See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
Notes to the Unaudited Condensed Consolidated Financial Statements
1. Nature of Business
The terms "MBI" or "the Company", "we", "our", and "us" are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015. The Company's focus is on the treatment of highly resistant cancers and viruses through the development of its drug candidates. These candidates are based substantially on discoveries licensed from The University of Texas System on behalf of the MD Anderson Cancer Center, which we refer to as MD Anderson. MBI formed Moleculin Australia Pty. Ltd., (MAPL), a wholly owned subsidiary in June 2018, to perform certain preclinical development in Australia. This has enabled the Company to realize the benefits of certain research and development tax credits in Australia. In 2019, the Company sublicensed essentially all of the rights to its technologies in 29 countries in Europe and Asia to WPD Pharmaceuticals Sp.z o.o. (WPD or WPD Pharmaceuticals) in exchange for collaboration on development in Poland. Also in 2019, the Company sublicensed its technologies to Animal Life Sciences, Inc. (ALI), to enable research and commercialization for non-human use and share development data. As part of this agreement, ALI issued to the Company a 10% interest in ALI.
The Company has three core technologies: 1) Annamycin, which the Company refers to as a "next generation" anthracycline; 2) a portfolio of Immune/Transcription Modulators, of which WP1066 is one of the lead molecules; and 3) a portfolio of Metabolism/Glycosylation Inhibitors, of which WP1122 is the lead molecule. The Company has six drug candidates, representing all three core technologies, and three of which have shown human activity in clinical trials. As of the end of 2020, those three drug candidates accounted for five clinical trials in the United States (US) and Europe. Two of those trials are externally funded studies of WP1066 in brain tumors. Two internally funded Phase 1 clinical trials, Annamycin in acute myeloid leukemia (AML), and WP1220 in cutaneous T-cell lymphoma (CTCL), were successfully concluded. An additional Phase 1/2 clinical trial of Annamycin in AML is also internally funded and is currently ongoing. In 2021, the Company anticipates the initiation of four or more new clinical trials in addition to the three trials continuing from 2020.
In late 2020, MBI received US Food and Drug Administration (FDA) clearance to proceed with an additional Phase 1b/2 clinical trial of Annamycin for the treatment of soft tissue sarcoma (STS) lung metastases and the Company expects to commence this study in the US in the second half of 2021. Based on a recently announced reimbursement grant awarded in Poland, MBI expects a second Phase 1b/2 clinical trial of Annamycin in STS lung metastases to be primarily investigator-funded in Europe. MBI also plans to begin a Phase 1/2 clinical trial of Annamycin in combination with Ara-C for the treatment of AML in Europe, by seeking approval for its own clinical trial and a second, similar grant funded trial through its sublicensee, WPD Pharmaceuticals in Poland. The Company is also working with regulatory authorities in the United Kingdom (UK) to initiate a Phase 1 clinical trial of WP1122 in healthy volunteers with the intent to progress to COVID-19 patients either there or in locations where the prevalence of COVID-19 will adequately support recruitment. The Company intends to internally fund the initial trials of WP1122 but may seek external funding opportunities if activity is seen in COVID-19 patients. Additionally, the Company is pursuing filing an Investigative New Drug application (IND) in the US for the treatment of certain cancers in 2021. Finally, the Company continues to seek opportunities to collaborate on a potential Phase 2 clinical study of WP1220 in CTCL.
The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have and does not intend to have a sales organization. The Company’s overall strategy is to seek potential outlicensing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs if approved.
COVID-19 - In March 2020, the World Health Organization declared the outbreak of a novel Coronavirus (COVID-19) as a pandemic, which continues to spread throughout the world. The spread of COVID-19 has caused significant volatility in US and international markets, including Poland, where MBI conducts some of its clinical trials and Italy, where its drug supply is produced. There has been limited interruption of its drug supply, and most Polish clinics where the Company is conducting trials are limiting access for monitoring activities. Additionally, MBI believes COVID-19 has materially slowed the recruitment of patients for its clinical trials. This could worsen or be alleviated at any time. Furthermore, there is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the US and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations. Additionally, the Company believes that the potential for impact to its supply chain due to COVID-19 will be reduced as vaccine production normalizes throughout the industry. In light of current worldwide trends with respect to COVID-19, MBI does not expect COVID-19 to materially impact recruitment for current or future oncology trials as COVID-19 hospitalizations have recently decreased. However, the Company cannot be certain that these trends will continue and there is the possibility they may reverse.
