What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-17 compared with 2020-11-12 · 1341 added, 1637 removed, 395 unchanged (88% of the section changed)

4 unchanged sentences

thousands, except for share and per share data)

September 30, 2020

December 31, 2019

Current assets:

Cash and cash equivalents

Marketable securities, short term

Funds receivable from sale of New Jersey net operating loss

Cash and cash

Marketable securities

Funds receivable from New

Jersey net operating loss

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Right of use assets, net

Patent and trademark rights, net

Marketable securities, long term

expenses and other current assets

current assets

Property and equipment,

Right of use asset, net

Patent and trademark rights,

Marketable securities, long

LIABILITIES AND STOCKHOLDERS’

2 unchanged sentences

Accrued expenses

Current portion of operating lease liabilities

Current portion of financing obligation

Total current liabilities

Current portion of operating

lease liability

portion of financing obligation

current liabilities

Long-term liabilities:

Operating lease obligation

Notes payable, net

Financing obligation arising from sale leaseback transaction (Note 14)

Operating lease liability

Financing obligation arising from sale leaseback

transaction (Note 13)

Redeemable warrants

Commitments and contingencies

Commitments and contingencies (Notes 11, 12,

Stockholders’

Series B Convertible Preferred Stock, stated value $1,000 per share, 8,000 shares designated, 733 and 778 shares issues and outstanding, respectively

Common stock, par value $0.001 per share, authorized 350,000,000 shares;

Series B Convertible Preferred Stock, stated

value $1,000 per share, 725 shares designated, 732 shares issued and outstanding

Common Stock, par value $0.001 per share, authorized

350,000,000 shares;

issued and outstanding 47,832,997 and 42,154,371, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

stockholders’

liabilities and stockholders’

accompanying notes to consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

Statements of Comprehensive Loss

Statement of Operations and Comprehensive Loss

thousands, except share and per share data)

Three months ended

September 30,

Nine months ended

September 30,

Clinical treatment programs –

United States

Clinical treatment programs - Europe

months ended March 31,

Clinical treatment

programs - US

treatment programs - Europe

Total Revenues

2 unchanged sentences

Research and development

General and administrative

and administrative

Total Costs and Expenses

1 unchanged sentence

Interest and other income

Interest expense and other finance costs

Extinguishment of notes payable

Convertible note valuation adjustment

Settlement of litigation

Redeemable warrants valuation adjustment

Other comprehensive income (loss):

Unrealized loss on marketable securities

Net comprehensive loss

Basic and diluted loss per share

Weighted average shares outstanding, basic and diluted

Interest expense and other

finance costs

Redeemable warrants valuation

from sale of Income tax operating losses

Other comprehensive (loss)

Reclassification adjustment

for realized investment lost

in unrealized loss on marketable securities available for sale

Comprehensive

Basic and diluted loss

Weighted average shares outstanding basic

accompanying notes to consolidated financial statements.

2 unchanged sentences

Statement of Changes in Stockholders’

the Nine Months Ended September 30, 2020 and 2019

the Three Months Ended March 31, 2021 and 2020

thousands except share data)

Comprehensive

other Comprehensive

Income (Loss)

Stockholders’

1 unchanged sentence

Shares issued for:

Common stock issuances

Warrant modification

Common stock issuances, net of costs

Equity-based compensation

Shares issued to pay accounts payable

Series B preferred shares converted to common shares

Net comprehensive loss

Balance September 30, 2020

Series B Preferred

Accumulated other

Series B preferred shares converted to common

Comprehensive

Income (Loss)

Balance March 31, 2021

Paid-in Capital

other Comprehensive Income (Loss)

Stockholders’

2 unchanged sentences

Common stock issuance, net of costs

Convertible note origination shares

Deemed dividends

Warrant modification

Equity-based compensation

Redeemable warrants

Shares issued to pay accounts payable

Series B preferred shares issued, net of offering costs

Series B preferred shares converted to common shares

Net comprehensive loss

Balance September 30, 2019

Series B preferred shares converted to common

Comprehensive

Balance March 31, 2020

accompanying notes to consolidated financial statements.

2 unchanged sentences

Statements of Cash Flows

the Nine Months Ended September 30, 2020 and 2019

the Three Months Ended March 31, 2021 and 2020

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property and equipment

Redeemable warrants valuation adjustment

Fair value of convertible note adjustment

Change in convertible debt –

Extinguishment of notes payable

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation of property

and equipment

Redeemable warrants valuation

Warrant modification

Amortization of patent, trademark rights

Amortization of patent,

trademark rights

Changes in ROU assets

Loss on available for sale

marketable securities

Gain from sale of income

tax operating losses

Equity-based compensation

Realized (loss) gain on sale of marketable securities

Amortization of finance and debt issuance costs

Amortization of finance

and debt issuance costs

Change in assets and liabilities:

Accounts receivable and other receivables

Prepaid expenses and other current assets

Prepaid expenses and other

current assets and other non current assets

Lease liability

1 unchanged sentence

Accrued interest expense

Accrued expenses

Net cash used in operating activities

Net cash used in operating

Cash flows from investing activities:

Proceeds from sale of marketable securities

Purchase of marketable securities

Purchase of property and equipment

Purchase of patent and trademark rights

Net cash used in investing activities

Proceeds from sale of marketable

Purchase of short-term

marketable securities

Purchase of property and

of patent and trademark rights

cash provided by investing activities

Cash flows from financing activities:

Payment of note payable

Financing obligation payments

Proceeds from note payable, net of issuance costs

Proceeds from sale of stock, net of issuance costs

Net cash provided by financing activities

from sale of stock, net of issuance costs

Net cash provided by

financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosures of non-cash investing and financing cash flow information:

Unrealized loss on marketable securities

Conversion of Series B preferred

Conversion of note payable into shares

Stock issued to settle accounts payable

Operating lease –

right of use assets

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Supplemental disclosures of non-cash investing

and financing cash flow information:

issued to settle accounts payable

of Series B preferred

accompanying notes to consolidated financial statements.

5 unchanged sentences

and its subsidiaries (collectively, “AIM”

or “Company”) are an immuno-pharma company headquartered

in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of cancers, various viruses

and immune-deficiency disorders.

The Company has established a strong foundation of laboratory, pre-clinical and clinical data

with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the

human body and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.

or the “Company”) are an immuno-pharma company headquartered

in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of cancers, viruses and immune-deficiency

The Company has established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development

of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body and to aid the development

of therapeutic products for the treatment of certain cancers and chronic diseases.

flagship products include Ampligen®

2 unchanged sentences

(Interferon Alfa-N3).

A first-in-class drug is also known as a new molecular entity that contains

an active moiety.

Ampligen has not been approved by the FDA or marketed in the US.

global pandemic due to a novel strain of coronavirus (COVID-19) has occurred.

Since the late 2019 outbreak of SARS-CoV-2, the

novel virus that causes COVID-19, the Company has been actively engaged in determining whether Ampligen could be an effective

treatment for this virus or could be part of a vaccine.

The Company believes that Ampligen has the potential to be both an early-onset

treatment for and prophylaxis against SARS-Cov-2.

Ampligen is also being researched as part of a potential COVID-19 vaccine strategy

that combines Ampligen as an immune enhancer seeking to boost the efficacy of the vaccine and also convey cross-reactivity and

cross-protection against future mutations.

A first-in-class drug is also known as a new molecular entity that contains an active

Ampligen has not been approved by the FDA or marketed in the United States.

the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, the Company has been actively engaged in determining whether

Ampligen could be an effective treatment for this virus or could be part of a vaccine.

The Company believes that Ampligen has

the potential to be both an early-onset treatment for and prophylaxis against SARS-CoV-2.

Ampligen also has potential as a COVID-19

vaccine strategy that combines Ampligen as an immune enhancer seeking to boost the efficacy of the vaccine and also convey cross-reactivity

and cross-protection against future mutations.

The Company believes that prior studies of Ampligen in SARS-CoV-1 animal experimentation

may predict similar protective effects against the new virus.

February 2020, AIM filed three provisional patent applications related to Ampligen in the Company’s efforts toward joining

the global health community in the fight against the deadly coronavirus.

The Company’s three provisional patent applications

1) Ampligen as a therapy for the coronavirus;

2) Ampligen as part of a proposed intranasal universal coronavirus vaccine

that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection and;

3) a high-volume manufacturing

process for Ampligen.

Under the Patent Cooperation Treaty of 1970, which provides international protections for patents, the three

provisional patent applications can be converted to international patent applications based on the date of their filings.

early April 2020, the Company entered into a Material Transfer Agreement with Shenzhen Smoore Technologies located in Shenzhen

China, the world’s largest manufacturer of inhalation devices.

Pursuant to this agreement, the Company is providing Smoore

with Ampligen and Smoore will be conducting in vitro tests using its porous ceramic atomizer technology.

Initial testing will

include evaluation of Ampligen with regard to safety and characterization of the inhaler vapor properties.

Additional testing

will study the particle size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology.

The goal of these studies is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver

biologically active Ampligen deep into the lung airways of humans.

Ampligen is scheduled to be shipped to Smoore for testing,

pending resolution of various China inbound import regulatory requirements.

AIM and Smoore are working to identify and navigate

any and all regulatory obligations.

The Company will provide additional updates as they become available.

in April 2020, the Company entered into confidentiality and non-disclosure agreements with numerous companies for the potential

outsourcing of the production of polymer, enzyme, placebo as well as Ampligen, and one Contract Research Organization, Amarex

Clinical Research LLC (“Amarex”), which will provide regulatory support, including managing a clinical trial testing

Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.

addition, the Company has joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic

of China (PRC) for use as a prophylactic/early-onset therapeutic against COVID-19.

CGA is a member-based online information platform

and offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the

China Overseas Development Association.

The relationship with ChinaGoAbroad is ongoing.

May 11, 2020, the FDA authorized an IND for Roswell Park Comprehensive Cancer Institute (“Roswell Park”) to conduct

a Phase 1/2a study of a regimen of Ampligen and interferon alpha in cancer patients with mild or moderate COVID-19 infections.

This new clinical trial, sponsored by the Roswell Park in collaboration with the Company, will test the safety of this combination

regimen in patients with cancer and mild to moderate COVID-19, and the extent to which this therapy will promote clearance of

the SARS-CoV-2 virus from the upper airway.

It is planned that the phase 1/2a study will enroll up to 44 patients in two stages.

Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses.

Once that initial phase is

complete, further study participants will be randomized to two arms:

one receiving the two-drug combination and a control group

who will not receive Ampligen or interferon alfa but will receive best available care.

The Company intends to be a financial sponsor

of the study and will provide Ampligen at no charge for this study.

March 2020, the Japanese National Institute of Infectious Diseases (“NIID”) initiated preliminary laboratory testing

of Ampligen as a potential treatment for COVID-19.

On July 1, 2020, we entered into a trilateral material transfer and research

agreement with the NIID and Shionogi & Co., Ltd.

(“Shionogi”), one of Japan’s premier pharma companies to

test the Company’s drug Ampligen as a potential vaccine adjuvant for COVID-19.

Under the agreement, we have and will continue

to provide Ampligen samples for various research projects.

Per this agreement, the details of all preclinical and clinical results

will remain confidential until released by NIID and Shionogi.

July 6, 2020, we entered into a clinical trial agreement with Roswell Park pursuant to which Roswell Park will conduct a Phase

1/2a trial of Ampligen (rintatolimod) in combination with Intron-A (interferon alfa-2b), in cancer patients with COVID-19, the

disease caused by the SARS-CoV-2 coronavirus.

the Company also entered into a material transfer agreement with the University of Rochester which is planning a series of in

vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism

The Company also entered into a specialized services agreement with Utah State University that has supplied Ampligen

to support the University’s Institute for Viral Research in its research into SARS-CoV-2.

The Utah State results show that

Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically achievable intranasal Ampligen dosage levels.

June 2020, AIM filed a provisional patent application for, among other discoveries, the use of Ampligen®

as a potential early-onset

therapy for the treatment of COVID-19 induced chronic fatigue.

survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath

months after recovering from the acute illness.

These patients are commonly referred to as “Long Haulers.”

is increasing evidence that patients with COVID-19 can develop a similar, ME/CFS-like illness.

In October 2020, AIM received Institutional

Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program (EAP) clinical trial for Myalgic Encephalomyelitis/Chronic

Fatigue Syndrome (ME/CFS) to include patients previously diagnosed with SARS-CoV-2, but who still demonstrate chronic fatigue-like

November 2, 2020, AIM announced the publication of statistically significant data detailing how Ampligen could have a considerable

positive impact on people living with ME/CFS when administered in the early stages of the disease.

The data were published in

PLOS ONE , a peer-reviewed open access scientific journal published by the Public Library of Science.

AIM researchers found

that the TLR3 agonist Ampligen substantially improved physical performance in a subset of ME/CFS patients.

The findings potentially

carry special importance for COVID-19 “Long Haulers,”

who are uniquely situated to potentially benefit from Ampligen

as an early onset therapy for subjects who have recovered from acute COVID-19, but then experience chronic fatigue-like symptoms.

COVID-19 pandemic has significantly impacted the economic conditions in the U.S., accelerating during the first half of March.

The ultimate impact of the pandemic on the Company’s results of operations, financial position, liquidity, or capital resources

cannot be reasonably estimated at this time.

is committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise

needed to commercialize the many potential therapeutic aspects of its drug, Ampligen, and its approved drug, Alferon N Injection.

the opinion of management, all adjustments necessary for a fair presentation of such consolidated financial statements have been

Given the evolution of uncertainty associated with SAR-CoV-2,

there is uncertainty as to the effects on the Company’s financial position, results of operations or cash flows.

full impact of the COVID-19 outbreak continues to evolve, as such, it is uncertain as to the full magnitude that the pandemic

will have on the Company’s financial condition, liquidity, and future results of operations.

is actively monitoring the global situation on its financial condition, liquidity, operations, scientific collaborations, suppliers,

industry, and workforce.

Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company

is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for

fiscal year 2021.

the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues,

it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity for

the fiscal year 2021.

in April 2020, the Company entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing

of the production of polymer, enzyme, placebo as well as Ampligen and one Contract Research Organization which may also assist with the

planning, presentation and filing of documents with the FDA.

These confidentiality and non-disclosure agreements are only the initial

step in forging relationships with these entities to obtain contract manufacturers and research partners.

No assurance can be given as

to how many of these, initial explorations, if any, will result in definitive arrangements or, with regard to potential research partners,

what research arrangements will develop and thereafter prove fruitful.

represents an RNA being developed for globally important cancers, viral diseases and disorders of the immune system.

Ampligen has in

the clinic demonstrated the potential for standalone efficacy in a number of solid tumors.

The Company has also seen success in increasing

survival rates and efficacy in the treatment of animal tumors when Ampligen is used in combination with checkpoint blockade therapies.

This success in the field of immuno-oncology has guided the Company’s focus toward the potential use of Ampligen as a combinational

therapy for the treatment of a variety of solid tumor types.

There are currently multiple Ampligen clinical trials testing Ampligen in

humans —

both underway and planned —

at major cancer research centers.

Ampligen was used as a monotherapy to treat pancreatic

cancer patients in an Early Access Program (EAP) approved by the Inspectorate of Healthcare in the Netherlands at Erasmus Medical Center.

In September 2020, AIM reported receipt of statistically significantly results of positive survival benefit when using Ampligen in patients

with locally advanced/metastatic pancreatic cancer after systemic chemotherapy.

AIM will work with its Contract Research Organization,

Amarex Clinical Research LLC, to seek FDA “fast-track”

and possibly even FDA “breakthrough”

designations and

to obtain authorization to conduct follow-up pancreatic cancer Phase 2/3 clinical trials with potential sites in the Netherlands at Erasmus

MC under Prof.

van Eijck, and also at major cancer research centers in the United States.

is also being evaluated for the treatment of myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS).

AIM is currently sponsoring

an expanded access program for ME/CFS patients in the U.S.

In August 2016, the Company received approval of its New Drug Application,

or NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen in the Argentine

Republic for the treatment of severe CFS.

With regulatory approval in Argentina, Ampligen is the world’s only approved therapeutic

Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial

distribution.

On September 19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent

On June 10, 2020, the Company received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen

to Argentina.

The next steps in the commercial launch of Ampligen include ANMAT conducting a final inspection of the product and release

tests before granting final approval to begin commercial sales.

AIM has supplied GP Pharm with the Ampligen required for testing and

ANMAT release.

Once final approval by ANMAT is obtained, the Company anticipates that GP Pharm will begin distributing Ampligen in Argentina.

The Company continues to pursue its Ampligen NDA, for the treatment of CFS with the FDA.

N Injection is approved for a category of sexually transmitted disease infections and patients that are intolerant to recombinant interferon

in Argentina.

Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the U.S.

for the intralesional

treatment of refractory (resistant to other treatment) or recurring external condylomata acuminata/genital warts (GW) in patients 18

years of age or older.

Certain types of human papilloma viruses cause GW.

AIM also has approval from ANMAT for the treatment of refractory

patients that failed or were intolerant to treatment with recombinant interferon in Argentina.

Company operates a 30,000 sq.

facility at 783 Jersey Ave, New Brunswick, NJ, where it conducts testing and has produced limited quantities

of active pharmaceutical ingredients (“API”) for its products.

The Company has reviewed its operations at the facility and

believes that some of the equipment most likely should be upgraded to realize greater efficiencies, when and if it requires more API

than is currently in storage.

The Company is also exploring engaging a Contract Manufacturing Organization (“CMO”) to produce

While the Company believes it has sufficient API to meet its current needs, it is also continually exploring new efficiencies so

as to maximize its ability to fulfill future obligations.

On April 5, 2021, the Company’s board of directors approved the exercise

of AIM’s option to re-purchase the New Brunswick facility, pursuant to the terms of the March 16, 2018 sale and lease-back agreement

and, thereafter, the Company sold certain equipment and machinery that it determined to be obsolete and no longer needed for current

and future manufacturing.

the opinion of management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included.

Such adjustments consist of normal recurring items.

Interim results are not necessarily indicative of results for a

interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission

(“SEC”), and do not contain certain information which will be included in the Company’s annual consolidated

financial statements and notes thereto.

consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for

the years ended December 31, 2019 and 2018, contained in the Company’s Annual Report on Form 10-K for the year ended December

31, 2019 filed on March 30, 2020.

May 29, 2019, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect

a reverse stock split at a ratio in the range of 1-for-20 to 1-for-50.

The Company’s Board of Directors approved the implementation

of the reverse stock split at a ratio 1-for-44 which took effect on June 10, 2019.

All share and per share amounts for prior periods

have been revised to give retroactive effect to this reverse stock split.

Interim results are not necessarily indicative of results for a full year.

interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission (“SEC”),

and do not contain certain information which will be included in the Company’s annual consolidated financial statements and notes

consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the years

ended December 31, 2020 and 2019, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed

on March 31, 2021.

Net Loss Per Share

and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the

Equivalent common shares, consisting of stock options and warrants which amounted to 8,017 and 5,893,040 and 534,283 and

6,733,420 are excluded from the calculation of diluted net loss per share for the three months and nine months ended September

30, 2020 and 2019, respectively, since their effect is antidilutive due to the net loss.

and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period.

Equivalent common shares, consisting of stock options and warrants which amounted to 1,672,825 and 520,508 are excluded from the calculation

of diluted net loss per share for the three months ended March 31, 2021 and 2020, respectively, since their effect is antidilutive due

to the net loss.

Equity-Based Compensation

fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing

valuation model.

fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation

Expected volatility is based on the historical volatility of the price of the Company’s stock.

The risk-free

interest rate is based on U.S.

The risk-free interest rate

is based on U.S.

Treasury issues with a term equal to the expected life of the option and equity warrant.

uses historical data to estimate expected dividend yield, expected life and forfeiture rates.

