Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36304

Phio Pharmaceuticals Corp.

(Exact name of registrant as specified in its charter)

Delaware	45-3215903
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

257 Simarano Drive, Suite 101, Marlborough, MA 01752

(Address of principal executive office) (Zip code)

Registrant’s telephone number, including area code: (508) 767-3861

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value, $0.0001 per share	PHIO	The Nasdaq Capital Market

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 ☒ 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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	☒
		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 financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2023, Phio Pharmaceuticals Corp. had 2,443,447 shares of common stock, $0.0001 par value, outstanding.

PHIO PHARMACEUTICALS CORP.

FORM 10-Q — QUARTER ENDED SEPTEMBER 30, 2023

INDEX

Part No.	Item No.	Description	Page No.

I		FINANCIAL INFORMATION	3

	1	Financial Statements (Unaudited)	3
		Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	4
		Condensed Consolidated Statements of Preferred Stock and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	5
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	6
		Notes to Condensed Consolidated Financial Statements	7
	2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	3	Quantitative and Qualitative Disclosures About Market Risk	20
	4	Controls and Procedures	20

II		OTHER INFORMATION	21

	1	Legal Proceedings	21
	1A	Risk Factors	21
	2	Unregistered Sales of Equity Securities and Use of Proceeds	21
	3	Defaults Upon Senior Securities	21
	4	Mine Safety Disclosures	21
	5	Other Information	21
	6	Exhibits	22

Signatures			23

PART I — FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

(Unaudited)


	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash	$	8,407		$	11,781
Restricted cash		50			50
Prepaid expenses and other current assets		871			615
Total current assets		9,328			12,446
Right of use asset		66			161
Property and equipment, net		142			183
Other assets		3			24
Total assets	$	9,539		$	12,814
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	173		$	779
Accrued expenses		2,083			1,025
Lease liability		70			135
Total current liabilities		2,326			1,939
Lease liability, net of current portion		–			35
Total liabilities		2,326			1,974
Commitments and contingencies (Note 2)		–			–
Series D Preferred Stock, $0.0001 par value; 0 and 1 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022, respectively		–			2
Stockholders’ equity:
Common stock, $0.0001 par value, 100,000,000 shares authorized; 2,307,385 and 1,139,024 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		–			–
Additional paid-in capital		144,524			139,218
Accumulated deficit		(137,311	)		(128,380	)
Total stockholders’ equity		7,213			10,838
Total liabilities, preferred stock and stockholders’ equity	$	9,539		$	12,814

The accompanying notes are an integral part of these condensed consolidated financial statements.

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	1,808		$	2,508		$	5,325		$	5,398
General and administrative		968			1,063			3,600			3,334
Total operating expenses		2,776			3,571			8,925			8,732
Operating loss		(2,776	)		(3,571	)		(8,925	)		(8,732	)
Total other expense, net		(4	)		(5	)		(6	)		(17	)
Net loss	$	(2,780	)	$	(3,576	)	$	(8,931	)	$	(8,749	)
Net loss per common share:
Basic and diluted	$	(1.14	)	$	(3.14	)	$	(5.03	)	$	(7.70	)
Weighted average number of common shares outstanding
Basic and diluted		2,440,164			1,138,571			1,775,043			1,135,744

The accompanying notes are an integral part of these condensed consolidated financial statements.

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF

PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share data)

(Unaudited)


For the Three and Nine Months	Series D Preferred Stock						Common Stock					Additional Paid-in			Accumulated
Ended September 30, 2023	Shares			Amount			Shares			Amount		Capital			Deficit			Total
Balance at December 31, 2022		1		$	2			1,139,024		$	–	$	139,218		$	(128,380	)	$	10,838
Cash-in-lieu of fractional shares for reverse stock split		–			–			(1,706	)		–		(11	)		–			(11	)
Redemption of preferred stock		(1	)		(2	)		–			–		–			–			–
Issuance of common stock upon vesting of restricted stock units		–			–			18,080			–		–			–			–
Shares withheld for payroll taxes		–			–			(4,816	)		–		(25	)		–			(25	)
Stock-based compensation expense		–			–			–			–		111			–			111
Net loss		–			–			–			–		–			(3,602	)		(3,602	)
Balance at March 31, 2023		–		$	–			1,150,582		$	–	$	139,293		$	(131,982	)	$	7,311
Issuance of common stock and warrants, net of offering costs		–			–			659,629			–		5,048			–			5,048
Issuance of common stock upon exercise of warrants		–			–			175,000			–		–			–			–
Stock-based compensation expense		–			–			–			–		94			–			94
Net loss		–			–			–			–		–			(2,549	)		(2,549	)
Balance at June 30, 2023		–		$	–			1,985,211		$	–	$	144,435		$	(134,531	)	$	9,904
Issuance of common stock upon exercise of warrants		–			–			320,290			–		–			–			–
Issuance of common stock upon vesting of restricted stock units		–			–			2,000			–		–			–			–
Shares withheld for payroll taxes		–			–			(116	)		–		–			–			–
Stock-based compensation expense		–			–			–			–		89			–			89
Net loss		–			–			–			–		–			(2,780	)		(2,780	)
Balance at September 30, 2023		–		$	–			2,307,385		$	–	$	144,524		$	(137,311	)	$	7,213

For the Three and Nine Months Ended	Series D Preferred Stock				Common Stock					Additional Paid-in			Accumulated
September 30, 2022	Shares		Amount		Shares			Amount		Capital			Deficit			Total
Balance at December 31, 2021		–	$	–		1,127,917		$	–	$	138,832		$	(116,900	)	$	21,932
Issuance of common stock upon vesting of restricted stock units		–		–		12,943			–		–			–			–
Shares withheld for payroll taxes		–		–		(2,633	)		–		(25	)		–			(25	)
Stock-based compensation expense		–		–		–			–		186			–			186
Net loss		–		–		–			–		–			(2,642	)		(2,642	)
Balance at March 31, 2022		–	$	–		1,138,227		$	–	$	138,993		$	(119,542	)	$	19,451
Stock-based compensation expense		–		–		–			–		83			–			83
Net loss		–		–		–			–		–			(2,531	)		(2,531	)
Balance at June 30, 2022		–	$	–		1,138,227		$	–	$	139,076		$	(122,073	)	$	17,003
Issuance of common stock upon vesting of restricted stock units		–		–		1,064			–		–			–			–
Shares withheld for payroll taxes		–		–		(293	)		–		(3	)		–			(3	)
Stock-based compensation expense		–		–		–			–		103			–			103
Net loss		–		–		–			–		–			(3,576	)		(3,576	)
Balance at September 30, 2022		–	$	–		1,138,998		$	–	$	139,176		$	(125,649	)	$	13,527

The accompanying notes are an integral part of these condensed consolidated financial statements.

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)
(Unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(8,931	)	$	(8,749	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		46			56
Amortization of right of use asset		95			91
Stock-based compensation		294			372
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(235	)		(220	)
Accounts payable		(606	)		260
Accrued expenses		1,058			(1,141	)
Lease liability		(100	)		(93	)
Net cash used in operating activities		(8,379	)		(9,424	)
Cash flows from investing activities:
Cash paid for purchase of property and equipment		(5	)		(121	)
Net cash used in investing activities		(5	)		(121	)
Cash flows from financing activities:
Net proceeds from the issuance of common stock and warrants		5,048			–
Cash in lieu of fractional shares for reverse stock split		(11	)		–
Redemption of Series D preferred stock		(2	)		–
Payment of taxes on net share settlements of restricted stock units		(25	)		(28	)
Net cash provided by (used in) financing activities		5,010			(28	)
Net decrease in cash and restricted cash		(3,374	)		(9,573	)
Cash and restricted cash at the beginning of period		11,831			24,107
Cash and restricted cash at the end of period	$	8,457		$	14,534

The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets to the totals above:


	September 30,
	2023		2022
Cash	$	8,407	$	14,484
Restricted cash		50		50
Cash and restricted cash	$	8,457	$	14,534

The accompanying notes are an integral part of these condensed consolidated financial statements.

PHIO PHARMACEUTICALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Significant Accounting Policies

Nature of Operations

Phio Pharmaceuticals Corp. (“Phio” or the “Company”) is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi technology platform is designed to make immune cells more effective in killing tumor cells. Phio is developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems.

Effective January 26, 2023, the Company completed a 1-for-12 reverse stock split of the Company’s outstanding common stock, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. The reverse stock split did not reduce the number of authorized shares of the Company’s common or preferred stock. All share and per share amounts have been adjusted to give effect to the reverse stock split.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Phio and its wholly-owned subsidiary, MirImmune, LLC. All material intercompany accounts have been eliminated in consolidation.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures that are included in the Company’s annual consolidated financial statements, but that are not required for interim reporting purposes, have been condensed or omitted. Additionally, the Company made adjustments to the outstanding stock option and unvested restricted stock unit balances, and related per share amounts, at December 31, 2022 to reflect final revisions to those outstanding equity awards as a result of the Company’s reverse stock split. The adjustment had no effect on the Company’s condensed consolidated financial statements. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2023 (the “2022 Form 10-K”). In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas subject to significant estimates and judgement include, among others, those related to the fair value of equity awards, accruals for research and development expenses, useful lives of property and equipment, and the valuation allowance on the Company’s deferred tax assets. On an ongoing basis the Company evaluates its estimates and bases its estimates on historical experience and other relevant assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from these estimates.

Liquidity

The Company has reported recurring losses from operations since inception and expects to continue to have negative cash flows from operations for the foreseeable future. Historically, the Company’s primary source of funding has been from sales of its securities. The Company’s ability to continue to fund its operations is dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity, or strategic opportunities, in order to maintain its operations. This is dependent on a number of factors, including the market demand or liquidity of the Company’s common stock. There is no guarantee that debt, additional equity or other funding will be available to the Company on acceptable terms, or at all. If the Company fails to obtain additional funding when needed, the Company would be forced to scale back or terminate its operations or seek to merge with or to be acquired by another company.

The Company has limited cash resources, has reported recurring losses from operations since inception and has not yet received product revenues. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern, and the Company’s current cash resources may not provide sufficient capital to fund operations for at least the next 12 months from the date of the release of these financial statements. The continuation of the Company as a going concern depends upon the Company’s ability to raise additional capital through an equity offering, debt offering and/or strategic opportunity to fund its operations. There can be no assurance that the Company will be successful in accomplishing these plans in order to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies disclosed in the Company’s 2022 Form 10-K.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements that have significantly impacted this Quarterly Report on Form 10-Q, beyond those disclosed in the Company’s 2022 Form 10-K.

2. Collaboration Agreement

AgonOx, Inc. (“AgonOx”)

In March 2021, the Company entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx, a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer. Under the Clinical Co-Development Agreement, Phio and AgonOx are working to develop a T cell-based therapy using the Company’s lead product candidate, PH-762, and AgonOx’s “double positive” tumor infiltrating lymphocytes (“DP TIL”) technology. Per the terms of the Clinical Co-Development Agreement, the Company committed to provide financial support for development costs of up to $4,000,000 to AgonOx for expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors.

The Company will recognize its share of costs arising from research and development activities performed by AgonOx in the Company’s financial statements in the period AgonOx incurs such expense. Phio will be entitled to certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology.

The Company recognized approximately $606,000 and $906,000 of expense in connection with these efforts during the three and nine months ended September 30, 2023, respectively. No expense under the Clinical Co-Development Agreement was recognized during the three and nine months ended September 30, 2022.

There is approximately $2,964,000 of remaining costs not yet incurred under the Clinical Co-Development Agreement as of September 30, 2023.

3. Fair Value of Financial Instruments

The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurement,” for the Company’s financial assets and liabilities that are re-measured and reported at fair value each reporting period and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

At September 30, 2023 and December 31, 2022, the Company categorized its restricted cash of $50,000 as Level 2 hierarchy. Restricted cash consists of certificates of deposit held by financial institutions as collateral for the Company’s corporate credit cards. The assets classified as Level 2 have initially been valued at the applicable transaction price and subsequently valued, at the end of each reporting period, using other market observable data. Observable market data points include quoted prices, interest rates, reportable trades and other industry and economic events.

