Note 4 – Accounts Payable

Accounts payable consisted of the following:

Schedule of Accounts Payable

The Company relies on a third-party contract manufacturing operation to produce and/or test our compounds used in our potential product candidates.

In October 2020, the Company entered into a Master Services Agreement with a third-party product manufacturer to perform biologic development and manufacturing services on behalf of the Company. Associated with this, the Company has subsequently executed a number of Statements of Work for the research and development of products for use in clinical trials.

On August 24, 2022, existing agreements with the third-party product manufacturer were amended. As part of the amendment, the third-party manufacturer agreed that services to be rendered in future periods, will be paid or settled at the Company’s discretion, in a combination of cash and issuance of the Company’s common stock. The amendment also eliminated future financial commitments of the Company.

During the nine months ended September 30, 2023 the Company incurred $3.7 million in research and development expenses to account for services rendered by the third-party product manufacturer. In addition, the Company paid cash of $1.7 million and issued 1.3 million shares of its common stock with a fair value of $0.59 million in settlement of accounts payable of $1.1 million, which resulted in a gain on settlement of $0.55 million. The shares were valued at the respective date of issuance.

The outstanding accounts payable balance due to the third-party product manufacturer totaled $3.1 million and $2.3 million as of September 30, 2023 and December 31, 2022, respectively.