As of September 30, 2019,March 31, 2020, the aggregate intrinsic value of options vested and outstandingexercisable was $362,219.$543,181. As of September 30, 2019,March 31, 2020, there are 435,50060,500 awards remaining to be issued under the Plan.

Stock Warrants

The following table summarizes the stock warrant activity for the ninethree months ended September 30, 2019:March 31, 2020:

In April 2019, the Company entered into two consulting agreements with consultants to provide services and advice related to company operations, investor relations, marketing, corporate structure, financing and public markets. The initial term of the agreement is eighteen months. As consideration for entering into this agreement the Company issued each consultant 50,000 common stock warrants with a term of five years and an exercise price of $1.75. The warrants vest over an eighteen-month period in equal monthly installments provided that the consultant is providing services on each vesting date. In addition, each consultant will earn $5,000 per month for these services. Payment of the cash portion of the fee accrued until the Company completed its initial public offering.

The common stock warrants were valued at $161,500 and will be recognized over the 18-month vesting term. During the nine months ended September 30, 2019, $49,346 has been recognized as an expense. At September 30, 2019, the Company had $112,154 of unrecognized expenses related to options.

The following table discloses information regarding outstanding and exercisable warrants at September 30, 2019March 31, 2020:

As of September 30, 2019,March 31, 2020, the aggregate intrinsic value of warrants vested and outstandingexercisable was $3,200,070.$3,471,865.

Other

On April 11, 2019, the Company’s board of directors approved a private placement of up to a maximum of 817,500 shares of common stock at $2.00 per share. As of September 30, 2019, 817,500 shares had been sold for proceeds net of fundraising expenses of $1,507,169.

On April 17, 2019, the Company entered into an agreement with a foreign registered broker dealer to assist in fundraising on the Company’s behalf. Fees for these services consisted of a cash fee of 10% of amounts raised and an equity fee of 10% of the amounts raised. The equity fee will be payable in five-year common stock warrants with an exercise price of $2.00 per share. As of September 30, 2019, 63,750 warrants with a fair value of $101,206 were issued under this agreement.

On April 10, 2018, the Company engaged Boustead Securities, LLC (“Boustead”) to act as exclusive financial advisor related to the Company’s IPO. The agreement expired in April 2019 prior to the Company completing its IPO. In addition, an entity related to Boustead is a holder of the Company’s outstanding convertible debt as of September 30, 2019.

On April 11, 2019, the Company entered into a consulting agreement with a consultant to provide services and advice related to social media, investor relations, marketing and public markets. The initial term of the agreement is twelve months. As consideration for entering into this agreement the Company issued a total of 75,000 shares of common stock. The shares will vest over an eight-month period in equal monthly installments provided that the consultant is providing services on each vesting date. If the agreement is terminated prior to full vesting the Company shall have the right to repurchase unvested shares from the consultant for $0.001 per share. During the nine months ended September 30, 2019, $105,430 of expense has been recognized related to this agreement.

On June 3, 2019, the Company engaged The Benchmark Company, LLC (“Benchmark”) to act as exclusive financial advisor related to the Company’s IPO. Benchmark was compensated with a success fee of 7% of the gross offering proceeds, expense allowance of 1% of the gross offering proceeds and warrants equal to 7% of the shares sold with a five-year term and an exercise price equal to the price of the initial public offering. In addition, the Company agreed to reimburse Benchmark for expenses. The agreement can be terminated by either party with 30 days written notice.

Note 64 – Commitments and Contingencies

Executive Employment and Consulting Agreements

On September 1, 2017, the Company entered into an employment agreement with Mr. John Climaco pursuant to which Mr. Climaco agreed to serve as Chief Executive Officer and Director of the Company commencing on such date for an initial term of three years. The agreement provides for an initial annual salary of $150,000. The annual salary increasedshall increase at the completion of the Company’s initial public offering to an annual salary of $300,000. Pursuant to the employment agreement, the Company and Mr. Climaco agreed to issue Mr. Climaco 900,000 shares of common stock in exchange for $900, which purchase was finalized on September 30, 2017. The common shares could have beenmay be reacquired by the Company if employment wasis terminated prior to the initial public offering. After the completion of the initial public offering a portion of the shares may be reacquired by the Company if employment is terminated prior to the expiration of the agreement. Effective March 1, 2019, the employment agreement was amended to increase the annual salary to $186,000 and establish Mr. Climaco as a full-time employee. EffectiveOn June 28, 2019, the employment agreement was amendedcompensation committee of the board of directors agreed to modify Mr. Climaco’s compensation to increase the annual base salary to $440,000 and Mr. Climaco will be entitled to a cash bonus with a target of 55% of his base salary following the initial public offering.