The carrying amounts of cash, accounts payable and accrued expenses of the Company approximate their fair values due to their short-term nature.

4. Leases

In January 2019, the Company amended the lease for its corporate headquarters and primary research facility in Marlborough, Massachusetts. The lease is for a total of 7,581 square feet of office and laboratory space and will expire on March 31, 2024. The lease contains an option to terminate after two or three years by providing advance written notice of termination pursuant to the terms of the agreement. The exercise of this option was not determined to be reasonably certain and thus was not included in the lease liability on the Company’s balance sheet. The Company did not exercise its option to terminate in either the second or third year of the lease, and the option to terminate has expired. Additionally, the lease agreement did not contain information to determine the borrowing rate implicit in the lease. As such, the Company calculated its incremental borrowing rate based on what the Company would have to pay to borrow on a collateralized basis over the lease term for an amount equal to the remaining lease payments, taking into consideration such assumptions as, but not limited to, the U.S. treasury yield rate and borrowing rates from a creditworthy financial institution using the above lease factors.

The lease for the Company’s corporate headquarters represents all of its significant lease obligations. The amounts reported in the condensed consolidated balance sheets for the operating lease in which the Company is the lessee and other supplemental balance sheet information is set forth as follows, in thousands, except the lease term (number of years) and discount rate:


	September 30, 2023		December 31, 2022
Assets
Right of use asset	$	66	$	161
Liabilities
Lease liability, current		70		135
Lease liability, non-current		–		35
Total lease liability	$	70	$	170
Lease Term and Discount Rate
Weighted average remaining lease term		0.50		1.25
Weighted average discount rate		4.70%		4.70%

Operating lease costs included in operating expense were $33,000 for the three months ended September 30, 2023 and 2022. Operating lease costs included in operating expense were $99,000 for the nine months ended September 30, 2023 and 2022.

Cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated balance sheets and included within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements of cash flows was $35,000 and $34,000 for the three months ended September 30, 2023 and 2022, respectively. Cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated balance sheets and included within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements of cash flow was $104,000 and $101,000 for the nine months ended September 30, 2023 and 2022, respectively.

Future lease payments for the Company’s non-cancellable operating lease and a reconciliation to the carrying amount of the operating lease liability presented in the condensed consolidated balance sheet as of September 30, 2023 is as follows, in thousands:


2023 (remaining)	$	36
2024		35
Total lease payments		71
Less: Imputed interest		(1	)
Total operating lease liability	$	70

5. Preferred Stock

The Company has authorized up to 10,000,000 shares of preferred stock, $0.0001 par value per share, for issuance. The Company’s Board of Directors (the “Board’) is authorized under the Company’s Amended and Restated Articles of Incorporation (as may be amended and/or restated from time to time, the “Amended Certificate”), to designate the authorized preferred stock into one or more series and to fix and determine such rights, preferences, privileges and restrictions of any series of preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be determined by the Board upon its issuance.

On November 16, 2022, the Company issued and sold one share of the Company’s Series D Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”) to Robert Bitterman, then its interim Executive Chairman and current Chief Executive Officer, for $1,750. The Series D Preferred Stock was entitled to 17,500,000 votes per share exclusively with respect to any proposal to amend the Company’s Amended Certificate to effect a reverse stock split of the Company’s common stock (“Reverse Stock Split”). The terms of the Series D Preferred Stock provided that it would be voted, without action by the holder, on any such proposal in the same proportion as shares of the Company’s common stock were voted. The Series D Preferred Stock otherwise had no voting rights except as required by the General Corporation Law of the State of Delaware.

The Series D Preferred Stock was not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series D Preferred Stock had no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily. The holder of the Series D Preferred Stock was not entitled to receive dividends of any kind.

Under its terms, the outstanding share of Series D Preferred Stock was to be redeemed in whole, but not in part, at any time: (i) if such redemption was approved by the Board in its sole discretion or (ii) automatically and effective upon the approval by the Company's stockholders of a Reverse Stock Split. Upon such redemption, the holder of the Series D Preferred Stock was entitled to receive consideration of $1,750 in cash.

The Series D Preferred Stock was redeemed in whole on January 4, 2023, upon the approval by the Company’s stockholders of a Reverse Stock Split, such that, at September 30, 2023, there were no shares of Series D Preferred Stock authorized, issued or outstanding and all of the Company’s authorized shares of preferred stock were undesignated.

6. Stockholders’ Equity

April 2023 Financing — On April 20, 2023, the Company completed a registered direct offering and a concurrent private placement of a total of: 353,983 registered shares of the Company’s common stock at a purchase price per share of $5.65, unregistered five and one-half year term Series A warrants to purchase up to 353,983 shares of common stock at an exercise price of $5.40 per share and unregistered eighteen month term Series B warrants to purchase up to 353,983 shares of common stock at an exercise price of $5.40 per share (collectively, the “April 2023 Financing”). In addition, the Company issued unregistered warrants to the placement agent, H.C. Wainwright & Co., LLC (“HCW”), in the April 2023 Financing to purchase a total of 26,549 shares of common stock at an exercise price of $7.0625 per share. Net proceeds to the Company from the April 2023 Financing were $1,538,000 after deducting placement agent fees and offering expenses.

In connection with the April 2023 Financing, the Company entered into warrant amendment agreements (the “Warrant Amendment Agreements”) with the participating investors to amend the exercise price of certain existing warrants to purchase up to an aggregate of 191,619 shares of common stock that were previously issued in April 2018 through January 2021, such that each of the amended warrants have an exercise price of $5.40 per share. The Company received $24,000 as consideration in connection with the Warrant Amendment Agreements. The Company assessed the amendments to the exercise price of the warrants under the FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”) and determined that the amendment to the exercise price was completed in connection with and contingent on the close of the April 2023 Financing. The increase in fair value of $293,000 related to the Warrant Amendment Agreements was recognized as an equity issuance cost and recorded in additional paid in capital per ASC 815.

June 2023 Financing — On June 2, 2023, the Company completed a registered direct offering and a concurrent private placement of a total of: 233,646 registered shares and 72,000 unregistered shares of the Company’s common stock each at a purchase price per share of $4.28, unregistered pre-funded warrants to purchase up to an aggregate of 628,935 shares of common stock at a purchase price per share of $4.279 and with an exercise price of $0.001 per share, unregistered five and one-half year term Series A warrants to purchase up to an aggregate of 934,581 shares of common stock at an exercise price of $4.03 per share and unregistered eighteen month term Series B warrants to purchase up to an aggregate of 934,581 shares of common stock at an exercise price of $4.03 per share (collectively, the “June 2023 Financing”). In addition, the Company issued unregistered warrants to the placement agent, HCW, in the June 2023 Financing to purchase a total of 70,094 shares of common stock at an exercise price of $5.35 per share. Net proceeds to the Company from the June 2023 Financing were $3,510,000 after deducting placement agent fees and offering expenses.

Warrants

The Company first assessed the warrants in the April 2023 Financing and June 2023 Financing under the FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) to determine whether they were within the scope of ASC 480. As there were no instances outside of the Company’s control that could require cash settlement, the Company’s warrants issued in the April 2023 Financing and June 2023 Financing were determined to be outside the scope of ASC 480.

The Company then applied and followed the applicable accounting guidance in ASC Topic 815. Financial instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the agreement. The warrants issued in the April 2023 Financing and June 2023 Financing did not meet the definition of a derivative instrument as they are indexed to the Company’s common stock and classified within stockholders’ equity. Based on this determination, the warrants issued in the April 2023 Financing and June 2023 Financing were classified within stockholders’ equity.

During the three and nine months ended September 30, 2023, shares of common stock issued related to exercises from the pre-funded warrants issued in the June 2023 Financing totaled 320,290 and 495,290, respectively. The Company realized proceeds of $320 and $495, respectively, from the exercises of the pre-funded warrants. There were no warrants exercised during the three and nine months ended September 30, 2022.

The following table summarizes the Company’s outstanding warrants, all of which are classified as equity instruments, at September 30, 2023:

Summary of outstanding warrants
	Number of Shares			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2022		545,401		$	54.53
Issued		3,302,706			4.46
Exercised		(495,290	)		0.001
Expired		(1,837	)		1,245.59
Outstanding at September 30, 2023		3,350,980		$	9.09

The Company’s outstanding warrants as of September 30, 2023 expire at various dates between October 2023 and December 2028.

7. Stock-based Compensation

In July 2023, the Company’s stockholders approved an amendment to the Company’s 2020 Long-Term Incentive Plan (the “2020 Plan”) to increase the number of shares authorized for issuance thereunder by 125,500 shares.

Restricted Stock Units

Restricted stock units (“RSUs”) are issued under the Company’s 2020 Plan or as inducement grants issued outside of the 2020 Plan to new employees. RSUs are generally subject to graded vesting and the satisfaction of certain service requirements. Upon vesting, each outstanding RSU will be settled for one share of the Company’s common stock. Employee RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes due upon vesting and withholds a number of shares of equal value. The fair value of the RSUs awarded are based upon the Company’s closing stock price at the grant date and are expensed over the requisite service period.

The following table summarizes the activity of the Company’s RSUs for the nine months ended September 30, 2023:

Summary of RSU activity
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Unvested units at December 31, 2022		47,335		$	15.03
Granted		43,500			5.24
Vested		(20,080	)		16.34
Forfeited		(1,500	)		5.24
Unvested units at September 30, 2023		69,255		$	12.93

There were no RSU grants during the three months ended September 30, 2023. The weighted-average fair value of RSUs granted during the nine months ended September 30, 2023 was $5.24. The weighted-average fair value of RSUs granted during the three and nine months ended September 30, 2022 was $9.00 and $10.32, respectively.

Stock-based compensation expense related to RSUs was $89,000 and $294,000 for the three and nine months ended September 30, 2023, respectively. Stock-based compensation expense related to RSUs was $98,000 and $359,000 for the three and nine months ended September 30, 2022, respectively.

The aggregate fair value of awards that vested during the nine months ended September 30, 2023 and 2022 was $100,000 and $138,000, respectively, which represents the market value of the Company’s common stock on the date that the RSUs vested.

Stock Options

Stock options are available to be issued under the 2020 Plan and are generally subject to graded vesting and the satisfaction of certain service requirements. Upon the exercise of a stock option, the Company issues new shares and delivers them to the recipient. The Company does not expect to net share settle to satisfy stock option exercises.

The Company used the Black-Scholes option-pricing model to determine the fair value of all its option grants. The risk-free interest rate used for each grant was based upon the yield on zero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption was based upon the Company’s own implied volatility. The expected life assumption used for option grants was based upon the simplified method provided for under the FASB ASC Topic 718, “Compensation – Stock Compensation”. The dividend yield assumption was based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.

The following table summarizes the activity of the Company’s stock options for the nine months ended September 30, 2023:

Summary of stock option activity
	Number of Shares			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance at December 31, 2022		177		$	35,231.40
Granted		–			–
Exercised		–			–
Forfeited		–			–
Expired		(50	)		82,948.68
Balance at September 30, 2023		127		$	16,445.06	$	–
Exercisable at September 30, 2023		127		$	16,445.06	$	–

Stock-based compensation expense related to stock options for the three and nine months ended September 30, 2022 was $5,000 and $13,000, respectively. As of September 30, 2022, the compensation expense for all unvested stock options had been recognized in the Company’s results of operations.

Compensation Expense Related to Equity Awards

The following table sets forth total stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022, in thousands:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Research and development	$	51	$	54	$	163	$	163
General and administrative		38		49		131		209
Total stock-based compensation	$	89	$	103	$	294	$	372

8. Net Loss per Common Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing the Company’s net loss by the weighted average number of common shares outstanding and the impact of the dilutive effect of potential common stock equivalents, except when the inclusion of such potential common stock equivalents would be anti-dilutive. Dilutive potential common stock equivalents primarily consist of stock options, RSUs and warrants. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented because the impact of these items is generally anti-dilutive during periods of net loss.

The weighted average number of common shares outstanding as of September 30, 2023 includes the pre-funded warrants issued in connection with the June 2023 Financing, the exercise of which requires nominal consideration for the delivery of the shares of common stock.

