10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________ to _________

Commission file number: 000-21990

Oncotelic Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-3679168
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

29397 Agoura Road Suite 107 Agoura Hills, CA	91301
(Address of principal executive offices)	(Zip Code)

(650) 635-7000

(Registrant’s telephone number, including area code)

Mateon Therapeutics, Inc.

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
None	OTLC	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” a “smaller reporting company” and an “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 10, 2021, there were 371,354,911 shares of the registrant’s common stock outstanding.

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

(Formerly Mateon Therapeutics, Inc.)

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months and Six Months Ended June 30, 2021 and 2020	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	7
	Notes to Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	51
ITEM 4.	Controls and Procedures	51
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	53
ITEM 1A.	Risk Factors	53
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
ITEM 3.	Defaults Upon Senior Securities	53
ITEM 4.	Mine Safety Disclosures	53
ITEM 5.	Other Information	54
ITEM 6.	Exhibits, Financial Statement Schedules	54
SIGNATURES		55

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2021			2020
ASSETS
Current assets:
Cash	$	461,285		$	474,019
Restricted cash		20,000			20,000
Accounts receivable		156,270			19,748
Prepaid & other current assets		56,881			101,869
Total current assets		694,436			615,636
Development equipment, net of depreciation of $106,884 and $101,810		5,074			10,148
Intangibles, net of accumulated amortization of $162,655 and $136,974		847,525			873,206
In process R&D		1,101,760			1,101,760
Goodwill		21,062,455			21,062,455
Total assets	$	23,711,250		$	23,663,205
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	4,149,412		$	2,735,805
Accounts payable to related party		322,995			391,631
Contingent Consideration		2,625,000			2,625,000
Derivative liability on Notes		538,610			777,024
Convertible debt for clinical trial		2,040,329			2,000,000
Convertible debt, net of costs		1,658,262			1,091,612
Convertible debt, related party, net of costs		645,947			297,989
Private Placement convertible note, net of costs		1,798,801			943,586
Private Placement convertible note, related party, net of costs		93,488			67,992
Payroll Protection Plan loan		252,973			251,733
Total current liabilities		14,125,817			11,182,372
Commitments and contingencies (Note 12)
Stockholders’ equity:
Convertible Preferred stock, $0.01 par value, 15,000,000 shares authorized; 0 and 278,188 shares issued and outstanding		-			2,782
Common stock, $.01 par value; 150,000,000 shares authorized; 370,096,959 and 90,601,912 issued and outstanding, respectively		3,700,969			906,019
Additional paid-in capital		32,876,120			32,493,086
Accumulated deficit		(27,664,368	)		(21,630,008	)
Total Oncotelic Therapeutics, Inc. stockholders’ equity		8,912,721			11,771,879
Non-controlling interests		672,712			708,954
Total stockholders’ equity		9,585,433			12,480,833
Total liabilities and stockholders’ equity	$	23,711,250		$	23,663,205

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

3

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three MONTHS AND SIX MONTHS ended JUNE 30, 2021 and 2020

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Service Revenue	$	-		$	1,400,000		$	-		$	1,740,855
Operating expenses:
Research and development	$	956,814		$	482,142		$	2,513,486		$	794,141
General and administrative		2,807,398			904,018			3,288,607			3,583,168
Total operating expenses		3,764,212			1,386,160			5,802,093			4,377,309
Loss from operations		(3,764,212	)		13,840			(5,802,093	)		(2,636,454	)
Other expense:
Interest expense, net		(433,979	)		(137,089	)		(954,886	)		(1,283,794	)
Change in fair value of derivative on debt		630,174			746,809			93,829			10,512
Loss on debt conversion		-			(41,469	)		(27,504	)		(166,067	)
Total other expense		196,195			568,251			(888,561	)		(1,439,349	)
Net loss before non-controlling interests		(3,568,017	)		582,091			(6,690,654	)		(4,075,803	)
Net loss attributable to non-controlling interests		(336,737	)		-			(656,294	)		-
Net income (loss) attributable to Oncotelic Therapeutics, Inc.	$	(3,231,280	)	$	582,091		$	(6,034,360	)	$	(4,075,803	)
Basic net loss per share attributable to common stock	$	(0.01	)	$	0.01		$	(0.03	)	$	(0.05	)
Basic weighted average common stock outstanding		369,547,235			88,152,403			232,700,641			86,537,199
Diluted net loss per share attributable to common stock	$	(0.01	)	$	0.01		$	(0.03	)	$	(0.05	)
Diluted weighted average common stock outstanding		369,547,235			94,736,703			232,700,641			86,537,217

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

4

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated STATEMENT of STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Unaudited)

											Additional						Non
	Preferred Stock						Common Stock				Paid-in			Accumulated			controlling			Stockholders’
	Shares			Amount			Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2021		278,188		$	2,782			90,601,912	$	906,019	$	32,493,086		$	(21,630,008	)	$	708,954		$	12,480,833
Common shares issued upon conversion of Preferred Stock		(278,188	)		(2,782	)		278,187,847		2,781,878		(2,779,096	)		-			-			-
Common shares issued upon conversion of debt		-			-			657,200		6,572		203,729			-			-			210,301
Beneficial Conversion Feature on convertible debt		-			-			-		-		605,719			-			-			605,719
Warrants issued in connection with private placement		-			-			-		-		166,575			-			-			166,575
Increase in non-controlling interest from issuance of additional Edgepoint stock		-			-			-		-		-			-			620,052			620,052
Net loss		-			-										(2,803,080	)		(319,557	)		(3,122,637	)
Balance at March 31, 2021		-			-			369,446,959		3,694,469		30,690,013			(24,433,088	)		1,009,449			10,960,843
Warrants issued in connection with private placement		-			-			-		-		2,023,552			-			-			2,023,552
Common shares issued in lieu of services		-			-			250,000		2,500		67,500			-			-			70,000
Common shares issued for cash								400,000		4,000		95,055									99,055
Net loss		-			-			-		-		-			(3,231,280	)		(336,737	)		(3,568,017	)
Balance as of June 30, 2021		-		$	-			370,096,959	$	3,700,969	$	32,876,120		$	(27,664,368	)	$	672,712		$	9,585,433

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

5

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020

									Additional					Non
	Preferred Stock				Common Stock				Paid-in		Accumulated			controlling	Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Interests	Equity
Balance at January 1, 2020		278,188	$	2,782		84,069,967	$	840,700	$	28,185,599	$	(12,127,406	)		$	16,901,675
Stock-based compensation		-		-		-		-		2,147,591		-				2,147,591
Common shares issued upon partial conversion of debt		-		-		3,962,145		39,621		681,443		-				721,064
Net loss		-		-								(4,657,894	)			(4,657,894	)
Balance at March 31, 2020		278,188		2,782		88,032,112		880,321		31,014,633		(16,785,300	)			15,112,436
Common shares issued upon partial conversion of debt		-		-		569,800		5,699		97,741		-				103,440
Net loss		-		-		-		-		-		582,091				582,091
Balance as of June 30, 2020		278,188	$	2,782		88,601,912	$	886,020	$	31,112,374	$	(16,203,209	)		$	15,797,967

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

6

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Unaudited)

	For the Six Months Ended June 30,
	2021			2020
Cash flows from operating activities:
Net loss	$	(6,690,654	)	$	(4,075,803	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of debt discount and deferred finance costs		737,330			1,283,691
Amortization of intangible assets		25,683			163,403
Stock-based compensation		2,093,552			2,147,591
Depreciation on development equipment		5,074			18,658
Change in fair value of derivative		(93,829	)		(10,512	)
Loss on debt conversion		27,504			166,067
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(91,534	)		68,920
Accounts payable and accrued expenses		1,589,592			454,302
Accounts payable to related party		(68,635	)		42,623
Net cash provided by (used in) operating activities		(2,465,917	)		258,940
Cash flows from financing activities:
Proceeds from private placement		1,613,200			-
Proceeds from sales of common stock		70,108			-
Proceeds from convertible debt		200,000
Proceeds from short term loans, others		744,875			-
Repaid to note holder		(100,000	)		-
Repaid to others		(75,000	)		-
Proceeds from Payroll Protection Plan		-			250,000
Proceeds from short term loan, related party		-			70,000
Net cash provided by financing activities		2,453,183			320,000
Net increase (decrease) in cash		(12,734	)		578,940
Cash and restricted cash - beginning of period		494,019			81,964
Cash and restricted cash - end of period	$	481,285		$	660,904
Supplemental cash flow information:
Cash paid for:
Interest paid	$	-		$	-
Non-cash investing and financing activities:
Warrants issued in connection with private placement	$	2,190,127		$	-
Common shares issued upon partial conversion of debt	$	210,301		$	824,504
Common shares issued in lieu of services	$	70,000		$	-
Non-cash cost upon sale of common stock	$	28,947
Beneficial Conversion Feature on convertible debt and restricted common shares	$	605,719		$	-

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

7

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Oncotelic Therapeutics, Inc. (also d/b/a Mateon Therapeutics, Inc.) (“Oncotelic”), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, changed its name to Mateon Therapeutics, Inc. in 2016, and then Oncotelic Therapeutics, Inc. in November 2020. Oncotelic conducts business activities through Oncotelic and its wholly-owned subsidiaries, Oncotelic, Inc., a Delaware corporation (“Oncotelic, Inc.”), PointR Data, Inc. (“PointR”), a Delaware corporation, and EdgePoint AI, Inc. (“Edgepoint”), a Delaware Corporation for which there are non-controlling interests, (Oncotelic, Oncotelic Inc., PointR and Edgepoint are collectively called the “Company”).

In February 2020, the Company formed a subsidiary, Edgepoint. Edgepoint is a start-up company that plans to develop technologies and IP related to various unmet issues within the pharma and medical device industries. The Company may spin off Edgepoint into a separate public company.

The Company is a cancer immunotherapy company dedicated to the development of first in class self-immunization protocol (“SIP™”) candidates for difficult to treat cancers. The Company’s proprietary SIP™ candidates offer advantages over other immunotherapies because they do not require extraction of the tumor or isolation of the antigens, and they have the potential for broad-spectrum applicability for multiple cancer types. The Company’s proprietary product candidates have shown promising clinical activity in phase 2 trials for the treatment of gliomas and pancreatic cancers. The Company aims to translate its unique insights, which span more than three decades of original work using RNA therapeutics, into the deployment of antisense as a RNA therapeutic for diseases which are caused by TGF-β overexpression, starting with cancer and expanding to Duchenne Muscular Dystrophy (“DMD”) and others. Oncotelic Inc.’s lead product candidate, OT-101, is being developed as a broad-spectrum anti-cancer drug that can also be used in combination with other standard cancer therapies to establish an effective multi-modality treatment strategy for difficult-to-treat cancers. Together, the Company plans to initiate phase 3 clinical trials for OT-101 in both high-grade glioma and pancreatic cancer, and any other indications that may evolve. The Company is evaluating the further development of its product candidates OXi4503 as a treatment for acute myeloid leukemia and myelodysplastic syndromes and CA4P in combination with a checkpoint inhibitor for the treatment of advanced metastatic melanoma.

The Company is also developing OT-101 for the various epidemics and pandemics, similar to the current corona virus (“COVID-19”) pandemic. In this connection, the Company entered into an agreement and supplemental agreement with Golden Mountain Partners (“GMP”) for a total of $1.2 million to render services and was paid for the development of OT-101. The Company recorded $0.9 and $1.2 million as revenue during the three and six months ended June 30, 2020 respectively, upon completion of all performance obligations under the agreement. No similar revenues were recorded during the same periods in 2021. Further, in June 2020, the Company secured $2 million in convertible debt financing from GMP to conduct a clinical trial evaluating OT-101 against COVID-19. The Company discontinued enrollment in its OT-101 clinical trial in patients with COVID-19 in June 2021. The trial completed randomization of 32 out of 36 patients planned, on an intent to treat basis. The discontinuance of the trial was due to the continuing rise of more severe variants in Latin America, leading to exhaustion of medical care infrastructure in Latin America.

In addition, the Company is developing Artemisinin. Artemisinin, purified from a plant Artemisia annua, is able to inhibit TGF-β activity and is able to neutralize SARS-CoV-2 (COVID-19). The Company’s test results during an in vitro study at Utah State University showed Artemisinin having an EC50 of 0.45 ug/ml, and a Safety Index of 140. Artemisinin can target multiple viral threats including COVID-19 by suppressing both viral replication and clinical symptoms that arise from viral infection. Viral replication cannot occur without TGF-β. Artemisinin also has been reported to have antiviral activities against hepatitis B and C viruses, human herpes viruses, HIV-1, influenza virus A, and bovine viral diarrhea virus in the low micromolar range. TGF-β surge and cytokine storm cannot occur without TGF-β. Clinical consequences related to the TGF-β surge, including ARDS and cytokine storm, are suppressed by targeting TGF-β with Artemisinin. This was a global study, with India to contribute at least 120 patients upto the total potential aggregate of 3000 patients. ARTI-19 in India was conducted by Windlas Biotech Private Limited (“Windlas”), business partner in India, as part of the plan for the Company’s global effort at deploying Pulmoheal^TM across India, Africa, and Latin America. We continue to evaluate to seek approval, and subsequently launch Pulmoheal^TM, with or without local partners, in various countries within the regions planned. Pulmoheal^TM is a combination of ARTIVeda^TM, our artificial intelligence (“AI”) cough application and our AI post marketing survey (“PMS”).

In January 2021 and subsequently in February 2021, the Company announced preliminary results for ARTIVeda^™, or PulmoHeal^™, which is the Company’s lead Ayurvedic drug against COVID-19 in India and being developed by the Company in partnership with Windlas. These interim results were based on 120 randomized patients across 3 sites in India. The ARTI-19 India trial completed enrollment of 120 randomized individuals, we reported positive topline results in April 2021 and we expect final data as soon as available. Upon completion of the trial results and obtaining regulatory approval for the use in India, it is the Company’s objective to file for Emergency Use Authorization (“EUA”) with regulatory authorities around the world, including India, the United States, the United Kingdom, countries in Africa and Latin America; discussions regarding EUA with several of these authorities have commenced.

Recent Developments

Equity Purchase Agreement

On May 3, 2021, the Company entered into an Equity Purchase Agreement (the “EPL”) and Registration Rights Agreement (the “Registration Rights Agreement”) with Peak One Opportunity Fund, L.P. (“Peak One”), pursuant to which the Company shall have the right, but not the obligation, to direct Peak One, to purchase up to $10.0 million (the “Maximum Commitment Amount”) in shares of the common stock, par value $0.01 per share (“Common Stock”) in multiple tranches.

8

Geneva Roth Remark Notes

On May 25, 2021, the Company consummated the closing of a private placement transaction whereby, pursuant to a Securities Purchase Agreement (the “Geneva Agreement”) entered into with Geneva Roth Remark (“Geneva”), the Company issued a convertible promissory note in the aggregate principal amount of $203,750 (the “Note 1”). Further on June 28, 2021, the Company issued an additional convertible promissory note in the aggregate principal amount of $103,750 (“Note 2”, and collectively with Note 1, the “Notes”). The Notes are convertible into shares of the Company’s Common Stock. Additional convertible promissory notes may be issued under the Geneva Agreement for up to $1.2 million in the aggregate principal amount subject to further agreement by and between the Company and Geneva.

Extension of Maturity Date for J.H. Darbie Financing Notes & Issuance of Oncotelic Warrants

The Company issued and sold a total of 100 units (“Units”), with each Unit consisting of (i) 25,000 shares of Edgepoint common stock, par value $0.01 per share (“Edgepoint Common Stock”), for a price of $1.00 per share of Edgepoint Common Stock; (ii) one convertible promissory note issued by the Company (the “Unit Note”), convertible into up to 25,000 shares of EdgePoint Common Stock at a conversion price of $1.00 per share, or up to 138,889 shares of the Company’s Common Stock, at a conversion price of $0.18 per share; and (iii) 100,000 warrants, consisting of (a) 50,000 warrants to purchase an equivalent number of shares of EdgePoint Common Stock at $1.00 per share (“Edgepoint Warrant”), and (b) 50,000 warrants to purchase an equivalent number of shares of Company Common Stock at $0.20 per share (“Oncotelic Warrant”) (collectively, the “JH Darbie Financing”).

In June 2021, the Company and the Investors agreed to extend the maturity date of the Notes from June 30, 2021, to March 31, 2022. In addition, the Company and JHDarbie identified an error in the Oncotelic Warrants and JH Darbie Financing documents which intended to have the investors to purchase $50,000 of shares of Common Stock or Edgepoint Common Stock. However, the Company only issued 50,000 Oncotelic Warrants, with an aggregate exercise price of $10,000. The error was corrected by the Company and the Company issued to the Investors an aggregate of 20.0 million additional Oncotelic Warrants, and 2.0 million additional Oncotelic Warrants to J.H. Darbie., as placement agent. Each Investor was entitled to receive 200,000 additional Oncotelic Warrants for each Unit purchased. The issuance of the additional warrants resulted in the Company recording an expense of $2,023,552 in the Company’s statement of operations during the three months ended June 30, 2021. No similar expense was recorded in the same period in 2020.

Consent Solicitation

In June 2020, the Company commenced a solicitation of various shareholder consents (the “Consent Solicitation”), pursuant to a consent solicitation statement (the “Consent Solicitation Statement”), to the holders (the “Stockholders”) of its Common Stock and Preferred Stock, to approve the following actions:

(1) changing the name of the Company and changing the Company’s ticker symbol (the “Name Change”);

(2) amending the Company’s Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”) to increase the number of shares of common stock (“Common Stock”) available for issuance from 7.25 million shares to 27.25 million shares, and increasing the maximum number of stock awards that may be issued in any fiscal year from 500,000 to 1,000,000 shares (the “Plan Amendment”);

(3) increasing the authorized number of shares of Common Stock from 150,000,000 to 750,000,000 (the “Capital Increase”); and

(4) amending and restating the certificate of incorporation for the Company (the “Amended and Restated Certificate”) to give effect to the Name Change, Capital Increase and forum selection provision.

The Stockholders approved the Name Change, the Plan Amendment, the Capital Increase, and the Amended and Restated Certificate. In November 2020, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State for the State of Delaware changing its name from “Mateon Therapeutics, Inc.” to “Oncotelic Therapeutics, Inc.” Further, in February 2021, the Company filed an amendment to its Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 shares to 750,000,000 shares. The Company has converted its 278,188 shares of Preferred Stock to 278,187,847 shares of Common Stock effective March 31, 2021.

9

The Company registered an additional total of 20,000,000 shares of its Common Stock, which may be issued pursuant to the Registrant’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”) filed with the SEC along with our form S-8 on April 19, 2021. Such additional shares were approved by the Stockholders on August 10, 2020, as stated in the Company’s Current Report on Form 8-K filed on August 14, 2020.

A notice of corporate action was filed with the Financial Industry Regulatory Authority (“FINRA”), requesting approval to change its name and ticker symbol. On March 29, 2021, the Company received approval from FINRA on its notice of corporate action, and effective March 30, 2021, the Company’s ticker symbol has changed from “MATN” to “OTLC”.

Principles of Consolidation

The consolidated financial statements include the accounts of Oncotelic, its wholly owned subsidiaries, Oncotelic Inc. and PointR, and Edgepoint our non-controlled interest entity. Intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted pursuant to such rules and regulations.

Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net accumulated losses of approximately $27.7 million since inception of Oncotelic Inc., as the Company’s historical financial statements before the Merger have been replaced with the historical financial statements of Oncotelic Inc. The Company also has a negative working capital of $13.4 million at June 30, 2021 of which $2.6 million contingent liability of issuance of common shares of the Company to PointR shareholders upon achievement of certain milestones in accordance with the PointR merger agreement. The Company has negative cash flows from operations for the six months ended June 30, 2021 of $2.6 million. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

The Company’s long-term plans include continued development of its current pipeline of products to generate sufficient revenues, through either technology transfer or product sales, to cover its anticipated expenses. Until the Company is able to generate sufficient revenues from its current pipeline, the Company plans on funding its operations through the sale of equity and/or the issuance of debt, combined with or without warrants or other equity instruments.

Between July 2020 and March 2021, the Company raised gross proceeds of $5 million, through the JH Darbie Financing. The Company incurred $0.7 million of costs associated with the raise, of which $0.65 million was paid as direct placement fees to JH Darbie. JH Darbie and the Company are parties to a placement agent agreement, dated February 25, 2020 pursuant to which JH Darbie had the right to sell a minimum of 40 Units and a maximum of 100 Units on a best-efforts basis. Concurrently with the sale of the Units, JH Darbie was granted, a warrant, exercisable over a five-year period, to purchase 10% of the number of Units sold in the JH Darbie Financing. As such, the Company granted 10 Units to JH Darbie pursuant to the JH Darbie Placement Agreement.

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In addition to the JH Darbie Financing, the Company raised $0.1 million from the Equity Purchase Agreement with Peak One, $0.3 million from Geneva and an additional $0.8 million from various bridge financiers, including $0.3 million from Autotelic Inc., a related party.

During the three and six months ended June 30, 2020, the Company recorded a total of approximately $0.9 and $1.2 million, respectively in service revenues from GMP. No similar revenues were recorded during the similar periods in 2021. There are no assurances that the Company would be able to generate revenues for services and/or out-licensing fees in the near future.

Although no assurances can be given as to the Company’s ability to deliver on its revenue plans, or that unforeseen expenses may arise, management believes that the potential equity and debt financing or other potential financing will provide the necessary funding for the Company to continue as a going concern. Also, management cannot guarantee any potential debt or equity financing will be available on favorable terms or at all. As such, management does not believe the Company has sufficient cash for 12 months from the date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease operations completely.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expense during the reporting period. Actual results could materially differ from those estimates.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the valuation of goodwill and intangible assets for impairment, deferred tax asset and valuation allowance, and fair value of financial instruments.

Cash

As of June 30, 2021, and December 31, 2020 the Company held all its cash in banks. The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2021 and December 31, 2020, respectively. Restricted cash consists of certificates of deposits held at banks as collateral for various purposes.

Fair Value of Financial Instruments

The carrying value of cash, accounts payable and accrued expense approximate their fair values based on the short-term maturity of these instruments. As defined in ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

● Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

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● Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

● Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2021 and December 31, 2020. The derivative liabilities associated with its 2019 bridge financing Convertible Notes (see Note 5), consisted of conversion feature derivatives at June 30, 2021 and December 31, 2020, are Level 3 fair value measurements.

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 as of June 30, 2021 and 2020:

	June 30, 2021 Conversion Feature			June 30, 2020 Conversion Feature
Balance at January 1, 2021 and 2020	$	777,024		$	540,517
New derivative liability		-			870,268
Reclassification to additional paid in capital from conversion of debt to common stock		(144,585	)		(408,811	)
Change in fair value		(93,829	)		(10,512	)
Balance at June, 2021 and 2020	$	538,610		$	991,462

As of June 30, 2021 and 2020, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on assumptions used in the Black-Scholes valuation model. The key valuation assumptions used consists, in part, of the price of the Company’s Common Stock, a risk-free interest rate based on the yield of a Treasury note and expected volatility of the Company’s Common Stock all as of the measurement dates. The Company used the following assumptions to estimate fair value of the derivatives as of June 30, 2021 and 2020:

	June 30, 2021 Key Assumptions for fair value of conversions			June 30, 2020 Key Assumptions for fair value of conversions
Risk free interest		0.07	%		0.16	%
Market price of share	$	0.36		$	0.1875
Life of instrument in years		0.81 - 1.10			1.81 – 2.10
Volatility		94.4	%		151.87	%
Dividend yield		0	%		0	%

When the Company changes its valuation inputs for measuring financial liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended June 30, 2021 and 2020, respectively, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

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Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of Common Stock equivalents (notes convertible into Common Stock, stock options and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted loss since such inclusion would be anti-dilutive:

	Six Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020
Convertible notes		37,641,648		11,584,300		37,641,648		8,000,000
Stock options		3,941,301		6,135,284		3,941,301		6,135,284
Warrants		42,737,500		15,237,500		42,737,500		15,237,500
Potentially dilutive securities		84,320,449		26,372,784		84,320,449		26,372,784

The following table reflects the inclusion of the common stock equivalents included in the calculation of the diluted net income per share for the three months ended June 30, 2020. No similar calculations are required for the three months ended June 30, 2021 or the six months ended June 30, 2021 and 2020, respectively as all these periods had losses.

Reconciliation for Basic to Diluted Weighted Average common stock outstanding
Basic weighted average common stock outstanding	88,152,403
Add: Dilutive Common Stock Instruments
Shares issuable upon conversion of debt	6,584,300
Diluted weighted average common stock outstanding	94,736,703

Stock-Based Compensation

The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the statements of operations.

For stock options issued to employees and members of the Board of Directors (the “Board”) for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.

Pursuant to ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above.

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For warrants issued in connection with fund raising activities, the Company estimates the grant date fair value of each warrant using the Black-Scholes pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the warrant, the expected volatility of the Common Stock consistent with the expected life of the warrant, risk-free interest rates and expected dividend yields of the Common Stock. If the warrants are issued upon termination or cancellation of prior issued warrants, then the Company estimates the grant date fair value of the new warrants using the Black-Scholes pricing model and evaluates whether the new warrants are deemed as equity instruments or liability instruments. If the warrants are deemed to be equity instruments, the Company records stock compensation expense and an addition to additional paid in capital. If however, the warrants are deemed to be liability instruments, then the fair value is treated as a deemed dividend and credited to additional paid in capital.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for long-lived assets.

Intangible Assets

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for intangible assets.

Goodwill

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for Goodwill.

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Derivative Financial Instruments Indexed to the Company’s Common Stock

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statement of Income.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 “Debt – Debt with Conversion and Other Options.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 “Derivatives and Hedging – Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Revenue Recognition

The Company recognizes revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).

Under ASU 2014-9, the Company recognizes revenue when its customers obtain control of the promised good or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five-step: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASU 2014-09, the Company identifies the performance obligation(s) in the contract by assessing whether the goods or services promised within each contract are distinct. The Company then recognizes revenue for the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

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The Company anticipates generating revenues from rendering services to other third party customers for the development of certain drug products and/or in connection with certain out-licensing agreements. In the case of services rendered for development of the drugs, revenue is recognized upon the achievement of the performance obligations or over time on a straight-line basis over the extended service period. In the case of out-licensing contracts, the Company records revenues either upon achievement of certain pre-defined milestones, when there is no obligation of the Company achieve any performance obligations in connection with the said pre-defined milestones, or upon achievement of the performance obligations if the milestones require the Company to provide the performance obligations.

The Company occasionally collects advance payments from customers toward commitments to provide services or performance obligations, in which case the advance payment is recorded as a liability until the obligations are fulfilled and revenue is recognized.

Research Service Agreement between GMP and Oncotelic /Oncotelic Inc. (“Oncotelic Entities”)

In February 2020, Oncotelic Inc. and GMP entered into a research and services agreement (the “Agreement”) memorializing their collaborative efforts to develop and test COVID-19 antisense therapeutics. In March 2020, the Company reported the positive anti-viral activity results of OT-101 (the “Product”) in an in vitro antiviral testing performed by an independent laboratory to GMP, at which time, the Oncotelic Entities and GMP entered into a supplement to the Agreement (the “Supplement”) to confirm the inclusion of the Product within the scope of the Agreement, pending positive confirmatory testing against COVID-19. In consideration for the financial support provided by GMP for the research, pursuant to the terms of the Agreement (as amended by the Supplement) GMP was entitled to obtain certain exclusive rights to the use of the Product in the COVID field on a global basis, and an economic interest in the use of the Product in the COVID field including 50/50 profit sharing. GMP paid the Company fees of $0.3 million for the Agreement during the three months ended March 31, 2020 and $0.9 million for the Supplement during the three months ended June 30, 2020, respectively. The Company also recorded approximately $40 thousand for reimbursement of actual costs incurred.

Agreement with Autotelic BIO (“ATB”)

Oncotelic Inc. had entered into a license agreement in February 2018 (the “ATB Agreement”) with ATB. The ATB Agreement licensed the use of OT-101 in combination with Interleukin-2 (the “Combined Product”), and granted to ATB an exclusive license under the Oncotelic Inc. technology to develop, make, have made, use, sell, offer for sale, import and export the Combined Product, and the Combination Product only, in the field, throughout the entire world (excluding the United States of America and Canada) as the territory, on the terms and subject to the conditions of the ATB Agreement. The ATB Agreement requires ATB to be responsible for the development of the Combination Product. Oncotelic Inc. was responsible to provide to ATB the technical know-how and other pertinent information on the development of the Combination Product. ATB paid Oncotelic Inc. a non-refundable milestone payment in consideration for the rights and licenses granted to ATB under the ATB Agreement, and ATB was to pay Oncotelic Inc. $500,000 within sixty days from the successful completion of the in vivo efficacy studies. This payment was made after the successful completion of the in-vivo study and, as such, the Company recorded the revenue. In addition, ATB is to pay Oncotelic Inc.: (i) $500,000 upon Oncotelic Inc.’s completion of the technology know how and Oncotelic Inc.’s technical assistance and regulatory consultation to ATB, as determined by the preparation of a Current Good Regulation Practices audit or certification by the Food and Drug Administration, with a mutual goal to obtain marketing approval of the Combined Product developed by ATB in the aforementioned territory; (ii) $1,000,000 upon receiving marketing approval of the Combined Product in Japan, China, Brazil, Mexico, Russia, or Korea; and (iii) $2,000,000 from receiving marketing approval of the Combined Product in Germany, France, Spain, Italy, or the United Kingdom. The Company recorded $500,000 as revenue under the ATB Agreement for the successful completion of the in-vivo study during the three months ended June 30, 2020.

Research & Development Costs

In accordance with ASC 730-10-25 “Research and Development”, research and development costs are charged to expense as and when incurred.

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Prior Period Reclassifications

Certain amounts in prior periods may have been reclassified to conform with current period presentation.

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting period unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). It eliminates Step 2 of the current two-step goodwill impairment test, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 had no material impact on the Company’s consolidated financial statements and related disclosures.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 became effective on January 1, 2018. The ASU also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company adopted ASU 2015-14 during the three months ended March 31, 2020 as till then, no revenue was earned by the Company.

In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential impact of the Update on its financial statements

All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

NOTE 3 - INTANGIBLE ASSETS AND GOODWILL

The Company completed a merger with Oncotelic, which gave rise to Goodwill of $4,879,999. Further, we added goodwill of $16,182,456 upon the completion of the Merger with PointR. In general, the goodwill is tested on an annual impairment date of December 31. However, since both assets are currently being developed for various cancer and COVID-19 therapies, and the Company is contemplating other collaboration efforts for both products and the other products that the Company owns, the Company does not believe the there are any factors or indications that the goodwill is impaired.

Assignment and Assumption Agreement with Autotelic, Inc.

In April 2018, Oncotelic Inc. entered into an Assignment and Assumption Agreement (the “Assignment Agreement”) with Autotelic Inc., an affiliate company, and Autotelic LLC, an affiliate company, pursuant to which Oncotelic acquired the rights to all intellectual property (“IP”) related to a patented product. As consideration for the Assignment Agreement, Oncotelic Inc. issued 204,798 shares of its Common Stock for a value of $819,191. The Assignment Agreement also provides that Oncotelic Inc. shall be responsible for all costs related to the IP, including development and maintenance, going forward.

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Intangible Asset Summary

The following table summarizes the balances as of June 30, 2021 and December 31, 2020, of the intangible assets acquired, their useful life, and annual amortization:

	June 30, 2021			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			16.50
Intangible asset – Capitalization of license cost		190,989			16.50
		1,010,180
Less Accumulated Amortization		(162,655	)
Total	$	847,525

	December 31, 2020			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			18.00
Intangible asset – Capitalization of license cost		190,989			18.00
		1,010,180
Less Accumulated Amortization		(136,974	)
Total	$	873,206

Amortization of identifiable intangible assets for the three months ended June 30, 2021 and 2020 was $12,841 and $12,841, respectively. Amortization of identifiable intangible assets for the six months ended June 30, 2021 and 2020 was $25,683 and $25,683, respectively.

The future yearly amortization expense over the next five years and thereafter are as follows:

For the six months and years ended December 31,
Six months of 2021	$	25,683
2022		51,365
2023		51,365
2024		51,365
2025		51,365
Thereafter		616,382
	$	847,525

In-Process Research & Development (IPR&D) Summary

The IPR&D assets were acquired in the PointR acquisition during the year ended December 31, 2019. Since January 2021, the Company has determined that the IPR&D should be reported as an indefinitely lived asset and therefore will evaluate, on an annual basis, for any impairment on the IPR&D and will record an impairment if identified. The balance of IPR&D as of June 30, 2021 and December 31, 2020 was $1,101,760.

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NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expense consists of the following amounts:

	June 30, 2021		December 31, 2020
Accounts payable	$	3,309,612	$	1,937,419
Accrued expense		839,801		798,386
	$	4,149,413	$	2,735,805

	June 30, 2021		December 31, 2020
Accounts payable – related party	$	322,995	$	391,631

NOTE 5 – CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT

As of June 30, 2021 special purchase agreements (SPAs) with convertible debentures and notes, net of debt discount and including accrued interest, if any, consist of the following amounts:

	June 30, 2021
Convertible debentures
10% Convertible note payable, due April 23, 2022 – Bridge Investor		22,389
10% Convertible note payable, due April 23, 2022 – Related Party		105,964
10% Convertible note payable, due August 6, 2022 – Bridge Investor		178,306
		306,659
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		116,458
5% Convertible note payable – Related Party		269,984
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		269,503
5% Convertible note payable – CEO, CTO & CFO		88,307
5% Convertible note payable – Bridge Investors		180,923
		925,175
Geneva Notes
Geneva notes		307,500
Other Debt
Short term debt from CEO		20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
		764,875
Total of debentures, notes and other debt	$	2,304,209

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As of December 31, 2020, convertible debentures and notes, net of debt discount, consist of the following amounts:

	December 31, 2020
Convertible debentures
10% Convertible note payable, due June 12, 2022 – Peak One	$	-
10% Convertible note payable, due April 23, 2022 - TFK		39,065
10% Convertible note payable, due April 23, 2022 – Related Party		14,256
10% Convertible note payable, due April 23, 2022 – Bridge Investor		69,848
10% Convertible note payable, due August 6, 2022 – Bridge Investor		168,421
		291,590
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		213,046
5% Convertible note payable – Related Party		263,733
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		263,253
5% Convertible note payable – CEO, CTO & CFO		86,257
5% Convertible note payable – Bridge Investors		176,722
		1,003,011
Other Debt
Short term debt from CFO		25,000
Short term debt from CEO		20,000
Other short term debt – Bridge Investor		50,000
		95,000
Total of debentures, notes and other debt	$	1,389,601

Convertible Debentures

The gross principal balances on the convertible debentures listed above totaled $1,000,000 and included an initial debt discounts totaling $800,140, resulting from the recording of the original issue discount, the related financing costs, the beneficial conversion feature for the intrinsic value of the non-bifurcated conversion option and the restricted shares issued contemporaneously with the convertible notes.

Total amortization expense related to these debt discounts was $81,639 and $460,339 for the six months ended June 30, 2021, and 2020, respectively. In addition, during the six months ended June 30, 2021 and 2020, we recorded additional and accelerated amortization of debt discounts, which was created from the bifurcation of the conversion option related the host hybrid instruments, of $24,491 and $192,761, respectively upon the partial and/or full conversion of debt by Peak One and TFK to shares of the Company’s common stock. The total unamortized debt discount at June 30, 2021 and December 31, 2020, was approximately $93,340 and $200,205, respectively.

All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days during the year ended December 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument. As of December 31, 2020, we had a derivative liability of approximately $777,000. The Company recorded additional derivative liability from the change in fair value of approximately $50,262 during the six months ended June 30, 2021. The Company also extinguished approximately $144,585 of derivative liability following the conversion of certain notes to the Company’s common stock in the six months ended June 30, 2021.

The Company recorded additional derivative liability of approximately $870,000 during the six months ended June 30, 2020 since the conversion option attached to certain notes became convertible into a variable number of shares of our common stock. The Company also extinguished approximately $409,000 of derivative liability following the conversion of certain notes to the Company’s common stock in the six months ended June 30, 2020. Following the recognition as derivative liability of the embedded conversion options, the Company fully amortized the remaining unamortized beneficial conversion feature for approximately $232,000, recorded an initial $258,070 from the initial recognition of the debt discount following the bifurcation of the embedded conversion option

Bridge Financing

Peak One Financing

On April 17, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P. (the “Buyer”, “Peak One”), for a commitment to purchase convertible notes in the aggregate amount of $400,000, pursuant to which, for an aggregate purchase price of $400,000, the Buyer purchased (a) Tranche #1 in the form of a Convertible Promissory Note in the principal amount of $200,000 (the “Convertible Note”) and (b) 350,000 restricted shares of the Company’s Common Stock (the “Shares”) (the “Purchase and Sale Transaction”). The Company used the net proceeds from the Purchase and Sale Transaction for working capital and general corporate purposes.