On July 27, 2017,June 28, 2019, the Company entered into a consulting agreementemployment letters with a company owned by Mr. Matthew LourieDrs. Silberman and Picker pursuant to which Mr. Louriethe Company agreed to serve as Chief Financial Officerthe following compensation terms: (i) Dr. Silberman agreed to commit 50% of her time to Company matters in exchange for a base salary, commencing upon the successful closing of the Company on a part time basisIPO, of $175,000; commencing on such dateat the end of 2019, an annual cash bonus target of 28% of her base salary (prorated for an initial term of one year, which will be automatically renewed for additional one-year terms unless either party chooses to cancel the agreement with 30 days-notice. The agreement provides for a monthly compensation of $5,000any partial years); and a one-time rightten-year option to purchase 15,000125,000 shares of common stock at $0.001with an exercise price of $2.00 per share. The common shares may be reacquired by the Company if the agreement is terminated by Mr. Lourie prior to the initial public offering. After the completion of the initial public offering a portion of the shares may be reacquired by the Company if the agreement is terminated by Mr. Lourie prior to two years after the initial public offering. The boardshare vesting annually in four equal installments; and (ii) Dr. Picker agreed to waivecommit 25% of his time to Company matters in exchange for a base salary, commencing upon the reacquisition right on these shares. On November 13, 2019, upon thesuccessful closing of the IPO, Mr. Lourie resigned as Chief Financial Officer but will continueof $91,000; commencing at the end of 2019, an annual cash bonus target of 36% of his base salary (prorated for any partial years); and a ten-year option to provide consulting services based onpurchase 100,000 shares of common stock with an hourly rate.exercise price of $2.00 per share vesting annually in four equal installments.

On September 14, 2019, the Company, entered into an employment agreement with Christopher Downs to serve as its Chief Financial Officer commencing on the closing date of the Company’s IPO, which occurred on November 13, 2019. The initial term of the Employment Agreement will continue for a period of three years. The Employment Agreement provides for an initial annual base salary of $300,000. Mr. Downs may receive an annual bonus (pro rated for 2019), targeted at 35% of base salary. Under the agreement, upon the closing of the IPO, Mr. Downs was granted a ten-year option to purchase 300,000 shares at an exercise price per share equal to the public offering price per share of the shares sold in the IPO. The option vests in four equal installments on each of the succeeding four anniversary dates of the option grant, provided Mr. Downs is employed by the Company on each such vesting date.

WP744 Portfolio (Berubicin)

On November 21, 2017, the Company entered into a Collaboration and Asset Purchase Agreement with Reata Pharmaceuticals, Inc. (“Reata”). Through this agreement, the Company purchased all of Reata’s rights, title, interest and previously conducted research and development results in the chemical compound commonly known as Berubicin. In exchange for these rights, the Company agreed to pay Reata an amount equal to 2.25% of the net sales of Berubicin for a period of 10 years from the Company’s first commercial sale of Berubicin plus $10,000. Reata also agreed to collaborate with the Company on the development of Berubicin, from time to time.

On December 28, 2017, the Company entered into a Technology Rights and Development Agreement with Houston Pharmaceuticals, Inc. (“HPI”),. HPI is affiliated with Dr. Priebe, who controls a related party. Dr. Waldemar Priebe, our founder and largest shareholder, is alsomajority of the founder and a shareholder of HPI.Company’s shares. Pursuant to this agreement, the Company obtained a worldwide exclusive license to the chemical compound commonly known as WP744. In exchange for these rights, the Company agreed to pay consideration to HPI as follows: (i) a royalty of 2% of net sales of any product utilizing WP744 for a period of ten years after the first commercial sale of such; and (ii) $100,000 upon beginning Phase II clinical trials; and (iii) $200,000 upon the approval by the FDA of a New Drug Application for any product utilizing WP744; and (iv) a series of quarterly development payments totaling $750,000 beginning immediately after the Company’s raise of $7,000,000 of investment capital. In addition, the Company issued 200,000 shares of the Company’s common stock valued at $0.045 per share to HPI upon execution of the agreement. OurThe Company’s rights pursuant to the HPI License wereare contingent on us raising at least $7.0 million within 12 months from the effective date of the HPI License, a date which was extended by an additional 12 months by the payment of $40,000. On November 13, 2019, the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the HPI agreement. As of March 31, 2020 and December 31, 2019, $50,000 and $45,833 is payable to HPI related to the above agreements, respectively.

On August 30, 2018, wethe Company entered into a sublicense agreement with WPD Pharmaceuticals, Inc. (“WPD”), a related party based in Poland. Dr. Waldemar Priebe, our founder and largest shareholder, is also the founder and shareholder of WPD.. Pursuant to the agreement, the Company granted WPD an exclusive sublicense, even as to us, for the patent rights wethe Company licensed pursuant to the HPI License within the following countries: Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Moldova, Romania, Bulgaria, Serbia, Macedonia, Albania, Armenia, Azerbaijan, Georgia, Montenegro, Bosnia, Croatia, Slovenia, Slovakia, Czech Republic, Hungary, Chechnya, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Greece, Austria, and Russia. The sublicense agreement provides that WPD must use commercially reasonable development efforts to attempt to develop and commercialize licensed products in the above mentioned territories, which means the expenditure of at least $2.0 million on the development, testing, regulatory approval or commercialization of the licensed products during the three year period immediately following the date of the sublicense agreement. In the event that WPD fails to use commercially reasonable development efforts by the foregoing three-year deadline, we havethe Company has the right to terminate this sublicense agreement. In consideration for the rights granted under the sublicense agreement, to the extent we arethe Company is required to make any payments to HPI pursuant to the HPI License as a result of this sublicense agreement, WPD agreed to advance us such payments, and to pay us a royalty equal to 1% of such payments. WPD is a Polish corporation that is owned by an entity controlled by Dr. Priebe, the Company’s founder and largest shareholder.

