<SEC-DOCUMENT>0000921895-22-003082.txt : 20221118
<SEC-HEADER>0000921895-22-003082.hdr.sgml : 20221118
<ACCEPTANCE-DATETIME>20221118110227
ACCESSION NUMBER:		0000921895-22-003082
CONFORMED SUBMISSION TYPE:	DFAN14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20221117
DATE AS OF CHANGE:		20221118

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Diffusion Pharmaceuticals Inc.
		CENTRAL INDEX KEY:			0001053691
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				300645032
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DFAN14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-37942
		FILM NUMBER:		221401044

	BUSINESS ADDRESS:	
		STREET 1:		300 EAST MAIN STREET
		STREET 2:		SUITE 201
		CITY:			CHARLOTTESVILLE
		STATE:			VA
		ZIP:			22902
		BUSINESS PHONE:		(434) 220-0718

	MAIL ADDRESS:	
		STREET 1:		300 EAST MAIN STREET
		STREET 2:		SUITE 201
		CITY:			CHARLOTTESVILLE
		STATE:			VA
		ZIP:			22902

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RestorGenex Corp
		DATE OF NAME CHANGE:	20140307

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Stratus Media Group, Inc
		DATE OF NAME CHANGE:	20080722

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FERIS INTERNATIONAL, INC.
		DATE OF NAME CHANGE:	20080228

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Dobkin David
		CENTRAL INDEX KEY:			0001806055

	FILING VALUES:
		FORM TYPE:		DFAN14A

	MAIL ADDRESS:	
		STREET 1:		250 W. 55TH ST., #3401
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019
</SEC-HEADER>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

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14A</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0">INFORMATION REQUIRED IN PROXY STATEMENT</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0">SCHEDULE 14A INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Amendment No. )</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Filed by the Registrant &#9744;</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">&#9744;</TD><TD>Preliminary Proxy Statement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top"><TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">&#9744;</TD><TD>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</TD></TR></TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top"><TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">&#9744;</TD><TD>Definitive Proxy Statement</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top"><TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">&#9744;</TD><TD>Definitive Additional Materials</TD></TR></TABLE>



<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top"><TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">&#9746;</TD><TD>Soliciting Material Under &sect; 240.14a-12</TD></TR></TABLE>



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    <TD STYLE="width: 100%; text-align: center; vertical-align: top; border-bottom: Black 0.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">DIFFUSION PHARMACEUTICALS INC.</P>
</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: top"><P>(Name of Registrant as Specified In Its Charter)</P>

</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD></TR>
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    <TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 0.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">LIFESCI SPECIAL OPPORTUNITIES MASTER FUND LTD.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">LIFESCI SPECIAL OPPORTUNITIES PARTNERS, LP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">LIFESCI SPECIAL OPPORTUNITIES OFFSHORE FUND, LTD.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">LIFESCI SPECIAL OPPORTUNITIES PARTNERS GP, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">LIFESCI MANAGEMENT COMPANY, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">DAVID DOBKIN</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">JILL DAVIDSON</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">TENZIN KHANGSAR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">JEFFREY KIMBELL</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">JESSICA M. LOCKETT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">JEFFREY MAX</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">JOHN ZIEGLER</P>
</TD></TR>
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    <TD STYLE="text-align: center; vertical-align: top"><P>(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Payment of Filing Fee (Check all boxes that apply):</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">LifeSci Special Opportunities
Master Fund Ltd., a Cayman Island exempted company (together with its affiliates &ldquo;LifeSci Special Opportunities&rdquo;), together
with the other participants named herein (collectively, &ldquo;LifeSci&rdquo;), intends to file a preliminary proxy statement and accompanying
universal proxy card with the Securities and Exchange Commission (&ldquo;SEC&rdquo;) to be used to solicit votes in connection with the
upcoming annual meeting of stockholders (the &ldquo;Annual Meeting&rdquo;) of Diffusion Pharmaceuticals Inc., a Delaware corporation (the
 &ldquo;Company&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">On November 17, 2022, LifeSci
issued the following press release:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center; text-indent: 0in"><B>LifeSci Special Opportunities
Responds to Recent Press Release Issued by Diffusion Pharmaceuticals</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center; text-indent: 0in"><B><I>Sets the Record Straight
on Diffusion&rsquo;s Misleading Narrative and Raises Concerns about a Troubling Pattern of Entrenchment and Lack of Accountability on
the Board</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center; text-indent: 0in"><B><I>Has Nominated a Slate
of Highly Qualified Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">NEW YORK, NY, November
17, 2022 &ndash; LifeSci Special Opportunities Master Fund Ltd. (&ldquo;<U>LifeSci Special Opportunities</U>&rdquo; or &ldquo;<U>we</U>&rdquo;),
the holder of 96,976 shares of common stock of Diffusion Pharmaceuticals Inc. (&ldquo;<U>Diffusion</U>&rdquo; or the &ldquo;<U>Company</U>&rdquo;)
(NASDAQ: DFFN), or approximately 4.8% of the Company&rsquo;s outstanding shares, today issued a statement in response to the Company&rsquo;s
misleading press release from November 14, 2022 and announced that it has nominated a slate of high quality director candidates for election
at the Company&rsquo;s upcoming annual meeting to be held on December 30, 2022 (the &ldquo;<U>2022 Annual Meeting</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><U>LifeSci Special Opportunities
Statement</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">&ldquo;The Company&rsquo;s
November 14, 2022 press release announcing that its board of directors (the &ldquo;<U>Board</U>&rdquo;) has authorized a review and evaluation
of potential strategic opportunities appears to have been deliberately timed in order to obscure prior attempts by third parties, including
LifeSci Capital LLC (&ldquo;<U>LS Capital</U>&rdquo;), a commonly-owned affiliate of LifeSci Special Opportunities, acting on behalf of
its clients, to engage the Board in discussions regarding potential strategic alternatives. The Company&rsquo;s press release endeavors
to mislead stockholders regarding the facts as to LS Capital&rsquo;s efforts to constructively engage with the Company on possible pathways
to unlock significant value for all of the Company&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Further, the announcement
of the strategic review process appears to be a desperate and thinly veiled effort to distract stockholders and the market from the Company&rsquo;s
failures, including the Board&rsquo;s and management&rsquo;s inability to develop their lead asset, Trans Sodium Crocetinate (TSC), and
the catastrophic erosion of Diffusion&rsquo;s cash balances and stockholder value that has occurred under their leadership. We believe
that stockholders will be able to see through these transparent attempts to deflect attention away from the Company&rsquo;s operational
and share price underperformance, including the fact that the Company&rsquo;s share price has declined by approximately 78% from November
15, 2021 to November 11, 2022.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>1</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">We encourage stockholders
to review our proxy materials as they become available, which will include additional information regarding our concerns with the Company.&rdquo;</P>

