3. ACCRUED EXPENSES

Accrued Bonus

During the years ended December 31, 2023 and 2022, the Company accrued $786,999 and $1,094,582, respectively, in bonus expense relating to employees and officers of the Company. On May 31, 2023, the 2022 accrued bonus balance was settled by issuance of 974,046 stock options with a total fair value of $977,123. The fair value of the options issued was less than the accrued bonus balance by $117,459 due to payroll taxes accrued for related to the 2022 bonuses and not payable with the issuance of the stock options and for employees who were terminated after December 31, 2022 and not eligible for the bonus payout. This difference was recorded against payroll expense and is presented within general and administrative expenses and research and development expenses on the statement of operations for the year ended December 31, 2023.

Accrued Severance

On November 10, 2023, Joseph McGuire and Dr. Mihail Obrocea were terminated from their positions as Chief Financial Officer (and principal financial and accounting officer) and Chief Medical Officer, respectively, of the Company, effective immediately, as part of the Company’s effort to streamline operations. Mr. McGuire’s and Dr. Obrocea’s terminations were not based on any disagreement with the Company’s operations, policies or practices. As of December 31, 2023, the Company has accrued severance balance of $824,435.