ctdh20230630

ctdh20230630_10q.htm

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, 2023

☐ 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: 0-25466

CYCLO THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Nevada		59-3029743
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

6714 NW 16^th Street, Suite B, Gainesville, Florida		32653
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: 386-418-8060

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.0001 per share	CYTH	The Nasdaq Stock Market LLC
Warrants to purchase Common Stock	CYTHW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “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 11, 2023 the Company had outstanding 19,308,449 shares of its common stock.

CYCLO THERAPEUTICS, INC.

FORM 10-Q

TABLE OF CONTENTS

	Description	Page

PART I	FINANCIAL INFORMATION	1
Item 1.	Financial Statements.	1
	Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022.	1
	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2023 and 2022.	2
	Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the Three Months Ended June 30, 2023 and 2022.	3
	Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the Six Months Ended June 30, 2023 and 2022.	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2023 and 2022.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	21
Item 4.	Controls and Procedures.	21
PART II	OTHER INFORMATION	22
Item 1A.	Risk Factors.	22
Item 6.	Exhibits.	22

SIGNATURES		23

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2023			December 31, 2022
	(unaudited)
*ASSETS*

CURRENT ASSETS
Cash and cash equivalents	$	841,530		$	1,543,418
Accounts receivable, net		88,391			54,991
Inventory, net		236,643			254,491
Prepaid insurance and services		166,222			101,135
Prepaid clinical expenses		3,215,184			2,204,520
Total current assets		4,547,970			4,158,555

FURNITURE AND EQUIPMENT, NET		45,550			55,188

RIGHT-TO-USE LEASE ASSET, NET		49,147			1,470

TOTAL ASSETS	$	4,642,667		$	4,215,213
*LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)*

CURRENT LIABILITIES
Current portion of lease liability	$	17,466		$	-
Accounts payable and accrued expenses		6,078,097			3,480,669
Total current liabilities		6,095,563			3,480,669

LONG-TERM LIABILITIES
Lease liability, net of current portion		31,939			-

Total long-term liabilities		31,939			-

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per share, 50,000,000 and 20,000,000 shares authorized, 15,308,449 and 8,481,848 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		1,531			849
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized, 0 outstanding		-			-
Additional paid-in capital		71,956,553			64,533,074
Accumulated deficit		(73,442,919	)		(63,799,379	)
Total stockholders' equity (deficit)		(1,484,835	)		734,544

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	4,642,667		$	4,215,213

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022

REVENUES
Product sales	$	117,118		$	541,886		$	269,529		$	736,790

EXPENSES
Personnel		784,867			970,759			1,691,822			2,187,664
Cost of products sold (exclusive of direct and indirect overhead and handling costs)		19,909			73,667			30,105			90,131
Research and development		3,170,199			1,874,383			6,568,366			2,958,435
Repairs and maintenance		7,063			3,675			8,315			7,998
Professional fees		414,402			649,842			897,237			1,061,897
Office and other		272,940			291,611			555,315			585,787
Board of Director fees and costs		75,458			124,131			147,583			216,256
Depreciation		4,819			4,741			9,638			9,482
Freight and shipping		403			5,101			1,222			9,621
Total operating expenses		4,750,060			3,997,910			9,909,603			7,127,271

LOSS FROM OPERATIONS		(4,632,942	)		(3,456,024	)		(9,640,074	)		(6,390,481	)

OTHER INCOME (EXPENSE)
Investment and other income (expense)		(3,513	)		4,034			(3,466	)		8,376
Gain on forgiveness of PPP loan		-			-			-			158,524
Total other income (expense)		(3,513	)		4,034			(3,466	)		166,900

LOSS BEFORE INCOME TAXES		(4,636,455	)		(3,451,990	)		(9,643,540	)		(6,223,581	)

PROVISION FOR INCOME TAXES		-			-			-			-

NET LOSS	$	(4,636,455	)	$	(3,451,990	)	$	(9,643,540	)	$	(6,223,581	)

BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.33	)	$	(0.41	)	$	(0.77	)	$	(0.74	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		14,042,214			8,424,003			12,537,394			8,417,901

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	Common Stock				Additional					Total
	Shares		Par Value		Paid-In Capital		Accumulated Deficit			Stockholders’ Equity (Deficit)

Balance, March 31, 2023		10,553,544	$	1,056	$	68,366,532	$	(68,806,464	)	$	(438,876	)

Sale of common stock		4,077,853		407		3,404,599		-			3,405,006

Exercise of warrants		537,000		54		-		-			54

Stock issued to nonemployees		140,052		14		144,240		-			144,254

Stock-based compensation		-		-		41,182		-			41,182

Net loss		-		-		-		(4,636,455	)		(4,636,455	)

Balance, June 30, 2023		15,308,449	$	1,531	$	71,956,553	$	(73,442,919	)	$	(1,484,835	)

Balance, March 31, 2022		8,415,196	$	842	$	64,167,254	$	(51,120,082	)	$	13,048,014

Stock issued to employees		7,500		1		15,749		-			15,750

Stock issued to nonemployees		16,739		1		41,255		-			41,256

Stock-based compensation		-		-		87,012		-			87,012

Net loss		-		-		-		(3,451,990	)		(3,451,990	)

Balance, June 30, 2022		8,439,435	$	844	$	64,311,270	$	(54,572,072	)	$	9,740,042

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	Common Stock				Additional					Total
	Shares		Par Value		Paid-In Capital		Accumulated Deficit			Stockholders’ Equity (Deficit)

