LIXT US Equity☆

10-K

1

form10-k.htm

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

For the fiscal year ended December 31, 2020

For the transition period from ______ to ______

Commission

file number: 000-51476

LIXTE

BIOTECHNOLOGY HOLDINGS, INC.

(Exact

name of registrant as specified in its charter)

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification Number)

East Setauket, New York 11733

(Address of principal executive offices) (Zip Code)

Registrant’s

telephone number: (631) 830-7092

Securities

registered pursuant to Section 12(b) of the Act: Common Stock, $0.0001 par value.

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, par value $0.0001 per share LIXT The NASDAQ Stock Market, LLC

Indicate

by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No

[X]

Indicate

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant

to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that

the registrant was required to submit such files). Yes [X] No [ ]

Indicate

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting,

or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] Smaller reporting company [X]

Emerging growth company [ ]

If

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate

by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered

public accounting firm that prepared or issued its audit report. [ ]

Indicate

by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes [ ] No [X]

The

aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2020 was approximately $13,193,000.

The

Company had 13,538,259 shares of common stock, $0.0001 par value, issued and outstanding as of March 12, 2021.

Documents

incorporated by reference: None.

TABLE

OF CONTENTS

Page Number

PART I

ITEM 1. BUSINESS 4

ITEM 1A. RISK FACTORS 16

ITEM 1B. UNRESOLVED STAFF COMMENTS 50

ITEM 2. PROPERTIES 50

ITEM 3. LEGAL PROCEEDINGS 50

ITEM 4. MINE SAFETY DISCLOSURES 50

PART II

ITEM 6. SELECTED FINANCIAL DATA 52

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 66

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 66

ITEM 9A. CONTROLS AND PROCEDURES 66

ITEM 9B. OTHER INFORMATION 67

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 68

ITEM 11. EXECUTIVE COMPENSATION 75

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 88

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 89

INDEX TO EXHIBITS 90

SIGNATURES 93

CONSOLIDATED FINANCIAL STATEMENTS F-1

Introductory

Comment

Throughout

this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,” “Lixte,”

the “Company” and the “Registrant” refer to Lixte Biotechnology Holdings, Inc., a Delaware corporation,

and Lixte Biotechnology, Inc., a Delaware corporation, our wholly-owned subsidiary.

FORWARD-LOOKING

STATEMENTS

This

Annual Report on Form 10-K (the “Report”) contains certain forward-looking statements. For example, statements regarding

our financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions

about future product demand, supply, manufacturing, costs, marketing and pricing factors are all forward-looking statements. These

statements are generally accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,”

“potential(ly),” “continue,” “forecast,” “predict,” “plan,” “may,”

“will,” “could,” “would,” “should,” “expect” or the negative of such

terms or other comparable terminology. We believe that the assumptions and expectations reflected in such forward-looking statements

are reasonable, based on information available to us on the date hereof, but we cannot assure you that these assumptions and expectations

will prove to have been correct or that we will take any action that we may presently be planning. However, these forward-looking

statements are inherently subject to known and unknown risks and uncertainties. Actual results or experience may differ materially

from those expected or anticipated in the forward-looking statements. Factors that could cause or contribute to such differences

include, but are not limited to, regulatory policies, competition from other similar businesses, and market and general policies,

competition from other similar businesses, and market and general economic factors. This discussion should be read in conjunction

with the consolidated financial statements and notes thereto included in this Report.

If

one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual

results may vary materially from what we project. Any forward-looking statement you read in this Report reflects our current views

with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations,

results of operations, growth strategy, and liquidity. All subsequent forward-looking statements attributable to us or individuals

acting on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors

identified in this Report, which would cause actual results to differ before making an investment decision. We are under no duty

to update any of these forward-looking statements after the date of this Report or to conform these statements to actual results.

PART

I

ITEM

1. BUSINESS

Company

Overview

We

are a drug discovery company that uses biomarker technology to identify enzyme targets associated with serious common diseases

and then designs novel compounds to attack those targets. Our product pipeline is primarily focused on inhibitors of protein phosphatases,

used alone and in combination with cytotoxic agents and/or x-ray and immune checkpoint blockers, and encompasses two major categories

of compounds at various stages of pre-clinical and clinical development that we believe have broad therapeutic potential not only

for cancer but also for other debilitating and life-threatening diseases.

We

have developed two series of pharmacologically active drugs, the LB-100 series and the LB-200 series. We believe that the mechanism

by which compounds of the LB-100 series affect cancer cell growth is different from cancer agents currently approved for clinical

use. Lead compounds from each series have activity against a broad spectrum of common and rarer human cancers in cell culture

systems. In addition, compounds from both series have anti-cancer activity in animal models of glioblastoma multiforme, neuroblastoma,

and medulloblastoma, all cancers of neural tissue. Lead compounds of the LB-100 series also have activity against melanoma, breast

cancer and sarcoma in animal models and enhance the effectiveness of commonly used anti-cancer drugs in these model systems. The

enhancement of anti-cancer activity of these anti-cancer drugs occurs at doses of LB-100 that do not significantly increase toxicity

in animals. It is therefore hoped that, when combined with standard anti-cancer regimens against many tumor types, our compounds

will improve therapeutic benefit without enhancing toxicity in humans.

