| COMMITMENTS AND CONTINGENCIES | NOTE 9 - COMMITMENTS AND CONTINGENCIES Litigation and Other Loss Contingencies The Company records liabilities
for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources when it is probable that a liability
has been incurred and the amount of the loss can be reasonably estimated. The Company has no liabilities recorded for loss contingencies
as of December 31, 2023. Potential Legal Matters Action Against Former Executive of KBL On September 1, 2021, the
Company initiated legal action in the Chancery Court of Delaware against Dr. Marlene Krauss, the Company’s former Chief Executive
Officer and director (“Dr. Krauss”) and two of her affiliated companies, KBL IV Sponsor, LLC and KBL Healthcare Management,
Inc. (collectively, the “KBL Affiliates”) for, among other things, engaging in unauthorized monetary transfers of the
Company’s assets, non-disclosure of financial liabilities within the Company’s Consolidated Financial Statements, issuing
shares of stock without proper authorization; and improperly allowing stockholder redemptions to take place. The Company’s complaint
alleges causes of action against Dr. Krauss and/or the KBL Affiliates for breach of fiduciary duties, ultra vires acts, unjust enrichment,
negligence and declaratory relief, and seeks compensatory damages in excess of $11,286,570, together with interest, attorneys’ fees
and costs. There can be no assurance that the Company will be successful in its legal actions. On October 5, 2021, Dr. Krauss
and the KBL Affiliates filed an Answer, Counterclaims and Third-Party Complaint (the “Krauss Counterclaims”) against the Company
and twelve individuals who are, or were, directors and/or officers of the Company, i.e., Marc Feldmann, Lawrence Steinman, James N. Woody, Teresa DeLuca,
Frank Knuettel II, Pamela Marrone, Lawrence Gold, Donald A. McGovern, Jr., Russell T. Ray, Richard W. Barker, Shoshana Shendelman and
Ozan Pamir (collectively, the “Third-Party Defendants”). On October 27, 2021, the Company and Ozan Pamir filed
an Answer to the Krauss Counterclaims, and all of the other Third-Party Defendants filed a Motion to Dismiss as to the Third-Party Complaint. On January 28, 2022, in lieu
of filing an opposition to the Motion to Dismiss, Dr. Krauss and the KBL Affiliates filed a Motion for leave to file amended counterclaims
and third-party complaint, and to dismiss six of the current and former directors previously named, i.e., to dismiss Teresa DeLuca,
Frank Knuettel II, Pamela Marrone, Russell T. Ray, Richard W. Barker and Shoshana Shendelman. The Motion was granted by stipulation
and, on February 24, 2022, Dr. Krauss filed an amended Answer, Counterclaims and Third-Party Complaint (the “Amended Counterclaims”).
In essence, the Amended Counterclaims allege (a) that the Company and the remaining Third-Party Defendants breached fiduciary duties to
Dr. Krauss by making alleged misstatements against Dr. Krauss in SEC filings and failing to register her shares in the Company so that
they could be traded, and (b) the Company breached contracts between the Company and Dr. Krauss for registration of such shares, and also
failed to pay to Dr. Krauss the amounts alleged to be owing under a promissory note in the principal amount of $371,178, plus an additional
$300,000 under Dr. Krauss’s resignation agreement. The Amended Counterclaims seek unspecified amounts of monetary damages,
declaratory relief, equitable and injunctive relief, and attorney’s fees and costs. On March 16, 2022, Donald
A. McGovern, Jr. and Lawrence Gold filed a Motion to Dismiss the Amended Counterclaims against them, and the Company and the remaining
Third-Party Defendants filed an Answer to the Amended Counterclaims denying the same. On April 19, 2022, Dr. Krauss stipulated to
dismiss all of her counterclaims and allegations against both Donald A. McGovern, Jr. and Lawrence Gold, thereby mooting their Motion
to Dismiss the Amended Counterclaims against them. The Company and the Third-Party Defendants intend to continue to vigorously defend
against all of the Amended Counterclaims, however, there can be no assurance that they will be successful in the legal defense of such