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

Schedule of anti-dilutive stock
	September 30,
	2023		2022
Stock options		127		142
Unvested restricted stock units		69,255		57,017
Warrants¹		3,217,335		545,401
Total		3,286,717		602,560

__________________

¹ The weighted average number of common shares outstanding as of September 30, 2023 includes pre-funded warrants issued in the June 2023 Financing because the exercise of such warrants requires only nominal consideration. Therefore, these pre-funded warrants are not included in the table above.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this report, “we,” “our,” “ours,” “us,” “Phio” and the “Company” refers to Phio Pharmaceuticals Corp. and our subsidiary, MirImmune, LLC and the ongoing business operations of Phio Pharmaceuticals Corp. and MirImmune, LLC, whether conducted through Phio Pharmaceuticals Corp. or MirImmune, LLC.

This management’s discussion and analysis of financial condition as of September 30, 2023 and results of operations for the three and nine months ended September 30, 2023 and 2022 should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2023 (the “2022 Form 10-K”).

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “intends,” “believes,” “anticipates,” “indicates,” “plans,” “expects,” “suggests,” “may,” “would,” “should,” “potential,” “designed to,” “will,” “ongoing,” “estimate,” “forecast,” “target,” “predict,” “could” and similar references, although not all forward-looking statements contain these words. Forward-looking statements are neither historical facts nor assurances of future performance. These statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Risks that could cause actual results to vary from expected results expressed in our forward-looking statements include, but are not limited to, the impact to our business and operations by inflationary pressures, rising interest rates, recession fears, the development of our product candidates, our ability to execute on business strategies, our ability to develop our product candidates with collaboration partners, and the success of any such collaborations, the timeline and duration for advancing our product candidates into clinical development, results from our preclinical and clinical activities, the timing or likelihood of regulatory filings and approvals, the success of our efforts to commercialize our product candidates if approved, our ability to manufacture and supply our product candidates for clinical activities, and for commercial use if approved, the scope of protection we are able to establish and maintain for intellectual property rights covering our technology platform, and our ability to obtain future financing. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements as a result of a number of important factors, including those identified in our 2022 Form 10-K under the heading “Risk Factors” and in other filings the Company periodically makes with the SEC. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q speak as of the date hereof and the Company does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this report except as required by law.

Overview

Phio is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi technology platform is designed to make immune cells more effective in killing tumor cells. We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. Our efforts are focused on developing immuno-oncology therapeutics using our INTASYL platform. We have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy (“ACT”) applications with our INTASYL compounds.

PH-762

PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“PD-1”). PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in immunotherapy. Decreasing the expression of PD-1 can thereby increase the capacity of T cells, which protect the body from cancer cells and infections, to kill cancer cells.

Our preclinical studies have demonstrated that direct-to-tumor application of PH-762 resulted in potent anti-tumoral effects and have shown that direct-to-tumor treatment with PH-762 inhibits tumor growth in a dose dependent fashion in PD-1 responsive and refractory models. Importantly, direct-to-tumor administration of PH-762 resulted in activity against distant untreated tumors, indicative of a systemic anti-tumor response. We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.

In November 2023, we announced the first patient dosed in our U.S. multi-center Phase 1b clinical trial with PH-762 under a previously cleared Investigational New Drug (“IND”) application by the Food and Drug Administration. Intratumoral injection of PH-762 in this dose-escalating trial will treat patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma and is currently open for continued enrollment of patients. This trial is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762.

Given our intention to focus our efforts and resources on our U.S. clinical trial with PH-762, we have completed the winding down process for our first-in-human clinical trial for PH-762 in France, which was limited to the treatment of patients with metastatic melanoma. Safety data from the initial cohort of three patients in the French clinical trial were evaluated by a data monitoring committee in the first quarter of 2023. The safety data review disclosed no dose-limiting toxicity, and no drug-related severe or serious adverse events.

Due to INTASYL’s ease of administration, we have shown that our compounds can easily be incorporated into current ACT manufacturing processes. In ACT, T cells are usually taken from a patient's own blood or tumor tissue, grown in large numbers in a laboratory, and then given back to the patient to help the immune system fight cancer. By treating T cells with our INTASYL compounds while they are being grown in the laboratory, we believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer. Preclinical data generated in collaboration with AgonOx, Inc. (“AgonOx”), a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer, demonstrated that treating AgonOx’s “double positive” tumor infiltrating lymphocytes (“DP TIL”) with PH-762 increased their tumor killing activity by two-fold.

In March 2021, we entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL. Under the Clinical Co-Development Agreement, we committed to provide financial support for development costs of up to $4 million to AgonOx for expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. We are also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology.

PH-762 treated DP TIL are being evaluated in a Phase 1 clinical trial in the United States with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx. The primary trial objectives are to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. The Company announced the first patient was dosed in August 2023 and the trial is open for the continued enrollment of patients.

As of September 30, 2023, there is approximately $2,964,000 of remaining costs not yet incurred under the Clinical Co-Development Agreement.

PH-894

PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby effecting the immune system as well as the tumor. Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and antibody therapies. Therefore, what sets this compound apart is its dual mechanism: PH-894 suppression of BRD4 in T cells results in T cell activation, and suppression of BRD4 in tumor cells results in tumors becoming more sensitive to being killed by T cells.

Preclinical studies conducted have demonstrated that PH-894 resulted in a strong, concentration dependent and durable silencing of BRD4 in T cells and in various cancer cells. Similar to PH-762, preclinical studies have also shown that direct-to-tumor application of PH-894 resulted in potent and statistically significant anti-tumoral effects against distant untreated tumors, indicative of a systemic anti-tumor response. These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the IND-enabling studies and are in the process of continuing to finalize the study reports required for an IND submission with PH-894. As a result of the reprioritization to advance our clinical trial with PH-762 in the U.S., we have elected to defer the IND submission for PH-894.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and could have a material impact on our reported results.

There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our 2022 Form 10-K.

Results of Operations

The following table summarizes the results of our operations for the periods indicated, in thousands:

	Three Months Ended September 30,									Nine Months Ended September 30,
Description	2023			2022			Dollar Change			2023			2022			Dollar Change
Operating expenses	$	2,776		$	3,571		$	(795	)	$	8,925		$	8,732		$	193
Operating loss	$	(2,776	)	$	(3,571	)	$	795		$	(8,925	)	$	(8,732	)	$	(193	)
Net loss	$	(2,780	)	$	(3,576	)	$	796		$	(8,931	)	$	(8,749	)	$	(182	)

Comparison of the Three and Nine Months Ended September 30, 2023 and 2022

Operating Expenses

The following table summarizes our total operating expenses, for the periods indicated, in thousands:

	Three Months Ended September 30,							Nine Months Ended September 30,
Description	2023		2022		Dollar Change			2023		2022		Dollar Change
Research and development	$	1,808	$	2,508	$	(700	)	$	5,325	$	5,398	$	(73	)
General and administrative		968		1,063		(95	)		3,600		3,334		266
Total operating expenses	$	2,776	$	3,571	$	(795	)	$	8,925	$	8,732	$	193

Research and Development Expenses

Research and development expenses relate to compensation and benefits for research and development personnel, facility-related expenses, supplies, external services, costs to acquire technology licenses, research activities under our research collaboration, expenses associated with preclinical and clinical development activities and other operating costs. Our research and development programs are focused on the development of immuno-oncology therapeutics based on our INTASYL therapeutic platform. Since we commenced operations, research and development expenses have been a significant portion of our total operating expenses and are expected to constitute the majority of our spending for the foreseeable future.

Research and development expenses for the three months ended September 30, 2023 decreased 28% as compared to the three months ended September 30, 2022. The decrease in research and development expenses was primarily due to the completion of our IND-enabling preclinical studies for PH-894 of approximately $1,515,000, partially offset by an increase in clinical-related costs of approximately $788,000 for our two U.S. PH-762 Phase 1 clinical trials as compared to the prior year period.

Research and development expenses for the nine months ended September 30, 2023 decreased 1% as compared to the nine months ended September 30, 2022. The change in research and development expenses was primarily due to a decrease in costs related to the completion of our IND-enabling preclinical studies for PH-894 of approximately $1,562,000 and reduced lab supplies of approximately $218,000 as a result of a decrease in lab personnel, partially offset by an increase in clinical-related costs of approximately $1,647,000 for our two U.S. PH-762 Phase 1 clinical trials as compared to the prior year period.

We anticipate research and development expenses to increase as a result of our clinical-related activities as our programs progress in clinical development.

General and Administrative Expenses

General and administrative expenses relate to compensation and benefits for general and administrative personnel, facility-related expenses, professional fees for legal and patent-related activities, audit, tax and consulting services, as well as other general corporate expenses.

General and administrative expenses for the three months ended September 30, 2023 decreased 9% as compared to the three months ended September 30, 2022. The decrease was primarily due to the reduced use of business development consultants of approximately $73,000 as compared to the prior year period.

General and administrative expenses for the nine months ended September 30, 2023 increased 8% as compared to the nine months ended September 30, 2022. The increase in general and administrative expenses was primarily due to higher legal fees of approximately $359,000 and audit fees of $62,000, partially offset by decreases in payroll-related expenses, including executive search-related fees, of approximately $190,000 due to changes in headcount as compared to the prior year period.

Liquidity and Capital Resources

Historically, our primary source of funding has been through the sale of our securities. In the future, we will be dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations. We have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. At September 30, 2023, we had cash of $8,407,000 as compared with $11,781,000 at December 31, 2022.

During the nine months ended September 30, 2023, we completed the April 2023 Financing and June 2023 Financing (each as defined in Note 6 to our condensed consolidated interim financial statements) and received total net proceeds of $5,048,000 after deducting placement agent fees and offering expenses. For further information regarding the April 2023 Financing and June 2023 Financing, see Note 6 to our condensed consolidated interim financial statements included elsewhere in this Quarterly Report.

We have limited cash resources, have reported recurring losses from operations since inception and have not yet received product revenues. These factors raise substantial doubt regarding our ability to continue as a going concern, and our current cash resources may not provide sufficient capital to fund operations for at least the next 12 months from the date of the release of the financial statements included elsewhere in this Quarterly Report. Our continuation as a going concern depends upon our ability to raise additional capital through equity offerings, debt offerings and/or strategic opportunities to fund our operations. There can be no assurance that we will be successful in accomplishing any of these plans in order to continue as a going concern. The financial statements included elsewhere in this Quarterly Report do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The following table summarizes our cash flows for the periods indicated, in thousands:

	Nine Months Ended September 30,
	2023			2022
Net cash used in operating activities	$	(8,379	)	$	(9,424	)
Net cash used in investing activities		(5	)		(121	)
Net cash provided by (used in) financing activities		5,010			(28	)
Net decrease in cash and restricted cash	$	(3,374	)	$	(9,573	)

Net Cash Flow from Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2023 decreased 11% as compared to the nine months ended September 30, 2022, primarily due to decreased cash outflows from changes in operating assets and liabilities of $1,311,000 as a result of liabilities owed for the payments related to the IND-enabling studies with PH-894 and clinical supply manufacturing of PH-762 and PH-894 in the prior year period partially offset by an increase in net loss of $182,000 and non-cash related items of $84,000.

Net Cash Flow from Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2023 decreased 96% as compared to the nine months ended September 30, 2022, primarily due to changes in laboratory and computer equipment purchases for our facility over the comparative period.

Net Cash Flow from Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2023 increased as compared to the net cash used in financing activities for the nine months ended September 30, 2022, primarily due to the completion of our April 2023 Financing and June 2023 Financing.

Contractual Obligations

The Company does not intend to renew the lease for its corporate headquarters and primary research facility in Marlborough, Massachusetts, which will expire on March 31, 2024. Beginning in April of 2024, we expect to continue operations as a fully remote business.