Our

activities are subject to significant risks and uncertainties, including the need for additional capital, as described below.

We have not yet commenced any revenue-generating operations, do not have positive cash flows from operations, and are dependent

on periodic infusions of equity capital to fund our operating requirements.

Description

of Business; Research; Clinical Trial Activities

Our

primary focus is developing new treatments for human cancers for which better therapies are urgently needed.

Our

drug discovery process is based on discerning clues to potential new targets for disease treatments reported in the increasingly

large body of literature identifying the molecular variants which characterize human cancers and other non-cancer disorders. We

design drugs for which there are existing data suggesting that they may affect the altered pathways of the cancer cell and may

be given safely to humans. We seek to rapidly arrive at patentable structures through analysis of the literature rather than screening

of thousands of structures for activity against a particular biochemical pathway.

This

approach has led to the development of two classes of drugs for the treatment of cancer, consisting of protein phosphatase inhibitors

(PTase-i), designated by us as the LB-100 series of compounds, and histone deacetylase inhibitors (HDACi), designated by us as

the LB-200 series of compounds.

The

LB-100 series consists of novel structures which have the potential to be first in their class and may be useful in the treatment

of not only several types of cancer but also vascular and metabolic diseases. The LB-200 series contains compounds which have

the potential to be the most effective in its class and may be useful for the treatment of chronic hereditary diseases, such as

Gaucher’s disease, in addition to cancer and neurodegenerative diseases.

We

have demonstrated that lead compounds of both the LB-100 series and the LB-200 are active against a broad spectrum of human cancers

in cell culture and against several types of human cancers in animal models. The research on these compounds was initiated in

2006 under a Cooperative Research and Development Agreement or CRADA with the National Institute of Neurologic Disorders and Stroke

or NINDS of the National Institutes of Health or NIH dated March 22, 2006 that was subsequently extended through a series of amendments

until it terminated on April 1, 2013.

Effective

treatment of brain tumors depends upon the ability of compounds to penetrate a physiological barrier known as the “blood-brain

barrier” which protects the brain from exposure to potentially toxic substances in the blood. Because there is no certainty

that our compounds will be active against tumors confined to the brain, the LB-100 compounds have been studied against a variety

of common and rare cancer types and have been shown to potentiate the activity of standard anti-cancer drugs in animal models

of breast and pancreatic cancer, melanoma, pheochromocytomas and sarcomas. Because the LB-100 compounds appear to exert their

ability to improve the effectiveness of different forms of chemotherapy and radiation therapy by inhibiting a process upon which

most, if not all, cancer cell types depend on to survive treatment, we believe the LB-100 series of compounds may be useful against

most, if not all, cancer types.

The

LB-200 series consists of histone deacetylase inhibitors (HDACi). Many pharmaceutical companies are also developing drugs of this

type, and at least two companies have HDACi approved for clinical use, in both cases for the treatment of a type of lymphoma.

Despite this significant competition, we have demonstrated that our HDACi have broad activity against many cancer types, have

neuroprotective activity, and have anti-fungal activity. In addition, these compounds have low toxicity. LB-200 has not yet advanced

to the clinical stage and would require additional capital to fund further development. Accordingly, because of our focus on the

clinical development of LB-100 and analogs for cancer therapy as described below in more detail, we have decided not to actively

pursue the pre-clinical development of our LB-200 series of compounds at this time. At this time, we intend to only maintain our

composition of matter patents for LB-200.

Collaborations

with leading academic research centers in the United States, Europe and Asia have established the breadth of activity of LB-100

in pre-clinical models of several major cancers. There is considerable scientific interest in LB-100 because it exerts its activity

by a novel mechanism and is the first of its type to be evaluated so broadly in multiple animal models of cancer and now in human

beings. LB-100 is one of a series of serine/threonine phosphatase (s/t ptase) inhibitors designed by us. The s/t ptases are ubiquitous

enzymes that regulate many cell signaling networks important to cell growth, division and death. The s/t ptases have long been

appreciated as potentially important targets for anti-cancer drugs. However, because of the multi- functionality of these enzymes,

it had been widely held that pharmacologic inhibitors of s/t ptases would be too toxic to allow their development as anti-cancer

treatments, but we have shown that this is not the case. LB-100 was well-tolerated at doses associated with objective regression

(significant tumor shrinkage) and/or the arresting of tumor progression in patients with progressive cancers.

Pre-clinical

studies showed that LB-100 itself inhibits a spectrum of human cancers and that combined with standard cytotoxic drugs and/or

radiation, LB-100 potentiates their effectiveness against hematologic and solid tumor cancers without enhancing toxicity. Given

at very low doses in animal models of cancer, LB-100 markedly increased the effectiveness of a PD-1 blocker, one of the widely

used new immunotherapy drugs. This finding raises the possibility that LB-100 may further expand the value of the expanding field

of cancer immunotherapy.