Amended Counterclaims. In April 2022, Donald A. McGovern, Jr. and Lawrence Gold were dismissed from the lawsuit as parties. Discovery
has not yet commenced in the case. The Company and the Third-Party Defendants intend to continue to vigorously defend against all
the Amended Counterclaims, however, there can be no assurance that they will be successful in the legal defense of such Amended Counterclaims. Action Against the Company by Dr. Krauss On August 19, 2021, Dr. Krauss
initiated legal action in the Chancery Court of Delaware against the Company. The original Complaint sought expedited relief and
made the following two claims: (1) it alleged that the Company is obligated to advance expenses including, attorney’s fees,
to Dr. Krauss for the costs of defending against the SEC and certain Subpoenas served by the SEC on Dr. Krauss; and (2) it alleged that
the Company is also required to reimburse Dr. Krauss for the costs of bringing this lawsuit against the Company. On or about
September 3, 2021, Dr. Krauss filed an Amended and Supplemental Complaint (the “Amended Complaint”) in this action, which
added the further claims that Dr. Krauss is also allegedly entitled to advancement by the Company of her expenses, including attorney’s
fees, for the costs of defending against the Third-Party Complaint in the Tyche Capital LLC action referenced below, and the costs of
defending against the Company’s own Complaint against Dr. Krauss as described above. On or about September 23, 2021,
the Company filed its Answer to the Amended Complaint in which the Company denied each of Dr. Krauss’ claims and further raised
numerous affirmative defenses with respect thereto. On November 15, 2021, Dr.
Krauss filed a Motion for Summary Adjudication as to certain of the issues in the case, which was opposed by the Company. A hearing
on such Motion was held on December 7, 2021, and, on March 7, 2022, the Court issued a decision in the matter denying the Motion
for Summary Adjudication in part and granting it in part. The Court then issued an Order implementing such a decision on March 29,
2022. The parties are now engaging in proceedings set forth in that implementing Order. The Court granted Dr. Krauss’s request
for advancement of some of the legal fees which Dr. Krauss requested in her Motion, and the Company was required to pay a portion of those
fees while it objects to the remaining portion of disputed fees. On October 10, 2022, Dr. Krauss
filed an application to compel the Company to pay the full amount of fees requested by Dr. Krauss for May-July 2022, and to modify the
Court’s Order. The Company filed its Opposition thereto. On January 18, 2023, Dr. Krauss filed a Second Application to compel the Company
to pay the full amount of fees requested by Dr. Krauss for August-October 2022, and to modify the Court’s Order. The Company filed its
Opposition thereto. On May 3, 2023, the Court issued an Order granting both of Dr. Krauss’s Applications for payment of the full amount
of requested attorney’s fees totaling $714,557 for the months of May through October 2022, which were paid in May 2023. Notwithstanding
the Order, such ruling does not constitute any final adjudication as to whether Dr. Krauss will ultimately be entitled to permanently
retain such advancements, and Dr. Krauss has posted an undertaking with the Court affirmatively promising to repay all such amounts if
she is eventually found to be liable for the Company’s and/or the SEC’s claims against her. The Company is seeking payment for a substantial
portion of such amounts from its director and officers’ insurance policy, of which no assurance can be provided that the directors and
officers insurance policy will cover such amounts. Action Against Tyche Capital LLC The Company commenced and
filed an action against defendant Tyche Capital LLC (“Tyche”) in the Supreme Court of New York, in the County of New York,
on April 15, 2021. In its Complaint, the Company alleged claims against Tyche arising out of Tyche’s breach of its written
contractual obligations to the Company as set forth in a “Guarantee and Commitment Agreement” dated July 25, 2019, and a “Term
Sheet for KBL Business Combination With CannBioRex” dated April 10, 2019 (collectively, the “Subject Guarantee”).