Details of our obligations under the Clinical Co-Development Agreement with our partner AgonOx as of September 30, 2023 can be found in Note 2 of the condensed consolidated interim financial statements included elsewhere in this Quarterly Report. Outside of the above, there have been no material changes to the contractual obligations as disclosed in our 2022 Form 10-K.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide this information.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer (who is also acting as our Principal Financial Officer), evaluated the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this report, management, with the participation of our Principal Executive Officer (who is also acting as our Principal Financial Officer), concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of such date.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ending September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

From time to time, the Company may become a party to various legal proceedings and complaints arising in the ordinary course of business. We are not currently a party to any actual or threatened material legal proceedings of which we are aware.

ITEM 1A.

RISK FACTORS

There have been no material changes in our risk factors set forth in Part I, “Item 1A. Risk Factors” in our 2022 Form 10-K. The risk factors disclosed in Part I, “Item 1A. Risk Factors” in our 2022 Form 10-K could materially adversely affect our business, financial condition, or results of operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including these risks. Additional risks not currently known or currently material to us may also harm our business.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

No sales or issuances of unregistered securities occurred that have not previously been disclosed in a Current Report on Form 8-K.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

EXHIBIT INDEX

		Incorporated by Reference Herein
Exhibit Number	Description	Form	Date

10.1	2020 Phio Pharmaceuticals Corp. Long Term Incentive Plan, as amended and restated. *#
10.2	Form of Nonqualified Stock Option Award under the Company’s 2020 Long Term Incentive Plan.*#
31.1	Sarbanes-Oxley Act Section 302 Certification of Principal Executive Officer and Principal Financial Officer. *
32.1	Sarbanes-Oxley Act Section 906 Certification of Principal Executive Officer and Principal Financial Officer. **

101.INS	Inline XBRL Instance Document.*
101.SCH	Inline XBRL Taxonomy Extension Schema Document.*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104	The cover page for this report, formatted in Inline XBRL (included in Exhibit 101).*

_________________

*	Filed herewith.
**	Furnished herewith and not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section or incorporated by reference into any filing under the Securities Act or the Exchange Act.
#	Indicates a management contract or compensatory plan or arrangement.

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.

	Phio Pharmaceuticals Corp.

	By:		/s/ Robert J. Bitterman
			Robert J. Bitterman
			President and Chief Executive Officer (as Principal Executive and Financial Officer)

			Date: November 9, 2023

Exhibit 10.1

PHIO PHARMACEUTICALS CORP.

2020 LONG TERM INCENTIVE PLAN

GENERAL.

(a) Successor to Prior Plan. This Plan is the successor to the Phio Pharmaceuticals Corp. 2012 Long Term Incentive Plan, as amended (the “Prior Plan”). From and after 12:01 a.m. Eastern time on the Effective Date, no additional stock awards will be granted under the Prior Plan.

(b) Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards.

(c) Available Awards. This Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; and (vii) Performance Cash Awards.

(d) Purpose. This Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible award recipients may benefit from increases in the value of the Common Stock.

ADMINISTRATION.

(a) Administration by Board. The Board will administer this Plan. The Board may delegate administration of this Plan to a Committee or Committees, as provided in Section 2(d).

(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of this Plan:

(i) To determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.

(ii) To construe and interpret this Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of this Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in this Plan or in any Award Document or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make this Plan or Award fully effective.

(iii) To settle all controversies regarding this Plan and Awards granted under it.

(iv) To accelerate, in whole or in part, or to extend, in whole or in part, the time during which an Award may be exercised or vest, or at which cash or shares of Common Stock may be issued.

(v) To suspend or terminate this Plan at any time. Except as otherwise provided in this Plan or an Award Document, suspension or termination of this Plan will not materially impair a Participant’s rights under his or her then-outstanding Award without his or her written consent except as provided in subsection (viii) below.

(vi)To amend this Plan in any respect the Board deems necessary or advisable, including, without limitation, adopting amendments relating to Incentive Stock Options and nonqualified deferred compensation under Section 409A of the Code and/or making this Plan or Awards granted under this Plan exempt from or compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of this Plan that (A) materially increases the number of shares of Common Stock available for issuance under this Plan, (B) materially expands the class of individuals eligible to receive Awards under this Plan, (C) materially increases the benefits accruing to Participants under this Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under this Plan, (E) materially extends the term of this Plan, or (F) materially expands the types of Awards available for issuance under this Plan. Except as otherwise provided in this Plan (including subsection (viii) below) or an Award Document, no amendment of this Plan will materially impair a Participant’s rights under an outstanding Award without the Participant’s written consent.

(vii)To submit any amendment to this Plan for stockholder approval, including, but not limited to, amendments to this Plan intended to satisfy the requirements of (A) Section 422 of the Code regarding “incentive stock options” or (B) Rule 16b-3 of the Exchange Act or any successor rule, if applicable.

(viii)To approve forms of Award Documents for use under this Plan and to amend the terms of any one or more outstanding Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Documents for such Awards, subject to any specified limits in this Plan that are not subject to Board discretion. A Participant’s rights under any Award will not be impaired by any such amendment unless the Company requests the consent of the affected Participant, and the Participant consents in writing. However, a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. In addition, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code, or (D) to comply with other applicable laws or listing requirements.

(ix)Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of this Plan and/or Award Documents.

(x)To adopt such procedures and sub-plans as are necessary or appropriate (A) to permit or facilitate participation in this Plan by persons eligible to receive Awards under this Plan who are not citizens of, subject to taxation by, or employed outside, the United States or (B) to allow Awards to qualify for special tax treatment in a jurisdiction other than the United States. Board approval will not be necessary for immaterial modifications to this Plan or any Award Document that are required for compliance with the laws of the relevant jurisdiction.

(c) Minimum Vesting. Notwithstanding any other provision of this Plan, Awards granted under this Plan may not become exercisable, vest or settle, in whole or in part, prior to the one-year anniversary of the date of grant, except that (1) the Board may provide that Awards become exercisable, vest or settle prior to such date in the event of the Participant’s death or disability or in connection with a Change in Control, and (2) Awards to Non-Employee Directors may vest on the Company’s next annual meeting of stockholders (provided that such annual meetings are at least fifty (50) weeks apart). Notwithstanding the foregoing, up to 5% of the aggregate number of Shares authorized for issuance under this Plan (as described in Section 3(a)(1) hereof) may be issued without regard to the restrictions of the foregoing sentence.

(d) Delegation to Committee.

(i) General. The Board may delegate some or all of the administration of this Plan to a Committee or Committees. If administration of this Plan is delegated to a Committee, the Committee will have, in connection with the administration of this Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Any delegation of administrative powers will be reflected in the charter of the Committee to which the delegation is made, or resolutions, not inconsistent with the provisions of this Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to any subcommittee. Unless otherwise provided by the Board, delegation of authority by the Board to a Committee, or to an Officer or employee pursuant to Section 2(e), does not limit the authority of the Board, which may continue to exercise any authority so delegated and may concurrently administer this Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(ii) Rule 16b-3 Compliance. The Committee may consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 of the Exchange Act.

(e) Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following, to the maximum extent permitted by applicable law: (i) designate Employees who are not Officers to be recipients of Stock Awards and the terms of such Stock Awards; and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on a form that is substantially the same as the form of Stock Award Document approved by the Committee or the Board for use in connection with such Stock Awards, unless otherwise provided for in the resolutions approving the delegation authority.

(f) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board (or a duly authorized Committee, subcommittee or Officer exercising powers delegated by the Board under this Section 2) in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

SHARES SUBJECT TO THIS PLAN.

(a) Share Reserve.

(i) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 225,500 shares of Common Stock plus (A) any shares of Common Stock that remain available for grant under the Prior Plan as of the Effective Date and (B) any shares of Common Stock subject to outstanding awards under the Prior Plan as of the Effective Date (such outstanding awards the “Prior Plan Awards”) that on or after the Effective Date are forfeited, terminated, expire or otherwise lapse without being exercised (to the extent applicable), or are settled in cash (the “Share Reserve”).

(ii) For clarity, the Share Reserve is a limitation on the number of shares of Common Stock that may be issued under this Plan. As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in Section 3(b) below), the Share Reserve is not a limit on the number of Stock Awards that can be granted.

(iii) Shares may be issued under the terms of this Plan in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under this Plan.

(iv) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate Fair Market Value on the date of grant of Shares subject to Awards granted under this Plan, together with any cash compensation paid or payable, during any calendar year to any one Non-Employee Director shall not exceed $500,000; provided, however, that in the calendar year in which a Non-Employee Director first joins the Board or is designated as Chairman of the Board, such maximum dollar value may be up to two hundred percent (200%) of the dollar value set forth in the foregoing limit. The limitation described in this Section shall be determined without regard to amounts paid to a Non-Employee Director during or for any period in which such individual was an employee or consultant, and any severance and other payments paid to a Non-Employee Director for such director’s prior or current service to the Company or any Subsidiary other than serving as a director shall not be taken into account in applying the limit provided above. For the avoidance of doubt, any compensation that is deferred shall be counted toward this limit for the year in which it was first earned, and not when paid or settled.

(b) Reversion of Shares to the Share Reserve. If a Stock Award or any portion of a Stock Award expires, is cancelled or forfeited or otherwise terminates without all of the shares covered by the Stock Award having been issued, then the shares of Common Stock subject to the Stock Award (or portion thereof) that expires, is cancelled or forfeited or otherwise terminates shall revert and again be available for issuance under this Plan. If any shares of Common Stock are repurchased by the Company using proceeds from the exercise or purchase price of a Stock Award, or retained because the Stock Award (or a portion thereof) is settled in cash (i.e., the Participant receives cash rather than stock), then the shares that are repurchased or retained shall not revert and will not become available for issuance under this Plan. Any shares retained and not issued by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will reduce the number of shares of Common Stock that are available for issuance under this Plan and such shares shall not be available for issuance under this Plan.

(c) Incentive Stock Option Limit. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued on the exercise of Incentive Stock Options will be 225,500 shares of Common Stock.

(d) Source of Shares. The stock issuable under this Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise or shares classified as treasury shares.

ELIGIBILITY.

(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.

Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Document will conform to (through incorporation of provisions hereof by reference in the applicable Award Document or otherwise) the substance of each of the following provisions:

(a) Term. Subject to Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Award Document.

(b) Exercise Price. Subject to Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a corporate transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

(c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The purchase price shall be denominated in U.S. dollars. The permitted methods of payment are as follows:

(i) by cash, check, bank draft or money order payable to the Company;

(ii) pursuant to a program developed under Regulation T as promulgated by the United States Federal Reserve Board or a successor regulation, or a similar rule in a foreign jurisdiction of domicile of a Participant, that, prior to or contemporaneously with the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the proceeds of sale of such stock;

(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

(v) in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Document.

(d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Award Document evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR (with respect to which the Participant is exercising the SAR on such date), over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Document evidencing such SAR.

(e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board determines. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

(i) Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.

(ii) Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by U.S. Treasury Regulation 1.421-1(b)(2) or other applicable law. If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii) Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, on the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

(f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

(g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Document, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Document. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR will terminate.

(h) Extension of Termination Date. Except as otherwise provided in the applicable Award Document, or other agreement between the Participant and the Company, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of three (3) months (that need not be consecutive) after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Document. In addition, unless otherwise provided in a Participant’s applicable Award Document, or other agreement between the Participant and the Company, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, and the Company does not waive the potential violation of the policy or otherwise permit the sale, or allow the Participant to surrender shares of Common Stock to the Company in satisfaction of any exercise price and/or any withholding obligations under Section 8(g), then the Option or SAR will terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Document.

(i) Disability of Participant. Except as otherwise provided in the applicable Award Document, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Document. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

(j) Death of Participant. Except as otherwise provided in the applicable Award Document, or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in this Plan or the applicable Award Document, or other agreement between the Participant and the Company, for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death, and (ii) the expiration of the term of such Option or SAR as set forth in the applicable Award Document. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR will terminate.

(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Document or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate upon the date on which the event giving rise to the termination for Cause first occurred, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date on which the event giving rise to the termination for Cause first occurred (or, if required by law, the date of termination of Continuous Service). If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Option or SAR will also be suspended during the investigation period.

(l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least 6 months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the U.S. Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Change in Control in which such Option or SAR is not assumed, continued, or substituted, or (iii) upon the non-exempt Employee’s retirement (as such term may be defined in the non-exempt Employee’s applicable Award Document, in another agreement between the non-exempt Employee and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than 6 months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt Employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure that any income derived by a non-exempt Employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from such employee’s regular rate of pay, the provisions of this paragraph will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Documents.