We

completed a Phase 1 clinical trial of LB-100 to evaluate its safety that showed it is associated with antitumor activity in humans

at doses that are readily tolerable. Responses included objective regression (tumor shrinkage) lasting for 11 months of a pancreatic

cancer and cessation of growth (stabilization of disease) for 4 months or more of 9 other progressive solid tumors out of 20 patients

who had measurable disease. As Phase 1 clinical trials are fundamentally designed to determine safety of a new compound in humans,

we were encouraged by these results. The next step is to demonstrate in Phase 2 clinical trials the efficacy of LB-100 in one

or more specific tumor types, against which the compound has well documented activity in pre-clinical models.

Clinical

Trial Agreements

Moffitt

Cancer Center Clinical Trial Research Agreement

Effective

August 20, 2018, we entered into a Clinical Trial Research Agreement with the Moffitt Cancer Center and Research Institute Hospital

Inc., Tampa, Florida, effective for a term of five years, unless terminated earlier by us pursuant to 30 days written notice.

Pursuant to the Clinical Trial Research Agreement, Moffitt agreed to conduct and manage a Phase 1b/2 clinical trial to evaluate

the therapeutic benefit of our lead anti-cancer clinical compound LB-100 to be administered intravenously in patients with low

or intermediate-1 risk myelodysplastic syndrome (MDS).

In

November 2018, we received approval from the FDA for our Investigational New Drug Application to conduct a Phase 1b/2 clinical

trial to evaluate the therapeutic benefit of LB-100 in patients with low and intermediate-1 risk MDS who have failed or are intolerant

of standard treatment. Patients with MDS, although usually older, are generally well except for severe anemia requiring frequent

blood transfusions. This Phase 1b/2 clinical trial utilizes LB-100 as a single agent in the treatment of patients with low and

intermediate-1 risk MDS, including patients with del(5q) myelodysplastic syndrome (del5qMDS) failing first line therapy. The bone

marrow cells of patients with del5qMDS are deficient in PP2A by virtue of an acquired mutation and are especially vulnerable to

further inhibition of PP2A by LB-100. The clinical trial began at a single site in April 2019 and the first patient was entered

into the clinical trial in July 2019. A total enrollment of 41 patients is planned. An interim analysis will be done after the

first 21 patients are entered. If there are 3 or more responders but fewer than 7, an additional 20 patients will be entered.

If at any point there are 7 or more responders, this will be sufficient evidence to support continued development of LB-100 for

the treatment of low and intermediate-1 risk MDS. Recruitment has been slow and the Covid-19 pandemic has further reduced recruitment

of patients into the protocol. At the current rate of accrual, the trial would be completed over a period of four years from its

initiation, with the final analysis and reporting expected by July 2023. However, with additional funds, our objective would be

to add two additional MDS centers to the Phase 2 portion of the study to accelerate patient accrual, with the goal of an earlier

reporting date.

Spanish

Sarcoma Group Collaboration Agreement

As

of July 31, 2019, we entered into a Collaboration Agreement for an Investigator-Initiated Clinical Trial with the Spanish Sarcoma

Group (Grupo Español de Investigación en Sarcomas or “GEIS”), Madrid, Spain, to carry out a study entitled

“Randomized phase I/II trial of LB-100 plus doxorubicin vs. doxorubicin alone in first line of advanced soft tissue sarcoma”.

The purpose of this clinical trial is to obtain information about the efficacy and safety of LB-100 combined with doxorubicin

in soft tissue sarcomas. Doxorubicin is the global standard for initial treatment of advanced soft tissue sarcomas (“ASTS”).

Doxorubicin alone has been the mainstay of first line treatment of ASTS for over 40 years, with little therapeutic gain from adding

cytotoxic compounds to or substituting other cytotoxic compounds for doxorubicin. In animal models, LB-100 consistently enhances

the anti-tumor activity of doxorubicin without apparent increases in toxicity.

GEIS

has a network of referral centers in Spain and across Europe that have an impressive track record of efficiently conducting innovative

studies in ASTS. We agreed to provide GEIS with a supply of LB-100 to be utilized in the conduct of this clinical trial, as well

as to provide funding for the clinical trial. The goal was to enter the first patient during the quarter ending December 31, 2020,

with approximately 150 patients to be enrolled over two years. Advanced sarcoma is a very aggressive disease. The design of the

study assumes a median progression free survival (PFS, no evidence of disease progression or death from any cause) of 4.5 months

in the doxorubicin arm and an alternative median PFS of 7.5 months in the doxorubicin plus LB-100 arm to demonstrate a statistically

significant decrease in relative risk of progression or death by adding LB-100. There is a planned interim analysis of the primary

endpoint when about half of the 102 events required for final analysis is reached.

In

order to manufacture a new inventory supply of LB-100 for the GEIS clinical trial, the Company has engaged a number of vendors

to carry out the multiple tasks needed to make and gain approval of a new clinical product for investigational study in Spain.