<HR ALIGN="LEFT" SIZE="1" STYLE="width: 5pc; margin-top: 12pt">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>1</SUP></FONT> Represents the date one trading day prior to LifeSci Special Opportunities&rsquo; engagement with the Company becoming public.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><U>Background Information</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">On October 17, 2022, on
behalf of a client and unaffiliated investor in the Company, LS Capital presented an unsolicited offer to the Company to purchase 100%
of the Company&rsquo;s outstanding common stock not already owned by its client for $6.58 per share in cash, which represented a 20% premium
to the Company&rsquo;s closing stock price as of the close of business on Friday, October 13, 2022. The Company unceremoniously rejected
the offer on October 25, 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Since May 2022, LS Capital
had attempted to engage constructively with the Company on behalf of LS Capital&rsquo;s client to discuss potential strategic alternatives
that LS Capital believed would be in the Company&rsquo;s best interest and unlock value for all of the Company&rsquo;s stockholders. Following
LS Capital&rsquo;s initial contact, the Company ignored all attempts by LS Capital to continue engaging for nearly four months until mid-September.
With the Board and management continuing to refuse to engage directly, LS Capital had the opportunity to speak with an investor relations
firm representing the Company, and continued to request to speak with Diffusion&rsquo;s management. As a precursor to a call with management,
LS Capital discussed entering into a non-disclosure agreement with the Company. However, the Company&rsquo;s proposed non-disclosure agreement
was far from customary in LS Capital&rsquo;s experience and sought to impose a multi-year standstill and other burdensome restrictions,
which LS Capital viewed as a deliberate and troubling attempt by the Board to disenfranchise stockholders and further ensconce themselves
in Diffusion&rsquo;s failing business. Ultimately, a call with the Company proceeded without a non-disclosure agreement in place, and
LS Capital shared its thoughts with the Company on potential strategic options. Following this call, the Company ceased engaging with
LS Capital, refusing requests for follow-up discussions and negotiations. Not surprisingly, the Company&rsquo;s behavior appears to be
consistent with its vague October 25, 2022 press release, which stated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in 12pt; text-align: justify; text-indent: 0in"><I>&ldquo;There is no
timeline for this review and there is no assurance that the Board&rsquo;s review will result in any transaction being consummated. Diffusion
does not intend to comment on the process or make further disclosures until it determines an update is appropriate.&rdquo;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">LifeSci Special Opportunities,
as a large stockholder of the Company, is naturally concerned about the Board&rsquo;s motives and willingness to actually engage in substantive
conversations that, in our view, would result in the Company achieving its stated goal of enhancing shareholder value. LifeSci Special
Opportunities is also concerned that the Company has not held an annual meeting to elect directors in nearly 17 months, which appears
to be yet another entrenchment tactic by the Board to maintain the status quo. When the 2022 Annual Meeting of stockholders is finally
held (assuming the Company does not delay it again), it will be over 18 months since directors were elected at the 2021 annual meeting
of stockholders. Furthermore, it appears the Company only announced that it would hold the 2022 Annual Meeting as a reactive measure to
external pressure, such as the third party offer from LS Capital&rsquo;s client, and did so with very little notice, which prompted an
accelerated timeline for stockholders to provide notice of any nominations or business proposals. The timing of the Company&rsquo;s public
announcement of its strategic review process also seems to be only in response to the unsolicited offer to acquire the Company rather
than any genuine initiative by leadership to take actions that are in the best interest of Diffusion stockholders. We also question the
circumstances surrounding the recent and abrupt weekend-resignation of one of the Company&rsquo;s directors that was announced concurrently
with the Company&rsquo;s misleading press release.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">In LifeSci Special Opportunities&rsquo;
view, these are all clear and unfortunate symptoms of a reactive and troubled Board that is trying to avoid being held accountable by
its stockholders.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><U>The Urgent Need for Fresh
Perspectives </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">Given the Board&rsquo;s
track record of overseeing significant value destruction and seeming indifference towards the Company&rsquo;s stockholders, the true owners
of the Company, we believe it has become abundantly clear that the current Board and management are not worthy stewards of our Company.