On August 31, 2018, the Company entered into a sublicense agreement with Animal Life Sciences, LLC (“ALI”), a related party, pursuant to which wethe Company granted ALI an exclusive sublicense, even as to us, for the patent rights wethe Company licensed pursuant to the HPI License solely for the treatment of cancer in non-human animals through any type of administration. In consideration for the rights granted under the sublicense agreement, ALI agreed to issue us membership interests in ALI equal to 1.52% of the outstanding ALI membership interests. As additional consideration for the rights granted, to the extent we arethe Company is required to make any payments to HPI pursuant to the HPI License as a result of this sublicense agreement, ALI agreed to advance us such payments, and to pay us a royalty equal to 1% of such payments. Dr. Waldemar Priebe, ourthe Company’s founder and largest shareholder, is also the founder and a shareholder of ALI holdswith 38% of theALI’s membership interests of ALI.interests.

OtherWP1244 Portfolio

On January 29, 2019,10, 2020, the Company entered into a consulting agreementPatent and Technology License Agreement (“Agreement”) with The Board of Regents of The University of Texas System, an agency of the State of Texas, on behalf of The University of Texas M. D. Anderson Cancer Center (“UTMDACC”). Pursuant to the Agreement, the Company obtained a royalty-bearing, worldwide, exclusive license to certain intellectual property rights, including patent rights, related to the Company’s recently announced WP1244 drug technology. In consideration, the Company must make payments to UTMDACC including an up-front license fee, annual maintenance fee, milestone payments and royalty payments (including minimum annual royalties) on sales of licensed products developed under the Agreement. The term of the Agreement expires on the last to occur of: (a) the expiration of all patents subject to the Agreement, or (b) fifteen years after execution; provided that UTMDACC has the right to terminate this Agreement in the event that the Company fails to meet certain commercial diligence milestones. The commercial diligence milestones are as follows (i) initiated PC toxicology to support filing of Investigational New Drug Application (“IND”) or New Drug Application (“NDA”) for the Licensed Product within the eighteen (18) month period following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period following the Effective Date and (iii) Commencement of Phase I Study within the five (5) year period following the Effective Date. During the three months ended March 31, 2020, the Company paid $50,000 to UTMDACC related to this agreement.

Anti-Viral Portfolio

On March 20, 2020, the Company entered into a Development Agreement (“Agreement”) with WPD. Pursuant to the Agreement, WPD agreed to use its commercially reasonable efforts in good faith to develop and commercialize certain products (including WP1122) that WPD had previously sublicensed, solely in the field of pharmaceutical drug products for the treatment of any viral infection in humans, with a related party. The agreement isgoal of eventual approval of in certain territories consisting of: Germany, Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Romania, Armenia, Azerbaijan, Georgia, Slovakia, Czech Republic, Hungary, Uzbekistan, Kazakhstan, Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland, Sweden, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland.

Pursuant to the Agreement, the Company agreed to pay WPD the following payments: (i) an upfront payment of $225,000 to WPD (paid in April 2020); and (ii) within thirty days of the verified achievement of the Phase II Milestone, (such verification shall be conducted by an independent third party mutually acceptable to the parties hereto), the Company will make a payment of $775,000 to WPD. WPD agreed to pay the Company a development fee of 50% of the net sales for any products in the above territories; provided that Poland shall not be included as a territory after WPD receives marketing approval for a period of one year, with compensation of $5,000 per month. The consulting services include the full-time services of a technical researcher currently employed by WPD. The Company paid $30,000 for the first six months upon executionproduct in one-half of the agreement andcountries included in the agreed upon territories or upon the payment by WPD to the Company of development fees of $1.0 million. The term of the Agreement will expire on the expiration of the sublicense pursuant to which WPD has accrued $10,000 as a liability as of September 30, 2019.originally sublicensed the products which will occur in 2028.

Note 75 – Subsequent Events

On November 13, 2019,April 6, 2020, the Company closed its initial public offeringBoard of 2,125,000 sharesDirectors approved to grant 125,000 options to one employee of its common stock at a pricethe Company. The options to the public of $4.00 per share.employee vest in four equal annual installments beginning on the first anniversary following issuance. The gross proceeds from the offering, before deducting underwriting discountsoptions have a ten-year term and commissions and other offering expenses payable by the Company, were $8.5 million. In conjunction with the closing the underwriters were issued 148,750 common stock warrants with a term of five years andhave an exercise price of $4.00. The warrants become exercisable$2.20 per share.

On May 1, 2020, the US Securities and Exchange Commission (“SEC”) published Release No. 88802, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), announced a temporary suspension of trading in the Company's securities due to statements made by the Company and others in press releases issued between March 23, 2020 and April 13, 2020 concerning the Company's business, including the status of development of a drug candidate labeled WP1122, the status of testing WP1122's impact on COVID-19, and the ability to expedite regulatory approval of any such treatment. Pursuant to the suspension order, the trading halt was initiated at 9:30 a.m. EDT on May 5,4, 2020 and terminates at 11:59 p.m. EDT on May 15, 2020. In addition,As of the date of this report, the Company grantedhas submitted a petition to terminate the underwriters a 45-day over-allotment optionsuspension, but there is no assurance that the Company will be successful. The Company believes it will be able to purchase updemonstrate the accuracy and adequacy of the Company’s public disclosures, but the SEC may determine to an additional 318,750 shares of common stock atextend the initial price totrading suspension until such time that it believes the public less underwriting discountsinformation in the marketplace about the Company and commissions. the Company’s securities is accurate and adequate. The Company will provide further guidance as appropriate.