These tasks include the synthesis under good manufacturing practices (GMP) of the active pharmacologic ingredient (API), with

documentation of each of the steps involved by an independent auditor. The API is then transferred to a vendor that prepares the

clinical drug product (DP), also under GMP conditions documented by an independent auditor. The DP is then sent to a vendor to

test for purity and sterility, provide appropriate labels, store the drug, and distribute the drug to the clinical centers for

use in the clinical trials. A formal application documenting all steps taken to prepare the DP for clinical use must be submitted

to the appropriate regulatory authorities for review and approval before being used in a clinical trial.

The

Company estimates that this program to provide new inventory of the DP for the Spanish sarcoma study, and potentially for subsequent

multiple trials within the European Union, will cost from $600,000 and $700,000. The Company’s remaining aggregate commitments

under this program, less amounts previously paid to date, totaled approximately $300,000 as of December 31, 2020, which are expected

to be incurred through June 30, 2021.

We

had previously expected that this clinical trial would commence during the quarter ended June 30, 2020. However, during July 2020,

the Spanish regulatory authority advised us that although it had approved the scientific and ethical basis of the protocol, it

required that we manufacture new inventory of LB-100 under current Spanish pharmaceutical manufacturing standards. These regulations

were adopted subsequent to the production of our existing LB-100 inventory. We are in the process of obtaining approval from the

European Union regulatory authorities for new inventory of LB-100. Accordingly, the clinical trial is now estimated to begin during

the quarter ending September 30, 2021 and to be completed by the quarter ending September 30, 2024. The interim analysis is expected

in June 2023 and could indicate either inferiority or superiority of LB-100 plus doxorubicin as compared to doxorubicin alone.

A positive study would have the potential to change the standard therapy for this disease after four decades of failure to improve

the marginal benefit of doxorubicin alone.

NCI

Pharmacologic Study

During

the fourth quarter of 2019, the National Cancer Institute (NCI) enrolled the first two patients of a planned eight patient pharmacologic

study of the ability of LB-100 to enter the brain and penetrate recurrent brain tumors in patients where surgical removal of the

cancers is indicated (clinical trials registry NCT03027388). This study is being conducted and funded by the NCI under a Cooperative

Research and Development Agreement with us; additional information will be reported by us as it is provided by the NCI.

Primary

malignant brain tumors (gliomas) are very challenging to treat. Radiation combined with the chemotherapeutic drug temozolomide

has been the mainstay of therapy of the most aggressive gliomas (glioblastoma multiforme or GBM) for decades, with some further

benefit gained by the addition of one or more anti-cancer drugs, but without major advances in overall survival for the majority

of patients. In animal models of GBM, our novel protein phosphatase inhibitor LB-100 enhances the effectiveness of radiation,

temozolomide chemotherapy treatments and immunotherapy, raising the possibility that LB-100 may improve outcomes of standard GBM

treatment in the clinic. Although LB-100 has proven safe in patients at doses associated with apparent anti-tumor activity against

several human cancers arising outside the brain, the ability of LB-100 to penetrate tumor tissue arising in the brain is not known.

Unfortunately, many drugs potentially useful for GBM treatment do not enter the brain in amounts necessary for anti-cancer action.

The

NCI study is designed to determine the extent to which LB-100 enters recurrent malignant gliomas. Patients having surgery to remove

one or more tumors will receive one dose of LB-100 prior to surgery and have blood and tumor tissue analyzed to determine the

amount of LB-100 present and to determine whether the cells in the tumors show the biochemical changes expected to be present

if LB-100 reaches its molecular target. The goal is to obtain data in up to eight patients. As a result of the innovative design

of the NCI study, data from so few patients should be sufficient to provide a sound rationale for conducting a larger clinical

trial to determine the effectiveness of adding LB-100 to the standard treatment regimen for GBMs.

Clinical

Research Support Agreement with City of Hope National Medical Center

Effective

January 18, 2021, we executed a Clinical Research Support Agreement with City of Hope National Medical Center, an NCI-designated

comprehensive cancer center, and City of Hope Medical Foundation (collectively, “City of Hope”), to carry out a Phase

1b clinical trial of our first-in-class protein phosphatase inhibitor, LB-100, combined with a standard regimen for untreated,

extensive stage-disease small cell lung cancer (ED-SCLC). LB-100 will be given in combination with carboplatin, etoposide and

atezolizumab, an FDA approved but marginally effective regimen, to previously untreated ED-SCLC patients. The dose of LB-100 will

be escalated with the standard fixed doses of the 3-drug regimen to reach a recommended Phase 2 dose (RP2D). Patient entry will

be expanded so that a total of 12 patients will be evaluable at the RP2D to confirm the safety of the LB-100 combination and to

look for potential therapeutic activity as assessed by objective response rate, duration of overall response, progression-free-survival

and overall survival.

Small

cell lung cancer (SCLC) comprises about 15% of all lung cancers worldwide with about 30,000 new cases annually in the United States.