Balance, December 31, 2022		8,481,848	$	849	$	64,533,074	$	(63,799,379	)	$	734,544

Sale of common stock and accompanying warrants, net		5,007,853		500		7,146,389		-			7,146,889

Exercise of warrants		1,678,696		168		-		-			168

Stock issued to nonemployees		140,052		14		144,240		-			144,254

Stock-based compensation		-		-		132,850		-			132,850

Net loss		-		-		-		(9,643,540	)		(9,643,540	)

Balance, June 30, 2023		15,308,449	$	1,531	$	71,956,553	$	(73,442,919	)	$	(1,484,835	)

Balance, December 31, 2021		8,403,869	$	841	$	64,019,513	$	(48,348,491	)	$	15,671,863

Stock issued to employees		7,500		1		15,749		-			15,750

Stock issued to nonemployees		28,066		2		82,258		-			82,260

Stock-based compensation		-		-		193,750		-			193,750

Net loss		-		-		-		(6,223,581	)		(6,223,581	)

Balance, June 30, 2022		8,439,435	$	844	$	64,311,270	$	(54,572,072	)	$	9,740,042

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(9,643,540	)	$	(6,223,581	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,638			9,482
Gain on forgiveness of PPP loan		-			(158,524	)
Stock-based compensation		132,850			193,750
Stock compensation to employees		-			15,750
Stock compensation to nonemployees		144,254			82,260
Increase or decrease in:
Accounts receivable, net		(33,400	)		83,181
Inventory, net		17,848			(33,176	)
Prepaid clinical expenses		(1,010,664	)		(1,423,270	)
Prepaid insurance and services		(65,087	)		(143,971	)
Other		1,728			(1,882	)
Accounts payable and accrued expenses		2,597,428			(1,586,011	)
Total adjustments		1,794,595			(2,962,411	)

NET CASH USED IN OPERATING ACTIVITIES		(7,848,945	)		(9,185,992	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment		-			(4,600	)
Collections from mortgage note receivable		-			24,494
NET CASH PROVIDED BY INVESTING ACTIVITIES		-			19,894

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of warrants		2,917,581			-
Net proceeds from sale of stock		4,229,308			-
Exercise of warrants		168			-
Payments on PPP loan		-			(8,159	)
Refund of PPP loan payments		-			14,937
NET CASH PROVIDED BY FINANCING ACTIVITIES		7,147,057			6,778

NET DECREASE IN CASH AND CASH EQUIVALENTS		(701,888	)		(9,159,320	)

CASH AND CASH EQUIVALENTS, beginning of period		1,543,418			16,612,711

CASH AND CASH EQUIVALENTS, end of period	$	841,530		$	7,453,391

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	5,466		$	-

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The information presented herein as of June 30, 2023 and for the six months ended June 30, 2023 and 2022 is unaudited.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of the more significant accounting policies of Cyclo Therapeutics, Inc. (the “Company,” “we,” “our” or “us”) that affect the accompanying condensed consolidated financial statements:

(a) ORGANIZATION AND OPERATIONS–– The Company was incorporated in August 1990 as a Florida corporation, under the name Cyclodextrin Technologies Development, Inc. with operations beginning in July 1992. In conjunction with a restructuring in 2000, we changed our name to CTD Holdings, Inc. We changed our name to Cyclo Therapeutics, Inc. in September 2019 to better reflect our current business and on November 6, 2020, we reincorporated from the State of Florida to the State of Nevada.

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, and patient dosing began in the first quarter of 2023.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin- based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products.

(b) BASIS OF PRESENTATION––The condensed consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The interim condensed consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q, including these notes, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and these notes, have been prepared in accordance with Generally Accepted Accounting Principles and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Customer account balances with invoices dated over 90 days old are considered past due. The Company does not accrue interest on past due accounts. Customer payments are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, applied to the oldest unpaid invoices.

The carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects management’s best estimate of expected credit losses. The Company reviews each customer balance where all or a portion of the balance exceeds 90 days from the invoice date. Based on the Company’s assessment of the customer's current and forecasted creditworthiness, the Company estimates the portion, if any, of the balance that will not be collected, and writes off receivables as a charge to the allowance for credit losses when, in management’s estimation, it is probable that the receivable is worthless. The Company has estimated an allowance for doubtful accounts of $10,300 at June 30, 2023 and December 31, 2022.

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was approximately $52,900 at June 30, 2023 and December 31, 2022.

The Company’s reserve for obsolete inventory is based on the Company’s best estimates of product sales and customer demands. It is reasonably possible that the estimates used by the Company to determine its provisions for inventory write-downs will be materially different from actual write-downs. These differences could result in materially higher than expected inventory provisions and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition in the near term.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

(f) PREPAID CLINICAL EXPENSES––Prepaid clinical expenses consist of our pharmaceutical drug Trappsol® Cyclo™ expected to be used in our clinical trial program recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed.

(g) FURNITURE AND EQUIPMENT––Furniture and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles and seven to ten years for machinery, equipment and office furniture). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset.

(h) LEASES––The Company leases office and warehouse space. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities on the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In evaluating contracts to determine if they qualify as a lease, the Company considers factors such as if the Company has obtained substantially all of the rights to the underlying asset through exclusivity, if it can direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights. This evaluation may require significant judgment.