The Company alleges in its Complaint that, notwithstanding demand having been made on Tyche to perform its obligations under the Subject
Guarantee, Tyche has failed and refused to do so, and is currently in debt to the Company for such failure in the amount of $6,776,686,
together with interest accruing thereon at the rate set forth in the Subject Guarantee. On or about May 17, 2021,
Tyche responded to the Company’s Complaint by filing an Answer and Counterclaims against the Company alleging that it was the Company,
rather than Tyche, that had breached the Subject Guarantee. Tyche also filed a Third-Party Complaint against six third-party defendants,
including three members of the Company’s management, Sir Marc Feldmann, Dr. James Woody, and Ozan Pamir (collectively, the “Individual
Company Defendants”), claiming that they allegedly breached fiduciary duties to Tyche with regards to the Subject Guarantee. In
that regard, on June 25, 2021, each of the Individual Company Defendants filed a Motion to Dismiss Tyche’s Third-Party Complaint
against them. On November 23, 2021, the
Court granted the Company’s request to issue an Order of attachment against all of Tyche’s shares of the Company’s stock
that had been held in escrow. In so doing, the Court found that the Company had demonstrated a likelihood of success on the merits
of the case based on the facts alleged in the Company’s Complaint. On February 18, 2022, Tyche
filed an Amended Answer, Counterclaims and Third-Party Complaint. On March 22, 2022, the Company and each of the Individual Company
Defendants filed a Motion to Dismiss all of Tyche’s claims. A hearing on such Motion to Dismiss was held on August 25,
2022, and the Court granted the Motion to Dismiss entirely as to each of the Individual Company Defendants, and also as to three of the
four Counterclaims brought against the Company, only leaving Tyche’s declaratory relief claim. On September 9, 2022, Tyche filed
a Notice of Appeal as to the Court’s decision, which has not yet been briefed or adjudicated. On August 26, 2022, Tyche filed a
Motion to vacate or modify the Company’s existing attachment Order against Tyche’s shares of the Company’s stock held
in escrow. The Company has filed its Opposition thereto, and the Court summarily denied such Motion without hearing on January 3, 2023.
Tyche subsequently filed a Notice of Appeal as to that denial and filed its Opening Brief on January 30, 2023. The Company
filed its opposition brief on March 2, 2023, and the matter was taken under submission by the Appellate Court. On May 4, 2023, the Appellate
Court issued its decision unanimously affirming the ruling of the lower Court in the Company’s favor. On January 30, 2023, the Company
filed a Notice of Motion for Summary Judgment and to Dismiss Affirmative Defenses against Tyche. Tyche filed opposition thereto, and hearings
on the Company’s Motion were ultimately held on September 11 and 19, 2023. In its ruling, the Court granted the Company’s Motion, but
referred the question as to the amount of the Company’s damages against Tyche to a special referee. The Court and the parties are now
in the process of appointing the special referee so that a determination can be made as to the amount of the Company’s damages against
Tyche. Tyche filed a Notice of Appeal as the Court’s summary judgment ruling on October 12, 2023. No briefing for the appeal has yet occurred.
The Company intends to continue to vigorously pursue its claims against Tyche, and the Company and the Individual Company Defendants intend
to continue to vigorously defend against all of Tyche’s claims should they be appealed; however, there can be no assurance that they will
be successful in such endeavors. Action Against Ronald Bauer & Samantha
Bauer The Company and two of its
wholly owned subsidiaries, Katexco Pharmaceuticals Corp. and CannBioRex Pharmaceuticals Corp. (collectively, the “Company Plaintiffs”),
initiated legal action against Ronald Bauer and Samantha Bauer, as well as two of their companies, Theseus Capital Ltd. and Astatine Capital
Ltd. (collectively, the “Bauer Defendants”), in the Supreme Court of British Columbia on February 25, 2022. The Company Plaintiffs
are seeking damages against the Bauer Defendants for misappropriated funds and stock shares, unauthorized stock sales, and improper travel
expenses, in the combined sum of at least $4,395,000 CAD [$3,317,408 USD] plus the additional sum of $2,721,036 USD (which relate to the
aforementioned damages). The Bauer Defendants filed
a Response to the Civil Claim Complaint of the Company on May 6, 2022, in which the Bauer Defendants denied the Company’s claims
and set forth their own version of the facts in the matter. Discovery has not yet commenced in the case. There can be no assurance that
the Company Plaintiffs will be successful in this legal action. Declaratory Relief Action Against the Company
by AmTrust International On June 29, 2022, AmTrust
International Underwriters DAC (“AmTrust”), which was the premerger directors’ and officers’ insurance policy
underwriter for KBL, filed a declaratory relief action against the Company in the U.S. District Court for the Northern District
of California (the “Declaratory Relief Action”) seeking declaration of AmTrust’s obligations under the directors’
and officers’ insurance policy. In the Declaratory Relief Action, AmTrust is claiming that as a result of the merger
the Company is no longer the insured under the subject insurance policy, notwithstanding the fact that the fees which the Company
seeks to recover from AmTrust relate to matters occurring prior to the merger. On September 20, 2022, the
Company filed its Answer and Counterclaims against AmTrust for bad faith breach of AmTrust’s insurance coverage obligations to the
Company under the subject directors’ and officers’ insurance policy, and seeking damages of at least $2 million in compensatory
damages, together with applicable punitive damages. In addition, the Company brought a Third-Party Complaint against its excess insurance
carrier, Freedom Specialty Insurance Company (“Freedom”) seeking declaratory relief that Freedom will also be required to
honor its policy coverage as soon as the amount of AmTrust’s insurance coverage obligations to the Company have been exhausted.