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The Convertible Note has a principal balance of $200,000, including a 10%$ OID of $20,000 and $5,000 in debt issuance costs, receiving net proceeds of $175,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “Tranche #1 Conversion Shares”) of the Company’s Common Stock at any time, at the option of the holder, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times, reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the Tranche #1 Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the Convertible Note resulted in a discount from the beneficial conversion feature totaling $84,570, including $52,285 related to the beneficial conversion feature and a discount from the issuance of restricted stock of 350,000 shares for $32,285. Total amortization of these OID and debt issuance cost discounts totaled $0 for the 3 months ended June 30, 2021. Total unamortized discount on this note was $0 and $0 at June 30, 2021 and December 31, 2020, respectively.

On June 12, 2019, the Company entered into an amendment of the Purchase Agreement (“Amendment #1”) in connection with the draw-down of the second tranche, and to provide for additional borrowing capacity under that agreement. Amendment #1 increased the borrowing amount up to $600,000, adding the ability to borrow an additional $200,000 in a third tranche.

On June 12, 2019, the Buyer purchased Convertible Note Tranche #2 (“Tranche #2”) totaling $200,000, including a 10% OID of $20,000 and a $1,000 debt issuance cost, receiving net proceeds of $179,000 against the April 17, 2019, Purchase Agreement with Peak One, with a maturity date of June 12, 2022. Amounts due under Tranche #2 are convertible at the same terms as Tranche #1 above.

The issuance of Tranche #2 resulted in a discount from the beneficial conversion feature totaling $180,000, including $132,091 related to the conversion feature and a discount from the issuance of restricted stock of 350,000 shares for $47,909. Total amortization of these OID and debt issuance cost discounts totaled $0 for the 3 months ended June 30, 2021. Total unamortized discount on this note was $0 as of June 30, 2021.

On November 5, 2019, the Company and Peak One amended the Convertible Note under Tranche #1 to extend the date of conversion of the Convertible Note into Common Stock of the Company at 65% of the traded price of the Company’s Common Stock until January 8, 2020. This amendment put a temporary hold on Peak One to convert the debt under Tranche 1. This restriction did not apply if Peak One opted to convert the Convertible Note at $0.10. The Company compensated Peak One 300,000 shares of the Company’s Common Stock for delaying the conversion until January 18, 2020. Such shares were issued to Peak One on November 14, 2019. Non-cash compensation expense of $60,000 was recorded for such issuance.

Peak One converted $200,000 of Tranche #1 out of their total debt into 2,581,945 shares of the Company during the year ended December 31, 2020. Further, Peak One converted $200,000 of Tranche #2 of their total debt into 2,000,000 shares of the Company during the year ended December 31, 2020. As such, the total outstanding debt for Peak One was $0 as of June 30, 2021.

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TFK Financing

On April 23, 2019, the Company, entered into a Convertible Note (the “TFK Note”) with TFK Investments, LLC (“TFK”). The TFK Note has a principal balance of $200,000, including a 10% OID of $20,000 and $5,000 in debt issuance costs, receiving net proceeds of $175,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “TFK Conversion Shares”) of the Company’s Common Stock at any time, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the TFK Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the TFK Note resulted in a discount from the beneficial conversion feature totaling $84,570, including $52,285 related to the beneficial conversion feature and a discount from the issuance of restricted, stock of 350,000 shares for $32,285. Total amortization of these OID and debt issuance cost discounts totaled $3,015 for the three months ended June 30, 2021. Total unamortized discount on this note was $0 as of June 30, 2021 and June 30, 2021.

On November 5, 2019, the Company and TFK amended the TFK Convertible Note to extend the date of conversion of the Convertible Note into Common Stock of the Company at 65% of the traded price of the Company’s Common Stock until January 8, 2020. This restriction did not apply if TFK wished to convert the Convertible Note at $0.10 per share. The Company compensated TFK 300,000 shares of the Company’s Common Stock for delaying the conversion until January 8, 2020. Such shares were issued to TFK on November 14, 2019. Non-cash compensation expense of $60,000 was recorded for such issuance.

TFK converted $133,430 of their total debt into 1,950,000 shares of common stock of the Company during the year ended December 31, 2020. As such, the total gross outstanding debt for TFK was approximately $67,000 as of December 31, 2020. TFK had a balance of approximately $109,000 related to the derivative liability as of December 31, 2020. The Company recorded approximately $38,000 as an increase in fair value for the derivative liability, and hence the TFK had a balance of approximately $145,000 of derivative liability. The Company extinguished the $145,000 of derivative liability and approximately $67,000 of the value of the debt, totaling approximately $210,000 following the conversion of the notes to the Company’s common stock during the three months ended June 30, 2021 for a total of 657,200 shares of common stock of the Company and recorded a loss on the conversion of approximately $2,000 for the three months and six ended June 30, 2021. As such, TFK’s debt as of June 30, 2021 was $0.

Notes with Officer and Bridge Investor

On April 17, 2019, the Company entered into a Securities Purchase Agreement (the “Bridge SPA”) with our CEO and the Bridge Investor with a commitment to purchase convertible notes in the aggregate of $400,000.

On April 23, 2019, the Company entered into a convertible note with our Chief Executive Officer, Vuong Trieu, Ph. D. (the “Trieu Note”). The Trieu Note has a principal balance of $164,444, including a 10% OID of $16,444, resulting in net proceeds of $148,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “Trieu Conversion Shares”) of the Company’s Common Stock at any time, at the option of the holder, at a conversion price of $0.10 per share (the “Fixed Price”), at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180^th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

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The issuance of the Trieu Note resulted in a discount from the beneficial conversion feature totaling $131,555 related to the conversion feature. Total amortization of the 10% OID discount and beneficial conversion feature totaled $2,743 and $2,715 for the six months ended June 30, 2021, and 2020, respectively. Total unamortized discount on this note was $4,441 as of June 30, 2021.

On April 23, 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #1 (“Tranche #1”) with the Bridge Investor. Tranche #1 has a principal balance of $35,556, an OID of $3,556, resulting in net proceeds of $32,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under Tranche #1 may also be converted into shares (the “Bridge SPA Conversion Shares”) of the Company’s Common Stock at any time, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the note resulted in a discount from the beneficial conversion feature totaling $28,445. Total amortization of the OID and discount totaled $8,132 for the six months ended June 30, 2021. Total unamortized discount on this note was $13,167 as of June 30, 2021.

On August 6, 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #2 (“Tranche #2”) with the Bridge Investor. Tranche #2 has a principal balance of $200,000, an OID of $20,000 and debt issuance costs of $5,000, resulting in net proceeds of $175,000, with a maturity date of August 6, 2022. Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under Tranche #1 may also be converted into Bridge Conversion Shares of the Company’s Common Stock at any time, at the option of the holder, at a conversion price equal to the Fixed Price, at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180^th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the note resulted in a discount from the beneficial conversion feature totaling $175,000. Total amortization of the OID and discount totaled $4,943 at June 30, 2021. Total unamortized discount on this note was $26,636 as of June 30, 2021.

All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days prior to the end of the three months ended March 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument. As of June 30, 2021, Peak One and TFK had fully converted their notes.

Fall 2019 Debt Financing

In December 2019, the Company closed its Fall 2019 Debt Financing raising an additional $500,000 for gross proceeds of $1.0 million. The Company entered into Note Purchase Agreements (the “Note Purchase Agreements”) with certain accredited investors for the sale of convertible promissory notes (the “Fall 2019 Notes”). The Company completed the initial closing under the Note Purchase Agreements on November 23, 2019, issuing a $250,000 principal amount Fall 2019 Note to each of Dr. Vuong Trieu, the Company’s Chief Executive Officer, and Stephen Boesch, in exchange for gross proceeds of $500,000. In connection with the second and final closing the Company issued the Fall 2019 Notes to additional investors including $250,000 to Dr. Sanjay Jha, through his family trust, the former CEO of Motorola and COO/President of Qualcomm. The Company also offset certain amounts due to Dr. Vuong Trieu, the Company’s Chief Executive Officer, Chulho Park, the Company’s Chief Technology Officer, and Amit Shah, the Company’s Chief Financial Officer and converted such amounts due into the Fall 2019 Notes. $35,000 due to Dr. Vuong Trieu, $27,000 due to Chulho Park and $20,000 due to Amit Shah was converted into debt. The Company also issued the Fall 2019 Notes of $168,000 to two unaffiliated accredited investors.

All the Fall 2019 Notes provide for interest at the rate of 5% per annum and are unsecured. All amounts outstanding under the Fall 2019 Notes become due and payable upon the approval of the holders of a majority of the principal amount of outstanding Fall 2019 Notes (the “Majority Holders”) on or after (a) November 23, 2020 or (b) the occurrence of an event of default (either, the “Maturity Date”). The Company may prepay the Fall 2019 Notes at any time. Events of default under the Fall 2019 Notes include failure to make payments under the Fall 2019 Notes within thirty (30) days of the date due, failure to observe of the Note Purchase Agreement or Fall 2019 Notes which is not cured within thirty (30) days of notice of the breach, bankruptcy, or a change in control of the Company (as defined in the Note Purchase Agreement).

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The Majority Holders have the right, at any time not more than five (5) days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Fall 2019 Notes. The Fall 2019 Notes may be converted, at the election of the Majority Holders, either (a) into shares of the Company’s Common Stock at a conversion price of $0.18 per share, or (b) into shares of common stock of the Edgepoint, at a conversion price of $5.00 (based on a $5.0 million pre-money valuation) of Edgepoint and 1,000,000 shares outstanding.

The issuance of the Fall 2019 notes resulted in a discount from the BCF totaling $222,222 related to the conversion feature. Total amortization of the discount totaled $0 and $111,111 for the six months ended June 30, 2021, and 2020, respectively. Total unamortized discount on this note was $0 as of June 30, 2021.

Further, the Company recorded interest expense of $11,250 and $12,500 on these Fall 2019 Notes for the three months ended June 30, 2021, and 2020, respectively. The Company recorded interest expense of $22,708 and $25,000 on these Fall 2019 Notes for the six months ended June 30, 2021, and 2020, respectively.

The total amount outstanding under the Fall 2019 Notes, net of discounts and including accrued interest thereon, as of June 30, 2021, and December 31, 2020, was $925,174 and $1,003,011, respectively.

Geneva Notes

In May and June 2021, the Company entered into Securities Purchase Agreement with Geneva Roth Remark Holdings Inc. (“Geneva”), whereby the Company issued two convertible notes in the aggregate principal amount of $307,500 convertible into shares of common stock of the Company with additional tranches of financing of up to $1,200,000 in the aggregate term of the note. The convertible notes carry a six (6%) percent coupon and a default coupon of 22%, and both mature one year from issuance. Geneva has the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following issuance date and ending on the maturity date to convert all or any part of the outstanding and unpaid amount of the note into the Company’s common stock at a conversion price established at sixty five (65%) percent multiplied by the lowest two (2) daily volume weighted average price over the fifteen (15) consecutive trading days. The convertible notes carry a put feature, at the option of Geneva, whereby upon the occurrence of certain events of default, the convertible notes repayment should be accelerated, in the amount of principal plus accrued but unpaid interest plus default interest, in cash with premium.

The total amount outstanding under the Geneva Notes as of June 30, 2021, and December 31, 2020, was $307,500 and $0, respectively. $100,000 of the total net proceeds for the June 2021 tranche was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

Paycheck Protection Program

In April 2020, the Company received loan proceeds in the amount of $250,000 under the Paycheck Protection Program (“PPP”) which was established under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and is administered by the Small Business Administration (“SBA”). The PPP provides loans to qualifying businesses in amounts up to 2.5 times the average monthly payroll expenses and was designed to provide direct financial incentive to qualifying businesses to keep their workforce employed during the Coronavirus crisis. PPP Loans are uncollateralized and guaranteed by the SBA and are forgivable after a “covered period” (8 weeks or 24 weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll, benefits, mortgage interest, rent and utilities. The forgiveness amount will be reduced if the borrower terminates employees or reduces salaries and wages more than 25% during the covered period. Any unforgiven portion is payable over 2 years if issued before, or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrowers loan forgiveness amount to the lender, or if the borrower does not apply for forgiveness, 10 months after the covered period. PPP loans provide for customary events of default, including payment defaults, breach of representations and warranties, and insolvency events and may be accelerated upon occurrence of one or more of these events of default. Additionally, the PPP Loans do not include prepayment penalties.

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The Company believes it met the PPP’s loan forgiveness requirements and on August 7, 2021 applied for forgiveness. When legal release is received from the SBA or lender, the Company will record the amount forgiven as forgiveness income within the other income section of its statement of operations. If any portion of the PPP loan is not forgiven, the Company will be required to repay that portion, plus interest, through the maturity date.

The SBA reserves the right to audit any PPP loan, regardless of size. These audits may occur after the forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain their PPP loan documentation for six years after the loan was forgiven or repaid in full and to provide that documentation to the SBA upon request.

The balance outstanding on PPP loan, inclusive of accrued interest, was $252,973 and $251,733 on June 30, 2021 and December 31, 2020, respectively.

GMP Note

In June 2020, the Company secured $2 million in debt financing, evidenced by a one-year convertible note (the “GMP Note”) from GMP, to conduct a clinical trial evaluating OT-101 against COVID-19 bearing 2% annual interest, and is personally guaranteed by Dr. Vuong Trieu, the Chief Executive Officer of the Company. The GMP Note is convertible into the Company’s Common Stock upon the GMP Note’s maturity one year from the date of the GMP Note, at the Company’s Common Stock price on the date of conversion with no discount. GMP does not have the option to convert prior to the GMP Note’s maturity at the end of one year. Such financing will be utilized solely to fund the clinical trial.

The Company’s liability under GMP Note commenced to accrue when GMP first began to pay for services related to the clinical trial to our third-party clinical research organization, up to a maximum of $2 million. As of December 31, 2020, GMP has been invoiced by the clinical research organization for the full $2 million and as such the Company has recognized the liability as a convertible debt.

The balance outstanding on the GMP Note, inclusive of accrued interest, was $2,040,329 and $2,000,000 on June 30, 2021 and December 31, 2020, respectively.

Other short-term loans

Other Debt
Short term debt from CEO	$	20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
	$	764,875

The Company’s CEO had provided a short term loan of $70,000 to the Company during the year ended December 31, 2020, of which $50,000 was repaid. As such, $20,000 was outstanding at June 30, 2021. During the three months ended March 31, 2021, Autotelic Inc. provided a short term funding of $120,000 to the Company, which was repaid after the three months ended March 31, 2021. On May 18, 2021, Autotelic provided an additional short term funding of $250,000 to the Company. As such, $250,000 was outstanding and payable to Autotelic at June 30, 2021. During the fourth quarter of the year ended December 31, 2020, the Company’s CFO and the Bridge Investor provided short term loans of $25,000 and $50,000, respectively to the Company. Such loans were repaid as of March 31, 2021. Additionally, the Company received $69,050 from the Company’s CFO during the three months ended June 30, 2021 and such amount was outstanding as of June 30, 2021.

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During the three months ended June 30, 2021, the Company received $425,825 primarily from two bridge investors and such amount was outstanding as of June 30, 2021.

NOTE 6 - PRIVATE PLACEMENT AND JH DARBIE FINANCING

During the period from July 2020 to March 31, 2021, the Company entered into varioussubscription agreements with certain accredited investors, including the CEO, pursuant to the JH Darbie Financing, whereby the Company issued and sold a total of 100 Units, for total gross proceeds of approximately $5 million, pursuant to the JH Darbie Placement Agreement, with each Unit consisting of:

■ 25,000 shares of Edge Point Common stock for a price of $1.00 per share of Edge Point Common stock.

■ One convertible promissory note, convertible up to 25,000 shares of Edge Point Common stock, at a conversion price of $1.00 per share or up to 138,889 shares of the Company’s common stock, at a conversion price of $0.18 per share.

■ 50,000 warrants to purchase an equivalent number of shares of Edge Point Common stock at $1.00 per share and an equivalent number of shares of the Company’s common stock at $0.20 per share with a three-year expiration date. Either the Edgepoint or the Company’s warrants would be exercised.

As June 30, 2021, funds received under the JH Darbie Financing, net of debt discount, consist of the following amounts:

	June 30, 2021
Convertible promissory notes
Subscription agreements - accredited investors	$	1,798,801
Subscription agreements – related party		93,488
Total convertible promissory notes	$	1,892,289

The Company incurred approximately $0.64 million of issuance costs, including legal costs of approximately $39,000, that are incremental costs directly related to the issuance of the various instruments bundled in the offering.

Concurrently with the sale of the Units, JH Darbie was granted a warrant, exercisable over a five-year period, to purchase 10% of the number of Units sold in the JH Darbie Financing. As such, the Company granted 10 Units to JH Darbie pursuant to the JH Darbie Placement Agreement.

The terms of convertible notes are summarized as follows:

■ Term: Through June 30, 2021 (extended to March 31, 2022).

■ Coupon: 16%.

■ Convertible at the option of the holder at any time in the Company’s Common Stock or Edgepoint Common Stock.

■ The conversion price is initially set at $0.18 per share for the Company’s Common Stock or $1.00 for Edgepoint Common Stock, subject to adjustment.

The Company allocated the proceeds among the freestanding financial instruments that were issued in the single transaction using the relative fair value method, which affects the determination of each financial instrument initial carrying amount. The Company utilized the relative fair value method as none of the freestanding financial instruments issued as part of the single transaction are measured at fair value. Under the relative fair value method, the Company made separate estimates of the fair value of each freestanding financial instrument and then allocated the proceeds in proportion to those fair value amounts. The Company recorded non-controlling interests of approximately $1 million in Edgepoint. Non-controlling interests represent the portion of net assets in consolidated entities that are not owned by the Company and are reported as a component of equity in the consolidated balance sheets.

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As of the multiple closings of the Company during the three months ended March 31, 2021, under the private placement memorandum with JH Darbie, the estimated volume weighted grant date fair value of approximately $0.23 per share associated with the warrants to purchase up to 2,035,000 shares of common stock issued in this offering, or a total of approximately $ 0.5 million, was recorded to additional paid-in capital on a relative fair value basis. All warrants sold in this offering had an exercise price of $0.20 per share of the Company stock or $1.00 per share of Edge Point, subject to adjustment, are exercisable immediately and expire three years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values:

Expected Term	1.5 years
Expected volatility		152.3%-164.8	%
Risk-free interest rates		0.09%-0.11	%
Dividend yields		0.00	%

As of the multiple closings of the Company through December 31, 2020, under the private placement memorandum with JH Darbie, the estimated grant date fair value of approximately $0.18 per share associated with the warrants to purchase up to 3,465,000 shares of common stock issued in this offering, or a total of approximately $0.6 million, was recorded to additional paid-in capital on a relative fair value basis. All warrants sold in this offering had an exercise price of $0.20 per share of the Company stock or $1.00 per share of Edge Point, subject to adjustment, are exercisable immediately and expire three years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values.

Expected Term	1.5 years
Expected volatility		168.5%-191.9	%
Risk-free interest rates		0.12%-0.15	%
Dividend yields		0.00	%

The Company recorded an initial debt discount of approximately $0.7 million representing the intrinsic value of the non-bifurcated conversion option embedded in the convertible debt instrument based upon the difference between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price.

The Company recognized amortization expense related to the debt discount and debt issuance costs of $659,854 and $0 for the six months ended June 30, 2021, and June 30, 2020, respectively, which is included in interest expense in the statements of operations.

On June 29, 2021, the Company executed amendment #4 to the private placement memorandum. At the time of the original PPM, the Company had inadvertently made an error in the PPM. Originally, the investor was granted 50,000 of the Company’s warrants to purchase an equivalent number of shares of the Company’s common stock at a strike price of $0.20 or 50,000 warrants to purchase an equivalent number of Edgepoint’s common share at strike price of $1.00. However, the PPM was incorrectly written in that the investor could only invest in $10,000 (50,000 shares of common stock at $0.20 per share) of common stock of the Company) or $50,000 (50,000 shares of common stock in Edgepoint AI, Inc. at $1.00 per share). In conjunction with amendment #4 and to correct the error in the PPM, the Company approved the issuance of further 20,000,000 warrants to purchase shares of common stock of the Company to the investors in the 100 Units and 2,000,000 warrants to purchase shares of common stock of the Company to the Placement Agent at the same terms and conditions of the PPM. To clarify further, each unit will receive additional 200,000 warrants to purchase an equivalent number of shares of the Company’s common stock at $0.20 per share, so as to make it overall 250,000 warrants to buy an equivalent number of shares of the Company’s common stock, for which the investor would pay a total of $50,000 per unit invested upon exercise.

In connection with the additional warrants issued by the Company in connection with the amendment #4, the Company recorded a stock-based compensation fair value expense of $2,023,522 during the period ended June 30, 2021. No similar expense was recorded during the same period of 2020. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values.

Expected Term	1-2 years
Expected volatility		94.4%-130.0	%
Risk-free interest rates		0.08%-0.25	%
Dividend yields		0.00	%

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NOTE 7 - RELATED PARTY TRANSACTIONS

Master Service Agreement with Autotelic Inc.

In October 2015, Oncotelic entered into a Master Service Agreement (the “MSA”) with Autotelic Inc., a related party that is partly-owned by the Company’s CEO Vuong Trieu, Ph.D. Dr. Trieu, a related party, is a control person in Autotelic Inc. Autotelic Inc. currently owns less than 10% of the Company. The MSA stated that Autotelic Inc. will provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA includes personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA requires a 90-day written termination notice in the event either party requires to terminate such services.

Expenses related to the MSA were $117,980 for the three months ended June 30, 2021 as compared to $82,313 for the same period of 2020. Expenses related to the MSA were $482,445 for the six months ended June 30, 2021 as compared to $159,404 for the same period of 2020.

Note Payable and Short Term Loan – Related Parties

In April 2019, the Company issued a convertible note to Dr. Trieu totaling $164,444, including OID of $16,444, receiving net proceeds of $148,000, which was used by the Company for working capital and general corporate purposes. The Company issued a Fall 2019 Note to Dr. Trieu in the principal amount of $250,000. Dr. Trieu also offset certain amounts due to him in the amount of $35,000 and was converted into the Fall 2019 debt. During the year ended December 31, 2020, Dr. Trieu provided additional short-term funding of $70,000 to the Company, of which the Company repaid $50,000 prior to December 31, 2020. During the year ended December 31, 2020, Dr. Trieu purchased a total of 5 Units under the private placement for a gross total of $250,000.

During the three months ended March 31, 2021, Autotelic Inc, provided a short-term loan of $120,000 to the Company, which was repaid in April 2021. During the three months ended June 30, 2021, Autotelic Inc. provided a short-term loan of $250,000 to the Company.

Artius Consulting Agreement

On March 9, 2020, the Company and Artius Bioconsulting, LLC (“Artius”), for which Mr. King is the Managing Member, entered into an amendment to the Consulting Agreement dated December 1, 2018, under which Artius agreed to serve as a consultant to the Company for services related to the Company’s business from time to time, effective December 1, 2019 (the “Effective Date”) (the “Artius Agreement”). In connection with the Artius Agreement, Mr. King also agreed to assist the Company with strategic advisory services with respect to transactional and operational contracts, budgetary input, among other matters in connection with the formation of a new business unit to develop AI and Blockchain Driven Vision Systems (“EdgePoint AI”), for which Mr. King is Chief Executive Officer.

Under the terms of the Artius Agreement, the Company agreed to grant to Artius, subject to approval by the Company’s Board of Directors and pursuant to the Company’s 2017 Equity Incentive Plan, 148,837 restricted shares of the Company’s Common Stock, in addition to a 30% pre-financing ownership stake in EdgePoint AI. The Artius Agreement contemplates that Mr. King will generally provide his services at a rate of $237 per hour, not to exceed 44 hours per month and payable monthly, and to reimburse Mr. King for reasonable and necessary expenses incurred by him or Artius in connection with providing services to the Company.

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Either the Company or Artius may terminate the Artius Agreement at any time, for any reason following the Effective Date. The Artius Agreement will automatically renew one year from the Effective Date, unless the Parties agree to terminate the Artius Agreement at that time.

No expense was recorded during the three and six months ended June 30, 2021 or 2020, respectively, related to this Agreement.

Maida Consulting Agreement

Effective May 5, 2020, the Company and Dr. Maida entered into an independent consulting agreement, commencing April 1, 2020 (the “Maida Agreement”), under which Dr. Maida will assist the Company in providing medical expertise and advice from time to time in the design, conduct and oversight of the Company’s existing and future clinical trials.

Pursuant to the terms of the Maida Agreement, the Company will grant to Dr. Maida 400,000 restricted shares of the Company’s Common Stock corresponding to $80,000 at the stock value of $0.20 per share, to vest on May 5, 2021. The Company will also pay Dr. Maida $15,000 per month for a minimum of 20 hours per week, in in addition to reimbursement of reasonable and necessary expenses incurred by Dr. Maida in connection with his services to the Company.

Either the Company or Dr. Maida may terminate the Maida Agreement, for any reason, upon 30 days advance written notice.

The Company recorded an expense of $45,000 during the three months ended June 30, 2021 related to this Agreement as compared to $30,000 during the same period in 2020. The Company recorded an expense of $90,000 during the three months ended June 30, 2021 related to this Agreement as compared to $30,000 during the same period in 2020.

NOTE 8 - EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

On May 3, 2021, the Company entered into an Equity Purchase Agreement (“EPL”) and Registration Rights Agreement with Peak One Opportunity Fund LP (“Peak One” or the “Investor”). Under the terms of the EPL, the Company issued 250,000 shares of Common Stock to Peak One. Further, under the terms of the EPL, Peak One agreed to purchase from the Company up to $10,000,000 of the Company’s Common Stock upon effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission and subject to certain limitations and conditions set forth in the Equity Purchase Agreement. The Registration Rights Agreement provided that the Company would (i) file the Registration Statement with the SEC by July 2, 2021; and (ii) use its best efforts to have the Registration Statement declared effective by the Commission at the earliest possible date (in any event, within 90 days after the execution date of the definitive agreements). The Company filed a Registration Statement on Form S-1 with the Commission on May 24, 2021, and the Form S-1 was declared effective on June 2, 2021.

Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the Equity Purchase Agreement, the Company shall have the discretion to deliver put notices to the Investor and the Investor will be obligated to purchase shares of the Company’s Common Stock based on the investment amount specified in each put notice. The minimum amount that the Company shall be entitled to put to the Investor in each put notice is $20,000 and the maximum amount is up to the lesser of $1.0 million or two hundred fifty percent (250%) of the average daily trading volume of the Company’s Common Stock defined as the average trading volume of the Company’s Common Stock in the ten (10) days preceding the date on the put notice multiplied by the lowest closing bid price in the ten (10) immediately preceding the date of the put notice. Pursuant to the Equity Purchase Agreement, the Investor will not be permitted to purchase, and the Company may not put shares of the Company’s Common Stock to the Investor that would result in the Investor’s beneficial ownership of the Company’s outstanding Common Stock exceeding 4.99%. The price of each put share shall be equal to ninety one percent (91%) of the market price, which is defined as the lesser of (i) closing bid price of the Common stock on the trading date immediately preceding the respective put date, or (ii) the lowest closing bid price of the Common Stock during the seven (7) trading days immediately following the clearing date associated with the applicable put notice.

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In connection with the EPL, the Company issued 250,000 shares of Common Stock to Peak One and recorded a fair value stock compensation expense of approximately $70,000.

During the three months ended June 30, 2021, the Company sold a total of 400,000 shares of Common Stock at prices ranging from $0.15 and $0.23 for total gross proceeds of approximately $99,000, net of issuance costs of approximately $29,000. Approximately $37,000 of the total net proceeds was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

NOTE 9 - STOCKHOLDERS’ EQUITY

The following transactions affected the Company’s Stockholders’ Equity:

Equity Transactions During the Period Since the Merger

Issuance and conversion of Preferred Stock

In April 2019, pursuant to the Merger the Company issued 193,713 shares of Series A Preferred in exchange for 77,154 shares of Oncotelic Common Stock. Further, in November 2019 the Company issued 84,475 shares of Series A Preferred to PointR in exchange of 11,135,935 shares of PointR Common Stock upon the consummation of the PointR merger. In March 2021, 278,188 shares of the Company’s preferred stock converted to 278,187,847 shares of its Common Stock, effective March 31, 2021.

Issuance of Common Stock during the six months ended June 30, 2021

In January 2021, the Company issued 657,200 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In March 2021, the Company converted 278,188 shares of our Series A Preferred Stock to 278,187,847 shares of its Common Stock.

In May 2021, the Company issued 250,000 shares of its Common Stock to Peak One in connection with the EPL and recorded a stock compensation expense of approximately $70,000.

In June 2021, the Company sold a total of 400,000 registered shares of Common Stock at prices ranging from $0.15 and $0.23 in connection with the EPL. The Company received net cash of $70,000 against such sale.

Issuance of Common Stock during the six months ended June 30, 2020

In February 2020, the Company issued 500,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In March 2020, the Company issued 750,000 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In March 2020, the Company issued 500,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In March 2020, the Company issued 1,012,145 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In February 2020, the Company issued 1,200,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In June 2020, Mateon issued 569,800 shares of its Common Stock to Peak One in connection with the full conversion of one of their convertible notes payable.

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NOTE 10 – STOCK-BASED COMPENSATION

Options

Pursuant to the Merger, the Company’s Common Stock and corresponding outstanding options survived. The below information details the Company’s associated option activity.

As of June 30, 2021, options to purchase Common Stock were outstanding under three stock option plans – the 2017 Equity Incentive Plan (the “2017 Plan”), the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2005 Stock Plan (the “2005 Plan”). Under the 2017 Plan, up to 2,000,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards. Under the 2015 and 2005 Plans, taken together, up to 7,250,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of incentive stock options, nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards.

Employees, consultants, and directors are eligible for awards granted under the 2017 and 2015 Plans. The Company registered an additional total of 20,000,000 shares of its Common Stock, which may be issued pursuant to the Registrant’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”). Such additional shares were approved by the shareholders of the Company on August 10, 2020 and as reported to the Securities and Exchange Commission (the “SEC”) vide a Current Report on Form 8-K on August 14, 2020. As such, the total number of shares of the Company’s Common Stock available for issuance under the 2015 plan is 27,250,000. After June 30, 2021, the Company issued 1,257,952 of its common shares in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees. All these grants had been approved by the Board of Directors of the Company under the 2015 Plan.

Since the adoption of the 2015 Plan, no further awards may be granted under the 2005 Plan, although options previously granted remain outstanding in accordance with their terms.

Compensation based stock option activity for qualified and unqualified stock options are summarized as follows:

			Weighted
For the six months ended June 30, 2021			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		3,941,301	$	0.78
Outstanding at June 30, 2021		3,941,301	$	0.78

For the year ended December 31, 2020

				Weighted
				Average
	Shares			Exercise Price
Outstanding at January 1, 2020		6,145,044		$	0.75
Expired or canceled		(2,203,743	)		0.70
Outstanding at December 31, 2020		3,941,301		$	0.78

The following table summarizes information about options to purchase shares of the Company’s Common Stock outstanding and exercisable at June 30, 2021:

						Weighted-
				Weighted-		Average
		Outstanding		Average		Exercise		Number
Exercise prices		Options		Remaining Life		Price		Exercisable
$	0.22		1,750,000		4.84	$	0.22		1,750,000
	0.38		900,000		4.16		0.38		900,000
	0.73		762,500		3.78		0.73		762,500
	1.37		150,000		2.00		1.37		150,000
	1.43		300,000		3.91		1.43		300,000
	11.88		2,359		0.51		11.88		2,359
	15.00		75,000		3.91		15.00		75,000
	19.80		1,442		0.34		19.80		1,442
			3,941,301		4.28	$	0.78		3,941,301

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The compensation expense attributed to the issuance of the options is recognized as they are vested.

The employee stock option plan stock options are generally exercisable for ten years from the grant date and vest over various terms from the grant date to three years.

The aggregate intrinsic value totaled $0 and was based on the Company’s closing stock price of $0.22 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date. Correspondingly, the aggregate intrinsic value totaled $0 and was based on the Company’s closing stock price of $0.22 as of December 31, 2020, which would have been received by the option holders had all option holders exercised their options as of that date.

As of June 30, 2021, there was no future compensation cost as all stock options vested prior to December 31, 2019 and the compensation was fully expensed prior to the Merger. In August 2019, the Company had entered into Employment Agreements and incentive compensation arrangements with each of its executive officers, including Dr. Vuong Trieu, the Chief Executive Officer (“CEO”); Dr. Chulho Park, its prior Chief Technology Officer (“CTO’); and Mr. Amit Shah, the Chief Financial Officer (“CFO”). The incentive stock options and the restricted stock awards approved for the Company’s executive officers were granted and issued after June 30, 2021. The Company issued 1,257,952 of its common shares in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees, including the awards due to the CEO, CFO, the prior CTO and Saran Saund, the Chief Business Officer of the Company. The Company shall measure the stock-based compensation cost and record such cost in the relevant period.

Warrants

Pursuant to the Merger, the Company’s Common Stock and corresponding outstanding warrants survived. The below information represents the Company’s associated warrant activity.

During the three months ended March 31, 2021, 2,035,000 warrants were issued related to private placement. The fair value of these warrants on issue date amounted to $467,637 with an expected life of 1.5 years, as calculated using Black Scholes valuation model. Further, during the three months ended June 30, 2021, and as disclosed in Note 6 above, the Company issued 20,000,000 warrants were issued related to private placement. The fair value of these warrants on issue date amounted to $2,023,552 with an expected life of 1-2 years, as calculated using Black Scholes valuation model.

In February 2020, the Company offered to cancel to all the prior warrants of the warrant holders from the 2018 debt financing and offered to reissue new warrants to such warrant holders. Out of all the warrant holders, holders of 13,750,000 warrants opted to participate in the reissuance during the same period in 2020. The company recognized stock-based compensation of $2.1 million as the fair value of the warrants using a Black Scholes valuation model. No similar expense was recorded for the three months ended March 31, 2021.

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The issuance of warrants to purchase shares of the Company’s Common Stock, including those attributed to debt issuances, as of June 30, 2021 and December 31, 2020 are summarized as follows:

			Weighted-
			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		18,702,500	$	0.20
Issued during six months ended June 30, 2021		24,035,000		0.20
Outstanding at June 30, 2021		42,737,500	$	0.20

				Weighted-
				Average
For the year ended December 31, 2020	Shares			Exercise Price
Outstanding at January 1, 2020		19,515,787		$	0.60
Issued during the year ended December 31, 2020		17,215,000			0.20
Expired or cancelled		(18,028,287	)		0.63
Outstanding at December 31, 2020		18,702,500		$	0.20

The following table summarizes information about warrants outstanding and exercisable at June 30, 2021:

		Outstanding and exercisable
				Weighted-		Weighted-
				Average		Average
		Number		Remaining Life		Exercise		Number
Exercise Price		Outstanding		in Years		Price		Exercisable
$	0.20		1,487,500		2.08	$	0.20		1,487,500
	0.20		41,250,000		2.15		0.20		41,250,000
			42,737,500		2.15	$	0.20		42,737,500

The Company issued 24,035,000 warrants during the six months ended June 30, 2021, of which 22,000,000 warrants issued during the three months ended June 30, 2021. The Company recorded stock-based compensation of approximately $2.0 million, as fair value of the warrants, using a Black Scholes valuation model using the following input values. The expense attributed to the issuances of the warrants was recognized as they vested/earned. These warrants are exercisable for three to five years from the grant date. All the warrants are currently exercisable.

Expected Term	1-2 years
Expected volatility		94.4 – 130.0	%
Risk-free interest rates		0.08 – 0.25	%
Dividend yields		0.00	%

The Company issued 13,750,000 warrants issued during the six months ended June 30, 2020 were as recorded stock-based compensation of $2.1 million as the fair value of the warrants using a Black Scholes valuation model using the following input values. The expense attributed to the issuances of the warrants was recognized as they vested/earned. These warrants are exercisable for three to five years from the grant date. All the warrants are currently exercisable.