On November 20, 2019,May 7, 2020, pursuant to the over-allotment option,WP1244 Portfolio license agreement described above, the underwriters purchased 318,750 sharesCompany entered into a Sponsored Research Agreement with The University of common stock atTexas M. D. Anderson Cancer Center (“UTMDACC”) to perform research relating to novel anticancer agents targeting CNS malignancies. The Company agreed to fund approximately $1.3 million over a two-year period. The Company will pay and record $0.6 million in 2020 related to this agreement in research and development expenses in the initial price toCompany’s Consolidated Statements of Operations. The remainder will be paid and recorded in 2021. The principal investigator for this agreement is Dr. Waldemar Priebe, who controls a majority of the public of $4.00 per share less underwriting discounts and commissions of $89,250.Company’s shares.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See Item 1A. “Risk Factors” of our Form S-1 filed with10-K for the SEC on October 7,year ended December 31, 2019, under "Risk Factors", available on the Security and Exchange Commission's (“SEC”) EDGAR website at www.sec.gov, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements under the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-Q. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under Item 1A. “Risk Factors” as discussed inof our Form S-1 filed with10-K for the SEC on October 7,year ended December 31, 2019 and in other filings made by us from time to time with the SEC.

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this Form 10-Q may describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

·                    the economic and market uncertainty caused by the COVID-19 outbreak;

·                    our ability to obtain additional funding to develop our product candidates;

·                    the need to obtain regulatory approval of our product candidates;

·                    the success of our clinical trials through all phases of clinical development;

·                    compliance with obligations under intellectual property licenses with third parties;

·                    any delays in regulatory review and approval of product candidates in clinical development;

·                    our ability to commercialize our product candidates;

·                    market acceptance of our product candidates;

·                    competition from existing products or new products that may emerge;

·                    potential product liability claims;

·                    our dependency on third-party manufacturers to supply or manufacture our products;

·                    our ability to establish or maintain collaborations, licensing or other arrangements;

·                    our ability and third parties’ abilities to protect intellectual property rights;

·                    our ability to adequately support future growth; and

·                    our ability to attract and retain key personnel to manage our business effectively.

We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q in the case of forward-looking statements contained in this Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, you should not rely on any of the forward-looking statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Overview

We are a clinical pharmaceutical company organized as a Nevada corporation onin July 27, 2017 to focus on the clinical development of anticanceranti-cancer drug candidates for the treatment of brain and central nervous system tumors, which drug candidates are based on intellectual property that we license under a license agreementagreements with HPI and The University of Texas M.D. Anderson Cancer Center and own pursuant to a collaboration and asset purchase agreement with Reata.

Recent Business DevelopmentsWe believe our lead drug candidate, Berubicin, if approved by the FDA, may be a significant discovery in the treatment of glioblastoma. Glioblastoma are tumors that arise from astrocytes, which are star-shaped cells making up the supportive tissue of the brain. These tumors are usually highly malignant (cancerous) because the cells reproduce quickly, and they are supported by a large network of blood vessels. Berubicin is an anthracycline, which is a class of drugs that are among the most powerful chemotherapy drugs known. Based on limited clinical data, we believe Berubicin is the first anthracycline that appears to have crossed the blood brain barrier and target brain cancer cells. While our current focus is solely on the development of Berubicin, we are also in the process of attempting to secure intellectual property rights in additional compounds that may be developed into drugs to treat cancers.

Berubicin was discovered at MD Anderson by Dr. Waldemar Priebe, the founder of the Company. Through a series of transactions, Berubicin was initially licensed to Reata. Reata conducted a Phase I clinical trial on Berubicin but subsequently allowed their IND with the FDA to lapse for strategic reasons. This will require us to obtain a new IND for Berubicin before beginning further clinical trials.

We do not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, we do not have a sales organization.

On November 21, 2017, we entered into a Collaboration and Asset Purchase Agreement with Reata. Through this agreement,Reata (the “Reata Agreement”). Pursuant to the Reata Agreement we purchased all of Reata’s rights, title, interest and previously conducted researchintellectual property and development results indata regarding Berubicin, including all trade secrets, knowhow, confidential information and other intellectual property rights, which we refer to as the chemical compound commonly known as Berubicin. In exchange for these rights, we agreed to pay Reata an amount equal to 2.25% of the net sales of Berubicin for a period of 10 years from our first commercial sale of Berubicin plus $10,000. Reata also agreed to use commercially reasonable efforts, at the Company’s expense, to provide development assistance related to the product and/or product intellectual property.Data.