(m) No Repricing. Neither an Option nor SAR may be modified to reduce the exercise price thereof nor may a new Option, SAR or other Award at a lower price be substituted or exchanged for a surrendered Option or SAR (other than adjustments or substitutions in accordance with Section 9(a) relating to Capitalization Adjustments), unless such action is approved by the stockholders of the Company.

PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.

(a) Restricted Stock Awards. Each Restricted Stock Award Document will be in such form and will contain such terms and conditions as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Documents may change from time to time, and the terms and conditions of separate Restricted Stock Award Documents need not be identical. Each Restricted Stock Award Document will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award Document may be subject to forfeiture to the Company in accordance with a vesting schedule and subject to such conditions as may be determined by the Board.

(iii) Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Document.

(iv) Transferability. Common Stock issued pursuant to an Award, and rights to acquire shares of Common Stock under the Restricted Stock Award Document, will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Document, as the Board determines in its sole discretion, so long as such Common Stock remains subject to the terms of the Restricted Stock Award Document.

(v) Dividends. Any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Document will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Documents may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Documents need not be identical. Each Restricted Stock Unit Award Document will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Document.

(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Document. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any dividend equivalents and/or additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Document to which they relate.

(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Document, or other agreement between the Participant and the Company, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(i) Performance Stock Awards. A Performance Stock Award is a Stock Award that is payable (including that may be granted, vest or exercised) contingent upon the attainment during a Performance Period of the achievement of certain performance goals. A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance Period, the performance goals to be achieved during the Performance Period, and the measure of whether and to what degree such performance goals have been attained will be conclusively determined by the Committee, the Board, or an authorized Officer, in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Document, the Board may determine that cash may be used in payment of Performance Stock Awards.

(ii) Performance Cash Awards. A Performance Cash Award is a cash award that is granted and/or becomes payable contingent upon the attainment during a Performance Period of the achievement of certain performance goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the performance goals to be achieved during the Performance Period, and the measure of whether and to what degree such performance goals have been attained will be conclusively determined by the Committee, the Board, or an authorized Officer, in its sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.

(iii) Board Discretion. The Committee, the Board, or an authorized Officer, as the case may be, retains the discretion to define the manner of calculating the performance criteria it selects to use for a Performance Period.

COVENANTS OF THE COMPANY.

(a) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to, and does not undertake to, provide tax advice or to minimize the tax consequences of an Award to the holder of such Award.

(b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over this Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act this Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under this Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.

MISCELLANEOUS.

(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

(b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the latest date that all necessary corporate action has occurred and all material terms of the Award (including, in the case of stock options, the exercise price thereof) are fixed, unless otherwise determined by the Board, regardless of when the documentation evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Document as a result of a clerical error in the papering of the Award Document, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Document.

(c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.

(d) No Employment or Other Service Rights. Nothing in this Plan, any Award Document or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or any other capacity or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, including, but not limited to, Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the organizational documents of the Company or an Affiliate (including articles of incorporation and bylaws), and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(e) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence), or the Participant’s role or primary responsibilities are changed to a level that, in the Board’s determination does not justify the Participant’s unvested Awards, and such reduction or change occurs after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

(f) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds USD$100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(g) Withholding Obligations. Unless prohibited by the terms of an Award Document, the Company may, in its sole discretion, satisfy any national, state, local or other tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award (only up to the amount permitted that will not cause an adverse accounting consequence or cost); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant, including proceeds from the sale of shares of Common Stock issued pursuant to a Stock Award; or (v) by such other method as may be set forth in the Award Document.

(h) Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

(i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code (to the extent applicable to a Participant). Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of this Plan and in accordance with applicable law.

(j) Compliance with Section 409A. Unless otherwise expressly provided for in an Award Document, or other agreement between the Participant and the Company, this Plan and Award Documents will be interpreted to the greatest extent possible in a manner that makes this Plan and the Awards granted hereunder exempt from Section 409A of the Code, to the extent that Section 409A of the Code is applicable to an Award, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Document evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Document is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Document. Notwithstanding anything to the contrary in this Plan (and unless the Award Document specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code and the Participant is otherwise subject to Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six (6) months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule.

(i) Clawback/Recovery. All Awards granted under this Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Document as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.

ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to this Plan pursuant to Section 3(a); (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c); and (iii) the class(es) and number of securities or other property and value (including price per share of stock) subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Document, or other agreement between the Participant and the Company, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

(c) Change in Control. The following provisions will apply to Awards in the event of a Change in Control unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award. In the event of a Change in Control, then, notwithstanding any other provision of this Plan, the Board will take one or more of the following actions with respect to each outstanding Award, contingent upon the closing or completion of the Change in Control:

(i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Award or to substitute a similar award for the Award (including, but not limited to, an award to acquire the same consideration per share paid to the stockholders of the Company pursuant to the Change in Control);

(ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii) accelerate the vesting, in whole or in part, of the Award (and, if applicable, the time at which the Award may be exercised) to a date prior to the effective time of such Change in Control as the Board will determine (or, if the Board will not determine such a date, to the date that is 5 days prior to the effective date of the Change in Control), with such Award terminating if not exercised (if applicable) at or prior to the effective time of the Change in Control, and with such exercise reversed if the Change in Control does not become effective;

(iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Award;

(v) cancel or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the Change in Control, in exchange for such cash consideration, if any, as the Board, in its reasonable determination, may consider appropriate as an approximation of the value of the canceled Award, taking into account the value of the Common Stock subject to the canceled Award, the possibility that the Award might not otherwise vest in full, and such other factors as the Board deems relevant; and

(vi) cancel or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the Change in Control, in exchange for a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value in the Change in Control of the property the Participant would have received upon the exercise of the Award immediately prior to the effective time of the Change in Control, over (B) any exercise price payable by such holder in connection with such exercise.

The Board need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of an Award.

In the absence of any affirmative determination by the Board at the time of a Change in Control, each outstanding Award will be assumed or an equivalent Award will be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the Award or to substitute an equivalent Award, in which case the vesting of such Award will accelerate in its entirety (along with, if applicable, the time at which the Award may be exercised) to a date prior to the effective time of such Change in Control as the Board will determine (or, if the Board will not determine such a date, to the date that is 5 days prior to the effective date of the Change in Control), with such Award terminating if not exercised (if applicable) at or prior to the effective time of the Change in Control, and with such exercise reversed if the Change in Control does not become effective.

(d) Acceleration of Awards upon a Change in Control. An Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Award Document for such Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

10.

TERMINATION OR SUSPENSION OF THIS PLAN.

The Board or the Compensation Committee may suspend or terminate this Plan at any time. This Plan will have no fixed expiration date; provided, however, that no Incentive Stock Option may be granted more than 10 years after the later of (i) the Adoption Date and (ii) the adoption by the Board of any amendment to this Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code. No Awards may be granted under this Plan while this Plan is suspended or after it is terminated.

11.

EFFECTIVE DATE OF PLAN; TIMING OF FIRST GRANT OR EXERCISE.

No Stock Award may be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award, or Performance Stock Award, may be granted) and no Performance Cash Award may be settled unless and until this Plan has been approved by the stockholders of the Company, which approval will be within 12 months before or after the Adoption Date. The Plan was approved by the Board on the Adoption Date and shall become effective on the Effective Date, subject to stockholder approval on such date. Subject to earlier termination as provided in Section 10, no new Stock Awards may be granted under this Plan on or after October 8, 2030; provided, however, that Stock Awards outstanding on such date shall remain subject to the terms of the Plan and any applicable Award Document.

12.

CHOICE OF LAW.

The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

13.

DEFINITIONS.

As used in this Plan, the following definitions will apply to the capitalized terms indicated below:

(a) “Adoption Date” means August 5, 2020, which is the date of adoption of this Plan by the Board.

(b) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company, as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

(d) “Award Document” means a written agreement between the Company and a Participant, or a written notice issued by the Company to a Participant, evidencing the terms and conditions of an Award.

(e) “Board” means the Board of Directors of the Company.

(f) “Capital Stock” means each and every class of common stock of the Company, regardless of the number of votes per share.

(g) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to this Plan or subject to any Stock Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(h) “Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company or any Affiliate defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) Participant’s failure substantially to perform his or her duties and responsibilities to the Company or any Affiliate or violation of a policy of the Company or any Affiliate; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other misconduct that has caused or is reasonably expected to result in injury to the Company or any Affiliate; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company or any Affiliate; or (iv) Participant’s breach of any of his or her obligations under any written agreement or covenant with the Company or any Affiliate. The determination as to whether a Participant is being terminated for Cause will be made in good faith by the Company and will be final and binding on the Participant. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company, any Affiliate or such Participant for any other purpose.

(i) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing 50% or more of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) 50% or more of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii) there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

(iv) individuals who, on the Adoption Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under U.S. Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.

(j) “Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

(k) “Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(d).

(l) “Compensation Committee” means the Compensation Committee of the Board.

(m) “Common Stock” means the common stock of the Company.

(n) “Company” Phio Pharmaceuticals Corp., a Delaware corporation.

(o) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of this Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form Registration Statement on Form S-8 or a successor form under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.

(p) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. If the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. In addition, if required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under U.S. Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder). A leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the applicable Award Document, the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(q) “Director” means a member of the Board.

(r)“Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(C)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(s) “Effective Date” means October 8, 2020.

(t) “Employee” means any person providing services as an employee of the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of this Plan.

(u) “Entity” means a corporation, partnership, limited liability company or other entity.

(v) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(w) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.

(x) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock as of any date of determination will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.

(ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

(iii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

(y) “Incentive Stock Option” means an option granted pursuant to Section 5 of this Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

(z) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3 of the Exchange Act.

(aa) “Nonstatutory Stock Option” means any option granted pursuant to Section 5 of this Plan that does not qualify as an Incentive Stock Option.

(bb) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

(cc) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to this Plan.

(dd) “Option Agreement” means an Award Document evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of this Plan.

(ee) “Optionholder” means a person to whom an Option is granted pursuant to this Plan or, if applicable, such other person who holds an outstanding Option.

(ff) “Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

(gg) “Participant” means a person to whom an Award is granted pursuant to this Plan or, if applicable, such other person who holds an outstanding Stock Award.

(hh) “Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6(c)(ii).

(ii) “Performance Period” means the period of time selected by the Board over which the attainment of one or more performance goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.

(jj) “Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i).

(kk) “Plan” means this 2020 Phio Pharmaceuticals Corp. Long Term Incentive Plan, as amended and restated from time to time.

(ll) “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(mm) “Restricted Stock Award Document” means an Award Document evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Document will be subject to the terms and conditions of this Plan.

(nn) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(oo) “Restricted Stock Unit Award Document” means an Award Document evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Document will be subject to the terms and conditions of this Plan.

(pp) “Securities Act” means the U.S. Securities Act of 1933, as amended.

(qq) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

(rr) “Stock Appreciation Right Award Document” means an Award Document evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Award Document will be subject to the terms and conditions of this Plan.

(ss) “Stock Award” means any right to receive Common Stock granted under this Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, or a Performance Stock Award.

(tt) “Stock Award Document” means an Award Document evidencing the terms and conditions of a Stock Award grant. Each Stock Award Document will be subject to the terms and conditions of this Plan.

(uu) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.

(vv) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.

Exhibit 10.2

Terms of Nonqualified Stock Option Award

Type:		Non-Statutory Stock Award
Name:		[Name] (the “Participant”)
Number of Shares of Stock subject to Award:		[Number]
Price per Share:		$[Exercise price no less than FMV]
Grant Date		[Date] (“Grant Date”)
Vesting Commencement Date:		[Date]
Vesting Schedule:		[Description of vesting schedule]
Expiration Date:		[Date 10 years following the date of grant]

PHIO PHARMACEUTICALS CORP.