Options granted in the nine months

ended September 30, 2020 and 2019 were 400,000 and 39,267, respectively.

The Company uses historical

data to estimate expected dividend yield, expected life and forfeiture rates.

There were no options granted in the three months ended

March 31, 2021 and 2020.

option for employees’

activity during the nine months ended September 30, 2020 is as follows:

activity during the three months ended March 31, 2021 is as follows:

option activity for employees:

Outstanding January 1, 2021

Outstanding September 30, 2020

Vested and expected to vest September 30, 2020

Exercisable September 30, 2020

Outstanding March 31, 2021

Vested and expected

to vest March 31, 2021

Exercisable March 31, 2021

stock option activity for employees:

Unvested January 1, 2021

Unvested September 30, 2020

Unvested March 31, 2021

option activity for non-employees:

Outstanding January 1, 2021

Outstanding September 30, 2020

Vested and expected to vest September 30, 2020

Exercisable September 30, 2020

Outstanding March 31, 2021

Vested and expected

to vest March 31, 2021

Exercisable March 31, 2021

stock option activity for non-employees:

Unvested January 1, 2021

Unvested September 30, 2020

compensation expense was approximately $596,000 and $649,000 for the nine months ended September 30, 2020 and 2019 resulting in

an increase in general and administrative expenses, respectively.

of September 30, 2020, and 2019, respectively, there was approximately $1,080,000 and $877,000 of unrecognized equity-based compensation

Unvested March 31, 2021

compensation expense was approximately $526,000 and $196,000 for the three months ended March 31, 2021 and 2020 resulting in an increase

in general and administrative expenses, respectively.

of March 31, 2021, and 2020, respectively, there was approximately $914,000 and $1,324,000 of unrecognized equity-based compensation

cost related to options granted under the Equity Incentive Plan.

Company uses the lower of first-in, first-out (“FIFO”) cost or net realizable value method of accounting for inventory.

sales of Alferon in the U.S.

will not resume until new batches of commercial filled and finished product are produced and released

Food and Drug Administration (“FDA”).

While the facility is approved by the FDA under the Biologics License

Application (“BLA”) for Alferon, this status will need to be reaffirmed by an FDA pre-approval inspection.

will also need the FDA’s approval to release commercial product once it has submitted satisfactory stability and quality

release data.

Currently, the manufacturing process is on hold and there is no definitive timetable to have the facility back online.

Due to the Company extending the timeline of Alferon production to in excess of one year, the Company reclassified Alferon work

in process inventory of $1,095,000 to other assets within our balance sheet as of September 30, 2020 and December 31, 2019 and

due to the high cost estimates to bring the facility back online.

Prior to completing validation, the Company plans on modernizing

the manufacturing process to make it lower-cost and higher volume.

If, following modernization, the Company is unable to gain

the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, its operations

most likely will be materially and/or adversely affected.

Considering these contingencies, there can be no assurances that the

approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again

made commercially available, it will return to prior sales levels.

Alferon work in process is currently compliant with our internal protocols and is stored in a controlled state.

All of these factors

contribute to the potential sale of the Alferon work in process, after validation lots have been produced and including a successful

pre-approval inspection.

Marketable Securities

securities consist of mutual funds and debt securities.

As of September 30, 2020, and December 31, 2019, it was determined that

none of the marketable securities had an other-than-temporary impairment.

At September 30, 2020 and December 31, 2019, all securities

were measured as Level 1 instruments of the fair value measurements standard (see Note 13:

As of September 30, 2020,

and December 31, 2019 the Company held $15,980,000 and $7,308,000 in debt and equity securities, respectively.

securities consist of debt securities.

As of March 31, 2021, and December 31, 2020, it was determined that none of the marketable securities

had an other-than-temporary impairment.

At March 31, 2021 and December 31, 2020, all securities were measured as Level 1 instruments

of the fair value measurements standard (see Note 12:

As of March 31, 2021, and December 31, 2020 the Company held $14,828,000

and $15,877,000 in debt and equity securities, respectively.

securities classified as available for sale consisted of:

(in thousands)

Gains /(Losses)

Marketable Securities

Unrealized Gains /(Losses)

Treasury notes

1 unchanged sentence

Corporate bonds

of December 31, 2019 the Company held no debt securities.

(in thousands)

Unrealized Gains /(Losses)

Treasury notes

Government mortgage backed securities

Corporate bonds

following presents available-for-sale securities’

1 unchanged sentence

(in thousands)

Less than 12 Months

than 12 Months

Months or More

Unrealized Gains

Government mortgage backed

(in thousands)

than 12 Months

Months or More

Unrealized Gains

Gross Unrealized

Unrealized Gains

Treasury notes

4 unchanged sentences

(in thousands)

September 30, 2020

December 31, 2019

Professional fees

Clinical trial expenses

Other expenses

1 unchanged sentence

(in thousands)

September 30, 2020

December 31, 2019

Land, buildings and improvements

Furniture, fixtures, and equipment

Furniture, fixtures,

and equipment

Total property and equipment

accumulated depreciation

Property and equipment, net

Property and equipment,

and equipment are recorded at cost.

Depreciation is computed using the straight-line method over the estimated useful lives of

the respective assets, ranging from three to thirty-nine years.

Depreciation is computed using the straight-line method over the estimated useful lives of the respective

assets, ranging from three to thirty-nine years.

March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered into an agreement to lease the property

back for ten years.

The lease payments are initially $408,000 per year for two years through March 31, 2020 and will escalate

in subsequent years.

The lease payments are initially $408,000 per year for two years through March 31, 2020 and will escalate in subsequent

(See Note 13:

Financing Obligation Arising from Sale Leaseback Transaction for more details on the sale leaseback

of the property and equipment).

Financing Obligation Arising from Sale Leaseback Transaction for more details on the sale leaseback of the property

and equipment).

May 13, 2021, the Company completed its re-purchase of the land and building for $4,661,400 pursuant to its repurchase option

in the property lease.

December 31, 2019

December 31, 2020

March 31, 2021

and trademarks are stated at cost (primarily legal fees) and are amortized using the straight-line method of the estimated useful life

During the years ended December 31, 2020, the Company decided not to pursue certain patents in various countries for strategic

reasons and recorded abandonment charges which are included in research and development.

of patents and trademarks for each of the next five years is as follows:

Year Ending December 31,

Stockholders’

Preferred Stock

Company is authorized to issue 5,000,000 shares of $0.01 par value preferred stock with such designations, rights and preferences

as may be determined by the Board of Directors.

Of our authorized preferred stock, 250,000 shares have been designated as Series

A Junior Participating Preferred Stock and 8,000 shares have been designated as Series B Convertible Preferred Stock.

B Convertible Preferred Stock has a stated value $1,000 per share.

Company is authorized to issue 5,000,000 shares of $0.01 par value preferred stock with such designations, rights and preferences as

may be determined by the Board of Directors.

Of its authorized preferred stock, 250,000 shares have been designated as Series A Junior

Participating Preferred Stock and 8,000 shares have been designated as Series B Convertible Preferred Stock.

The Series B Convertible

Preferred Stock has a stated value $1,000 per share.

Company is authorized to issue 8,000 Series B Convertible Preferred Stock, no par value, stated value $1,000 per share.

September 30, 2020, and December 31, 2019, the Company had 733 and 783 shares of Series B Convertible Preferred Stock outstanding,

respectively.

Each such Preferred Share is convertible into 114 shares of common stock.

As of March 31,

2021, and December 31, 2020, the Company had 725 and 732 shares of Series B Convertible Preferred Stock outstanding, respectively.

such Preferred Share is convertible into 114 shares of common stock.

to a registration statement relating to a rights offering declared effective by the SEC on February 14, 2019, AIM distributed

8 unchanged sentences

from the rights offering were approximately $4,700,000.

During the nine months ending September 30, 2020, 45 shares of Series

B Convertible Preferred Stock were converted into common stock.

During the three months ending March 31, 2021, 7 shares of Series

B Convertible Preferred stock were converted into common stock, and for the twelve months ending December 31, 2020, 46 shares

of Series B Convertible Preferred Stock were converted into common stock

Company has authorized shares of 350,000,000 with specific limitations and restrictions on the usage of 8,000,000 of the 350,000,000

authorized shares.

June 2019, the Company effected a 44-to-1 reverse stock split of the outstanding shares, in order to become compliant with the

NYSE regulations.

This did not affect the number of authorized shares.

All references herein to shares of common stock, options,

warrants and preferred stock have been adjusted to give effect to this reverse stock.

June 11, 2019, the board of directors approved up to $500,000 for all directors, officers and employees to buy Company shares

from the Company at the market price.

As of September 30, 2019, the Company has issued 67,767 shares of its common stock at prices

between $4.03 and $4.37 for a total of $274,000.

This plan expired August 19, 2019.

On September 27, 2019, the Company closed

an public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”) of (i) 1,740,550 shares of

Common Stock;

(ii) pre-funded warrants exercisable for 7,148,310 shares of Common Stock (the “Pre-funded Warrants”),

and (iii) warrants to purchase up to an aggregate of 8,888,860 shares of Common Stock (the “Warrants”).

In conjunction

with the Offering, a Representative’s Warrant to purchase up to an aggregate of 266,665 shares of common stock (the “Representative’s

Warrant”).

The shares of Common Stock and Warrants were sold at a combined Offering price of $0.90, less underwriting discounts

and commissions.

Each Warrant sold with the shares of Common Stock represents the right to purchase one share of Common Stock

at an exercise price of $0.99 per share.

The Pre-Funded Warrants and Warrants were sold at a combined Offering price of $0.899,

less underwriting discounts and commissions.

The Pre-Funded Warrants were sold to purchasers whose purchase of shares of Common

Stock in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially

owning more than 4.99% of the Company’s outstanding Common Stock immediately following the consummation of the Offering,

in lieu of shares of Common Stock.

Each Pre-Funded Warrant represents the right to purchase one share of Common Stock at an exercise

price of $0.001 per share.

The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded

Warrants are exercised in full.

A registration statement on Form S-1, relating to the Offering was filed with the SEC and was

declared effective on September 25, 2019, the net proceeds were approximately $7,200,000.

During the nine months ended September

30, 2020, 1,870,000 of the Pre-funded Warrants were exercised and 8,873,860 Warrants were exercised.

In addition, on March 25,

2020, the Representative’s Warrant was amended to permit exercise of such warrant to commence on March 30, 2020.

These warrants

were exercised on March 31, 2020 and an aggregate of 266,665 shares were issued upon exercise of this warrant for gross proceeds

of approximately $264,000 and a $46,000 expense for the warrant modification.

May 2, 2019, the Company entered into a modification agreement with certain redeemable warrant holders of the August 23, 2017

and April 20, 2018, respectively.

The warrant exercise price was reduced to $6.60 and 103,410 warrants were exercised, reducing

the liability attributed to the warrants by approximately $404,000, and the Company realized about $682,000 in net proceeds, resulting

in an addition to stockholders’

equity of approximately $1,086,000, offset by a deemed dividend of $135,000.

July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim, pursuant

to which it may sell from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”).

EDA replaced the EDA with Maxim.

On July 19, 2019, the Company filed a prospectus supplement with the SEC in connection with the

offering under the 2019 EDA under its existing Registration Statement on Form S-3 (File No 333-226059) related to the sale of

shares of its common stock having an aggregate offering price of up to $4,508,244, the maximum number of Shares permitted to be

sold under the 2019 EDA at that time.

As of December 31, 2019, the Company had sold 905,869 shares under the 2019 EDA for gross

proceeds of $2,553,079 which includes a 3.5% fee to Maxim of $89,358.

On March 3, 2020, the Company filed a new prospectus supplement

with SEC increasing the aggregate offering price of shares of common stock it could sell under the 2019 EDA to $10,867,245.

March 10, 2020, the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019

EDA to $18,833,739.

During the nine months ended September 30, 2020, the Company sold 18,990,367 shares under the 2019 EDA for

total gross proceeds of $50,692,287, which includes a 3.5% fee to Maxim of $1,774,230.

On June 15, 2020, the Company filed another

prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $19,406,552.

On August 18, 2020,

the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $19,004,095.

During the quarter ended September 30, 2020, the Company sold 6,409,441 shares under the 2019 EDA for total gross proceeds of

$17,813,884, which includes a 3.5% fee to Maxim of $623,486.

The actual number of shares, that the Company can sell, and the proceeds

to be received therefrom under the 2019 EDA are dependent upon the market price of its Common Stock.

2018 Equity Incentive Plan, effective September 12, 2018, authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory

Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance

Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.

Initially, a maximum of 7,000,000 shares of Common

Stock is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan.

Unless sooner terminated, the

2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date.

On October 17, 2018, the

Board of Directors issued 26,324 options to the officers and directors at the exercise price of $9.68 expiring in 10 years, and

on November 14, 2018, the Board of Directors issued 23 options to each employee, officer and director at the exercise price of

$9.68 expiring in ten years.

On January 28, 2019, 27,570 options were issued to each of these officers with an exercise price

of $9.68 for a period of ten years with a vesting period of one year.

In August, 2020, 400,000 options were issued to each of

these officers with a exercise price range of of $2.77 to $3.07 for a period of ten years with a vesting period of one year.

of September 30, 2020, and December 31, 2019, there were 40,685,282 and 10,386,754 shares outstanding, respectively.

July 7, 2020, the board of directors approved up to $500,000 for all directors, officers and employees to buy company shares from the

Company at the market price.

As of August 31, 2020, the Company has issued 10,730 shares of its common stock at a price of $2.33 for

a total of $25,000.

This plan expired September 10, 2020.

September 4, 2020, the board of directors approved up to $500,000 for all directors, officers and employees to buy company shares from

the Company at the market price.

As of October 31, 2020, the Company has issued 12,316 shares of its common stock at a price of $2.03

for a total of $25,000.

This plan expired November 1, 2020.

November 5, 2020, the board of directors approved up to $500,000 for all directors, officers and employees to buy company shares from

the Company at the market price.

As of December 31, 2020, the Company has issued 14,435 shares of its common stock at a price of $1.72

for a total of $25,000.

This plan expired January 2, 2021.

January 4, 2021, the board of directors approved up to $500,000 for all directors, officers and employees to buy company shares from

the Company at the market price.

As of March 31, 2021, the Company has issued 21,700 shares of its common stock at a price ranging of

$2.26 to $2.35 for a total of $50,000.

This plan expired March 4, 2021.

March 4, 2021 the board of directors approved up to $500,000 for all directors, officers and employees to buy company shares from the

Company at the market price.

As of March 31, 2021, the Company had issued 0 shares of its common stock.

September 27, 2019, the Company closed a public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”)

of (i) 1,740,550 shares of Common Stock;

(ii) pre-funded warrants exercisable for 7,148,310 shares of Common Stock (the “Pre-funded

Warrants”), and (iii) warrants to purchase up to an aggregate of 8,888,860 shares of Common Stock (the “Warrants”).

In conjunction with the Offering, a Representative’s

Warrant to purchase up to an aggregate of 266,665 shares of common stock (the “Representative’s Warrant”) .

The shares of Common Stock and Warrants were sold at a combined Offering price of $0.90, less underwriting discounts and commissions.

Each Warrant sold with the shares of Common Stock represents the right to purchase one share of Common Stock at an exercise price of

$0.99 per share.

The Pre-Funded Warrants and Warrants were sold at a combined Offering price of $0.899, less underwriting discounts and

The Pre-Funded Warrants were sold to purchasers whose purchase of shares of Common Stock in the Offering would otherwise

result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company’s

outstanding Common Stock immediately following the consummation of the Offering, in lieu of shares of Common Stock.

Each Pre-Funded Warrant

represents the right to purchase one share of Common Stock at an exercise price of $0.001 per share.

The Pre-Funded Warrants are exercisable

immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full.

A registration statement on Form S-1,

relating to the Offering was filed with the SEC and was declared effective on September 25, 2019, the net proceeds were approximately

During the year ending December 31 , 2020, 1,870,000 of the Pre-funded Warrants

were exercised and 7,687,860 Warrants were exercised.

In addition, on March 25, 2020, the Representative’s Warrant was amended

to permit exercise of such warrant to commence on March 30, 2020.

These warrants were exercised on March 31, 2020 and an aggregate of

266,665 shares were issued upon exercise of this warrant for gross proceeds of approximately $264,000 and a $46,000 expense for the warrant

modification.

July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim Group LLC (“Maxim”),

pursuant to which it could sell from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”).

2019 EDA replaced a prior EDA with Maxim.

For the year ended December 31, 2020, the Company sold 20,444,807 shares under the 2019 EDA

for total gross proceeds of $53,936,615, which includes a 3.5% fee to Maxim of $1,888,727.

During the period ending March 31, 2021, the

Company sold 5,665,731 shares under the 2019 EDA for total gross proceeds of $13,301,526, which includes a 3.5% fee to Maxim of $465,533.

The 2019 EDA was terminated in early February 2021.

2018 Equity Incentive Plan, effective September 12, 2018, authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock

Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards,

(vii) Performance Cash Awards, and (viii) Other Stock Awards.

Initially, a maximum of 7,000,000 shares of Common Stock is reserved for

potential issuance pursuant to awards under the 2018 Equity Incentive Plan.

Unless sooner terminated, the 2018 Equity Incentive Plan

will continue in effect for a period of 10 years from its effective date.

On October 17, 2018, the Board of Directors issued 26,324 options

to the officers and directors at the exercise price of $9.68 expiring in 10 years, and on November 14, 2018, the Board of Directors issued

23 options to each employee, officer and director at the exercise price of $9.68 expiring in ten years.

On January 28, 2019, 27,570 options

were issued to each of these officers with an exercise price of $9.68 for a period of ten years with a vesting period of one year.

August 2020, 400,000 options were issued to each of these officers with an exercise price range of $2.77 to $3.07 for a period of ten

years with a vesting period of one year.

During December 2020, 675,000 options were issued to employees with an exercise price range

of $1.85 to $1.96 for a period of ten years with a vesting period of one year.

of March 31, 2021, and December 31, 2020, there were 47,832,997 and 42,154,371 shares outstanding, respectively.

Cash and Cash Equivalents

1 unchanged sentence

Recent Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and

subsequent amendments to the guidance, ASU 2018-19 in November 2018 and ASU 2020-02 in February 2020.

The standard significantly

changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured

at fair value through net income.

The standard will replace today’s “incurred loss”

approach with an “expected

model for instruments measured at amortized cost.

For available-for-sale debt securities, entities will be required

to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model.

It also simplifies the accounting model for purchased credit-impaired debt securities and loans.

The amendment will affect loans,

debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and

any other financial assets not excluded from the scope that have the contractual right to receive cash.

ASU 2018-19 clarifies

that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments.

The amendments

should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic.

This ASU will

be effective for us beginning the first day of our 2023 fiscal year.

Early adoption is permitted.

We are evaluating the impact

of adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate

the effect the adoption of the new standard will have on our financial statements.

recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the

Company’s present or future financial statements.

Convertible Note Payable

September 28, 2018, the Company entered into a $3,170,000 10% Secured Convertible Promissory Note (the “IR Note”)

with Iliad Research and Trading, L.P.

(the “Holder”), which was issued to the Holder in conjunction with 500,000 shares

of common stock (the “Origination Shares”).

The Company collected $3,000,000 in cash from the Holder during September

2018 and the remainder $170,000 was retained by the Holder for the Holder’s legal fees of $20,000 for the issuance of the

IR Note and the Original Issue Discount of $150,000.

The Company incurred $210,000 in third-party fees directly attributed to

the issuance of the IR Note.

The Company promised to pay the principal amount, together with guaranteed interest at the annual

rate of 10%, with principal and accrued interest on the IR Note due and payable on September 28, 2019, unless converted under

terms and provisions as set forth within the IR Note.