Although this aggressive neuroendocrine tumor is more sensitive to cytotoxic chemotherapy and radiation than the most common type

of lung cancer, SCLC patients soon relapse after treatment and have a dismal prognosis. Recently, the addition of an immune blocker,

atezolizumab, to carboplatin plus etoposide showed for the first time in 20 years modest improvement in median progression- free

survival from 4.3 to 5.2 months and in median overall survival from 10.3 to 12.3 months. In animal models, LB-100 significantly

enhances the antitumor activity of cytotoxic chemotherapy in general and in particular the combination of carboplatin and etoposide

against SCLC cells without enhancing toxicity.

If

the extensive preclinical data showing LB-100 increases the effectiveness of chemotherapy applies to patients, the Company believes

evidence of therapeutic benefit of LB-100 added to standard treatment of this very aggressive cancer could be revealed even in

this early clinical trial paving the way for a randomized Phase 3 study. Perhaps even more important to the Company’s clinical

development of LB-100, evidence in this clinical trial of potentiation of cytotoxic therapy without an increase in toxicity simply

by the addition of LB-100 would justify clinical investigation of the added benefit of adding LB-100 to many widely used “standard”

cytotoxic regimens for a host of cancers.

The

Company estimates that from 24 to 30 patients will be needed to complete this clinical trial, at an estimated cost of $2,500,000

to $2,900,000, respectively. If a significant number of patients fail during the dose-escalation process, an increase of up to

12 patients would likely be necessary, at an estimated additional cost of $800,000.

The

clinical trial is planned to commence during the quarter ending June 30, 2021, with patient accrual expected to take approximately

18 to 24 months to conduct. If LB-100 does potentiate the benefit of the standard regimen, some evidence could be noted at 12

months into the clinical trial, but an assessment of potential increased activity is likely to require at least 24 months.

Clinical

Trial Monitoring Agreements

On

September 12, 2018, we finalized a work order agreement with Theradex Systems, Inc. (“Theradex”), an international

contract research organization, to monitor the Phase 1b/2 clinical trial being managed and conducted by Moffitt. The clinical

trial began in April 2019 and the first patient was entered into the clinical trial in July 2019. At the current rate of accrual,

the trial would be completed over a period of four years from its initiation, with the final analysis and reporting expected by

July 2023. Costs under this work order agreement are estimated to be approximately $954,000, with such payments expected to be

divided approximately 94% to Theradex for services and approximately 6% for payments for pass-through costs.

On

February 5, 2021, we signed a new work order agreement with Theradex to monitor the City of Hope investigator-initiated clinical

trial in small cell lung cancer in accordance with FDA requirements for oversight by the sponsoring party. The Company estimates

that it will incur approximately $335,000 of costs under this work order agreement through September 30, 2023.

Patent

and License Agreements

On

March 22, 2018, we entered into a Patent Assignment and Exploitation Agreement with INSERM TRANSFERT SA, acting as delegatee of

the French National Institute of Health and Medical Research, for the assignment to us of INSERM’S interest in United States

Patent No. 9,833,450 entitled “Oxabicyloheptanes and Oxabicycloheptenes for the Treatment of Depressive and Stress Disorders,”

which was filed with the United States Patent and Trademark Office in the name of INSERM and us as co-owners on February 19, 2016

and granted on December 5, 2017, and related patent applications and filings. INSERM is a French public institution dedicated

to research in the field of health and medicine that had previously entered into a Material Transfer Agreement with us to allow

INSERM to conduct research on our proprietary compound LB-100 and/or its analogs for the treatment of depressive or stress disorders

in humans. Pursuant to the Agreement, we have agreed to make certain milestone payments to INSERM aggregating up to $1,750,000

upon achievement of development milestones and up to $6,500,000 upon achievement of commercial milestones. We also agreed to pay

INSERM certain commercial royalties on net sales of products attributed to the Agreement. The exploitation of this patent for

the treatment of depressive and stress disorders in humans will require substantial additional capital and/or a joint venture

or other type of business arrangement with a pharmaceutical company with substantially greater capital and business resources

than those available to us. As there can be no assurances that we will be able to obtain the capital or business resources necessary

to focus on the exploitation of this patent, it is uncertain when we may reach any of the development or commercialization milestones

under the Agreement, if at all.

Effective

April 2, 2018, we entered into a consulting agreement for a term of two years with Liberi Life Sciences Consultancy BV, located

in The Netherlands, for consulting and advisory services with respect to sales and licensing, as well as the procurement of investors

in China, Japan and South Korea. The Consulting Agreement was extended for an additional period of one year. The Consulting Agreement

provided for the payment of a fixed, one-time retainer of EURO 15,000 (US $18,348), which was paid on April 5, 2018, and 2.5%

of the net payments received by us from sales of products or licensing activities arising directly and exclusively from leads

generated by the advisor during the term of the Consulting Agreement, and any investors introduced to us by the advisor that results

in an investment in us during the term of the Consulting Agreement.