2. Basis of presentation, principles of consolidation, significant accounting policies and liquidity
Reverse Stock Split - On January 29, 2021, the Company filed a Certificate of Amendment to the amended and restated certificate of incorporation with the Secretary of State and the State of Delaware to effect a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 for 6. The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented. Certain amounts in the financial statements, the notes thereto, and elsewhere in the Form 10-Q may be slightly different than previously reported due to rounding up of fractional shares as a result of the reverse stock split.
Basis of Presentation – Unaudited Interim Condensed Consolidated Financial Information - The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the US (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the US Securities and Exchange Commission (SEC) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These interim condensed unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of December 31, 2020 and December 31, 2019 and notes thereto contained in the Form 10-K filed with the SEC on March 24, 2021.
Principles of Consolidation - The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All long-lived assets of the Company reside in the US.
Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies, to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes to the significant accounting policies during the three months ended March 31, 2021, other than those noted below.
Use of Estimates - The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes.
Liquidity and Financial Condition - The Company is an early stage and emerging growth company (EGC) and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage and emerging growth companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three months ended March 31, 2021 and 2020, the Company incurred net losses of $4.4 million and $1.2 million, respectively, and had net cash flows used in operating activities of $3.6 million and $4.3 million, respectively. At March 31, 2021, the Company had an accumulated deficit of $61.4 million and cash and cash equivalents of $86.3 million. The Company expects its cash on hand as of March 31, 2021 will be sufficient to fund the Company's operations beyond the near term. Such projections are subject to changes in the Company’s internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity. The Company does not expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the development of its core technologies to the point of generating revenue, most likely via outlicensing, and continues to invest in research and development for additional applications of the Company's core technologies and potentially increase its pipeline of drug candidates. The Company anticipates incurring operating losses for the next several years. If the Company needs to raise additional capital in order to continue to execute its business plan, there is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital could adversely impact the Company's ability to achieve its intended business objectives and meet its financial obligations as they become due and payable.
Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the US, which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held.
Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.
The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).
Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows:
Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities.
Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 – Unobservable inputs for the asset or liability.
The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4.
The following table provides liabilities reported at fair value and measured on a recurring basis at March 31, 2021 and December 31, 2020 (in thousands):
Description
|
|
Fair Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Fair value of warrant liability as of March 31, 2021:
|
|
$
|
6,563
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,563
|
|
Fair value of warrant liability as of December 31, 2020:
|
|
$
|
8,192
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,192
|
|
The table below (in thousands) of Level 3 liabilities begins with the valuation as of the beginning of the first quarter and then is adjusted for the exercises that occurred during the first quarter of 2021 and adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.
Three Months Ended March 31, 2021
|
|
Warrant Liability Long-Term
|
|
|
Warrant Liability Total
|
|
Balance, December 31, 2020
|
|
$
|
8,192
|
|
|
$
|
8,192
|
|
Exercise of warrants
|
|
|
(52
|
)
|
|
|
(52
|
)
|
Change in fair value - net
|
|
|
(1,577
|
)
|
|
|
(1,577
|
)
|
Balance, March 31, 2021
|
|
$
|
6,563
|
|
|
$
|
6,563
|
|
Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be antidilutive. For the three months ended March 31, 2021 and 2020, approximately 3.8 million and approximately 3.1 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their antidilutive effect.
Subsequent Events - The Company’s management reviewed all material events through the date these unaudited condensed consolidated financial statements were issued for subsequent events disclosure consideration, see other notes and specifically Note 8 - Subsequent Events.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) (ASU 2020-06). ASU 2020-06 simplifies the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of both liabilities and equity, including convertible instruments and contracts in an entity's own equity. The guidance is effective for the Company beginning on January 1, 2022 and prescribes different transition methods for the various provisions. The Company is currently evaluating the impact that this standard will have, if any, on its financial statements.