2020 LONG TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

Pursuant to this Nonqualified Stock Award Agreement (this “Award Agreement”), and subject to the terms and conditions herein and in the 2020 Long Term Incentive Plan (the “Plan”), which Plan is incorporated by reference into this Award Agreement, Phio Pharmaceuticals Corp. (the “Company,” which term shall include affiliates thereof unless the context indicates otherwise) grants to the Participant nonqualified stock option (“NQSO”) award (the “Award”) under the Plan, conditioned on the Participant’s acknowledgment of receipt and acceptance in accordance with Section 14 hereof, which shall be no later than 60 days after receiving this Award Agreement. Participant’s failure to timely execute the acknowledgement of receipt and acceptance shall render the Award and this Award Agreement null and void and of no force and effect. Capitalized terms used in this Award Agreement, unless otherwise defined, shall have the meanings set forth in the Plan.

	1.	Grant of Awards. Subject to the terms and conditions of this Award Agreement and the Plan, the Award entitles the Participant to purchase from the Company up to that number of shares of Common Stock set forth in this Award Agreement at the exercise price per share set forth in this Award Agreement, subject to applicable withholding for taxes, if applicable. The Participant may exercise the Award as provided in Section 4 hereof. The option rights granted by the Award are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code.

	2.	Vesting.

	(a)	The Award is subject to the vesting terms set forth above at top of this Award Agreement.

	(b)	In the event of a Change in Control, the Award shall vest in full and become fully exercisable provided the Participant is then providing Continuous Service for the Company.

	3.	Effect of Termination of Continuous Service.

	(a)	Definition. For purposes of this Award Agreement: The Participant shall be considered to have a termination of “Continuous Service” on the first day following the Grant Date that the Participant is no longer either employed by the Company or retained by the Company to provide services, and the term “Termination Date” means the day on which the Participant’s termination of Continuous Service occurs.

	(b)	Forfeiture. In the event the Participant has a termination of Continuous Service, (i) any portion of the Award that is not exercisable immediately prior to the Termination Date (after giving effect to any applicable vesting acceleration provisions as set forth herein or in the Plan, as applicable) shall be cancelled, terminated, and of no further force and effect as of the Termination Date, and (ii) any portion of the Award that remains unexercised at the expiration of the applicable exercise period described in this Section shall be cancelled, terminated, and of no further force and effect as of the expiration of such period.

	(c)	Termination of Continuous Service Other than for Cause, Death, or Disability. If the Participant has a termination of Continuous Service (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Award (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the Participant’s termination of Continuous Service and (ii) the expiration of the term of the Award, as set forth in this Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Award within the applicable time frame, the Award will terminate.

	(d)	Termination of Continuous Service due to Disability. Except as otherwise provided in another agreement between the Participant and the Company, if the Participant has a termination of Continuous Service as a result of the Participant’s Disability, the Participant may exercise his or her Award (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service, and (ii) the expiration of the term of the Award as set forth at the top of this Award Document. If, after termination of Continuous Service, the Participant does not exercise his or her Award within the applicable time frame, the Award (as applicable) will terminate.

	(e)	Termination of Continuous Service due to Death. Except as otherwise provided in another agreement between the Participant and the Company, if (i) a Participant has a termination of Continuous Service as a result of the Participant’s death, or (ii) the Participant dies within the period for exercisability after Participant has had a termination of Continuous Service (for a reason other than death), set forth under Sections 3(c) or 3(d) hereof, then the Award may be exercised (to the extent the Participant was entitled to exercise such Award as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Award by bequest or inheritance or by a person designated to exercise the Award upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death, and (ii) the expiration of the term of such Award as set forth at the top of this Award Document. If, after the Participant’s death, the Award is not exercised within the applicable time frame, the Award will terminate.

	(f)	Termination of Continuous Service for Cause. Except as explicitly provided otherwise in another individual written agreement between the Company or any Affiliate and the Participant, if the Participant has a termination of Continuous Service for Cause, the Award will terminate upon the date on which the event giving rise to the termination for Cause first occurred, and the Participant will be prohibited from exercising his or her Award from and after the date on which the event giving rise to the termination for Cause first occurred (or, if required by law, the date of termination of Continuous Service). If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Award will also be suspended during the investigation period.

	4.	Exercising the Award. The Award granted hereby may only be exercised to the extent it is vested and in accordance with the terms of the Plan and this Award Agreement and any procedures established or accepted by the Board.

	(a)	Unless otherwise permitted by the Board, the Award shall be exercisable by written notice to the Company indicating the date of the exercise election and the number of vested shares desired to be exercised, duly signed and delivered in person or by certified mail to the address indicated in the form (or by other means approved by the Board, including through an online or electronic system, if applicable). Subject to satisfaction of the requirements herein and in the Plan, the exercise date shall be the date such written notice is received.

	(b)	The written exercise notice must be accompanied by payment of the exercise price per share set forth in this Award Agreement in full for the corresponding shares of Common Stock in the manner designated by the Board. Notwithstanding the foregoing, subject to applicable law and to the extent permitted and pursuant to such procedures as may be established by the Board, the Participant may arrange for payment of all or a portion of the exercise price through (i) delivery of Common Stock that the Participant has previously acquired to the Company (valued at Fair Market Value on the exercise date), (ii) directing the Company to withhold and retain shares of Common Stock in lieu of issuance pursuant to the exercise (valued at Fair Market Value on the exercise date), (iii) directing a broker designated by or acceptable to the Company to arrange for the sale of a portion of the shares issued pursuant to the exercise and deliver the proceeds to the Company.

	(c)	No portion of the Award may be exercised after the Expiration Date or during any period for which such exercise is prohibited under a Company policy relating to the trading of its securities, including any insider trading or Section 16 officer policy.

	(d)	During the lifetime of the Participant, only the Participant or the Participant’s legal representative may exercise the Award unless otherwise approved by the Board.

	5.	Form of Settlement. In full satisfaction of the exercise of any portion of the Award granted hereby, the Company will issue to the Participant the amount owed in whole shares of Common Stock, subject to applicable withholding, if any, except as otherwise may be provided to effectuate an alternative exercise method permitted under Section 4.

	(a)	Notwithstanding anything herein to the contrary, no exercise shall become effective until the Company determines that the issuance and delivery of shares of Common Stock pursuant to such exercise is in compliance with all applicable, laws, regulations of governmental authority, and the requirements of any securities exchange on which shares of Common Stock may be traded.

	(b)	The Board may, as a condition to the issuance of shares of Common Stock pursuant to the exercise of the Award, require the Participant to make covenants and representations and/or enter into agreements with the Company to reflect the Participant’s rights and obligations as a stockholder of the Company and any limitations and restrictions on such shares.

	(c)	The transfer of shares of Common Stock made to satisfy any payment for the settlement of the Award shall be effectuated by the issuance of certificates representing such shares (bearing such legends as the Board deems necessary or desirable), and/or other appropriate means as determined by the Board.

	(d)	Unless and until any shares of Common Stock are issued in settlement of the Award, the Award shall not confer to the Participant any rights or status as a stockholder of the Company.

	6.	Withholding. If applicable, the Board shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state, and local withholding tax requirements attributable to the Award. Alternatively, the Company shall have the right to withhold from any payment required to be made in settlement of the Award an amount sufficient to satisfy such federal, state, and local withholding tax requirements, as applicable.^[1]

	7.	No Assignment or Transfer. Neither the Award nor any right or interest in any Award granted hereunder may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution. No transfer by will or the laws of descent and distribution shall be effective to bind the Company unless the Board shall have been furnished with (i) written notice thereof along with such evidence as the Board may deem necessary to establish the validity of the transfer and (ii) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgements made by the Participant in connection with the grant.

	8.	Participant Representations. By accepting the Award, the Participant represents and acknowledges the following:

	(a)	The Participant has received a copy of the Plan, has reviewed the Plan and this Award Agreement in their entirety, and has had an opportunity to obtain the advice of independent counsel prior to accepting the Award.

	(b)	The Participant has had the opportunity to consult with a tax advisor concerning the tax consequences of accepting and exercising the Award, and understands that the Company makes no representation regarding the tax treatment as to any aspect of the Award, including the grant, vesting, settlement, or conversion of the Award.

	(c)	The Participant understands that neither the grant of this discretionary Award nor the Participant’s participation in the Plan confers any right to continue in the service of the Company or to receive any other award or amount of compensation, whether under the Plan or otherwise, and no payment of any award under the Plan will be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance, or other benefit plan of the Company except as otherwise specifically provided in such other plan.

	(d)	The Participant consents to the collection, use, and transfer, in electronic or other form, of the Participant’s personal data by the Company, the Board, and any third party retained to administer the Plan for the exclusive purpose of administering the Award and Participant’s participation in the Plan. The Participant agrees to promptly notify the Board of any changes in the Participant’s name, address, or contact information during the entire period of Plan participation.

Adjustments. If there is a change in the outstanding shares of Common Stock due to a stock dividend, split, or consolidation, or a recapitalization, corporate change, corporate transaction, or other similar event relating to the Company, the Board may adjust the type or number of shares of Common Stock subject to any outstanding portion of the Award and/or the exercise price per share thereof in accordance with Section 9 the Plan.

____________

^[1] Note to Draft: As independent contractors will not be subject to withholding taxes, this provision can be removed in its entirety when this award agreement is used for independent contractors. This provision should not be deleted when being used for employees, as the Company will want all available mechanisms for collecting withholding taxes. For ease of administration, this provision was drafted so it can stay in for both independent contractor and employee grants, so there is only one version of the award agreement.

	10.	Administration; Interpretation. In accordance with the Plan and this Award Agreement, the Board shall have full discretionary authority to administer the Award, including discretionary authority to interpret and construe any and all provisions relating to the Award. Decisions of the Board shall be final, binding, and conclusive on all parties. In the event of a conflict between this Award Agreement and the Plan, the terms of this Award Agreement shall prevail.

	11.	Section 409A. It is intended that this Award Agreement will comply with Section 409A of the Code and the interpretive guidance thereunder (“Section 409A”), including, to the maximum extent applicable, the exceptions for (among others) short-term deferrals, certain stock rights, separation pay arrangements, reimbursements, and in-kind distributions, and this Award Agreement shall be administered accordingly, and interpreted and construed on a basis consistent with such intent. To the extent that any provision of this Award Agreement would fail to comply with the applicable requirements of Section 409A, the Company may, in its sole and absolute discretion and without requiring the Participant’s consent, make such modifications to this Award Agreement and/or payments to be made thereunder to the extent it determines necessary or advisable to comply with the requirements of Section 409A. Nothing in this Agreement shall be construed as a guarantee of any particular tax effect for the Award, and the Company does not guarantee that any compensation or benefits provided under this Award Agreement will satisfy the provisions of Section 409A.

	12.	Successors. The terms of this Award Agreement shall be binding upon and inure to the benefit of the heirs of the Participant or distributees of the Participant’s estate and any successor to the Company.

	13.	Governing Law; Severability; Dispute Resolution.

	(a)	Governing Law. This Award Agreement shall be construed and administered in accordance with the laws of Delaware without regard to its conflict of law principles.
	(b)	Severability. Any determination by a court of competent jurisdiction or relevant governmental authority that any provision or part of a provision in this Award Agreement is unlawful or invalid shall not serve to invalidate any portion of this Award Agreement not found to be unlawful or invalid, and any provision or part of a provision found to be unlawful or invalid shall be construed in a manner that will give effect to the terms of such provision or part of a provision to the fullest extent possible while remaining lawful and valid.

14.

Acknowledgment of Receipt and Acceptance. By signing this Award Agreement (or execution by other means approved by the Board, including by electronic signature), the Participant acknowledges receipt and acceptance of the Award, agrees to the representations made in Section 8, and indicates his or her intention to be bound by this Award Agreement and the terms of the Plan.

[Signature page follows.]

Participant’s acknowledgment of receipt and acceptance:

[Participant name]

Date

Company Representative

[Name and title of company representative]
Phio Pharmaceuticals Corp.

Date

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECURITIES EXCHANGE ACT OF 1934 RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert J. Bitterman, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Phio Pharmaceuticals Corp.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: November 9, 2023

/s/ Robert J. Bitterman
Robert J. Bitterman
President and Chief Executive Officer
(as Principal Executive and Financial Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Phio Pharmaceuticals Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the Company’s financial condition and result of operations.