Effective

August 20, 2018, we entered into an Exclusive License Agreement with Moffitt. Pursuant to the License Agreement, Moffitt granted

us an exclusive license under certain patents owned by Moffitt relating to the treatment of MDS and a non-exclusive license under

inventions, concepts, processes, information, data, know-how, research results, clinical data, and the like (other than the Licensed

Patents) necessary or useful for the practice of any claim under the Licensed Patents or the use, development, manufacture or

sale of any product for the treatment of MDS which would otherwise infringe a valid claim under the Licensed Patents. We were

obligated to pay Moffitt a non-refundable license issue fee of $25,000 after the first patient is entered into a Phase 1b/2 clinical

trial to be managed and conducted by Moffitt. The clinical trial began at a single site in April 2019 and the first patient was

entered into the clinical trial in July 2019. We are also obligated to pay Moffitt an annual license maintenance fee of $25,000

commencing on the first anniversary of the Effective Date and every anniversary thereafter until we commence payment of minimum

royalty payments. We have also agreed to pay non-refundable milestone payments to Moffitt, which cannot be credited against earned

royalties payable by us, based on reaching various clinical and commercial milestones aggregating $1,897,000, subject to reduction

by 40% under certain circumstances relating to the status of Valid Claims, as such term is defined in the License Agreement. As

of December 31, 2020, no milestones had yet been attained.

We

will be obligated to pay Moffitt earned royalties of 4% on worldwide cumulative net sales of royalty-bearing products, subject

to reduction to 2% under certain circumstances, on a quarterly basis, with a minimum royalty payment of $50,000 in the first four

years after sales commence, and $100,000 in year five and each year thereafter, subject to reduction by 40% under certain circumstances

relating to the status of Valid Claims, as such term is defined in the License Agreement. Our obligation to pay earned royalties

under the License Agreement commences on the date of the first sale of a royalty-bearing product, and shall automatically expire

on a country-by-country basis on the date on which the last valid claim of the Licensed Patents expires, lapses or is declared

invalid, and the obligation to pay any earned royalties under the License Agreement shall terminate on the date on which the last

valid claim of the Licensed Patents expires, lapses, or is declared to be invalid in all countries.

Other

Significant Agreements and Contracts

Effective

October 18, 2013, we entered into a Materials Cooperative Research and Development Agreement (M-CRADA) with the NINDS of the NIH

for a term of four years. The Surgical Neurology Branch of NINDS is conducting research characterizing a variety of compounds

proprietary to us and is examining the potential of the compounds for anti-cancer activity, reducing neurological deficit due

to ischemia and brain injury, and stabilizing catalytic function of misfolded proteins for inborn brain diseases. Under an M-CRADA,

a party provides research material, in this case proprietary compounds from our pipeline, for study by scientists at NIH. The

exchange of material was for research only and did not imply any endorsement of the material on the part of either party. Under

the M-CRADA, the NIH grants a collaborator an exclusive option to elect an exclusive or non-exclusive commercialization license.

On

December 24, 2013, we entered into an agreement with NDA Consulting Corp. for consultation and advice in the field of oncology

research and drug development. As part of the agreement, NDA also agreed to cause its president, Dr. Daniel D. Von Hoff, M.D.,

to become a member of our Scientific Advisory Committee. The term of the agreement was for one year and provided for a quarterly

cash fee of $4,000. The agreement has been automatically renewed for additional one-year terms on its anniversary date since 2014.

Consulting and advisory fees charged to operations pursuant to this agreement for the years ended December 31, 2020 and 2019 were

$16,000 and $16,000, respectively.

Effective

September 14, 2015, we entered into a Collaboration Agreement with BioPharmaWorks, pursuant to which we engaged BioPharmaWorks

to perform certain services for us. Those services include, among other things: (a) assisting us to (i) commercialize our products

and strengthen our patent portfolio, (ii) identify large pharmaceutical companies with potential interest in our product pipeline,

and (iii) prepare and deliver presentations concerning our products; (b) at the request of the Board of Directors, serving as

backup management for up to three months should our Chief Executive Officer and scientific leader be temporarily unable to carry

out his duties; (c) being available for consultation in drug discovery and development; and (d) identifying providers and overseeing

tasks relating to clinical use and commercialization of new compounds.

BioPharmaWorks

was founded in 2015 by former Pfizer scientists with extensive multi-disciplinary research and development and drug development

experience. The Collaboration Agreement was for an initial term of two years and automatically renews for subsequent annual periods

unless terminated by a party not less than 60 days prior to the expiration of the applicable period. In connection with the Collaboration

Agreement, we agreed to pay BioPharmaWorks a monthly fee of $10,000, subject to our right to pay a negotiated hourly rate in lieu

of the monthly payment and agreed to issue to BioPharmaWorks certain equity-based compensation. In November 2016, it was mutually

agreed to suspend services and payments under the Collaboration Agreement, without extending its term, for the period from November

1, 2016 through March 31, 2017. The Collaboration Agreement resumed as scheduled on April 1, 2017. In April 2018, it was again

mutually agreed to suspend services and payments under the Collaboration Agreement, without extending its term, for the period

from February 1, 2018 through the September 13, 2019 anniversary date. In February 2019, we subsequently agreed to resume the

Collaboration Agreement with BioPharmaWorks effective March 1, 2019, and the Collaboration Agreement is currently in effect.