Expected Term	3 years
Expected volatility		140.5	%
Risk-free interest rates		1.40	%
Dividend yields		0.00	%

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NOTE 11 – INCOME TAXES

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes as of June 30, 2021 and December 31, 2020 are as follows in thousands:

	June 30, 2021			December 31, 2020
Deferred tax assets:
Stock-based compensation	$	1,164		$	1,164
Assets		6,015			6,227
Liability accruals		253			173
R&D Credit		4,776			4,760
Capital Loss		528			528
Deferred state tax		(2,173	)		(2,086	)
Net operating loss carry forward		56,506			56,090
Total gross deferred tax assets		67,069			66,856
Less - valuation allowance		(67,069	)		(66,856	)
Net deferred tax assets	$	-		$	-

The Company had gross deferred tax assets of approximately $68.0 million and $66.9 million as of June 30, 2021 and December 31, 2020, respectively, which primarily relate to net operating loss carryforwards.

As of June 30, 2021 and December 31, 2020, the Company had gross federal net operating loss carryforwards of approximately $239.7 million and $237.7 million, respectively, which are available to offset future taxable income, if any. The Company recorded a valuation allowance in the full amount of its net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not.

At June 30, 2021 and December 31, 2020, the Company had California state gross operating loss carry-forwards of approximately $74.9 million and $69.8 million which will expire in various amounts from 2028 through 2040. At December 31, 2020, the Company had federal research and development tax credits of approximately $3.3 million which will expire in 2021 and California state research and development tax credits of approximately $1.4 million which have no expiration date.

The Company identified its federal and California state tax returns as “major” tax jurisdictions. The periods out income tax returns are subject to examination for these jurisdictions are 2017 through 2020. We believe our income tax filing positions and deductions will be sustained on audit, and we do not anticipate any adjustments that would result in a material change to our financial position. Therefore, no liabilities for uncertain income tax positions have been recorded. As of the date of this filing, the Company has not filed its 2019 and 2020 federal and state corporate income tax returns. The Company expects to file these documents as soon as practical.

Portions of these carryforwards will expire through 2038, if not otherwise utilized. The Company’s utilization of net operating loss carryforwards could be subject to an annual limitation. as a result of certain past or future events, such as stock sales or other equity events constituting a “change in ownership” under the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations could result in the expiration of net operating loss carryforwards and tax credits before they can be utilized. We have not performed a formal analysis, but we believe our ability to use such net operating losses and tax credit carryforwards will be subject to annual limitations, due to change of ownership control provisions under Section 382 and 383 of the Internal Revenue Code, which would significantly impact our ability to realize these deferred tax assets.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases

Currently, the Company is leasing the office located at 29397 Agoura Road, Suite 107, Agoura Hills, CA 91301 on a month-to-month basis until such time a new office is identified. The Company believes the office is sufficient for its current operations.

Legal Claims

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows.

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PointR Merger Contingent Consideration

The total purchase price of $17,831,427 represented the consideration transferred from Mateon in the Merger and was calculated based on the number of shares of Common Stock plus the preferred shares outstanding but convertible into Common Stock outstanding at the date of the Merger and includes $2,625,000 of contingent consideration of shares issuable to PointR shareholders upon achievement of certain milestones.

NOTE 13 – SUBSEQUENT EVENTS

Stock Awards Under the 2015 Plan

The Company issued 1,257,952 shares of its Common Stock in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees. All these grants had been approved for issuance after June 30, 2021 by the Board of Directors of the Company under the 2015 Plan.

Unsecured Convertible Notes

In August 2021, the Company issued Note Purchase Agreements with Autotelic Inc., the CFO, and certain other accredited investors. Under the terms of the Note Purchase Agreements, the Company issued an aggregate of $698,500 (the “Principal Amount”) in debt in the form of unsecured convertible promissory notes (collectively, the “Notes”). The Notes are unsecured, and provide for interest at the rate of 5% per annum. Such Notes were issued against some of the short-term debt due as of June 30, 2021. All amounts outstanding under the Notes become due and payable at such time as determined by the holders of a majority of the Principal Amount of the Notes (the “Majority Holders”), on or after (a) the one year anniversary of the Notes ,or (b) the occurrence of an Event of Default (as defined in the Note Purchase Agreements) (the “Maturity Date”). The Company may prepay the Notes at any time. Events of Default under the Notes include, without limitation, (i) failure to make payments under the Notes within thirty (30) days of the Maturity Date, (ii) breaches of the Note Purchase Agreement or Notes by the Company which is not cured within thirty (30) days of notice of the breach, (iii) bankruptcy, or (iv) a change in control of the Company (as defined in the Note Purchase Agreements). The Majority Holders have the right, at any time not more than five days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Notes. The Notes may be converted, at the election of the Majority Holders, into shares of the Company’s common stock, par value $0.01 per share, at a fixed conversion price of $0.18 per share.

GMP Letter of Intent and Term Sheet

On August 13, 2021 the Company, the CEO, and GMP executed a letter of intent and a non-binding term sheet (the “Term Sheet”), which Term Sheet included certain binding terms relating to a standstill agreement and the issuance of a convertible promissory note (as more fully described below). The Term Sheet sets forth the terms and conditions pursuant to which the Company and GMP will, subject to shareholder approval, form a joint venture (the “JV”) with the objective to develop the Company’s product portfolio. Pursuant to the Term Sheet, the Company will contribute its product portfolio to the JV in consideration for a 35% ownership stake in the JV. As set forth above, the Term Sheet sets forth certain binding terms regarding (i) a 45-day standstill by the Company, and (ii) the issuance by the Company of a convertible note for $1.5 million to GMP to fund the OT-101 clinical trial study close-out. Although no assurances can be given, the Company and GMP currently intend to conduct an initial public offering of the JV, at a future date, on either the Hong Kong Exchange or other stock exchange. The formation of the JV is not assured as the formation of the JV is subject to approval of the Company’s shareholders and the execution of definitive agreements, among other conditions.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Quarterly Report” or “Report”) includes a number of forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Some of these risks are included in the section entitled “Risk Factors” set forth in this Quarterly Report and in other reports that we file with the Securities and Exchange Commission (“SEC”). The occurrence of any of these risks, or others of which we are currently unaware, may cause our company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and without limitation:

● our ability to successfully commercialize our products and services on a large enough scale to generate profitable operations;

● our ability to maintain and develop relationships with customers and suppliers;

● our ability to successfully integrate acquired businesses or new products, or to realize anticipated synergies in connection with acquisitions of businesses or products;

● expectations concerning our ability to raise additional funding and to continue as a going concern;

● our ability to successfully implement our business plan;

● our ability to avoid, or to adequately address any intellectual property claims brought by third parties; and

● the anticipated impact of any changes in industry regulation.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that the actual results of operations or the results of our future activities will not differ materially from our assumptions.

Corporate History

Oncotelic Therapeutics, Inc. (also d/b/a Mateon Therapeutics, Inc.) (“Oncotelic”), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, changed its name to Mateon Therapeutics, Inc. in 2016, and then Oncotelic Therapeutics, Inc. in November 2020. Oncotelic conducts business activities through Oncotelic and its wholly-owned subsidiaries, Oncotelic, Inc., a Delaware corporation, PointR Data, Inc. (“PointR”), a Delaware corporation, and EdgePoint AI, Inc. (“Edgepoint”), a Delaware Corporation for which there are non-controlling interests, (Oncotelic, Oncotelic Inc., PointR and Edgepoint are collectively called the “Company”). The Company is evaluating the further development of its product candidates OXi4503 as a treatment for acute myeloid leukemia and myelodysplastic syndromes and CA4P in combination with a checkpoint inhibitor for the treatment of advanced metastatic melanoma.

Amendments to Certificate of Incorporation

In November 2020 the Company filed an amendment to its Certificate of Incorporation with the Secretary of State for the State of Delaware changing its name from “Mateon Therapeutics, Inc.” to “Oncotelic Therapeutics, Inc.” A notice of corporate action was filed with the Financial Industry Regulatory Authority (“FINRA”), requesting confirmation to change its name and approval for a new ticker symbol. On March 29, 2021, the Company received approval from FINRA on its notice of corporate action, and effective March 30, 2021, the Company’s ticker symbol had changed from “MATN” to “OTLC”.

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In January 2021, the Company filed an additional amendment to its Certificate of Incorporation, as amended (the “Charter Amendment”), with the Secretary of State for the State of Delaware, which Charter Amendment went effective immediately upon acceptance by the Secretary of State for the State of Delaware. As approved by the Company’s stockholders by written consent on August 10, 2020, the Charter Amendment increased the number of authorized shares of common stock, par value $0.01 per share (“Common Stock”) from 150,000,000 shares to 750,000,000 shares.

Conversion of Series A Preferred Stock to Common Stock

Subsequent to obtaining the approval from FINRA on March 29, 2021 related to the various corporate actions, the Company converted 278,188 Series A Preferred Stock into 278,187,847 shares of Common Stock of the Company. After such conversion and as of May 7, 2021, the total number of shares of Common Stock outstanding is 369,696,959.

Recent Events

Peak One Equity Purchase Agreement

On May 3, 2021, the Company entered into an Equity Purchase Agreement (the “EPL”) and Registration Rights Agreement (the “Registration Rights Agreement”) with Peak One Opportunity Fund, L.P. (“Peak One”), pursuant to which the Company shall have the right, but not the obligation, to direct Peak One, to purchase up to $10.0 million (the “Maximum Commitment Amount”) in shares of the Company’s Common Stock. Under the EPL and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit Put Notices (as defined in the EPL) to Peak One (i) in a minimum amount not less than $20,000.00, and (ii) in a maximum amount up to the lesser of (a) $1.0 million or (b) 250% of the Average Daily Trading Value (as defined in the EPL). In exchange for Peak One entering into the EPL, the Company agreed, among other things, to (A) issue Peak One and Peak One Investments, LLC, an aggregate of 250,000 shares of Common Stock, and (B) file a registration statement registering the Common Stock issued or issuable to Peak One under the EPL for resale (the “Registration Statement”) with the SEC within 60 calendar days of the date of the EPL, as more specifically set forth in the Registration Rights Agreement. The obligation of Peak One to purchase the Company’s Common Stock shall begin on the date of the EPL, and ending on the earlier of (i) the date on which Peak One shall have purchased Common Stock pursuant to the EPL equal to the Maximum Commitment Amount, (ii) twenty four (24) months after the initial effectiveness of the Registration Statement , (iii) written notice of termination by the Company to Peak One (subject to certain restrictions set forth in the EPL), (iv) the Registration Statement is no longer effective after the initial effective date of the Registration Statement, or (v) the date that the Company commences a voluntary case or any person commences a proceeding against the Company, a custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors (the “Commitment Period”). During the Commitment Period, the purchase price to be paid by Peak One for the Common Stock under the EPL shall be 91% of the Market Price, which is defined as the lesser of the (i) closing bid price of the Common Stock on the trading day immediately preceding the respective Put Date (as defined in the EPL), or (ii) lowest closing bid price of the Common Stock during the Valuation Period (as defined in the EPL), in each case as reported by Bloomberg Finance L.P or other reputable source designated by Peak One.

During the three months ended June 30, 2021, the Company sold total of 400,000 shares of Common Stock at prices ranging from $0.15 and $0.23 for total gross proceeds of approximately $99,000, net of issuance costs of approximately $29,000. Approximately $37,000 of the total net proceeds was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

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Private Placement through JH Darbie & Co., Inc.

Between July 2020 and March 2021, the Company offered and sold certain units (“Units”) in a private placement through JH Darbie & Co., Inc. (“JH Darbie”), with each unit consisting of: (i) 25,000 shares of Edgepoint common stock, par value $0.01 per share (“Edgepoint Common Stock”), for a price of $1.00 per share of Edgepoint Common Stock; (ii) one convertible promissory note issued by the Company (the “Unit Note”), convertible into up to 25,000 shares of EdgePoint Common Stock at a conversion price of $1.00 per share, or up to 138,889 shares of the Company’s Common Stock, at a conversion price of $0.18 per share; and (iii) 100,000 warrants (the “Warrants”), consisting of (a) 50,000 warrants to purchase an equivalent number of shares of EdgePoint Common Stock at $1.00 per share (“Edgepoint Warrant”), and (b) 50,000 warrants to purchase an equivalent number of shares of Company Common Stock at $0.20 per share (“Oncotelic Warrant”) (the sale of Units is hereinafter, the “JH Darbie Financing”). In total, as of December 31, 2020, the Company had issued and sold a total of 63 Units. In addition, 6.3 Units were issued to JH Darbie as fees. Subsequent to December 31, 2020 and through the date of this report, the Company sold the remaining 37 Units and JH Darbie earned an additional 3.7 Units as fees.

The JH Darbie Financing resulted in gross proceeds of $5 million to the Company. Placement agent fees of $0.65 million were paid to JH Darbie pursuant to that certain Placement Agent Agreement, dated February 25, 2020 between the Company and JH Darbie (the “Darbie Placement Agreement”). In addition, the Company paid approximately $39,000 as legal costs for the transaction. Under the Darbie Placement Agreement, JH Darbie had the right to sell a minimum of 40 Units and a maximum of 100 Units on a best-efforts basis. The Company has had nine tranches under the JH Darbie Financing between July and March 31, 2021. Subsequent to December 31, 2020, the Company received gross funds of $1.85 million through 4 tranches under the JH Darbie Financing. Placement fees of $0.2 million were paid to JH Darbie in connection with such financing.

In June 2021, the Company and the Investors agreed to extend the maturity date of the Notes from June 30, 2021, to March 31, 2022. In addition, the Company and JHDarbie identified an error in the Oncotelic Warrants and JH Darbie Financing documents which intended to have the investors to purchase $50,000 of shares of Common Stock or Edgepoint Common Stock. However, the Company only issued 50,000 Oncotelic Warrants, with an aggregate exercise price of $10,000. The error was corrected by the Company and the Company issued to the Investors an aggregate of 20.0 million additional Oncotelic Warrants, and 2.0 million additional Oncotelic Warrants to J.H. Darbie, as placement agent. Each Investor was entitled to receive 200,000 additional Oncotelic Warrants for each Unit purchased.

Geneva Roth Remark Notes

In May and June 2021, the Company entered into Securities Purchase Agreement (the “Geneva Agreement”) with Geneva Roth Remark Holdings Inc. (“Geneva”), whereby the Company issued two convertible notes (collectively, the “Geneva Notes”) in the aggregate principal amount of $307,500, convertible into shares of Common Stock. Under the terms of the Geneva Agreement, the Company will receive additional tranches of convertible note financing of up to $1.2 million throughout the term of the Geneva Agreement. The Geneva Notes have an interest rate of six percent (6%), which increases to twenty-two percent (22%) in the event of a default under each respective Note, and both mature one year from issuance (the “Maturity Date”). Geneva has the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following issuance date and ending on the Maturity Date to convert all or any part of the outstanding and unpaid amount of the applicable Geneva Note into the Company’s Common Stock at a conversion price established at sixty five (65%) percent multiplied by the lowest two (2) daily volume weighted average price over the fifteen (15) consecutive trading days. The Geneva Notes include a clause accelerating the Company’s payment obligations upon the occurrence of certain events of default whereby, at the option of Geneva, the Company will become immediately obligated to repay Geneva in an amount equal to the principal of the applicable Geneva Loan plus both accrued but unpaid interest and default interest, in cash, with premium.

The total amount outstanding under the Geneva Notes as of June 30, 2021, and December 31, 2020, was $307,500 and $0, respectively. $100,000 of the total net proceeds for the June 2021 tranche was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

Short-term loans

The Company’s CEO had provided a short term loan of $70,000 to the Company during the year ended December 31, 2020, of which $50,000 was repaid. As such, $20,000 was outstanding at June 30, 2021. During the three months ended March 31, 2021, Autotelic Inc. provided a short term funding of $120,000 to the Company, which was repaid after the three months ended March 31, 2021. On May 18, 2021, Autotelic provided an additional short term funding of $250,000 to the Company. As such, $250,000 was outstanding and payable to Autotelic at June 30, 2021. During the fourth quarter of the year ended December 31, 2020, the Company’s CFO and the Bridge Investor provided short term loans of $25,000 and $50,000, respectively to the Company. Such loans were repaid as of March 31, 2021. Additionally, the Company received $69,050 from the Company’s CFO during the three months ended June 30, 2021 and such amount was outstanding as of June 30, 2021. During the three months ended June 30, 2021, the Company received $425,825 primarily from two bridge investors and such amount was outstanding as of June 30, 2021.

Unsecured convertible notes

In August 2021, the Company issued Note Purchase Agreements with Autotelic the CFO, and certain other accredited investors. Under the terms of the Note Purchase Agreements, the Company issued an aggregate of $698,500 (the “Principal Amount”) in debt in the form of unsecured convertible promissory notes (collectively, the “Notes”). The Notes are unsecured, and provide for interest at the rate of 5% per annum. Such Notes were issued against some of the short-term debt due as of June 30, 2021. All amounts outstanding under the Notes become due and payable at such time as determined by the holders of a majority of the Principal Amount of the Notes (the “Majority Holders”), on or after (a) the one year anniversary of the Notes ,or (b) the occurrence of an Event of Default (as defined in the Note Purchase Agreements) (the “Maturity Date”). The Company may prepay the Notes at any time. Events of Default under the Notes include, without limitation, (i) failure to make payments under the Notes within thirty (30) days of the Maturity Date, (ii) breaches of the Note Purchase Agreement or Notes by the Company which is not cured within thirty (30) days of notice of the breach, (iii) bankruptcy, or (iv) a change in control of the Company (as defined in the Note Purchase Agreements). The Majority Holders have the right, at any time not more than five days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Notes. The Notes may be converted, at the election of the Majority Holders, into shares of the Company’s common stock, par value $0.01 per share, at a fixed conversion price of $0.18 per share.

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Consent Solicitation and Amendments to Certificate of Incorporation

On June 25, 2020, the Company commenced a solicitation of shareholder consents (the “Consent Solicitation”), pursuant to a consent solicitation statement (the “Consent Solicitation Statement”), to the holders (the “Stockholders”) of its Common Stock and Series A Convertible Preferred Stock. The deadline for Stockholders to respond to the Consent Solicitation Statement was August 10, 2020. Pursuant to the Consent Solicitation Statement, the following actions were approved by the written consent of the requisite number of Stockholders:

(1)	changing the name of the Company and changing the Company’s ticker symbol (the “Name Change”);
(2)	amending the Company’s Amended and Restated 2015 Equity Incentive Plan to increase the number of shares of Common Stock available for issuance from 7.25 million shares to 27.25 million shares, and increasing the maximum number of stock awards that may be issued in any fiscal year from 500,000 to 1,000,000 shares (the “Plan Amendment”);
(3)	increasing the authorized number of shares of Common Stock from 150,000,000 to 750,000,000 (the “Capital Increase”); and
(4)	amending and restating the certificate of incorporation for the Company to give effect to the Name Change, Capital Increase and forum selection provision.

The Company filed a Current Report on Form 8-K with the SEC to declare the voting results on August 14, 2020. In November 2020, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State for the State of Delaware changing its name from “Mateon Therapeutics, Inc.” to “Oncotelic Therapeutics, Inc.” A notice of corporate action was filed with FINRA, requesting confirmation to change its name and approval for a new ticker symbol. On March 29, 2021, the Company received approval from FINRA on its notice of corporate action, and effective March 30, 2021, the Company’s ticker symbol changed from “MATN” to “OTLC”.

In January 2021, the Company filed the Charter Amendment, with the Secretary of State for the State of Delaware, which Charter Amendment went effective immediately upon acceptance by the Secretary of State for the State of Delaware. As approved by the Company’s stockholders by written consent on August 10, 2020, the Charter Amendment increased the number of authorized shares of Common Stock from 150,000,000 shares to 750,000,000 shares.

The Company registered an additional 20,000,000 shares of its Common Stock, which may be issued pursuant to the Company’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”). Such additional shares were approved by the Stockholders on August 10, 2020 and disclosed on the Company’s Current Report on Form 8-K filed on August 14, 2020. As such, the total number of shares of the Company’s Common Stock available for issuance under the Plan are 27,250,000.

In March 2021, the Company converted 278,188 shares of the Company’s Series A Preferred Stock to 278,187,847 shares of its Common Stock pursuant to the terms of the agreement and plans of merger with Oncotelic, Inc. and PointR (collectively, the “Mergers”). For additional information on the Mergers, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on April 15, 2021.

Mergers

The Company consummated the transactions for both Mergers in 2019. For additional information on both mergers, refer to our Annual Report on Form 10-K filed with the SEC on April 15, 2021.

Company Overview

We are a clinical stage biopharmaceutical company developing drugs for the treatment of cancer. Our goal is to advance our drug candidates into late stage pivotal clinical trials and either sell marketing rights to a larger pharmaceutical company or seek approval from the United States Food and Drug Administration (“FDA”) ourselves.

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The Company’s lead product candidate, OT-101, is being developed as a broad-spectrum anti-cancer drug that can also be used in combination with other standard cancer therapies to establish an effective multi-modality treatment strategy for difficult-to-treat cancers. Together, we plan to initiate phase 3 clinical trials for OT-101 in both high-grade glioma and pancreatic cancer. During Phase 2 clinical trials in pancreatic cancer, melanoma, and colorectal cancers (“Study P001”) and in high-grade gliomas (“Study G004”), meaningful clinical benefits were observed and OT-101 exhibited a favorable safety profile. These clinical benefits included long-term survival and meaningful tumor reduction. Both partial and complete responses have been observed in the Study G004 Phase 2 clinical trial of OT-101 as a single agent in patients with aggressive brain tumors.

The Company’s self-immunization protocol (“SIP™”) is based on novel and proprietary sequential treatment of cancers with OT-101 (an antisense against TGF-ß2) and chemotherapies. This sequential treatment strategy is aimed at achieving effective self-immunization against a patients’ own cancer, resulting in robust therapeutic immune response and consequently better control of the cancer and improved survival. Prolonged states of being cancer-free have been observed in some patients with the most aggressive forms of cancer, raising a renewed hope for a potential cure. The use of OT-101 lifts the suppression of the patient’s immune cells around the cancer tissue, providing the foundation for an effective initial priming, which is critical for a successful immune response. The subsequent chemotherapy results in the release of neoantigens that result in a robust boost of the immune response. We believe that a rational combination of the company’s SIP™ platform with immune-modulatory drugs like interleukin 2 (“IL-2”) and/or immune checkpoint inhibitors has the potential to help achieve sustained and robust immune responses in patients with the most difficult-to-treat forms of cancer.

The Company is also working on developing OT-101 as a possible drug candidate that can be deployed in various epidemic and pandemic diseases, such as Severe Acute Respiratory Syndrome (“SARS”) and specifically for the current COVID-19. As of the date of this report, the Company has filed an Investigational New Drug Application (“IND”) with the FDA to permit the Company to conduct clinical trials to prove the efficacy of OT-101 against COVID-19. The Company has initiated clinical trials in Latin America to evaluate the efficacy of OT-101 against COVID-19 and expects preliminary results before the end of the fiscal year 2021. The Company plans to initiate the Company’s Phase 2 clinical trial of OT-101, a TGF-β antisense, for the treatment of patients with mild to severe COVID-19 infection. The multi-center, double blind, randomized, placebo-control study pas planned to evaluate the safety and efficacy of OT-101 in combination with standard of care on two patient groups – (1) mild or moderate disease, and (2) severe disease requiring mechanical ventilation or intubation. The Company discontinued enrollment in its OT-101 clinical trial in patients with COVID-19 in June 2021. The trial completed randomization of 32 out of 36 patients planned, on an intent to treat basis. The discontinuance of the trial was due to the continuing rise of more severe variants in Latin America, leading to exhaustion of medical care infrastructure in Latin America.

In addition, the Company is developing Artemisinin as an Ayurvedic therapeutic under the product names ARTIVeda^TM (when marketed within India), and ArtiShield^TM (when marketed outside of India) (ARTIVeda^TM and ArtiShield^TM are collectively referred to herein as “ARTIVeda^TM”). Artemisinin, purified from a plant Artemisia Annua, has exhibited an ability to inhibit TGF-β activity and neutralize COVID-19. The Company’s test results during an in vitro study at Utah State University showed Artemisinin having an EC50 of 0.45 ug/ml, and a Safety Index of 140. Artemisinin can target multiple viral threats including COVID-19 by suppressing both viral replication and clinical symptoms that arise from viral infection. Viral replication cannot occur without TGF-β. Artemisinin also has been reported to have antiviral activities against hepatitis B and C viruses, human herpes viruses, HIV-1, influenza virus A, and bovine viral diarrhea virus in the low micromolar range. TGF-β surge and cytokine storm cannot occur without TGF-β. In a clinical study undertaken in India, clinical consequences related to the TGF-β surge, including ARDS and cytokine storm, were suppressed by targeting TGF-β with Artemisinin. The clinical study (“ARTI-19”) showing these results was a global study, enrolling at least 120 patients. The number of patients planned to be enrolled in the ARTI-19 trial increases the total aggregate number of patients using ARTIVeda^TM to 3,000. The ARTI-19 trials were conducted by Windlas Biotech Private Limited (“Windlas”), the Company’s business partner in India, as part of the Company’s global effort at deploying ARTIVeda^TM across India, Africa, and Latin America. The Windlas study evaluates the safety and efficacy of Artemisia Absinthium Powder 500mg capsule of ARTIVeda^TM in the treatment of adults with COVID-19. Data from ARTI-19 is expected by end of the fourth quarter of the fiscal year 2021. The ARTI-19 trial was registered under the Clinical Trials Registry India (“CTRI”) with three active sites and additional sites to be added as the trial progresses and expands. ARTI-19 was conducted with Windlas as part of the plan for the Company’s global effort at deploying Pulmoheal^TM, a product package of ARTIVeda^TM, our artificial intelligence (“AI”) cough application (“ArtiHealth”), and our AI post marketing survey (“PMS”), across India, Africa, and Latin America. We continue to evaluate to seek approval, and subsequently launch PulmoHeal^TM, with or without local partners, in various countries within the regions planned.

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In January 2021 and subsequently in February 2021, the Company announced preliminary results for ARTI-19 trials for ARTIVeda^™. The interim results announced were, as previously disclosed above, based on 120 randomized patients across three sites in India. We reported positive topline results in April 2021, and we expect final data as soon as available. Upon completion of the trial results and obtaining regulatory approval for the use in India, it is the Company’s objective to file for Emergency Use Authorization (“EUA”) with regulatory authorities around the world, including India, the United States, the United Kingdom, countries in Africa and Latin America; discussions regarding EUA with several of these authorities have commenced.

No adverse events were reported that required discontinuation of treatment. When ARTIVeda^™ was added to the standard of care (“SOC”), more patients recovered faster than SOC alone. Of the 39 patients, 31 patients (79.5%) being treated with ARTIVeda^™ became asymptomatic after 5-day of therapy. In comparison, only 12 of the 21 control patients (57.1%) treated with SOC alone became asymptomatic on day 5 (P=0.028, Fisher’s exact test). For the sicklier patients (WHO scale 4), the median time to becoming asymptomatic was only 5 days for the ARTIVeda + SOC group (N=18), as compared to 14 days for the SOC alone group (N=10) (P=0.004, Log-rank test).These data sets provide clinical support that targeting the TGF-β pathway with ARTIVeda^™ may contribute to a faster recovery of patients with mild to moderate COVID-19. The trend was more pronounced with higher initial disease status. Log rank statistics: WHO-scale 2,3,4: p= 0.0369 /RR = 1.476 (0.8957-2.433), WHO-scale 3,4: p= 0.026/ RR = 1.581 (0.9094-2.747), WHO-scale 4: p= 0.0043/ RR = 2.038 (0.9961-4.168). RR = rate ratio for recovery. The Company has published the results of the trial in certain renowned publications.

In addition to ARTIVeda^™, the Company has also developed and launched ArtiHealth and the PMS, and when packaged with ARTIVeda^TM , are packaged as a product offering under the name PulmoHeal^™. PulmoHeal^™ is a full evaluation package of drug and assessment platforms for COVID-19, and other respiratory disease patients. Windlas has launched ArtiHealth on Amazon.in, Flipkart, and 1mg.com. The platform has been powered by the Company’s AI supercomputing and AI platform in conjunction with IBM. Initially, the cough assessment will be powered by Salcit Pvt. Ltd.’s (“Salcit”) AI module. Per Salcit, their AI module has overall accuracy in predicting the pattern of the disease at 91.97%, sensitivity at 87.2%, and specificity at 93.69%.

Our artificial intelligence subsidiary, PointR, develops and deploys high performance cluster computers and AI technologies as a supercomputing grid that can be layered in and interconnected to create an all-point mesh to harvest operational data within manufacturing plants, hospitals, clinics, and phase I units. These grids provide real-time, localized decision-making, harvesting complex data from structured and unstructured sources. The deployment of this supercomputing grid enables data capture and insight extraction in real time in blocks which are chained into blockchain ledger records serving as immutable transactions for stakeholders such as regulatory agencies, caretakers, insurers, payers, and manufacturers. The PointR grid can integrate and fuse data from any type of sensors or collection devices. For example, the Vision platform is a network of activity detection cameras functionalized with AI algorithms to monitor, evaluate, and archive real time visual data as a series of metadata entries in a Blockchain ledger. In the pharmaceutical industry, PointR’s AI combined with Blockchain will be used in the entire life cycle of a drug: discovery, clinical trials and manufacturing. Leveraging its deep partnership with IBM, the PointR team will combine its own AI Vision technology with industry standard Blockchain to transform drug manufacturing and real-world evidence monitoring for clinical trials. The combined system has the potential to automatically record individual key steps in Current Good Manufacturing Practice regulations enforced by the FDA (“CGMP”) for manufacturing operations including the flow of people, raw materials and operations in trusted perpetual blockchain ledgers that are indisputable. This has the potential to create much more efficient CGMP manufacturing operations while simultaneously improving reliability and data security. The Company is also developing AI driven telehealth and other applications, that would be used in health monitoring and supporting the Company’s various clinical programs. The PointR technology is planned to be transferred into Edgepoint. Edgepoint also plans to redeploy TrustPoint, a tested technology for CGMP drug manufacturing relieving human errors in supply chain and increasing compliance with warehouse operating procedures. For example, the warehouse module of TrustPoint will automatically create a shopping list from standard templates and alert supply chain personnel to collect and deliver a list of raw materials to manufacturing. To support the anti-viral drug program, Edgepoint is developing ArtiHealth. Protected by patents and partnership with IBM Watson Health Research ArtiHealth allows patients to cough and speak into the ArtiHealth App that can be operated either by a nurse or by the end-user patient at home. ArtiHealth is part of the company’s Telehealth platform to remotely monitor patient’s progression of disease. The Company’s clinical trials of ARTIVeda^TM will deploy ArtiHealth to COVID-19 patients in the study to collect and score data by medical professionals. The data will be used by the AI to predict and diagnose patients as a de-novo software as a medical device. After regulatory approvals, ArtiHealth will be bundled with ARTIVeda^TM to be prescribed by physicians. Patients will be able to self-monitor progression of their respiratory condition with the Edgepoint App as much as they check their temperature with a thermometer. ArtiHealth virtualizes and expands the use of spirometers in the form of a software app.

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Since April 2019, we have been operating under significant capital constraints, which has curtailed our ability to achieve meaningful progress in either of the Company’s two clinical programs – one of which is developing OXi4503 as a treatment for acute myeloid leukemia and myelodysplastic syndromes and the other of which is developing CA4P in combination with a checkpoint inhibitor for the treatment of advanced metastatic melanoma. We believe that the merger of Oncotelic and Oncotelic Inc. creates a combined company that has potential to generate shareholder value through a promising pipeline of next generation immunotherapies targeting several significant cancer markets where there is a lack of therapeutic options and lack of an effective immunotherapy protocol

Research Service Agreement between Golden Mountain Partners LLC (“GMP”) and the Company.

When COVID-19 emerged in China, the Company and GMP contemplated a collaboration to develop drug candidates for COVID-19. Oncotelic Inc. and GMP entered into a research and services agreement (the “GMP Research Agreement”) on February 3, 2020 memorializing their collaborative efforts to develop and test COVID-19 antisense therapeutics (the “GMP Agreement Product”). On March 18, 2020, the Company reported the anti-viral activity of OT-101 – its lead drug candidate currently in phase 3 testing in pancreatic cancer and glioblastoma. In an in vitro antiviral testing performed by an independent laboratory, OT-101 has an 50% effective concentration (“EC50”) of 7.6 µg/mL and is not toxic at the highest dose of 1000 µg/mL giving a safety index (“SI”) value of >130, which is considered highly active. On March 23, 2020, the Company and GMP entered into a supplement to the GMP Research Agreement (the “GMP Research Supplement”) to confirm the inclusion of OT-101 within the scope of the GMP Research Agreement as a GMP Agreement Product, pending positive confirmatory testing against COVID-19. In consideration for the financial support provided by GMP for the research, pursuant to the terms of the GMP Research Agreement (as amended by the GMP Research Supplement) GMP is entitled to obtain certain exclusive rights to the use of the GMP Agreement Product in the COVID Field on a global basis, and an economic interest in the use of the GMP Agreement Product in the COVID Field, including up to an equal split of profit sharing. As described in the GMP Research Supplement, the Company intends to license or assign intellectual property rights, including the 2020 Patent Application and any other intellectual property rights owned or controlled by the Company relating to the GMP Agreement Product, OXi4503 and CA4P, to a joint venture company (the “Joint Venture Company”) to be established jointly between Oncotelic Inc. and GMP (or its designee), as well as providing management services and other expertise to the Joint Venture Company. GMP intends that it (or its designee, as the case may be) shall provide funding to the Joint Venture Company to support its development and commercial activities in the Joint Venture Company’s territories, and in each case, on terms to be agreed by the parties. GMP shall be entitled to use its governmental relations and local expertise in Greater China to assist with coordinating the research, development and commercialization of (i) the GMP Agreement Products in the COVID Field, (ii) the GMP Agreement Products in the OT101 Oncology Field, (iii) OXi4503; and (iv) CA4P, in each case in Greater China.

The Joint Venture Company is intended to be jointly owned by the Company and GMP (or its designee), and its principal activities shall be to research, develop, bring to market and commercialize: (i) the GMP Agreement Products in the COVID Field on a global basis, (ii) the GMP Agreement Products in the OT101 Oncology Field, (iii) OXi4503; and (iv) CA4P, in each case in Greater China. On April 6, 2020, the Company announced that it had delivered the requisite testing results to GMP confirming the applicability and potential use of OT-101 for the treatment of COVID-19. OT-101 exhibited potent activity against both COVID-19 and SARS with a robust safety index of greater than 500. Also, the Company has submitted a Pre-Investigational New Drug application package to the FDA. GMP paid the Company fees of $300,000 during the three months ended March 31, 2020 and $900,000 during the three months ended June 30, 2020 for the services rendered under the agreement. The Company also recorded approximately $40,000 for reimbursement of actual costs incurred.

In June 2020, the Company secured $2 million in debt financing, evidenced by a one-year convertible note (the “GMP Note”) from GMP or its affiliate, to conduct a clinical trial evaluating OT-101 against COVID-19 bearing 2% annual interest, and is personally guaranteed by Dr. Vuong Trieu, the Chief Executive Officer of the Company. The GMP Note is convertible into the Company’s Common Stock upon the GMP Note’s maturity one year from the date of the GMP Note, at the Company’s Common Stock price on the date of conversion with no discount. GMP does not have the option to convert prior to the GMP Note’s maturity at the end of one year. Such financing will be utilized solely to fund the clinical trial.

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The Company’s liability under GMP Note commenced to accrue when GMP first began to pay for services related to the clinical trial to our third-party clinical research organization, up to a maximum of $2 million. As of June 30, 2021, the clinical research organization has invoiced GMP’s affiliate for the entire $2 million, and the Company has accrued the $2 million as a convertible debt, including accrued interest thereon, under the terms of the GMP Note.

On August 13, 2021 the Company, the CEO, and GMP executed a letter of intent and a non-binding term sheet (the “Term Sheet”), which Term Sheet included certain binding terms relating to a standstill agreement and the issuance of a convertible promissory note (as more fully described below). The Term Sheet sets forth the terms and conditions pursuant to which the Company and GMP will, subject to shareholder approval, form a joint venture (the “JV”) with the objective to develop the Company’s product portfolio. Pursuant to the Term Sheet, the Company will contribute its product portfolio to the JV in consideration for a 35% ownership stake in the JV. As set forth above, the Term Sheet sets forth certain binding terms regarding (i) a 45-day standstill by the Company, and (ii) the issuance by the Company of a convertible note for $1.5 million to GMP to fund the OT-101 clinical trial study close-out. Although no assurances can be given, the Company and GMP currently intend to conduct an initial public offering of the JV, at a future date, on either the Hong Kong Exchange or other stock exchange. The formation of the JV is not assured as the formation of the JV is subject to approval of the Company’s shareholders and the execution of definitive agreements, among other conditions.