On December 28, 2017, we entered into an Amended and Restated Patent License Agreement with HPI. Dr. Waldemar Priebe, our founder and largest shareholder, is alsoobtained the founder and a shareholder of HPI. Pursuantrights to this Agreement, we obtained a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as WP744.Berubicin from HPI in an agreement we refer to as the HPI License. HPI is affiliated with Dr. Priebe, who controls a majority of our shares. Under the HPI License we obtained the exclusive right to develop certain patented chemical compounds for use in the treatment of cancer anywhere in the world. In exchange for these rights,the HPI License we agreed to pay consideration to HPI as follows:HPI: (i) development fees of $750,000 over a three-year period beginning after the $7.0 million raise is complete;November 2019; (ii) a 2% royalty on net sales; (iii) a $50,000 per year license fee; (iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of a New Drug Application (“NDA”)an NDA for Berubicin; and (v) 200,000 shares of our common stock. Our rights pursuant tostock.

With the Reata Agreement and the HPI License, were contingent on us raising at least $7.0 millionwe believe we have obtained all rights and expire on December 28, 2019. On November 13, 2019, the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the HPI agreement.

On August 30, 2018 we entered into a sublicense agreement (the “WPD Sublicense”) with WPD Pharmaceuticals, a Polish corporation (“WPD”). Dr. Waldemar Priebe,necessary to develop Berubicin. As stated earlier, it is our founder and largest shareholder, is also the founder and a shareholder of WPD. Pursuantplan to obtain additional intellectual property covering other compounds which, subject to the WPD Sublicense, we granted to WPD a sublicense to researchreceipt of additional financing, may be developed into drugs for brain and develop, including submission of grant proposals and independent funding, apply for centralized, national or other marketing authorization, manufacture, have manufacture, use, export/import, offer to sell and/or sell Berubicin in a limited territory comprised mainly of Eastern European and Central Asian countries. In exchange for this sublicense, we obtained a commitment from WPD to expend at least $2.0 million on the development, testing, regulatory approval or commercialization of Berubicin during the three year period immediately following the effective date of the Agreement. In addition, we will be entitled to a 1% royalty on all commercial sales by WPD of the licensed products in the licensed territory.cancers.

On January 31, 2019, WPD announced that it will receive funding in the amount 22,033,066 PLN (approximately US $5,798,875) for the new drug development as a part of the project “New approach to glioblastoma treatment addressing the critical unmet medical need”. This announcement follows the recommendation by the Polish National Center for Research and Development of a list of projects for co-financing by the European Union, under the Smart Growth Operational Program 2014-2020, Sectoral Programme InnoNeuroPharm, Priority Axis I: Support R&D carried out by enterprises, Measure 1.2 Sectorial programs R&D, which list included WPD’s project “New Approach to Glioblastoma Treatment Addressing the Critical Unmet Medical Need,” (the “WPD Project”) undertaken pursuant to the WPD Sublicense. The main goal of the WPD Project is to implement the first in the world multicenter pediatric phase I clinical trial to determine maximum tolerated dose (MTD) and phase IB and II clinical trials in adults, in order to attempt to confirm the efficacy of Berubicin. The WPD Project will also include preclinical tests to determine the prospective use of Berubicin with temozolomide and with other compounds being developed by WPD as candidates for anticancer drugs.

The WPD Project includes the implementation of the following stages of R&D:

On August 31, 2018, we entered into a sublicense agreement (the “ALI Sublicense”) with Animal Life Sciences, LLC. (“ALI”). Dr. Waldemar Priebe, our founder and largest shareholder, is also the founder and a shareholder of ALI. Pursuant to the ALI Sublicense, we granted to ALI a sublicense to research and develop, including submission of grant proposals and independent funding, apply for centralized, national or other marketing authorization, manufacture, have manufacture, use, export/import, offer to sell and/or sell Berubicin for the treatment of cancers in non-human animals throughout the world. In exchange for this sublicense, we received 1.52% of the membership interests in ALI, as well as a royalty of 1% on all sales of the licensed products by ALI.

On March 6, 2019, we submitted a Pre-IND Meeting Request for Berubicin for Injection for the Treatment of Glioblastoma Multiforme to the US Food and Drug Administration Division of Oncology Products 2 (DOP2), Center for Drug Evaluation and Research. In this letter we outline the past development history of Berubicin and our rationale for the continued investigation of the compound and certain questions, the answers to which will provide us with FDA guidance for our development plans. Among the questions we posed to the FDA are those related to obtaining permission to utilize the supply of Berubicin we acquired from Reata in our planned Phase II clinical trial. We have performed preliminary purity testing and analysis on this material and have verified that it is 99.9% pure. On May 1, 2019, the FDA responded to our request with a letter indicating that our proposal to use a lyophilized drug product in the proposed Phase II clinical trial appears to be reasonable. The FDA also recommended that the existing supply of Berubicin be reprocessed by batch recrystallization, a step we intend to take prior to submission of our IND filing. We estimate that this material would cost a significant amount to reproduce today and thus its usability in future clinical trials represents a potential significant cost savings for us, as well as the potential elimination of the risk and time normally associated with manufacturing complex drugs such as Berubicin.