The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.
3. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following components (in thousands):
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Accrued research and development
|
|
$
|
1,299
|
|
|
$
|
907
|
|
Accrued payroll and bonuses
|
|
|
810
|
|
|
|
426
|
|
Accrued legal, regulatory, professional and other
|
|
|
324
|
|
|
|
262
|
|
Operating lease liability - current
|
|
|
122
|
|
|
|
118
|
|
Accrued related party
|
|
|
95
|
|
|
|
78
|
|
Total accrued expenses and other current liabilities
|
|
$
|
2,650
|
|
|
$
|
1,791
|
|
Additionally, accounts payable includes $48,000 as of March 31, 2021 and December 31, 2020, respectively, for a related party payable.
4. Warrants
Liability Classified Warrants
The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon US Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Beginning in 2020, only the volatility of the Company's own stock is used in the BSM as it now has sufficient historic data in its stock price.
The assumptions used in determining the fair value of the liability classified warrants are as follows:
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Risk-free interest rate
|
|
0.1% to 0.7%
|
|
|
0.1% to 0.3%
|
|
Volatility
|
|
96.5% to 136.1%
|
|
|
113.7% to 127.4%
|
|
Expected life (years)
|
|
0.9 to 4.5
|
|
|
1.1 to 4.6
|
|
Dividend yield
|
|
—%
|
|
|
—%
|
|
A summary of the Company's liability classified warrant activity during the three months ended March 31, 2021 and related information follows:
|
|
Number of Shares
|
|
|
Range of Warrant Exercise
|
|
|
Weighted Average
|
|
|
Weighted Average Remaining Contractual
|
|
|
|
Under Warrant
|
|
|
Price per Share
|
|
|
Exercise Price
|
|
|
Life (Years)
|
|
Balance at January 1, 2021
|
|
|
2,733,645
|
|
|
$
|
6.30
|
|
|
$
|
16.80
|
|
|
$
|
9.45
|
|
|
|
3.6
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Exercised
|
|
|
(10,000
|
)
|
|
|
6.30
|
|
|
|
6.30
|
|
|
|
6.30
|
|
|
|
—
|
|
Expired
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Balance at March 31, 2021
|
|
|
2,723,645
|
|
|
$
|
6.30
|
|
|
$
|
16.80
|
|
|
$
|
9.46
|
|
|
|
3.4
|
|
Exercisable at March 31, 2021
|
|
|
2,723,645
|
|
|
$
|
6.30
|
|
|
$
|
16.80
|
|
|
$
|
9.46
|
|
|
|
3.4
|
|
For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2021, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.
Equity Classified Warrants
At March 31, 2021 and December 31, 2020, respectively, the Company had 109,639 equity classified warrants outstanding and 85,472 warrants were exercisable.
There was no stock compensation expense for non-employee agreements equity classified warrants for the three months ended March 31, 2021 and 2020, respectively and $124,000 of unrecognized stock compensation expense related to the Company's equity-classified warrants.
5. Equity
Q1 2021 Stock Issuances
In February 2021, the Company entered into an underwritten public offering for the sale by the Company of 14,273,684 shares of its common stock at a public offering price of $4.75 per share and granted the underwriters a 30-day option to purchase up to an additional 2,141,052 shares of common stock offered in the public offering, which was exercised. The Company received total proceeds of $78.0 million, prior to deducting the underwriting discount and other estimated offering expenses. In January 2021 the Company issued 468,684 shares for gross proceeds of $2.9 million using the Company's At The Market Agreement with Oppenheimer & Co., Inc. The Company terminated the 2020 ATM Agreement on February 2, 2021. Additionally, during the first quarter of 2021, 10,000 shares were issued due to the exercise of warrants related to past public offerings. Gross proceeds received due to these exercises approximated $63,000.
Q1 2020 Stock Issuances
In February 2020, the Company entered into subscription agreements with certain institutional investors for the sale by the Company of 1,250,000 shares of its common stock and warrants to purchase 937,501 shares of common stock at a combined public offering price of $4.80 per share and related warrant. The Company received total proceeds of $6.0 million, prior to deducting the placement agent fees and other offering expenses.