The IR Note provides the Holder with the right to convert, at any time,

all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at

a conversion price of $0.30 per share.

In addition, beginning on March 28, 2019, the IR Note also provides the Holder with the

right to redeem all or any portion of the IR Note (“Redemption Amount”).

The payments of each Redemption Amount may

be made, at the option of the Company, in cash, by converting such Redemption Amount into shares of common stock (“Redemption

Conversion Shares”), or a combination thereof.

The number of Redemption Conversion Shares equals the portion of the applicable

Redemption Amount being converted divided by the lesser of $0.30 or 80% of the lowest Volume Weighted Average Price (“VWAP”)

during the ten (10) trading days immediately preceding the applicable measurement date (the “Market Price”).

Agreement requires the Company to reserve at least 8,900,000 shares of common stock from its authorized and unissued common stock

to provide for all issuances of common stock under the IR Note.

However, the IR Note provides that the aggregate number shares

of common stock issued to the Holder under the IR Note and Purchase Agreement shall not exceed 19.99% of the total number of shares

of common stock outstanding as of the closing date unless the Company has obtained stockholder approval of the issuance.

The Origination

Shares were to be returned to the Company in the event that the Company could provide within 30 days of the closing of the transaction

certain requested assets as security for repayment of the IR Note.

The security was not provided so the Origination Shares remained

with the Holder.

Company determined the IR Note should be recorded at fair value with subsequent changes in fair value recorded in earnings.

conclusion is based on the redemption conversion feature, which allows the Holder to trigger the redemption of the IR Note for

cash or conversion of the IR Note for common shares prior to its maturity date at a price of the lesser of $0.30 per share or

the Market Price as defined within the IR Note.

The choice of cash redemption or conversion of the IR Note for common shares is

at the option of the Company.

This feature may require the Company to issue a variable number of common shares to settle the IR

Note which was determined to have a predominantly fixed monetary value at inception.

March 13, 2019, the Company amended the Purchase Agreement pursuant to which it issued the Convertible IR Note (the “Amendment”).

The Amendment extends the maturity of the IR Note to September 28, 2020.

In addition, the redemption conversion rates were revised

to a price to be determined by mutual agreement between the Company and the Holder.

In the event that the Company and the Holder

are unable to reach a mutually agreeable price, the Company will be required to pay the applicable redemption amount in cash.

The maximum amount of the IR Note the Lender will be able to redeem in any given calendar month is $300,000.

Company evaluated the Amendment in accordance with ASC 470, Debt (“ASC 470”) and determined the Amendment is

considered an extinguishment of the existing debt and issuance of net debt.

As a result, the Company derecognized the liability

and recorded a loss on the extinguishment of debt of $345,000 in 2019 which was equal to the difference between the reacquisition

price of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished

Subsequently, the amended note was recorded in accordance with ASC 480 at the fair value that the note was issued with changes

in fair value recorded through earnings at each reporting period.

were a series of debt conversions during 2019 which partially converted $1,400,000 of the $3,408,000 convertible debt, as amended,

into stockholders’

equity, adding approximately $1,400,000 to stockholders’

The number of shares issued in

these conversions were 204,246 shares.

In October 2019 and November 2019 respectively, the lender redeemed $300,000 pursuant to

the terms of the modification.

In connection with the IR Note, the Company recorded a gain equal to $127,000 for the year-end

December 31, 2019.

Long Term Debt.

expense associated with the IR Note was $0 for September 30, 2020 and $94,000 for the nine months ended September 30, 2019.

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 reduces

the number of models used to account for convertible instruments, amends diluted EPS calculations for convertible instruments, and amends

the requirements for a contract (or embedded derivative) that is potentially settled in an entity’s own shares to be classified

The amendments add certain disclosure requirements to increase transparency and decision-usefulness about a convertible instrument’s

terms and features.

Under the amendment, the Company must use the if-converted method for including convertible instruments in diluted

EPS as opposed to the treasury stock method.

ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2023.

Early adoption is allowed under the standard with either a modified retrospective or full retrospective method.

The Company early

adopted ASU 2020-06 on January 1, 2021 using the modified retrospective method.

As a result of Management’s evaluation, the adoption

of ASU 2020-06 did not have a material impact on the consolidated financial statements.

Long-Term Debt

August 5, 2019, the Company issued a Secured Promissory Note (the “CV Note”) with Chicago Venture Partners, L.P.

“CV”).

The Note has an original principal amount of $2,635,000, bears interest at a rate of 10% per annum and will

mature in 24 months, unless earlier paid in accordance with its terms.

The Company received proceeds of $1,900,000 after an original

issue discount and payment of Lender’s legal fees.

Pursuant to a Security Agreement between the Company and the Lender,

repayment of the Convertible Note is secured by substantially all of our assets other than its intellectual property.

(the “CV”).

The Note has an original principal amount of $2,635,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless

earlier paid in accordance with its terms.

The Company received proceeds of $1,900,000 after an original issue discount and payment of

Lender’s legal fees.

Pursuant to a Security Agreement between the Company and the Lender, repayment of the Note is secured by substantially

all of its assets other than its intellectual property.

the quarter ending June 30, 2020, the Holder made redemptions of $650,000 reducing the principal to $1,985,000.

29, 2020, the Company paid off the outstanding CV note consisted of principal of $1,985,000, and accrued interest payable of $220,000.

The net payment of $1,795,000, less the write off of the origination discount of $369,000 and issuance costs of $6,000, resulted

in a gain on extinguishment of $66,000.

On May 29, 2020, the

Company paid off the outstanding CV note consisting of principal of $1,985,000, and accrued interest payable of $220,000.

The net payment

of $1,795,000, less the write off of the origination discount of $369,000 and issuance costs of $6,000, resulted in a gain on extinguishment

expense associated with the CV Note was approximately $0, for the period ending March 31, 2021 and approximately $70,000,

for the period ending March 31, 2020.

December 5, 2019, the Company issued a secured Promissory Note (the “AS Note”) to Atlas Sciences L.P.

(“AS”).

The AS Note has an original principal amount of $2,175,000, bears interest at a rate of 10% per annum and will mature in 24 months,

unless earlier paid in accordance with its term.

In conjunction with the AS Note, the Company utilized $1,650,000 of the net proceeds

from the AS Note to pay off in full our obligation to Iliad, an entity with affiliations to AS, pursuant to the IR Note.

Company evaluated the IR Note transaction in accordance with ASC 470, Debt (“ASC 470”) and determined the exchange

is considered an extinguishment of the existing debt and issuance of new debt.

As a result, the Company derecognized the liability

and recorded a loss on the extinguishment of debt of $250,000 which was equal to the difference between the reacquisition price

of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished debt.

Subsequently, the AS Note was recorded in accordance with ASC 470 whereby the Company will record a liability equal to the proceeds

received on December 5, 2019.

June 19, 2020, the Company paid off the outstanding AS note consisted of original principal of $2,175,000, and accrued interest

payable of $122,000 less origination discount of $376,000 and issuance costs of $7,000, with a net note payable of $1,838,000,

including a gain on extinguishment of $76,000.

conjunction with the financing, the Company used the proceeds to pay the outstanding IR Note.

Convertible Note Payable.

expense associated with the CV Note and AS Note for the period ended September 30, 2020 was approximately $116,000 and $106,000,

respectively.

The AS Note has an original principal amount of $2,175,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless

earlier paid in accordance with its term.

June 19, 2020, the Company paid off the outstanding AS note which consisted of original principal of $2,175,000, and accrued interest

payable of $122,000 less origination discount of $376,000 and issuance costs of $7,000, with a net note payable of $1,838,000, including

a gain on extinguishment of $76,000.

expense associated with AS Note for the period ending March 31, 2021 was $0 and was approximately $56,000 for the period ending March

Company is required under U.S.

GAAP to disclose information about the fair value of all the Company’s financial instruments,

whether or not these instruments are measured at fair value on the Company’s consolidated balance sheets.

GAAP to disclose information about the fair value of all the Company’s financial instruments, whether

or not these instruments are measured at fair value on the Company’s consolidated balance sheets.

Company estimates that the fair values of cash and cash equivalents, other assets, accounts payable and accrued expenses approximate

their carrying values due to the short-term maturities of these items.

The Company also has certain warrants with a cash settlement

feature in the unlikely occurrence of a Fundamental Transaction, namely (1) a merger or consolidation with another person;

sale of substantially all of its assets;

The Company also has certain warrants with a cash settlement feature

in the unlikely occurrence of a Fundamental Transaction, namely (1) a merger or consolidation with another person;

(2) sale of substantially

all of its assets;

(3) holders of common stock sell 50% or more of outstanding shares;

(4) the Company effects

an exchange of all its securities for other securities, cash or property, and (5) the Company effects a stock purchase agreement

or business combination for more than 50% of outstanding shares.

The fair value of the redeemable warrants (“Warrants”)

related to the Company’s August 2016, February 2017, June 2017, August 2017, April 2018 and March 2019 common stock warrant

issuances, are calculated using a Monte Carlo Simulation.

While the Monte Carlo Simulation is one of a number of possible pricing

models, the Company has determined it to be industry accepted and fairly presented the fair value of the Warrants.

As an additional

factor to determine the fair value of the Put’s liability, the occurrence probability of a Fundamental Transaction event

was factored into the valuation.

(4) the Company effects an exchange of all its

securities for other securities, cash or property, and (5) the Company effects a stock purchase agreement or business combination for

more than 50% of outstanding shares.

The fair value of the redeemable warrants (“Warrants”) related to the Company’s

August 2016, February 2017, June 2017, August 2017, April 2018 and March 2019 common stock warrant issuances, are calculated using a

Monte Carlo Simulation.

While the Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it

to be industry accepted and fairly presented the fair value of the Warrants.

As an additional factor to determine the fair value of the

Put’s liability, the occurrence probability of a Fundamental Transaction event was factored into the valuation.

Company recomputes the fair value of the Warrants at the issuance date and the end of each quarterly reporting period.

computation includes subjective input assumptions that are consistently applied each period.

If the Company were to alter its

assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

Such value computation

includes subjective input assumptions that are consistently applied each period.

If the Company were to alter its assumptions or the

numbers input based on such assumptions, the resulting fair value could be materially different.

Company utilized the following assumptions to estimate the fair value of the August 2016 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

5 unchanged sentences

Company utilized the following assumptions to estimate the fair value of the February 2017 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

Exercise price per share

$ 30.25 –

$ 30.25-33.00

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

price per share

interest rate

holding period

dividend yield

Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

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Company utilized the following assumptions to estimate the fair value of the August 2017 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

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Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

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Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:

September 30, 2020

December 31, 2019

Underlying price per share

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The risk-free interest rates for the Warrants are based on U.S.

Treasury constant maturities for periods

commensurate with the remaining expected holding periods of the warrants.

Treasury constant maturities for periods commensurate

with the remaining expected holding periods of the warrants.

Holding Period .

The expected holding period represents the period of time that the Warrants are expected to be outstanding

until they are exercised.

The Company utilizes the remaining contractual term of the Warrants at each valuation date as the

expected holding period.

Expected stock volatility is based on daily observations of the Company’s historical stock values for

a period commensurate with the remaining expected holding period on the last day of the period for which the computation is

The expected holding period represents the period of time that the Warrants are expected to be outstanding until

they are exercised.

The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding

Expected stock volatility is based on daily observations of the Company’s historical stock values for a period

commensurate with the remaining expected holding period on the last day of the period for which the computation is made.

Dividend Yield .

Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining

expected holding period.

As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption

will be continued in future calculations unless the Company changes its dividend policy.

Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected

holding period.

As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption will be continued

in future calculations unless the Company changes its dividend policy.

Probability of a Fundamental Transaction.

The possibility of the occurrence of a Fundamental Transaction triggering a

Put right is extremely remote.

As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all

cash transaction;

The possibility of the occurrence of a Fundamental Transaction triggering a Put right

is extremely remote.

As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all cash transaction;

(2) results in the Company going private;

or (3) is a transaction involving a person or entity not traded

on a national securities exchange.

or (3) is a transaction involving a person or entity not traded on a national securities

The Company believes such an occurrence is highly unlikely because:

Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the

Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest;

Company flagship product is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients;

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Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer.

the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range

of probabilities related to a Put right being triggered as:

Range of Probability

the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities

related to a Put right being triggered as:

of Probability

Monte Carlo Simulation has incorporated a 5.0% probability of a Fundamental Transaction to date for the life of the securities.

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As the Company has no specific expectation of a Fundamental Transaction,

for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to

model the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.

for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model

the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.

100 Day Volatility at Announcement of a Fundamental Transaction .

An estimate of future volatility is necessary as there

is no mechanism for directly measuring future stock price movements.

Daily observations of the Company’s historical

stock values for the 100 days immediately prior to the Warrants’

grant dates, with a floor of 100%, were utilized as

a proxy for the future volatility.

An estimate of future volatility is necessary as there is no

mechanism for directly measuring future stock price movements.

Daily observations of the Company’s historical stock values

for the 100 days immediately prior to the Warrants’

grant dates, with a floor of 100%, were utilized as a proxy for the future

Risk-Free Interest Rate at Announcement of a Fundamental Transaction .

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to the forward U.S.

Treasury rate for the period equal to the time between the date forecast for the public announcement of

a Fundamental Transaction and the Warrant expiration date for each simulation.

Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental

Transaction and the Warrant expiration date for each simulation.

Time Between Announcement and Consummation of a Fundamental Transaction.

The expected time between the announcement and

the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed

by acquirers and is estimated to be six months.

The Monte Carlo Simulation approach incorporates this additional period to

reflect the delay Warrant Holders would experience in receiving the proceeds of the Put.

the assumptions remain consistent from period to period (e.g., using historical stock prices), the numbers input change from period

to period (e.g., the actual historical prices input for the relevant period).

The expected time between the announcement and the consummation

of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and

is estimated to be six months.

The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant

Holders would experience in receiving the proceeds of the Put.

the assumptions remain consistent from period to period (e.g., using historical stock prices), the numbers input change from period to

period (e.g., the actual historical prices input for the relevant period).

Company applies FASB ASC 820 that defines fair value, establishes a framework for measuring fair value in U.S.

GAAP, and expands

disclosures about fair value measurements.

The guidance does not impose any new requirements around which assets and liabilities

are to be measured at fair value, and instead applies to asset and liability balances required or permitted to be measured at

fair value under existing accounting pronouncements.

The Company measures its warrant liability for those warrants with a cash

settlement feature at fair value.

GAAP, and expands disclosures

about fair value measurements.

The guidance does not impose any new requirements around which assets and liabilities are to be measured

at fair value, and instead applies to asset and liability balances required or permitted to be measured at fair value under existing

accounting pronouncements.

The Company measures its warrant liability for those warrants with a cash settlement feature at fair value.

ASC 820-10-35-37 establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability.

Classification is based on the lowest level of inputs that is significant to the fair value measurement.

The valuation hierarchy

contains three levels:

The valuation hierarchy contains

three levels:

Quoted prices are available in active markets for identical assets or liabilities at the reporting date.

this includes certain U.S.

Generally, this

includes certain U.S.

and government agency debt and equity securities that are traded in an active market.

Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices

in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially

the full term of the assets or liabilities.

Generally, this includes debt and equity securities that are not traded in an

active market.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value

of the assets or liabilities.

Level 3 assets and liabilities include financial instruments whose value is determined using

pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination

of fair value requires significant management judgment or estimation.

As of September 30, 2020, the Company has classified

the warrants with cash settlement features as Level 3.

Management evaluates a variety of inputs and then estimates fair value

based on those inputs.

As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants.

quoted prices in markets

that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities.

Generally, this includes debt and equity securities that are not traded in an active market.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the

assets or liabilities.

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models,

discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value

requires significant management judgment or estimation.

As of September 30, 2020, the Company has classified the warrants with cash

settlement features as Level 3.

Management evaluates a variety of inputs and then estimates fair value based on those inputs.

discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants.

table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy

(in thousands)

As of September 30, 2020

Treasury notes

Government mortgage backed Securities

Corporate bonds

Marketable Securities

thousands) As of March 31, 2021

Redeemable warrants

(in thousands)

As of December 31, 2019

thousands) As of December 31, 2020

Redeemable warrants

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Fair value adjustment

Balance at September 30, 2020

Balance at March 31, 2021

Financing Obligation Arising from Sale Leaseback Transaction

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back for ten years at $408,000 per year for two years through March 31, 2020.

The lease payments will increase 2.5% per year for

the next three years through March 31, 2023 and the lease payments will increase 3% for the remaining five years through March

The sale of the property includes an option to repurchase the property at fair value which does not permanently transfer

all the risks and rewards of ownership to the buyer.

The option to repurchase the property also would be at a higher price than

the sales price and is considered likely based upon the Company’s plans going forward.

Because the sale of the property

includes the option to repurchase the property and includes the above attributes, the transaction was accounted for as a financing

transaction whereby the Company debited cash for the amount of cash received and credit financing obligation.

The Company will

continue to report the property as an asset and the property will continue to be depreciated.

The fair value repurchase option

is accounted for similar to a share appreciation mortgage.

Accordingly, the guidance in ASC 470-30 related to participating mortgage

loans would be applied to the liability.

If the option expires unused, the sale is recognized at that time.

The gain on the sale

would be the excess of the liability (current fair value of the property) over its carrying amount.

As part of the sale of this

building, warrants were provided to the buyer for the purchase of up to 73,314 shares of Company common stock for a period of

five years at an exercise price of $17.05 per share, 125% of the closing price of the common stock on the NYSE American on the

date of execution of the letter of intent for the purchase.

The warrants cannot be exercised to the extent that any exercise would

result in the purchaser owning in excess of 4.99% of our issued and outstanding shares of common stock.

Property and Equipment in Note 7 above are the property and equipment involved in this transaction.

Depreciation on the building

will continue until a sale has been recognized.

minimum payments required under the Financing Obligation and the balance of the Finance Obligation as of September 30, 2020 are

(in thousands)

The lease payments will increase 2.5% per year for the

next three years through March 31, 2023 and the lease payments will increase 3% for the remaining five years through March 31, 2028.

The sale of the property includes an option to repurchase the property at fair value which does not permanently transfer all the risks

and rewards of ownership to the buyer.

The option to repurchase the property also would be at a higher price than the sales price and

is considered likely based upon the Company’s plans going forward.

Because the sale of the property includes the option to repurchase

the property and includes the above attributes, the transaction was accounted for as a financing transaction whereby the Company debited

cash for the amount of cash received and credited financing obligation.

The Company will continue to report the property as an asset

and the property will continue to be depreciated.

If the option is exercised, the cash payment by the seller-lessee is to pay off the

financing obligation.

As part of the sale of this building, warrants were provided to the buyer for the purchase of up to 3,225,806 shares

of Company common stock for a period of five years at an exercise price of $0.3875 per share, 125% of the closing price of the common

stock on the NYSE American on the date of execution of the letter of intent for the purchase.

The warrants cannot be exercised to the

extent that any exercise would result in the purchaser owning in excess of 4.99% of the Company’s issued and outstanding shares

of common stock.

Property and equipment in “Note 6 Property and Equipment”

above are the property and equipment involved in this transaction.

Depreciation on the building will continue until a sale has been recognized.

See Note 15 Subsequent Events.

minimum payments required under the Financing Obligation and the balance of the Finance Obligation as of March 31, 2021, are as follows:

Total of payments

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Long term portion

expense relating to this financing agreement was $46,000 for the nine months ended September 30, 2020 and $51,000 for the nine

months ended September 30, 2019.

February 2016, the FASB established Topic 842, Leases, by issuing ASU No.

2016-02, which requires lessees to recognize leases

on-balance sheet and disclose key information about leasing arrangements.