On October 25, 2022, AmTrust filed its Answer to the Company’s Counterclaims and, on October 27, 2022, Freedom filed its Answer
to the Third-Party Complaint. On November 22, 2022,
the Company filed a Motion for Summary Adjudication against both AmTrust and Freedom. The Motion was fully briefed and a hearing
was held on March 9, 2023. The standard to prevail on a Motion for Summary Adjudication in the Court is high to prevail and requires
a judge to find that there are no disputed issues of fact so that they can rule on the issues as a matter of law. In this instance the
judge found three major issues could be decided as a matter of law in the Company’s favor and that one issue, the Change in Control exclusion,
requires further discovery. On April 21, 2023, the Court
issued an Order Granting in Part and Denying in Part the Company’s Motion for Partial Summary Judgment. Specifically, the Court granted
summary adjudication in favor of the Company on the following issues: (a) that the Company is, in fact, an insured under both the AmTrust
and Freedom insurance policies; (b) that certain SEC subpoena related expenses for defendants Dr. Marlene Krauss, the Company’s former
Chief Executive Officer and Director, and George Hornig, the former Chairman of the Board, are within the basic scope of coverage under
both the AmTrust and Freedom insurance policies; and (c) that the Insured vs. Insured exclusion relied upon by AmTrust and Freedom is
not applicable to bar any such coverage. The Court also found that
there were issues of disputed facts as to the Change in Control exclusion contained within the policies, which therefore precluded the
Court from granting the remainder of the Company’s requests for summary adjudication as a matter of law. Accordingly, the Court, at this
time, denied the Company’s further requests for summary adjudication and deemed that for the time being, the Change in Control issue is
to be determined at the time of trial, in order to find that the policies (i) provide coverage for the fees which the Company has advanced
and will advance to Dr. Marlene Krauss and George Hornig; (ii) that AmTrust has breached the policy; (iii) that AmTrust must pay such
expenses of the Company; and that, once the AmTrust policy has been exhausted, (iv) Freedom will be obligated to pay such expenses of
the Company pursuant to its policy. On August 4, 2023, the Court
granted the Company’s request to file a second motion for partial summary judgment in this case, this one being on the issue of whether
AmTrust should be required to advance to the Company the defense costs being incurred by Dr. Marlene Krauss and George Hornig during the
pendency of the case. The Motion for Partial Summary Judgment was fully briefed by the parties, and a hearing for such Motion was held
on January 11, 2024. After the matter was taken under submission, on February 12, 2024, the Court granted the Company’s Motion for Partial
Summary Judgment against both AmTrust and Freedom, and ordered as follows: (a) AmTrust is obligated under its insurance policy with the
Company to advance to the Company all defense costs in excess of the deductible that the Company has advanced, or will advance, to Dr.