Recent Developments

On January 10, 2020, we entered into a Patent and Technology License Agreement (the “1244 Agreement”) with The Board of Regents of The University of Texas System, an agency of the State of Texas, on behalf of The University of Texas M. D. Anderson Cancer Center (“UTMDACC”). Pursuant to the 1244 Agreement, we obtained a royalty-bearing, worldwide, exclusive license to certain intellectual property rights, including patent rights, related to our WP1244 drug technology. In consideration, we must make payments to UTMDACC including an up-front license fee, annual maintenance fee, milestone payments and royalty payments (including minimum annual royalties) for sales of licensed products developed under the 1244 Agreement. The term of the 1244 Agreement expires on the last to occur of: (a) the expiration of all patents subject to the 1244 Agreement, or (b) fifteen years after execution; provided that UTMDACC has the right to terminate the 1244 Agreement in the event that we fail to meet certain commercial diligence milestones.

On March 20, 2020, we entered into a Development Agreement with WPD Pharmaceuticals (“WPD”) (the “Development Agreement”), a company founded by Dr. Priebe. Pursuant to the Development Agreement, WPD agreed to use its commercially reasonable efforts in good faith to develop and commercialize certain products that WPD had previously sublicensed, solely in the field of pharmaceutical drug products for the treatment of any viral infection in humans, with a goal of eventual approval of in certain territories consisting of: Germany, Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Romania, Armenia, Azerbaijan, Georgia, Slovakia, Czech Republic, Hungary, Uzbekistan, Kazakhstan, Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland, Sweden, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland.

Pursuant to the Development Agreement, we agreed to pay WPD the following payments: (i) an upfront payment of $225,000 to WPD (paid in April 2020); and (ii) within thirty days of the verified achievement of the Phase II Milestone, (such verification shall be conducted by an independent third party mutually acceptable to the parties hereto), we will make a payment of $775,000 to WPD. WPD agreed to pay us a development fee of 50% of the net sales for any products in the above territories; provided that Poland shall not be included as a territory after WPD receives marketing approval for a product in one-half of the countries included in the agreed upon territories or upon the payment by WPD to us of development fees of $1.0 million. The term of the Development Agreement will expire on the expiration of the sublicense pursuant to which WPD has originally sublicensed the products.

On May 1, 2020, the SEC pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended, ordered the temporary suspension of trading in the securities of Moleculin because of questions regarding the accuracy and adequacy of information in the marketplace about Moleculin and its securities. Pursuant to the suspension order, the suspension commenced at 9:30 a.m. EDT on May 4, 2020 and terminates at 11:59 p.m. EDT on May 15, 2020. As of the date of this report, we have submitted a petition to terminate the suspension, but there is no assurance that we will be successful. We believe we will be able to demonstrate the accuracy and adequacy of our public disclosures, but the SEC may determine to extend the trading suspension until such time that it believes the information in the marketplace about us and our securities is accurate and adequate.

Results of Operations

for the Three months ending September 30,Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019 compared to three months ending September 30, 2018

General and Administrative Expense

General and administrative expense was $420,191$1,355,054 for the three months ended September 30, 2019March 31, 2020 compared to $165,305$146,783 for 2018.the comparable period in 2019. The increase in general and administrative expense, was mainly attributable to an increase of approximately $185,000$153,000 for stock-based compensation, $367,000 in employee compensation and approximately $58,000taxes, $90,000 for investor relations services, $235,000 increase in professional fees.advertising and marketing, $84,000 increase in legal and accounting expenses and $136,500 increase in insurance expenses.

Research and Development Expense

Research and development expense was $278,903$613,077 for the three months ending September 30,ended March 31, 2019 compared to $4,600$48,307 for 2018.the comparable period in 2019. The expenses incurred during the period were related to patent maintenance costdrug manufacturing and contract labor related to the preparation of our Phase II study. We expect to incur increased research and development costs in the future as our product development activities expand.

Interest Expense

Interest expense of $7,561 and $10,632 for the three months ending September 30, 2019 and 2018, respectively, included expense accrued on our notes payable and convertible notes payable issued in 2017 bearing interest at the rate of 10% per annum.

Net Loss

The net loss for the three months ended September 30, 2019 was $706,655 compared to $193,204 for 2018. The change in net loss is attributable to the increased personnel and activity associated with preparing for our IPO and clinical trials.

Nine months ending September 30, 2019 compared to nine months ending September 30, 2018

General and Administrative Expense

General and administrative expense was $939,306 for the nine months ended September 30, 2019 compared to $651,937 for 2018. The increase in general and administrative expense, was mainly attributable to an increase of approximately $333,000 for stock-based compensation, approximately $60,000 for investor relations services and approximately $102,000 related to the write off of previously capitalized deferred issuance cost. These increases were offset by decreased in professional and regulatory fees of approximately $50,000 and approximately $204,000 in costs associated with our Regulation CF fundraising campaign.

Research and Development Expense

Research and development expense was $369,940 for the nine months ending September 30, 2019 compared to $21,267 for 2018. The expenses incurred during the period were related to patent maintenance cost and contract labor related to the preparation of our Phase II study. We expect to incur increased research and development costs in the future as our product development activities expand.

Interest Expense

Interest expense of $22,535 and $17,983 for the nine months ended September 30, 2019 and 2018, respectively, included expense accrued on our notes payable and convertible notes payable issued in 2017 bearing interest at the rate of 10% per annum.

Net Loss

The net loss for the ninethree months ended September 30, 2019March 31, 2020 was $1,349,863$1,968,131 compared to $760,386$211,501 for 2018.the comparable period in 2019. The change in net loss is attributable to the increased personnel and activity associated with preparing for our IPO and clinical trials.trials in 2020.