Topic 842 was subsequently amended by ASU No.

Land Easement Practical Expedient for Transition to Topic 842;

2018-10, Codification Improvements to Topic 842, Leases;

2018-11, Targeted Improvements;

2018-20, Narrow-Scope Improvements for Lessors.

The new standard establishes

a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases

with a term longer than 12 months.

Leases will be classified as finance or operating, with classification affecting the pattern

and classification of expense recognition in the income statement.

new standard was effective for the Company on January 1, 2019, with early adoption permitted.

A modified retrospective transition

approach was required, applying the new standard to all leases existing at the date of initial application.

An entity may choose

to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements

as its date of initial application.

If an entity chooses the second option, the transition requirements for existing leases also

apply to leases entered into between the date of initial application and the effective date.

The entity must also recast its comparative

period financial statements and provide the disclosures required by the new standard for the comparative periods.

We adopted the

new standard on January 1, 2019 and used the effective date as our date of initial application.

Consequently, financial information

will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January

new standard provides several optional practical expedients in transition.

We elected the ‘package of practical expedients’,

which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification

and initial direct costs.

We elected all the new standard’s available transition practical expedients other than the use-of

new standard also provides practical expedients for an entity’s ongoing accounting.

We elected the short-term lease recognition

exemption for all leases that qualify.

This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities,

and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition.

We also elected the practical expedient to not separate lease and non-lease components for leases of office equipment.

standard had a material effect on our financial statements.

The most significant effect related to the recognition of new ROU

assets and lease liabilities on our balance sheet for our real estate and equipment operating leases and providing significant

new disclosures about our leasing activities.

Company entered into a Lease Agreement for a term of five years commencing on September 14, 2020 with Fraser Advanced Information

Systems, pursuant to which the Company agreed to lease two Sharp copiers.

expense relating to this financing agreement was $14,000 for the three months ended March 31, 2021 and $16,000 for the three months ended

March 31, 2020.

Company entered into a Lease Agreement for a term of five years commencing on September 14, 2020 with Fraser Advanced Information Systems,

pursuant to which the Company agreed to lease two Sharp copiers.

The base of $1,415 per month.

June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018 with SML FL Holdings

LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

The base rent increases by 3% each

year, and ranges from $2,100 per month for the first year to $2,785 per month for the sixth year.

May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 with 604 Associates

LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

The base rent is $1,500 per month

for the term of the lease.

expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably

certain that the Company would exercise such options.

The Company’s leases have remaining lease terms between 6 months and

As of September 30, 2020, the weighted-average remaining term is 2.17 years.

The Company has determined that the incremental

borrowing rate is 10% as of December 31, 2018 based upon the recently completed financing transaction in September 2018.

are the lease commitments for the next 5 years and thereafter.

Year-Ending September 30,

(in thousands)

June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018 with SML FL Holdings LLC,

pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

The base rent increases by 3% each year, and

ranges from $2,100 per month for the first year to $2,785 per month for the sixth year.

May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 with 604 Associates LLC,

pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

The base rent is $1,500 per month for the term

of the lease.

expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain

that the Company would exercise such options.

The Company’s leases have remaining lease terms between 6 months and 4 years.

of March 31, 2021, the weighted-average remaining term is 1.67 years.

Company has determined that the incremental borrowing rate is 10% as of March 31, 2021 based upon the recently completed financing transaction

in December 2019.

Year Ending March 31,

Less imputed interest

of September, 30, 2020, the balance of the right of use assets was $188,000 and the corresponding lease liability balance was

Total rent expense was $41,000 for the nine months ended September 30, 2020 and $44,000 for the nine months end September

of March 31, 2021, the balance of the right of use assets was $168,000 and the corresponding lease liability balance was $168,000.

rent expense was $11,000 for the three months ended March 31, 2021 and $11,000 for the three months end March 31, 2020.

Subsequent Events

On November 10,

2020, the Company entered into a five year employment agreement with Thomas K.

Equels, President, CEO and Executive Vice

Chairman of the Board.

Compensation is divided into both short- and long-term compensation.

Short term (cash)

compensation will consist of a base salary of $850,000 and a year-end target bonus of $350,000 based on performance and goals

established by the Compensation Committee.

Long term compensation will be provided by 300,000 non-qualified yearly stock

options with one-year vesting on November 30,2021, and each anniversary date thereafter.

On November 11, 2020, the Company

issued to Mr.

Equels 10 year options to purchase 300,000 shares of the Company’s common stock.

The exercise price of

these options is $1.96 per share, the closing price of the common stock on the NYSE American on the trading date immediately

preceding the date of issuance.

The options will vest one year after their issuance.

These options were issued pursuant to

the terms of Mr.

Equels’

employment agreement.

May 13, 2021, the Company completed its re-purchase of its New Brunswick, New Jersey facility pursuant to the repurchase option

in the facility lease for $4,661,400.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Note Regarding Forward-Looking Statements

statements in this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section

21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act.

These statements are based on our

management’s current beliefs, expectations and assumptions about future events, conditions and results and on information

currently available to us.

Discussions containing these forward-looking statements may be found, among other places, in this “Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

statements in this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E

of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act.

These statements are based on our management’s

current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us.

Discussions containing these forward-looking statements may be found, among other places, in this “Management’s Discussion

and Analysis of Financial Condition and Results of Operations”

Part II, Item 1 “Legal Proceedings”;

and Part II, Item 1A “Risk Factors”.

statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations,

financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements.

as “expect,”

II, Item 1A “Risk Factors”.

statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations, financial

position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements.

Words such as “expect,”

“anticipate,”

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“opportunity”

expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of

identifying forward-looking statements.

the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks

and uncertainties inherent in our business including, without limitation:

our ability to adequately fund our projects as we will

need additional funding to proceed with our objectives, the potential therapeutic effect of our products, the possibility of obtaining

regulatory approval, our ability to find senior co-development partners with the capital and expertise needed to commercialize

our products and to enter into arrangements with them on commercially reasonable terms, our ability to manufacture and sell any

products, our ability to enter into arrangements with third party vendors, market acceptance of our products, our ability to earn

a profit from sales or licenses of any drugs, our ability to discover new drugs in the future, changing market conditions, changes

in laws and regulations affecting our industry, and issues related to our New Brunswick, New Jersey facility.

the outbreak of the COVID-19 coronavirus and our prior research into Ampligen’s antiviral activity against Severe Acute

Respiratory Syndrome, or SARS, we are now expanding our clinical/business focus to include the potential of Ampligen to serve

as a protective prophylaxis and an early-onset therapeutic for the virus SARS-CoV-2, the cause of COVID-19 and as part of a vaccine.

and similar expressions or variations of such words are intended

to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements.

the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and

uncertainties inherent in our business including, without limitation:

our ability to adequately fund our projects as we will need additional

funding to proceed with our objectives, the potential therapeutic effect of our products, the possibility of obtaining regulatory approval,

our ability to find senior co-development partners with the capital and expertise needed to commercialize our products and to enter into

arrangements with them on commercially reasonable terms, our ability to manufacture and sell any products, our ability to enter into

arrangements with third party vendors, market acceptance of our products, our ability to earn a profit from sales or licenses of any

drugs, our ability to discover new drugs in the future, changing market conditions, changes in laws and regulations affecting our industry,

and issues related to our New Brunswick, New Jersey facility.

the outbreak of the COVID-19 coronavirus and our prior research into Ampligen’s antiviral activity against Severe Acute Respiratory

Syndrome, or SARS, we are focusing on the potential of Ampligen to serve as a protective prophylaxis and an early-onset therapeutic for

Significant testing and trials will be required to determine whether Ampligen will be effective in the treatment of the COVID-19

coronavirus in humans and no assurance can be given that it will be the case.

Our beliefs rely on a number of previous studies

related to SARS-CoV-1.

No assurance can be given that future studies will not result in findings that are different from those

reported in the studies to which we refer.

Results obtained in animal models do not necessarily predict results in humans.

of the world’s largest pharmaceutical companies and medical institutions are racing to find a treatment for COVID-19.

if Ampligen proves effective in combating the virus, no assurance can be given that our actions toward proving this will be given

first priority or that another treatment that eventually proves capable will not negate our current and future efforts.

Our beliefs rely on a number of studies.

No assurance can

be given that future studies will not result in findings that are different from those reported in the studies we refer to.

is disrupting world health and world economies and most likely will continue to do so for a long time.

While we are able to continue

to operate, we –like all businesses —

are unable to gauge exactly how this pandemic will affect our operations in

We are reaching out, directly and indirectly, to the U.S.

government, numerous foreign governments and entities related

to the COVID-19 coronavirus and, if successful, will be working in these countries.

this regard, we are working with Japan’s National Institute of Infectious Diseases (“NIID”) to test Ampligen

as a potential treatment for COVID-19 coronavirus.

In March 2020, the NIID initiated preliminary laboratory testing of Ampligen

as a potential treatment for COVID-19.

On July 1, 2020, we entered into a trilateral material transfer and research agreement

with the NIID and Shionogi & Co., Ltd.

(“Shionogi”), one of Japan’s premier pharma companies to test the

Company’s drug Ampligen as a potential vaccine adjuvant for COVID-19.

Under the agreement, we have and will continue to

provide Ampligen samples for various research projects.

Per the agreement, the details of all preclinical and clinical results

will remain confidential until released by NIID and Shionogi.

addition, Shenzhen Smoore Technology Limited has agreed to run preliminary tests in China to the efficacy of Smoore’s inhalation

delivery device using Ampligen.

Ampligen is scheduled to be shipped to Smoore for testing, pending resolution of various China

inbound import regulatory requirements.

AIM and Smoore are working to identify and navigate any and all regulatory obligations.

Assuming Ampligen proves an effective COVID-19 treatment, significant testing will be required to determine whether the Smoore

device will be able to safely deliver Ampligen in an appropriate dose without diminishing its efficacy against COVID-19.

to operate, clearly, like all businesses, we are unable to gauge how bad this pandemic will affect our operations in the future.

out to numerous foreign governments related to the COVID-19 coronavirus and, if successful, will be working in these countries.

in foreign countries carries with it a number of risks, including potential difficulties in enforcing intellectual property rights.

We cannot assure that our potential operations in foreign countries will not be adversely affected by these risks.

We have filed

provisional patent applications related to the COVID-19 coronavirus.

However, these filings do not assure that patents will ultimately

We recently contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization

and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via

intranasal delivery.

Testing is subject to obtaining IND authorization from the FDA.

No assurance can be given that the IND will

be obtained or that the testing will be successful.

Should it prove promising, additional testing will be required.

July 6, 2020, the Company entered into a clinical trial agreement (CTA) with Roswell Park to support Roswell Park’s Phase

1/2a trial of Ampligen in combination with interferon alfa-2b, in cancer patients with mild to moderate COVID-19, the disease

caused by the SARS-CoV-2 coronavirus.

Funding for the clinical trial is provided, in part, through grants from the National Cancer

Institute and AIM, as well as institutional support from Roswell Park.

It is planned that the phase 1/2a study will enroll up

to 44 patients in two stages.

Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses.

Once that initial phase is complete, further study participants will be randomized to two arms:

one receiving the two-drug combination

and a control group who will not receive Ampligen or interferon alfa but will receive best available care.

We are a financial

sponsor of the study and will provide Ampligen at no charge for this study.

Additional information on the clinical trial, which

is recruiting patients, is available at clinicaltrials.gov .

the Company also entered into a material transfer agreement with the University of Rochester which is planning a series of in

vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism

The Company also entered into a specialized services agreement with Utah State University and supplied Ampligen to

support the University’s Institute for Viral Research in its research into SARS-CoV-2.

The Utah State results show that

Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically achievable intranasal Ampligen dosage levels.

February 2013, we received a Complete Response Letter from the Food and Drug Administration, or FDA, for our Ampligen New Drug

cannot assure that our potential operations in foreign countries will not be adversely affected by these risks.

We have filed provisional

patent applications related to the COVID-19 coronavirus.

However, these filings do not assure that patents will ultimately be granted.

February 2013, we received a Complete Response Letter (CRL) from the Food and Drug Administration, or FDA, for our Ampligen New Drug

Application, or NDA, for the treatment of CFS.

The FDA communicated that we should conduct at least one additional clinical trial,

complete various nonclinical studies and perform a number of data analyses.

Accordingly, the remaining steps to potentially gain

FDA approval of the Ampligen NDA, the final results of these and other ongoing activities could vary materially from our expectations

and could adversely affect the chances for approval of the Ampligen NDA.

These activities and the ultimate outcomes are subject

to a variety of risks and uncertainties, including but not limited to risks that (i) the FDA may ask for additional data, information

or studies to be completed or provided;

and (ii) the FDA may require additional work related to the commercial manufacturing process

to be completed or may, in the course of the inspection of manufacturing facilities, identify issues to be resolved.

August 2016, we received approval of our NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica, or ANMAT,

for commercial sale of rintatolimod (U.S.

The FDA communicated that we should conduct at least one additional clinical trial, complete

various nonclinical studies and perform a number of data analyses.

Accordingly, the remaining steps to potentially gain FDA approval

of the Ampligen NDA, the final results of these and other ongoing activities could vary materially from our expectations and could adversely

affect the chances for approval of the Ampligen NDA.

These activities and the ultimate outcomes are subject to a variety of risks and

uncertainties, including but not limited to risks that (i) the FDA may ask for additional data, information or studies to be completed

and (ii) the FDA may require additional work related to the commercial manufacturing process to be completed or may, in

the course of the inspection of manufacturing facilities, identify issues to be resolved.

August 2016, we received approval of our NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica, or ANMAT, for

commercial sale of rintatolimod (U.S.

Ampligen®) in the Argentine Republic for the treatment of severe CFS.

The product will be marketed by GP Pharm, our commercial partner in Latin America.

We believe, but cannot assure, that this approval

provides a platform for potential sales in certain countries within the European Union under regulations that support cross-border

pharmaceutical sales of licensed drugs.

In Europe, approval in a country with a stringent regulatory process in place, such as

Argentina, should add further validation for the product as the Early Access Program, or EAP, as discussed below and was used

in Europe in pancreatic cancer.

ANMAT approval is only an initial, but important, step in the overall successful commercialization

of our product.

There are a number of actions that must occur before we could be able to commence commercial sales in Argentina.

In September 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Commercialization in Argentina will

require, among other things, an appropriate reimbursement level, appropriate marketing strategies, completion of manufacturing

preparations for launch.

Additionally, AIM has shipped Ampligen to Argentina for ANMAT’s release.

Approval of rintatolimod

for severe CFS in the Argentine Republic does not in any way suggest that the Ampligen NDA in the United States or any comparable

application filed in the European Union or elsewhere will obtain commercial approval.

May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management

of an EAP in Europe and Turkey related to CFS.

will be marketed by GP Pharm, our commercial partner in Latin America.

We believe, but cannot assure, that this approval provides a platform

for potential sales in certain countries within the European Union under regulations that support cross-border pharmaceutical sales of

licensed drugs.

In Europe, approval in a country with a stringent regulatory process in place, such as Argentina, should add further

validation for the product as the Early Access Program, or EAP, as discussed below and underway in Europe in pancreatic cancer.

approval is only an initial, but important, step in the overall successful commercialization of our product.

There are a number of actions

that must occur before we could be able to commence commercial sales in Argentina.

In September 2019, we received clearance from the

FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

We are currently working with GP Pharma on the commercial

launch of Ampligen in Argentina.

Commercialization in Argentina will require, among other things, an appropriate reimbursement level,

appropriate marketing strategies, completion of manufacturing preparations for launch and ANMAT conducting a final inspection of the

product and release tests before granting final approval to begin commercial sales.

This testing and approval process is currently delayed

due to the COVID-19 pandemic and ANMAT’s internal processes.

Approval of rintatolimod for severe CFS in the Argentine Republic

does not in any way suggest that the Ampligen NDA in the United States or any comparable application filed in the European Union or elsewhere

will obtain commercial approval.

May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of

an EAP in Europe and Turkey related to CFS.

Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor

in this territory, is performing EAP activities.

In January 2017, the EAP was extended to pancreatic cancer patients beginning

in the Netherlands.

In February 2018, we signed an amendment to extend the territory to cover Canada to treat pancreatic cancer

patients, pending government approval.

In March 2018, we signed an amendment to which myTomorrows will be our exclusive service

provider for special access activities in Canada for the supply of Ampligen for the treatment of CFS.

No assurance can be given

that we can sufficiently supply product should we experience an unexpected demand for Ampligen in our clinical studies, the commercial

launch in Argentina or pursuant to the EAPs.

No assurance can be given that Ampligen will prove effective in the treatment of

pancreatic cancer.

six oncology Ampligen clinical trials are underway with a number of subjects enrolled at university cancer centers testing whether

tumor microenvironments can be reprogrammed to increase the effectiveness of cancer immunotherapy, including checkpoint blockade.

Four are at Roswell Park and the other two (one temporarily suspended with plans to be reactivated) are at the University of Pittsburgh

Medical Center.

No assurance can be given as to the results of these underway trials.

Six additional cancer trials in collaboration

with University Medical/Cancer Research Centers using Ampligen plus checkpoint blockade are in various pre-enrollment stages.

No assurance can be given as to whether some or all of the planned additional oncology clinical trials will occur and they are

subject to many factors including lack of regulatory approval(s), lack of study drug, or a change in priorities at the sponsoring

universities or cancer centers.

Even if these additional clinical trials are initiated, as we are not the sponsor, we cannot assure

that these clinical studies or the six studies underway will be successful or yield any useful data.

In addition, initiation of

planned clinical trials may not occur secondary to many factors including lack of regulatory approval(s) or lack of study drug.

Even if these clinical trials are initiated, the Company cannot assure that the clinical studies will be successful or yield any

useful data or require additional funding.

The Company recognizes that all cancer centers, like all medical facilities, must make

the pandemic their priority.

Therefore, there is the potential for delays in clinical trial enrollment and reporting in ongoing

studies in cancer patients because of the COVID-19 medical emergency.

overall objectives include plans to continue seeking approval for commercialization of Ampligen in the United States and abroad

as well as seeking to broaden commercial therapeutic indications for Alferon N Injection presently approved in the United States

and Argentina.

We continue to pursue senior co-development partners with the capital and expertise needed to commercialize our

products and to enter into arrangements with them on commercially reasonable terms.

Our ability to commercialize our products,

widen commercial therapeutic indications of Alferon N Injection and/or capitalize on our collaborations with research laboratories

to examine our products are subject to a number of significant risks and uncertainties including, but not limited to our ability

to enter into more definitive agreements with some of the research laboratories and others that we are collaborating with, to

fund and conduct additional testing and studies, whether or not such testing is successful or requires additional testing and

meets the requirements of the FDA and comparable foreign regulatory agencies.

We do not know when, if ever, our products will

be generally available for commercial sale for any indication.

strived to maximize the outsourcing of certain components of our manufacturing, quality control, marketing and distribution while

maintaining control over the entire process through our quality assurance and regulatory groups.

We are investigating utilizing

contract manufactures for the Alferon process.

We cannot provide any guarantee that the facility or current or potential contract

manufacturers will pass an FDA pre-approval inspection for Alferon manufacturing.

sales of Alferon in the U.S.

will not resume until new batches of commercial filled and finished product are produced and released

While the facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon,

this status will need to be reaffirmed by an FDA pre-approval inspection.

We will also need the FDA’s approval to release

commercial product once we have submitted satisfactory stability and quality release data.

Currently, the manufacturing process

is on hold and there is no definitive timetable to have the facility back online.

Prior to completing validation, we plan on modernizing

the manufacturing process to make it lower-cost and higher volume.

If, following modernization, we are unable to gain the necessary

FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, our operations most likely will

be materially and/or adversely affected.