Krauss and Mr. Hornig in connection with certain SEC Subpoenas, and (b) upon exhaustion of the AmTrust insurance policy, Freedom is obligated
to do the same pursuant to its excess liability insurance policy with the Company. This Order applies throughout the interim of the case,
but does not constitute a final judgment, and both the Company and the two insurers retain their rights to contest all applicable issues
at trial, which is scheduled for May 12, 2025. A final judgment following trial could potentially confirm these obligations of the insurers
or, alternatively, reverse and require the Company to repay all or portions of such advance payments. There is no assurance at this time
as to what the final judgment may entail. The parties have commenced
written discovery proceedings against each other and anticipate that depositions will also occur. The Company intends to continue to vigorously
pursue this matter in order to establish the Company’s entitlement to full and final payment by both AmTrust and Freedom of the subject
advancement expenses of the Company. While the Company continues to believe it has a strong case against both AmTrust and Freedom, there
can be no assurance that the Company will prevail in this action. Stanford License Agreement On May 8, 2018, Katexco entered
into a six-month option agreement (the “Stanford Option”) with Stanford University (“Stanford”) under which Stanford
granted the Company a six-month option to acquire an exclusive license for patents (the “Licensed Patents”) which are related
to biological substances used to treat auto- immune diseases. In consideration for the Stanford Option, the Company paid Stanford $10,000
(the “Option Payment”), which was creditable against the first anniversary license maintenance fee payment. On July 25, 2018, Katexco
exercised their six-month option and entered into an exclusive license agreement (the “Stanford License Agreement”) with Stanford.
Pursuant to the Stanford License Agreement, beginning upon the first anniversary of the effective date, and each anniversary thereafter,
the Company will pay Stanford, in advance, a yearly license maintenance fee of $20,000, on each of the first and second anniversaries
and $40,000 on each subsequent anniversary, which will be expensed on a straight-line basis annually. Furthermore, the Company will
be obligated to make the following milestone payments:
i) $100,000 upon initiation of Phase II trial;
ii) $500,000 upon the first U.S. Food and Drug Administration approval
of a product (the “Licensed Product”) resulting from the Licensed Patents; and
iii) $250,000 upon each new Licensed Product thereafter. The Stanford License Agreement
is cancellable by the Company with 30 days notice. Royalties, calculated at 2.5% of 95% of net product sales, will be payable to Stanford.
Also, the Company will reimburse Stanford for patent expenses as per the agreement. The Company paid Stanford $20,000 for the annual license
maintenance fee that was recorded to prepaid expenses and is being expensed on a straight-line basis over 12 months, which had a zero
balance as of December 31, 2021. During the years ended December 31, 2023 and 2022, the Company recorded patent and license fees of $55,526
and $69,278, respectively, related to the Stanford License Agreement, which is included in general and administrative expenses on the
accompanying statements of operations and comprehensive loss. Oxford University Agreements On September 18, 2020, CBR
Pharma entered into a 3 year research and development agreement (the “3 Year Oxford Agreement”) with Oxford to research and
investigate the mechanisms underlying fibrosis in exchange for aggregate consideration of $1,085,738 (£795,468), of which $109,192
(£80,000) is to be paid 30 days after the project start date and the remaining amount is to be paid in four equal installments of
$244,136 (£178,867) on the six month anniversary and each of the annual anniversaries of the project start date. The agreement can
be terminated by either party upon written notice or if the Company remains in default on any payments due under this agreement for more
than 30 days. During the years ended December 31, 2023 and 2022, the Company recognized $260,752 (£205,857) and $322,767 (£265,156),
respectively, of research and development expenses in connection with the 3 Year Oxford Agreement. On September 21, 2020, CBR
Pharma entered into a 2 year research and development agreement (the “2 Year Oxford Agreement”) with Oxford University for
the clinical development of cannabinoid drugs for the treatment of inflammatory diseases in exchange for aggregate consideration of $625,124
(£458,000), of which $138,917 (£101,778) is to be paid 30 days after the project start date and the remaining amount is to
be paid every 6 months after the project start date in 4 installments, whereby $138,917 (£101,778) is to be paid in the first 3
installments and $69,456 (£50,888) is to be paid as the final installment. The agreement can be terminated by either party upon
written notice or if the Company remains in default on any payments due under this agreement for more than 30 days. During the years ended
December 31, 2023 and 2022, the Company recognized $0 0 As of December 31, 2023 and
2022, the Company owed Oxford no monies for the 2-year agreement. On May 24, 2021, the Company
entered into a research agreement with the University of Oxford (“Oxford” and the “Fifth Oxford Agreement”), pursuant
to which the Company will sponsor work at the University of Oxford to conduct a multi-center, randomized, double blind, parallel group,
