Note 1 - Organization and Description of Business

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Nature of Operations [Text Block]

1.

Organization and Description of Business

Diffusion Pharmaceuticals Inc. (“Diffusion” or the “Company”), a Delaware corporation, is a clinical stage biotechnology company developing new treatments for life threatening conditions by improving the body’s ability to bring oxygen to the areas where it is needed most. The Company is developing its lead product candidate, transcrocetinate sodium, also known as trans sodium crocetinate (“TSC”), for use in those life threatening conditions in which cellular oxygen deprivation (“hypoxia”) is the basis for significant unmet medical needs. TSC is designed to safely and selectively target and re-oxygenate the micro-environment of hypoxic cells, and can potentially be used in many indications, including oncology and cardiovascular/stroke.  In cancer, TSC re-oxygenates treatment-resistant cancerous tissue, making the cancer cells up to

three

times more susceptible to the therapeutic effects of standard-of-care radiation therapy and chemotherapy. In stroke, TSC helps promote the diffusion of oxygen into those brain cells in which oxygen-deprivation causes neuronal death resulting in patient mortality or morbidity. In addition to the TSC programs, the Company is exploring alternatives regarding how best to capitalize upon our product candidate RES-

529,

which

may

include possible out-licensing and other options. RES-

529

is a novel

PI3K/Akt/mTOR

pathway inhibitor which has completed

two

Phase

1

clinical trials for age-related macular degeneration and was in preclinical development in oncology, specifically GBM. RES-

529

has shown activity in both in vitro and in vivo glioblastoma animal models and has been demonstrated to be orally bioavailable and capable of crossing the blood brain barrier. 

On

December 13, 2018,

the Company effected a

1

-for-

15

reverse split of its common stock. As a result of the reverse stock split, every

fifteen

shares of common stock outstanding immediately prior to the reverse stock split were reclassified and combined into

one

share of Common Stock.

No

fractional shares were issued in connection with the reverse stock split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock had their holdings rounded up to the next whole share. Proportional adjustments were made to the Company’s outstanding warrants, stock options and other equity securities and to the Company’s

2015

Equity Incentive Plan, as amended, to reflect the reverse stock split, in each case, in accordance with the terms thereof. The accompanying consolidated financial statements and these notes give retroactive effect to this reverse stock split.