Entry into MOU and Agreement with Windlas

In August 2020, the Company executed a memorandum of understanding (the “MOU”) with Windlas for the development and commercialization of Artemisinin as a therapeutic pharmaceutical, nutraceutical and herbal supplement against COVID-19. The development of Artemisinin against COVID-19 is dependent on the successful completion of ARTI-19 clinical trial “Artemisinin Intervention trial against COVID-19” (“ARTI-19 trial”), which is being initiated globally in Africa, India, and South America. Windlas will be our manufacturing partner for the clinical trial batches as well as commercial batches. In September 2020, the Company executed the final MOU with Windlas regarding the development and commercialization of Artemisinin as therapeutic pharmaceutical, nutraceutical and herbal supplement against COVID-19.

The ARTI-19 trial has been cleared by India regulatory authorities and registered under CTRI. Three sites have been selected for the ARTI-19 trial, the approval of the requisite Institutional Review Boards has been obtained, and the respective staff has been trained into the protocol and electronic data capture systems. Additional sites will be added as the trial progresses. 120 patients were enrolled in the ARTI-19 trial during the year ended December 31, 2020. In January 2021 and subsequently in February 2021, the Company announced preliminary results for ARTIVeda^TM, and final topline results in April 2021. As described above, ARTIVeda^TM is the Company’s lead Ayurvedic drug against COVID-19 in India and being developed by the Company in partnership with Windlas. We expect final data available 6-8 weeks thereafter. Upon completion of the trial results, it is the Company’s objective to file for EUA with regulatory authorities around the world, including India, the United States, and the United Kingdom; discussions regarding EUA with several of these authorities have commenced. For more information, please see above under Company Overview.

Paycheck Protection Program

In April 2020, the Company received loan proceeds in the amount of $250,000 under the Paycheck Protection Program (“PPP”) which was established under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and is administered by the Small Business Administration (“SBA”). The PPP provides loans to qualifying businesses in amounts up to 2.5 times the average monthly payroll expenses and was designed to provide direct financial incentive to qualifying businesses to keep their workforce employed during the Coronavirus crisis. PPP Loans are uncollateralized and guaranteed by the SBA and are forgivable after a “covered period” (8 weeks or 24 weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll, benefits, mortgage interest, rent and utilities. The forgiveness amount will be reduced if the borrower terminates employees or reduces salaries and wages more than 25% during the covered period. Any unforgiven portion is payable over 2 years if issued before, or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrowers loan forgiveness amount to the lender, or if the borrower does not apply for forgiveness, 10 months after the covered period. PPP loans provide for customary events of default, including payment defaults, breach of representations and warranties, and insolvency events and may be accelerated upon occurrence of one or more of these events of default. Additionally, the PPP Loans do not include prepayment penalties.

The Company believes it met the PPP’s loan forgiveness requirements and on August 7, 2021 applied for forgiveness. When legal release is received from the SBA or lender, the Company will record the amount forgiven as forgiveness income within the other income section of its statement of operations. If any portion of the PPP loan is not forgiven, the Company will be required to repay that portion, plus interest, through the maturity date.

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The SBA reserves the right to audit any loan provided under the PPP, regardless of size. These audits may occur after the forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain their PPP loan documentation for six years after the loan was forgiven or repaid in full and to provide that documentation to the SBA upon request.

The balance outstanding on PPP Loan inclusive of interest accrued was $252,349 and $251,733 on June 30, 2021 and December 31, 2020, respectively.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expense during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances at the time we make such estimates. Actual results and outcomes may differ materially from our estimates, judgments and assumptions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Our significant accounting policies are more fully described in Note 2 to our Unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. We believe the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments are the following:

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three months ended June 30, 2021 and 2020, there were no impairment losses recognized for long-lived assets.

Intangible Assets

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.

Goodwill

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

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The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards.

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 “Debt – Debt with Conversion and Other Options.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 “Derivatives and Hedging – Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Derivative Financial Instruments Indexed to the Company’s Common Stock

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statement of Income.

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Research and Development Expense

Research and development expense consist of costs we incur for the development of our investigational drugs and, to a lesser extent, for preclinical research activities. Research and development costs are expensed as incurred. Research and development expense include clinical trial costs, salaries and benefits of employees, including associated stock-based compensation, payments to clinical investigators, drug manufacturing costs, laboratory supplies and facility costs. Clinical trial costs are a significant component of our research and development expense, and these can be difficult to accurately estimate. Included in clinical trial costs are fees paid to other entities that conduct certain research and development activities on our behalf, such as clinical research organizations, or CROs. We estimate clinical trial expense based on the services performed pursuant to contracts with research institutions such as CROs and the actual clinical investigators. These estimates are based on actual time and expenses incurred by the CRO and the clinical investigators. Also included in clinical trial expense are costs based on the level of patient enrollment into the clinical trial and the actual services performed under the related clinical trial agreement. Changes in clinical trial assumptions, such as the length of time estimated to enroll all patients, rate of screening failures, patient drop-out rates, number and nature of adverse event reports and the total number of patients enrolled can impact the average and expected cost per patient and the overall cost of the clinical trial. Based on patient enrollment reports and services provided, we may periodically adjust estimates for the clinical trial costs. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed, the length of time for these services or the costs of these services, our actual expenses could differ from our estimates.

Share-Based Compensation

We record the estimated fair value of all share-based payments issued to employees and other service providers. Our share-based payments consist primarily of stock options. The valuation of stock options is an inherently subjective process, since market values are not available for any stock options in our equity securities. Market values are also not available on long-term, non-transferable stock options in other equity securities. With no market values on options to trade in our common stock and no comparable market values on any long-term non-transferable stock options, the process of valuing our stock options is even more uncertain and subjective. Accordingly, we use a Black-Scholes option pricing model to derive an estimated fair value of the stock options which we issue. The Black-Scholes option pricing model requires certain input assumptions, including the expected term of the options and the expected volatility of our common stock. Changes in these assumptions could have a material impact on the estimated fair value that we record for share-based payments that we issue. We determine the term of the options based on the simplified method, which averages the vesting period and the contractual life of the stock option. We determine the expected volatility based on the historical volatility of our common stock over a period commensurate with the option’s expected term. The Black-Scholes option pricing model also requires assumptions for risk-free interest rates and the expected dividend yield of our common stock, but we feel that these values are more objective and note that changes in these values do not have a significant impact on the estimated value of the options when compared to the volatility and term assumptions.

We are also required to estimate the level of award forfeitures expected to occur and record compensation expense only for those awards that are ultimately expected to vest. Accordingly, we perform a historical analysis of option awards that are forfeited prior to vesting, and record total stock option expense that reflects this estimated forfeiture rate.

Results of Operations

Comparison of the Results of Operations for the Three Months Ended June 30, 2021 to the Three Months Ended June, 2020

A comparison of the Company’s operating results for the three months ended June 30, 2021 and 2020, respectively, is as follows.

	June 30, 2021			June 30, 2020			Variance
Revenue	$	-		$	1,400,000		$	(1,400,000	)
Operating expense:
Research and development		956,814			482,142			474,672
General and administrative		2,807,398			904,018			1,903,380
Total operating expense		3,764,212			1,386,160			2,378,052
Loss from operations		(3,764,212	)		(1,386,160	)		3,778,052
Loss on conversion of debt		-			(41,469	)		(41,469	)
Change in the value of derivatives on debt		630,174			746,809			116,635
Interest expense, net		(433,979	)		(137,089	)		296,890
Net income (loss) before controlling interests	$	(3,568,017	)	$	582,091		$	(4,150,108	)

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Net (Income) Loss

We recorded a net loss of approximately $3.6 million for the three months ended June 30, 2021, compared to a net income of approximately $0.6 million for the three months ended June 30, 2020. The increased loss of approximately $4.1 million for the three months ended June 30, 2021 as compared to the same period of 2020 was primarily due to lower revenues of $1.4 million recorded in the three months ended June 30, 2020 compared to no revenues in the same period of 2020; and higher operating expenses of approximately $2.4 million and reduced by lower interest expense of $0.3 million and reduced change in value of derivatives of $0.1 million.

Revenue

We did not record services revenue during the three months ended June 30, 2021 as compared to $1.4 million during the same period ended June 30, 2020. No service has been provided during the three months ended June 30, 2021. The services revenue was recorded from services provided to GMP during the period ended June 30, 2020 in connection with the development of OT-101 for COVID-19 of $900,000, and $500,000 from Autotelic Bio.

Research and Development Expenses

Research and development (“R&D”) expenses increased by approximately $0.5 million for the three months ended June 30, 2021 compared to the same period in 2020. The higher R&D cost was primarily due to higher personnel expenses of approximately $0.1 million, and higher expenses related to clinical trials of approximately $0.4 million.

As a result of our mergers with Oncotelic, Inc. and PointR, we expect to increase research and development activities, including the initiation of new clinical trials including those for COVID-19, and therefore believe that research and development expenses will increase for the remainder of 2021 compared to research and development expenses in 2020, subject to our continuing ability to secure sufficient funding to continue planned operations.

General and Administrative Expenses

General and administrative (“G&A”) expenses increased by approximately $1.9 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the an increase of approximately $2.0 million in stock compensation expense incurred in connection with issuance of new warrants during the three months ended June 30, 2021, partially offset by lower compensation expenses of $0.1 million.

As a result of our mergers with Oncotelic and PointR, we expect G&A expenses to increase for the remainder of 2020 in order to support our anticipated additional business development, fundraising, investor relations and administrative activities, subject to our continuing ability to secure sufficient funding to continue planned operations.

Loss on Conversion of Debt

During the three months ended June 30, 2020, we recorded a loss on conversion of debt by Peak One and TFK of approximately $42,000 related to the difference in fair value to the price at which the debt was converted. No similar expense was recorded during the same period in 2020.

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Change in Value of Derivatives

During the three months ended June, 2021, we recorded approximately $0.6 million change in value upon conversion of certain debt owed to Peak One and TFK, to liabilities as a derivative, as well as new debt converting to liabilities on the convertible promissory notes issued to our CEO and a bridge investor (collectively, the “Convertible Notes”). The Company recorded $0.7 million change during the same period in 2020. The Convertible Notes became convertible 180 days after issuance, and as such Peak One, TFK, the CEO and the bridge investor had the ability to convert that debt into equity at: (i) the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days, or (ii) at the lower of $0.10 per share or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument which resulted in the recording of a derivative liability and change in value of the derivative.

Interest Expense, Net

We recorded interest expense, including amortization of debt costs, of approximately $0.4 million for the three months ended June 30, 2021 primarily in connection with debt raised from convertible notes and the JH Darbie Financing, as compared to $0.1 million for the same period of 2020, in connection with debt raised from convertible notes during 2019. For more information on debt raised from convertible notes and the JH Darbie Financing, see Note 5 and Note 6 of the Unaudited Consolidated Financial Statements of this Quarterly Report.

Comparison of the Results of Operations for the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020

A comparison of the Company’s operating results for the six months ended June 30, 2021 and 2020, respectively, is as follows.

	June 30, 2021			June 30, 2020			Variance
Revenue	$	-		$	1,740,855		$	(1,740,855	)
Operating expense:
Research and development		2,513,486			794,141			1,719,345
General and administrative		3,288,607			3,583,168			(294,561	)
Total operating expense		5,082,093			4,377,309			1,424,784
Loss from operations		(5,082,093	)		(2,636,454	)		(3,165,639	)
Loss on conversion of debt		(27,504	)		(166,067	)		138,563
Change in the value of derivatives on debt		93,829			10,512			83,317
Interest expense, net		(954,886	)		(1,283,794	)		328,908
Net loss before controlling interests	$	(6,690,654	)	$	(4,075,803	)	$	(2,614,851	)

Net Loss

We recorded a net loss of approximately $6.7 million for the six months ended June 30, 2021, compared to a net loss of approximately $4.1 million for the three months ended June 30, 2020. The reduced loss of approximately $2.6 million for the six months ended June, 2021 as compared to the same period of 2020 was primarily due to lower revenues of approximately $1.7 million, higher operating expenses of approximately $1.4 million, partially offset by reduced interest expense, including acceleration of amortization of debt issuance costs related to the debt of approximately $0.3 million, reduced change in value of derivatives of $0.1 million and lower loss on conversion of debt of $0.1 million.

Revenue

We did not record services revenue during the six months ended June 30, 2021 as compared to $1.7 million during the same period ended June 30, 2020. The services revenue of $1.2 million was recorded from services provided to GMP during the period ended June 30, 2020 in connection with the development of OT-101 for COVID-19, and included reimbursement of costs incurred of approximately $41,000 and $0.5 million from Autotelic Bio.

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Research and Development Expenses

Research and development (“R&D”) expenses increased by approximately $1.7 million for the six months ended June 30, 2021 compared to the same period in 2020. The higher expenses related to clinical trials of approximately $1.4 million, higher personnel overhead costs of approximately $0.4 million and partially offset by lower operational costs of approximately $0.1 million.

As a result of our mergers with Oncotelic, Inc. and PointR, we expect to increase research and development activities, including the initiation of new clinical trials including those for COVID-19, and therefore believe that research and development expenses will increase for the remainder of 2021 compared to research and development expenses in 2020, subject to our continuing ability to secure sufficient funding to continue planned operations.

General and Administrative Expenses

General and administrative (“G&A”) expenses decreased by approximately $0.3 million for the six months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the lower compensation costs of approximately $0.2 million and lower legal and professional costs of approximately $0.1 million.

As a result of our mergers with Oncotelic and PointR, we expect G&A expenses to increase for the remainder of 2020 in order to support our anticipated additional business development, fundraising, investor relations and administrative activities, subject to our continuing ability to secure sufficient funding to continue planned operations.

Loss on Conversion of Debt

During the six months ended June 30, 2021, we recorded a loss on conversion of debt by TFK of approximately $27 thousand related to the difference in fair value to the price at which the debt was converted, compared to a loss of $0.1 million during the same period in 2020 upon the conversion of debt by Peak One.

Change in Value of Derivatives

During the six months ended June 30, 2021, we recorded approximately $0.1 million change in value upon conversion of the debt to liabilities as a derivative as well as new debt converting to liabilities on the Convertible Notes. The Company recorded approximately $10,000 change in value during the same period in 2020. The Convertible Notes became convertible 180 days after issuance, and as such Peak One, TFK, the CEO and the bridge investor had the ability to convert that debt into equity at: (i) the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days, or (ii) at the lower of $0.10 per share or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument which resulted in the recording of a derivative liability and change in value of the derivative.

Interest Expense, Net

We recorded interest expense, including amortization of debt costs, of approximately $1.0 million for the six months ended June 30, 2021 primarily in connection with debt raised from convertible notes and the JH Darbie Financing, as compared to $1.3 million for the same period of 2020, in connection with debt raised from convertible notes during 2019.

Liquidity, Financial Condition and Capital Resources ($s in ‘000’s)

	June 30, 2021			December 31, 2020
Cash	$	461		$	474
Working capital		(13,431	)		(10,567	)
Stockholders’ Equity		9,585			12,481

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The Company has experienced net losses every year since inception and as of June 30, 2021 had an accumulated deficit of approximately $27.7 million. As of June 30, 2021, the Company had approximately $0.5 million in cash, and current liabilities of approximately $14.1 million. Of the approximately $14.1 million in current liabilities, approximately $2.0 million was debt for conducting clinical trials for OT-101 from GMP, and $2.6 million related to contingent liability to issue Common Stock of the Company to PointR shareholders upon achievement of certain milestones (see Note 1 of our Annual Report on Form 10K for the year ended December 31, 2020 filed with the SEC on April 15, 2021). The Company does not expect to generate any meaningful revenue from product sales in the near future and expects to incur additional operating losses over the next several years, primarily as a result of the Company’s plans to continue clinical trials for its investigational drugs. The Company’s limited capital resources, history of recurring losses and uncertainties as to whether the Company’s operations will become profitable raise substantial doubt about its ability to continue as a going concern. The financial statements contained in this report do not include any adjustments related to the recoverability of assets or classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

The principal source of the Company’s working capital deficit to date has been the issuance of convertible notes, a substantial part of which has been provided by officers and certain insiders. The Company will need to raise additional capital in order to fund its operations and continue development of product candidates. The Company is evaluating the options to further the development of the Company’s lead product candidate, OT-101 for both cancer and COVID-19, Artemisinin for COVID-19, developing AI technologies to support the COVID-19 therapies; in addition to evaluating the development pathway of its product candidates; OXi4503 and/or CA4P.

The Company anticipates raising substantial additional capital through the sale of equity securities and/or debt, but no other financing arrangements are in place at this time.

If the Company is unable to access additional funds when needed, it may not be able to continue the development of these investigational drugs and the Company could be required to delay, scale back or eliminate some or all of its development programs and operations. Any additional equity financing, if available, would be dilutive to the current stockholders and may not be available on favorable terms. Additional debt financing, if available, may involve restrictive covenants and could also be dilutive. The Company’s ability to access capital is not assured and, if access is not achieved on a timely basis, would materially harm the Company’s financial condition, the value of its Common Stock and its business prospects.

Cash Flows

	Six month ended June 30,
	2021			2020
Net cash used in operating activities	$	(2,465,917	)	$	258,940
Net cash provided by financing activities		2,453,183			320,000
Increase (decrease) in cash	$	(12,734	)	$	578,940

Operating Activities

Net cash used in operating activities was approximately $2.5 million for the six months ended June 30, 2021. This was due to the net loss of approximately $6.7 million, primarily offset by non-cash amortization of debt discounts and deferred financing costs of $0.7 million, non-cash stock compensation costs on fair value of the warrants issued during the three months ended June 30, 2021 of $2.1 million and changes in operating assets and liabilities of approximately $1.3 million.

Net cash generated from operating activities was approximately $32 thousand for the six months ended June 30, 2020. This was due to the net loss of approximately $4.1 million, which was partially offset by non-cash charges of approximately $3.6 million, non-cash loss on conversion of debt of approximately $0.2 million and changes in operating assets and liabilities of $0.7 million.

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Financing Activities

For the six months ended June 30, 2021, net cash provided by financing activities was $2.5 million, due to a receipt of cash from the JH Darbie Financing of $1.6 million, sale of equity of $0.1 million, proceeds of a convertible note of $0.3 million and a short-term loans from certain bridge investors of $0.8 million, partially offset by repayments of debt of approximately $0.2 million.

For the six months ended June 30, 2020, net cash provided by financing activities $250,000 from the PPP Loan and $70,000 from receipt of cash from the Company’s CEO.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Effects of Inflation

We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

Contractual Obligations

Our current drug development programs are based on a series of compounds called combretastatins, which we have exclusively licensed from Arizona State University, or ASU. If our current drug candidates are approved, we will be required to pay low to mid-single-digit royalties on future net sales of products associated with the ASU patent rights until these patent rights expire.

We also have an exclusive license from Bristol-Myers Squibb, or BMS, for certain patent rights to particular combretastatins, including CA4P. If CA4P is approved, we will be required to pay low-single-digit royalties on future net sales of products associated with the BMS patent rights until these patent rights expire.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our cash is maintained in U.S. dollar accounts. We have adopted a policy for the cash that we hold, and also for any cash equivalents and investments that we may hold, the primary objective of which is to preserve principal, while also maintaining liquidity to meet our operating needs and maximize yields to the extent possible. Although our investments can be subject to credit risk, we follow procedures to limit the amount of credit exposure in any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and would be likely to decrease in value if market interest rates increase. However, due to the generally conservative nature of our investments and relatively short duration, we believe that interest rate risk is mitigated.

Although we may from time to time manufacture drugs and conduct preclinical or clinical trials outside of the United States, we believe our exposure to foreign currency risk to be immaterial.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

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As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our CEO and our CFO each concluded that our disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding required disclosure.

Material Weaknesses in Internal Control over Financial Reporting

Management conducted an assessment of the effectiveness of our internal control over financial reporting as of June 30, 2021 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Registrant’s internal control over financial reporting as of June 30, 2021 was not effective as a result of certain material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are observed in many small companies with a small number of accounting and financial reporting staff:

● Lack of formal policies and procedures;

● Lack of a functioning audit committee and independent directors on the Company’s board of directors to oversee financial reporting responsibilities;

● Inadequate or lack of segregation of duties;

● Lack of dedicated resources and experienced personnel to design and implement internal control procedures to support financial reporting objectives;

● Lack of qualified accounting personnel to prepare and report financial information in accordance with GAAP; and

● Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner.

Management’s Plan to Remediate the Material Weaknesses

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

● Continue to search for, evaluate and recruit qualified independent outside directors;

● Hire qualified accounting personnel to prepare and report financial information in accordance with GAAP;

● Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and

● Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures.

Changes in Internal Control over Financial Reporting

During the six months ended June 30, 2021, we continued to execute upon our planned remediation actions which are all intended to strengthen our overall control environment. We are evaluating hiring an external firm to help us with the remediation efforts. While we have made progress in our planned remediation efforts and we expect the Company to complete its planned execution of internal controls over financial reporting during the year ended December 31, 2021, we may not be able to achieve our objectives in completely remediating our existing weaknesses.

We are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

52

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

In addition to the risk factor described below, for information about the risks and uncertainties related to our business, please see the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020 filed on April 15, 2021. The risks described below and in our Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Our business may suffer from the severity or longevity of the COVID-19 Global Outbreak.

The COVID-19 is currently impacting countries, communities, supply chains and markets, as well as the global financial markets. To date, COVID-19 has not had a material impact on the Company, other than as set forth above. However, the Company cannot predict whether COVID-19 will have a material impact on our financial condition and results of operations due to understaffing, disruptions in government spending, among other factors. In addition, at this time we cannot predict the impact of COVID-19 on our ability to obtain financing necessary for the Company to fund its working capital requirements. In most respects, it is too early in the COVID-19 pandemic to be able to quantify or qualify the longer-term ramifications on our business, our customers and/or our potential investors.

There is no guaranty that the Company will enter into definitive agreements for the formation of a joint venture (the “Joint Venture”) with Golden Mountain Partners, LLC (“GMP”), or that the Company will benefit from entering into the Joint Venture with GMP.

As of the date of this Quarterly Report, definitive agreements have not been executed necessary to form the Joint Venture, as discussed in that certain Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on August 17, 2021 (the “Current Report”). Therefore, no assurances can be given that the Company will receive any of the benefits set in the Current Report regarding the Joint Venture, or that the Joint Venture will be formed at all. If the Joint Venture is formed, and definitive agreements are executed, no assurances can be given that: (i) the Joint Venture will consummate an initial public offering, (ii) the Joint Venture will obtain the value anticipated by management; or (iii) the Company will realize a return on its investment in the Joint Venture.

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds

In January 2021, the Company issued 657,000 shares of its Common Stock to TFK in connection with the partial conversion of their convertible promissory notes. For more information regarding the convertible promissory note issued to TFK, see Note 5 to the Unaudited Consolidated Financial Statements included in this Quarterly Report.

In March 2021, the Company converted 278,188 shares of the Company’s Series A Preferred Stock into 278,187,847 shares of its Common Stock pursuant to the terms of the Merger Agreement and PointR Merger Agreement. For more information regarding the Merger Agreement and the PointR Merger Agreement, see Note 1 to our Annual Report on form 10-K for the year ended December 31, 2020 filed with the SEC on April 15, 2021).

In May 2021, the Company issued 250,000 shares of its common stock to Peak One as compensation in connection with the EPL. These shares were subsequently registered by the filing of our Registration Statement on Form S-1 with the SEC.

In August 2021, the Company issued Note Purchase Agreements with Autotelic Inc., the CFO, and certain other accredited investors. Under the terms of the Note Purchase Agreements, the Company issued an aggregate of $698,500 in debt in the form of unsecured convertible promissory notes. Such Notes were issued against some of the short-term debt due as of June 30, 2021. Such unsecured convertible notes may be converted into shares of the Company’s common stock upon the conversion of the unsecured convertible note.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

53

Item 5. Other Information

In August 2021, the Company, Golden Mountain Partners, LLC, and Vuong Trieu, the Company’s Chief Executive Officer signed a letter of intent and a term sheet (the “Term Sheet”) pursuant to which the Company is to receive a loan of $1.5 million in exchange for the issuance of a convertible promissory note, which may be convertible into shares of the Company’s Common Stock upon certain terms and conditions as to be negotiated by the parties at a later date.

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

In reviewing the agreements included as exhibits to this Quarterly Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

● should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

● have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

● may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

● were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Quarterly Report and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

The following exhibits are included as part of this Quarterly Report. A more complete list of previously filed Exhibits can be found with our Annual Report on Form 10K filed with the SEC on April 15, 2021:

		Incorporated by Reference
Exhibit Number	Description	Form	Filing Date	Exhibit Number	Filed Herewith
10.1	Amendment to the Oncotelic Therapeutics, Inc. 2015 Equity Incentive Plan	S-8	4/19/2021	10.1
10.2	Equity Purchase Agreement by and between Oncotelic Therapeutics, Inc., and Peak One Opportunity Fund, L.P., dated May 3, 2021	8-K	5/7/2021	10.2
10.3	Registration Rights Agreement, by and between Oncotelic Therapeutics, Inc., and Peak One Opportunity Fund, L.P., dated May 3, 2020	S-8	5/7/2021	10.1
10.4	Form of Convertible Promissory Note, issued by the Company under the Note Purchase Agreement dated as of August 4, 2021.	8-K	8/5/2021	10.1
10.5	Form of Note Purchase Agreement, dated as of August 4, 2021, by and among the Company and the investors identified therein.	8-K	8/5/2021	10.2
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a).				x
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).				x
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				x
101.1	Interactive Data Files for the three and six months ended June 30, 2021 and June 30, 2020				x
101.INS	XBRL Instance Document				x
101.SCH	XBRL Taxonomy Extension Schema				x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase				x
101.DEF	XBRL Taxonomy Extension Definition Linkbase				x
101.LAB	XBRL Taxonomy Extension Label Linkbase				x
101.PRE	XBRL Taxonomy Extension Presentation Linkbase				x

*	Confidential treatment has been granted for portions of this Exhibit. Redacted portions filed separately with the Securities and Exchange Commission.
+	Management contract or compensatory plan or arrangement.

54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ONCOTELIC THERPAEUTICS INC.

By:	/s/ Vuong Trieu
	Vuong Trieu, Ph.D.
	Chief Executive Officer and Director (Principal Executive Officer)
Date:	August 20, 2021
By:	/s/ Amit Shah
	Amit Shah
	Chief Financial Officer (Principal Financial and Accounting Officer)
Date:	August 20, 2021

55

EX-31.1

Exhibit 31.1

ONCOTELIC THERAPEUTICS, INC.

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Vuong Trieu, Ph.D., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Oncotelic Therapeutics, Inc. for the period ended June 30, 2021;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Vuong Trieu
	Vuong Trieu, Ph.D.
	Chief Executive Officer (Principal Executive Officer)
Date:	August 20, 2021

EX-31.2

Exhibit 31.2

ONCOTELIC THERAPEUTICS, INC.

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Amit Shah, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Oncotelic Therapeutics, Inc. for the period ended June 30, 2021;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Amit Shah
	Amit Shah
	Chief Financial Officer (Principal Financial and Accounting Officer)
Date:	August 20, 2021

EX-32.1

Exhibit 32.1

ONCOTELIC THERAPEUTICS, INC.

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of Oncotelic Therapeutics, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

By:	/s/ Vuong Trieu
	Vuong Trieu, Ph.D.
	Chief Executive Officer (Principal Executive Officer)
Date:	August 20, 2021

EX-32.2

Exhibit 32.2

ONCOTELIC THERAPEUTICS, INC.

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of Oncotelic Therapeutics, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

By:	/s/ Amit Shah
	Amit Shah
	Chief Financial Officer (Principal Financial and Accounting Officer)
Date:	August 20, 2021

XML

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 10, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--12-31
Entity File Number	000-21990
Entity Registrant Name	Oncotelic Therapeutics, Inc.
Entity Central Index Key	0000908259
Entity Tax Identification Number	13-3679168
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	29397 Agoura Road Suite 107
Entity Address, City or Town	Agoura Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91301
City Area Code	(650)
Local Phone Number	635-7000
Title of 12(b) Security	None
Trading Symbol	OTLC
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		371,354,911

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash	$ 461,285	$ 474,019
Restricted cash	20,000	20,000
Accounts receivable	156,270	19,748
Prepaid & other current assets	56,881	101,869
Total current assets	694,436	615,636
Development equipment, net of depreciation of $106,884 and $101,810	5,074	10,148
Intangibles, net of accumulated amortization of $162,655 and $136,974	847,525	873,206
In process R&D	1,101,760	1,101,760
Goodwill	21,062,455	21,062,455
Total assets	23,711,250	23,663,205
Current liabilities:
Accounts payable and accrued liabilities	4,149,412	2,735,805
Accounts payable to related party	322,995	391,631
Contingent Consideration	2,625,000	2,625,000
Derivative liability on Notes	538,610	777,024
Convertible debt for clinical trial	2,040,329	2,000,000
Convertible debt, net of costs	1,658,262	1,091,612
Convertible debt, related party, net of costs	645,947	297,989
Private Placement convertible note, net of costs	1,798,801	943,586
Private Placement convertible note, related party, net of costs	93,488	67,992
Payroll Protection Plan loan	252,973	251,733
Total current liabilities	14,125,817	11,182,372
Commitments and contingencies (Note 12)
Stockholders’ equity:
Convertible Preferred stock, $0.01 par value, 15,000,000 shares authorized; 0 and 278,188 shares issued and outstanding		2,782
Common stock, $.01 par value; 150,000,000 shares authorized; 370,096,959 and 90,601,912 issued and outstanding, respectively	3,700,969	906,019
Additional paid-in capital	32,876,120	32,493,086
Accumulated deficit	(27,664,368)	(21,630,008)
Total Oncotelic Therapeutics, Inc. stockholders’ equity	8,912,721	11,771,879
Non-controlling interests	672,712	708,954
Total stockholders’ equity	9,585,433	12,480,833
Total liabilities and stockholders’ equity	$ 23,711,250	$ 23,663,205

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Depreciation of development equipment	$ 106,884	$ 101,810
Amortization of intangible assets	$ 162,655	$ 136,974
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	15,000,000	15,000,000
Convertible preferred stock, shares issued	0	278,188
Convertible preferred stock, shares outstanding	0	278,188
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	370,096,959	90,601,912
Common stock, shares outstanding	370,096,959	90,601,912

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Service Revenue		$ 1,400,000		$ 1,740,855
Operating expenses:
Research and development	956,814	482,142	2,513,486	794,141
General and administrative	2,807,398	904,018	3,288,607	3,583,168
Total operating expenses	3,764,212	1,386,160	5,802,093	4,377,309
Loss from operations	(3,764,212)	13,840	(5,802,093)	(2,636,454)
Other expense:
Interest expense, net	(433,979)	(137,089)	(954,886)	(1,283,794)
Change in fair value of derivative on debt	630,174	746,809	93,829	10,512
Loss on debt conversion		(41,469)	(27,504)	(166,067)
Total other expense	196,195	568,251	(888,561)	(1,439,349)
Net loss before non-controlling interests	(3,568,017)	582,091	(6,690,654)	(4,075,803)
Net loss attributable to non-controlling interests	(336,737)		(656,294)
Net income (loss) attributable to Oncotelic Therapeutics, Inc.	$ (3,231,280)	$ 582,091	$ (6,034,360)	$ (4,075,803)
Basic net loss per share attributable to common stock	$ (0.01)	$ 0.01	$ (0.03)	$ (0.05)
Basic weighted average common stock outstanding	369,547,235	88,152,403	232,700,641	86,537,199
Diluted net loss per share attributable to common stock	$ (0.01)	$ 0.01	$ (0.03)	$ (0.05)
Diluted weighted average common stock outstanding	369,547,235	94,736,703	232,700,641	86,537,217

XML

Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2019	$ 2,782	$ 840,700	$ 28,185,599	$ (12,127,406)		$ 16,901,675
Balance, shares at Dec. 31, 2019	278,188	84,069,967
Stock-based compensation			2,147,591			2,147,591
Common shares issued upon partial conversion of debt		$ 39,621	681,443			721,064
Common shares issued upon partial conversion of debt, shares		3,962,145
Net loss				(4,657,894)		(4,657,894)
Ending balance, value at Mar. 31, 2020	$ 2,782	$ 880,321	31,014,633	(16,785,300)		15,112,436
Balance, shares at Mar. 31, 2020	278,188	88,032,112
Beginning balance, value at Dec. 31, 2019	$ 2,782	$ 840,700	28,185,599	(12,127,406)		16,901,675
Balance, shares at Dec. 31, 2019	278,188	84,069,967
Net loss						(4,075,803)
Ending balance, value at Jun. 30, 2020	$ 2,782	$ 886,020	31,112,374	(16,203,209)		15,797,967
Balance, shares at Jun. 30, 2020	278,188	88,601,912
Beginning balance, value at Dec. 31, 2019	$ 2,782	$ 840,700	28,185,599	(12,127,406)		16,901,675
Balance, shares at Dec. 31, 2019	278,188	84,069,967
Ending balance, value at Dec. 31, 2020	$ 2,782	$ 906,019	32,493,086	(21,630,008)	708,954	12,480,833
Balance, shares at Dec. 31, 2020	278,188	90,601,912
Beginning balance, value at Mar. 31, 2020	$ 2,782	$ 880,321	31,014,633	(16,785,300)		15,112,436
Balance, shares at Mar. 31, 2020	278,188	88,032,112
Common shares issued upon partial conversion of debt		$ 5,699	97,741			103,440
Common shares issued upon partial conversion of debt, shares		569,800
Net loss				582,091		582,091
Ending balance, value at Jun. 30, 2020	$ 2,782	$ 886,020	31,112,374	(16,203,209)		15,797,967
Balance, shares at Jun. 30, 2020	278,188	88,601,912
Beginning balance, value at Dec. 31, 2020	$ 2,782	$ 906,019	32,493,086	(21,630,008)	708,954	12,480,833
Balance, shares at Dec. 31, 2020	278,188	90,601,912
Common shares issued upon conversion of Preferred Stock	$ (2,782)	$ 2,781,878	(2,779,096)
Common shares issued upon conversion of Preferred Stock, shares	(278,188)	278,187,847
Common shares issued upon conversion of debt		$ 6,572	203,729			210,301
Common shares issued upon conversion of debt, shares		657,200
Beneficial Conversion Feature on convertible debt			605,719			605,719
Warrants issued in connection with private placement			166,575			166,575
Increase in non-controlling interest from issuance of additional Edgepoint stock					620,052	620,052
Net loss				(2,803,080)	(319,557)	(3,122,637)
Ending balance, value at Mar. 31, 2021		$ 3,694,469	30,690,013	(24,433,088)	1,009,449	10,960,843
Balance, shares at Mar. 31, 2021		369,446,959
Beginning balance, value at Dec. 31, 2020	$ 2,782	$ 906,019	32,493,086	(21,630,008)	708,954	12,480,833
Balance, shares at Dec. 31, 2020	278,188	90,601,912
Net loss						(6,690,654)
Ending balance, value at Jun. 30, 2021		$ 3,700,969	32,876,120	(27,664,368)	672,712	9,585,433
Balance, shares at Jun. 30, 2021		370,096,959
Beginning balance, value at Mar. 31, 2021		$ 3,694,469	30,690,013	(24,433,088)	1,009,449	10,960,843
Balance, shares at Mar. 31, 2021		369,446,959
Warrants issued in connection with private placement			2,023,552			2,023,552
Common shares issued in lieu of services		$ 2,500	67,500			70,000
Common shares issued for services, shares		250,000
Common shares issued for cash		$ 4,000	95,055			99,055
Common shares issued for cash, shares		400,000
Net loss				(3,231,280)	(336,737)	(3,568,017)
Ending balance, value at Jun. 30, 2021		$ 3,700,969	$ 32,876,120	$ (27,664,368)	$ 672,712	$ 9,585,433
Balance, shares at Jun. 30, 2021		370,096,959

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Cash flows from operating activities:
Net loss	$ (3,568,017)	$ (3,122,637)	$ 582,091	$ (4,657,894)	$ (6,690,654)	$ (4,075,803)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of debt discount and deferred finance costs					737,330	1,283,691
Amortization of intangible assets					25,683	163,403
Stock-based compensation					2,093,552	2,147,591
Depreciation on development equipment					5,074	18,658
Change in fair value of derivative	(630,174)		(746,809)		(93,829)	(10,512)
Loss on debt conversion					27,504	166,067
Changes in operating assets and liabilities:
Prepaid expenses and other current assets					(91,534)	68,920
Accounts payable and accrued expenses					1,589,592	454,302
Accounts payable to related party					(68,635)	42,623
Net cash provided by (used in) operating activities					(2,465,917)	258,940
Cash flows from financing activities:
Proceeds from private placement					1,613,200
Proceeds from sales of common stock					70,108
Proceeds from convertible debt					200,000
Proceeds from short term loans, others					744,875
Repaid to note holder					(100,000)
Repaid to others					(75,000)
Proceeds from Payroll Protection Plan						250,000
Proceeds from short term loan, related party						70,000
Net cash provided by financing activities					2,453,183	320,000
Net increase (decrease) in cash					(12,734)	578,940
Cash and restricted cash - beginning of period		$ 494,019		$ 81,964	494,019	81,964	$ 81,964
Cash and restricted cash - end of period	$ 481,285		$ 660,904		481,285	660,904	$ 494,019
Supplemental cash flow information:
Interest paid
Non-cash investing and financing activities:
Warrants issued in connection with private placement					2,190,127
Common shares issued upon partial conversion of debt					210,301	824,504
Common shares issued in lieu of services					70,000
Non-cash cost upon sale of common stock					28,947
Beneficial Conversion Feature on convertible debt and restricted common shares					$ 605,719

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Oncotelic Therapeutics, Inc. (also d/b/a Mateon Therapeutics, Inc.) (“Oncotelic”), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, changed its name to Mateon Therapeutics, Inc. in 2016, and then Oncotelic Therapeutics, Inc. in November 2020. Oncotelic conducts business activities through Oncotelic and its wholly-owned subsidiaries, Oncotelic, Inc., a Delaware corporation (“Oncotelic, Inc.”), PointR Data, Inc. (“PointR”), a Delaware corporation, and EdgePoint AI, Inc. (“Edgepoint”), a Delaware Corporation for which there are non-controlling interests, (Oncotelic, Oncotelic Inc., PointR and Edgepoint are collectively called the “Company”).