Considering these contingencies, there can be no assurances that the approved Alferon

N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially

available, it will return to prior sales levels.

In January 2017, the EAP was extended to pancreatic cancer patients beginning in the

In February 2018, we signed an amendment to extend the territory to cover Canada to treat pancreatic cancer patients, pending

government approval.

In March 2018, we signed an amendment to which myTomorrows will be our exclusive service provider for special access

activities in Canada for the supply of Ampligen for the treatment of CFS.

No assurance can be given that we can sufficiently supply product

should we experience an unexpected demand for Ampligen in our clinical studies, the commercial launch in Argentina or pursuant to the

No assurance can be given that Ampligen will prove effective in the treatment of pancreatic cancer.

six oncology Ampligen clinical trials are underway, in various phases of development and activity, with a number of

subjects enrolled at university cancer centers testing whether tumor microenvironments can be reprogrammed to increase the

effectiveness of cancer immunotherapy, including checkpoint blockade.

Four studies are at Roswell Park and two

studies are at the University of Pittsburgh Medical Center.

No assurance can be given as to the results of these underway

Four additional cancer trials in collaboration with University Medical/Cancer Research Centers using Ampligen plus

checkpoint blockade are in various pre-enrollment stages.

No assurance can be given as to whether some or all of the planned

additional oncology clinical trials will occur and they are subject to many factors including lack of regulatory approval(s),

lack of study drug, or a change in priorities at the sponsoring universities or cancer centers.

Even if these additional

clinical trials are initiated, as we are not the sponsor, we cannot assure that these clinical studies or the studies

underway will be successful or yield any useful data.

In addition, initiation of planned clinical trials may not occur

secondary to many factors including lack of regulatory approval(s) or lack of study drug.

Even if these clinical trials are

initiated, we cannot assure that the clinical studies will be successful or yield any useful data or require additional

overall objectives include plans to continue seeking approval for commercialization of Ampligen in the United States and abroad as well

as seeking to broaden commercial therapeutic indications for Alferon N Injection presently approved in the United States and Argentina.

We continue to pursue senior co-development partners with the capital and expertise needed to commercialize our products and to enter

into arrangements with them on commercially reasonable terms.

Our ability to commercialize our products, widen commercial therapeutic

indications of Alferon N Injection and/or capitalize on our collaborations with research laboratories to examine our products are subject

to a number of significant risks and uncertainties including, but not limited to our ability to enter into more definitive agreements

with some of the research laboratories and others that we are collaborating with, to fund and conduct additional testing and studies,

whether or not such testing is successful or requires additional testing and meets the requirements of the FDA and comparable foreign

regulatory agencies.

We do not know when, if ever, our products will be generally available for commercial sale for any indication.

strived to maximize the outsourcing of certain components of our manufacturing, quality control, marketing and distribution while maintaining

control over the entire process through our quality assurance and regulatory groups.

We cannot provide any guarantee that the facility

or our contract manufacturers will pass an FDA pre-approval inspection for Alferon manufacturing.

production of new Alferon Active Pharmaceutical Ingredient, or API, inventory will begin at our New Brunswick facility once the validation

phase is complete.

While the facility has already been approved by the FDA under the Biological License Application, or BLA, for Alferon,

this status will need to be reaffirmed by a successful Pre-Approval Inspection by the FDA prior to commercial sale of newly produced

inventory product.

If and when we obtain a reaffirmation of FDA BLA status and has begun production of new Alferon API, it will need

FDA approval as to the quality and stability of the final product before commercial sales can resume.

We will need additional funds to

finance the revalidation process in our facility to initiate commercial manufacturing, thereby readying ourselves for an FDA Pre-Approval

If we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon

inventory, our operations most likely will be materially and/or adversely affected.

In light of these contingencies, there can be no

assurances that the approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and

when it is again made commercially available, it will return to prior sales levels.

have been delays related to importing Ampligen to China.

We are working with Shenzhen Smoore to alleviate these issues and to

identify a mutually beneficial course of action that would allow us to move forward with the proposed testing of Ampligen.

will announce when the shipment for testing purposes has been completed.

If we are unable to resolve these issues, we will explore

inhalation therapy elsewhere.

AIM and Smoore signed a two-month extension of the MTA on April 1, 2021 and are working toward

agreement on a longer extension.

believe, and are investigating, Ampligen’s potential role in enhancing the activity of influenza vaccines.

While certain

studies involving rodents, non-human primates (monkeys) and healthy human subjects indicate that Ampligen may enhance the activity

of influenza vaccines by conferring increased cross-reactivity or cross-protection, further studies will be required and no assurance

can be given that Ampligen will assist in the development of a universal vaccine for influenza or other viruses.

forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified

and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events.

The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could

differ materially from those projected in the forward-looking statements.

While certain studies

involving rodents, non-human primates (monkeys) and healthy human subjects indicate that Ampligen may enhance the activity of influenza

vaccines by conferring increased cross-reactivity or cross-protection, further studies will be required and no assurance can be given

that Ampligen will assist in the development of a universal vaccine for influenza or other viruses.

forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some

of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events.

and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially

from those projected in the forward-looking statements.

Moreover, we operate in an evolving environment.

risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors

and uncertainties.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements

contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Report also refers to estimates and other statistical data made by independent parties and by us relating to market size and growth

and other data about our industry.

This data involves a number of assumptions and limitations, and you are cautioned not to give

undue weight to such estimates.

In addition, projections, assumptions and estimates of our future performance and the future performance

of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

New risk factors and uncertainties

may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

Except as required

by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of

any new information, future events, changed circumstances or otherwise.

Report also refers to estimates and other statistical data made by independent parties and by us relating to market size and growth and

other data about our industry.

This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight

to such estimates.

In addition, projections, assumptions and estimates of our future performance and the future performance of the markets

in which we operate are necessarily subject to a high degree of uncertainty and risk.

ImmunoTech Inc.

and its subsidiaries (collectively, “AIM”, “Company”, “we”

or “us”)

are an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat

multiple types of cancers, various viruses and immune-deficiency disorders.

We have established a strong foundation of laboratory,

pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural

antiviral defense system of the human body and to aid the development of therapeutic products for the treatment of certain cancers

and chronic diseases.

or “us”) are

an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat multiple

types of cancers, various viruses and immune-deficiency disorders.

We have established a strong foundation of laboratory, pre-clinical

and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system

of the human body and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.

flagship products include Ampligen®

2 unchanged sentences

(Interferon Alfa-N3).

A first-in-class drug is also known as a new molecular entity that contains

an active moiety.

A first-in-class drug is also known as a new molecular entity that contains an active

Ampligen has not been approved by the FDA or marketed in the US.

the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, we have been actively engaged in determining whether Ampligen

could be an effective treatment for this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be

both an early-onset treatment for and prophylaxis against SARS-CoV-2.

Ampligen is also being researched as part of a potential

COVID-19 vaccine strategy that combines Ampligen as an immune enhancer seeking to boost the efficacy of the vaccine and also convey

cross-reactivity and cross-protection against future mutations.

We believe that prior studies of Ampligen in SARS-CoV-1 animal

experimentation may predict similar protective effects against the new virus.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing

of the production of polymer, enzyme, placebo as well as Ampligen and one Contract Research Organization which may also assist

with the planning, presentation and filing of documents with the FDA.

These confidentiality and non-disclosure agreements are

only the initial step in forging relationships with these entities to obtain contract manufacturers and research partners.

assurance can be given as to how many of these, initial explorations, if any, will result in definitive arrangements or, with

regard to potential research partners, what research arrangements will develop and thereafter prove fruitful.

Ampligen®

represents an RNA being developed for globally important cancers, viral diseases and disorders of the immune system.

Ampligen®

has in the clinic demonstrated the potential for standalone efficacy in a number of solid tumors.

We have also seen success in

increasing survival rates and efficacy in the treatment of animal tumors when Ampligen®

is used in combination with checkpoint

blockade therapies.

This success in the field of immuno-oncology has guided our focus toward the potential use of Ampligen®

as a combinational therapy for the treatment of a variety of solid tumor types.

There are currently multiple Ampligen®

trials testing Ampligen in humans —

both underway and planned —

at major cancer research centers around the country.

Ampligen ®

was used as a monotherapy to treat pancreatic cancer patients in an Early Access Program (EAP) approved by the

Inspectorate of Healthcare in the Netherlands at Erasmus Medical Center.

In September, AIM reported receipt of statistically significantly

results of positive survival benefit when using Ampligen in patients with locally advanced/metastatic pancreatic cancer after

systemic chemotherapy.

AIM will work with its Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track”

the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, we have been actively engaged in determining whether Ampligen could

be an effective treatment for this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be both an early-onset

treatment for and prophylaxis against SARS-CoV-2.

Ampligen also has potential as a COVID-19 vaccine strategy that combines Ampligen as

an immune enhancer seeking to boost the efficacy of intranasal and other vaccines and, as to intranasal, also convey cross-reactivity

and cross-protection against future mutations.

We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict

similar protective effects against the new virus.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing of

the production of polymer, enzyme, placebo as well as Ampligen and one Contract Research Organization which may also assist with the

planning, presentation and filing of documents with the FDA.

These confidentiality and non-disclosure agreements are only the initial

step in forging relationships with these entities to obtain contract manufacturers and research partners.

No assurance can be given as

to how many of these, initial explorations, if any, will result in definitive arrangements or, with regard to potential research partners,

what research arrangements will develop and thereafter prove fruitful.

represents a dsRNA being developed for globally important cancers, viral diseases and disorders of the immune system.

Ampligen has in

the clinic demonstrated the potential for standalone efficacy in a number of solid tumors.

We have also seen success in increasing survival

rates and efficacy in the treatment of animal tumors when Ampligen is used in combination with checkpoint blockade therapies.

in the field of immuno-oncology has guided our focus toward the potential use of Ampligen as a combinational therapy for the treatment

of a variety of solid tumor types.

There are currently multiple Ampligen clinical trials testing Ampligen in humans —

both underway

and planned —

at major cancer research centers.

Ampligen was used as a monotherapy to treat pancreatic cancer patients in an Early

Access Program (EAP) approved by the Inspectorate of Healthcare in the Netherlands at Erasmus Medical Center.

In September, we reported

receipt of statistically significantly results of positive survival benefit when using Ampligen in patients with locally advanced/metastatic

pancreatic cancer after systemic chemotherapy.

We will work with our Contract Research Organization, Amarex Clinical Research LLC, to

seek FDA “fast-track”

and possibly even FDA “breakthrough”

designations and to obtain authorization to conduct a follow-up pancreatic cancer

Phase 2/3 clinical trial with sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research

centers in the United States.

Ampligen®

designations and to obtain authorization to conduct

a follow-up pancreatic cancer Phase 2/3 clinical trials with potential sites in the Netherlands at Erasmus MC under Prof.

and also at major cancer research centers in the United States.

is also being evaluated for the treatment of myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS).

AIM is currently sponsoring

We are currently sponsoring

an expanded access program for ME/CFS patients in the U.S.

In August 2016, we received approval of our NDA from Administracion

Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen®

in the Argentine Republic

In August 2016, we received approval of our New Drug Application (NDA) from

Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen in the Argentine Republic

for the treatment of severe CFS.

With regulatory approval in Argentina, Ampligen®

is the world’s only approved therapeutic

On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of

Ampligen®

to Argentina.

The next steps in the commercial launch of Ampligen®

include ANMAT conducting a final inspection

of the product and release tests before granting final approval to begin commercial sales.

AIM has supplied GP Pharm with the

Ampligen required for testing and ANMAT release.

Once final approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen®

With regulatory approval in Argentina, Ampligen is the world’s only approved therapeutic for ME/CFS.

Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial distribution.

On September 19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen to Argentina.

The next steps in the commercial launch of Ampligen include ANMAT conducting a final inspection of the product and release tests before

granting final approval to begin commercial sales.

We have supplied GP Pharm with the Ampligen required for testing and ANMAT release.

This testing and approval process is currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes.

approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen in Argentina.

We continue to pursue our Ampligen NDA for the

treatment of CFS with the FDA.

N Injection is approved for a category of sexually transmitted disease infections and patients that are intolerant to recombinant interferon

in Argentina.

We continue to pursue our Ampligen New Drug Application, or NDA, for the treatment of CFS with the FDA.

N Injection®

is approved for a category of sexually transmitted diseases infection and patients that are intolerant to recombinant

interferon in Argentina.

Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the

for the intralesional treatment of refractory (resistant to other treatment) or recurring external condylomata acuminata/genital

warts (GW) in patients 18 years of age or older.

Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the U.S.

for the intralesional

treatment of refractory (resistant to other treatment) or recurring external condylomata acuminata/genital warts (GW) in patients 18

years of age or older.

Certain types of human papilloma viruses cause GW.

AIM also has approval from

ANMAT for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon in Argentina.

We also have approval from ANMAT for the treatment of refractory

patients that failed or were intolerant to treatment with recombinant interferon in Argentina.

operate a 30,000 sq.

facility in New Brunswick, NJ with the objective of producing Ampligen®

and Alferon®.

committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed

to commercialize the many potential therapeutic aspects of Ampligen®

and our FDA-approved drug Alferon®

primary pharmaceutical product platform consists of Ampligen®, a first-in-class drug of large macromolecular double-stranded

(ds) RNA (ribonucleic acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.

Ampligen®

facility in New Brunswick, NJ, where we conduct testing and have produced limited quantities of active pharmaceutical

ingredients (“API”) for our products.

We have reviewed our operations at the facility and believe that some of the equipment

most likely should be upgraded to realize greater efficiencies, when and if we require more API than is currently in storage.

also exploring engaging a Contract Manufacturing Organization (“CMO”) to produce API.

While we believe we have sufficient

API to meet our current needs, we are also continually exploring new efficiencies so as to maximize our ability to fulfill future obligations.

Related, on April 5, 2021, the Company approved a proposal from Polysciences Inc.

(“Polysciences”) for the manufacture of

AIM’s Poly I and Poly C12U polynucleotides and associated test methods at Polysciences’

Warrington, Penn.

location to enhance

the Company’s capacity to produce the polymer precursors to Ampligen.

The Company is working with Polysciences to finalize a Service

Agreement and a Quality Agreement.

primary pharmaceutical product platform consists of Ampligen®, a first-in-class drug of large macromolecular double-stranded (ds)

RNA (ribonucleic acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.

Ampligen®

1 unchanged sentence

undergoing clinical development for the treatment of certain cancers and ME/CFS.

Over its developmental history, Ampligen®

has received various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency (“EMA”)),

Treatment protocol (e.g., “Expanded Access”

Over its developmental history, Ampligen has received

various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency (“EMA”)), Treatment protocol

(e.g., “Expanded Access”

or “Compassionate”

use authorization) with Cost Recovery Authorization

(FDA) and “promising”

use authorization) with Cost Recovery Authorization (FDA) and “promising”

clinical outcome recognition based on the evaluation of certain summary clinical reports (“AHRQ”

or Agency for Healthcare Research and Quality).

Ampligen®

represents the first drug in the class of large (macromolecular)

dsRNA molecules to apply for NDA review.

Based on the results of published, peer reviewed pre-clinical studies and clinical trials,

we believe that Ampligen®

may have broad-spectrum anti-viral and anti-cancer properties.

believe that nucleic acid compounds represent a potential new class of pharmaceutical products designed to act at the molecular

level for treatment of many human diseases.

There are two forms of nucleic acids, deoxyribonucleic acid (“DNA”) and

ribonucleic acid (“RNA”).

DNA is a group of naturally occurring molecules found in chromosomes, the cell’s genetic

RNA is a group of naturally occurring informational molecules which orchestrate a cell’s behavior which, in turn,

regulates the action of groups of cells, including the cells which compromise the body’s immune system.

RNA directs the

production of proteins and regulates certain cell activities including the activation of an otherwise dormant cellular defense

against viruses and tumors.

Our drug technology utilizes specifically-configured RNA and is a selective TLR3 agonist that is administered

intravenously.

Ampligen®

has been assigned the generic name rintatolimod by the United States Adopted Names Council (USANC)

and has the chemical designation poly(I):poly(C 12 U).

trials of Ampligen®

that have been conducted or that are ongoing include studies of the potential treatment of patients with

renal cell carcinoma, malignant melanoma, non-small cell lung, ovarian, breast, colorectal, urothelial, prostate and pancreatic

cancer, ME/CFS, Hepatitis B and HIV.

or Agency for Healthcare

Research and Quality).

Ampligen represents the first drug in the class of large (macromolecular) dsRNA molecules to apply for NDA review.

Based on the results of published, peer reviewed pre-clinical studies and clinical trials, we believe that Ampligen may have broad-spectrum

anti-viral and anti-cancer properties.

believe that nucleic acid compounds represent a potential new class of pharmaceutical products designed to act at the molecular level

for treatment of many human diseases.

There are two forms of nucleic acids, deoxyribonucleic acid (“DNA”) and ribonucleic

acid (“RNA”).

DNA is a group of naturally occurring molecules found in chromosomes, the cell’s genetic machinery.

is a group of naturally occurring informational molecules which orchestrate a cell’s behavior which, in turn, regulates the action

of groups of cells, including the cells which compromise the body’s immune system.

RNA directs the production of proteins and regulates

certain cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors.

Our drug technology

utilizes specifically-configured RNA and is a selective Toll-like Receptor 3 (TLR3) agonist that is administered intravenously.

has been assigned the generic name rintatolimod by the United States Adopted Names Council (USANC) and has the chemical designation poly(I):poly(C 12 U).

trials of Ampligen that have been conducted or that are ongoing include studies of the potential treatment of patients with renal cell

carcinoma, malignant melanoma, non-small cell lung, ovarian, breast, colorectal, prostate and pancreatic cancer, ME/CFS, Hepatitis B

have received approval of our NDA from ANMAT for commercial sale of rintatolimod (U.S.

Ampligen®) in the Argentine

Republic for the treatment of severe CFS.

Ampligen) in the Argentine Republic

for the treatment of severe CFS.

The product will be marketed by GP Pharm, our commercial partner in Latin America.

September 19, 2019, AIM received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent

We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Commercialization in Argentina

will require, among other things, GP Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement

level, design of marketing strategies and completion of manufacturing preparations for launch.

FDA has authorized an open-label expanded access treatment protocol, (“AMP-511”), allowing patient access to Ampligen®

in an open-label safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen®

this very serious and chronic condition.

The data collected from the AMP-511 protocol through clinical sites provide safety information

regarding the use of Ampligen®

in patients with CFS.

We are establishing an enlarged data base of clinical safety information

which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen®

We believe that continued efforts to understand existing data, and to advance the development of new data and information,

will ultimately support our future filings for Ampligen®

and/or the design of future clinical studies that the FDA requested

in a complete response letter.

The FDA approved the increase reimbursement level from $200 to $345 per 200 mg vial of Ampligen,

due to increased production costs;

Shipment of the drug

product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial distribution.

19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen to Argentina.

currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Commercialization in Argentina will require, among

other things, GP Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement level, design of marketing

strategies and completion of manufacturing preparations for launch and ANMAT conducting a final inspection of the product and release

tests before granting final approval to begin commercial sales.

AIM has supplied GP Pharm with the Ampligen required for testing and

ANMAT release.

This testing and approval

process is currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes.

Once final approval by ANMAT is obtained,

GP Pharm will begin distributing Ampligen in Argentina.

We continue to pursue our Ampligen NDA, for the treatment of CFS with the FDA.

FDA has authorized an open-label expanded access treatment protocol, (“AMP-511”), allowing patient access to Ampligen in

an open-label safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this very serious

and chronic condition.

The data collected from the AMP-511 protocol through clinical sites provide safety information regarding the use

of Ampligen in patients with CFS.

