Note 4 – Accounts Payable

Accounts payable consisted of the following (in thousands):

Schedule of Accounts Payable

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

On August 24, 2022, the Company entered into an agreement with this third-party manufacturer and issued 1,222,281 shares of common stock with a fair value of $3.3 million as part of a payment agreement. The shares were valued at $2.66 based on the closing price of the Company’s common stock on the date of the agreement. As part of the agreement, the Company also paid this third-party manufacturer $1.3 million on September 1, 2022 and $1.0 million on October 3, 2022, respectively, and agreed to pay another $1.0 million in November 2022. In addition, the Company and the third-party manufacturer agreed that services to be rendered in future periods, as specified in the agreement, will be paid or settled at the Company’s discretion, in a combination of cash and issuance of the Company’s common stock. The agreement also amended certain agreements executed in prior years which eliminated future financial commitment of the Company.

The Company’s accounts payable to this third-party manufacturer amounted to $2.6 million and $6.3 million as of September 30, 2022 and December 31, 2021, respectively.