In February 2020, the Company formed a subsidiary, Edgepoint. Edgepoint is a start-up company that plans to develop technologies and IP related to various unmet issues within the pharma and medical device industries. The Company may spin off Edgepoint into a separate public company.

The Company is a cancer immunotherapy company dedicated to the development of first in class self-immunization protocol (“SIP™”) candidates for difficult to treat cancers. The Company’s proprietary SIP™ candidates offer advantages over other immunotherapies because they do not require extraction of the tumor or isolation of the antigens, and they have the potential for broad-spectrum applicability for multiple cancer types. The Company’s proprietary product candidates have shown promising clinical activity in phase 2 trials for the treatment of gliomas and pancreatic cancers. The Company aims to translate its unique insights, which span more than three decades of original work using RNA therapeutics, into the deployment of antisense as a RNA therapeutic for diseases which are caused by TGF-β overexpression, starting with cancer and expanding to Duchenne Muscular Dystrophy (“DMD”) and others. Oncotelic Inc.’s lead product candidate, OT-101, is being developed as a broad-spectrum anti-cancer drug that can also be used in combination with other standard cancer therapies to establish an effective multi-modality treatment strategy for difficult-to-treat cancers. Together, the Company plans to initiate phase 3 clinical trials for OT-101 in both high-grade glioma and pancreatic cancer, and any other indications that may evolve. The Company is evaluating the further development of its product candidates OXi4503 as a treatment for acute myeloid leukemia and myelodysplastic syndromes and CA4P in combination with a checkpoint inhibitor for the treatment of advanced metastatic melanoma.

The Company is also developing OT-101 for the various epidemics and pandemics, similar to the current corona virus (“COVID-19”) pandemic. In this connection, the Company entered into an agreement and supplemental agreement with Golden Mountain Partners (“GMP”) for a total of $1.2 million to render services and was paid for the development of OT-101. The Company recorded $0.9 and $1.2 million as revenue during the three and six months ended June 30, 2020 respectively, upon completion of all performance obligations under the agreement. No similar revenues were recorded during the same periods in 2021. Further, in June 2020, the Company secured $2 million in convertible debt financing from GMP to conduct a clinical trial evaluating OT-101 against COVID-19. The Company discontinued enrollment in its OT-101 clinical trial in patients with COVID-19 in June 2021. The trial completed randomization of 32 out of 36 patients planned, on an intent to treat basis. The discontinuance of the trial was due to the continuing rise of more severe variants in Latin America, leading to exhaustion of medical care infrastructure in Latin America.

In addition, the Company is developing Artemisinin. Artemisinin, purified from a plant Artemisia annua, is able to inhibit TGF-β activity and is able to neutralize SARS-CoV-2 (COVID-19). The Company’s test results during an in vitro study at Utah State University showed Artemisinin having an EC50 of 0.45 ug/ml, and a Safety Index of 140. Artemisinin can target multiple viral threats including COVID-19 by suppressing both viral replication and clinical symptoms that arise from viral infection. Viral replication cannot occur without TGF-β. Artemisinin also has been reported to have antiviral activities against hepatitis B and C viruses, human herpes viruses, HIV-1, influenza virus A, and bovine viral diarrhea virus in the low micromolar range. TGF-β surge and cytokine storm cannot occur without TGF-β. Clinical consequences related to the TGF-β surge, including ARDS and cytokine storm, are suppressed by targeting TGF-β with Artemisinin. This was a global study, with India to contribute at least 120 patients upto the total potential aggregate of 3000 patients. ARTI-19 in India was conducted by Windlas Biotech Private Limited (“Windlas”), business partner in India, as part of the plan for the Company’s global effort at deploying Pulmoheal^TM across India, Africa, and Latin America. We continue to evaluate to seek approval, and subsequently launch Pulmoheal^TM, with or without local partners, in various countries within the regions planned. Pulmoheal^TM is a combination of ARTIVeda^TM, our artificial intelligence (“AI”) cough application and our AI post marketing survey (“PMS”).

In January 2021 and subsequently in February 2021, the Company announced preliminary results for ARTIVeda^™, or PulmoHeal^™, which is the Company’s lead Ayurvedic drug against COVID-19 in India and being developed by the Company in partnership with Windlas. These interim results were based on 120 randomized patients across 3 sites in India. The ARTI-19 India trial completed enrollment of 120 randomized individuals, we reported positive topline results in April 2021 and we expect final data as soon as available. Upon completion of the trial results and obtaining regulatory approval for the use in India, it is the Company’s objective to file for Emergency Use Authorization (“EUA”) with regulatory authorities around the world, including India, the United States, the United Kingdom, countries in Africa and Latin America; discussions regarding EUA with several of these authorities have commenced.

Recent Developments

Equity Purchase Agreement

On May 3, 2021, the Company entered into an Equity Purchase Agreement (the “EPL”) and Registration Rights Agreement (the “Registration Rights Agreement”) with Peak One Opportunity Fund, L.P. (“Peak One”), pursuant to which the Company shall have the right, but not the obligation, to direct Peak One, to purchase up to $10.0 million (the “Maximum Commitment Amount”) in shares of the common stock, par value $0.01 per share (“Common Stock”) in multiple tranches.

Geneva Roth Remark Notes

On May 25, 2021, the Company consummated the closing of a private placement transaction whereby, pursuant to a Securities Purchase Agreement (the “Geneva Agreement”) entered into with Geneva Roth Remark (“Geneva”), the Company issued a convertible promissory note in the aggregate principal amount of $203,750 (the “Note 1”). Further on June 28, 2021, the Company issued an additional convertible promissory note in the aggregate principal amount of $103,750 (“Note 2”, and collectively with Note 1, the “Notes”). The Notes are convertible into shares of the Company’s Common Stock. Additional convertible promissory notes may be issued under the Geneva Agreement for up to $1.2 million in the aggregate principal amount subject to further agreement by and between the Company and Geneva.

Extension of Maturity Date for J.H. Darbie Financing Notes & Issuance of Oncotelic Warrants

The Company issued and sold a total of 100 units (“Units”), with each Unit consisting of (i) 25,000 shares of Edgepoint common stock, par value $0.01 per share (“Edgepoint Common Stock”), for a price of $1.00 per share of Edgepoint Common Stock; (ii) one convertible promissory note issued by the Company (the “Unit Note”), convertible into up to 25,000 shares of EdgePoint Common Stock at a conversion price of $1.00 per share, or up to 138,889 shares of the Company’s Common Stock, at a conversion price of $0.18 per share; and (iii) 100,000 warrants, consisting of (a) 50,000 warrants to purchase an equivalent number of shares of EdgePoint Common Stock at $1.00 per share (“Edgepoint Warrant”), and (b) 50,000 warrants to purchase an equivalent number of shares of Company Common Stock at $0.20 per share (“Oncotelic Warrant”) (collectively, the “JH Darbie Financing”).

In June 2021, the Company and the Investors agreed to extend the maturity date of the Notes from June 30, 2021, to March 31, 2022. In addition, the Company and JHDarbie identified an error in the Oncotelic Warrants and JH Darbie Financing documents which intended to have the investors to purchase $50,000 of shares of Common Stock or Edgepoint Common Stock. However, the Company only issued 50,000 Oncotelic Warrants, with an aggregate exercise price of $10,000. The error was corrected by the Company and the Company issued to the Investors an aggregate of 20.0 million additional Oncotelic Warrants, and 2.0 million additional Oncotelic Warrants to J.H. Darbie., as placement agent. Each Investor was entitled to receive 200,000 additional Oncotelic Warrants for each Unit purchased. The issuance of the additional warrants resulted in the Company recording an expense of $2,023,552 in the Company’s statement of operations during the three months ended June 30, 2021. No similar expense was recorded in the same period in 2020.

Consent Solicitation

In June 2020, the Company commenced a solicitation of various shareholder consents (the “Consent Solicitation”), pursuant to a consent solicitation statement (the “Consent Solicitation Statement”), to the holders (the “Stockholders”) of its Common Stock and Preferred Stock, to approve the following actions:

(1) changing the name of the Company and changing the Company’s ticker symbol (the “Name Change”);

(2) amending the Company’s Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”) to increase the number of shares of common stock (“Common Stock”) available for issuance from 7.25 million shares to 27.25 million shares, and increasing the maximum number of stock awards that may be issued in any fiscal year from 500,000 to 1,000,000 shares (the “Plan Amendment”);

(3) increasing the authorized number of shares of Common Stock from 150,000,000 to 750,000,000 (the “Capital Increase”); and

(4) amending and restating the certificate of incorporation for the Company (the “Amended and Restated Certificate”) to give effect to the Name Change, Capital Increase and forum selection provision.

The Stockholders approved the Name Change, the Plan Amendment, the Capital Increase, and the Amended and Restated Certificate. In November 2020, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State for the State of Delaware changing its name from “Mateon Therapeutics, Inc.” to “Oncotelic Therapeutics, Inc.” Further, in February 2021, the Company filed an amendment to its Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 shares to 750,000,000 shares. The Company has converted its 278,188 shares of Preferred Stock to 278,187,847 shares of Common Stock effective March 31, 2021.

The Company registered an additional total of 20,000,000 shares of its Common Stock, which may be issued pursuant to the Registrant’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”) filed with the SEC along with our form S-8 on April 19, 2021. Such additional shares were approved by the Stockholders on August 10, 2020, as stated in the Company’s Current Report on Form 8-K filed on August 14, 2020.

A notice of corporate action was filed with the Financial Industry Regulatory Authority (“FINRA”), requesting approval to change its name and ticker symbol. On March 29, 2021, the Company received approval from FINRA on its notice of corporate action, and effective March 30, 2021, the Company’s ticker symbol has changed from “MATN” to “OTLC”.

Principles of Consolidation

The consolidated financial statements include the accounts of Oncotelic, its wholly owned subsidiaries, Oncotelic Inc. and PointR, and Edgepoint our non-controlled interest entity. Intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted pursuant to such rules and regulations.

Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net accumulated losses of approximately $27.7 million since inception of Oncotelic Inc., as the Company’s historical financial statements before the Merger have been replaced with the historical financial statements of Oncotelic Inc. The Company also has a negative working capital of $13.4 million at June 30, 2021 of which $2.6 million contingent liability of issuance of common shares of the Company to PointR shareholders upon achievement of certain milestones in accordance with the PointR merger agreement. The Company has negative cash flows from operations for the six months ended June 30, 2021 of $2.6 million. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. Management expects to incur additional losses in the foreseeable future and recognizes the need to raise capital to remain viable. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

The Company’s long-term plans include continued development of its current pipeline of products to generate sufficient revenues, through either technology transfer or product sales, to cover its anticipated expenses. Until the Company is able to generate sufficient revenues from its current pipeline, the Company plans on funding its operations through the sale of equity and/or the issuance of debt, combined with or without warrants or other equity instruments.

Between July 2020 and March 2021, the Company raised gross proceeds of $5 million, through the JH Darbie Financing. The Company incurred $0.7 million of costs associated with the raise, of which $0.65 million was paid as direct placement fees to JH Darbie. JH Darbie and the Company are parties to a placement agent agreement, dated February 25, 2020 pursuant to which JH Darbie had the right to sell a minimum of 40 Units and a maximum of 100 Units on a best-efforts basis. Concurrently with the sale of the Units, JH Darbie was granted, a warrant, exercisable over a five-year period, to purchase 10% of the number of Units sold in the JH Darbie Financing. As such, the Company granted 10 Units to JH Darbie pursuant to the JH Darbie Placement Agreement.

In addition to the JH Darbie Financing, the Company raised $0.1 million from the Equity Purchase Agreement with Peak One, $0.3 million from Geneva and an additional $0.8 million from various bridge financiers, including $0.3 million from Autotelic Inc., a related party.

During the three and six months ended June 30, 2020, the Company recorded a total of approximately $0.9 and $1.2 million, respectively in service revenues from GMP. No similar revenues were recorded during the similar periods in 2021. There are no assurances that the Company would be able to generate revenues for services and/or out-licensing fees in the near future.

Although no assurances can be given as to the Company’s ability to deliver on its revenue plans, or that unforeseen expenses may arise, management believes that the potential equity and debt financing or other potential financing will provide the necessary funding for the Company to continue as a going concern. Also, management cannot guarantee any potential debt or equity financing will be available on favorable terms or at all. As such, management does not believe the Company has sufficient cash for 12 months from the date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease operations completely.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expense during the reporting period. Actual results could materially differ from those estimates.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the valuation of goodwill and intangible assets for impairment, deferred tax asset and valuation allowance, and fair value of financial instruments.

Cash

As of June 30, 2021, and December 31, 2020 the Company held all its cash in banks. The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2021 and December 31, 2020, respectively. Restricted cash consists of certificates of deposits held at banks as collateral for various purposes.

Fair Value of Financial Instruments

The carrying value of cash, accounts payable and accrued expense approximate their fair values based on the short-term maturity of these instruments. As defined in ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

● Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

● Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

● Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2021 and December 31, 2020. The derivative liabilities associated with its 2019 bridge financing Convertible Notes (see Note 5), consisted of conversion feature derivatives at June 30, 2021 and December 31, 2020, are Level 3 fair value measurements.

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 as of June 30, 2021 and 2020:

	June 30, 2021 Conversion Feature			June 30, 2020 Conversion Feature
Balance at January 1, 2021 and 2020	$	777,024		$	540,517
New derivative liability		-			870,268
Reclassification to additional paid in capital from conversion of debt to common stock		(144,585	)		(408,811	)
Change in fair value		(93,829	)		(10,512	)
Balance at June, 2021 and 2020	$	538,610		$	991,462

As of June 30, 2021 and 2020, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on assumptions used in the Black-Scholes valuation model. The key valuation assumptions used consists, in part, of the price of the Company’s Common Stock, a risk-free interest rate based on the yield of a Treasury note and expected volatility of the Company’s Common Stock all as of the measurement dates. The Company used the following assumptions to estimate fair value of the derivatives as of June 30, 2021 and 2020:

	June 30, 2021 Key Assumptions for fair value of conversions			June 30, 2020 Key Assumptions for fair value of conversions
Risk free interest		0.07	%		0.16	%
Market price of share	$	0.36		$	0.1875
Life of instrument in years		0.81 - 1.10			1.81 – 2.10
Volatility		94.4	%		151.87	%
Dividend yield		0	%		0	%

When the Company changes its valuation inputs for measuring financial liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended June 30, 2021 and 2020, respectively, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of Common Stock equivalents (notes convertible into Common Stock, stock options and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted loss since such inclusion would be anti-dilutive:

	Six Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020
Convertible notes		37,641,648		11,584,300		37,641,648		8,000,000
Stock options		3,941,301		6,135,284		3,941,301		6,135,284
Warrants		42,737,500		15,237,500		42,737,500		15,237,500
Potentially dilutive securities		84,320,449		26,372,784		84,320,449		26,372,784

The following table reflects the inclusion of the common stock equivalents included in the calculation of the diluted net income per share for the three months ended June 30, 2020. No similar calculations are required for the three months ended June 30, 2021 or the six months ended June 30, 2021 and 2020, respectively as all these periods had losses.

Reconciliation for Basic to Diluted Weighted Average common stock outstanding
Basic weighted average common stock outstanding	88,152,403
Add: Dilutive Common Stock Instruments
Shares issuable upon conversion of debt	6,584,300
Diluted weighted average common stock outstanding	94,736,703

Stock-Based Compensation

The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the statements of operations.

For stock options issued to employees and members of the Board of Directors (the “Board”) for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.

Pursuant to ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above.

For warrants issued in connection with fund raising activities, the Company estimates the grant date fair value of each warrant using the Black-Scholes pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the warrant, the expected volatility of the Common Stock consistent with the expected life of the warrant, risk-free interest rates and expected dividend yields of the Common Stock. If the warrants are issued upon termination or cancellation of prior issued warrants, then the Company estimates the grant date fair value of the new warrants using the Black-Scholes pricing model and evaluates whether the new warrants are deemed as equity instruments or liability instruments. If the warrants are deemed to be equity instruments, the Company records stock compensation expense and an addition to additional paid in capital. If however, the warrants are deemed to be liability instruments, then the fair value is treated as a deemed dividend and credited to additional paid in capital.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for long-lived assets.

Intangible Assets

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for intangible assets.

Goodwill

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for Goodwill.

Derivative Financial Instruments Indexed to the Company’s Common Stock

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statement of Income.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 “Debt – Debt with Conversion and Other Options.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 “Derivatives and Hedging – Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Revenue Recognition

The Company recognizes revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).

Under ASU 2014-9, the Company recognizes revenue when its customers obtain control of the promised good or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five-step: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASU 2014-09, the Company identifies the performance obligation(s) in the contract by assessing whether the goods or services promised within each contract are distinct. The Company then recognizes revenue for the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company anticipates generating revenues from rendering services to other third party customers for the development of certain drug products and/or in connection with certain out-licensing agreements. In the case of services rendered for development of the drugs, revenue is recognized upon the achievement of the performance obligations or over time on a straight-line basis over the extended service period. In the case of out-licensing contracts, the Company records revenues either upon achievement of certain pre-defined milestones, when there is no obligation of the Company achieve any performance obligations in connection with the said pre-defined milestones, or upon achievement of the performance obligations if the milestones require the Company to provide the performance obligations.

The Company occasionally collects advance payments from customers toward commitments to provide services or performance obligations, in which case the advance payment is recorded as a liability until the obligations are fulfilled and revenue is recognized.

Research Service Agreement between GMP and Oncotelic /Oncotelic Inc. (“Oncotelic Entities”)

In February 2020, Oncotelic Inc. and GMP entered into a research and services agreement (the “Agreement”) memorializing their collaborative efforts to develop and test COVID-19 antisense therapeutics. In March 2020, the Company reported the positive anti-viral activity results of OT-101 (the “Product”) in an in vitro antiviral testing performed by an independent laboratory to GMP, at which time, the Oncotelic Entities and GMP entered into a supplement to the Agreement (the “Supplement”) to confirm the inclusion of the Product within the scope of the Agreement, pending positive confirmatory testing against COVID-19. In consideration for the financial support provided by GMP for the research, pursuant to the terms of the Agreement (as amended by the Supplement) GMP was entitled to obtain certain exclusive rights to the use of the Product in the COVID field on a global basis, and an economic interest in the use of the Product in the COVID field including 50/50 profit sharing. GMP paid the Company fees of $0.3 million for the Agreement during the three months ended March 31, 2020 and $0.9 million for the Supplement during the three months ended June 30, 2020, respectively. The Company also recorded approximately $40 thousand for reimbursement of actual costs incurred.

Agreement with Autotelic BIO (“ATB”)

Oncotelic Inc. had entered into a license agreement in February 2018 (the “ATB Agreement”) with ATB. The ATB Agreement licensed the use of OT-101 in combination with Interleukin-2 (the “Combined Product”), and granted to ATB an exclusive license under the Oncotelic Inc. technology to develop, make, have made, use, sell, offer for sale, import and export the Combined Product, and the Combination Product only, in the field, throughout the entire world (excluding the United States of America and Canada) as the territory, on the terms and subject to the conditions of the ATB Agreement. The ATB Agreement requires ATB to be responsible for the development of the Combination Product. Oncotelic Inc. was responsible to provide to ATB the technical know-how and other pertinent information on the development of the Combination Product. ATB paid Oncotelic Inc. a non-refundable milestone payment in consideration for the rights and licenses granted to ATB under the ATB Agreement, and ATB was to pay Oncotelic Inc. $500,000 within sixty days from the successful completion of the in vivo efficacy studies. This payment was made after the successful completion of the in-vivo study and, as such, the Company recorded the revenue. In addition, ATB is to pay Oncotelic Inc.: (i) $500,000 upon Oncotelic Inc.’s completion of the technology know how and Oncotelic Inc.’s technical assistance and regulatory consultation to ATB, as determined by the preparation of a Current Good Regulation Practices audit or certification by the Food and Drug Administration, with a mutual goal to obtain marketing approval of the Combined Product developed by ATB in the aforementioned territory; (ii) $1,000,000 upon receiving marketing approval of the Combined Product in Japan, China, Brazil, Mexico, Russia, or Korea; and (iii) $2,000,000 from receiving marketing approval of the Combined Product in Germany, France, Spain, Italy, or the United Kingdom. The Company recorded $500,000 as revenue under the ATB Agreement for the successful completion of the in-vivo study during the three months ended June 30, 2020.

Research & Development Costs

In accordance with ASC 730-10-25 “Research and Development”, research and development costs are charged to expense as and when incurred.

Prior Period Reclassifications

Certain amounts in prior periods may have been reclassified to conform with current period presentation.

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting period unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). It eliminates Step 2 of the current two-step goodwill impairment test, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 had no material impact on the Company’s consolidated financial statements and related disclosures.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 became effective on January 1, 2018. The ASU also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company adopted ASU 2015-14 during the three months ended March 31, 2020 as till then, no revenue was earned by the Company.

In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential impact of the Update on its financial statements

All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

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INTANGIBLE ASSETS AND GOODWILL

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

NOTE 3 - INTANGIBLE ASSETS AND GOODWILL

The Company completed a merger with Oncotelic, which gave rise to Goodwill of $4,879,999. Further, we added goodwill of $16,182,456 upon the completion of the Merger with PointR. In general, the goodwill is tested on an annual impairment date of December 31. However, since both assets are currently being developed for various cancer and COVID-19 therapies, and the Company is contemplating other collaboration efforts for both products and the other products that the Company owns, the Company does not believe the there are any factors or indications that the goodwill is impaired.

Assignment and Assumption Agreement with Autotelic, Inc.

In April 2018, Oncotelic Inc. entered into an Assignment and Assumption Agreement (the “Assignment Agreement”) with Autotelic Inc., an affiliate company, and Autotelic LLC, an affiliate company, pursuant to which Oncotelic acquired the rights to all intellectual property (“IP”) related to a patented product. As consideration for the Assignment Agreement, Oncotelic Inc. issued 204,798 shares of its Common Stock for a value of $819,191. The Assignment Agreement also provides that Oncotelic Inc. shall be responsible for all costs related to the IP, including development and maintenance, going forward.

Intangible Asset Summary

The following table summarizes the balances as of June 30, 2021 and December 31, 2020, of the intangible assets acquired, their useful life, and annual amortization:

	June 30, 2021			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			16.50
Intangible asset – Capitalization of license cost		190,989			16.50
		1,010,180
Less Accumulated Amortization		(162,655	)
Total	$	847,525

	December 31, 2020			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			18.00
Intangible asset – Capitalization of license cost		190,989			18.00
		1,010,180
Less Accumulated Amortization		(136,974	)
Total	$	873,206

Amortization of identifiable intangible assets for the three months ended June 30, 2021 and 2020 was $12,841 and $12,841, respectively. Amortization of identifiable intangible assets for the six months ended June 30, 2021 and 2020 was $25,683 and $25,683, respectively.

The future yearly amortization expense over the next five years and thereafter are as follows:

For the six months and years ended December 31,
Six months of 2021	$	25,683
2022		51,365
2023		51,365
2024		51,365
2025		51,365
Thereafter		616,382
	$	847,525

In-Process Research & Development (IPR&D) Summary

The IPR&D assets were acquired in the PointR acquisition during the year ended December 31, 2019. Since January 2021, the Company has determined that the IPR&D should be reported as an indefinitely lived asset and therefore will evaluate, on an annual basis, for any impairment on the IPR&D and will record an impairment if identified. The balance of IPR&D as of June 30, 2021 and December 31, 2020 was $1,101,760.

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expense consists of the following amounts:

	June 30, 2021		December 31, 2020
Accounts payable	$	3,309,612	$	1,937,419
Accrued expense		839,801		798,386
	$	4,149,413	$	2,735,805

	June 30, 2021		December 31, 2020
Accounts payable – related party	$	322,995	$	391,631

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CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT

NOTE 5 – CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT

As of June 30, 2021 special purchase agreements (SPAs) with convertible debentures and notes, net of debt discount and including accrued interest, if any, consist of the following amounts:

	June 30, 2021
Convertible debentures
10% Convertible note payable, due April 23, 2022 – Bridge Investor		22,389
10% Convertible note payable, due April 23, 2022 – Related Party		105,964
10% Convertible note payable, due August 6, 2022 – Bridge Investor		178,306
		306,659
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		116,458
5% Convertible note payable – Related Party		269,984
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		269,503
5% Convertible note payable – CEO, CTO & CFO		88,307
5% Convertible note payable – Bridge Investors		180,923
		925,175
Geneva Notes
Geneva notes		307,500
Other Debt
Short term debt from CEO		20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
		764,875
Total of debentures, notes and other debt	$	2,304,209

As of December 31, 2020, convertible debentures and notes, net of debt discount, consist of the following amounts:

	December 31, 2020
Convertible debentures
10% Convertible note payable, due June 12, 2022 – Peak One	$	-
10% Convertible note payable, due April 23, 2022 - TFK		39,065
10% Convertible note payable, due April 23, 2022 – Related Party		14,256
10% Convertible note payable, due April 23, 2022 – Bridge Investor		69,848
10% Convertible note payable, due August 6, 2022 – Bridge Investor		168,421
		291,590
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		213,046
5% Convertible note payable – Related Party		263,733
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		263,253
5% Convertible note payable – CEO, CTO & CFO		86,257
5% Convertible note payable – Bridge Investors		176,722
		1,003,011
Other Debt
Short term debt from CFO		25,000
Short term debt from CEO		20,000
Other short term debt – Bridge Investor		50,000
		95,000
Total of debentures, notes and other debt	$	1,389,601

Convertible Debentures

The gross principal balances on the convertible debentures listed above totaled $1,000,000 and included an initial debt discounts totaling $800,140, resulting from the recording of the original issue discount, the related financing costs, the beneficial conversion feature for the intrinsic value of the non-bifurcated conversion option and the restricted shares issued contemporaneously with the convertible notes.

Total amortization expense related to these debt discounts was $81,639 and $460,339 for the six months ended June 30, 2021, and 2020, respectively. In addition, during the six months ended June 30, 2021 and 2020, we recorded additional and accelerated amortization of debt discounts, which was created from the bifurcation of the conversion option related the host hybrid instruments, of $24,491 and $192,761, respectively upon the partial and/or full conversion of debt by Peak One and TFK to shares of the Company’s common stock. The total unamortized debt discount at June 30, 2021 and December 31, 2020, was approximately $93,340 and $200,205, respectively.

All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days during the year ended December 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument. As of December 31, 2020, we had a derivative liability of approximately $777,000. The Company recorded additional derivative liability from the change in fair value of approximately $50,262 during the six months ended June 30, 2021. The Company also extinguished approximately $144,585 of derivative liability following the conversion of certain notes to the Company’s common stock in the six months ended June 30, 2021.

The Company recorded additional derivative liability of approximately $870,000 during the six months ended June 30, 2020 since the conversion option attached to certain notes became convertible into a variable number of shares of our common stock. The Company also extinguished approximately $409,000 of derivative liability following the conversion of certain notes to the Company’s common stock in the six months ended June 30, 2020. Following the recognition as derivative liability of the embedded conversion options, the Company fully amortized the remaining unamortized beneficial conversion feature for approximately $232,000, recorded an initial $258,070 from the initial recognition of the debt discount following the bifurcation of the embedded conversion option

Bridge Financing

Peak One Financing

On April 17, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P. (the “Buyer”, “Peak One”), for a commitment to purchase convertible notes in the aggregate amount of $400,000, pursuant to which, for an aggregate purchase price of $400,000, the Buyer purchased (a) Tranche #1 in the form of a Convertible Promissory Note in the principal amount of $200,000 (the “Convertible Note”) and (b) 350,000 restricted shares of the Company’s Common Stock (the “Shares”) (the “Purchase and Sale Transaction”). The Company used the net proceeds from the Purchase and Sale Transaction for working capital and general corporate purposes.

The Convertible Note has a principal balance of $200,000, including a 10%$ OID of $20,000 and $5,000 in debt issuance costs, receiving net proceeds of $175,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “Tranche #1 Conversion Shares”) of the Company’s Common Stock at any time, at the option of the holder, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times, reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the Tranche #1 Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the Convertible Note resulted in a discount from the beneficial conversion feature totaling $84,570, including $52,285 related to the beneficial conversion feature and a discount from the issuance of restricted stock of 350,000 shares for $32,285. Total amortization of these OID and debt issuance cost discounts totaled $0 for the 3 months ended June 30, 2021. Total unamortized discount on this note was $0 and $0 at June 30, 2021 and December 31, 2020, respectively.

On June 12, 2019, the Company entered into an amendment of the Purchase Agreement (“Amendment #1”) in connection with the draw-down of the second tranche, and to provide for additional borrowing capacity under that agreement. Amendment #1 increased the borrowing amount up to $600,000, adding the ability to borrow an additional $200,000 in a third tranche.

On June 12, 2019, the Buyer purchased Convertible Note Tranche #2 (“Tranche #2”) totaling $200,000, including a 10% OID of $20,000 and a $1,000 debt issuance cost, receiving net proceeds of $179,000 against the April 17, 2019, Purchase Agreement with Peak One, with a maturity date of June 12, 2022. Amounts due under Tranche #2 are convertible at the same terms as Tranche #1 above.

The issuance of Tranche #2 resulted in a discount from the beneficial conversion feature totaling $180,000, including $132,091 related to the conversion feature and a discount from the issuance of restricted stock of 350,000 shares for $47,909. Total amortization of these OID and debt issuance cost discounts totaled $0 for the 3 months ended June 30, 2021. Total unamortized discount on this note was $0 as of June 30, 2021.

On November 5, 2019, the Company and Peak One amended the Convertible Note under Tranche #1 to extend the date of conversion of the Convertible Note into Common Stock of the Company at 65% of the traded price of the Company’s Common Stock until January 8, 2020. This amendment put a temporary hold on Peak One to convert the debt under Tranche 1. This restriction did not apply if Peak One opted to convert the Convertible Note at $0.10. The Company compensated Peak One 300,000 shares of the Company’s Common Stock for delaying the conversion until January 18, 2020. Such shares were issued to Peak One on November 14, 2019. Non-cash compensation expense of $60,000 was recorded for such issuance.

Peak One converted $200,000 of Tranche #1 out of their total debt into 2,581,945 shares of the Company during the year ended December 31, 2020. Further, Peak One converted $200,000 of Tranche #2 of their total debt into 2,000,000 shares of the Company during the year ended December 31, 2020. As such, the total outstanding debt for Peak One was $0 as of June 30, 2021.

TFK Financing

On April 23, 2019, the Company, entered into a Convertible Note (the “TFK Note”) with TFK Investments, LLC (“TFK”). The TFK Note has a principal balance of $200,000, including a 10% OID of $20,000 and $5,000 in debt issuance costs, receiving net proceeds of $175,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “TFK Conversion Shares”) of the Company’s Common Stock at any time, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the TFK Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the TFK Note resulted in a discount from the beneficial conversion feature totaling $84,570, including $52,285 related to the beneficial conversion feature and a discount from the issuance of restricted, stock of 350,000 shares for $32,285. Total amortization of these OID and debt issuance cost discounts totaled $3,015 for the three months ended June 30, 2021. Total unamortized discount on this note was $0 as of June 30, 2021 and June 30, 2021.

On November 5, 2019, the Company and TFK amended the TFK Convertible Note to extend the date of conversion of the Convertible Note into Common Stock of the Company at 65% of the traded price of the Company’s Common Stock until January 8, 2020. This restriction did not apply if TFK wished to convert the Convertible Note at $0.10 per share. The Company compensated TFK 300,000 shares of the Company’s Common Stock for delaying the conversion until January 8, 2020. Such shares were issued to TFK on November 14, 2019. Non-cash compensation expense of $60,000 was recorded for such issuance.

TFK converted $133,430 of their total debt into 1,950,000 shares of common stock of the Company during the year ended December 31, 2020. As such, the total gross outstanding debt for TFK was approximately $67,000 as of December 31, 2020. TFK had a balance of approximately $109,000 related to the derivative liability as of December 31, 2020. The Company recorded approximately $38,000 as an increase in fair value for the derivative liability, and hence the TFK had a balance of approximately $145,000 of derivative liability. The Company extinguished the $145,000 of derivative liability and approximately $67,000 of the value of the debt, totaling approximately $210,000 following the conversion of the notes to the Company’s common stock during the three months ended June 30, 2021 for a total of 657,200 shares of common stock of the Company and recorded a loss on the conversion of approximately $2,000 for the three months and six ended June 30, 2021. As such, TFK’s debt as of June 30, 2021 was $0.

Notes with Officer and Bridge Investor

On April 17, 2019, the Company entered into a Securities Purchase Agreement (the “Bridge SPA”) with our CEO and the Bridge Investor with a commitment to purchase convertible notes in the aggregate of $400,000.

On April 23, 2019, the Company entered into a convertible note with our Chief Executive Officer, Vuong Trieu, Ph. D. (the “Trieu Note”). The Trieu Note has a principal balance of $164,444, including a 10% OID of $16,444, resulting in net proceeds of $148,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under the Convertible Note may also be converted into shares (the “Trieu Conversion Shares”) of the Company’s Common Stock at any time, at the option of the holder, at a conversion price of $0.10 per share (the “Fixed Price”), at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180^th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the Trieu Note resulted in a discount from the beneficial conversion feature totaling $131,555 related to the conversion feature. Total amortization of the 10% OID discount and beneficial conversion feature totaled $2,743 and $2,715 for the six months ended June 30, 2021, and 2020, respectively. Total unamortized discount on this note was $4,441 as of June 30, 2021.

On April 23, 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #1 (“Tranche #1”) with the Bridge Investor. Tranche #1 has a principal balance of $35,556, an OID of $3,556, resulting in net proceeds of $32,000, with a maturity date of April 23, 2022. Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under Tranche #1 may also be converted into shares (the “Bridge SPA Conversion Shares”) of the Company’s Common Stock at any time, at (i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the note resulted in a discount from the beneficial conversion feature totaling $28,445. Total amortization of the OID and discount totaled $8,132 for the six months ended June 30, 2021. Total unamortized discount on this note was $13,167 as of June 30, 2021.

On August 6, 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #2 (“Tranche #2”) with the Bridge Investor. Tranche #2 has a principal balance of $200,000, an OID of $20,000 and debt issuance costs of $5,000, resulting in net proceeds of $175,000, with a maturity date of August 6, 2022. Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event. Amounts due under Tranche #1 may also be converted into Bridge Conversion Shares of the Company’s Common Stock at any time, at the option of the holder, at a conversion price equal to the Fixed Price, at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180^th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.

The issuance of the note resulted in a discount from the beneficial conversion feature totaling $175,000. Total amortization of the OID and discount totaled $4,943 at June 30, 2021. Total unamortized discount on this note was $26,636 as of June 30, 2021.

All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days prior to the end of the three months ended March 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. This gave rise to a derivative feature within the debt instrument. As of June 30, 2021, Peak One and TFK had fully converted their notes.