feasibility study of anti-TNF injection for the treatment of adults with frozen shoulder during the pain-predominant phase. As a consideration,
the Company agreed to make the following payments to Oxford:
Amount Due
Milestone (excluding VAT)
Upon signing of the Fifth Oxford Agreement £ 70,546
6 months post signing of the Fifth Oxford Agreement £ 70,546
12 months post signing of the Fifth Oxford Agreement £ 70,546
24 months post signing of the Fifth Oxford Agreement £ 70,546 The Company paid the first
milestone of $97,900 (£70,546) on September 3, 2021, which was due upon signing of the Fifth Oxford Agreement, which was recorded
to prepaid expenses and will be amortized over the term of the agreement on a straight-line basis. During the years ended December 31,
2023 and 2022, the Company recorded $74,465 (£58,788) and $271,931 (£223,394), respectively, of research and development expenses
and has prepaid balances of $0 0 On November 2, 2021, the Company
and Oxford University entered into a twenty-year licensed technology agreement of the HMGB1 molecule, which is related to tissue regeneration,
whereby Oxford University agreed to license the technology to the Company for research, development and use of the licensed patents. The
Company agreed to pay Oxford University for past patent costs $66,223 (£49,207), an initial License fee of $13,458 (£10,000),
future royalties based on sales and milestones, and an annual maintenance fee of $4,037 (£3,000). The Company has the option to
terminate the agreement after the third anniversary of the agreement. During the years ended December 31, 2023 and 2022, the Company recorded
$721,362 and $10,581, respectively, of research and development expenses related to this agreement. Due
to the ongoing costs of the HMGB1 research program and the need for the Company to focus its resources on the Company’s primary
platform to treat fibrosis using anti-TNF (tumor necrosis factor), the Board of Directors of the Company elected to terminate the Company’s
HMGB1 license agreement with Oxford on September 22, 2023, and on September 22, 2023, the Company and Oxford entered into a termination
letter, formally terminating the License effective September 22, 2023. The termination letter also clarified amounts that we owed after
termination of the License, including approximately $20,000 in unbilled fees. No material early termination penalties were incurred by
the Company in connection with the termination of the license. Due to recent financial constraints,
the Company has been unable to timely pay amounts due to Oxford, the licensor of the majority of the Company’s licenses and patents
and the Company’s research partner. Oxford alleges that an aggregate of approximately £929,030 is owed from the Company and
one of its subsidiaries to Oxford under the terms of licenses and agreements with Oxford and related parties. The Company is currently
in ongoing discussions with Oxford to reduce that amount and enter into a payment plan with regards to the amounts owed; however, no definitive
terms or extensions have been agreed to date. Oxford has also notified the Company that it is not willing to discuss any new projects
or arrangements until all outstanding invoices have been paid or a payment plan has been agreed to; has engaged a law firm to seek the
collection of the amounts owed, together with interest; and has threatened legal proceedings against us. While we are hopeful that we
can come to mutually agreeable terms regarding a settlement, payment plan, and/or extension, with Oxford, we may not have sufficient funds
to pay amounts due to Oxford in the near term, if at all, and Oxford may take action against us, including filing legal proceedings against
us seeking amounts due and interest, attempting to terminate their relationship with us, and/or filing a wind-up petition against one
of the Company’s subsidiaries in the UK. If Oxford were to take legal action against us or terminate their relationship with us,
we may be forced to scale back our business plan and/or seek bankruptcy protection. We may be subject to litigation and damages for our
failure to pay amounts due to Oxford, and may be forced to pay interest and penalties, which funds we do not currently have. Kennedy License Agreement On September 27, 2019, 180
LP entered into a license agreement (the “Kennedy License Agreement”) with the Kennedy Trust for Rheumatology Research (“Kennedy”)
exclusively in the U.S., Japan, United Kingdom and countries of the EU, for certain licensed patents (the “Kennedy Licensed Patents”),
including the right to grant sublicenses, and the right to research, develop, sell or manufacture any pharmaceutical product (i) whose
research, development, manufacture, use, importation or sale would infringe the Kennedy Licensed Patents absent the license granted under
the Kennedy License Agreement or (ii) containing an antibody that is a fragment of or derived from an antibody whose research, development,
manufacture, use, importation or sale would infringe the Kennedy Licensed Patents absent the license granted under the Kennedy License
Agreement, for all human uses, including the diagnosis, prophylaxis and treatment of diseases and conditions. As a consideration for the
grant of the Kennedy Licensed Patents, 180 LP paid Kennedy an upfront fee of GBP £60,000, (USD $74,000) on November 22, 2019, which
was recognized as an intangible asset for the purchase of the licensed patents and is being amortized over the remaining life of the patents.