Effective

August 12, 2020, we entered into a Master Service Agreement with the Foundation for Angelman Syndrome Therapy (FAST) to collaborate

in supporting preclinical studies of the potential benefit of LB-100 in a mouse model of Angelman Syndrome (AS) as reported in

The Proceedings of The National Academy of Science (Wang et al, June 3, 2019). The preclinical studies will take place at The

University of California - Davis under the direction of Dr. David Segal, an internationally recognized leader in AS research.

If the preclinical studies confirm that LB-100 reduces AS signs in rodent models, we have agreed to enter into discussions with

FAST with respect to possible collaborations to most efficiently assess the benefit of LB-100 in patients with AS, which is a

rare disease affecting an estimated one out of 12,000 to one out of 20,000 persons in the United States. The genetic cause of

AS, reduced function of a specific maternal gene called Ube3, has been understood for some time, but the molecular abnormality

resulting from the genetic lesion has now been shown to be increased concentrations of protein phosphatase 2A (PP2A), a molecular

target of our investigational compound, LB-100. We agreed to provide FAST with a supply of LB-100 to be utilized in the conduct

of this study, which is initially expected to be completed within three years. Conditioned on FAST’s completion of this

study, we have agreed to pay FAST five percent (5%) of all proceeds, as defined in the Master Service Agreement, received by us,

up to a maximum of $250,000 from the exploitation of the study results.

Future

Clinical Trials

Presented

below are clinical trials that we would currently consider conducting over the next few years. We expect that these potential

clinical trials, and the details thereof, will change over time as we obtain more clinical information on LB-100. Our ability

to conduct these clinical trials is subject to the availability of sufficient additional financial resources.

(1)

A Phase 1b/2 randomized clinical trial in previously untreated patients with small cell lung cancer (SCLC) comparing the standard

regimen, carboplatin/etoposide/atezolizumab, with and without LB-100. The malignant cells of this uniformly rapidly fatal lung

cancer are genetically sensitive to PP2A inhibition (by a process termed “synthetic lethality”).

(2)

A Phase 1b/2 randomized clinical trial in patients adding LB-100 to PD-1 inhibitors against one of several cancers in which PD-1

inhibitors alone have definite but modest activity.

The

Phase 1b/2 clinical trials in SCLC and in LB-100 plus a PD-1 inhibitor in yet to be specified solid tumors will require additional

financing in excess of that currently budgeted to fund a Phase 1b/2 clinical trial in myelodysplastic syndrome that began in April

2019, and/or partnering relationships with other pharmaceutical companies, in order for us to undertake and complete such clinical

studies. We are in discussions with various parties with respect to the financing of these clinical studies, although there can

be no assurances that we will be able to obtain such financing and/or partnering relationships on acceptable terms or at all.

Our longer-term objective is to secure one or more strategic partnerships with pharmaceutical companies with major programs in

cancer research and drug development.

Intellectual

Property

Our

products will ultimately be based on our intellectual property and are expected to be covered by our patents. These patents now

cover sole rights to the composition and synthesis of the LB-100 and LB-200 series of drugs, with coverage of the LB-200 series

now limited to those patents issued in the United States. Joint patent applications with the NIH have been filed for the treatment

of glioblastoma multiforme, medulloblastoma, and neuroblastoma. We have also filed patent applications for the use of certain

homologs of both series of drugs for the treatment of neurodegenerative diseases such as Alzheimer’s Disease and Parkinson’s

Disease, Amyotrophic Lateral Sclerosis (ALS, or Lou Gehrig’s Disease), stroke, and traumatic brain injury, and patent applications

for the use of homologs of the LB-200 series for the treatment of serious systemic fungal infections and for the treatment of

common fungal infections of the skin and nails.

Patent

applications for the LB-100 series (oxabicycloheptanes and heptenes) and the LB-200 series (histone deacetylase inhibitors; HDACi)

have been filed in the United States and internationally under the Patent Cooperation Treaty. Patents for composition of matter

and for several uses of both the LB-100 series and the LB-200 series have been issued in the United States, Mexico, Australia,

Japan, China, Hong Kong, Canada, Germany, France, the United Kingdom, and by the European Patent Office and the Eurasian Patent

Office. For the LB-200 series, only patents issued in the United States are being maintained.

Our

portfolio of domestic and international patents issued is summarized below. We have additional domestic and international patents

pending.