We have serious concerns about whether they can be trusted to run the strategic review process, especially given their entrenchment tactics
and the timing of the stated commencement of the review process, which appears to only have been undertaken in response to an unsolicited
offer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0.5in">While we are open to working
constructively with the Company, we do not intend to stand idly by and allow the Board and management to continue unchecked on this path
of value destruction. To that end, we have nominated the following highly qualified individuals for election at the 2022 Annual Meeting:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B><U>Jill Davidson</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Ms. Davidson has significant expertise in the pharmaceutical industry and currently serves as the President
of Fast Scripts LLC, an early-stage medical service provider to those recovering from opioid addiction</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Previously, Ms. Davidson served in c-suite level roles at medical care providers Omnicare, Inc. and Clasen
Long Term Care Pharmacy. She was also the President of the Missouri-Illinois Gateway Hemophilia Association and the Vice President of
the National Pharmacy Roundtable.</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Ms. Davidson is the Co-Manager of SkiProp LLC and the Manager of Davidson LLC, which both own various
rental properties.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B><U>Tenzin Khangsar</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Khangsar is the Principal at Snowlion Ventures, a Vancouver-based financial consulting firm, and was
previously an advisor to Deloitte Touche and a Managing Director and Executive Vice President for RCI Capital Group.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Khangsar has served as an executive advisor for privately-held emerging growth companies and publicly-traded
corporations alike, advising on financial strategy and execution and organizational infrastructure to support governance matters, among
which include Google LLC, Key, Empower Clinics Inc. (CSE: CBDT) and Dapper Labs.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Khangsar also previously served in various government roles in Canada&#8217;s Office of the Prime
Minister and the Minister of Immigration, including as Chief of Staff, and served as Honorary Counsel to the Government of Mongolia, Chair
of the Multicultural Advisory Committee of British Columbia and Director and President of the Canada-India Business Council.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">He also previously served on the board of directors of Northstar Trade Finance, a financial services provider,
and Planterra, a non-profit dedicated to sustainable community development through travel, and has significant experience serving in executive
roles at non-profit organizations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B><U>Jeffrey Kimbell</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Kimbell has extensive experience in the healthcare industry as well as significant advisory and government
experience, and he currently serves as the President of Jeffrey J. Kimbell &amp; Associates, a client service provider to the life sciences
industry.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Kimbell served on President George W. Bush&#8217;s Transition Team Advisory Committee for the U.S.
Department of Health and Human Services.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Previously, he served as Founding Partner of Advyzom, LLC, a leading boutique consulting company specializing
in highly strategic regulatory and development advice and services for the pharmaceutical and healthcare industries.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Kimbell previously served as the first Executive Director of the Medical Device Manufacturers Association,
one of the leading educational and advocacy association advancing the interests of innovative and entrepreneurial medical device manufacturers
in the United States.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B><U>Jessica M. Lockett</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Ms. Lockett currently serves as a Partner at Lockett + Horwitz, PLC.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Ms. Lockett has extensive knowledge of the capital markets and securities laws, and as a corporate and
securities law attorney, she has experience representing public and private companies at various stages of development with corporate
governance and securities matters, as well as advising on mergers and acquisitions, financing, and fundraising activities.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Ms. Lockett currently serves on the board of directors of Ammo, Inc. (NASDAQ: POWW).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B><U>Jeffrey Max</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Max has extensive experience as a c-suite level executive across a variety of industries. He currently
serves as the CEO of Ascent Solar Technologies, and previously served as CEO of Agile Space Industries, Inc., Rezolve, Inc., Venda, Inc.