We are establishing an enlarged data base of clinical safety information which we believe will provide

further documentation regarding the absence of autoimmune disease associated with Ampligen treatment.

We believe that continued efforts

to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for

Ampligen and/or the design of future clinical studies that the FDA requested in a complete response letter.

The FDA approved the increase

reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased production costs;

which was re-authorized in 2021.

At this time, we do not plan on passing this adjustment along

to the patients in this program.

As of September 30, 2020, there are 10 patients enrolled in this open-label expanded access treatment

In October 2020, AIM received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access

Program (EAP) clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed

with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms.

May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management

of an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS.

to the agreement, as amended, myTomorrows also will manage all Early Access Programs and Special Access Programs in Europe, Canada

and Turkey to treat pancreatic cancer and ME/CFS patients.

April 2018, we completed data analysis of an intranasal human safety study of Ampligen®

plus FluMist®

At this time, we do not plan on passing this adjustment along to the patients in this program.

As of March 31, 2021, there are 11 patients

enrolled in this open-label expanded access treatment protocol.

In October 2020, we received Institutional Review Board (IRB) approval

for the expansion of the AMP-511 Expanded Access Program (EAP) clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome

(ME/CFS) to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic

fatigue-like symptoms;

1 of the 11 patients enrolled has post COVID chronic fatigue-like symptoms.

May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of

an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS.

Pursuant to the agreement,

as amended, myTomorrows also will manage all Early Access Programs and Special Access Programs in Europe, Canada and Turkey to treat

pancreatic cancer and ME/CFS patients.

The agreement automatically extends for a period of 12 months on May 20, 2021.

April 2018, we completed data analysis of an intranasal human safety study of Ampligen plus FluMist®

known as AMP-600.

The study was previously closed after the US Centers for Disease Control and Prevention (“CDC”) recommended against

the use of FluMist®.

Intranasal Ampligen®

in combination with FluMist®

was previously closed after the US Centers for Disease Control and Prevention (“CDC”) recommended against the use of FluMist®.

Intranasal Ampligen in combination with FluMist®

was generally well-tolerated in the study.

June 2018, Ampligen®

was cited as outperforming two other TLR3 agonists, poly IC and natural double stranded RNA, in creating

an enhanced tumor microenvironment for checkpoint blockage therapy in the journal of Cancer Research ( http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985 ).

In a head-to-head study in explant culture models, Ampligen®

activated the TLR3 pathway and promoted an accumulation of killer

T cells but, unlike the other two TLR3 agonists, it did so without causing regulatory T cell (Treg) attraction.

These findings

were considered important because they indicate that Ampligen®

selectively reprograms the tumor microenvironment by inducing

the beneficial aspects of tumor inflammation (attracting killer T cells), without amplifying immune suppressive elements such

as regulatory T cells.

The study was conducted at the University of Pittsburgh and Roswell Park as a part of the NIH-funded P01

CA132714 and Ovarian Cancer Specialized Program of Research Excellence (SPORE).

Based upon these findings AIM and Roswell Park

expanded their existing scientific collaboration to advance the clinical development of Ampligen®

which has shown promise

in preclinical studies when combined with checkpoint inhibitors (CPIs).

The parties executed a Memorandum of Understanding (“MOU”)

designed to further assess the clinical potential of Ampligen®

June 2018, Ampligen was cited as outperforming two other TLR3 agonists, poly IC and natural double stranded RNA, in creating an enhanced

tumor microenvironment for checkpoint blockage therapy in the journal of Cancer Research (http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985 ).

In a head-to-head study in explant culture models, Ampligen activated the TLR3 pathway and promoted an accumulation of killer T cells

but, unlike the other two TLR3 agonists, it did so without causing regulatory T cell (Treg) attraction.

These findings were considered

important because they indicate that Ampligen selectively reprograms the tumor microenvironment by inducing the beneficial aspects of

tumor inflammation (attracting killer T cells), without amplifying immune suppressive elements such as regulatory T cells.

was conducted at the University of Pittsburgh and Roswell Park as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized

Program of Research Excellence (SPORE).

Based upon these findings we and Roswell Park expanded our existing scientific collaboration

to advance the clinical development of Ampligen which has shown promise in preclinical studies when combined with checkpoint inhibitors

The parties executed a Memorandum of Understanding (“MOU”) designed to further assess the clinical potential of Ampligen

in treating certain cancers.

This phase I/II study will evaluate

the potential of Ampligen®

to enhance the immune mediated effects of CPIs in patients with advanced solid tumors including

bladder, melanoma and renal cell carcinoma.

2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen®, following its “Fill

& Finish”

at the Contract Manufacturing Organization.

These lots passed all required testing for regulatory release

for human use and are being used for multiple programs including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands,

and will continue to be used for ongoing and future clinical studies in oncology.

Additionally, two lots of Ampligen were manufactured

in December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen have been fully tested and released for

commercial product launch in Argentina and for clinical trials.

N Injection®

This phase I/II study will evaluate the potential of Ampligen to enhance the immune mediated effects of

CPIs in patients with advanced solid tumors including bladder, melanoma and renal cell carcinoma.

At the moment, this study is on hold

as we await updates and next steps from Roswell Park.

2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill & Finish”

at Jubilant HollisterStier, the Contract Manufacturing Organization.

These lots passed all required testing for regulatory release for

human use and are being used for multiple programs including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands, and

will continue to be used for ongoing and future clinical studies in oncology.

Additionally, two lots of Ampligen were manufactured in

December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen have been fully tested and released for commercial

product launch in Argentina and for clinical trials.

Additionally, in December 2020, we added Pharmaceutics International Inc.

(“Pii”)

as a “Fill & Finish”

provider to enhance our capacity to produce Ampligen.

This addition amplifies our manufacturing

capability by providing redundancy and cost savings.

The contracts augment our existing fill and finish capacity.

N Injection®

is the registered trademark for our injectable formulation of natural alpha interferon.

natural-source, multi-species alpha interferon currently approved for sale in the U.S.

and Argentina for the intralesional (within

lesions) treatment of refractory (resistant to other treatment) or recurring external genital warts in patients 18 years of age

is also approved in Argentina for the treatment of refractory patients that failed or were intolerant to

treatment with recombinant interferons.

Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually

transmitted disease (“STD”).

According to the CDC, HPV is the most common sexually transmitted infection, with approximately

79 million Americans —

most in their late teens and early 20s —

N Injection is the registered trademark for our injectable formulation of natural alpha interferon.

Alferon is the only natural-source,

multi-species alpha interferon currently approved for sale in the U.S.

and Argentina for the intralesional (within lesions) treatment

of refractory (resistant to other treatment) or recurring external genital warts in patients 18 years of age or older.

Alferon is also

approved in Argentina for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferons.

Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually transmitted disease (“STD”).

According to the CDC, HPV is the most common sexually transmitted infection, with approximately 79 million Americans —

their late teens and early 20s —

infected with HPV.

In fact, the CDC states that “HPV

is so common that nearly all sexually active men and women get the virus at some point in their lives.”

Although they do

not usually result in death, genital warts commonly recur, causing significant morbidity and entail substantial health care costs.

In fact, the CDC states that “HPV is so common that nearly all sexually

active men and women get the virus at some point in their lives.”

Although they do not usually result in death, genital warts commonly

recur, causing significant morbidity and entail substantial health care costs.

are a group of proteins produced and secreted by cells to combat diseases.

Researchers have identified four major classes of human

Researchers have identified four major classes of human interferon:

alpha, beta, gamma and omega.

Alferon N Injection®

contains a multi-species form of alpha interferon.

The world-wide

market for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products

are approved for many major medical uses worldwide.

Alferon N Injection contains a multi-species form of alpha interferon.

The world-wide market for injectable

alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products are approved for many major

medical uses worldwide.

Alpha interferons are manufactured commercially in three ways:

engineering, by cell culture, and from human white blood cells.

All three of these types of alpha interferon are or were approved

for commercial sale in the U.S.

Our natural alpha interferon is produced from human white blood cells.

by genetic engineering, by cell culture, and from

human white blood cells.

All three of these types of alpha interferon are or were approved for commercial sale in the U.S.

alpha interferon is produced from human white blood cells.

potential advantages of natural alpha interferon over recombinant (synthetic) interferon produced and marketed by other pharmaceutical

firms may be based upon their respective molecular compositions.

Natural alpha interferon is composed of a family of proteins

containing many molecular species of interferon.

In contrast, commercial recombinant alpha interferon products each contain only

a single species.

Researchers have reported that the various species of interferons may have differing antiviral activity depending

upon the type of virus.

Natural alpha interferon presents a broad complement of species, which we believe may account for its

higher activity in laboratory studies.

Natural alpha interferon is composed of a family of proteins containing

many molecular species of interferon.

In contrast, commercial recombinant alpha interferon products each contain only a single species.

Researchers have reported that the various species of interferons may have differing antiviral activity depending upon the type of virus.

Natural alpha interferon presents a broad complement of species, which we believe may account for its higher activity in laboratory studies.

Natural alpha interferon is also glycosylated (partially covered with sugar molecules).

Such glycosylation is not present on the currently U.S.

Such glycosylation is not present on the currently

marketed recombinant alpha interferons.

We believe that the absence of

glycosylation may be, in part, responsible for the production of interferon-neutralizing antibodies seen in patients treated with

recombinant alpha interferon.

Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon

species, the types and relative quantity of these species are different from our natural alpha interferon.

N Injection®

[Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species

alpha interferon product.

There are essentially no neutralizing antibodies observed against Alferon N Injection®

the product has a relatively low side-effect profile.

The recombinant DNA derived alpha interferon formulations have been reported

to have decreased effectiveness after one year of treatment, probably due to neutralizing antibody formation

We believe that the absence of glycosylation may be, in part, responsible for the production

of interferon-neutralizing antibodies seen in patients treated with recombinant alpha interferon.

Although cell culture-derived interferon

is also composed of multiple glycosylated alpha interferon species, the types and relative quantity of these species are different from

our natural alpha interferon.

N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon

There are essentially no neutralizing antibodies observed against Alferon N Injection to date and the product has a relatively

low side-effect profile.

The recombinant DNA derived alpha interferon formulations have been reported to have decreased effectiveness

after one year of treatment, probably due to neutralizing antibody formation.

“Manufacturing”

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sections below for more details on the manufacture and marketing/distribution

of Alferon N Injection®.

the SARS-CoV-1 outbreak in 2002-03, Ampligen exhibited excellent antiviral properties and protective survival effect in NIH-contracted

studies of SARS-infected mice, which is very similar to SARS-CoV-2, the novel virus that causes COVID-19.

Barnard 2006 study ( https://journals.sagepub.com/doi/abs/10.1177/095632020601700505 ) found that Ampligen reduced virus

lung levels to below detectable limits.

Day 2009 study ( https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2787736/ ) found that, instead of 100% mortality, there

was 100% protective survival.

compared key transcription regulatory sequences of SARS-CoV-1 to SARS-CoV-2 and found significant similarities, suggesting highly

probable extension of the antiviral effects of Ampligen in the earlier NIH-contracted SARS experiments to COVID-19.

SARS-CoV-2 virus –

which causes COVID-19 –

shares important genomic and pathogenic similarities with SARS-CoV-1 (hence

Since Ampligen has shown antiviral activity against more distantly related coronaviruses, there was a reasonable probability

that the antiviral effects of Ampligen against SARS-CoV-1 will likely extend to SARS-CoV-2, as discussed below, recently, Ampligen

has demonstrated in vitro antiviral activity against SARS-CoV-2.

We believe that this creates a compelling case for clinical trials

to evaluate Ampligen as a potential tool in the fight against COVID-19.

the late 2019 outbreak of SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment

for this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be both an early-onset treatment for

and prophylaxis against SARS-Cov-2.

Ampligen is also being researched as part of a potential COVID-19 vaccine strategy that combines

Ampligen as an immune enhancer seeking to boost the efficacy of the vaccine and also convey cross-reactivity and cross-protection

against future mutations.

We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective

effects against the new virus.

February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health

community in the fight against the deadly coronavirus (See:

https://aimimmuno.com/press-release/aim-immunotech-files-provisional-patent-application-for-the-use-of-ampligenr-as-a-potential-therapy-for-covid-19-induced-chronic-fatigue/).

Our three provisional patent applications include:

1) Ampligen as a therapy for the coronavirus;

2) Ampligen as part of a proposed

intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection

3) a high-volume manufacturing process for Ampligen.

Under the Patent Cooperation Treaty of 1970, which provides international

protections for patents, the three provisional patent applications can convert to international patent applications based on the

date of their filings.

early April 2020, we entered into a Material Transfer Agreement with Shenzhen Smoore Technologies located in Shenzhen China, the

world’s largest manufacturer of inhalation devices.

Pursuant to this agreement, Smoore has agreed to run preliminary tests

in China to the efficacy of Smoore’s inhalation delivery device using Ampligen.

Initial testing will include evaluation

of Ampligen with regards to safety and characterization of the inhaler vapor properties.

Additional testing will study the particle

size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology.

The goal of these studies

is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver biologically active Ampligen

deep into the lung airways of humans.

The Ampligen is scheduled to be shipped to Smoore for testing, pending resolution of various

China inbound import regulatory requirements.

AIM and Smoore are working to identify and navigate any and all regulatory obligations.

August 6, 2020, we contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization

and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via

intranasal delivery.

For Phase I we anticipate providing approximately $514,000 to Amarex.

For the subsequent Phase II we anticipate

providing approximately an additional $650,000.

Additional costs expected to be incurred by us for the clinical trial are estimated

at $4.5 million.

We expect that Phase I will consist of 24 test subjects and that Phase II will consist of 150 test subjects.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing

of the production of polymer, enzyme, placebo as well as Ampligen, and one Contract Research Organization, Amarex, which will

provide regulatory support related to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal

addition, we have joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China

(PRC) for use as a prophylactic/early-onset therapeutic against COVID-19.

CGA is a member-based online information platform and

offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China

Overseas Development Association (CODA).

The relationship with ChinaGoAbroad is ongoing.

May 11, 2020, the FDA authorized an IND for Roswell Park to conduct a Phase 1/2a study of a regimen of Ampligen and interferon

alpha in cancer patients with mild or moderate COVID-19 infections.

This new clinical trial, sponsored by the Roswell Park in

collaboration with us, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19,

and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway.

It is planned that

the phase 1/2a study will enroll up to 44 patients in two stages.

Phase 1 will see 12-24 patients receiving both Ampligen and

interferon alfa-2b at escalating doses.

Once that initial phase is complete, further study participants will be randomized to

one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will

receive best available care.

We intend to be a financial sponsor of the study and will provide Ampligen at no charge for this

July 6, 2020, we entered into a clinical trial agreement with Roswell Park pursuant to which Roswell Park will conduct a Phase

1/2a trial of Ampligen (rintatolimod) in combination with interferon alfa, in cancer patients with COVID-19, the disease caused

by the SARS-CoV-2 coronavirus.

The National Cancer Institute and AIM are supporting this trial.

AIM reported in September that

recruitment in the trial had begun.

clinicaltrials.gov/NCT04379518.

we also entered into a material transfer agreement with the University of Rochester which is planning a series of in vitro experiments

in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action.

entered into a specialized services agreement with Utah State University and has supplied Ampligen to support the University’s

Institute for Viral Research in its research into SARS-CoV-2.

The Utah State results show that Ampligen was able to decrease SARS-CoV-2

infectious viral yields by 90% at clinically achievable intranasal Ampligen dosage levels.

of Alferon N Injection.

have been working with the University of Pittsburgh’s chemokine modulation research initiative which includes the use of

Ampligen®

as a potential adjuvant to modify the tumor microenvironment (TME) with the goal of increasing anti-tumor responses

to check point inhibitors (CPI).

As part of this collaboration, AIM has supplied Ampligen®

(rintatolimod) to the University.

Ampligen as a potential adjuvant to modify the tumor microenvironment (TME) with the goal of increasing anti-tumor responses to

check point inhibitors (CPI).

As part of this collaboration, we have supplied Ampligen (rintatolimod) to the University.

The study, under the leadership of Robert P.

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Kalinski relocated to Roswell Park in

Buffalo, NY and has established a cancer program which will continue to require a supply of Ampligen®.

October 2018, we signed a clinical trial agreement with Roswell Park to evaluate Ampligen®

in combination with checkpoint

inhibitors (CPIs).

The Phase IIa clinical trial will evaluate the immune-mediated effects of cytokine modulation in combination

with CPIs in patients with primary resistance to CPI therapy.

The protocol will seek to evaluate the combination of Ampligen®

and CPIs in patients with advanced urothelial carcinoma, renal cell carcinoma and melanoma.

Ampligen®

is our investigational

immune-enhancing TLR3 agonist that has demonstrated a robust anti-cancer effect in preclinical models when combined with CPIs.

This new agreement expands the extensive prior clinical and preclinical work into the clinical checkpoint blockade arena and offers

the opportunity to begin evaluation of this combination therapy in patients with a variety of solid tumors where large numbers

of patients do not respond or progress following treatment with standard CPI-based therapy.

six Ampligen®

clinical trials are underway at university cancer centers testing whether tumor microenvironments can be reprogrammed

to increase the effectiveness of cancer immunotherapy, including checkpoint inhibitors:

Buffalo, NY and has established a cancer program which will continue to require a supply of Ampligen.

October 2018, we signed a clinical trial agreement with Roswell Park to evaluate Ampligen in combination with checkpoint inhibitors (CPIs).

The Phase IIa clinical trial will evaluate the immune-mediated effects of cytokine modulation in combination with CPIs in patients with

primary resistance to CPI therapy.

The protocol will seek to evaluate the combination of Ampligen and CPIs in patients with advanced

urothelial carcinoma, renal cell carcinoma and melanoma.

Ampligen is our investigational immune-enhancing TLR3 agonist that has demonstrated

a robust anti-cancer effect in preclinical models when combined with CPIs.

This agreement expands the extensive prior clinical and preclinical

work into the clinical checkpoint blockade arena and offers the opportunity to begin evaluation of this combination therapy in patients

with a variety of solid tumors where large numbers of patients do not respond or progress following treatment with standard CPI-based

This study is on hold as we await next steps from Roswell Park.

six Ampligen clinical trials are underway at university cancer centers testing whether tumor microenvironments can be reprogrammed to

increase the effectiveness of cancer immunotherapy, including checkpoint inhibitors:

Recurrent Ovarian Cancer - Phase 1 / 2 study of intraperitoneal chemo-immunotherapy in advanced recurrent ovarian cancer;

Phase 1 portion establishes intraperitoneal safety.

1 portion establishes intraperitoneal safety.

Awaiting publication of Phase I results.

https://clinicaltrials.gov/ct2/show/NCT02432378

Recurrent Ovarian Cancer - A follow-up Phase 2 study of advanced recurrent ovarian cancer using cisplatin, pembrolizumab,

plus Ampligen;

Recurrent Ovarian Cancer - A follow-up Phase 2 study of advanced recurrent ovarian cancer using cisplatin, pembrolizumab, plus

up to 45 patients to be enrolled;

enrollment has commenced, and the numerous patients have commenced treatment.

enrollment has commenced, and numerous patients have commenced treatment.

https://clinicaltrials.gov/ct2/show/NCT03734692

4 Metastatic Triple Negative Breast Cancer - Phase 2 study of metastatic triple-negative breast cancer using chemokine

modulation therapy, including Ampligen and pembrolizumab.

4 Metastatic Triple Negative Breast Cancer - Phase 2 study of metastatic triple-negative breast cancer using chemokine modulation

therapy, including Ampligen and pembrolizumab.