(i) REVENUE RECOGNITION––Revenues are recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under Accounting Standard Update (“ASU”) No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S., we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers. The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

For additional information on our revenues, please read Note 2, Revenues, to these condensed consolidated financial statements.

(j) SHIPPING AND HANDLING FEES––Shipping and handling fees, if billed to customers, are included in product sales. Shipping and handling costs associated with inbound and outbound freight are expensed as incurred and included in freight and shipping expense.

(k) ADVERTISING––Advertising costs are charged to operations when incurred. We incur minimal advertising expenses.

(l) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. Research and development expense primarily consists of product development, third-party contractors, salaries and materials.

(m) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. As of June 30, 2023 and December 31, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

(n) NET LOSS PER COMMON SHARE–– Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 11,411,813 and 7,419,760 shares of common stock were antidilutive for the three and six months ended June 30, 2023, and warrants to purchase 2,048,186 shares of common stock were antidilutive for the three and six months ended June 30, 2022.

(o) STOCK-BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. In the case of employees and consultants, an expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. With respect to directors, the Company accrues stock compensation expense on a quarterly basis based on the Company’s historical director compensation policies, and each quarter recognizes such expense based on the trading price of the common stock during such quarter. This expense is then trued up at the time the shares are issued to directors based on the trading price at the time of issuance.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

The Company periodically issues stock options under its 2021 Equity Incentive Plan. The Company uses the Black-Scholes valuation method to estimate the fair value of stock options at grant date. Compensation expense is recognized on the straight-line basis over the requisite service period, which is generally the vesting period.

(p) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

●	Level 1: Quoted market prices in active markets for identical assets or liabilities.

●	Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

●	Level 3: Unobservable inputs that are not corroborated by market data.

We have no assets or liabilities required to have their fair value measured on a recurring basis at June 30, 2023 and December 31, 2022. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, and which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature.

(q) USE OF ESTIMATES––The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, including regarding contingencies, that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company’s most significant estimates relate to inventory obsolescence, stock-based compensation and warrant liability valuation. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

(r) RECENT ACCOUNTING PRONOUNCEMENTS––In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (Topic 326), which provides guidance on how an entity should measure credit losses on financial instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The ASU is effective for smaller reporting company’s in the first quarter of 2023. The Company adopted the new guidance as of January 1, 2023, and it did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

- 10 -

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

The Company has adopted this standard as of January 1, 2023, and determined no material impact on its condensed consolidated financial statements.

(s) WARRANTS––The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and satisfy additional conditions for equity classification. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, “Fair Value Measurement,” with any subsequent changes in fair value recognized in the statement of operations in the period of change. The fair value of liability classified warrants was not material at June 30, 2023, and December 31, 2022.

(t) LIQUIDITY AND GOING CONCERN––For the three and six months ended June 30, 2023, the Company incurred a net loss of $4,636,455 and $9,643,540, respectively. The Company has an accumulated deficit of $73,442,919 at June 30, 2023. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including personnel expenses and board advisory fees. We believe our expenses will continue to increase as we continue to conduct clinical trials and seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC and Alzheimer’s disease.

For the six months ended June 30, 2023, the Company’s operations used $7,848,945 in cash, and at June 30, 2023, the Company had a cash balance of $841,530 and negative working capital of approximately $1,548,000. We will need to raise additional capital for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. As further discussed in Note 11, subsequent to quarter-end, the Company generated gross proceeds of $5,000,000 from the sale of securities in private placements of the Company’s securities.

We intend to continue to raise such capital through the sale of equity securities from time to time, the issuance of debt securities, the sale or licensing of existing assets or assets in development, or from other non-dilutive funding mechanisms. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

Our condensed consolidated financial statements for the three and six months ended June 30, 2023 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

(2) REVENUES:

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life threatening rare diseases and medical conditions. However, substantially all of the Company’s revenues are derived from the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. Currently, a small portion of the Company’s revenues is generated by sales of Trappsol® Cyclo™ to South America (Brazil) for the treatment of NPC patients.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(2) REVENUES: (CONTINUED)

The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties.

Revenues by product are summarized as follows:

	Three Months Ended June, 30				Six Months Ended June 30,
	2023		2022		2023		2022
Trappsol® Cyclo™	$	57,751	$	700	$	111,135	$	700
Trappsol® HPB		57,244		357,032		143,228		421,605
Trappsol® Fine Chemical		2,065		178,621		5,304		308,324
Aquaplex®		58		188		9,862		816
Other		-		5,345		-		5,345
Total revenues	$	117,118	$	541,886	$	269,529	$	736,790

Substantially all of our sales of Trappsol® Cyclo™ for the three and six months ended June 30, 2023 and 2022 were to a single customer who exports the drug to South America. Substantially all of our Aquaplex® sales for the three and six months ended June 30, 2023 and 2022 were to one customer.

(3) MAJOR CUSTOMERS AND SUPPLIERS:

Our revenues are derived primarily from chemical supply and pharmaceutical companies located primarily in the United States. For the three months ended June 30, 2023 two major customers accounted for 86% of total revenues. For the six months ended June 30, 2023 three major customers accounted for 71% of total revenues. For the three months ended June 30, 2022, three customers accounting for 63% of total revenues. For the six months ended June 30, 2022, four major customers accounted for 66% of total revenues, and three customers accounted for 99% of accounts receivable.

Substantially all inventory purchases were from three vendors in 2023 and 2022. These vendors are located primarily outside the United States.

