not a service period.

The Company did not recognize warrant expense related to collaboration agreements during

the years ended December 31, 2021 and 2020.

During the years ended December 31, 2021 and 2020, collaboration warrants to purchase 30,307

shares and 2,015 shares expired, respectively.

No collaboration or consulting service warrants were granted or exercised during the years

ended December 31, 2021 and 2020.

No collaboration or consulting service warrants were granted or exercised and all of the outstanding collaboration

warrants expired during the year ended December 31, 2021.

As a result, no collaboration or consulting service warrants were outstanding

as of December 31, 2022 and 2021.

Warrants Related to Financing Arrangements

In addition to the Series A Warrants issued in

connection with the July 2021 Private Placement discussed above, warrants to purchase approximately 31,000 and 0.4 million shares of the

Company’s common stock related to financing arrangements were outstanding as of December 31, 2021 and 2020, respectively, as described

Publicly traded warrants to purchase approximately

23,000 and 29,000 shares of common stock were outstanding as of December 31, 2021 and 2020, respectively.

These warrants have an exercise

price of $ 13.00 per share and expire on July 17, 2024 .

The warrants trade on NASDAQ under the symbol “XBIOW.” The warrants

also provide that if the weighted-average price of common stock on any trading day on or after 30 days after issuance is lower than the

then-applicable exercise price per share, each warrant may be exercised, at the option of the holder, on a cashless basis for one share

of common stock.

Warrants to purchase approximately 6,000 shares and 0.2 million shares of common stock were exercised on a cashless,

In connection with the July 2021 Private Placement,

the Company issued Series A Warrants to purchase an aggregate of 4,629,630 shares as described above.

Series A Warrants were exercised during the years ended December 31, 2022 and 2021.

In addition, the Company has publicly traded warrants

to purchase approximately 21,000 and 23,000 shares of common stock outstanding as of December 31, 2022 and 2021, respectively.

These warrants

have an exercise price of $ 13.00 per share and expire on July 17, 2024 .

The warrants trade on Nasdaq under the symbol “XBIOW.”

The warrants also provide that if the weighted-average price of common stock on any trading day on or after 30 days after issuance is

lower than the then-applicable exercise price per share, each warrant may be exercised, at the option of the holder, on a cashless basis

for one share of common stock.

Warrants to purchase approximately 2,000 shares and 6,000 shares of common stock were exercised on a cashless,

one-for-one basis during the years ended December 31, 2022 and 2021, respectively.

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ended December 31, 2022 and 2021.

Warrants to purchase approximately 8,000 shares

of the Company’s common stock were outstanding as of December 31, 2021 and 2020.

These warrants have an exercise price of $ 2.91

per share and expire on July 3, 2026 .

None of these warrants were exercised or forfeited during the years ended December 31, 2021 and

The Company also has outstanding warrants to purchase

approximately 8,000 shares of the Company’s common stock as of December 31, 2022 and 2021.

These warrants have an exercise price

of $ 2.91 per share and expire on July 3, 2026 .

None of these warrants were exercised or forfeited during the years ended December 31,

2022 and 2021.

Warrants to purchase approximately 129,000 shares

of the Company’s common stock at an exercise price of $ 27.00 per share were outstanding as of December 31, 2020.

These warrants

were exercisable beginning on September 8, 2019 and expire on September 8, 2026 .

On November 15, 2021, the Company entered into a letter

agreement with the holders of these warrants to exchange such warrants for an aggregate of approximately 52,000 shares of the Company’s

common stock.

The Company recorded a gain of approximately $ 41,000 as a result of this exchange as the fair value of the warrants immediately

before the exchange was more than the fair value of the shares issued in the exchange.

As a result, all of these warrants were cancelled

and none were outstanding as of December 31, 2021.

In addition to the financing warrants discussed

above, the Company had additional outstanding debt and equity financing warrants to purchase an aggregate of approximately 0.2 million

shares of common stock as of December 31, 2020.

All of these debt and equity financing warrants expired unexercised during the year ended

December 31, 2021.

As a result, none of these debt and equity warrants were outstanding as of December 31, 2021.

On November 15,

2021, the Company entered into a letter agreement with the holders of these warrants to exchange such warrants for an aggregate of approximately

52,000 shares of the Company’s common stock.

The Company recorded a gain of approximately $ 41,000 as a result of this exchange as

the fair value of the warrants immediately before the exchange was more than the fair value of the shares issued in the exchange.

result, all of these warrants were cancelled and none were outstanding as of December 31, 2022 and 2021.