Fall 2019 Debt Financing

In December 2019, the Company closed its Fall 2019 Debt Financing raising an additional $500,000 for gross proceeds of $1.0 million. The Company entered into Note Purchase Agreements (the “Note Purchase Agreements”) with certain accredited investors for the sale of convertible promissory notes (the “Fall 2019 Notes”). The Company completed the initial closing under the Note Purchase Agreements on November 23, 2019, issuing a $250,000 principal amount Fall 2019 Note to each of Dr. Vuong Trieu, the Company’s Chief Executive Officer, and Stephen Boesch, in exchange for gross proceeds of $500,000. In connection with the second and final closing the Company issued the Fall 2019 Notes to additional investors including $250,000 to Dr. Sanjay Jha, through his family trust, the former CEO of Motorola and COO/President of Qualcomm. The Company also offset certain amounts due to Dr. Vuong Trieu, the Company’s Chief Executive Officer, Chulho Park, the Company’s Chief Technology Officer, and Amit Shah, the Company’s Chief Financial Officer and converted such amounts due into the Fall 2019 Notes. $35,000 due to Dr. Vuong Trieu, $27,000 due to Chulho Park and $20,000 due to Amit Shah was converted into debt. The Company also issued the Fall 2019 Notes of $168,000 to two unaffiliated accredited investors.

All the Fall 2019 Notes provide for interest at the rate of 5% per annum and are unsecured. All amounts outstanding under the Fall 2019 Notes become due and payable upon the approval of the holders of a majority of the principal amount of outstanding Fall 2019 Notes (the “Majority Holders”) on or after (a) November 23, 2020 or (b) the occurrence of an event of default (either, the “Maturity Date”). The Company may prepay the Fall 2019 Notes at any time. Events of default under the Fall 2019 Notes include failure to make payments under the Fall 2019 Notes within thirty (30) days of the date due, failure to observe of the Note Purchase Agreement or Fall 2019 Notes which is not cured within thirty (30) days of notice of the breach, bankruptcy, or a change in control of the Company (as defined in the Note Purchase Agreement).

The Majority Holders have the right, at any time not more than five (5) days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Fall 2019 Notes. The Fall 2019 Notes may be converted, at the election of the Majority Holders, either (a) into shares of the Company’s Common Stock at a conversion price of $0.18 per share, or (b) into shares of common stock of the Edgepoint, at a conversion price of $5.00 (based on a $5.0 million pre-money valuation) of Edgepoint and 1,000,000 shares outstanding.

The issuance of the Fall 2019 notes resulted in a discount from the BCF totaling $222,222 related to the conversion feature. Total amortization of the discount totaled $0 and $111,111 for the six months ended June 30, 2021, and 2020, respectively. Total unamortized discount on this note was $0 as of June 30, 2021.

Further, the Company recorded interest expense of $11,250 and $12,500 on these Fall 2019 Notes for the three months ended June 30, 2021, and 2020, respectively. The Company recorded interest expense of $22,708 and $25,000 on these Fall 2019 Notes for the six months ended June 30, 2021, and 2020, respectively.

The total amount outstanding under the Fall 2019 Notes, net of discounts and including accrued interest thereon, as of June 30, 2021, and December 31, 2020, was $925,174 and $1,003,011, respectively.

Geneva Notes

In May and June 2021, the Company entered into Securities Purchase Agreement with Geneva Roth Remark Holdings Inc. (“Geneva”), whereby the Company issued two convertible notes in the aggregate principal amount of $307,500 convertible into shares of common stock of the Company with additional tranches of financing of up to $1,200,000 in the aggregate term of the note. The convertible notes carry a six (6%) percent coupon and a default coupon of 22%, and both mature one year from issuance. Geneva has the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following issuance date and ending on the maturity date to convert all or any part of the outstanding and unpaid amount of the note into the Company’s common stock at a conversion price established at sixty five (65%) percent multiplied by the lowest two (2) daily volume weighted average price over the fifteen (15) consecutive trading days. The convertible notes carry a put feature, at the option of Geneva, whereby upon the occurrence of certain events of default, the convertible notes repayment should be accelerated, in the amount of principal plus accrued but unpaid interest plus default interest, in cash with premium.

The total amount outstanding under the Geneva Notes as of June 30, 2021, and December 31, 2020, was $307,500 and $0, respectively. $100,000 of the total net proceeds for the June 2021 tranche was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

Paycheck Protection Program

In April 2020, the Company received loan proceeds in the amount of $250,000 under the Paycheck Protection Program (“PPP”) which was established under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and is administered by the Small Business Administration (“SBA”). The PPP provides loans to qualifying businesses in amounts up to 2.5 times the average monthly payroll expenses and was designed to provide direct financial incentive to qualifying businesses to keep their workforce employed during the Coronavirus crisis. PPP Loans are uncollateralized and guaranteed by the SBA and are forgivable after a “covered period” (8 weeks or 24 weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll, benefits, mortgage interest, rent and utilities. The forgiveness amount will be reduced if the borrower terminates employees or reduces salaries and wages more than 25% during the covered period. Any unforgiven portion is payable over 2 years if issued before, or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrowers loan forgiveness amount to the lender, or if the borrower does not apply for forgiveness, 10 months after the covered period. PPP loans provide for customary events of default, including payment defaults, breach of representations and warranties, and insolvency events and may be accelerated upon occurrence of one or more of these events of default. Additionally, the PPP Loans do not include prepayment penalties.

The Company believes it met the PPP’s loan forgiveness requirements and on August 7, 2021 applied for forgiveness. When legal release is received from the SBA or lender, the Company will record the amount forgiven as forgiveness income within the other income section of its statement of operations. If any portion of the PPP loan is not forgiven, the Company will be required to repay that portion, plus interest, through the maturity date.

The SBA reserves the right to audit any PPP loan, regardless of size. These audits may occur after the forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain their PPP loan documentation for six years after the loan was forgiven or repaid in full and to provide that documentation to the SBA upon request.

The balance outstanding on PPP loan, inclusive of accrued interest, was $252,973 and $251,733 on June 30, 2021 and December 31, 2020, respectively.

GMP Note

In June 2020, the Company secured $2 million in debt financing, evidenced by a one-year convertible note (the “GMP Note”) from GMP, to conduct a clinical trial evaluating OT-101 against COVID-19 bearing 2% annual interest, and is personally guaranteed by Dr. Vuong Trieu, the Chief Executive Officer of the Company. The GMP Note is convertible into the Company’s Common Stock upon the GMP Note’s maturity one year from the date of the GMP Note, at the Company’s Common Stock price on the date of conversion with no discount. GMP does not have the option to convert prior to the GMP Note’s maturity at the end of one year. Such financing will be utilized solely to fund the clinical trial.

The Company’s liability under GMP Note commenced to accrue when GMP first began to pay for services related to the clinical trial to our third-party clinical research organization, up to a maximum of $2 million. As of December 31, 2020, GMP has been invoiced by the clinical research organization for the full $2 million and as such the Company has recognized the liability as a convertible debt.

The balance outstanding on the GMP Note, inclusive of accrued interest, was $2,040,329 and $2,000,000 on June 30, 2021 and December 31, 2020, respectively.

Other short-term loans

Other Debt
Short term debt from CEO	$	20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
	$	764,875

The Company’s CEO had provided a short term loan of $70,000 to the Company during the year ended December 31, 2020, of which $50,000 was repaid. As such, $20,000 was outstanding at June 30, 2021. During the three months ended March 31, 2021, Autotelic Inc. provided a short term funding of $120,000 to the Company, which was repaid after the three months ended March 31, 2021. On May 18, 2021, Autotelic provided an additional short term funding of $250,000 to the Company. As such, $250,000 was outstanding and payable to Autotelic at June 30, 2021. During the fourth quarter of the year ended December 31, 2020, the Company’s CFO and the Bridge Investor provided short term loans of $25,000 and $50,000, respectively to the Company. Such loans were repaid as of March 31, 2021. Additionally, the Company received $69,050 from the Company’s CFO during the three months ended June 30, 2021 and such amount was outstanding as of June 30, 2021.

During the three months ended June 30, 2021, the Company received $425,825 primarily from two bridge investors and such amount was outstanding as of June 30, 2021.

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PRIVATE PLACEMENT AND JH DARBIE FINANCING

6 Months Ended

Jun. 30, 2021

Private Placement And Jh Darbie Financing

PRIVATE PLACEMENT AND JH DARBIE FINANCING

NOTE 6 - PRIVATE PLACEMENT AND JH DARBIE FINANCING

During the period from July 2020 to March 31, 2021, the Company entered into varioussubscription agreements with certain accredited investors, including the CEO, pursuant to the JH Darbie Financing, whereby the Company issued and sold a total of 100 Units, for total gross proceeds of approximately $5 million, pursuant to the JH Darbie Placement Agreement, with each Unit consisting of:

■ 25,000 shares of Edge Point Common stock for a price of $1.00 per share of Edge Point Common stock.

■ One convertible promissory note, convertible up to 25,000 shares of Edge Point Common stock, at a conversion price of $1.00 per share or up to 138,889 shares of the Company’s common stock, at a conversion price of $0.18 per share.

■ 50,000 warrants to purchase an equivalent number of shares of Edge Point Common stock at $1.00 per share and an equivalent number of shares of the Company’s common stock at $0.20 per share with a three-year expiration date. Either the Edgepoint or the Company’s warrants would be exercised.

As June 30, 2021, funds received under the JH Darbie Financing, net of debt discount, consist of the following amounts:

	June 30, 2021
Convertible promissory notes
Subscription agreements - accredited investors	$	1,798,801
Subscription agreements – related party		93,488
Total convertible promissory notes	$	1,892,289

The Company incurred approximately $0.64 million of issuance costs, including legal costs of approximately $39,000, that are incremental costs directly related to the issuance of the various instruments bundled in the offering.

Concurrently with the sale of the Units, JH Darbie was granted a warrant, exercisable over a five-year period, to purchase 10% of the number of Units sold in the JH Darbie Financing. As such, the Company granted 10 Units to JH Darbie pursuant to the JH Darbie Placement Agreement.

The terms of convertible notes are summarized as follows:

■ Term: Through June 30, 2021 (extended to March 31, 2022).

■ Coupon: 16%.

■ Convertible at the option of the holder at any time in the Company’s Common Stock or Edgepoint Common Stock.

■ The conversion price is initially set at $0.18 per share for the Company’s Common Stock or $1.00 for Edgepoint Common Stock, subject to adjustment.

The Company allocated the proceeds among the freestanding financial instruments that were issued in the single transaction using the relative fair value method, which affects the determination of each financial instrument initial carrying amount. The Company utilized the relative fair value method as none of the freestanding financial instruments issued as part of the single transaction are measured at fair value. Under the relative fair value method, the Company made separate estimates of the fair value of each freestanding financial instrument and then allocated the proceeds in proportion to those fair value amounts. The Company recorded non-controlling interests of approximately $1 million in Edgepoint. Non-controlling interests represent the portion of net assets in consolidated entities that are not owned by the Company and are reported as a component of equity in the consolidated balance sheets.

As of the multiple closings of the Company during the three months ended March 31, 2021, under the private placement memorandum with JH Darbie, the estimated volume weighted grant date fair value of approximately $0.23 per share associated with the warrants to purchase up to 2,035,000 shares of common stock issued in this offering, or a total of approximately $ 0.5 million, was recorded to additional paid-in capital on a relative fair value basis. All warrants sold in this offering had an exercise price of $0.20 per share of the Company stock or $1.00 per share of Edge Point, subject to adjustment, are exercisable immediately and expire three years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values:

Expected Term	1.5 years
Expected volatility		152.3%-164.8	%
Risk-free interest rates		0.09%-0.11	%
Dividend yields		0.00	%

As of the multiple closings of the Company through December 31, 2020, under the private placement memorandum with JH Darbie, the estimated grant date fair value of approximately $0.18 per share associated with the warrants to purchase up to 3,465,000 shares of common stock issued in this offering, or a total of approximately $0.6 million, was recorded to additional paid-in capital on a relative fair value basis. All warrants sold in this offering had an exercise price of $0.20 per share of the Company stock or $1.00 per share of Edge Point, subject to adjustment, are exercisable immediately and expire three years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values.

Expected Term	1.5 years
Expected volatility		168.5%-191.9	%
Risk-free interest rates		0.12%-0.15	%
Dividend yields		0.00	%

The Company recorded an initial debt discount of approximately $0.7 million representing the intrinsic value of the non-bifurcated conversion option embedded in the convertible debt instrument based upon the difference between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price.

The Company recognized amortization expense related to the debt discount and debt issuance costs of $659,854 and $0 for the six months ended June 30, 2021, and June 30, 2020, respectively, which is included in interest expense in the statements of operations.

On June 29, 2021, the Company executed amendment #4 to the private placement memorandum. At the time of the original PPM, the Company had inadvertently made an error in the PPM. Originally, the investor was granted 50,000 of the Company’s warrants to purchase an equivalent number of shares of the Company’s common stock at a strike price of $0.20 or 50,000 warrants to purchase an equivalent number of Edgepoint’s common share at strike price of $1.00. However, the PPM was incorrectly written in that the investor could only invest in $10,000 (50,000 shares of common stock at $0.20 per share) of common stock of the Company) or $50,000 (50,000 shares of common stock in Edgepoint AI, Inc. at $1.00 per share). In conjunction with amendment #4 and to correct the error in the PPM, the Company approved the issuance of further 20,000,000 warrants to purchase shares of common stock of the Company to the investors in the 100 Units and 2,000,000 warrants to purchase shares of common stock of the Company to the Placement Agent at the same terms and conditions of the PPM. To clarify further, each unit will receive additional 200,000 warrants to purchase an equivalent number of shares of the Company’s common stock at $0.20 per share, so as to make it overall 250,000 warrants to buy an equivalent number of shares of the Company’s common stock, for which the investor would pay a total of $50,000 per unit invested upon exercise.

In connection with the additional warrants issued by the Company in connection with the amendment #4, the Company recorded a stock-based compensation fair value expense of $2,023,522 during the period ended June 30, 2021. No similar expense was recorded during the same period of 2020. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values.

Expected Term	1-2 years
Expected volatility		94.4%-130.0	%
Risk-free interest rates		0.08%-0.25	%
Dividend yields		0.00	%

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 - RELATED PARTY TRANSACTIONS

Master Service Agreement with Autotelic Inc.

In October 2015, Oncotelic entered into a Master Service Agreement (the “MSA”) with Autotelic Inc., a related party that is partly-owned by the Company’s CEO Vuong Trieu, Ph.D. Dr. Trieu, a related party, is a control person in Autotelic Inc. Autotelic Inc. currently owns less than 10% of the Company. The MSA stated that Autotelic Inc. will provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA includes personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA requires a 90-day written termination notice in the event either party requires to terminate such services.

Expenses related to the MSA were $117,980 for the three months ended June 30, 2021 as compared to $82,313 for the same period of 2020. Expenses related to the MSA were $482,445 for the six months ended June 30, 2021 as compared to $159,404 for the same period of 2020.

Note Payable and Short Term Loan – Related Parties

In April 2019, the Company issued a convertible note to Dr. Trieu totaling $164,444, including OID of $16,444, receiving net proceeds of $148,000, which was used by the Company for working capital and general corporate purposes. The Company issued a Fall 2019 Note to Dr. Trieu in the principal amount of $250,000. Dr. Trieu also offset certain amounts due to him in the amount of $35,000 and was converted into the Fall 2019 debt. During the year ended December 31, 2020, Dr. Trieu provided additional short-term funding of $70,000 to the Company, of which the Company repaid $50,000 prior to December 31, 2020. During the year ended December 31, 2020, Dr. Trieu purchased a total of 5 Units under the private placement for a gross total of $250,000.

During the three months ended March 31, 2021, Autotelic Inc, provided a short-term loan of $120,000 to the Company, which was repaid in April 2021. During the three months ended June 30, 2021, Autotelic Inc. provided a short-term loan of $250,000 to the Company.

Artius Consulting Agreement

On March 9, 2020, the Company and Artius Bioconsulting, LLC (“Artius”), for which Mr. King is the Managing Member, entered into an amendment to the Consulting Agreement dated December 1, 2018, under which Artius agreed to serve as a consultant to the Company for services related to the Company’s business from time to time, effective December 1, 2019 (the “Effective Date”) (the “Artius Agreement”). In connection with the Artius Agreement, Mr. King also agreed to assist the Company with strategic advisory services with respect to transactional and operational contracts, budgetary input, among other matters in connection with the formation of a new business unit to develop AI and Blockchain Driven Vision Systems (“EdgePoint AI”), for which Mr. King is Chief Executive Officer.

Under the terms of the Artius Agreement, the Company agreed to grant to Artius, subject to approval by the Company’s Board of Directors and pursuant to the Company’s 2017 Equity Incentive Plan, 148,837 restricted shares of the Company’s Common Stock, in addition to a 30% pre-financing ownership stake in EdgePoint AI. The Artius Agreement contemplates that Mr. King will generally provide his services at a rate of $237 per hour, not to exceed 44 hours per month and payable monthly, and to reimburse Mr. King for reasonable and necessary expenses incurred by him or Artius in connection with providing services to the Company.

Either the Company or Artius may terminate the Artius Agreement at any time, for any reason following the Effective Date. The Artius Agreement will automatically renew one year from the Effective Date, unless the Parties agree to terminate the Artius Agreement at that time.

No expense was recorded during the three and six months ended June 30, 2021 or 2020, respectively, related to this Agreement.

Maida Consulting Agreement

Effective May 5, 2020, the Company and Dr. Maida entered into an independent consulting agreement, commencing April 1, 2020 (the “Maida Agreement”), under which Dr. Maida will assist the Company in providing medical expertise and advice from time to time in the design, conduct and oversight of the Company’s existing and future clinical trials.

Pursuant to the terms of the Maida Agreement, the Company will grant to Dr. Maida 400,000 restricted shares of the Company’s Common Stock corresponding to $80,000 at the stock value of $0.20 per share, to vest on May 5, 2021. The Company will also pay Dr. Maida $15,000 per month for a minimum of 20 hours per week, in in addition to reimbursement of reasonable and necessary expenses incurred by Dr. Maida in connection with his services to the Company.

Either the Company or Dr. Maida may terminate the Maida Agreement, for any reason, upon 30 days advance written notice.

The Company recorded an expense of $45,000 during the three months ended June 30, 2021 related to this Agreement as compared to $30,000 during the same period in 2020. The Company recorded an expense of $90,000 during the three months ended June 30, 2021 related to this Agreement as compared to $30,000 during the same period in 2020.

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EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

6 Months Ended

Jun. 30, 2021

Equity Purchase Agreement And Registration Rights Agreement

EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

NOTE 8 - EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

On May 3, 2021, the Company entered into an Equity Purchase Agreement (“EPL”) and Registration Rights Agreement with Peak One Opportunity Fund LP (“Peak One” or the “Investor”). Under the terms of the EPL, the Company issued 250,000 shares of Common Stock to Peak One. Further, under the terms of the EPL, Peak One agreed to purchase from the Company up to $10,000,000 of the Company’s Common Stock upon effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission and subject to certain limitations and conditions set forth in the Equity Purchase Agreement. The Registration Rights Agreement provided that the Company would (i) file the Registration Statement with the SEC by July 2, 2021; and (ii) use its best efforts to have the Registration Statement declared effective by the Commission at the earliest possible date (in any event, within 90 days after the execution date of the definitive agreements). The Company filed a Registration Statement on Form S-1 with the Commission on May 24, 2021, and the Form S-1 was declared effective on June 2, 2021.

Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the Equity Purchase Agreement, the Company shall have the discretion to deliver put notices to the Investor and the Investor will be obligated to purchase shares of the Company’s Common Stock based on the investment amount specified in each put notice. The minimum amount that the Company shall be entitled to put to the Investor in each put notice is $20,000 and the maximum amount is up to the lesser of $1.0 million or two hundred fifty percent (250%) of the average daily trading volume of the Company’s Common Stock defined as the average trading volume of the Company’s Common Stock in the ten (10) days preceding the date on the put notice multiplied by the lowest closing bid price in the ten (10) immediately preceding the date of the put notice. Pursuant to the Equity Purchase Agreement, the Investor will not be permitted to purchase, and the Company may not put shares of the Company’s Common Stock to the Investor that would result in the Investor’s beneficial ownership of the Company’s outstanding Common Stock exceeding 4.99%. The price of each put share shall be equal to ninety one percent (91%) of the market price, which is defined as the lesser of (i) closing bid price of the Common stock on the trading date immediately preceding the respective put date, or (ii) the lowest closing bid price of the Common Stock during the seven (7) trading days immediately following the clearing date associated with the applicable put notice.

In connection with the EPL, the Company issued 250,000 shares of Common Stock to Peak One and recorded a fair value stock compensation expense of approximately $70,000.

During the three months ended June 30, 2021, the Company sold a total of 400,000 shares of Common Stock at prices ranging from $0.15 and $0.23 for total gross proceeds of approximately $99,000, net of issuance costs of approximately $29,000. Approximately $37,000 of the total net proceeds was received by the Company subsequent to June 30, 2021 and is included in the accounts receivable as of June 30, 2021.

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STOCKHOLDERS’ EQUITY

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 9 - STOCKHOLDERS’ EQUITY

The following transactions affected the Company’s Stockholders’ Equity:

Equity Transactions During the Period Since the Merger

Issuance and conversion of Preferred Stock

In April 2019, pursuant to the Merger the Company issued 193,713 shares of Series A Preferred in exchange for 77,154 shares of Oncotelic Common Stock. Further, in November 2019 the Company issued 84,475 shares of Series A Preferred to PointR in exchange of 11,135,935 shares of PointR Common Stock upon the consummation of the PointR merger. In March 2021, 278,188 shares of the Company’s preferred stock converted to 278,187,847 shares of its Common Stock, effective March 31, 2021.

Issuance of Common Stock during the six months ended June 30, 2021

In January 2021, the Company issued 657,200 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In March 2021, the Company converted 278,188 shares of our Series A Preferred Stock to 278,187,847 shares of its Common Stock.

In May 2021, the Company issued 250,000 shares of its Common Stock to Peak One in connection with the EPL and recorded a stock compensation expense of approximately $70,000.

In June 2021, the Company sold a total of 400,000 registered shares of Common Stock at prices ranging from $0.15 and $0.23 in connection with the EPL. The Company received net cash of $70,000 against such sale.

Issuance of Common Stock during the six months ended June 30, 2020

In February 2020, the Company issued 500,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In March 2020, the Company issued 750,000 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In March 2020, the Company issued 500,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In March 2020, the Company issued 1,012,145 shares of its Common Stock to TFK in connection with the part conversion of their convertible notes payable.

In February 2020, the Company issued 1,200,000 shares of its Common Stock to Peak One in connection with the part conversion of one of their convertible notes payable.

In June 2020, Mateon issued 569,800 shares of its Common Stock to Peak One in connection with the full conversion of one of their convertible notes payable.

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STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

Compensation Related Costs [Abstract]

STOCK-BASED COMPENSATION

NOTE 10 – STOCK-BASED COMPENSATION

Options

Pursuant to the Merger, the Company’s Common Stock and corresponding outstanding options survived. The below information details the Company’s associated option activity.

As of June 30, 2021, options to purchase Common Stock were outstanding under three stock option plans – the 2017 Equity Incentive Plan (the “2017 Plan”), the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2005 Stock Plan (the “2005 Plan”). Under the 2017 Plan, up to 2,000,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards. Under the 2015 and 2005 Plans, taken together, up to 7,250,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of incentive stock options, nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards.

Employees, consultants, and directors are eligible for awards granted under the 2017 and 2015 Plans. The Company registered an additional total of 20,000,000 shares of its Common Stock, which may be issued pursuant to the Registrant’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”). Such additional shares were approved by the shareholders of the Company on August 10, 2020 and as reported to the Securities and Exchange Commission (the “SEC”) vide a Current Report on Form 8-K on August 14, 2020. As such, the total number of shares of the Company’s Common Stock available for issuance under the 2015 plan is 27,250,000. After June 30, 2021, the Company issued 1,257,952 of its common shares in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees. All these grants had been approved by the Board of Directors of the Company under the 2015 Plan.

Since the adoption of the 2015 Plan, no further awards may be granted under the 2005 Plan, although options previously granted remain outstanding in accordance with their terms.

Compensation based stock option activity for qualified and unqualified stock options are summarized as follows:

			Weighted
For the six months ended June 30, 2021			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		3,941,301	$	0.78
Outstanding at June 30, 2021		3,941,301	$	0.78

For the year ended December 31, 2020

				Weighted
				Average
	Shares			Exercise Price
Outstanding at January 1, 2020		6,145,044		$	0.75
Expired or canceled		(2,203,743	)		0.70
Outstanding at December 31, 2020		3,941,301		$	0.78

The following table summarizes information about options to purchase shares of the Company’s Common Stock outstanding and exercisable at June 30, 2021:

						Weighted-
				Weighted-		Average
		Outstanding		Average		Exercise		Number
Exercise prices		Options		Remaining Life		Price		Exercisable
$	0.22		1,750,000		4.84	$	0.22		1,750,000
	0.38		900,000		4.16		0.38		900,000
	0.73		762,500		3.78		0.73		762,500
	1.37		150,000		2.00		1.37		150,000
	1.43		300,000		3.91		1.43		300,000
	11.88		2,359		0.51		11.88		2,359
	15.00		75,000		3.91		15.00		75,000
	19.80		1,442		0.34		19.80		1,442
			3,941,301		4.28	$	0.78		3,941,301

The compensation expense attributed to the issuance of the options is recognized as they are vested.

The employee stock option plan stock options are generally exercisable for ten years from the grant date and vest over various terms from the grant date to three years.

The aggregate intrinsic value totaled $0 and was based on the Company’s closing stock price of $0.22 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date. Correspondingly, the aggregate intrinsic value totaled $0 and was based on the Company’s closing stock price of $0.22 as of December 31, 2020, which would have been received by the option holders had all option holders exercised their options as of that date.

As of June 30, 2021, there was no future compensation cost as all stock options vested prior to December 31, 2019 and the compensation was fully expensed prior to the Merger. In August 2019, the Company had entered into Employment Agreements and incentive compensation arrangements with each of its executive officers, including Dr. Vuong Trieu, the Chief Executive Officer (“CEO”); Dr. Chulho Park, its prior Chief Technology Officer (“CTO’); and Mr. Amit Shah, the Chief Financial Officer (“CFO”). The incentive stock options and the restricted stock awards approved for the Company’s executive officers were granted and issued after June 30, 2021. The Company issued 1,257,952 of its common shares in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees, including the awards due to the CEO, CFO, the prior CTO and Saran Saund, the Chief Business Officer of the Company. The Company shall measure the stock-based compensation cost and record such cost in the relevant period.

Warrants

Pursuant to the Merger, the Company’s Common Stock and corresponding outstanding warrants survived. The below information represents the Company’s associated warrant activity.

During the three months ended March 31, 2021, 2,035,000 warrants were issued related to private placement. The fair value of these warrants on issue date amounted to $467,637 with an expected life of 1.5 years, as calculated using Black Scholes valuation model. Further, during the three months ended June 30, 2021, and as disclosed in Note 6 above, the Company issued 20,000,000 warrants were issued related to private placement. The fair value of these warrants on issue date amounted to $2,023,552 with an expected life of 1-2 years, as calculated using Black Scholes valuation model.

In February 2020, the Company offered to cancel to all the prior warrants of the warrant holders from the 2018 debt financing and offered to reissue new warrants to such warrant holders. Out of all the warrant holders, holders of 13,750,000 warrants opted to participate in the reissuance during the same period in 2020. The company recognized stock-based compensation of $2.1 million as the fair value of the warrants using a Black Scholes valuation model. No similar expense was recorded for the three months ended March 31, 2021.

The issuance of warrants to purchase shares of the Company’s Common Stock, including those attributed to debt issuances, as of June 30, 2021 and December 31, 2020 are summarized as follows:

			Weighted-
			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		18,702,500	$	0.20
Issued during six months ended June 30, 2021		24,035,000		0.20
Outstanding at June 30, 2021		42,737,500	$	0.20

				Weighted-
				Average
For the year ended December 31, 2020	Shares			Exercise Price
Outstanding at January 1, 2020		19,515,787		$	0.60
Issued during the year ended December 31, 2020		17,215,000			0.20
Expired or cancelled		(18,028,287	)		0.63
Outstanding at December 31, 2020		18,702,500		$	0.20

The following table summarizes information about warrants outstanding and exercisable at June 30, 2021:

		Outstanding and exercisable
				Weighted-		Weighted-
				Average		Average
		Number		Remaining Life		Exercise		Number
Exercise Price		Outstanding		in Years		Price		Exercisable
$	0.20		1,487,500		2.08	$	0.20		1,487,500
	0.20		41,250,000		2.15		0.20		41,250,000
			42,737,500		2.15	$	0.20		42,737,500

The Company issued 24,035,000 warrants during the six months ended June 30, 2021, of which 22,000,000 warrants issued during the three months ended June 30, 2021. The Company recorded stock-based compensation of approximately $2.0 million, as fair value of the warrants, using a Black Scholes valuation model using the following input values. The expense attributed to the issuances of the warrants was recognized as they vested/earned. These warrants are exercisable for three to five years from the grant date. All the warrants are currently exercisable.

Expected Term	1-2 years
Expected volatility		94.4 – 130.0	%
Risk-free interest rates		0.08 – 0.25	%
Dividend yields		0.00	%

The Company issued 13,750,000 warrants issued during the six months ended June 30, 2020 were as recorded stock-based compensation of $2.1 million as the fair value of the warrants using a Black Scholes valuation model using the following input values. The expense attributed to the issuances of the warrants was recognized as they vested/earned. These warrants are exercisable for three to five years from the grant date. All the warrants are currently exercisable.

Expected Term	3 years
Expected volatility		140.5	%
Risk-free interest rates		1.40	%
Dividend yields		0.00	%

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INCOME TAXES

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11 – INCOME TAXES

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes as of June 30, 2021 and December 31, 2020 are as follows in thousands:

	June 30, 2021			December 31, 2020
Deferred tax assets:
Stock-based compensation	$	1,164		$	1,164
Assets		6,015			6,227
Liability accruals		253			173
R&D Credit		4,776			4,760
Capital Loss		528			528
Deferred state tax		(2,173	)		(2,086	)
Net operating loss carry forward		56,506			56,090
Total gross deferred tax assets		67,069			66,856
Less - valuation allowance		(67,069	)		(66,856	)
Net deferred tax assets	$	-		$	-

The Company had gross deferred tax assets of approximately $68.0 million and $66.9 million as of June 30, 2021 and December 31, 2020, respectively, which primarily relate to net operating loss carryforwards.

As of June 30, 2021 and December 31, 2020, the Company had gross federal net operating loss carryforwards of approximately $239.7 million and $237.7 million, respectively, which are available to offset future taxable income, if any. The Company recorded a valuation allowance in the full amount of its net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not.

At June 30, 2021 and December 31, 2020, the Company had California state gross operating loss carry-forwards of approximately $74.9 million and $69.8 million which will expire in various amounts from 2028 through 2040. At December 31, 2020, the Company had federal research and development tax credits of approximately $3.3 million which will expire in 2021 and California state research and development tax credits of approximately $1.4 million which have no expiration date.

The Company identified its federal and California state tax returns as “major” tax jurisdictions. The periods out income tax returns are subject to examination for these jurisdictions are 2017 through 2020. We believe our income tax filing positions and deductions will be sustained on audit, and we do not anticipate any adjustments that would result in a material change to our financial position. Therefore, no liabilities for uncertain income tax positions have been recorded. As of the date of this filing, the Company has not filed its 2019 and 2020 federal and state corporate income tax returns. The Company expects to file these documents as soon as practical.

Portions of these carryforwards will expire through 2038, if not otherwise utilized. The Company’s utilization of net operating loss carryforwards could be subject to an annual limitation. as a result of certain past or future events, such as stock sales or other equity events constituting a “change in ownership” under the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations could result in the expiration of net operating loss carryforwards and tax credits before they can be utilized. We have not performed a formal analysis, but we believe our ability to use such net operating losses and tax credit carryforwards will be subject to annual limitations, due to change of ownership control provisions under Section 382 and 383 of the Internal Revenue Code, which would significantly impact our ability to realize these deferred tax assets.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases

Currently, the Company is leasing the office located at 29397 Agoura Road, Suite 107, Agoura Hills, CA 91301 on a month-to-month basis until such time a new office is identified. The Company believes the office is sufficient for its current operations.

Legal Claims

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows.

PointR Merger Contingent Consideration

The total purchase price of $17,831,427 represented the consideration transferred from Mateon in the Merger and was calculated based on the number of shares of Common Stock plus the preferred shares outstanding but convertible into Common Stock outstanding at the date of the Merger and includes $2,625,000 of contingent consideration of shares issuable to PointR shareholders upon achievement of certain milestones.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

Stock Awards Under the 2015 Plan

The Company issued 1,257,952 shares of its Common Stock in lieu of fully vested restricted stock units and 4,244,809 incentive and non-qualified stock options to purchase its Common Stock to its employees. All these grants had been approved for issuance after June 30, 2021 by the Board of Directors of the Company under the 2015 Plan.

Unsecured Convertible Notes

In August 2021, the Company issued Note Purchase Agreements with Autotelic Inc., the CFO, and certain other accredited investors. Under the terms of the Note Purchase Agreements, the Company issued an aggregate of $698,500 (the “Principal Amount”) in debt in the form of unsecured convertible promissory notes (collectively, the “Notes”). The Notes are unsecured, and provide for interest at the rate of 5% per annum. Such Notes were issued against some of the short-term debt due as of June 30, 2021. All amounts outstanding under the Notes become due and payable at such time as determined by the holders of a majority of the Principal Amount of the Notes (the “Majority Holders”), on or after (a) the one year anniversary of the Notes ,or (b) the occurrence of an Event of Default (as defined in the Note Purchase Agreements) (the “Maturity Date”). The Company may prepay the Notes at any time. Events of Default under the Notes include, without limitation, (i) failure to make payments under the Notes within thirty (30) days of the Maturity Date, (ii) breaches of the Note Purchase Agreement or Notes by the Company which is not cured within thirty (30) days of notice of the breach, (iii) bankruptcy, or (iv) a change in control of the Company (as defined in the Note Purchase Agreements). The Majority Holders have the right, at any time not more than five days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Notes. The Notes may be converted, at the election of the Majority Holders, into shares of the Company’s common stock, par value $0.01 per share, at a fixed conversion price of $0.18 per share.

GMP Letter of Intent and Term Sheet

On August 13, 2021 the Company, the CEO, and GMP executed a letter of intent and a non-binding term sheet (the “Term Sheet”), which Term Sheet included certain binding terms relating to a standstill agreement and the issuance of a convertible promissory note (as more fully described below). The Term Sheet sets forth the terms and conditions pursuant to which the Company and GMP will, subject to shareholder approval, form a joint venture (the “JV”) with the objective to develop the Company’s product portfolio. Pursuant to the Term Sheet, the Company will contribute its product portfolio to the JV in consideration for a 35% ownership stake in the JV. As set forth above, the Term Sheet sets forth certain binding terms regarding (i) a 45-day standstill by the Company, and (ii) the issuance by the Company of a convertible note for $1.5 million to GMP to fund the OT-101 clinical trial study close-out. Although no assurances can be given, the Company and GMP currently intend to conduct an initial public offering of the JV, at a future date, on either the Hong Kong Exchange or other stock exchange. The formation of the JV is not assured as the formation of the JV is subject to approval of the Company’s shareholders and the execution of definitive agreements, among other conditions.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expense during the reporting period. Actual results could materially differ from those estimates.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the valuation of goodwill and intangible assets for impairment, deferred tax asset and valuation allowance, and fair value of financial instruments.

Cash

Cash

As of June 30, 2021, and December 31, 2020 the Company held all its cash in banks. The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2021 and December 31, 2020, respectively. Restricted cash consists of certificates of deposits held at banks as collateral for various purposes.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying value of cash, accounts payable and accrued expense approximate their fair values based on the short-term maturity of these instruments. As defined in ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

● Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

● Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

● Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2021 and December 31, 2020. The derivative liabilities associated with its 2019 bridge financing Convertible Notes (see Note 5), consisted of conversion feature derivatives at June 30, 2021 and December 31, 2020, are Level 3 fair value measurements.