We have three sources for our Aquaplex® products. There are multiple sources for our Trappsol® products.

For the six months ended June 30, 2023, the product mix of our revenues consisted of 96% basic natural and chemically modified cyclodextrins and 4% cyclodextrin complexes. For the three months ended June 30, 2023, the product mix of our revenues consisted entirely of basic natural and chemically modified cyclodextrins. For the six months ended June 30, 2022 the product mix of our revenues consisted of 99.9% basic natural and chemically modified cyclodextrins and .1% cyclodextrin complexes. For the three months ended June 30, 2022 the product mix of our revenues consisted entirely of basic natural and chemically modified cyclodextrins.

(4) NOTE PAYABLE:

On May 4, 2020, the Company’s wholly owned subsidiary, Cyclodextrin Technologies Development, Inc., borrowed $158,524 from BBVA USA under the Paycheck Protection Program (PPP) which was established under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The loan matured on May 4, 2022 and bore interest at a rate of 1% per annum, payable monthly commencing on September 5, 2021.

Under the Paycheck Protection Program, because the loan was used to fund certain qualifying expenses as described in the CARES Act, the full amount of the loan, including accrued interest was forgiven in March 2022. As a result, the balance forgiven is presented separately as gain on the forgiveness of PPP loan in the accompanying condensed consolidated statement of operations.

- 12 -

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(5) LEASES

The Company entered into an operating lease in January 2023 for office and warehouse space, which has a lease term expiring in January 2026, with an option to extend for an additional three years. As it is not reasonably certain the Company will exercise the option to extend, the additional three years have not been included in the lease term. This lease replaced an existing operating lease which expired in January 2023. Right-of-use assets are recorded net of accumulated amortization, which was $8,502 as of June 30, 2023. Lease expense for lease payments are recognized on a straight-line basis over the lease term. Lease expense for the three and six months ended June 30, 2023 was $5,612 and $15,147. Lease expense for the three and six months ended June 30, 2022 was $7,397 and $14,874, respectively.

(6) EQUITY TRANSACTIONS:

On March 3, 2023, following the approval of the Company’s stockholders at a special meeting, the Company’s Articles of Incorporation were amended to increase the number of authorized shares of common stock from 20,000,000 to 50,000,000.

The Company accrues stock compensation expense over the period earned for employees and board members. Stock compensation expense for board members is included in “Board of Directors fees and costs” on our condensed consolidated statement of operations, and stock compensation expense for officers and employees that are not board members is included in “Personnel” on our condensed consolidated statement of operations. In the three and six month ended June 30, 2023, the Company recognized compensation expense of $82,750 and $113,500 to board members, in addition to $30,750 of accrued stock compensation as of December 31, 2022, and issued 140,052 shares of common stock to board members in the three months ended June 30, 2023. In the three and six months ended June 30, 2022, the Company issued 11,739 and 11,327 shares of common stock to board members with a value of $30,756 and $41,004, respectively at the time of issuance. The Company did not issue common stock to employees in the three and six month periods ended June 30, 2023 and 2022.

On January 3, 2023, the Company sold to an institutional investor in a registered direct offering 930,000 shares of common stock at a purchase price per share of $1.61, and prefunded warrants to purchase up to an aggregate of 1,678,696 shares of common stock at a purchase price of $1.61 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.0001 per share and remain exercisable until exercised in full. In a concurrent private placement, the Company also issued to the investor Series A-1 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of five years from the date of issuance, and Series A-2 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of three years from the date of issuance. The net proceeds from the registered direct offering were approximately $3.7 million after deducting fees due to the placement agent in the offering. A holder of pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of pre-funded warrants may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company. A holder of the Series A-1 and Series A-2 warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise, and may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company.

The Company classified the fair value of the warrants as equity because they are indexed to its own stock and meet the conditions necessary for equity classification in accordance with the guidance in ASC Subtopic 815-40 on derivatives and hedging.

H.C. Wainwright & Co., LLC acted as placement agent to the Company in connection with the registered direct offering and concurrent private placement and was paid a cash fee equal to 7.5% of the gross proceeds of the offering, a management fee equal to 1.0% of the gross proceeds of the offering, and was reimbursed by the Company for its non-accountable expenses in the amount of $35,000, for fees and expenses of its legal counsel, for other out-of-pocket expenses in the amount of $50,000, and for its clearing expenses in the amount of $15,950. The Company also issued to designees of the placement agent five-year warrants to purchase an aggregate of 156,522 shares of common stock at an exercise price of $2.0125 per share.

On January 25, 2023, the investor exercised a portion of its pre-funded warrants and acquired 400,696 shares of common stock for an aggregate exercise price of $40, and on February 27, 2023, the investor exercised an additional portion of its pre-funded warrants and acquired 741,000 shares of common stock for an aggregate exercise price of $74. On April 3, 2023, the investor exercised the remaining balance of pre-funded warrants and acquired 537,000 shares of common stock for an aggregate exercise price of $54.

- 13 -

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(6) EQUITY TRANSACTIONS: (CONTINUED)

On April 20, 2023, the Company, completed a private placement of its securities priced at-the-market under the rules of The Nasdaq Stock Market, Inc., to a group of accredited investors that included several directors of the Company and members of management and their affiliates. Investors in the private placement purchased 1,562,883 shares of common stock and were issued warrants to purchase 1,562,883 shares of common stock. The purchase price for one share of common stock and a warrant to purchase one share of common stock was $0.835. The warrants have an exercise price of $0.71 and a term of seven years. The gross proceeds of the private placement were $1,305,000.