The Company had additional outstanding debt and

equity financing warrants to purchase an aggregate of approximately 0.2 million shares of common stock as of December 31, 2020.

these debt and equity financing warrants expired unexercised during the year ended December 31, 2021.

As a result, none of these debt

and equity warrants were outstanding as of December 31, 2022 and 2021.

Share-Based Expense

Total share-based expense related to stock options,

RSUs and common stock awards was approximately $ 0.4

million and $ 0.5

million for the years ended December 31, 2021 and 2020, respectively.

Share-based expense is classified in the consolidated statements

of comprehensive loss as follows:

RSUs and common stock awards was approximately $ 0.5 million and $ 0.4 million for the years ended December 31, 2022 and 2021, respectively.

Share-based expense is classified in the consolidated statements of comprehensive loss as follows:

Schedule of Share-Based Compensation Expense

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31, 2022, is as follows:

Non-vested option activity

Schedule of non-vested options

Balance as of January 1, 2022

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outstanding as of December 31, 2022 and 2021, respectively.

The RSUs vested annually over a 3 -year period and had a grant date fair value

of $ 25.37 per share.

No RSUs vested during the year ended December 31, 2021 as all RSUs were fully vested.

During the year ended December

31, 2020, 1,389 RSUs vested.

The RSUs are fully vested and had a grant date fair value of $ 25.37 per share.

No RSUs were granted or expired during the years ended December 31, 2022 and 2021.

Non-Employee Stock

Share-based expense related to stock options granted

to non-employees is recognized as the services are rendered on a straight-line basis.

The Company determined that the fair value of the

stock options is more reliably measurable than the fair value of the services received.

No stock options to purchase shares of common

stock were granted by the Company to non-employees during the years ended December 31, 2021 and 2020.

No non-employee stock options were

exercised during the years ended December 31, 2021 and 2020.

No non-employee stock options vested during the

year ended December 31, 2021.

During the year ended December 31, 2020, 15,500 total stock options vested, with total fair values of approximately

The Company did not recognize any compensation expense related to non-employee options during the year ended December 31, 2021.

For the year ended December 31, 2020 the Company recognized approximately $ 400 of compensation expense related to non-employee options.

Share-based expense related to stock options

granted to non-employees is recognized as the services are rendered on a straight-line basis.

The Company determined that the fair

value of the stock options is more reliably measurable than the fair value of the services received.

No stock options to purchase

shares of common stock were granted by the Company to non-employees during the years ended December 31, 2022 and 2021.

non-employee stock options were exercised during the years ended December 31, 2022 and 2021.

compensation expense related to non-employee options during the years ended December 31, 2022 and December 31, 2021 as all

non-employee stock options were fully vested as of December 31, 2020.

The following is a summary of non-employee stock

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Exercisable as of December 31, 2022

All of the Company’s

non-employee stock option shares as of December 31, 2021 and 2020 were vested.

Common Stock Awards

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in exchange for services provided.

The Company measures the fair value of these awards using the fair value of the services provided

or the fair value of the awards granted, whichever is more reliably measurable.

The Company measures the fair value of these awards using the fair value of the services provided or

the fair value of the awards granted, whichever is more reliably measurable.

The fair value measurement date of these awards is generally

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The fair value of the awards is recognized as services are rendered on a straight-line

A summary of the Company’s common stock awards granted and issued during the years ended December 31, 2021 and 2020 are

A summary of the Company’s common stock awards granted and issued during the years ended December 31, 2022 and 2021 are as

Common stock awards granted and issued

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1, 2020 , the Company entered into a 2 two-year lease for its corporate headquarters in Framingham, Massachusetts.

called for total future minimum rent payments of approximately $ 78,000 at inception and has a termination date of September 30,

The Company does not have options to extend, termination options or material residual value guarantees.

The Company recorded a

right-of-use (“ROU”) asset and corresponding lease liability on the consolidated balance sheet.

The Company recognized a

ROU asset and a lease liability of approximately $ 71,000 during the year ended December 31, 2020.

As the sublease does not provide

an implicit rate, we used our incremental borrowing rate ( 10.2 %) based on the information available at the lease’s

commencement date in determining the present value of lease payments.

called for total future minimum rent payments of approximately $ 78,000 at inception and had a termination date of September 30,

The Company recorded a right-of-use (“ROU”) asset and corresponding lease liability on the consolidated balance

The Company did not have options to extend, termination options or material residual value guarantees.

The lease was not

renewed and the Company entered into a 12-month lease for office space in a shared office location effective October 1, 2022.

this lease has a term of 12 -months at inception, the Company did not apply the provisions of ASU 2016-02 and will account for it as

an operating lease.