180 LP will also pay Kennedy royalties equal to (i) 1% of the net sales for the first annual GBP £1 million (USD $1,283,400) of
net sales, and (ii) 2% of the net sales after the net sales are at or in excess of GBP £1 million, as well as 25% of all sublicense
revenue, provided that the amount of such percentage of sublicense revenue based on amounts which constitute royalties shall not be less
than 1% on the first cumulative GBP £1 million of net sales of the products sold by such sublicenses or their affiliates, and 2%
on that portion of the cumulative net sales of the products sold by such sublicenses or their affiliates in excess of GBP £1 million. The term of the royalties
paid by the Company to Kennedy will expire on the later of (i) the last valid claim of a patent included in the Kennedy Licensed Patents
which covers or claims the exploitation of a product in the applicable country; (ii) the expiration of regulatory exclusivity for the
product in the country; or (iii) 10 years from the first commercial sale of the product in the country. The Kennedy License Agreement
may be terminated without cause by providing a 90-day notice. Petcanna Sub-License Agreement On August 20, 2018, CBR Pharma
entered into a sub-license agreement (the “Sub-License Agreement”) with its wholly owned subsidiary, Petcanna Pharma Corp.
(“Petcanna”), of which the Company’s former Chief Financial Officer is a director. Petcanna is a private company with
one common principal with the Company. Pursuant to the terms of the
Sub-license Agreement, the Company has granted a sub-license on the Licensed Patents to pursue development and commercialization for the
treatment of all veterinary conditions. In consideration, Petcanna will (a) issue 450,000 common shares of its share capital (the
“Petcanna Shares”) 30 days after the effective date; and (b) pay royalties of 1% of net sales. The Company will be issued
85% and Yissum will be issued 15% of the 450,000 common shares of the Petcanna subsidiary. The Petcanna shares are deemed to be founders
shares with no value. The Petcanna shares have not been issued as of December 31, 2023. Operating Leases In February 2016, the FASB
issued an update to the Accounting Standards Codification Topic 842, Leases In accordance with ASC 842,
the Company can elect (by asset class) not to record on the balance sheet a lease whose term is 12 months or less and does not include
a purchase option that the lessee is reasonably certain to exercise. If elected, the lease would be treated like an operating lease under
previous GAAP; payments would be recognized on a straight-line basis over the lease term. When determining whether the lease qualifies
for this election, the Company would include renewal options only if they are considered part of the lease term, i.e., those options the
Company is reasonably certain to exercise. If the lease term increases to more than 12 months, or if it is reasonably certain the Company
will exercise a purchase option, the Company would no longer be able to apply this practical expedient and would apply ASC 842 guidance. Regarding leases (of which
it currently has none), the Company would use the practical expedient for short-term operating leases that are 12 months or less. This
practical expedient has been elected as a package and it would be applied consistently to all leases. Additionally, if the Company’s
leases are considered operating in nature and therefore not reflected on the balance sheet, the Company will recognize the short-term
lease payments as rent/l |