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 as of June 30, 2021 and 2020:

	June 30, 2021 Conversion Feature			June 30, 2020 Conversion Feature
Balance at January 1, 2021 and 2020	$	777,024		$	540,517
New derivative liability		-			870,268
Reclassification to additional paid in capital from conversion of debt to common stock		(144,585	)		(408,811	)
Change in fair value		(93,829	)		(10,512	)
Balance at June, 2021 and 2020	$	538,610		$	991,462

As of June 30, 2021 and 2020, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on assumptions used in the Black-Scholes valuation model. The key valuation assumptions used consists, in part, of the price of the Company’s Common Stock, a risk-free interest rate based on the yield of a Treasury note and expected volatility of the Company’s Common Stock all as of the measurement dates. The Company used the following assumptions to estimate fair value of the derivatives as of June 30, 2021 and 2020:

	June 30, 2021 Key Assumptions for fair value of conversions			June 30, 2020 Key Assumptions for fair value of conversions
Risk free interest		0.07	%		0.16	%
Market price of share	$	0.36		$	0.1875
Life of instrument in years		0.81 - 1.10			1.81 – 2.10
Volatility		94.4	%		151.87	%
Dividend yield		0	%		0	%

When the Company changes its valuation inputs for measuring financial liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended June 30, 2021 and 2020, respectively, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of Common Stock equivalents (notes convertible into Common Stock, stock options and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. The following number of shares have been excluded from diluted loss since such inclusion would be anti-dilutive:

	Six Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020
Convertible notes		37,641,648		11,584,300		37,641,648		8,000,000
Stock options		3,941,301		6,135,284		3,941,301		6,135,284
Warrants		42,737,500		15,237,500		42,737,500		15,237,500
Potentially dilutive securities		84,320,449		26,372,784		84,320,449		26,372,784

The following table reflects the inclusion of the common stock equivalents included in the calculation of the diluted net income per share for the three months ended June 30, 2020. No similar calculations are required for the three months ended June 30, 2021 or the six months ended June 30, 2021 and 2020, respectively as all these periods had losses.

Reconciliation for Basic to Diluted Weighted Average common stock outstanding
Basic weighted average common stock outstanding	88,152,403
Add: Dilutive Common Stock Instruments
Shares issuable upon conversion of debt	6,584,300
Diluted weighted average common stock outstanding	94,736,703

Stock-Based Compensation

Stock-Based Compensation

The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the statements of operations.

For stock options issued to employees and members of the Board of Directors (the “Board”) for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.

Pursuant to ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above.

For warrants issued in connection with fund raising activities, the Company estimates the grant date fair value of each warrant using the Black-Scholes pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the warrant, the expected volatility of the Common Stock consistent with the expected life of the warrant, risk-free interest rates and expected dividend yields of the Common Stock. If the warrants are issued upon termination or cancellation of prior issued warrants, then the Company estimates the grant date fair value of the new warrants using the Black-Scholes pricing model and evaluates whether the new warrants are deemed as equity instruments or liability instruments. If the warrants are deemed to be equity instruments, the Company records stock compensation expense and an addition to additional paid in capital. If however, the warrants are deemed to be liability instruments, then the fair value is treated as a deemed dividend and credited to additional paid in capital.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for long-lived assets.

Intangible Assets

Intangible Assets

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for intangible assets.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded. For the three and six months ended June 30, 2021 and 2020, there were no impairment losses recognized for Goodwill.

Derivative Financial Instruments Indexed to the Company’s Common Stock

Derivative Financial Instruments Indexed to the Company’s Common Stock

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statement of Income.

Convertible Instruments

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 “Debt – Debt with Conversion and Other Options.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 “Derivatives and Hedging – Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).

Under ASU 2014-9, the Company recognizes revenue when its customers obtain control of the promised good or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five-step: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASU 2014-09, the Company identifies the performance obligation(s) in the contract by assessing whether the goods or services promised within each contract are distinct. The Company then recognizes revenue for the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company anticipates generating revenues from rendering services to other third party customers for the development of certain drug products and/or in connection with certain out-licensing agreements. In the case of services rendered for development of the drugs, revenue is recognized upon the achievement of the performance obligations or over time on a straight-line basis over the extended service period. In the case of out-licensing contracts, the Company records revenues either upon achievement of certain pre-defined milestones, when there is no obligation of the Company achieve any performance obligations in connection with the said pre-defined milestones, or upon achievement of the performance obligations if the milestones require the Company to provide the performance obligations.

The Company occasionally collects advance payments from customers toward commitments to provide services or performance obligations, in which case the advance payment is recorded as a liability until the obligations are fulfilled and revenue is recognized.

Research Service Agreement between GMP and Oncotelic /Oncotelic Inc. (“Oncotelic Entities”)

Research Service Agreement between GMP and Oncotelic /Oncotelic Inc. (“Oncotelic Entities”)

In February 2020, Oncotelic Inc. and GMP entered into a research and services agreement (the “Agreement”) memorializing their collaborative efforts to develop and test COVID-19 antisense therapeutics. In March 2020, the Company reported the positive anti-viral activity results of OT-101 (the “Product”) in an in vitro antiviral testing performed by an independent laboratory to GMP, at which time, the Oncotelic Entities and GMP entered into a supplement to the Agreement (the “Supplement”) to confirm the inclusion of the Product within the scope of the Agreement, pending positive confirmatory testing against COVID-19. In consideration for the financial support provided by GMP for the research, pursuant to the terms of the Agreement (as amended by the Supplement) GMP was entitled to obtain certain exclusive rights to the use of the Product in the COVID field on a global basis, and an economic interest in the use of the Product in the COVID field including 50/50 profit sharing. GMP paid the Company fees of $0.3 million for the Agreement during the three months ended March 31, 2020 and $0.9 million for the Supplement during the three months ended June 30, 2020, respectively. The Company also recorded approximately $40 thousand for reimbursement of actual costs incurred.

Agreement with Autotelic BIO (“ATB”)

Agreement with Autotelic BIO (“ATB”)

Oncotelic Inc. had entered into a license agreement in February 2018 (the “ATB Agreement”) with ATB. The ATB Agreement licensed the use of OT-101 in combination with Interleukin-2 (the “Combined Product”), and granted to ATB an exclusive license under the Oncotelic Inc. technology to develop, make, have made, use, sell, offer for sale, import and export the Combined Product, and the Combination Product only, in the field, throughout the entire world (excluding the United States of America and Canada) as the territory, on the terms and subject to the conditions of the ATB Agreement. The ATB Agreement requires ATB to be responsible for the development of the Combination Product. Oncotelic Inc. was responsible to provide to ATB the technical know-how and other pertinent information on the development of the Combination Product. ATB paid Oncotelic Inc. a non-refundable milestone payment in consideration for the rights and licenses granted to ATB under the ATB Agreement, and ATB was to pay Oncotelic Inc. $500,000 within sixty days from the successful completion of the in vivo efficacy studies. This payment was made after the successful completion of the in-vivo study and, as such, the Company recorded the revenue. In addition, ATB is to pay Oncotelic Inc.: (i) $500,000 upon Oncotelic Inc.’s completion of the technology know how and Oncotelic Inc.’s technical assistance and regulatory consultation to ATB, as determined by the preparation of a Current Good Regulation Practices audit or certification by the Food and Drug Administration, with a mutual goal to obtain marketing approval of the Combined Product developed by ATB in the aforementioned territory; (ii) $1,000,000 upon receiving marketing approval of the Combined Product in Japan, China, Brazil, Mexico, Russia, or Korea; and (iii) $2,000,000 from receiving marketing approval of the Combined Product in Germany, France, Spain, Italy, or the United Kingdom. The Company recorded $500,000 as revenue under the ATB Agreement for the successful completion of the in-vivo study during the three months ended June 30, 2020.

Research & Development Costs

Research & Development Costs

In accordance with ASC 730-10-25 “Research and Development”, research and development costs are charged to expense as and when incurred.

Prior Period Reclassifications

Prior Period Reclassifications

Certain amounts in prior periods may have been reclassified to conform with current period presentation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting period unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). It eliminates Step 2 of the current two-step goodwill impairment test, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 had no material impact on the Company’s consolidated financial statements and related disclosures.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 became effective on January 1, 2018. The ASU also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company adopted ASU 2015-14 during the three months ended March 31, 2020 as till then, no revenue was earned by the Company.

In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential impact of the Update on its financial statements

All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

SUMMARY OF CHANGES IN FAIR VALUE OF DERIVATIVE LIABILITIES

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 as of June 30, 2021 and 2020:

	June 30, 2021 Conversion Feature			June 30, 2020 Conversion Feature
Balance at January 1, 2021 and 2020	$	777,024		$	540,517
New derivative liability		-			870,268
Reclassification to additional paid in capital from conversion of debt to common stock		(144,585	)		(408,811	)
Change in fair value		(93,829	)		(10,512	)
Balance at June, 2021 and 2020	$	538,610		$	991,462

SUMMARY OF ESTIMATE FAIR VALUE OF DERIVATIVE LIABILITIES

	June 30, 2021 Key Assumptions for fair value of conversions			June 30, 2020 Key Assumptions for fair value of conversions
Risk free interest		0.07	%		0.16	%
Market price of share	$	0.36		$	0.1875
Life of instrument in years		0.81 - 1.10			1.81 – 2.10
Volatility		94.4	%		151.87	%
Dividend yield		0	%		0	%

SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

	Six Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020
Convertible notes		37,641,648		11,584,300		37,641,648		8,000,000
Stock options		3,941,301		6,135,284		3,941,301		6,135,284
Warrants		42,737,500		15,237,500		42,737,500		15,237,500
Potentially dilutive securities		84,320,449		26,372,784		84,320,449		26,372,784

SCHEDULE OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Reconciliation for Basic to Diluted Weighted Average common stock outstanding
Basic weighted average common stock outstanding	88,152,403
Add: Dilutive Common Stock Instruments
Shares issuable upon conversion of debt	6,584,300
Diluted weighted average common stock outstanding	94,736,703

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INTANGIBLE ASSETS AND GOODWILL (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

SCHEDULE OF INTANGIBLE ASSETS

The following table summarizes the balances as of June 30, 2021 and December 31, 2020, of the intangible assets acquired, their useful life, and annual amortization:

	June 30, 2021			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			16.50
Intangible asset – Capitalization of license cost		190,989			16.50
		1,010,180
Less Accumulated Amortization		(162,655	)
Total	$	847,525

	December 31, 2020			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			18.00
Intangible asset – Capitalization of license cost		190,989			18.00
		1,010,180
Less Accumulated Amortization		(136,974	)
Total	$	873,206

SCHEDULE OF AMORTIZATION OF EXPENSE FOR INTANGIBLE ASSETS

The future yearly amortization expense over the next five years and thereafter are as follows:

For the six months and years ended December 31,
Six months of 2021	$	25,683
2022		51,365
2023		51,365
2024		51,365
2025		51,365
Thereafter		616,382
	$	847,525

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expense consists of the following amounts:

	June 30, 2021		December 31, 2020
Accounts payable	$	3,309,612	$	1,937,419
Accrued expense		839,801		798,386
	$	4,149,413	$	2,735,805

	June 30, 2021		December 31, 2020
Accounts payable – related party	$	322,995	$	391,631

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CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

SCHEDULE OF CONVERTIBLE DEBENTURES

As of June 30, 2021 special purchase agreements (SPAs) with convertible debentures and notes, net of debt discount and including accrued interest, if any, consist of the following amounts:

	June 30, 2021
Convertible debentures
10% Convertible note payable, due April 23, 2022 – Bridge Investor		22,389
10% Convertible note payable, due April 23, 2022 – Related Party		105,964
10% Convertible note payable, due August 6, 2022 – Bridge Investor		178,306
		306,659
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		116,458
5% Convertible note payable – Related Party		269,984
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		269,503
5% Convertible note payable – CEO, CTO & CFO		88,307
5% Convertible note payable – Bridge Investors		180,923
		925,175
Geneva Notes
Geneva notes		307,500
Other Debt
Short term debt from CEO		20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
		764,875
Total of debentures, notes and other debt	$	2,304,209

As of December 31, 2020, convertible debentures and notes, net of debt discount, consist of the following amounts:

	December 31, 2020
Convertible debentures
10% Convertible note payable, due June 12, 2022 – Peak One	$	-
10% Convertible note payable, due April 23, 2022 - TFK		39,065
10% Convertible note payable, due April 23, 2022 – Related Party		14,256
10% Convertible note payable, due April 23, 2022 – Bridge Investor		69,848
10% Convertible note payable, due August 6, 2022 – Bridge Investor		168,421
		291,590
Fall 2019 Notes
5% Convertible note payable – Stephen Boesch		213,046
5% Convertible note payable – Related Party		263,733
5% Convertible note payable – Dr. Sanjay Jha (Through his family trust)		263,253
5% Convertible note payable – CEO, CTO & CFO		86,257
5% Convertible note payable – Bridge Investors		176,722
		1,003,011
Other Debt
Short term debt from CFO		25,000
Short term debt from CEO		20,000
Other short term debt – Bridge Investor		50,000
		95,000
Total of debentures, notes and other debt	$	1,389,601

SCHEDULE OF SHORT-TERM LOANS

Other short-term loans

Other Debt
Short term debt from CEO	$	20,000
Short term debt – bridge investors		425,825
Short term debt from CFO		69,050
Short term debt – Autotelic Inc		250,000
	$	764,875

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PRIVATE PLACEMENT AND JH DARBIE FINANCING (Tables)

6 Months Ended

Jun. 30, 2021

Private Placement And Jh Darbie Financing

SCHEDULE OF FUNDS RECEIVED UNDER THE SUBSCRIPTION AGREEMENT

As June 30, 2021, funds received under the JH Darbie Financing, net of debt discount, consist of the following amounts:

	June 30, 2021
Convertible promissory notes
Subscription agreements - accredited investors	$	1,798,801
Subscription agreements – related party		93,488
Total convertible promissory notes	$	1,892,289

SCHEDULE OF FAIR VALUE WARRANTS ESTIMATED USING BLACK SCHOLES VALUATION MODEL

Expected Term	1.5 years
Expected volatility		152.3%-164.8	%
Risk-free interest rates		0.09%-0.11	%
Dividend yields		0.00	%

Expected Term	1.5 years
Expected volatility		168.5%-191.9	%
Risk-free interest rates		0.12%-0.15	%
Dividend yields		0.00	%

 

Expected Term	1-2 years
Expected volatility		94.4%-130.0	%
Risk-free interest rates		0.08%-0.25	%
Dividend yields		0.00	%

 

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STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2021

Compensation Related Costs [Abstract]

SCHEDULE OF COMPENSATION BASED STOCK OPTION ACTIVITY

Compensation based stock option activity for qualified and unqualified stock options are summarized as follows:

			Weighted
For the six months ended June 30, 2021			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		3,941,301	$	0.78
Outstanding at June 30, 2021		3,941,301	$	0.78

For the year ended December 31, 2020

				Weighted
				Average
	Shares			Exercise Price
Outstanding at January 1, 2020		6,145,044		$	0.75
Expired or canceled		(2,203,743	)		0.70
Outstanding at December 31, 2020		3,941,301		$	0.78

SCHEDULE OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE

The following table summarizes information about options to purchase shares of the Company’s Common Stock outstanding and exercisable at June 30, 2021:

						Weighted-
				Weighted-		Average
		Outstanding		Average		Exercise		Number
Exercise prices		Options		Remaining Life		Price		Exercisable
$	0.22		1,750,000		4.84	$	0.22		1,750,000
	0.38		900,000		4.16		0.38		900,000
	0.73		762,500		3.78		0.73		762,500
	1.37		150,000		2.00		1.37		150,000
	1.43		300,000		3.91		1.43		300,000
	11.88		2,359		0.51		11.88		2,359
	15.00		75,000		3.91		15.00		75,000
	19.80		1,442		0.34		19.80		1,442
			3,941,301		4.28	$	0.78		3,941,301

SCHEDULE OF WARRANTS ACTIVITY

The issuance of warrants to purchase shares of the Company’s Common Stock, including those attributed to debt issuances, as of June 30, 2021 and December 31, 2020 are summarized as follows:

			Weighted-
			Average
	Shares		Exercise Price
Outstanding at January 1, 2021		18,702,500	$	0.20
Issued during six months ended June 30, 2021		24,035,000		0.20
Outstanding at June 30, 2021		42,737,500	$	0.20

				Weighted-
				Average
For the year ended December 31, 2020	Shares			Exercise Price
Outstanding at January 1, 2020		19,515,787		$	0.60
Issued during the year ended December 31, 2020		17,215,000			0.20
Expired or cancelled		(18,028,287	)		0.63
Outstanding at December 31, 2020		18,702,500		$	0.20

SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE

The following table summarizes information about warrants outstanding and exercisable at June 30, 2021:

		Outstanding and exercisable
				Weighted-		Weighted-
				Average		Average
		Number		Remaining Life		Exercise		Number
Exercise Price		Outstanding		in Years		Price		Exercisable
$	0.20		1,487,500		2.08	$	0.20		1,487,500
	0.20		41,250,000		2.15		0.20		41,250,000
			42,737,500		2.15	$	0.20		42,737,500

SCHEDULE OF BLACK SCHOLES VALUATION ALLOWANCE MODEL OF WARRANTS

Expected Term	1-2 years
Expected volatility		94.4 – 130.0	%
Risk-free interest rates		0.08 – 0.25	%
Dividend yields		0.00	%

Expected Term	3 years
Expected volatility		140.5	%
Risk-free interest rates		1.40	%
Dividend yields		0.00	%

 

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INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes as of June 30, 2021 and December 31, 2020 are as follows in thousands:

	June 30, 2021			December 31, 2020
Deferred tax assets:
Stock-based compensation	$	1,164		$	1,164
Assets		6,015			6,227
Liability accruals		253			173
R&D Credit		4,776			4,760
Capital Loss		528			528
Deferred state tax		(2,173	)		(2,086	)
Net operating loss carry forward		56,506			56,090
Total gross deferred tax assets		67,069			66,856
Less - valuation allowance		(67,069	)		(66,856	)
Net deferred tax assets	$	-		$	-

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - USD ($)				1 Months Ended		3 Months Ended				6 Months Ended		9 Months Ended
	May 03, 2021	Mar. 31, 2021	Feb. 25, 2020	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Mar. 31, 2021	Jun. 29, 2021	Jun. 28, 2021	May 25, 2021	Feb. 28, 2021	Dec. 31, 2020	Jun. 25, 2020	Jun. 24, 2020
Property, Plant and Equipment [Line Items]
Service revenue								$ 1,400,000			$ 1,740,855
Stock Issued During Period, Value, New Issues						$ 99,055
Convertible Preferred stock, par value				$ 0.01	$ 0.01	$ 0.01				$ 0.01		$ 0.01		$ 0.20				$ 0.01
Convertible Debt				$ 1,000,000	$ 1,000,000	$ 1,000,000				$ 1,000,000		$ 1,000,000
Warrants to purchase common stock				42,737,500	42,737,500	42,737,500				42,737,500		42,737,500
Issuance of additional warrants						$ 2,023,552
Additional common stock issued				20,000,000	20,000,000	20,000,000				20,000,000		20,000,000
Net losses						$ (3,231,280)		$ 582,091		$ (6,034,360)	(4,075,803)
Working capital				$ 13,400,000	$ 13,400,000	13,400,000				13,400,000		$ 13,400,000
Contingent liability				$ 2,600,000	$ 2,600,000	$ 2,600,000				2,600,000		$ 2,600,000
Proceeds from private placement										$ 1,613,200
Warrant term				2 years 1 month 24 days	2 years 1 month 24 days	2 years 1 month 24 days				2 years 1 month 24 days		2 years 1 month 24 days
Investor [Member]
Property, Plant and Equipment [Line Items]
Debt Instrument, Maturity Date										Mar. 31, 2022
Bridge Financiers [Member]
Property, Plant and Equipment [Line Items]
Proceeds from private placement					$ 800,000
Autotelic Inc [Member]
Property, Plant and Equipment [Line Items]
Proceeds from private placement					$ 300,000
Oncotelic Warrant [Member]
Property, Plant and Equipment [Line Items]
Warrants to purchase common stock				20,000,000.0	20,000,000.0	20,000,000.0				20,000,000.0		20,000,000.0
Oncotelic Warrant [Member] | Investor [Member]
Property, Plant and Equipment [Line Items]
Warrants to purchase common stock				200,000,000,000	200,000,000,000	200,000,000,000				200,000,000,000		200,000,000,000
Common Stock [Member]
Property, Plant and Equipment [Line Items]
Stock Issued During Period, Value, New Issues						$ 4,000
Number of shares issued						400,000
Conversion of debt, shares								569,800	3,962,145
Common shares issued conversion of debt, shares		278,187,847					278,187,847
Preferred Stock [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued		278,188
Conversion of debt, shares
Common shares issued conversion of debt, shares							(278,188)
Edgepoint Common Stock [Member] | Warrant [Member]
Property, Plant and Equipment [Line Items]
Warrants to purchase common stock				50,000	50,000	50,000				50,000		50,000
Warrant exercise price per share				$ 1.00	$ 1.00	$ 1.00				$ 1.00		$ 1.00
Edgepoint Common Stock [Member] | Oncotelic Warrant [Member]
Property, Plant and Equipment [Line Items]
Warrants to purchase common stock				50,000	50,000	50,000				50,000		50,000
Warrant exercise price per share				$ 0.20	$ 0.20	$ 0.20				$ 0.20		$ 0.20
Warrants and Rights Outstanding				$ 10,000	$ 10,000	$ 10,000				$ 10,000		$ 10,000
Mateon Common Stock [Member] | Warrant [Member]
Property, Plant and Equipment [Line Items]
Warrant exercise price per share				$ 0.20	$ 0.20	$ 0.20				$ 0.20		$ 0.20
Warrant term				3 years	3 years	3 years				3 years		3 years
Convertible Promissory Note [Member] | Mateon Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, price per share				$ 0.18	$ 0.18	$ 0.18				$ 0.18		$ 0.18
One Convertible Promissory Note [Member] | Edgepoint Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, price per share				1.00	1.00	1.00				1.00		1.00
One Convertible Promissory Note [Member] | Mateon Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, price per share				$ 0.18	$ 0.18	$ 0.18				$ 0.18		$ 0.18
Maximum [Member]
Property, Plant and Equipment [Line Items]
Warrant term				5 years	5 years	5 years		5 years		5 years	5 years	5 years
Maximum [Member] | Convertible Promissory Note [Member] | Edgepoint Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, shares										25,000
Maximum [Member] | One Convertible Promissory Note [Member] | Edgepoint Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, shares										25,000
Maximum [Member] | One Convertible Promissory Note [Member] | Mateon Common Stock [Member]
Property, Plant and Equipment [Line Items]
Conversion of debt, shares										138,889
Minimum [Member]
Property, Plant and Equipment [Line Items]
Warrant term				3 years	3 years	3 years		3 years		3 years	3 years	3 years
JH Darbie & Co Inc [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued and sold				10
Proceeds from private placement													$ 5,000,000
Payment of direct placement fees												$ 700,000
Placement agent fees												$ 650,000
Warrant term				5 years	5 years	5 years				5 years		5 years
Percentage of purchase units													10.00%
JH Darbie & Co Inc [Member] | Oncotelic Warrant [Member]
Property, Plant and Equipment [Line Items]
Warrants to purchase common stock				2,000,000.0	2,000,000.0	2,000,000.0				2,000,000.0		2,000,000.0
JH Darbie & Co Inc [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued and sold			100
JH Darbie & Co Inc [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued and sold			40
GMP and Autotelic BIO [Member]
Property, Plant and Equipment [Line Items]
Service revenue								$ 900,000			$ 1,200,000
Supplemental Agreement [Member] | Golden Mountain Partners LLC [Member]
Property, Plant and Equipment [Line Items]
Payment for services										$ 1,200,000
Service revenue								900,000			1,200,000
Debt financing								$ 2,000,000			$ 2,000,000
Equity Purchase Agreement [Member]
Property, Plant and Equipment [Line Items]
Proceeds from private placement					$ 100,000
Equity Purchase Agreement [Member] | Peak One Opportunity Fund, L.P [Member]
Property, Plant and Equipment [Line Items]
Stock Issued During Period, Value, New Issues	$ 10,000,000.0
Convertible Preferred stock, par value	$ 0.01
Geneva Agreement [Member]
Property, Plant and Equipment [Line Items]
Convertible Debt															$ 103,750,000,000	$ 203,750
Proceeds from private placement					300,000
Geneva Agreement [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Convertible Debt															$ 1,200,000
Subscription Agreements [Member]
Property, Plant and Equipment [Line Items]
Convertible Debt				$ 1,892,289	$ 1,892,289	$ 1,892,289				1,892,289		$ 1,892,289
Subscription Agreements [Member] | Edgepoint AI, Inc [Member]
Property, Plant and Equipment [Line Items]
Stock Issued During Period, Value, New Issues										$ 50,000
Number of shares issued and sold										100
Number of shares issued										25,000
Stock value, price per share				$ 1.00	$ 1.00	$ 1.00				$ 1.00		$ 1.00
Restated 2015 Equity Incentive Plan [Member] | Common Stock [Member]
Property, Plant and Equipment [Line Items]
Increase the number of shares of common stock available for issuance																			27,250,000	7,250,000
Increasing the maximum number of stock awards																			1,000,000	500,000
Common stock, shares authorized																	750,000,000		750,000,000	150,000,000
Since Inception Date [Member]
Property, Plant and Equipment [Line Items]
Net losses										$ 27,700,000

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SUMMARY OF CHANGES IN FAIR VALUE OF DERIVATIVE LIABILITIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Accounting Policies [Abstract]
Beginning balance	$ 777,024	$ 540,517
New derivative liability		870,268
Reclassification to additional paid in capital from conversion of debt to common stock	(144,585)	(408,811)
Change in fair value	(93,829)	(10,512)
Ending balance	$ 538,610	$ 991,462

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SUMMARY OF ESTIMATE FAIR VALUE OF DERIVATIVE LIABILITIES (Details)	6 Months Ended
	Jun. 30, 2021 $ / shares	Jun. 30, 2020 $ / shares
Property, Plant and Equipment [Line Items]
Market price per share	$ 0.36	$ 0.1875
Measurement Input, Risk Free Interest Rate [Member]
Property, Plant and Equipment [Line Items]
Derivative liability, measurement input	0.0007	0.0016
Measurement Input, Expected Term [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Derivative liability, measurement input term	9 months 21 days	1 year 9 months 21 days
Measurement Input, Expected Term [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Derivative liability, measurement input term	1 year 1 month 6 days	2 years 1 month 6 days
Measurement Input, Price Volatility [Member]
Property, Plant and Equipment [Line Items]
Derivative liability, measurement input	0.944	1.5187
Measurement Input, Expected Dividend Rate [Member]
Property, Plant and Equipment [Line Items]
Derivative liability, measurement input	0	0

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SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	84,320,449	26,372,784	84,320,449	26,372,784
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	37,641,648	8,000,000	37,641,648	11,584,300
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	3,941,301	6,135,284	3,941,301	6,135,284
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	42,737,500	15,237,500	42,737,500	15,237,500

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SCHEDULE OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Accounting Policies [Abstract]
Basic weighted average common stock outstanding	369,547,235	88,152,403	232,700,641	86,537,199
Add: Dilutive Common Stock Instruments Shares issuable upon conversion of debt		6,584,300
Diluted weighted average common stock outstanding	369,547,235	94,736,703	232,700,641	86,537,217

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Entity Listings [Line Items]
Cash equivalents	$ 0		$ 0		$ 0
Impairment losses on long-lived assets			0
Impairment losses on intangible assets	0	$ 0	0	$ 0
Impairment losses on goodwill	0	0	0	0
Reimbursement of actual costs			40,000
Revenue		$ 1,400,000		$ 1,740,855
In-Vivo [Member]
Entity Listings [Line Items]
Revenue			500,000
Oncotelic, Inc. [Member]
Entity Listings [Line Items]
Due to related parties	$ 500,000		500,000
ATB Agreement [Member] | Japan, China, Brazil, Mexico, Russia and Korea [Member]
Entity Listings [Line Items]
Marketing approval received value			1,000,000
ATB Agreement [Member] | Germany, France, Spain, Italy and UK [Member]
Entity Listings [Line Items]
Marketing approval received value			2,000,000
Golden Mountain Partners LLC [Member] | Research Service Agreement [Member]
Entity Listings [Line Items]
Service fees			300,000
Golden Mountain Partners LLC [Member] | Supplement Research Service Agreement [Member]
Entity Listings [Line Items]
Service fees			900,000
Autotelic BIO [Member] | ATB Agreement [Member]
Entity Listings [Line Items]
Revenue			$ 500,000

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SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Intangible asset, gross	$ 1,010,180	$ 1,010,180
Less Accumulated Amortization	(162,655)	(136,974)
Intangible asset, net	847,525	873,206
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset, gross	$ 819,191	$ 819,191
Remaining estimated useful life (years)	16 years 6 months	18 years
License [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset, gross	$ 190,989	$ 190,989
Remaining estimated useful life (years)	16 years 6 months	18 years

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SCHEDULE OF AMORTIZATION OF EXPENSE FOR INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Six months of 2021	$ 25,683
2022	51,365
2023	51,365
2024	51,365
2025	51,365
Thereafter	616,382
Intangible asset, net	$ 847,525	$ 873,206

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INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Goodwill		$ 21,062,455		$ 21,062,455		$ 21,062,455
Amortization of identifiable intangible assets		12,841	$ 12,841	25,683	$ 25,683
In process research and development balance		1,101,760		1,101,760		$ 1,101,760
Merger Agreement [Member] | PointR [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Goodwill		16,182,456		16,182,456
Merger Agreement [Member] | Oncotelic [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Goodwill		$ 4,879,999		$ 4,879,999
Assignment and Assumption Agreement [Member] | Autotelic Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares issued during the period for acquisition, shares	204,798
Shares issued during the period for acquisition	$ 819,191

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SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accounts payable	$ 3,309,612	$ 1,937,419
Accrued expense	839,801	798,386
Accounts payable and accrued liabilities	4,149,412	2,735,805
Accounts payable - related party	$ 322,995	$ 391,631

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SCHEDULE OF CONVERTIBLE DEBENTURES (Details) (Parenthetical)	Jun. 30, 2021	Dec. 31, 2020
5% Convertible Note Payable - Stephen Boesch [Member]
Short-term Debt [Line Items]
Interest rate	5.00%	5.00%
5% Convertible Note Payable Related Party [Member]
Short-term Debt [Line Items]
Interest rate	5.00%	5.00%
5% Convertible Note Payable - Sanjay Jha [Member]
Short-term Debt [Line Items]
Interest rate	5.00%
5% Convertible Note Payable - CEO, CTO and CFO [Member]
Short-term Debt [Line Items]
Interest rate	5.00%	5.00%
5% Convertible note payable - Bridge Investors [Member]
Short-term Debt [Line Items]
Interest rate	5.00%	5.00%
5% Convertible Note Payable - Dr Sanjay Jha [Member]
Short-term Debt [Line Items]
Interest rate		5.00%
10% Convertible Note Payable Due April 23, 2022 [Member] | TFK Investments LLC [Member]
Short-term Debt [Line Items]
Interest rate		10.00%
10% Convertible Note Payable Due April 23, 2022 [Member] | Related Party [Member]
Short-term Debt [Line Items]
Interest rate	10.00%	10.00%
10% Convertible Note Payable Due April 23, 2022 [Member] | Bridge Investor [Member]
Short-term Debt [Line Items]
Interest rate	10.00%	10.00%
10% Convertible Note Payable Due August 6, 2022 [Member] | Bridge Investor [Member]
Short-term Debt [Line Items]
Interest rate	10.00%	10.00%
10% Convertible Note Payable Due June 12, 2022 [Member] | Peak One Opportunity Fund, L.P [Member]
Short-term Debt [Line Items]
Interest rate		10.00%

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SCHEDULE OF CONVERTIBLE DEBENTURES (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Short-term Debt [Line Items]
Other debt	$ 764,875	$ 95,000
Total of debentures, notes and other debt	2,304,209	1,389,601
Bridge Investor [Member]
Short-term Debt [Line Items]
Other debt	425,825	50,000
5% Convertible Note Payable - Stephen Boesch [Member]
Short-term Debt [Line Items]
Other debt	116,458
Convertible note payable		213,046
5% Convertible Note Payable Related Party [Member]
Short-term Debt [Line Items]
Other debt	269,984
Convertible note payable		263,733
5% Convertible Note Payable - Sanjay Jha [Member]
Short-term Debt [Line Items]
Other debt	269,503
5% Convertible Note Payable - CEO, CTO and CFO [Member]
Short-term Debt [Line Items]
Other debt	88,307
Convertible note payable		86,257
5% Convertible note payable - Bridge Investors [Member]
Short-term Debt [Line Items]
Other debt	180,923
Convertible note payable		176,722
5% Convertible Note Payable [Member]
Short-term Debt [Line Items]
Other debt	925,175
Convertible note payable		1,003,011
Geneva Notes [Member]
Short-term Debt [Line Items]
Other debt	307,500	0
Chief Executive Officer [Member]
Short-term Debt [Line Items]
Other debt	20,000	20,000
Chief Financial Officer [Member]
Short-term Debt [Line Items]
Other debt	69,050	25,000
Autotelic [Member]
Short-term Debt [Line Items]
Other debt	250,000
5% Convertible Note Payable - Dr Sanjay Jha [Member]
Short-term Debt [Line Items]
Convertible note payable		263,253
10% Convertible Note Payable Due April 23, 2022 [Member] | TFK Investments LLC [Member]
Short-term Debt [Line Items]
Convertible note payable		39,065
10% Convertible Note Payable Due April 23, 2022 [Member] | Bridge Investor [Member]
Short-term Debt [Line Items]
Other debt	105,964
Convertible note payable		69,848
10% Convertible Note Payable Due April 23, 2022 [Member] | Related Party [Member]
Short-term Debt [Line Items]
Other debt	22,389
Convertible note payable		14,256
10% Convertible Note Payable Due August 6, 2022 [Member] | Bridge Investor [Member]
Short-term Debt [Line Items]
Other debt	178,306
Convertible note payable		168,421
10% Convertible Note Payable [Member]
Short-term Debt [Line Items]
Other debt	$ 306,659
Convertible note payable		291,590
10% Convertible Note Payable Due June 12, 2022 [Member] | Peak One Opportunity Fund, L.P [Member]
Short-term Debt [Line Items]
Convertible note payable

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SCHEDULE OF SHORT-TERM LOANS (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Short Term Total	$ 764,875	$ 95,000
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Short Term Total	20,000	20,000
Bridge Investor [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Short Term Total	425,825	50,000
Chief Financial Officer [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Short Term Total	69,050	$ 25,000
Autotelic [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Short Term Total	$ 250,000