On May 2, 2023, the Company completed the private placement of its securities to Rafael Holdings, Inc. (Rafael Holdings), a Delaware corporation, in which Rafael Holdings purchased 2,514,970 shares of common stock, and a warrant to purchase an additional 2,514,970 shares of common, for an aggregate purchase price of $2,100,000. The warrant has an exercise price of $0.71 per share, and is exercisable for the seven-year period starting August 1, 2023, the date the Company obtained the approval of its shareholders to the exercise of the warrant in accordance with Listing Rules 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc. In connection with the closing of the transaction, the Company (i) entered into a Registration Rights Agreement with Rafael Holdings requiring the Company to file a registration statement with the Securities and Exchange Commission to register the resale of the shares and shares of common stock underlying the warrants upon the request of Rafael Holdings, and (ii) appointed William Conkling, the CEO of Rafael Holdings, to the Company’s Board of Directors.

On June 1, 2023, the Company entered into an additional securities purchase agreement with Rafael Holdings providing for the sale by the Company to Rafael Holdings of an additional 4,000,000 shares of common stock and a warrant to purchase an additional 4,000,000 shares of common stock, for an aggregate purchase price of $5,000,000. The warrant has an exercise price of $1.25 per share and a term of seven years from the date of issuance. The closing of the sale of the shares and warrant under the securities purchase agreement was subject to the approval of the Company’s stockholders to such sale in accordance with Nasdaq Listing Rules 5635(b) and 5635(d), as well as other customary conditions to closing. As discussed in Note 11, the closing of this transaction occurred on August 1, 2023 following the satisfaction of these conditions.

As of June 30, 2023, the Company had warrants outstanding to purchase 11,411,813 shares of common stock at exercise prices ranging from $0.71 to $65.00 per share that expire at various dates through 2030. In addition, there are currently outstanding seven-year warrants to purchase (i) 1,641 Units sold in our February 2017 private placement at an exercise price of $35.00 per Unit, and (ii) 2,400 Units sold in our October 2017 private placement at an exercise price of $25.00 per Unit. The exercise in full of these warrants to purchase units (including exercise of the warrants underlying these warrants) would result in the issuance of 8,082 additional shares of our common stock at an aggregate exercise price of $234,861.

(7) INCOME TAXES:

The Company reported a net loss for the six months ended June 30, 2023 and 2022, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit.

(8) EQUITY INCENTIVE PLAN:

On August 29, 2019, the Company’s stockholders approved the Company’s 2019 Omnibus Equity Incentive Plan at a special meeting of stockholders (the “Incentive Plan”). The Incentive Plan provides for the issuance of up to 68,437 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the Incentive Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant.

- 14 -

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8) EQUITY INCENTIVE PLAN: (CONTINUED)

As of June 30, 2023, we had awarded 68,437 shares of common stock as awards under the Incentive Plan, with no shares of common stock remaining available for future awards under the Incentive Plan.

On June 24, 2021, the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan at its annual meeting of stockholders (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 3,000,000 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the 2021 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. As of June 30, 2023, we had awarded 235,084 shares of common stock and granted options to purchase 801,861 shares of common stock under the 2021 Plan, with 1,963,055 shares of common stock remaining available for future awards.

During the three months ended March 31, 2023, the Company granted options to purchase (i) and aggregate of 321,631 shares of common stock at an exercise price of $1.28 per share to its officers and employees, (ii) 2,500 shares of common stock to three employees, with an exercise price of $1.28, and (iii) 3,350 shares of common stock to each of its five non-employee directors, with an exercise price of $1.28. During the three months ended June 30, 2023, the Company granted options to purchase 106,700 shares of common stock at exercise prices of $1.18 and $1.37 per share to a consultant and new member of the board of directors, respectively. Under the option agreements, these options vest either (i) immediately, (ii) quarterly over a one-year period, (iii) semi-annually over a one-year period, or (iv) monthly over a four-year period. All options have a 10-year term. The options granted during the three and six months ended June 30, 2023 were valued using the Black Scholes option pricing model using the following assumptions: (i) expected term of 5.00 to 6.25 years; (ii) risk free interest rate of 3.9% - 4.1%%; (iii) expected volatility of 92.7% to 100.3%; and (iv) dividend yield of 0.0%. The weighted-average grant date fair value of the options issued by the Company during the three and six months ended June 30, 2023 ranged from $0.86 to $1.01 per share.

(9) NET LOSS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per common share.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Numerator
Net loss	$	(4,636,455	)	$	(3,451,990	)	$	(9,643,540	)	$	(6,223,581	)
Denominator
Weighted-average common shares outstanding, basic and diluted		14,042,214			8,424,003			12,537,394			8,417,901
Net loss per share, basic and diluted	$	(0.33	)	$	(0.41	)	$	(0.77	)	$	(0.74	)

The Company reported a net loss for the three and six months ended June 30, 2023 and 2022, therefore, the basic and diluted net loss per share are the same in the respective periods because of the inclusion of potential common shares would have an anti-dilutive effect. Potential shares of common stock that are excluded from the computation of diluted weighted-average shares outstanding are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Stock options		801,861		412,263		801,861		425,646
Warrants		11,411,813		2,048,186		11,411,813		2,048,186

- 15 -

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(10) PURCHASE COMMITMENTS:

In connection with an agreement executed in January 2022 with Ashland, Inc., the Company committed to purchase minimum amounts of goods used in its normal operations based on completion of certain milestones. The first milestone was met during the first quarter of 2023, and $980,000 of goods were purchased and received. In the second quarter of 2023, the Company was invoiced $980,000 for the second milestone and is recorded to accounts payable, although goods have not yet been received. Future annual minimum purchases remaining under the agreement are $980,000, which are not reflected in total liabilities.