As of December 31, 2022, total minimum lease payments on this lease was approximately $ 14,000 .

Supplemental cash flow information and non-cash

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Cash paid for amounts included in the measurement of lease liabilities

Non-cash activity:

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

Supplemental balance sheet information related

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Balance Sheet Classification

December 31, 2021

December 31, 2020

Right-of-use assets - ST

Prepaid expenses and other

Right-of-use assets - LT

Current lease liabilities

Accrued expenses and other current liabilities

Non-current lease liabilities

Other liabilities

The Company did not apply the provisions of ASU

2016-02 to the lease of its office space lease in Miami, Florida.

Effective November 1, 2021 , the Company renewed its Miami office lease

for twelve-months to November 2022.

As this lease has a term of 12 -months at inception, the Company will account for it as an operating

2016-02 to the lease of its office space in Miami, Florida.

Effective November 1, 2022 , the Company renewed its Miami office lease for

twelve-months to November 2023.

As this lease has a term of 12 -months at inception, the Company will account for it as an operating lease.

As of December 31, 2022, total minimum lease payments on this lease was approximately $ 24,000 .

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Please refer to Note 4, Significant Strategic Collaborations,

and Note 6, Indefinite-Lived Intangible Assets and Other Long-Term Assets , for details on arrangements with collaboration partners

that are also related parties.

and Note 7, Other Assets , for details on arrangements with collaboration partners that are also related parties.

During the fourth quarter

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The Pharmsynthez Loan had a term of 15-months and accrued interest at a rate of 10 % per annum.

The Pharmsynthez Loan is guaranteed by all of the operating subsidiaries of Pharmsynthez, including SynBio and AS Kevelt, and is secured

by all of the common and preferred stock of the Company owned by Pharmsynthez and SynBio, as more fully described in Note 4 Significant

Strategic Collaborations .

The Company recognized approximately $ 48,000 and $ 51,000 of interest income related to this loan during

the twelve-months ended December 31, 2021 and 2020, respectively.

The Pharmsynthez Loan is guaranteed by all of the operating subsidiaries of Pharmsynthez, including SynBio and AS Kevelt (“Kevelt”),

and is secured by all of the common and preferred stock of the Company owned by Pharmsynthez and SynBio.

The Company recognized approximately

$ 9,000 and $ 48,000 of interest income related to this loan during the twelve-months ended December 31, 2022 and 2021, respectively.

Effective January 23, 2021, the Company entered

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from August 2021 through January 2022.

Effective August 31, 2021, the Company

entered into a Second Amendment to Loan Agreement and Other Loan Documents with Pharmsynthez, Kevelt and SynBio (the “Second

Pharmsynthez Loan Extension”) to modify the repayment terms and maturity of the Pharmsynthez Loan to July 2022.

the Second Pharmsynthez Loan Extension called for an upfront fee of $12,500 and two (2) equal monthly principal payments of $25,000

on September 30, 2021 and October 31, 2021.

In addition, the Second Pharmsynthez Loan Extension requires monthly interest payments

and the repayment of the remaining principal amount in six (6) equal monthly installments from February 2022 through July 2022.

other terms of the Pharmsynthez Loan, as amended, remain in effect.

All required payments under the Second Pharmsynthez Loan

Extension have been made through January 31, 2022.

In February 2022, the Company received a request from Pharmsynthez to further

extend the principal repayments until September 2022.

The Company agreed to extend the maturity date, although

final terms of such extension are under negotiation.

All other terms of the Pharmsynthez Loan, as amended, are expected to remain

in effect including the continued payment of interest on a monthly basis.

As a result of this request and the current economic uncertainty due to the

conflict between Russia and Ukraine and associated sanctions imposed by the U.S.

and other countries in response, the Company has

classified the loan receivable as long-term as of December 31, 2021.

The Company assessed the collectability of the loan and

determined that the collateral held by the Company, consisting of all of the common and preferred stock of the Company owned by

Pharmsynthez and SynBio, was adequate to support the outstanding principal balance.

As of December 31, 2021, approximately $0.4

million was included in other assets on the consolidated balance sheet.

As of December 31, 2020, approximately $0.5 million was

classified within prepaid expenses and other assets and approximately $0.1 million was classified within other assets on the

consolidated balance sheet.

Effective August 31, 2021, the Company entered

into a Second Amendment to Loan Agreement and Other Loan Documents with Pharmsynthez, Kevelt and SynBio (the “Second Pharmsynthez

Loan Extension”) to modify the repayment terms and maturity of the Pharmsynthez Loan to July 2022.