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CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT (Details Narrative) - USD ($)											1 Months Ended					3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Dec. 30, 2020	Nov. 05, 2019	Nov. 05, 2019	Aug. 06, 2019	Jun. 12, 2019	Apr. 23, 2019	Apr. 23, 2019	Apr. 17, 2019	Jun. 30, 2020	Apr. 30, 2020	Dec. 31, 2019	Nov. 30, 2019	Apr. 30, 2019	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 30, 2020	May 31, 2021	May 18, 2021	Mar. 31, 2021
Short-term Debt [Line Items]
Convertible notes gross	$ 1,000,000															$ 1,000,000				$ 1,000,000
Initial debt discount	800,140															800,140				800,140
Amortization expense related to debt discount																				81,639	$ 460,339
Unamortized debt discount	93,340	$ 200,205														93,340	$ 200,205			93,340		$ 200,205
Change in fair value of derivative liability																630,174		$ 746,809		93,829	10,512
Beneficial conversion feature, total																				605,719
Net proceeds from convertible debt																				200,000
Amortization of OID and debt issuance costs																				737,330	1,283,691
Non-cash compensation expense																				2,093,552	2,147,591
Conversion of debt, amount																		103,440	$ 721,064
Loss on convesrion of debt																		(41,469)		(27,504)	(166,067)
Accrued interest																				925,174		1,003,011
Short-term Debt	764,875	95,000														764,875	95,000			764,875		95,000
Proceeds from notes payable, net	100,000
TFK Investments LLC [Member]
Short-term Debt [Line Items]
Convertible notes gross	0															0				0
Derivative liability	145,000	109,000														145,000	109,000			145,000		109,000
Change in fair value of derivative liability																				$ 38,000
Principal amount		67,000															67,000					$ 67,000
Conversion of debt, shares																				657,200		1,950,000
Conversion of debt, amount																				$ 210,000		$ 133,430
Loss on convesrion of debt																2,000				$ 2,000
Tranche One [Member] | Peak One Opportunity Fund, L.P [Member]
Short-term Debt [Line Items]
Conversion of debt, shares																				2,581,945
Conversion of debt, amount																				$ 200,000
Tranche Two [Member] | Peak One Opportunity Fund, L.P [Member]
Short-term Debt [Line Items]
Conversion of debt, shares																				200,000
Conversion of debt, amount																				$ 2,000,000
Fall 2019 Debt Financing [Member]
Short-term Debt [Line Items]
Gross proceeds from convertible debt													$ 500,000
Debt financing													$ 1,000,000.0
Fall 2019 Notes [Member] | Note Purchase Agreements [Member]
Short-term Debt [Line Items]
Unamortized debt discount	0															0				0
Debt instrument, conversion description														The Majority Holders have the right, at any time not more than five (5) days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Fall 2019 Notes. The Fall 2019 Notes may be converted, at the election of the Majority Holders, either (a) into shares of the Company’s Common Stock at a conversion price of $0.18 per share, or (b) into shares of common stock of the Edgepoint, at a conversion price of $5.00 (based on a $5.0 million pre-money valuation) of Edgepoint and 1,000,000 shares outstanding.
Beneficial conversion feature, total																				222,222
Amortization of OID and debt issuance costs																				0	111,111
Debt interest rate														5.00%
Description on debt instrument														All amounts outstanding under the Fall 2019 Notes become due and payable upon the approval of the holders of a majority of the principal amount of outstanding Fall 2019 Notes (the “Majority Holders”) on or after (a) November 23, 2020 or (b) the occurrence of an event of default (either, the “Maturity Date”). The Company may prepay the Fall 2019 Notes at any time. Events of default under the Fall 2019 Notes include failure to make payments under the Fall 2019 Notes within thirty (30) days of the date due, failure to observe of the Note Purchase Agreement or Fall 2019 Notes which is not cured within thirty (30) days of notice of the breach, bankruptcy, or a change in control of the Company (as defined in the Note Purchase Agreement).
Interest expense																11,250		12,500		22,708	25,000
Paycheck Protection Program Promissory Note [Member]
Short-term Debt [Line Items]
Accrued interest																				252,973		251,733
GMP Note [Member]
Short-term Debt [Line Items]
Debt financing		2,000,000									$ 2,000,000						2,000,000	$ 2,000,000			$ 2,000,000	2,000,000
Debt interest rate											200.00%							200.00%			200.00%
Accrued interest																				2,040,329		2,000,000
Debt term											1 year
Convertible Debt [Member] | Peak One Opportunity Fund, L.P [Member] | Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount	0	0								$ 20,000						0	0			0		0
Debt instrument, conversion description										(i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times, reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the Tranche #1 Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.
Beneficial conversion feature, total										$ 84,570
Principal amount										200,000
Aggregate purchase price										$ 400,000
Number of restricted stock issued										350,000
Original issue discount, percentage										10.00%
Net proceeds from convertible debt										$ 175,000
Description of violation or event of default										Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event.
Beneficial conversion feature, excluding discount										$ 52,285
Number of restricted stock issued, value										32,285
Amortization of OID and debt issuance costs																0
Convertible Debt [Member] | Peak One Opportunity Fund, L.P [Member] | Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Principal amount										400,000
Convertible Debt [Member] | Peak One Opportunity Fund, L.P [Member] | Securities Purchase Agreement [Member]
Short-term Debt [Line Items]
Principal amount	0															0				0
Convertible Debt [Member] | TFK Investments LLC [Member] | Securities Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount		0						$ 20,000	$ 20,000								0					0
Debt instrument, conversion description								(i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of the TFK Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.
Beneficial conversion feature, total								$ 84,570
Principal amount								$ 200,000	200,000
Number of restricted stock issued								350,000
Original issue discount, percentage								10.00%
Net proceeds from convertible debt								$ 175,000
Maturity date								Apr. 23, 2022
Description of violation or event of default								Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event.
Beneficial conversion feature, excluding discount								$ 52,285
Number of restricted stock issued, value								32,285
Amortization of OID and debt issuance costs																				3,015
Debt issuance cost								$ 5,000	5,000
Common stock percentage					65.00%
Conversion of debt, shares					300,000
Non-cash compensation expense					$ 60,000
Conversion price per share				$ 0.10	$ 0.10
Convertible Debt [Member] | TFK Investments LLC [Member] | Securities Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note								140.00%
Convertible Debt [Member] | TFK Investments LLC [Member] | Securities Purchase Agreement [Member] | Minimum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note								110.00%
Convertible Debt [Member] | Tranche One [Member] | Peak One Opportunity Fund, L.P [Member]
Short-term Debt [Line Items]
Common stock percentage				65.00%
Conversion of debt, shares				300,000
Non-cash compensation expense				$ 60,000
Convertible Debt [Member] | Tranche One [Member] | Peak One Opportunity Fund, L.P [Member] | Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Principal amount							$ 600,000
Convertible Debt [Member] | Third Tranche [Member] | Peak One Opportunity Fund, L.P [Member] | Purchase Agreement [Member]
Short-term Debt [Line Items]
Principal amount							200,000
Convertible Debt [Member] | Tranche Two [Member] | Peak One Opportunity Fund, L.P [Member] | Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount							20,000
Beneficial conversion feature, total							180,000
Principal amount							$ 200,000
Number of restricted stock issued							350,000
Original issue discount, percentage							10.00%
Net proceeds from convertible debt							$ 179,000
Maturity date							Jun. 12, 2022
Beneficial conversion feature, excluding discount							$ 132,091
Number of restricted stock issued, value							47,909
Amortization of OID and debt issuance costs																0
Debt issuance cost							$ 1,000
Bridge Investor [Member]
Short-term Debt [Line Items]
Short-term Debt	425,825	50,000														425,825	50,000			425,825		50,000
Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Principal amount										$ 400,000
Bridge Investor [Member] | Convertible Debt [Member] | Peak One and TFK Financing [Member]
Short-term Debt [Line Items]
Derivative liability		777,000															777,000					777,000
Change in fair value of derivative liability																						50,262
Beneficial conversion feature, total																					$ 232,000
Bridge Investor [Member] | Convertible Debt [Member] | Peak One and TFK Financing [Member] | Common Stock [Member]
Short-term Debt [Line Items]
Derivative liability	409,000	144,585														409,000	144,585			409,000		144,585
Vyoung Trieu [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount	4,441							$ 164,444	164,444						$ 16,444	4,441				4,441
Principal amount								$ 16,444	$ 16,444						164,444
Net proceeds from convertible debt															$ 148,000
Amortization of OID and debt issuance costs																				2,743	2,715
Vyoung Trieu [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Bridge Investor [Member]
Short-term Debt [Line Items]
Debt instrument, conversion description								Amounts due under the Convertible Note may also be converted into shares (the “Trieu Conversion Shares”) of the Company’s Common Stock at any time, at the option of the holder, at a conversion price of $0.10 per share (the “Fixed Price”), at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company has agreed to at all times reserve and keep available out of its authorized Common Stock a number of shares equal to at least two times the full number of Conversion Shares. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.
Beneficial conversion feature, total								$ 131,555
Original issue discount, percentage								10.00%
Net proceeds from convertible debt								$ 148,000
Maturity date								Apr. 23, 2022
Description of violation or event of default								Upon the occurrence of certain events of default, the Buyer, amongst other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event.
Vyoung Trieu [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note									140.00%
Vyoung Trieu [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Minimum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note									110.00%
Dr. Vuong Trieu [Member] | Fall 2019 Notes [Member] | Note Purchase Agreements [Member]
Short-term Debt [Line Items]
Principal amount														$ 250,000
Gross proceeds from convertible debt														500,000
Due to related parties														35,000
Chulho Park [Member] | Fall 2019 Notes [Member] | Note Purchase Agreements [Member]
Short-term Debt [Line Items]
Due to related parties														27,000
Amit Shah [Member] | Fall 2019 Notes [Member] | Note Purchase Agreements [Member]
Short-term Debt [Line Items]
Due to related parties														20,000
Two Affiliated Accredited Investors [Member] | Fall 2019 Notes [Member] | Note Purchase Agreements [Member]
Short-term Debt [Line Items]
Principal amount														$ 168,000
Geneva Notes [Member]
Short-term Debt [Line Items]
Principal amount	307,500															307,500				307,500				$ 307,500
Short-term Debt	307,500	0														307,500	0			307,500		0
Silicon Valley Bank [Member] | Paycheck Protection Program Promissory Note [Member]
Short-term Debt [Line Items]
Principal amount												$ 250,000
Debt interest rate												1.00%
Debt, discription												The PPP provides loans to qualifying businesses in amounts up to 2.5 times the average monthly payroll expenses and was designed to provide direct financial incentive to qualifying businesses to keep their workforce employed during the Coronavirus crisis. PPP Loans are uncollateralized and guaranteed by the SBA and are forgivable after a “covered period” (8 weeks or 24 weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll, benefits, mortgage interest, rent and utilities. The forgiveness amount will be reduced if the borrower terminates employees or reduces salaries and wages more than 25% during the covered period. Any unforgiven portion is payable over 2 years if issued before, or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrowers loan forgiveness amount to the lender, or if the borrower does not apply for forgiveness, 10 months after the covered period.
Chief Executive Officer [Member]
Short-term Debt [Line Items]
Principal amount	20,000															20,000				20,000
Due to related parties	250,000	70,000														250,000	70,000			250,000		70,000			$ 250,000	$ 120,000
Short-term Debt	20,000	20,000														20,000	20,000			20,000		20,000
Repayments of Related Party Debt			$ 50,000																			70,000	$ 50,000
Chief Financial Officer [Member]
Short-term Debt [Line Items]
Short-term Debt	69,050	25,000														69,050	25,000			69,050		$ 25,000
Repayments of Related Party Debt		50,000
Proceeds from Short-term Debt																69,050	25,000
Two Bridges Investor [Member]
Short-term Debt [Line Items]
Accrued interest																425,825
Peak One and TFK Financing [Member]
Short-term Debt [Line Items]
Amortization expense related to debt discount																				192,761
Additional amortization																				24,491
Debt instrument, conversion description																						All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days during the year ended December 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances.
Derivative liability											$ 870,000							$ 870,000			$ 870,000
Share-based Payment Arrangement, Tranche One [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount		$ 13,167						$ 3,556	$ 3,556								$ 13,167					$ 13,167
Debt instrument, conversion description									(i) a conversion price, during the first 180 days, of $0.10 per share (the “Fixed Price”), and then (2) at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.
Beneficial conversion feature, total																				28,445
Principal amount								$ 35,556	$ 35,556
Net proceeds from convertible debt									$ 32,000											8,132
Maturity date									Apr. 23, 2022
Description of violation or event of default						Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event.			Upon the occurrence of certain events of default, the Buyer, among other remedies, has the right to charge a penalty in a range of 18% to 40% dependent on the specific default event.
Share-based Payment Arrangement, Tranche One [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note									140.00%
Share-based Payment Arrangement, Tranche One [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Minimum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note									110.00%
Share-based Payment Arrangement, Tranche Two [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member]
Short-term Debt [Line Items]
Unamortized debt discount	$ 26,636					$ 20,000										$ 26,636				$ 26,636
Debt instrument, conversion description						Amounts due under Tranche #1 may also be converted into Bridge Conversion Shares of the Company’s Common Stock at any time, at the option of the holder, at a conversion price equal to the Fixed Price, at the lower of the Fixed Price or 65% of the Company’s lowest traded price after the 180th day or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances. The Company may redeem the Convertible Note at rates of 110% to 140% rates over the principal balance dependent on certain events and redeem the value with accrued interest thereon, if any.														All the above notes issued to Peak One, TFK, our CEO and the bridge investors reached the 180 days prior to the end of the three months ended March 31, 2020. As such, all the note holders had the ability to convert that debt into equity at the variable conversion price of 65% of the Company’s lowest traded price after the first 180 days or at the lower of the Fixed Price or 55% of the Company’s traded stock price under certain circumstances.
Beneficial conversion feature, total																				$ 175,000
Principal amount						$ 200,000
Net proceeds from convertible debt						$ 175,000														$ 4,943
Maturity date						Aug. 06, 2022
Debt issuance cost						$ 5,000
Share-based Payment Arrangement, Tranche Two [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Maximum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note						140.00%
Share-based Payment Arrangement, Tranche Two [Member] | Bridge Investor [Member] | Convertible Debt [Member] | Securities Purchase Agreement [Member] | Minimum [Member]
Short-term Debt [Line Items]
Percentage of redemption of convertible note						110.00%

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SCHEDULE OF FUNDS RECEIVED UNDER THE SUBSCRIPTION AGREEMENT (Details)	Jun. 30, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Convertible promissory notes	$ 1,000,000
Subscription Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Convertible promissory notes	1,892,289
Subscription Agreements [Member] | Accredited Investors [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Convertible promissory notes	1,798,801
Subscription Agreements [Member] | Related Party [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Convertible promissory notes	$ 93,488

XML

Private Placement and JH Darbie Financing - Schedule of Fair Value Warrants Estimated Using Black Scholes Valuation Model (Details)	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Dividend yields		0.00%
Warrants [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected Term	1 year 6 months		1 year 6 months
Dividend yields	0.00%	0.00%	0.00%
Warrants [Member] | Minimum [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected Term		1 year
Expected volatility	152.30%	94.40%	168.50%
Risk-free interest rates	0.09%	0.08%	0.12%
Warrants [Member] | Maximum [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected Term		2 years
Expected volatility	164.80%	130.00%	191.90%
Risk-free interest rates	0.11%	0.25%	0.15%

XML

PRIVATE PLACEMENT AND JH DARBIE FINANCING (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended			6 Months Ended
	Jun. 29, 2021	Feb. 25, 2020	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Entity Listings [Line Items]
Warrants to purchase common stock			42,737,500	42,737,500			42,737,500
Warrant term			2 years 1 month 24 days	2 years 1 month 24 days			2 years 1 month 24 days
Additional paid-in capital			$ 32,876,120	$ 32,876,120			$ 32,876,120		$ 32,493,086
Initial debt discount			$ 93,340	$ 93,340			93,340		$ 200,205
Amortization of debt discount and debt issuance costs							$ 81,639	$ 460,339
Warrants for purchase shares	200,000
Common Stock Strike Price	$ 200,000
Class of Warrant Shares Puechased	50,000
Common Stock Shares Incorrectly Written	50,000
Common Stock, Par or Stated Value Per Share	$ 0.20		$ 0.01	$ 0.01			$ 0.01		$ 0.01
Warrants To Purchase O fCommon Stock Shares	0.20
Value of common stock invested	$ 50,000
StockBasedCompensationFairValueExpense	$ 2,023,522
Interest Expense [Member]
Entity Listings [Line Items]
Amortization of debt discount and debt issuance costs							$ 659,854	$ 0
Convertible Debt Instrument [Member]
Entity Listings [Line Items]
Initial debt discount			$ 700,000	$ 700,000			700,000
IPO [Member]
Entity Listings [Line Items]
Issuance cost			$ 640,000	$ 640,000			640,000
Legal costs							$ 39,000
Common Stock [Member]
Entity Listings [Line Items]
Number of shares issued during the period				400,000
Conversion of debt, shares					569,800	3,962,145
Warrants for purchase shares	50,000
Maximum [Member]
Entity Listings [Line Items]
Warrant term			5 years	5 years	5 years		5 years	5 years
Edgepoint Common Stock [Member] | Warrant [Member]
Entity Listings [Line Items]
Warrants to purchase common stock			50,000	50,000			50,000
Warrant exercise price per share			$ 1.00	$ 1.00			$ 1.00
Mateon Common Stock [Member] | Warrant [Member]
Entity Listings [Line Items]
Warrant exercise price per share			$ 0.20	$ 0.20			$ 0.20
Warrant term			3 years	3 years			3 years
One Convertible Promissory Note [Member] | Edgepoint Common Stock [Member]
Entity Listings [Line Items]
Conversion of debt, price per share			$ 1.00	$ 1.00			$ 1.00
One Convertible Promissory Note [Member] | Edgepoint Common Stock [Member] | Maximum [Member]
Entity Listings [Line Items]
Conversion of debt, shares							25,000
One Convertible Promissory Note [Member] | Mateon Common Stock [Member]
Entity Listings [Line Items]
Conversion of debt, price per share			$ 0.18	$ 0.18			$ 0.18
One Convertible Promissory Note [Member] | Mateon Common Stock [Member] | Maximum [Member]
Entity Listings [Line Items]
Conversion of debt, shares							138,889
JH Darbie & Co Inc [Member]
Entity Listings [Line Items]
Number of shares issued and sold			10
Warrant term			5 years	5 years			5 years
JH Darbie & Co Inc [Member] | Warrant [Member] | Private Placement [Member]
Entity Listings [Line Items]
Warrants to purchase common stock			2,035,000	2,035,000			2,035,000		3,465,000
Warrant exercise price per share			$ 0.23	$ 0.23			$ 0.23		$ 0.18
Additional paid-in capital			$ 500,000	$ 500,000			$ 500,000		$ 600,000
Fair value per share			$ 0.20	$ 0.20			$ 0.20		$ 0.20
JH Darbie & Co Inc [Member] | Maximum [Member]
Entity Listings [Line Items]
Number of shares issued and sold		100
Placement Agent [Member]
Entity Listings [Line Items]
Number of shares issued and sold							10
Conversion of debt, price per share			0.18	0.18			$ 0.18
Percentage of units granted							1000.00%
Coupon							16.00%
Debt instrument conversion term							Convertible at the option of the holder at any time in the Company’s Common Stock or Edgepoint Common Stock.
Placement Agent [Member] | Edgepoint Common Stock [Member]
Entity Listings [Line Items]
Conversion of debt, price per share			1.00	1.00			$ 1.00
Subscription Agreements [Member] | Edgepoint AI, Inc [Member]
Entity Listings [Line Items]
Number of shares issued and sold							100
Number of shares issued during the period							25,000
Stock value, price per share			$ 1.00	$ 1.00			$ 1.00
Subscription Agreements [Member] | Accredited Investors [Member]
Entity Listings [Line Items]
Number of shares issued and sold							100
Gross proceeds from private placement							$ 5,000,000

XML

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 30, 2020	Mar. 09, 2020	Apr. 30, 2019	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 30, 2020	Jun. 29, 2021	Apr. 23, 2019
Entity Listings [Line Items]
Original issue discount				$ 93,340			$ 93,340		$ 200,205
Net proceeds from convertible debt							200,000
Debt conversion amount					$ 103,440	$ 721,064
Short-term Debt				$ 764,875			$ 764,875		$ 95,000
Common stock, par value				$ 0.01			$ 0.01		$ 0.01		$ 0.20
Chief Executive Officer [Member]
Entity Listings [Line Items]
Principal amount				$ 20,000			$ 20,000
Payments of related party debt	$ 50,000								$ 70,000	$ 50,000
Shares issued during the period for private placing, shares									5
Shares issued during the period for private placing							250,000		$ 250,000
Short-term Debt				20,000			20,000		$ 20,000
Chief Executive Officer [Member] | Fall 2019 Note [Member]
Entity Listings [Line Items]
Principal amount			$ 250,000
Debt conversion amount			35,000
Autotelic Inc [Member]
Entity Listings [Line Items]
Short-term Debt				120,000			120,000
Master Service Agreement [Member] | Autotelic Inc [Member]
Entity Listings [Line Items]
Agreement related expenses				$ 117,980	82,313		$ 482,445	$ 159,404
Master Service Agreement [Member] | Autotelic Inc [Member] | Vyoung Trieu [Member] | Maximum [Member]
Entity Listings [Line Items]
Equity ownership percentage				10.00%			10.00%
Securities Purchase Agreement [Member] | Vyoung Trieu [Member] | Convertible Debt [Member]
Entity Listings [Line Items]
Principal amount			164,444									$ 16,444
Original issue discount			16,444	$ 4,441			$ 4,441					$ 164,444
Net proceeds from convertible debt			$ 148,000
Artius Consulting Agreement [Member] | Board of Directors [Member] | 2017 Equity Incentive Plan [Member]
Entity Listings [Line Items]
Equity ownership percentage		30.00%
Number of restricted shares		148,837
Debt description		The Artius Agreement contemplates that Mr. King will generally provide his services at a rate of $237 per hour, not to exceed 44 hours per month and payable monthly, and to reimburse Mr. King for reasonable and necessary expenses incurred by him or Artius in connection with providing services to the Company.
Maida Consulting Agreement [Member] | Dr. Maida [Member]
Entity Listings [Line Items]
Agreement related expenses				$ 45,000	$ 30,000
Number of restricted shares							400,000
Debt description							The Company will also pay Dr. Maida $15,000 per month for a minimum of 20 hours per week, in in addition to reimbursement of reasonable and necessary expenses incurred by Dr. Maida in connection with his services to the Company.
Number of restricted shares, shares							$ 80,000
Common stock, par value				$ 0.20			$ 0.20
Vested date							May 05, 2021

XML

EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT (Details Narrative) - USD ($)		1 Months Ended			3 Months Ended		6 Months Ended
	May 03, 2021	Jun. 30, 2021	May 31, 2021	Feb. 29, 2020	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Entity Listings [Line Items]
Stock Issued During Period, Value, New Issues					$ 99,055
Stock compensation expense				$ 2,100,000		$ 0	$ 2,000,000.0	$ 2,100,000
Proceeds from sale of common stock							70,108
Accounts receivable		$ 156,270			$ 156,270		156,270		$ 19,748
Equity Purchase Agreement and Registration Rights Agreement [Member]
Entity Listings [Line Items]
Number of shares issued and sold		400,000			400,000
Proceeds from sale of common stock		$ 70,000			$ 99,000
Stock issuance cost. net					29,000
Accounts receivable		$ 37,000			$ 37,000		$ 37,000
Equity Purchase Agreement and Registration Rights Agreement [Member] | Minimum [Member]
Entity Listings [Line Items]
Stock value, price per share	$ 0.15	$ 0.15			$ 0.15		$ 0.15
Equity Purchase Agreement and Registration Rights Agreement [Member] | Maximum [Member]
Entity Listings [Line Items]
Stock value, price per share	$ 0.23	$ 0.23			$ 0.23		$ 0.23
Equity Purchase Agreement and Registration Rights Agreement [Member] | Peak One Opportunity Fund, L.P [Member]
Entity Listings [Line Items]
Common shares issued for cash, shares	250,000		250,000
Stock Issued During Period, Value, New Issues	$ 10,000,000
Lessor, Operating Lease, Description	The minimum amount that the Company shall be entitled to put to the Investor in each put notice is $20,000 and the maximum amount is up to the lesser of $1.0 million or two hundred fifty percent (250%) of the average daily trading volume of the Company’s Common Stock defined as the average trading volume of the Company’s Common Stock in the ten (10) days preceding the date on the put notice multiplied by the lowest closing bid price in the ten (10) immediately preceding the date of the put notice. Pursuant to the Equity Purchase Agreement, the Investor will not be permitted to purchase, and the Company may not put shares of the Company’s Common Stock to the Investor that would result in the Investor’s beneficial ownership of the Company’s outstanding Common Stock exceeding 4.99%. The price of each put share shall be equal to ninety one percent (91%) of the market price, which is defined as the lesser of (i) closing bid price of the Common stock on the trading date immediately preceding the respective put date, or (ii) the lowest closing bid price of the Common Stock during the seven (7) trading days immediately following the clearing date associated with the applicable put notice.
Stock compensation expense	$ 70,000
Equity Purchase Agreement and Registration Rights Agreement [Member] | Peak One Opportunity Fund, L.P [Member] | Minimum [Member]
Entity Listings [Line Items]
Lease Obligation Incurred	20,000
Equity Purchase Agreement and Registration Rights Agreement [Member] | Peak One Opportunity Fund, L.P [Member] | Maximum [Member]
Entity Listings [Line Items]
Lease Obligation Incurred	$ 1,000,000.0

XML

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)			1 Months Ended							3 Months Ended		6 Months Ended
	May 03, 2021	Mar. 31, 2021	Jun. 30, 2021	May 31, 2021	Jan. 31, 2021	Jun. 30, 2020	Feb. 29, 2020	Nov. 30, 2019	Apr. 30, 2019	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020
Class of Stock [Line Items]
Share-based Payment Arrangement, Expense							$ 2,100,000				$ 0	$ 2,000,000.0	$ 2,100,000
Proceeds from Issuance of Common Stock												$ 70,108
Preferred Stock [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities											(278,188)
Number of shares issued during the period		278,188
Common Stock [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities		278,187,847									278,187,847
Number of shares issued during the period										400,000
TFK Investments LLC [Member]
Class of Stock [Line Items]
Number of shares issued during the period					657,200	750,000
TFK Investments LLC [Member] | Convertible Notes Payable [Member]
Class of Stock [Line Items]
Number of shares issued during the period						1,012,145
TFK Investments LLC [Member] | Preferred Stock [Member]
Class of Stock [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion			278,188							278,188		278,188
TFK Investments LLC [Member] | Common Stock [Member]
Class of Stock [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion			278,187,847							278,187,847		278,187,847
Peak One [Member]
Class of Stock [Line Items]
Number of shares issued during the period						500,000	500,000
Peak One [Member] | Convertible Notes Payable [Member]
Class of Stock [Line Items]
Number of shares issued during the period							1,200,000
Mateon Therapeutics Inc [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities						569,800
Series A Preferred Stock [Member] | TFK Investments LLC [Member]
Class of Stock [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion			278,188							278,188		278,188
Merger Agreement [Member] | Series A Preferred Stock [Member] | Oncotelic [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities									193,713
Number of shares issued during the period									77,154
Merger Agreement [Member] | Series A Preferred Stock [Member] | PointR [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities								11,135,935
Number of shares issued during the period								84,475
Equity Purchase Agreement and Registration Rights Agreement [Member]
Class of Stock [Line Items]
Sale of Stock, Number of Shares Issued in Transaction			400,000							400,000
Proceeds from Issuance of Common Stock			$ 70,000							$ 99,000
Equity Purchase Agreement and Registration Rights Agreement [Member] | Minimum [Member]
Class of Stock [Line Items]
Sale of Stock, Price Per Share	$ 0.15		$ 0.15							$ 0.15		$ 0.15
Equity Purchase Agreement and Registration Rights Agreement [Member] | Maximum [Member]
Class of Stock [Line Items]
Sale of Stock, Price Per Share	$ 0.23		$ 0.23							$ 0.23		$ 0.23
Equity Purchase Agreement and Registration Rights Agreement [Member] | Peak One Opportunity Fund, L.P [Member]
Class of Stock [Line Items]
Number of shares issued during the period	250,000			250,000
Share-based Payment Arrangement, Expense	$ 70,000

XML

SCHEDULE OF COMPENSATION BASED STOCK OPTION ACTIVITY (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Compensation Related Costs [Abstract]
Options Outstanding, Beginning Balance	3,941,301	6,145,044
Weighted Average Exercise Price Outstanding, Beginning Balance	$ 0.78	$ 0.75
Options Outstanding, Expired or canceled		(2,203,743)
Expired or cancelled		$ 0.70
Options Outstanding, Ending Balance	3,941,301	3,941,301
Weighted Average Exercise Price Outstanding, Ending Balance	$ 0.78	$ 0.78

XML

SCHEDULE OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE (Details)	6 Months Ended
	Jun. 30, 2021 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Outstanding Options	3,941,301
Weighted Average Remaining Life In Years	4 years 3 months 10 days
Weighted-Average Exercise Price | $ / shares	$ 0.78
Number Exercisable	3,941,301
Exercise Price 1 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 0.22
Number of Outstanding Options	1,750,000
Weighted Average Remaining Life In Years	4 years 10 months 2 days
Weighted-Average Exercise Price | $ / shares	$ 0.22
Number Exercisable	1,750,000
Exercise Price 2 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 0.38
Number of Outstanding Options	900,000
Weighted Average Remaining Life In Years	4 years 1 month 28 days
Weighted-Average Exercise Price | $ / shares	$ 0.38
Number Exercisable	900,000
Exercise Price 3 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 0.73
Number of Outstanding Options	762,500
Weighted Average Remaining Life In Years	3 years 9 months 10 days
Weighted-Average Exercise Price | $ / shares	$ 0.73
Number Exercisable	762,500
Exercise Price 4 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 1.37
Number of Outstanding Options	150,000
Weighted Average Remaining Life In Years	2 years
Weighted-Average Exercise Price | $ / shares	$ 1.37
Number Exercisable	150,000
Exercise Price 5 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 1.43
Number of Outstanding Options	300,000
Weighted Average Remaining Life In Years	3 years 10 months 28 days
Weighted-Average Exercise Price | $ / shares	$ 1.43
Number Exercisable	300,000
Exercise Price 6 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 11.88
Number of Outstanding Options	2,359
Weighted Average Remaining Life In Years	6 months 3 days
Weighted-Average Exercise Price | $ / shares	$ 11.88
Number Exercisable	2,359
Exercise Price 7 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 15.00
Number of Outstanding Options	75,000
Weighted Average Remaining Life In Years	3 years 10 months 28 days
Weighted-Average Exercise Price | $ / shares	$ 15.00
Number Exercisable	75,000
Exercise Price 8 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices | $ / shares	$ 19.80
Number of Outstanding Options	1,442
Weighted Average Remaining Life In Years	4 months 2 days
Weighted-Average Exercise Price | $ / shares	$ 19.80
Number Exercisable	1,442

XML

SCHEDULE OF WARRANTS ACTIVITY (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Compensation Related Costs [Abstract]
Number of Stock Options Outstanding, beginning balance	18,702,500	19,515,787
Weighted-Average Exercise Price, Outstanding, beginning balance	$ 0.20	$ 0.60
Number of Stock Options, Issued	24,035,000	17,215,000
Weighted-Average Exercise Price, Issued	$ 0.20	$ 0.20
Number of Stock Options, Expired or cancelled		(18,028,287)
Weighted-Average Exercise Price, Expired or cancelled		$ 0.63
Number of Stock Options Outstanding, ending balance	42,737,500	18,702,500
Weighted-Average Exercise Price, Outstanding, ending balance	$ 0.20	$ 0.20

XML

SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE (Details)	Jun. 30, 2021 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Warrants Outstanding, Number of Warrants	42,737,500
Warrants Exercisable, Weighted Average Remaining Life In Years	2 years 1 month 24 days
Warrants Weighted- Average Exercise Price | $ / shares	$ 0.20
Warrants Exercisable, Exercisable Number of Warrants	42,737,500
Exercise Price 1 [Member] | Warrant [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Warrants Outstanding, Exercise Price | $ / shares	$ 0.20
Warrants Outstanding, Number of Warrants	1,487,500
Warrants Exercisable, Weighted Average Remaining Life In Years	2 years 29 days
Warrants Weighted- Average Exercise Price | $ / shares	$ 0.20
Warrants Exercisable, Exercisable Number of Warrants	1,487,500
Exercise Price 2 [Member] | Warrant [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Warrants Outstanding, Exercise Price | $ / shares	$ 0.20
Warrants Outstanding, Number of Warrants	41,250,000
Warrants Exercisable, Weighted Average Remaining Life In Years	2 years 1 month 24 days
Warrants Weighted- Average Exercise Price | $ / shares	$ 0.20
Warrants Exercisable, Exercisable Number of Warrants	41,250,000

XML

SCHEDULE OF BLACK SCHOLES VALUATION ALLOWANCE MODEL OF WARRANTS (Details)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected volatility, Minimum	94.40%
Expected volatility,Maximum	130.00%
Risk-free interest rates, Minimum	0.08%
Risk-free interest rates, Maximum	0.25%
Dividend yields	0.00%
Warrant [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected term		3 years
Dividend yields		0.00%
Expected volatility		140.50%
Risk-free interest rates		1.40%
Warrant [Member] | Minimum [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected term	1 year
Warrant [Member] | Maximum [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Expected term	2 years

XML

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2021	Feb. 29, 2020	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Jun. 29, 2021
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Further awards granted					24,035,000		17,215,000
Options exercisable term					10 years
Options vesting period					3 years
Aggregate intrinsic value of options			$ 0		$ 0		$ 0
Weighted average fair value					$ 0.22		$ 0.22
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number					0
Class of Warrant or Right, Number of Securities Called by Warrants or Rights								50,000
Reissuance of warrants		13,750,000
Compensation cost		$ 2,100,000		$ 0	$ 2,000,000.0	$ 2,100,000
Warrants excersiable term			2 years 1 month 24 days		2 years 1 month 24 days
Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term						3 years
Warrants [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term				1 year 6 months			1 year 6 months
Common shares issued for cash, shares			22,000,000		24,035,000	13,750,000
Private Placement [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			20,000,000	2,035,000	20,000,000
Fair Value Adjustment of Warrants			$ 2,023,552	$ 467,637
Private Placement [Member] | Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					1 year 6 months
Maximum [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Warrants excersiable term			5 years		5 years	5 years
Maximum [Member] | Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					2 years
Maximum [Member] | Warrants [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					2 years
Maximum [Member] | Private Placement [Member] | Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					2 years
Minimum [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Warrants excersiable term			3 years		3 years	3 years
Minimum [Member] | Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					1 year
Minimum [Member] | Warrants [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					1 year
Minimum [Member] | Private Placement [Member] | Warrant [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected term					1 year
2017 Equity Incentive Plan [Member] | Maximum [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Number of common stock issued to awards					2,000,000
2015 and 2005 Equity Incentive Plan [Member] | Maximum [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Number of common stock issued to awards					7,250,000
2015 Equity Incentive Plan [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Number of common stock issued to awards					20,000,000
2015 Equity Incentive Plan [Member] | Subsequent Event [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	1,257,952
2015 Equity Incentive Plan [Member] | Subsequent Event [Member] | Employees [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Further awards granted	4,244,809
2015 Equity Incentive Plan [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance			27,250,000		27,250,000
2005 Equity Incentive Plan [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Further awards granted					0

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SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Deferred tax assets:
Stock-based compensation	$ 1,164	$ 1,164
Assets	6,015	6,227
Liability accruals	253	173
R&D Credit	4,776	4,760
Capital Loss	528	528
Deferred state tax	(2,173)	(2,086)
Net operating loss carry forward	56,506	56,090
Total gross deferred tax assets	67,069	66,856
Less - valuation allowance	(67,069)	(66,856)
Net deferred tax assets

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INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Gross deferred tax assets	$ 67,069	$ 66,856
Net operating loss expiration year	2038
Federal [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carry-forwards	$ 239,700	$ 237,700
Net operating loss expiration year		will expire in 2021
Tax credit		$ 3,300
State [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carry-forwards	$ 74,900	$ 69,800
Net operating loss expiration year	expire in various amounts from 2028 through 2040
State [Member] | CALIFORNIA
Operating Loss Carryforwards [Line Items]
Net operating loss expiration year		no expiration date
Tax credit		$ 1,400

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COMMITMENTS AND CONTINGENCIES (Details Narrative)	6 Months Ended
	Jun. 30, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Contingent liability	$ 2,600,000
Merger Agreement [Member] | PointR Data, Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Purchase price consideration	17,831,427
Contingent liability	$ 2,625,000

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)				6 Months Ended	12 Months Ended
	Aug. 13, 2021	Aug. 13, 2021	Jul. 02, 2021	Jun. 30, 2021	Dec. 31, 2020	Jun. 29, 2021
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted				24,035,000	17,215,000
Common stock, par value				$ 0.01	$ 0.01	$ 0.20
Proceeds from Convertible Debt				$ 200,000
Subsequent Event [Member] | Autotelic Inc [Member] | Note Purchase Agreements [Member]
Subsequent Event [Line Items]
Debt instrument principal amount	$ 698,500	$ 698,500
Debt interest rate	5.00%	5.00%
Debt instrument maturity date		Jun. 30, 2021
Debt instrument maturity date, description		The Company may prepay the Notes at any time. Events of Default under the Notes include, without limitation, (i) failure to make payments under the Notes within thirty (30) days of the Maturity Date, (ii) breaches of the Note Purchase Agreement or Notes by the Company which is not cured within thirty (30) days of notice of the breach, (iii) bankruptcy, or (iv) a change in control of the Company (as defined in the Note Purchase Agreements). The Majority Holders have the right, at any time not more than five days following the Maturity Date, to elect to convert all, and not less than all, of the outstanding accrued and unpaid interest and principal on the Notes
Common stock, par value	$ 0.01	$ 0.01
Debt instrument conversion price per shares	$ 0.18	$ 0.18
Subsequent Event [Member] | Golden Mountain Partners LLC [Member]
Subsequent Event [Line Items]
Proceeds from Convertible Debt	$ 1,500,000
2015 Equity Incentive Plan [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			1,257,952
2015 Equity Incentive Plan [Member] | Subsequent Event [Member] | Employees [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted			4,244,809