Stock-Based Compensation and Outstanding Awards
The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights. As of March 31, 2021, there were 726,493 shares remaining to be issued under the 2015 Stock Plan. The Company did not have any grants, exercises, or forfeitures of any stock-based awards during the three months ended March 31, 2021.
Stock-based compensation for the three months ended March 31, 2021 and 2020, respectively (in thousands):
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
General and administrative
|
|
$
|
309
|
|
|
$
|
334
|
|
Research and development
|
|
|
96
|
|
|
|
63
|
|
Total stock-based compensation expense
|
|
$
|
405
|
|
|
$
|
397
|
|
6. Income Taxes
Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not expect to pay any significant federal, state, or foreign income taxes in 2021 as a result of the losses recorded during the three months ended March 31, 2021 and the additional losses expected for the remainder of 2021 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2021, the Company maintained a full valuation allowance for all deferred tax assets.
The Company recorded no income tax provision for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate for the three months ended March 31, 2021 and 2020 is 0%. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants and valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections.
7. Commitments and Contingencies
In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2021.
Lease Obligations Payable
The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2021 and 2020, respectively (in thousands):
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Lease cost:
|
|
|
|
|
|
|
|
|
Operating lease cost
|
|
$
|
29
|
|
|
$
|
29
|
|
Variable lease cost
|
|
|
7
|
|
|
|
7
|
|
Short-term lease cost
|
|
|
—
|
|
|
|
4
|
|
Total
|
|
$
|
36
|
|
|
$
|
40
|
|
The Company recorded approximately $10,000 in sublease income from a related party for the three months ended March 31, 2021 and 2020, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $34,000 and $33,000 for the three months ended March 31, 2021 and 2020, respectively.
At March 31, 2021, future minimum liabilities under ASC 842 for the Company's operating leases were as follows (in thousands):
Maturity of lease liabilities
|
|
As of March 31, 2021
|
|
2021 (remaining nine months)
|
|
$
|
104
|
|
2022
|
|
|
105
|
|
2023
|
|
|
56
|
|
2024
|
|
|
10
|
|
2025 and thereafter
|
|
|
—
|
|
Total lease payments
|
|
|
275
|
|
Less: imputed interest
|
|
|
(26
|
)
|
Present value of operating lease liabilities
|
|
$
|
249
|
|
As of March 31, 2021, the weighted average remaining lease term for operating leases is 2.2 years, and the weighted average discount rate is 9.6%. The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses an incremental borrowing rate based on a peer analysis using information available at the commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.
Licenses
MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $38,000 and $61,000 for the three months ended March 31, 2021 and 2020, respectively.
HPI - On March 16, 2020, the Company entered into two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI). The first agreement, which has a term of two years, continues a prior consulting arrangement with HPI on the Company's licensed molecules and requires payments for $43,500 per quarter to HPI. The second agreement, which can be cancelled with sixty days' notice by either party, allows the Company's employees access to laboratory equipment owned by HPI for a payment of $15,000 per quarter to HPI. Total expenses related to the Company's agreements with HPI were $59,000 and $108,500 for the three months ended March 31, 2021 and 2020, respectively.
Sponsored Research Agreements with MD Anderson - MBI has a Sponsored Laboratory Study Agreement with MD Anderson expiring in October 2021. In February 2021, the Company extended this Agreement until December 31, 2022. The expenses recognized under this MD Anderson agreement with regards to the Sponsored Laboratory Study Agreements were $94,000 and $179,000 for the three months ended March 31, 2021 and 2020, respectively.
8. Subsequent Events
In addition to the subsequent events discussed elsewhere in these notes, see below for a discussion of the Company's subsequent events occurring after March 31, 2021.
The Company entered into an agreement, effective subsequent to March 31, 2021, with an investor relations consultant and as part of that agreement 5,000 shares of common stock will be issued in the aggregate between April 1, 2021 and December 31, 2021. Additionally, the Company entered to an advisory agreement on April 29, 2021 with a consultant, pursuant to which the Company issued a warrant to purchase 71,500 shares of common stock which will vest equally and quarterly over five years, or earlier upon a change of control, and only while services are being rendered.