Dated: November 9, 2023

/s/ Robert J. Bitterman
Robert J. Bitterman
President and Chief Executive Officer
(as Principal Executive and Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 03, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-36304
Entity Registrant Name	Phio Pharmaceuticals Corp.
Entity Central Index Key	0001533040
Entity Tax Identification Number	45-3215903
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	257 Simarano Drive
Entity Address, Address Line Two	Suite 101
Entity Address, City or Town	Marlborough
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01752
City Area Code	(508)
Local Phone Number	767-3861
Title of 12(b) Security	Common Stock, par value, $0.0001 per share
Trading Symbol	PHIO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,443,447

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 8,407	$ 11,781
Restricted cash	50	50
Prepaid expenses and other current assets	871	615
Total current assets	9,328	12,446
Right of use asset	66	161
Property and equipment, net	142	183
Other assets	3	24
Total assets	9,539	12,814
Current liabilities:
Accounts payable	173	779
Accrued expenses	2,083	1,025
Lease liability	70	135
Total current liabilities	2,326	1,939
Lease liability, net of current portion	0	35
Total liabilities	2,326	1,974
Commitments and contingencies (Note 2)
Series D Preferred Stock, $0.0001 par value; 0 and 1 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022, respectively	0	2
Stockholders’ equity:
Common stock, $0.0001 par value, 100,000,000 shares authorized; 2,307,385 and 1,139,024 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	0	0
Additional paid-in capital	144,524	139,218
Accumulated deficit	(137,311)	(128,380)
Total stockholders’ equity	7,213	10,838
Total liabilities, preferred stock and stockholders’ equity	$ 9,539	$ 12,814

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Temporary equity, par value	$ 0.0001	$ 0.0001
Temporary equity, shares authorized	0	1
Temporary equity, shares issued	0	1
Temporary equity, shares outstanding	0	1
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares, issued	2,307,385	1,139,024
Common stock, shares outstanding	2,307,385	1,139,024

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 1,808	$ 2,508	$ 5,325	$ 5,398
General and administrative	968	1,063	3,600	3,334
Total operating expenses	2,776	3,571	8,925	8,732
Operating loss	(2,776)	(3,571)	(8,925)	(8,732)
Total other expense, net	(4)	(5)	(6)	(17)
Net loss	$ (2,780)	$ (3,576)	$ (8,931)	$ (8,749)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss per common share, Basic	$ (1.14)	$ (3.14)	$ (5.03)	$ (7.70)
Net loss per common share, Diluted	$ (1.14)	$ (3.14)	$ (5.03)	$ (7.70)
Weighted average number of common shares outstanding, Basic	2,440,164	1,138,571	1,775,043	1,135,744
Weighted average number of common shares outstanding, Diluted	2,440,164	1,138,571	1,775,043	1,135,744

CONDENSED CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Preferred Stock Series D [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 0	$ 0	$ 138,832	$ (116,900)	$ 21,932
Balance at beginning, shares at Dec. 31, 2021	0	1,127,917
Issuance of common stock upon vesting of restricted stock units
Issuance of common stock upon vesting of restricted stock units, shares		12,943
Shares withheld for payroll taxes			(25)		(25)
Shares withheld for payroll taxes, shares		(2,633)
Stock-based compensation expense			186		186
Net loss				(2,642)	(2,642)
Ending balance, value at Mar. 31, 2022	$ 0	$ 0	138,993	(119,542)	19,451
Balance at ending, shares at Mar. 31, 2022	0	1,138,227
Beginning balance, value at Dec. 31, 2021	$ 0	$ 0	138,832	(116,900)	21,932
Balance at beginning, shares at Dec. 31, 2021	0	1,127,917
Net loss					(8,749)
Ending balance, value at Sep. 30, 2022	$ 0	$ 0	139,176	(125,649)	13,527
Balance at ending, shares at Sep. 30, 2022	0	1,138,998
Beginning balance, value at Mar. 31, 2022	$ 0	$ 0	138,993	(119,542)	19,451
Balance at beginning, shares at Mar. 31, 2022	0	1,138,227
Stock-based compensation expense			83		83
Net loss				(2,531)	(2,531)
Ending balance, value at Jun. 30, 2022	$ 0	$ 0	139,076	(122,073)	17,003
Balance at ending, shares at Jun. 30, 2022	0	1,138,227
Issuance of common stock upon vesting of restricted stock units
Issuance of common stock upon vesting of restricted stock units, shares		1,064
Shares withheld for payroll taxes			(3)		(3)
Shares withheld for payroll taxes, shares		(293)
Stock-based compensation expense			103		103
Net loss				(3,576)	(3,576)
Ending balance, value at Sep. 30, 2022	$ 0	$ 0	139,176	(125,649)	13,527
Balance at ending, shares at Sep. 30, 2022	0	1,138,998
Beginning balance, value at Dec. 31, 2022	$ 2	$ 0	139,218	(128,380)	10,838
Balance at beginning, shares at Dec. 31, 2022	1	1,139,024
Cash-in-lieu of fractional shares for reverse stock split			(11)		(11)
Cash-in-lieu of fractional shares for reverse stock split, shares		(1,706)
Redemption of preferred stock	$ (2)
Redemption of preferred stock, shares	(1)
Issuance of common stock upon vesting of restricted stock units
Issuance of common stock upon vesting of restricted stock units, shares		18,080
Shares withheld for payroll taxes			(25)		(25)
Shares withheld for payroll taxes, shares		(4,816)
Stock-based compensation expense			111		111
Net loss				(3,602)	(3,602)
Ending balance, value at Mar. 31, 2023	$ 0	$ 0	139,293	(131,982)	7,311
Balance at ending, shares at Mar. 31, 2023	0	1,150,582
Beginning balance, value at Dec. 31, 2022	$ 2	$ 0	139,218	(128,380)	10,838
Balance at beginning, shares at Dec. 31, 2022	1	1,139,024
Net loss					(8,931)
Ending balance, value at Sep. 30, 2023	$ 0	$ 0	144,524	(137,311)	7,213
Balance at ending, shares at Sep. 30, 2023	0	2,307,385
Beginning balance, value at Mar. 31, 2023	$ 0	$ 0	139,293	(131,982)	7,311
Balance at beginning, shares at Mar. 31, 2023	0	1,150,582
Issuance of common stock and warrants, net of offering costs	$ 0	$ 0	5,048	0	5,048
Issuance of common stock and warrants, net of offering costs, shares		659,629
Issuance of common stock upon exercise of warrants	0	$ 0	0	0	0
Issuance of common stock upon exercise of warrants, shares		175,000
Stock-based compensation expense			94		94
Net loss				(2,549)	(2,549)
Ending balance, value at Jun. 30, 2023	$ 0	$ 0	144,435	(134,531)	9,904
Balance at ending, shares at Jun. 30, 2023	0	1,985,211
Issuance of common stock upon exercise of warrants	$ 0	$ 0	0	0	0
Issuance of common stock upon exercise of warrants, shares		320,290
Issuance of common stock upon vesting of restricted stock units	0	$ 0	0	0	0
Issuance of common stock upon vesting of restricted stock units, shares		2,000
Shares withheld for payroll taxes
Shares withheld for payroll taxes, shares		(116)
Stock-based compensation expense			89		89
Net loss				(2,780)	(2,780)
Ending balance, value at Sep. 30, 2023	$ 0	$ 0	$ 144,524	$ (137,311)	$ 7,213
Balance at ending, shares at Sep. 30, 2023	0	2,307,385

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (8,931)	$ (8,749)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	46	56
Amortization of right of use asset	95	91
Stock-based compensation	294	372
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(235)	(220)
Accounts payable	(606)	260
Accrued expenses	1,058	(1,141)
Lease liability	(100)	(93)
Net cash used in operating activities	(8,379)	(9,424)
Cash flows from investing activities:
Cash paid for purchase of property and equipment	(5)	(121)
Net cash used in investing activities	(5)	(121)
Cash flows from financing activities:
Net proceeds from the issuance of common stock and warrants	5,048	0
Cash in lieu of fractional shares for reverse stock split	(11)	0
Redemption of Series D preferred stock	(2)	0
Payment of taxes on net share settlements of restricted stock units	(25)	(28)
Net cash provided by (used in) financing activities	5,010	(28)
Net decrease in cash and restricted cash	(3,374)	(9,573)
Cash and restricted cash at the beginning of period	11,831	24,107
Cash and restricted cash at the end of period	$ 8,457	$ 14,534

Reconciliation of Cash - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Cash	$ 8,407	$ 11,781	$ 14,484
Restricted cash	50	50	50
Cash and restricted cash	$ 8,457	$ 11,831	$ 14,534	$ 24,107

Organization and Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Significant Accounting Policies

1. Organization and Significant Accounting Policies

Nature of Operations

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Phio and its wholly-owned subsidiary, MirImmune, LLC. All material intercompany accounts have been eliminated in consolidation.

Basis of Presentation

Use of Estimates

Liquidity

Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies disclosed in the Company’s 2022 Form 10-K.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements that have significantly impacted this Quarterly Report on Form 10-Q, beyond those disclosed in the Company’s 2022 Form 10-K.

Collaboration Agreement

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration Agreement

2. Collaboration Agreement

AgonOx, Inc. (“AgonOx”)

There is approximately $2,964,000 of remaining costs not yet incurred under the Clinical Co-Development Agreement as of September 30, 2023.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

3. Fair Value of Financial Instruments

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The carrying amounts of cash, accounts payable and accrued expenses of the Company approximate their fair values due to their short-term nature.

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

4. Leases


	September 30, 2023		December 31, 2022
Assets
Right of use asset	$	66	$	161
Liabilities
Lease liability, current		70		135
Lease liability, non-current		–		35
Total lease liability	$	70	$	170
Lease Term and Discount Rate
Weighted average remaining lease term		0.50		1.25
Weighted average discount rate		4.70%		4.70%


2023 (remaining)	$	36
2024		35
Total lease payments		71
Less: Imputed interest		(1	)
Total operating lease liability	$	70

Preferred Stock

9 Months Ended

Sep. 30, 2023

Temporary Equity Disclosure [Abstract]

Preferred Stock

5. Preferred Stock

Stockholders’ Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders’ Equity

6. Stockholders’ Equity

Warrants

The following table summarizes the Company’s outstanding warrants, all of which are classified as equity instruments, at September 30, 2023:

Summary of outstanding warrants
	Number of Shares			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2022		545,401		$	54.53
Issued		3,302,706			4.46
Exercised		(495,290	)		0.001
Expired		(1,837	)		1,245.59
Outstanding at September 30, 2023		3,350,980		$	9.09

The Company’s outstanding warrants as of September 30, 2023 expire at various dates between October 2023 and December 2028.

Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

7. Stock-based Compensation

Restricted Stock Units

The following table summarizes the activity of the Company’s RSUs for the nine months ended September 30, 2023:

Summary of RSU activity
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Unvested units at December 31, 2022		47,335		$	15.03
Granted		43,500			5.24
Vested		(20,080	)		16.34
Forfeited		(1,500	)		5.24
Unvested units at September 30, 2023		69,255		$	12.93

Stock Options

The following table summarizes the activity of the Company’s stock options for the nine months ended September 30, 2023:

Summary of stock option activity
	Number of Shares			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance at December 31, 2022		177		$	35,231.40
Granted		–			–
Exercised		–			–
Forfeited		–			–
Expired		(50	)		82,948.68
Balance at September 30, 2023		127		$	16,445.06	$	–
Exercisable at September 30, 2023		127		$	16,445.06	$	–

Compensation Expense Related to Equity Awards

The following table sets forth total stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022, in thousands:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Research and development	$	51	$	54	$	163	$	163
General and administrative		38		49		131		209
Total stock-based compensation	$	89	$	103	$	294	$	372

Net Loss per Common Share

9 Months Ended

Sep. 30, 2023

Net loss per common share:

Net Loss per Common Share

8. Net Loss per Common Share

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

Schedule of anti-dilutive stock
	September 30,
	2023		2022
Stock options		127		142
Unvested restricted stock units		69,255		57,017
Warrants¹		3,217,335		545,401
Total		3,286,717		602,560

__________________

Organization and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	Nature of Operations Phio Pharmaceuticals Corp. (“Phio” or the “Company”) is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi technology platform is designed to make immune cells more effective in killing tumor cells. Phio is developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. Effective January 26, 2023, the Company completed a 1-for-12 reverse stock split of the Company’s outstanding common stock, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. The reverse stock split did not reduce the number of authorized shares of the Company’s common or preferred stock. All share and per share amounts have been adjusted to give effect to the reverse stock split.
Principles of Consolidation	Principles of Consolidation The condensed consolidated financial statements include the accounts of Phio and its wholly-owned subsidiary, MirImmune, LLC. All material intercompany accounts have been eliminated in consolidation.
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures that are included in the Company’s annual consolidated financial statements, but that are not required for interim reporting purposes, have been condensed or omitted. Additionally, the Company made adjustments to the outstanding stock option and unvested restricted stock unit balances, and related per share amounts, at December 31, 2022 to reflect final revisions to those outstanding equity awards as a result of the Company’s reverse stock split. The adjustment had no effect on the Company’s condensed consolidated financial statements. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2023 (the “2022 Form 10-K”). In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Interim results are not necessarily indicative of results for a full year.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas subject to significant estimates and judgement include, among others, those related to the fair value of equity awards, accruals for research and development expenses, useful lives of property and equipment, and the valuation allowance on the Company’s deferred tax assets. On an ongoing basis the Company evaluates its estimates and bases its estimates on historical experience and other relevant assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from these estimates.
Liquidity	Liquidity The Company has reported recurring losses from operations since inception and expects to continue to have negative cash flows from operations for the foreseeable future. Historically, the Company’s primary source of funding has been from sales of its securities. The Company’s ability to continue to fund its operations is dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity, or strategic opportunities, in order to maintain its operations. This is dependent on a number of factors, including the market demand or liquidity of the Company’s common stock. There is no guarantee that debt, additional equity or other funding will be available to the Company on acceptable terms, or at all. If the Company fails to obtain additional funding when needed, the Company would be forced to scale back or terminate its operations or seek to merge with or to be acquired by another company. The Company has limited cash resources, has reported recurring losses from operations since inception and has not yet received product revenues. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern, and the Company’s current cash resources may not provide sufficient capital to fund operations for at least the next 12 months from the date of the release of these financial statements. The continuation of the Company as a going concern depends upon the Company’s ability to raise additional capital through an equity offering, debt offering and/or strategic opportunity to fund its operations. There can be no assurance that the Company will be successful in accomplishing these plans in order to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies There have been no material changes to the significant accounting policies disclosed in the Company’s 2022 Form 10-K.
Recent Accounting Pronouncements	Recent Accounting Pronouncements There have been no recent accounting pronouncements that have significantly impacted this Quarterly Report on Form 10-Q, beyond those disclosed in the Company’s 2022 Form 10-K.

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of lease and supplemental balance sheet information


	September 30, 2023		December 31, 2022
Assets
Right of use asset	$	66	$	161
Liabilities
Lease liability, current		70		135
Lease liability, non-current		–		35
Total lease liability	$	70	$	170
Lease Term and Discount Rate
Weighted average remaining lease term		0.50		1.25
Weighted average discount rate		4.70%		4.70%

Schedule of future minimum lease payments


2023 (remaining)	$	36
2024		35
Total lease payments		71
Less: Imputed interest		(1	)
Total operating lease liability	$	70

Stockholders’ Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Summary of outstanding warrants

Summary of outstanding warrants
	Number of Shares			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2022		545,401		$	54.53
Issued		3,302,706			4.46
Exercised		(495,290	)		0.001
Expired		(1,837	)		1,245.59
Outstanding at September 30, 2023		3,350,980		$	9.09

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of RSU activity

Summary of RSU activity
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Unvested units at December 31, 2022		47,335		$	15.03
Granted		43,500			5.24
Vested		(20,080	)		16.34
Forfeited		(1,500	)		5.24
Unvested units at September 30, 2023		69,255		$	12.93

Summary of stock option activity

Summary of stock option activity
	Number of Shares			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance at December 31, 2022		177		$	35,231.40
Granted		–			–
Exercised		–			–
Forfeited		–			–
Expired		(50	)		82,948.68
Balance at September 30, 2023		127		$	16,445.06	$	–
Exercisable at September 30, 2023		127		$	16,445.06	$	–

Schedule of stock based compensation expense


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Research and development	$	51	$	54	$	163	$	163
General and administrative		38		49		131		209
Total stock-based compensation	$	89	$	103	$	294	$	372

Net Loss per Common Share (Tables)

9 Months Ended

Sep. 30, 2023

Net loss per common share:

Schedule of anti-dilutive stock

Schedule of anti-dilutive stock
	September 30,
	2023		2022
Stock options		127		142
Unvested restricted stock units		69,255		57,017
Warrants¹		3,217,335		545,401
Total		3,286,717		602,560

Organization and Significant Accounting Policies (Details Narrative)	Jan. 26, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reverse stock split	1-for-12 reverse stock split

Collaboration Agreement (Details Narrative) - Clinical Co Development Agreement [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Contractual obligation	$ 2,964,000		$ 2,964,000		$ 4,000,000
Expense from contractual obligations	$ 606,000	$ 0	$ 906,000	$ 0

Fair Value of Financial Instruments (Details Narrative) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 50,000	$ 50,000

Leases - (Details - Balance sheet lease items) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Right of use asset	$ 66	$ 161
Lease liability, current	70	135
Lease liability, non-current	0	35
Total lease liability	$ 70	$ 170
Weighted average remaining lease term	6 months	1 year 3 months
Weighted average discount rate	4.70%	4.70%

Leases (Details - Future lease payments) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023 (remaining)	$ 36
2024	35
Total lease payments	71
Less: Imputed interest	(1)
Total operating lease liability	$ 70	$ 170

Leases (Details Narrative)	3 Months Ended		9 Months Ended
Leases (Details Narrative)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)
Operating Lease, Cost	$ 33,000	$ 33,000	$ 99,000	$ 99,000
Operating Lease, Payments	$ 35,000	$ 34,000	$ 104,000	$ 101,000
Property Subject to Operating Lease [Member]
Operating lease footage \| ft²	7,581		7,581
Lease Expiration Date			Mar. 31, 2024

Preferred Stock (Details Narrative) - USD ($)	Nov. 16, 2022	Sep. 30, 2023	Dec. 31, 2022
Temporary Equity [Line Items]
Preferred stock, shares authorized		10,000,000
Preferred stock, par value		$ 0.0001
Temporary Equity, Par or Stated Value Per Share		$ 0.0001	$ 0.0001
Series D Preferred Stock [Member]
Temporary Equity [Line Items]
Temporary Equity, Aggregate Amount of Redemption Requirement		$ 1,750
Series D Preferred Stock [Member] \| Robert Bitterman [Member]
Temporary Equity [Line Items]
Issuance of preferred stock, shares	1
Temporary Equity, Par or Stated Value Per Share	$ 0.0001
Temporary Equity, Stock Issued During Period, Value, New Issues	$ 1,750
Description of voting rights of redeemable preferred stock. Includes eligibility to vote and votes per share owned. Include also, if any, unusual voting rights.	17,500,000 votes per share

Stockholders' Equity (Details - Warrants outstanding) - Warrant [Member]	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Class of Warrant or Right [Line Items]
Warrants outstanding \| shares	545,401
Warrants outstanding, weighted average exercise price \| $ / shares	$ 54.53
Warrants issued, shares \| shares	3,302,706
Warrants issued, weighted average exercise price \| $ / shares	$ 4.46
Warrants exercised, shares \| shares	(495,290)
Warrants exercised, weighted average exercise price \| $ / shares	$ 0.001
Warrants expired, shares \| shares	(1,837)
Warrants expired, weighted average exercise price \| $ / shares	$ 1,245.59
Warrants outstanding \| shares	3,350,980
Warrants outstanding, weighted average exercise price \| $ / shares	$ 9.09

Stockholders’ Equity (Details Narrative) - USD ($)			3 Months Ended	9 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	Jun. 02, 2023	Apr. 20, 2023	Sep. 30, 2023	Sep. 30, 2023
April 2023 Financing [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		353,983
Shares Issued, Price Per Share		$ 5.65
Proceeds from Issuance or Sale of Equity		$ 1,538,000
April 2023 Financing [Member] \| Warrant Amendment Agreements [Member] \| Previously Issued Warrants [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 5.40
Amended warrants		191,619
Proceeds from amendment of warrants		$ 24,000
Increase in fair value of warrants		$ 293,000
April 2023 Financing [Member] \| Series A Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares		353,983
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 5.40
April 2023 Financing [Member] \| Series B Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares		353,983
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 5.40
April 2023 Financing [Member] \| Placement Agent Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares		26,549
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 7.0625
June 2023 Financing [Member]
Class of Stock [Line Items]
Shares Issued, Price Per Share	$ 4.28
Proceeds from Issuance or Sale of Equity	$ 3,510,000
June 2023 Financing [Member] \| Series A Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares	934,581
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 4.03
June 2023 Financing [Member] \| Series B Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares	934,581
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 4.03
June 2023 Financing [Member] \| Placement Agent Warrants [Member]
Class of Stock [Line Items]
Warrants issued new, shares	70,094
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 5.35
June 2023 Financing [Member] \| Registered Shares [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues	233,646
June 2023 Financing [Member] \| Unregistered Shares [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues	72,000
June 2023 Financing [Member] \| Unregistered Pre Funded Warrants [Member]
Class of Stock [Line Items]
Shares Issued, Price Per Share	$ 4.279
Warrants issued new, shares	628,935
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.001
June 2023 Financing [Member] \| June 2023 Pre Funded Warrants [Member]
Class of Stock [Line Items]
Stock issued from conversion of warrants, shares			320,290	495,290
Proceeds from Warrant Exercises			$ 320	$ 495

Stock-based Compensation (Details - RSU activity) - Restricted Stock Units (RSUs) [Member] - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
RSU's unvested units, beginning balance		47,335
RSU beginning balance, price per share		$ 15.03
RSU's granted		43,500
RSU's granted, price per share	$ 9.00	$ 5.24	$ 10.32
RSU's vested		(20,080)
RSU's vested, price per share		$ 16.34
RSU's forfeited		(1,500)
RSU's forfeited, price per share		$ 5.24
RSU's unvested units, ending balance		69,255
RSU ending balance, price per share		$ 12.93

Stock-based Compensation (Details - Option activity) - Share-Based Payment Arrangement, Option [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding, beginning balance \| shares	177
Options outstanding, price per share, beginning balance \| $ / shares	$ 35,231.40
Options granted \| shares	0
Options granted, price per share \| $ / shares	$ 0
Options exercised \| shares	0
Options exercised, price per share \| $ / shares	$ 0
Options forfeited \| shares	0
Options forfeited, price per share \| $ / shares	$ 0
Options expired \| shares	(50)
Options expired, price per share \| $ / shares	$ 82,948.68
Options outstanding, ending balance \| shares	127
Options outstanding, price per share, ending balance \| $ / shares	$ 16,445.06
Aggregate Intrinsic Value, outstanding \| $	$ 0
Options exercisable \| shares	127
Options exercisable, price per share \| $ / shares	$ 16,445.06
Aggregate Intrinsic Value, Exercisable \| $	$ 0

Stock-based Compensation (Details - Share-based compensation) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 89	$ 103	$ 294	$ 372
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	51	54	163	163
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 38	$ 49	$ 131	$ 209

Stock-based Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
Stock-based Compensation (Details Narrative) - USD ($)	Jul. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense		$ 89,000	$ 103,000	$ 294,000	$ 372,000
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
RSU's granted, price per share			$ 9.00	$ 5.24	$ 10.32
Share-based compensation expense		$ 89,000	$ 98,000	$ 294,000	$ 359,000
Fair value of awards vested				$ 100,000	138,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense			$ 5,000		$ 13,000
2020 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized	125,500

Net Loss per Share (Details - Antidilutive shares) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	3,286,717	602,560
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	127	142
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	69,255	57,017
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	3,217,335	545,401