The terms of the Second Pharmsynthez

Loan Extension called for an upfront fee of $ 12,500 and two (2) equal monthly principal payments of $ 25,000 on September 30, 2021 and

October 31, 2021.

In addition, the Second Pharmsynthez Loan Extension required monthly interest payments and the repayment of the remaining

principal amount in six (6) equal monthly installments from February 2022 through July 2022.

All other terms of the Pharmsynthez Loan,

as amended, remained in effect.

All required payments under the Second Pharmsynthez Loan Extension had been made through January 31, 2022.

In February 2022, the Company received a request from Pharmsynthez to further extend the principal repayments and the maturity of the

The Company entered into a Third Amendment to

Loan Agreement and Other Loan Documents with Pharmsynthez, Kevelt and SynBio dated October 31, 2022 (the “Third Pharmsynthez Loan

Extension”) primarily to modify the repayment terms and maturity of the Pharmsynthez Loan to May 31, 2023.

The terms of the Third

Pharmsynthez Loan Extension require certain payments of principal, interest and fees at the signing of the Third Pharmsynthez Loan Extension.

In addition, the Third Pharmsynthez Loan Extension requires the repayment of the remaining principal amount, plus interest, in seven (7)

monthly installments from November 30, 2022 through May 31, 2023 as well as certain other terms and conditions.

All other terms of the

Pharmsynthez Loan, as amended, remained in effect.

While Pharmsynthez has made certain payments in accordance with the Third Pharmsynthez

Loan Extension, all principal and interest payments required to date under the Third Pharmsynthez Loan Extension have not been made.

a result, the Company has classified the loan receivable as long-term as of December 31, 2022 and 2021.

The Company assessed the collectability

of the loan and determined that the U.S.-based collateral held by the Company, consisting of all of the common and preferred stock of

the Company owned by Pharmsynthez and SynBio, was adequate to support the repayment of the outstanding principal balance.

As of December

31, 2022 and 2021, approximately $ 0.4 million was included in other assets on the consolidated balance sheet.

In April 2022, the Company entered into certain

agreements with CLS as described in Note 5.

One of the Company’s directors, Roger Kornberg, is a member of the scientific advisory

board of CLS.

Kornberg does not own any equity of CLS and is not receiving any economic benefit as a result of the transactions

contemplated by such agreements.

Adam Logal, one of our directors, is Senior Vice President, Chief Financial Officer, Chief Accounting

Officer and Treasurer of OPKO.

Subsequent Events

The Company performed a review of events subsequent

to the balance sheet date through the date the financial statements were issued and determined that, other than the further extension

of the Pharmsynthez Loan discussed in Note 14 Related Party Transactions , there were no such events requiring recognition or disclosure

in the financial statements.

to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring

recognition or disclosure in the financial statements except as described below.

Scripps Research

On March 17, 2023, the Company and Scripps Research

entered into a Research Funding and Option Agreement (the “Agreement”), pursuant to which the Company has agreed to provide

Scripps Research an aggregate of up to $938,000 to fund research relating to advancing the pre-clinical development of the Company’s

DNase oncology platform technology.

The research funding is payable by the Company to Scripps Research on a monthly basis in accordance

with a negotiated budget, which provides for an initial payment of approximately $78,000 on the date of the Agreement and subsequent monthly

payments of approximately $78,000 over a 12-month period.

Under the Agreement, the Company has the option to acquire a worldwide exclusive

license to Scripps Research’s rights in the Technology or Patent Rights (as defined in the Agreement), as well as a non-exclusive,

royalty-free, non-transferrable license to make and use TSRI Technology (as defined in the Agreement) solely for the Company’s internal

research purposes during the performance of the research program contemplated by the Agreement.

Unless earlier terminated, the term of the Agreement

continues from the date of the Agreement for fifteen (15) months.

The Agreement may be terminated by the Company with 30 days advance

written notice to Scripps Research beginning six (6) months after the Effective Date (as defined in the Agreement) or by Scripps Research

if the Company fails to make timely payments due under the Agreement, subject to 30 days’ written notice to cure such nonpayment.

The Agreement may further be terminated by either party in the event of the other party’s uncured failure to perform any obligations

under the Agreement or the bankruptcy of the other party.

Silicon Valley Bank

SVB was closed on March 10, 2023 by the California Department of Financial

Protection and Innovation, which appointed the FDIC as receiver.

The Company maintained cash primarily with SVB.

On March 12, 2023, the

Treasury, Federal Reserve and FDIC rolled out emergency measures to fully protect all depositors of SVB and, on March 13, 2023, we

had full access to our cash on deposit with SVB.

As a result, the Company does not anticipate any losses with respect to such balances .

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data