(11) SUBSEQUENT EVENTS:

Annual Meeting

On July 31, 2023, the Company held its 2023 Annual Meeting of Stockholders (the “Annual Meeting”) to consider and vote on proposals for (i) the election of the director nominees named in the definitive proxy statement for the Annual Meeting filed with the Securities and Exchange Commission on June 13, 2023; (ii) the approval of the exercise in full of a warrant to purchase 2,514,970 shares of common stock held by Rafael Holdings, (iii) the approval of the sale and issuance to Rafael Holdings of 4,000,000 shares of common stock and a warrant to purchase an additional 4,000,000 shares of common stock, (iv) the approval of the compensation of the Company’s named executive officers; and (v) the ratification of the appointment of WithumSmith to serve as the Company’s independent registered public accountants. The Company’s stockholders approved all of the foregoing proposals at the Annual Meeting.

Rafael Financing

On August 1, 2023, the Company completed the private placement of its securities to Rafael Holdings pursuant to a Securities Purchase Agreement between the Company and Rafael Holdings dated June 1, 2023 (the “Purchase Agreement”). Pursuant to the Purchase Agreement, Rafael Holdings purchased 4,000,000 shares of common stock, and a seven-year warrant to purchase an additional 4,000,000 shares of common at a price of $1.25 per share, for an aggregate purchase price of $5,000,000. The issuance of the shares and warrant to Rafael Holdings was approved by the Company’s shareholders at the Annual Meeting in accordance with Listing Rules 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc. (“Nasdaq”).

Nasdaq Compliance

As previously reported, on May 15, 2023, the Company received a letter from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”) because the stockholders’ equity of the Company of $(438,876) as of March 31, 2023, as reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 12, 2023, was below the minimum requirement of $2,500,000.

Pursuant to Nasdaq’s Listing Rules, the Company submitted to Nasdaq a plan to regain compliance with the Rule (a “Compliance Plan”). On August 1, 2023, Nasdaq notified the Company that based on its review of the Compliance Plan, the Company has been granted an extension to regain compliance with the Rule. As a result of the completion of the Rafael Financing, the Company has regained compliance with the Rule. However, Nasdaq has informed the Company that it will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, it may be subject to delisting.

- 16 -

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information to explain our results of operations and financial condition. You should also read our unaudited condensed consolidated interim financial statements and their notes included in this Form 10-Q, and our audited consolidated financial statements and their notes and other information included in our Annual Report on Form 10-K for the year ended December 31, 2022. This report may contain forward-looking statements. Forward-looking statements within this Form 10-Q are identified by words such as “believes,” “anticipates,” “expects,” “intends,” “may,” “will” “plans” and other similar expressions; however, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are subject to significant risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements to reflect events, circumstances or developments occurring subsequent to the filing of this Form 10-Q with the U.S. Securities and Exchange Commission (the “SEC”) or for any other reason and you should not place undue reliance on these forward-looking statements. You should carefully review and consider the various disclosures the Company makes in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business. All amounts presented herein are rounded to nearest $1,000.

Overview

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

Preliminary data from our completed clinical studies suggest that Trappsol® Cyclo™ clears toxic deposits of cholesterol and other lipids from cells, has a consistent pharmacokinetic profile peripherally, and crosses the blood-brain-barrier in individuals suffering from NPC, and results in neurological and neurocognitive benefits and other clinical improvements in NPC patients. The full significance of these findings will be determined as part of the final analysis of data derived from our clinical trials (both completed and ongoing).

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On May 17, 2010, the FDA designated Trappsol® Cyclo™ as an orphan drug for the treatment of NPC, which would provide us with the exclusive right to sell Trappsol® Cyclo™ for the treatment of NPC for seven years following FDA drug approval. In April 2015, we also obtained Orphan Drug Designation for Trappsol® Cyclo™ in Europe, which will provide us with 10 years of market exclusivity following regulatory approval, which period will be extended to 12 years upon acceptance by the EMA’s Pediatric Committee of our pediatric investigation plan (PIP) demonstrating that Trappsol® Cyclo™ addresses the pediatric population. On January 12, 2017, we received Fast Track Designation from the FDA, and on December 1, 2017, the FDA designated NPC a Rare Pediatric Disease.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with of Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, with patient dosing beginning in the first quarter of 2023.

We filed an international patent application in October 2019 under the Patent Cooperation Treaty directed to the treatment of Alzheimer’s disease with cyclodextrins, and we are pursuing national and regional stage applications based on this international application. The terms of any patents resulting from these national or regional stage applications would be expected to expire in 2039 if all the requisite maintenance fees are paid.

Results of Operations – Three and Six Months Ended June 30, 2023 Compared to Three and Six Months Ended June 30, 2022

We reported net losses of $4,636,455 and $9,643,540 for the three and six months ended June 30, 2023, compared to net losses of $3,451,990 and $6,223,581 for the three and six months ended June 30, 2022.