LB-100

Series of Compounds - Phosphatase Inhibitors – Composition and Use in Cancer Treatment

Oxabicycloheptanes

and Oxabicycloheptenes, Their Preparation and Use

LB-100

and LB-200 Series of Compounds – Use in Treatment of Multiple CNS Diseases

Neuroprotective

Agents for the Prevention and Treatment of Neurodegenerative Diseases

Oxabicycloheptanes

and Oxabicycloheptenes for the Treatment of Reperfusion Injury

Oxabicycloheptanes

and Oxabicycloheptenes for the Treatment of Depressive and Stress Disorders

HDAC

Inhibitors

Oxabicycloheptanes

and Oxabicycloheptenes for the Treatment of Diabetes

Formulations

of Oxabicycloheptanes and Oxabicycloheptenes

Process

of Synthesizing 3-(4-Methylpiperazine-1-Carbonyl)-7-Oxabicyclo [2.2.1] Heptane-2-Carboxylic Acid

Protein

Phosphatase 2A Inhibitors for Treating Myelodysplastic Syndromes

Oxabicycloheptane

Prodrugs

The

Market

Anti-Cancer

Drugs

We

have developed two series of pharmacologically active drugs, the LB-100 series and the LB-200 series. We believe that the mechanism

by which compounds of the LB-100 series affect cancer cell growth is different from cancer agents currently approved for clinical

use. Lead compounds from each series have activity against a broad spectrum of common and rarer human cancers in cell culture

systems. In addition, compounds from both series have anti-cancer activity in animal models of glioblastoma multiforme, neuroblastoma,

and medulloblastoma, all cancers of neural tissue. Lead compounds of the LB-100 series also have activity against melanoma, breast

cancer and sarcoma in animal models and enhance the effectiveness of commonly used anti-cancer drugs in these model systems. The

enhancement of anti-cancer activity of these anti-cancer drugs occurs at doses of LB-100 that do not significantly increase toxicity

in animals. It is therefore hoped that when combined with standard anti-cancer regimens against many tumor types, our compounds

will improve therapeutic benefit without enhancing toxicity in humans.

Marketing

Plan

Our

primary goal to date has been to take our primary compound, LB-100, through Phase 2 clinical trials. Because of the novelty and

spectrum of activity of LB-100, we believe it is reasonably likely we may find a partner in the pharmaceutical industry with interest

in this compound at some stage of its clinical development. However, we would prefer to delay the partnering/licensing decision

until the potential value of our products are augmented by demonstrating there is no impediment to clinical evaluation and a therapeutic

dose level is determined in clinical trials. Demonstration of clinical usefulness would be expected to substantially increase

the value of our product.

Research

and Development

Further

development of lead compounds in addition to LB-100 will require pharmacokinetic/ pharmacodynamic characterization (i.e., how

long a drug persists in the blood and how long the drug is active at the intended target) and large animal toxicologic evaluation

under conditions meeting FDA requirements. Most anti-cancer drugs fail in development because of unacceptable toxicity. However,

by analogy with mechanistically related compounds, there is good reason to believe that lead compounds in addition to LB-100 will

be able to be given to humans safely by routes and at doses resulting in concentration of drug producing anti-cancer activity

in animal model systems.

One

of our most valuable resources is our scientific team, a coalition of various experts brought together through contracts and other

collaborative arrangements. The team has expertise in cancer biology, proteomics (cancer biomarkers), medicinal and synthetic

chemistry, pharmacology, clinical oncology and drug evaluation. In a relatively short period of time and at low cost, this group

has developed lead compounds of two different classes of drugs that are positioned for development as new treatments for several

types of cancer.

Product

Development

We

are subject to FDA regulations as it conducts clinical trials. Additionally, any product for which we obtain marketing approval,

along with the manufacturing processes, post-approval clinical data and promotional activities for such product, will be subject

to continual review and periodic inspections by the FDA and other regulatory bodies. Even if regulatory approval of a product

is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or contain

requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Later discovery

of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity

or frequency, manufacturer or manufacturing processes, or failure to comply with regulatory requirements, may result in restrictions

on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recall, fines,

suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties.

Competition

The

life sciences industry is highly competitive and subject to rapid and profound technological change. Our present and potential

competitors include major pharmaceutical companies, as well as specialized biotechnology and life sciences firms in the United

States and in other countries. Most of these companies have considerably greater financial, technical and marketing resources

than we do. Additionally, mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more

resources being concentrated in our competitors. Our existing or prospective competitors may develop processes or products that

are more effective than ours or be more effective at implementing their technologies to develop commercial products faster. Our

competitors may succeed in obtaining patent protection and/or receiving regulatory approval for commercializing products before

we do. Developments by our competitors may render our product candidates obsolete or non-competitive.

We

also experience competition from universities and other research institutions, and we are likely to compete with others in acquiring

technology from those sources. There can be no assurance that other organizations will not develop technologies with significant

advantages over those that we are seeking to develop. Any such development could harm our business.

We

compete with universities and other research institutions engaged in research in these areas. Many of our competitors have greater

technical and financial resources than we do.

Our

ability to compete successfully is based on numerous factors, including:

If

we are unable to distinguish our products from competing products, or if competing products reach the market first, we may be

unable to compete successfully with current or future competitors.

Employees

and Human Capital Resources

As

of March 12, 2021, we had three full-time employees and one part-time employee. We consider our relationship with our employees

to be good. Our future performance depends significantly upon the continued service of our key personnel and our ability to attract

highly skilled employees. We provide our employees with opportunities for equity ownership.

Facilities

As

of March 12, 2021, we do not operate any facilities, but contract out research and development activities, drug production, and

drug storage to various commercial laboratories, drug manufacturers and storage facilities.

Government