Liquidity and Capital Resources

On September 30, 2019,March 31, 2020, we had cash of $630,109$5,379,790 and we had a working capital deficit of $7,296. On December 31, 2018 we had cash of $282,736 and a working capital deficit of $644,498.$5,852,496. We have historically funded our operations from proceeds from debt and equity sales.

On November 13, 2019, the Company closed its IPO of 2,125,000 shares of its common stock at a price to the public of $4.00 per share, followed shortly by the exercise of the over-allotment option issued to the underwriter which resulted in an additional 318,750 shares of common stock being issued at the IPO price of $4.00 per share. Management believes We believe that the proceeds from the IPO and itsour cash on hand areis sufficient to fund itsour planned operations beyond the near term.

Our plan of operations is primarily focused on using the proceeds from the IPO to complete aour Phase II clinical trial for Berubicin. We estimate that we will require additional financing beyond the proceeds of the IPO, of approximately $7.0$10.0 million to complete the trial, approximately $2.0 million to support near-term WP1244 preclinical work, plus such additional working capital to fund our operations during the pendency of the trial. The timing and costs of clinical trials are difficult to predict and as such the foregoing estimates may prove to be inaccurate.

We recognize that following the completion of the IPO, we will need to raise additional capital in order to meet our obligations and execute our business plan within the next two years.plan. If we are unable to raise sufficient funds, we will be required to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

Summary of Cash Flows

Cash used in operating activities

Net cash used in operating activities was $1,077,892$1,855,088 and $556,892$82,688 for the ninethree months ended September 30,March 31, 2020 and 2019 and 2018 and mainly included payments made for clinical trial preparation, officer compensation, trial preparation, marketing and professional fees to our consultants, attorneys and accountants for services related to completion of our audit and preparation of our public offering filings.

Cash providedused by financing activities

Net cash providedused by financing activities was $1,430,644$0 and $1,154,975$48,025 for the nine months September 30, 2019 and 2018. We received net proceeds of $1,507,169 from the issuance of common stock during the ninethree months ended September 30,March 31, 2020 and 2019. The amounts used in 2019 are related to the repayment of a loan and deferred issuance cost.

Cash used by investing activities

Since our inceptionNet cash used by investing activities was $6,410 and through September 30, 2019, we have funded our operations through$0 for the salethree months ended March 31, 2020 and issuance of common stock and convertible and non-convertible notes payable. From August 2017 to September 2018, we issued various convertible notes to our lenders.2019. The note proceeds were $386,825. Each note bore interest at 10% per annum and were scheduled to mature on the earlier of 12 to 18 months after issuance or the completion of an initial public offering of our securities. During the year ended December 31, 2018, $86,825 of these convertible notes converted into shares of common stock and common stock warrants.

In March 2018, we commenced an offering pursuant to Regulation CF of the Securities Act pursuant to which we offered units of SAFE securities. The offering ended on June 11, 2018 and we issued $628,558 of SAFE securities. Pursuant to the terms of the SAFE securities, upon completion of our IPO, the purchaser of the SAFE security automatically received a number of shares of our common stock equalamount used in 2020 is related to the purchase amount divided byof furniture and equipment.

Off-balance Sheet Arrangements

As of March 31, 2020, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the productpurpose of (a) 84% multiplied by (b) the public offering price per share in our IPO.facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Purchase Commitments

We do not have any material commitments for capital expenditures, although we are required to pay certain development fees to HPI and WPD as described in the section “- Recent Business Developments”“Overview” above.

On November 13, 2019,JOBS Act Accounting Election

The Jumpstart Our Business Startups Act of 2012, or the Company closed its IPO of 2,125,000 shares of its common stock atJOBS Act, exempts an “emerging growth company” such as us from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a pricecompany can elect to the public of $4.00 per share, followed shortly by the exerciseopt out of the over-allotment optionextended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We elected not to opt out of such extended transition period which means that when a standard is issued toor revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the underwriter which resulted in an additional 318,750 shares of common stock being issuednew or revised standard at the IPO pricetime private companies adopt the new or revised standard. This may make comparison of $4.00 per share. Management believes thatour financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the proceeds fromextended transition period difficult or impossible because of the IPO and its cash on hand are sufficient to fund its planned operations beyond the near term. These factors alleviate the substantial doubt regarding the Company’s ability to continue as a going concern as previously reported.potential differences in accounting standards used.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: long lived assets; intangible assets valuations; and income tax valuations. Management relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially from those estimates.

Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.

Stock-based Compensation – Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.

Research and Development Costs - Research and development costs are expensed as incurred.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting

We maintain a set of disclosure controls and procedures designed to ensure that material information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that material information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures.

Under the supervision, and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness, as of September 30, 2019,March 31, 2020, of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon such evaluation, our CEO and CFO have concluded that, as of September 30, 2019,March 31, 2020, our disclosure controls and procedures were not effective. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation, our management concluded that our internal controls over financial reporting were, and continue to be ineffective, due to material weaknesses in our internal controls due to the lack of sufficient numbers of staff to allow for the proper segregation of dutiesand the lack of formal documentation of our control environment.