Total revenues for the three month period ended June 30, 2023 decreased 78% to approximately $117,000 compared to approximately $542,000 for the same period in 2022. Total revenues for the six month period ended June 30, 2023 decreased 63% to approximately $270,000 compared to approximately $737,000 for the same period in 2022. Our change in the mix of our product sales for the three and six months ended June 30, 2023 and 2022 is as follows:

Trappsol® Cyclo HPBCDs

First and second-generation formulations of Trappsol® Cyclo™ HPBCD (in liquid and powder form) have been sold to a single customer who exports to Brazil for compassionate use in NPC patients. We sold approximately $58,000 and $700 of Trappsol® Cyclo™ for the three month periods ended June 30, 2023 and 2022, respectively. We sold approximately $111,000 and $700 of Trappsol® Cyclo™ for the six month periods ended June 30, 2023 and 2022, respectively. This product is designated as an orphan drug; the population of patients who use the product on a compassionate basis is small.

Trappsol® HPB

Our sales of Trappsol® HPB decreased by 84% for the three month period ended June 30, 2023, to approximately $57,000 from approximately $357,000 for the three months ended June 30, 2022. Our sales of Trappsol® HPB decreased by 66% for the six month period ended June 30, 2023, to approximately $143,000 from approximately $422,000 for the six months ended June 30, 2022.

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Trappsol® other products

Our sales of other Trappsol® products decreased by 99% for the three month period ended June 30, 2023, to approximately $2,000 from approximately $179,000 for the three months ended June 30, 2022. Our sales of other Trappsol® other products decreased by 98% for the six month period ended June 30, 2023, to approximately $5,000 from approximately $309,000 for the six months ended June 30, 2022.

Aquaplex®

Our sales of Aquaplex® for the three month period ended June 30, 2023 were approximately $60, as compared to sales of Aquaplex® for the three months ended June 30, 2022 of approximately $200. Our sales of Aquaplex® for the six month period ended June 30, 2023 were approximately $10,000, as compared to sales of Aquaplex® for the six months ended June 30, 2022 of approximately $800.

The largest customers for our legacy fine chemical business continue to follow historical product ordering trends by placing periodic large orders that represent a significant share of our annual sales volume. During the six months ended June 30, 2023, our three largest customers accounted for 71% of our sales; the largest accounted for 37% of sales. During the six months ended June 30, 2022, our four largest customers accounted for 66% of our sales; the largest accounted for 25% of sales. Historically, our usual smaller sales of HPB occur more frequently throughout the year compared to our large sales that we receive periodically. The timing of when we receive and are able to complete these two kinds of sales has a significant effect on our quarterly revenues and operating results and makes period to period comparisons difficult.

Our cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) for the three month period ended June 30, 2023 decreased 73% to approximately $20,000 from approximately $74,000 for the same period in 2022. Our cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) for the six month period ended June 30, 2023 decreased 67% to approximately $30,000 from approximately $90,000 for the same period in 2022. Our cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) as a percentage of sales was 11% for the six months ended June 30, 2023 and 12% for the six months ended June 30, 2022. Historically, the timing and product mix of sales to our large customers has had a significant effect on our sales, cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) and the related margin. We did not experience any significant increases in material costs during 2022, or the first six months of 2023.

Our gross margins may not be comparable to those of other entities, since some entities include all the costs related to their distribution network in cost of goods sold. Our cost of goods sold includes only the cost of products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation expense. Our employees provide receiving, inspection, warehousing and shipping operations for us. The cost of our employees is included in personnel expense. Our other costs of warehousing and shipping functions are included in office and other expense.

As we buy inventory from foreign suppliers, the change in the value of the U.S. dollar in relation to the Euro, Yen and Yuan has an effect on our cost of inventory. Our main supplier of specialty cyclodextrins and complexes, Cyclodextrin Research & Development Laboratory, is located in Hungary and its prices are set in Euros. The cost of our bulk inventory often changes due to fluctuations in the U.S. dollar. The cost of shipping from outside the U.S. also has a significant effect on our inventory acquisition costs. When we experience short-term increases in currency fluctuation or supplier price increases, we are often not able to raise our prices sufficiently to maintain our historical margins. Therefore, our margins on these sales may decline.

Personnel expenses decreased by 19%, to approximately $785,000 for the three months ended June 30, 2023 from approximately $971,000 for the three months ended June 30, 2022. Personnel expenses decreased by 23%, to approximately $1,692,000 for the six months ended June 30, 2023 from approximately $2,188,000 for the six months ended June 30, 2022. The decrease in personnel is due to the reallocation of personnel time from salaries to R&D expenses. We expect to maintain our level of employees and related costs in the near term.

Research and development expenses increased 69% to approximately $3,170,000 for the three months ended June 30, 2023, from approximately $1,874,000 for the three months ended June 30, 2022. Research and development expenses increased 122% to approximately $6,568,000 for the six months ended June 30, 2023, from approximately $2,958,000 for the six months ended June 30, 2022. Research and development expenses as a percentage of our total operating expenses increased to 66% for the six months ended June 30, 2023 from 42% for the six months ended June 30, 2022. The increase in research and development expense resulted from the increased activity in our Phase III study of Trappsol® Cyclo™ for the treatment of NPC in the more recent period.

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Professional fees decreased 36% to approximately $414,000 for the three months ended June 30, 2023, compared to approximately $650,000 for the three months ended June 30, 2022. Professional fees decreased 16% to approximately $897,000 for the six months ended June 30, 2023, compared to approximately $1,062,000 for the six months ended June 30, 2022.