and WhiteLight Systems, Inc., and as President of Powa Technologies, Inc.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Max currently serves as a director of Orbital Assembly Corporation.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Max previously served as a Managing Partner of La Plata Capital Partners, LLC, and as a Senior Advisor
to Liiv Group, two investment-based companies.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Mr. Max also previously served as Managing Director PLR Advisors, Ltd., a capital markets and technology
consulting firm, and Executive Vice President of OptiMark Technologies Inc., a stock-trading technology developer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 1pt 0 12pt; text-align: justify"><B><U>John Ziegler MD</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Dr. Ziegler is currently the Chief Medical Officer of Promedim Ltd., a firm specializing in the oversight
of pharmaceutical clinical trials, and also serves as the Managing Partner of Mountain Anesthesia PLLC (d/b/a Premier Healthcare Partners).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Dr. Ziegler has served as a consultant to the pharmaceutical industry since 2012 and, in that capacity,
has acted as the Medical Director of many clinical trials and drug development programs for a number of pharmaceutical companies and clinical
research organizations, and is also a Fellow of the American Society of Anesthesiologists.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 1pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify">Dr. Ziegler previously served on the board of directors of LifeSci Acquisition Corp (formerly NASDAQ:
LSAC).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in"><B>About LifeSci Special
Opportunities Master Fund Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in">Formed in 2021, LifeSci
Special Opportunities is a public investing arm of LifeSci Partners, a unique life sciences and healthcare consultancy formed in 2010.
The fund invests within the public healthcare industry focusing on undervalued biotech and pharmaceutical companies.</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">CERTAIN INFORMATION CONCERNING THE PARTICIPANTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">LifeSci Special Opportunities Master Fund Ltd., a
Cayman Islands exempted company (&ldquo;<U>LifeSci Special Opportunities</U>&rdquo;), together with the other participants named herein
(collectively, &ldquo;<U>LifeSci</U>&rdquo;), intends to file a preliminary proxy statement and accompanying universal proxy card with
the Securities and Exchange Commission (&ldquo;<U>SEC</U>&rdquo;) to be used to solicit votes in connection with the 2022 annual meeting
of stockholders of Diffusion Pharmaceuticals Inc., a Delaware corporation (the &ldquo;<U>Company</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">LIFESCI STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY
TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY
MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC&rsquo;S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED
TO THE PARTICIPANTS' PROXY SOLICITOR.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The participants in the proxy solicitation are anticipated
to be LifeSci Special Opportunities, LifeSci Special Opportunities Partners LP, a Delaware limited partnership (&ldquo;<U>LifeSci Opportunities
Partners</U>&rdquo;), LifeSci Special Opportunities Offshore Fund, Ltd., a Cayman Islands exempted company (&ldquo;<U>LifeSci Offshore</U>&rdquo;),
LifeSci Special Opportunities Partners GP, LLC, a Delaware limited liability company (&ldquo;<U>LifeSci GP</U>&rdquo;), LifeSci Management
Company LLC, a Delaware limited liability company (&ldquo;<U>LifeSci Management</U>&rdquo;), David Dobkin, Jill Davidson, Tenzin Khangsar,
Jeffrey Kimbell, Jessica M. Lockett, Jeffrey Max and John S. Ziegler.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of the date hereof, LifeSci Special Opportunities
beneficially owns 96,976 shares of common stock, $0.001 par value per share, of the Company (the &ldquo;<U>Common Stock</U>&rdquo;). LifeSci
Opportunities Partners, as a feeder fund of LifeSci Special Opportunities, may be deemed to beneficially own the 96,976 shares of Common
Stock beneficially owned by LifeSci Special Opportunities. LifeSci Offshore, as a feeder fund of LifeSci Special Opportunities, may be
deemed to beneficially own the 96,976 shares of Common Stock beneficially owned by LifeSci Special Opportunities. LifeSci GP, as the general
partner of LifeSci Special Opportunities, may be deemed to beneficially own the 96,976 shares of Common Stock beneficially owned by LifeSci
Special Opportunities. LifeSci Management, as the investment manager of LifeSci Special Opportunities, may be deemed to beneficially own
the 96,976 shares of Common Stock beneficially owned by LifeSci Special Opportunities. Mr. Dobkin, as managing member of each of LifeSci
GP and LifeSci Management, may be deemed to beneficially own the 96,976 shares of Common Stock beneficially owned by LifeSci Special Opportunities.
As of the date hereof, none of Messes. Davidson and Lockett or Messrs. Khangsar, Kimbell, Max and Ziegler own beneficially or of record
any securities of the Company.</P>



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