In light of the material weakness described above, we continue to perform additional analysis and other post-closing procedures to ensure our financial statements are prepared in accordance with GAAP. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented. Additional experienced personnel will be hired in the accounting and finance department, and appropriate consultants will be retained, and our accounting system will be upgraded as soon as it becomes economically feasible and sustainable.

Other than as described above, there has been no change in our internal control over financial reporting during our most recent calendar quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

From time to time in the ordinary course of our business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable. We have insurance policies covering potential losses where such coverage is cost effective.

We are not at this time involved in any legal proceedings.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in our 2019 Annual Report on Form S-110-K, filed with the SEC, on October 7, 2019, which are incorporated herein by reference. The risks described in the 2019 Annual Report on Form S-1 filed with the SEC on October 7, 201910-K are not the only risks facing our company.Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. ThereExcept as set forth below, there have been no material changes to our risk factors from those set forth in the 2019 Annual Report on Form S-1 filed10-K.

The outbreak of COVID-19 may adversely impact our business, preclinical studies and clinical trials.

In December 2019, a novel strain of coronavirus, SARS-CoV-2, which causes coronavirus disease 2019 (“COVID-19”), surfaced in Wuhan, China. Since then, COVID-19 has spread to multiple countries, including the United States. In response to the spread of COVID-19, we have expanded our virtual work environment by restricting all CNS-related travel through the adoption of additional virtual communications systems, encouraging employees to avoid non-work travel and to take all necessary precautions in accordance with guidance promulgated from the Centers for Disease Control (“CDC”), the White House Coronavirus Task Force, and the World Health Organization (“WHO”).

As a result of the COVID-19 outbreak, or similar pandemics, we have and may in the future experience disruptions that could severely impact our business, preclinical studies and clinical trials, including:

· delays or difficulties in enrolling patients in our clinical trials;

· delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

· increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 and/or being forced to quarantine,

· increased rates of non-compliance with follow-up visits with patients failing to attend their clinical trial follow-up visits or clinics closing during the scheduled visit;

· interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (particularly any procedures that may be deemed non-essential), which may impact the integrity of subject data and clinical study endpoints;

· interruption or delays in the operations of the FDA and comparable foreign regulatory agencies, which may impact approval timelines;

· interruption of, or delays in receiving, drug supply due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems;

· limitations on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness of employees or their families, the desire of employees to avoid contact with large groups of people, an increased reliance on working from home or travel disruptions; and

· general market conditions that could impact our ability to raise future financing that we are dependent upon.

These and other factors arising from the COVID-19 pandemic could worsen in countries that are already afflicted with COVID-19, could continue to spread to additional countries, or could return to countries where the pandemic has been partially contained, each of which could further adversely impact our ability to conduct clinical trials and our business generally, and could have a material adverse impact on our operations and financial condition and results.

In addition, the trading prices for our common stock and other biotechnology companies have been highly volatile as a result of the COVID-19 epidemic. As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms. The COVID-19 outbreak continues to rapidly evolve. The extent to which the outbreak may impact our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and actions to contain the outbreak or treat its impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

The SEC issued an order suspending the trading of our common stock.

On May 1, 2020, the SEC pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended, ordered the temporary suspension of trading in the securities of Moleculin because of questions regarding the accuracy and adequacy of information in the marketplace about Moleculin and its securities. Pursuant to the suspension order, the suspension commenced at 9:30 a.m. EDT on October 7, 2019.May 4, 2020 and terminates at 11:59 p.m. EDT on May 15, 2020. As of the date of this report, we have submitted a petition to terminate the suspension, but there is no assurance that we will be successful. We believe we will be able to demonstrate the accuracy and adequacy of our public disclosures, but the SEC may determine to extend the trading suspension until such time that it believes the information in the marketplace about us and our securities is accurate and adequate.

On April 2019, we commenced a private placement of up to a maximum of 817,500 shares of common stock at $2.00 per share. As of June 30, 2019, 767,500 shares had been sold for proceeds net of fundraising expenses of $1,407,169. In July 2019, we received $100,000 related to the sale of 50,000 shares under this offering. No other unregistered securities were sold or issued during the three months ended September 30, 2019. The issuance of the shares was exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act.None.

On November 13, 2019, we closed our initial public offering of 2,125,000 shares of our common stock at a price to the public of $4.00 per share. On November 20, 2019, we closed the issuance of an additional 318,750 shares of our common stock pursuant to the exercise in full of the underwriters’ over-allotment option in connection with our initial public offering. The gross proceeds from our initial public offering, before deducting underwriting discounts and commissions, was $9.8 million. The offer and sale of all of the shares in the offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-232443), which was declared effective by the SEC on November 7, 2019. The Benchmark Company, LLC and Joseph Gunnar & Co., LLC acted as underwriters for the offering.

There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on November 8, 2019 pursuant to Rule 424(b). No direct or indirect payments were made by us to any of our directors or officers or their associates, to persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries. Pending the uses described, we intend to invest the net proceeds in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

None.

Not applicable.

None.

INDEX TO EXHIBITS

+       Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to supplementally furnish to the SEC, upon its request, an unredacted copy of this exhibit.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CNS PHARMACEUTICALS, INC.