Office and other expenses decreased 7% to approximately $273,000 for the three months ended June 30, 2023, compared to approximately $292,000 for the three months ended June 30, 2022. Office and other expenses decreased 5% to approximately $555,000 for the six months ended June 30, 2023, compared to approximately $586,000 for the six months ended June 30, 2022.

We increased our valuation allowance to offset the increase in our deferred tax asset from our net operating loss and did not recognize an income benefit or provision for the three or six months ended June 30, 2023, and 2022, respectively.

Liquidity and Capital Resources

Our cash decreased to $841,530 as of June 30, 2023, compared to $1,543,418 as of December 31, 2022. We had negative working capital of approximately $1,550,000 as of June 30, 2023, compared to positive working capital of approximately $678,000 at December 31, 2022. Cash used in operations was approximately $7,849,000 for the six months ended June 30, 2023, compared to approximately $9,186,000 for the same period in 2022.

The Company has continued to realize losses from operations. However, as a result of our recent public and private offerings, we believe we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements for at least the next 12 months. We will need to raise additional capital in the future to support our ongoing operations and continue our clinical trials. We expect to continue to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. There can be no guarantee that the Company will be successful in its ability to raise capital to fund future operational and development initiatives.

Our condensed consolidated financial statements for the six months ended June 30, 2023 and the consolidated financial statements for the year ended December 31, 2022 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above.

At December 31, 2022, we had approximately $42,395,000 in net state and federal operating loss carryforwards expiring from 2024 through 2037, including $33,997,000 that will not expire, that can be used to offset our current and future taxable net income and reduce our income tax liabilities. We have provided a 100% valuation allowance on our deferred tax asset based on our expected future expenses related to our clinical trials and other development initiatives.

We had no off-balance sheet arrangements as of June 30, 2023.

Critical Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make judgments, 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 revenue and expenses during the reporting periods. We continually evaluate our judgments, estimates and assumptions. We base our estimates on the terms of underlying agreements, our expected course of development, historical experience and other factors we believe are reasonable based on the circumstances, the results of which form our management’s basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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There were no significant changes to our critical accounting policies during the quarter ended June 30, 2023. For information about critical accounting policies, see the discussion of critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

a. Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2023.

b. Material Weaknesses over Complex Equity Instruments

During the preparation of our interim condensed consolidated financial statements for the period ended June 30, 2023, we identified a material weakness in our internal controls relating to the accounting of complex equity instruments. Specifically, the controls relating to the evaluation of the appropriate accounting classification of warrants as equity classified.

c. Changes in Internal Control.

We made no changes in our internal control over financial reporting (as defined in Rules 13a-15(f)) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal controls that occurred during our last fiscal quarter that has materially affected, or which is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors.

We have identified no additional risk factors other than those included in our Annual Report on Form 10-K for our year ended December 31, 2022 that we filed with the Securities and Exchange Commission on March 17, 2023. Readers are urged to carefully review our risk factors because they may cause our results to differ from the "forward-looking" statements made in this report. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business, financial condition and results of operations. We do not undertake to update any of the "forward-looking" statements or to announce the results of any revisions to these "forward-looking" statements except as required by law.

Item 6. Exhibits.

EXHIBIT NO.		DESCRIPTION

3.1		Articles of Incorporation of Cyclo Therapeutics, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on November 10, 2020).

3.2		Certificate of Amendment to Articles of Incorporation of Cyclo Therapeutics, Inc., filed June 24, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 24, 2021).

3.3		Certificate of Amendment to Articles of Incorporation of Cyclo Therapeutics, Inc. filed March 7, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 8, 2023).

3.4		Bylaws of Cyclo Therapeutics, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2020).

4.1		Warrant, dated May 2, 2023, issued by Cyclo Therapeutics, Inc. to Rafael Holdings, Inc., (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2023)

4.2		Form of Warrant, issuable by Cyclo Therapeutics, Inc. to Rafael Holdings, Inc. pursuant to the Securities Purchase Agreement dated June 1, 2023 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 5, 2023)

10.1		Securities Purchase Agreement, dated as of May 2, 2023, between Cyclo Therapeutics, Inc. and Rafael Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2023)

10.2		Securities Purchase Agreement, dated as of June 1, 2023 (“June Subscription Agreement”), between Cyclo Therapeutics, Inc. and Rafael Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 5, 2023)

10.3		Registration Rights Agreement, dated as of May 2, 2023, between Cyclo Therapeutics, Inc. and Rafael Holdings, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2023)

10.4		Amendment to Registration Rights Agreement dated as of June 1, 2023, contained in Section 5(e) of the June 2023 Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 5, 2023)

31.1		Rule 13a-14(a)/15d-14a(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14a(a) Certification of Chief Financial Officer

32.1		Section 1350 Certification of Chief Executive Officer

32.2		Section 1350 Certification of Chief Financial Officer

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CYCLO THERAPEUTICS, INC.

Date: August 14, 2023	By:	/s/ N. Scott Fine
		N. Scott Fine
		Chief Executive Officer
		(principal executive officer)


Date: August 14, 2023	By:	/s/ Joshua M. Fine
		Joshua M. Fine
		Chief Financial Officer
		(principal financial and accounting officer)

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SEC Form 10-Q filed by Cyclo Therapeutics Inc.