NOTE

COMMITMENTS AND CONTINGENCIES

Lease Agreements

The Company presently leases office space under operating lease agreements expiring on

July 31, 2021,

October 3, 2021,

and

June 30, 2024.

The office leases require the Company to pay for its portion of taxes, maintenance and insurance. Rental expense under these agreements was

$395,190

and

$114,460

for the years ended

December 31, 2019

and

2018,

respectively. Rent expense for

2018

excludes New York lease costs as it was

not

restated for the new lease guidance.

All the Company’s existing leases as of

December 31, 2019

are classified as operating leases. As of

December 31, 2019,

the Company has

five

operating leases for facilities and office equipment with remaining terms expiring from

2019

through

2024

and a weighted average remaining lease term of

2.5

years. Many of the Company’s existing leases have fair value renewal options,

none

of which the Company considers certain of being exercised or included in the minimum lease term. Weighted-average discount rates used in the calculation of the Company’s lease liability are approximately

9.5%.

In addition, the Company is the lessor for office space in New York that it sublets to a tenant; the sublease expires in

2021.

Lease costs, net of sublease income, for the year ended

December 31, 2019

consisted of the following:

Operating lease cost	$	374,667
Variable lease costs		20,523
Sublease income		(234,098	)
Total lease costs	$	161,092

A maturity analysis of the Company’s operating leases follows:

Future undiscounted cash flows:

2020	$	356,196
2021		262,850
2022		60,819
2023		60,264
2024		30,132
Total		770,261

Discount factor		(90,435	)
Total lease liability		679,826
Current lease liability		(304,603	)
Non-current lease liability	$	375,223

Patent License Agreement with the Board of Regents of the University of Texas (NSAIDs)

January 8, 2003,

the Company entered into a patent license agreement with the Board of Regents of The University of Texas System (the “University”), under which it acquired an exclusive license for several patents and patent applications both inside and outside of the United States relating to gastrointestinal safer formulations of NSAIDs. Additionally, the Company acquired worldwide rights to commercialize licensed products which allow for the Company to grant sublicenses subject to royalty payments.

Under terms of the agreement, the Company is responsible for conducting clinical trials involving investigational use of a licensed product for the determination of metabolic and pharmacologic actions in humans, the side effects associated with increasing doses, examination of suspected indications, determination of the potential short-term side effects in humans and for establishing the safety, efficacy, labeled indications and risk-benefit profile in humans. The patent license agreement also requires the Company to provide reimbursement for all expenses incurred by The University of Texas Health Science Center at Houston for filing, prosecuting, enforcing and maintaining patent rights and requires an annual nonrefundable license management fee. In addition, the Company is obligated to pay certain milestone payments in future years relating to royalties resulting from the approval to sell licensed products and the resulting sales of such licensed products. The Company recognized total expenses of

$392,840

and

$85,330

related to the University in the years ended

December 31, 2019

and

2018,

respectively.

Investor Relations Agreement

March 21, 2017,

the Company entered into an agreement with an investor relations firm which expired in

June 2019.

The Company agreed to pay a monthly fee of

$15,000

starting

May 1, 2017.

The

$15,000

monthly fee is

$7,500

payable in cash and

$7,500

payable in shares of the Company’s common stock. The Company issued

13,601

and

21,127

shares of common stock during the years ended

December 31, 2019

and

2018,

respectively, as full payment for services during such period.