All patients have been treated or are in treatment.

https://www.clinicaltrials.gov/ct2/show/NCT03599453

4 Colorectal Cancer Metastatic to the Liver - Phase 2a study of Ampligen as component of chemokine modulatory regimen

on colorectal cancer metastatic to liver;

4 Colorectal Cancer Metastatic to the Liver - Phase 2a study of Ampligen as component of chemokine modulatory regimen on colorectal

cancer metastatic to liver;

the majority of the 12 planned patients enrolled and treated.

1 unchanged sentence

Prostate Cancer - Phase 2 study investigating the effectiveness and safety of aspirin and Ampligen with or without interferon-alpha

2b (Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing

radical prostatectomy.

2b (Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing radical

prostatectomy.

Patient enrollment has been initiated in this study designed for up to 45 patients.

4 unchanged sentences

of a combination of Ampligen, celecoxib with or without Intron A, when given along with chemotherapy;

the goal of this approach

is to increase survival.

the goal of this approach is

to increase survival.

This study is recruiting patients designed for up to 24 patients.

6 unchanged sentences

Roswell Park and Moffitt Cancer Center have both received “Breakthrough Awards”

from the U.S.

Department of Defense (DOD).

1 unchanged sentence

$15 million in DOD funding to study Ampligen.

Roswell Park is currently working on its draft of the IND, which its study and

Moffitt’s study require before next steps can be taken.

Roswell Park is currently working on its draft of the IND, which its study and Moffitt’s

study require before next steps can be taken.

4 Refractory Metastatic Colorectal Carcinoma —

2 unchanged sentences

Up to 25 patients to be enrolled.

This is expected to be funded

by grants, testing Ampligen and pembrolizumab.

This is expected to be funded by

grants, testing Ampligen and pembrolizumab.

https://www.clinicaltrials.gov/show/NCT04119830

5 unchanged sentences

4 Urothelial, Melanoma and Renal Cell Carcinoma —

Phase 2 study of advanced urothelial (bladder), melanoma and renal

cell carcinoma, resistant to checkpoint blockade, that will evaluate Ampligen in combination with a checkpoint blockade therapy

at Roswell Park.

Phase 2 study of advanced urothelial (bladder), melanoma and renal cell

carcinoma, resistant to checkpoint blockade, that will evaluate Ampligen in combination with a checkpoint blockade therapy at Roswell

Protocol design and funding currently being finalized.

2 unchanged sentences

in combination with pembrolizumab at University of Nebraska Medical Center.

Study design and budget being

Study design and budget being developed.

However, we now anticipate an extended delay, as other studies with funding have moved ahead of the Ampligen project.

Roswell Park is exploring a pilot study to establish proof of concept.

is exploring a pilot study to establish proof of concept.

Pancreatic Cancer —

Phase 2 study in advanced pancreatic cancer using checkpoint blockade plus Ampligen at University

of Nebraska Medical Center and Erasmus University.

Phase 2 study in advanced pancreatic cancer using checkpoint blockade plus Ampligen at University of

Nebraska Medical Center and Erasmus University.

Protocol and budget being developed.

This proposed study may be based on

data from our Dutch EAP (see below) and UNMC animal experiments showing synergy between Ampligen and checkpoint therapy.

second confirmatory animal trial has been completed;

while it did not replicate the previous survival results, it did demonstrate

a significant anti-tumor effect.

addition, the National Cancer Institute awarded $14.5 million to Roswell Park to study Ampligen as part of five Roswell Park-led

chemokine modulation clinical trials in melanoma, colorectal and ovarian cancers

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen®

to ME/CFS patients was

extended to pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in Europe and

Turkey and will manage all EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, the agreement

with myTomorrows was extended to cover Canada to treat pancreatic cancer patients, pending government approval.

There have been

no physician requests to date that would cause the program to move forward with the approval process.

of December 31, 2019, 42 pancreatic cancer patients have received treatment with Ampligen®

immuno-oncology therapy under the

EAP program at Erasmus University in the Netherlands.

This proposed study may be based on data from

our Dutch EAP (see below) and UNMC animal experiment showing synergy between Ampligen and checkpoint therapy.

A second confirmatory

animal trial has been completed;

while it did not replicate the previous survival results, it did demonstrate a significant anti-tumor

addition, the National Cancer Institute awarded $14.5 million to Roswell Park to study Ampligen as part of five Roswell Park-led chemokine

modulation clinical trials in melanoma, colorectal and ovarian cancers.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients was extended to

pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in Europe and Turkey and will

manage all EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, the agreement with myTomorrows

was extended to cover Canada to treat pancreatic cancer patients, pending government approval.

There have been no physician requests

to date that would cause the program to move forward with the approval process.

total of 42 pancreatic cancer patients received treatment with Ampligen immuno-oncology therapy under the EAP program at Erasmus MC in

the Netherlands.

Supervised by Prof.

Casper van Eijck, MD, a world-renowned specialist in

this dread malignancy, and Diba Latifi, MD, the team at Erasmus is making progress.

Early progress was reported in a published

abstract from Erasmus, and a copy of the abstract can be found at http://ir.aimimmuno.com/Events_Presentations .

was part of a larger original report covering a variety of medical topics, which can be found at https://www.pancreasclub.com/wp-content/uploads/2018/06/Poster-Abstracts.pdf .

September, AIM reported receipt of statistically significant results of positive survival benefit when using Ampligen in patients

with locally advanced/metastatic pancreatic cancer after systemic chemotherapy versus matched historical controls.

AIM will work

with its Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track”

and possibly even

FDA “breakthrough”

designations and to obtain IND authorizations to conduct a follow-up pancreatic cancer Phase 2/3

clinical trial with sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research centers in

the United States.

Casper van Eijck, MD, the team at Erasmus MC found a statistically significantly positive survival

benefit when using Ampligen in patients with locally advanced/metastatic pancreatic cancer after systemic chemotherapy.

with our Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track”

and possibly even FDA “breakthrough”

designations and to obtain IND authorizations to conduct follow-up pancreatic cancer Phase 2/3 clinical trials with potential sites in

the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research centers in the United States.

Additionally:

December 2020, the FDA granted Ampligen Orphan Drug Designation status for the treatment of pancreatic cancer.

The Orphan Drug Designation

program provides orphan status to drugs and biologics which are defined as those intended for the treatment, prevention or diagnosis

of a rare disease or condition, which is one that affects less than 200,000 persons in the United States or meets cost recovery provisions

The status helps incentivize the treatment of therapies to treat unmet medical needs by providing a company with seven

years of exclusivity rights once a drug reaches market.

February 2021, our subsidiary, NV Hemispherx Biopharma Europe, received formal notification from the European Commission (EC) granting

Orphan Medicinal Product Designation for Ampligen as a treatment for pancreatic cancer.

Orphan products, once commercially approved

in the European Union (EU), receive benefits including up to ten years of protection from market competition from similar medicines

with similar active component and indication for use that are not shown to be clinically superior.

September, we reported receipt of statistically significant results of positive survival benefit when using Ampligen in patients with

locally advanced/metastatic pancreatic cancer after systemic chemotherapy versus matched historical controls.

Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”)

1 unchanged sentence

and Chronic Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem.

ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S.

Institutes of Health (“NIH”), FDA and the CDC.

The CDC states on its website at https://www.cdc.gov/me-cfs/

Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body

People with ME/CFS are often not able to do their usual activities.

is recognized by both the government and private sector as a significant unmet medical need, including the U.S.

National Institutes of

Health (“NIH”), FDA and the CDC.

The CDC states on its website at https://www.cdc.gov/me-cfs/ that “

encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body systems.

People with ME/CFS

are often not able to do their usual activities.

At times, ME/CFS may confine them to bed.

with ME/CFS have severe fatigue and sleep problems.

ME/CFS may get worse after people with the illness try to do as much as they

want or need to do.

This symptom is known as post-exertional malaise (PEM).

Other symptoms can include problems with thinking

and concentrating, pain, and dizziness.

severe ME/CFS patients become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion

even at rest.

ME/CFS is characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties

and problems with concentration and short-term memory.

It is also accompanied by flu-like symptoms, pain in the joints and muscles,

tender lymph nodes, sore throat and new headaches.

A distinctive characteristic of the illness is a worsening of symptoms following

physical or mental exertion, which do not subside with rest.

October 2016, an analysis of a subset of CFS patients from the AMP-516 Phase 3 study was performed and presented at the IACFS/ME

annual meeting in Fort Lauderdale, FL.

The ITT Population (n=208) was separated into two subsets based primarily on baseline CFS

symptom duration (2-8 years (n=75) and <2 years plus >8 years (n=133)).

Responder analyses of the ITT Population and both

subsets were performed.

Responder analyses of Ampligen®

placebo patients improving ET duration from baseline by ≥25%

shows over twice the percentage of patients with clinical enhancement in ET effect in the Ampligen®

cohort compared to placebo

for the 2-8-year subset vs.

People with ME/CFS have severe fatigue and

sleep problems.

ME/CFS may get worse after people with the illness try to do as much as they want or need to do.

This symptom is known

as post-exertional malaise (PEM).

Other symptoms can include problems with thinking and concentrating, pain, and dizziness.

severe ME/CFS patients become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion even at

ME/CFS is characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties and problems

with concentration and short-term memory.

It is also accompanied by flu-like symptoms, pain in the joints and muscles, tender lymph nodes,

sore throat and new headaches.

A distinctive characteristic of the illness is a worsening of symptoms following physical or mental exertion,

which do not subside with rest.

October 2016, an analysis of a subset of CFS patients from the AMP-516 Phase 3 study was performed and presented at the International

Association for Chronic Fatigue Syndrome/Myalgic Encephalomyelitis (IACFS/ME) annual meeting in Fort Lauderdale, FL.

The intent to treat

(ITT) Population (n=208) was separated into two subsets based primarily on baseline CFS symptom duration (2-8 years (n=75) and <2

years plus >8 years (n=133)).

Responder analyses of the ITT Population and both subsets were performed.

Responder analyses of Ampligen

placebo patients improving exercise tolerance (ET) duration from baseline by ≥25% shows over twice the percentage of patients

with clinical enhancement in ET effect in the Ampligen cohort compared to placebo for the 2-8-year subset vs.

the ITT population.

This subset may assist in the design of future clinical studies of Ampligen®

in the treatment for ME/CFS patients.

subset may assist in the design of future clinical studies of Ampligen in the treatment for ME/CFS patients.

high number of younger people being hospitalized for COVID-19 suggests considerable numbers of people in the prime of their lives

may have a COVID-induced ME/CFS-like illness in their future.

Individuals with CFS lost an estimated $20,000 in 2002, implying

a total societal loss of $9.1 billion.

Twenty-five percent ($2.3 billion) resulted from lost household productivity, and the remaining

75% ($6.8 billion) from lost labor force productivity.

June of 2020, AIM filed a provisional patent application for, among other discoveries, the use of Ampligen®

as a potential

early-onset therapy for the treatment of COVID-19 induced chronic fatigue.

survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath

months after recovering from the acute illness.

“After one year, 17% of patients had not returned to work and 9% more had

not returned to their pre-SARS work levels”

According to a 2016 journal article, the estimated annual cost

of lost productivity related to ME/CFS was $9-37 billion in the United States, and for direct medical costs it was $9-14 billion.

June of 2020, we filed a provisional patent application for, among other discoveries, the use of Ampligen as a potential early-onset

therapy for the treatment of COVID-19 induced chronic fatigue.

survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath months

after recovering from the acute illness.

“After one year, 17% of patients had not returned to work and 9% more had not returned

to their pre-SARS work levels”

(Simmaron Research) .

Now there is increasing evidence that patients with

COVID-19 can develop a similar, ME/CFS-like illness.

Now there is increasing evidence that patients with COVID-19 can develop

a similar, ME/CFS-like illness.

These patients are commonly referred to as “Long Haulers.”

http://simmaronresearch.com/2020/04/will-covid-19-leave-an-explosion-of-me-cfs-cases-in-its-wake/

October 2020, AIM received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program

(EAP) clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed

with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms.

November 2, 2020, AIM announced the publication of statistically significant data detailing how Ampligen could have a considerable

positive impact on people living with ME/CFS when administered in the early stages of the disease.

The data were published in

PLOS ONE , a peer-reviewed open access scientific journal published by the Public Library of Science.

AIM researchers found

that the TLR3 agonist Ampligen substantially improved physical performance in a subset of ME/CFS patients.

Europe, the EMA has approved the Orphan Medicinal Products Designation for rintatolimod (Ampligen®) as a potential treatment

of Ebola virus disease and for Alferon®

N Injection, also known as interferon alfa-n3, as a potential treatment of MERS.

concluded our series of collaborations designed to determine the potential effectiveness of Ampligen®

and Alferon®

potential preventative and/or therapeutic treatments for Ebola related disorders.

Although we believe that the threat of both

MERS and Ebola globally may reemerge in the future, it appears that the spread of these disorders has somewhat diminished.

a result, we have elected to focus our research and development efforts on other areas at this time.

October 2020, we received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program (EAP) clinical

trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed with SARS-CoV-2 following

clearance of the virus, but who still demonstrate chronic fatigue-like symptoms.

November 2, 2020, we announced the publication of statistically significant data detailing how Ampligen could have a considerable positive

impact on people living with ME/CFS when administered in the early stages of the disease.

The data were published in PLOS ONE ,

a peer-reviewed open access scientific journal published by the Public Library of Science.

AIM researchers found that the TLR3 agonist

Ampligen substantially improved physical performance in a subset of ME/CFS patients.

the SARS-CoV-1 outbreak in 2002-03, Ampligen exhibited excellent antiviral properties and protective survival effect in NIH-contracted

studies of SARS-infected mice, which is very similar to SARS-CoV-2, the novel virus that causes COVID-19.

Barnard 2006 study (https://journals.sagepub.com/doi/abs/10.1177/095632020601700505) found that Ampligen reduced virus lung

levels to below detectable limits.

Day 2009 study (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2787736/) found that, instead of 100% mortality, there was 100%

protective survival.

compared key transcription regulatory sequences of SARS-CoV-1 to SARS-CoV-2 and found significant similarities, suggesting highly probable

extension of the antiviral effects of Ampligen in the earlier NIH-contracted SARS experiments to COVID-19.

SARS-CoV-2 virus –

which causes COVID-19 –

shares important genomic and pathogenic similarities with SARS-CoV-1 (hence its

Since Ampligen has shown antiviral activity against more distantly related coronaviruses, there was a reasonable probability that

the antiviral effects of Ampligen against SARS-CoV-1 will likely extend to SARS-CoV-2, as discussed below, recently, Ampligen has demonstrated

in vitro antiviral activity against SARS-CoV-2.

We believe that this creates a compelling case for clinical trials to evaluate Ampligen

as a potential tool in the fight against COVID-19.

the late 2019 outbreak of SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment for

this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be both an early-onset treatment for and prophylaxis

against SARS-Cov-2.

We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects

against the new virus.

February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health community

in the fight against the deadly coronavirus (See:

https://aimimmuno.com/press-release/aim-immunotech-files-provisional-patent-application-for-the-use-of-ampligenr-as-a-potential-therapy-for-covid-19-induced-chronic-

Our three provisional patent applications include:

1) Ampligen as a therapy for the coronavirus;

2) Ampligen as part of a

proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection

3) a high-volume manufacturing process for Ampligen.

Under the Patent Cooperation Treaty of 1970, which provides international protections

for patents, these three provisional patent applications were converted in to two international patent applications based on the date

of their filings.

April 1, 2020, we entered into a Material Transfer and Research Agreement (MTA) with Shenzhen Smoore Technology to study the utilization

of an innovative Smoore inhalation delivery device and Ampligen as a potential treatment approach for the SARS-CoV-2 pandemic.

There have been delays related to importing Ampligen to China.

We are working with Smoore to alleviate these issues and to identify

a mutually beneficial course of action that would allow us to move forward with the proposed testing of Ampligen.

AIM and Smoore

signed a two-month extension of the MTA on April 1, 2021 and are working toward agreement on a longer extension.

August 6, 2020, we contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization and provide

regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.

Amarex is providing us with monitoring support for our Phase I study with the Centre for Human Drug Research CHDR in The Netherlands.

For the subsequent Phase II/III studies we expect to incur clinical trial costs of up to $4-5 million.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing of

the production of polymer, enzyme, placebo as well as Ampligen, and one Contract Research Organization, Amarex, which will provide regulatory

and monitoring support related to a clinical trial testing Ampligen’s intranasal safety and potential as a COVID-19 prophylaxis

via intranasal delivery.

addition, we joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China (PRC) for

use as a prophylactic/early-onset therapeutic against COVID-19.

CGA is a member-based online information platform and offline advisory

firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas Development

Association (CODA).

The relationship with ChinaGoAbroad is ongoing.

May 11, 2020, the FDA authorized an IND for Roswell Park to conduct a Phase 1/2a study of a regimen of Ampligen and interferon alpha

in cancer patients with mild or moderate COVID-19 infections.

This new clinical trial, sponsored by the Roswell Park in collaboration

with us, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19, and the extent to which

this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway.

It is planned that the phase 1/2a study will enroll

up to 44 patients in two stages.

Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses.

Once that initial phase is complete, further study participants will be randomized to two arms:

one receiving the two-drug combination

and a control group who will not receive Ampligen or interferon alfa but will receive best available care.

We intend to be a financial

sponsor of the study and will provide Ampligen at no charge for this study.

July 6, 2020, we entered into a clinical trial agreement with Roswell Park pursuant to which Roswell Park will conduct a Phase

1/2a trial of Ampligen (rintatolimod) in combination with interferon alfa, in cancer patients with COVID-19, the disease caused

by the SARS-CoV-2 coronavirus.

We and National Cancer Institute are supporting this trial.

We reported in September 2020

that recruitment in the trial had begun.

clinicaltrials.gov/NCT04379518.

On November 25, 2020, the first patient in the study

had been enrolled and treated.

This study was recently amended to add 20 patients, with 10 randomized to receive a single dose

of Ampligen and 10 patients to receive current best therapies.

also entered into a material transfer agreement with the University of Rochester for a series of in vitro experiments to test the direct

antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action.

They are currently engaged in experiments with multiple

cell lines as they work to establish the study model system.

We also entered into a specialized services agreement with Utah State University

and have supplied Ampligen to support the University’s Institute for Viral Research in its research into SARS-CoV-2.

The Utah State

results show that Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically achievable intranasal Ampligen

dosage levels.

October 6, 2020, we received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program (EAP)

clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed with SARS-CoV-2,

but who still demonstrate chronic fatigue-like symptoms.

Patients in the trial are treated with our flagship pipeline drug Ampligen.

On January 6, 2021, we commenced with the treatment of the first previously diagnosed COVID-19 patient with long-COVID symptoms in the

AMP-511 study.

November 29, 2020, we entered into a Material Transfer and Research Agreement with Leyden Laboratories, B.V., (“Leyden Lab”)

to facilitate two proposed studies/research projects:

assessment of protective potential of intranasal administration of Ampligen in SARS-CoV-2 Syrian hamster challenge model;

assessment of protective potential of intranasal Ampligen in lethal influenza mouse challenge model.

January 11, 2021, we entered into a Sponsor Agreement with the Centre for Human Drug Research (CHDR), a foundation located in the Leiden

in the Netherlands, to manage a Phase 1 randomized, double-blind study to evaluate the safety and activity of repeated intranasal administration

The study protocol calls for the enrollment of eight healthy subjects in each of four Cohorts to receive Ampligen.

two healthy subjects in each Cohort will receive placebo, for a total of 40 healthy subjects.

The subjects will receive intranasal dosing

every other day for 13 days, for a total of seven doses each.

This study will assess the safety, tolerability and biological activity

of repeated administration of Ampligen intranasally.

The protocol design is for subjects in Cohort 1 to receive 75 μg of Ampligen

or a matching placebo, Cohort 2 to receive 200 μg of Ampligen or a matching placebo, Cohort 3 to receive 500 μg of Ampligen or

a matching placebo, and Cohort 4 to receive 1250 μg of Ampligen or a matching placebo.

We are sponsoring and funding the study.

April 2021, dosing of Cohort 2 in the Phase 1 clinical study was completed with no serious adverse events reported, and paving the way

for escalation of the dose in Cohort 3.

The trial is a critical step in our ongoing efforts to develop Ampligen as a potential prophylaxis

or treatment for COVID-19 and other respiratory viral diseases.

Europe, the EMA has approved the Orphan Medicinal Products Designation for rintatolimod (Ampligen) as a potential treatment of Ebola

virus disease and for Alferon N Injection, also known as interferon alfa-n3, as a potential treatment of MERS.

concluded our series of collaborations designed to determine the potential effectiveness of Ampligen and Alferon N as potential preventative

and/or therapeutic treatments for Ebola related disorders.

Although we believe that the threat of both MERS and Ebola globally may reemerge

in the future, it appears that the spread of these disorders has somewhat diminished.

As a result, we have elected to focus our research

and development efforts on other areas at this time.

April 5, 2021, we entered into an MTA with the University of Cagliari Dipartimento di Scienze della Vita e dell’Ambiente (UNICA),

an educational institution, under the laws of Italy, located in Monserrato (Cagliari), Italy.

The MTA relates to the research and development

of the effects of Ampligen and its ability to induce interferon production in several cell lines and also on the ability of the Ebola

virus protein VP35 to bind to viral dsRNA and impede interferon’s upregulation and activity, and on Ampligen’s ability to

reverse VP35 inhibition of interferon production in biological systems.

MANUFACTURING

January 2017, AIM approved a quote and provided a purchase order commitment with Jubilant Hollister-Stier LLC (“Jubilant”)

pursuant to which Jubilant will manufacture commercial size batches of Ampligen®.

Additional orders will be placed upon approved

quotes and purchase orders provided by AIM to Jubilant.

Jubilant was approved by the FDA as a manufacture of Ampligen by the successful

completion of a previous preapproval inspection by the agency.

The Administracion Nacional de Medicamentos, Alimentos y Tecnologia

Medica (ANMAT) in Argentina has approved Ampligen for commercial distribution for the treatment of Chronic Fatigue Syndrome (CFS).

Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial

distribution.

On September 19, 2019, AIM received clearance from the FDA to ship Ampligen to Argentina for the commercial launch

and subsequent sales.

We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Hollister-Stier (Jubilant) is AIM’s authorized CMO for Ampligen for our approval in Argentina.

Since the 2017 engagement

of Jubilant to manufacture Ampligen, two lots of Ampligen consisting of more than 16,000 units have been manufactured and released

in year 2018.

These lots passed all required testing for regulatory release for human use and are being used for multiple programs

including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands, and will continue to be used for ongoing and

future clinical studies in oncology.

The production of additional polymer (Ampligen intermediates) took place in 2019 at our New

Brunswick facility.

Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant.

manufactured lots of Ampligen have been fully tested and released by Jubilant for commercial product launch in Argentina and for

clinical trials.

is approved by the FDA for commercial sales in the U.S.

for the treatment of genital warts.

It is also approved by ANMAT in Argentina

for commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant interferons.

While the AIM facility in New Brunswick is approved by the FDA under the Biologic License Application (BLA) for Alferon®,

this status will need to be reaffirmed by an FDA pre-approval inspection which will not occur until new batches of commercial

filled and finished product are produced and released by the FDA.

Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) in Argentina approved Ampligen for commercial distribution

for the treatment of Chronic Fatigue Syndrome (CFS) in 2016.

Shipment of the drug product to Argentina was initiated in 2018 to complete

the release testing by ANMAT needed for commercial distribution.

On September 19, 2019, we received clearance from the FDA to ship Ampligen

to Argentina for the commercial launch and subsequent sales.

On June 10, 2020, we received import clearance from ANMAT to import the

first shipment of commercial grade vials of Ampligen to Argentina.

We are currently working with GP Pharma on the commercial launch of

Ampligen in Argentina See “Our Products;

Ampligen”

HollisterStier (Jubilant) is our authorized CMO for Ampligen for our approval in Argentina.

Since the 2017 engagement of Jubilant to

manufacture Ampligen, two lots of Ampligen consisting of more than 16,000 units have been manufactured and released in year 2018.

lots have been designated for human use in the US in the cost recovery CFS program and for expanded oncology clinical trials.

The production

of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility.

Additionally, two lots of Ampligen were

manufactured in December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen have been fully tested and released

for commercial product launch in Argentina and for clinical trials.

In addition, we have supplied GP Pharm with the Ampligen required

for testing and ANMAT release.

Once final approval by ANMAT is obtained, we anticipate that GP Pharm will begin distributing Ampligen

in Argentina.

December 2020, we added Pharmaceutics International Inc.

(“Pii”) as a “Fill & Finish”

provider to enhance

our capacity to produce the drug Ampligen.

This addition amplifies our manufacturing capability by providing redundancy and cost savings.

The contracts augment our existing fill and finish capacity.

is approved by the FDA for commercial sales in the US for the treatment of genital warts.

It is also approved by ANMAT in Argentina for

commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant interferons.

sales of Alferon in the United States will not resume until new batches of commercial filled and finished product are produced and released

While our facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon, this status

will need to be reaffirmed by an FDA pre-approval inspection.

We will also need the FDA’s approval to release commercial product

once we have submitted satisfactory stability and quality release data.

Currently, the manufacturing process is on hold and there is

no definitive timetable to have the facility back online.

have reviewed our operations at the New Brunswick facility and determined that some of the equipment should be upgraded to realize greater

efficiencies, when and if we require more API than is currently in storage.

We are also exploring engaging a Contract Manufacturing Organization

(“CMO”) to produce API.

While we believe we have sufficient API to meet our current needs, we are also continually exploring

new efficiencies so as to maximize our ability to fulfill future obligations.

In this regard, on April 5, 2021, we approved a proposal

from Polysciences Inc.

(“Polysciences”) for the manufacture of our Poly I and Poly C 12 U polynucleotides and associated

test methods at Polysciences’

Warrington, PA location to enhance our capacity to produce the polymer precursors to the drug Ampligen.

We are working with Polysciences to finalize a Service Agreement and a Quality Agreement and will notify the market when those

are complete.

April 5, 2021, our board of directors approved the exercise of our option to re-purchase the New Brunswick manufacturing facility, pursuant

to the terms of the March 16, 2018 sale and lease-back agreement and, thereafter, we sold certain equipment and machinery that

we determined to be obsolete and no longer needed for current and future manufacturing.

Licensing/Collaborations/Joint

maximize the availability of Ampligen®

to patients on a worldwide basis, we have embarked on a strategy to license the product

and/or to collaborate and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully

gain approval and commercialize Ampligen®

in their respective territories of the world.

Ideal partners would have the following

characteristics:

well established global and regional experience and coverage, robust commercial infrastructure, strong track

record of successful development and registration of in-licensed products, as well as a therapeutic area fit (ME/CFS, immuno-oncology,

maximize the availability of Ampligen to patients on a worldwide basis, we have embarked on a strategy to license the product and/or

to collaborate and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully gain

approval and commercialize Ampligen in their respective territories of the world.

Ideal partners would have the following characteristics:

well established global and regional experience and coverage, robust commercial infrastructure, strong track record of successful development

and registration of in-licensed products, as well as a therapeutic area fit (ME/CFS, immuno-oncology, etc.).

MARKETING/DISTRIBUTION

1 unchanged sentence

with GP Pharm.

Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen®

treat severe CFS in Argentina and for commercializing Ampligen®

for this indication in Argentina.

We granted GP Pharm the

right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving

certain performance milestones.

We also granted GP Pharm an option to market Alferon N Injection®

in Argentina and other Latin

America countries.

January 2017, the ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection®

the brand name “Naturaferon”) in Argentina.

Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen to treat severe

CFS in Argentina and for commercializing Ampligen for this indication in Argentina.

We granted GP Pharm the right to expand rights to

sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones.

also granted GP Pharm an option to market Alferon N Injection in Argentina and other Latin America countries.

See “Our Products;

Ampligen”

January 2017, the ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection (under the brand

name “Naturaferon”) in Argentina.

This extends the approval until 2022.

In February 2013, we received the

ANMAT approval for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon,

with Naturaferon®

in Argentina.

In February 2013, we received the ANMAT approval

for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon, with Naturaferon in

May 2016, we entered into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V.

(“myTomorrows”),

a Netherlands based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”)

related to ME/CFS.

Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory,

is performing EAP activities.

These activities will be directed to (a) the education of physicians and patients regarding the

possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval)

through named-patient use, compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related

to a patient-physician platform, (c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory

authorities for medical treatments prior to Marketing Authorization) for the use of such treatments, (d) the distribution and

sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the

collection of data such as patient-reported outcomes, doctor-reported experiences and registry data.

We are supporting these efforts

and supplying Ampligen®

to myTomorrows at a predetermined transfer price.

In the event that we receive Marketing Authorization

in any country in the Territory, we will pay myTomorrows a royalty on products sold.

Pursuant to the Impatients Agreement, the

royalty would be a percentage of Net Sales (as defined in the Impatients Agreement) of Ampligen®

sold in the Territory where

Marketing Authorization was obtained, and the maximum royalty would be a percentage of Net Sales.

The formula to determine the

percentage of Net Sales will be based on the number of patients that are entered into the EAP.

We believe that disclosure of the

exact maximum royalty rate and royalty termination date could cause competitive harm.

a Netherlands based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”) related

Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory, is performing

EAP activities.

These activities will be directed to (a) the education of physicians and patients regarding the possibility of early

access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval) through named-patient

use, compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related to a patient-physician platform,

(c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory authorities for medical treatments prior

to Marketing Authorization) for the use of such treatments, (d) the distribution and sale of such treatments pursuant to such Early Access

Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the collection of data such as patient-reported outcomes, doctor-reported

experiences and registry data.

We are supporting these efforts and supplying Ampligen to myTomorrows at a predetermined transfer price.

In the event that we receive Marketing Authorization in any country in the Territory, we will pay myTomorrows a royalty on products sold.

Pursuant to the Impatients Agreement, the royalty would be a percentage of Net Sales (as defined in the Impatients Agreement) of Ampligen

sold in the Territory where Marketing Authorization was obtained, and the maximum royalty would be a percentage of Net Sales.

to determine the percentage of Net Sales will be based on the number of patients that are entered into the EAP.

We believe that disclosure

of the exact maximum royalty rate and royalty termination date could cause competitive harm.

However, to assist the public in gauging

these terms, the actual maximum royalty rate is somewhere between 2% and 10% and the royalty termination date is somewhere between

five and fifteen years from the First Commercial Sale of a product within a specific country.

The parties established a Joint

Steering Committee comprised of representatives of both parties to oversee the EAP.

No assurance can be given that activities

under the EAP will result in Marketing Authorization or the sale of substantial amounts of Ampligen®

in the Territory.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen®

to ME/CFS patients has

been extended to pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in the

Territory and will manage all EAP activities relating to the pancreatic cancer extension of the program.

these terms, the actual maximum royalty rate is somewhere between 2% and 10% and the royalty termination date is somewhere between five

and fifteen years from the First Commercial Sale of a product within a specific country.

The parties established a Joint Steering Committee

comprised of representatives of both parties to oversee the EAP.

No assurance can be given that activities under the EAP will result

in Marketing Authorization or the sale of substantial amounts of Ampligen in the Territory.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients has been extended

to pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in the Territory and will manage

all EAP activities relating to the pancreatic cancer extension of the program.

February 2018, we signed an amendment to the EAP with myTomorrows.

This amendment extended the territory to cover Canada to treat

pancreatic cancer patients, pending government approval.

This amendment extended the territory to cover Canada to treat pancreatic

cancer patients, pending government approval.

March 2018, we signed an amendment to the EAP with myTomorrows, pursuant to which myTomorrows will be our exclusive service provider

for special access activities in Canada for the supply of Ampligen®

for the treatment of ME/CFS.

participant immediately vests in his or her deferred salary contributions, while Company contributions will vest over one year.

The 6% Company matching contribution was terminated effective January 1, 2016.

For the nine months ended September 30, 2020, the

Company did not make any contributions towards the 401(k) Plan.

for special access activities in Canada for the supply of Ampligen for the treatment of ME/CFS.

December 2020, we entered into a signed Letter of Agreement with myTomorrows for the delivery of Ampligen for the treatment of up to

16 pancreatic cancer patients.

August 2017, we extended our agreement with Asembia LLC, formerly Armada Healthcare, LLC, to undertake the marketing, education and sales

of Alferon N Injection throughout the United States.

We are currently exploring an expansion of this relationship.

participant immediately vests in his or her deferred salary contributions, while our contributions will vest over one year.

Our 6% matching

contribution was reinstated effective January 1, 2021.

For the three months ended March 31, 2021, our contributions towards the 401(k)

Plan were approximately $37,000.

Accounting Pronouncements

6 unchanged sentences

Critical Accounting Policies”

contained in our

Annual Report on Form 10-K for the year ended December 31, 2019.

contained in our Annual

Report on Form 10-K for the year ended December 31, 2020.

OF OPERATIONS

months ended September 30, 2020 versus three months ended September 30, 2019

net loss was approximately $3,306,000 and $2,948,000 for the three months ended September 30, 2020 and 2019, respectively, representing

an increase in loss of approximately $358,000 or 12% when compared to the same period in 2019.

This increase in loss for these

three months was primarily due to the following:

increase in general and administrative (G&A) expense of $239,000 or 13%;

increase in interest income of $61,000;

decrease of $415,000 from the 2019 quarterly reevaluation of certain redeemable warrants in;

decrease in production costs of $26,000;

decrease in research and development expenses of $88,000;

decrease interest expense and other finance cost of $142,000

loss per share was $(0.08) and $(1.13) for the three months ended September 30, 2020 and 2019, respectively.

The weighted average

number of shares of our common stock outstanding as of September 30, 2020 was 38,907,546 as compared to 2,603,854 as of September

from our Ampligen®

Cost Recovery Program were $36,000 and $61,000 for the quarters ended September 30, 2020 and 2019, respectively.

There was a decrease in revenues of $25,000.

The change in revenue is related to timing of orders and shipments in the three months

ending September 30, 2020.

The revenue was generated from the EAP and our FDA approved open-label treatment protocol, (“AMP

511”), that allows patient access to Ampligen®

for treatment in an open-label safety study.

costs were approximately $204,000 and $230,000, respectively, for the three months ended September 30, 2020 and 2019, representing

a decrease of $26,000 in production costs in the current period.

These costs primarily represent production expenses related to

Ampligen produced in 2019.

and Development Costs

and Development (“R&D”) costs for the quarter ended September 30, 2020 were approximately $1,102,000 as compared

to $1,190,000 for the quarter ended September 30, 2019 reflecting a decrease of approximately $88,000.

The reason for the decrease

in research and development costs was due to decreases in Ampligen polymer production cost of $350,000, Ampligen compliance and

stability of $64,000 and maintenance and engineering of $35,000 offset by and an increate in cost recovery of $25,000 and an increase

in clinical research of $268,000.

and Administrative Expenses

and Administrative (“G&A”) expenses for the quarters ended September 30, 2020 and 2019 were approximately $2,085,000

and $1,846,000, respectively, reflecting an increase of approximately $239,000 or 13%.

The increase in G&A expenses during

the current period was mainly due to an increase in professional fees of $236,000 and public relations of $34,000.

Income-Expenses

and other finance costs decreased $142,000 in the three months ended September 30, 2020 mostly due to the costs associated with

the long-term debt which were not in effect in the three months ended September 30, 2020.

The long-term debt was extinguished

in the second quarter of 2020.

Interest income increased $61,000 in the three months ended September 30, 2020 from the investments

from the proceeds from stock sales and exercised warrants.

quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for

the three months ended September 30, 2020 which amounted to a gain of approximately $31,000 compared to a gain of $446,000 for

September 30, 2019 (see Note 13:

Fair Value - for the various factors considered in the valuation of redeemable warrants).

months ended September 30, 2020 versus nine months ended September 30, 2019

net loss was approximately $10,466,000 and $8,341,000 for the nine months ended September 30, 2020 and 2019, respectively, representing

an increase in loss of approximately $2,125,000 or 25% when compared to the same period in 2019.

This increase in loss for these

nine months was primarily due to the following:

increase in G&A expense of $515,000 or 9%;

months ended March 31, 2021 versus three months ended March 31, 2020

net loss was approximately $3,579,000 and $3,808,000 for the three months ended March 31, 2021 and 2020, respectively, representing

a decrease in loss of approximately $229,000 or 6%.

This decrease in loss was primarily due to the following:

increase in research and development expenses of $526,000;

increase of $392,000 from the extinguishment of notes payable;

change of $120,000 for the quarterly revaluation of certain redeemable warrants in 2020 compared to a credit of $1,485,000

decrease in an insurance settlement of $260,000 in 2019;

increase in interest and finance costs of $80,000 related to long term debt;

increase in production costs of $33,000;

increase of $145,000 from the 2020 quarterly reevaluation of certain redeemable warrants;

increase in income tax operating tax of $181,000;

decrease in revenue of $17,000;

decrease in selling, general and administrative cost of $156,000;

decrease in interest expense and other finance cost of $272,000;

increase in interest income of $51,000.

decrease in production costs of $68,000.

loss per share was $(0.36) and $(4.41) for the nine months ended September 30, 2020 and 2019, respectively.

loss per share was $(0.08) and $(0.22) for the three months ended March 31, 2021 and 2020, respectively.

The weighted average

number of shares of our common stock outstanding as of September 30, 2020 was 28,826,283 as compared to 1,891,782 as of September

number of shares of our common stock outstanding as of March 31, 2021 was 45,726,855 as compared to 17,490,322 as of March 31,

from our Ampligen®

Cost Recovery Program were $121,000 and $90,000 for the nine months ended September 30, 2020 and 2019,

respectively.

There was an increase in revenues of $31,000.

The change in revenue is related to timing of orders and shipments

in the nine months ending September 30, 2020.

The revenue was generated from the EAP and our FDA approved open-label treatment

protocol, (“AMP 511”), that allows patient access to Ampligen®

Cost Recovery Program were $28,000 and $45,000 for the quarters ended March 31, 2021 and 2020, respectively.

There was a decrease in revenues of $17,000.

The change in revenue is related to timing of orders and shipments in the three months ending

March 31, 2020.

The revenue was generated from the EAP and our FDA approved open-label treatment protocol, (“AMP 511”), that

allows patient access to Ampligen®

for treatment in an open-label safety study.

costs were approximately $608,000 and $676,000, respectively, for the nine months ended September 30, 2020 and 2019, representing

a decrease of $68,000 in production costs in the current period.

These costs primarily represent production expenses related to

Ampligen produced in 2019.

costs were approximately $237,000 and $204,000, respectively, for the three months ended March 31, 2021 and 2020, representing

an increase of $33,000 in production costs in the current period.

These costs primarily represent production expenses related to increased

roof maintenance in the three months ending March 31, 2021

and Development Costs

and Development (“R&D”) costs for the nine months ended September 30, 2020 were approximately $3,445,000 as compared

to $3,214,000 for the nine months ended September 30, 2019 reflecting an increase of approximately $231,000.

The primary reasons

for the increase in research and development costs was due to an increase in abandoned patents of $129,000, a general increase

in Ampligen compliance cost of $235,000 and outside lab fees of $110,000 and offset by a decrease in outside contractors of $239,000.

and Development (“R&D”) costs for the quarter ended March 31, 2021 were approximately $1,424,000 as compared to

$898,000 for the quarter ended March 31, 2020 reflecting an increase of approximately $526,000 or 59%.

The reason for the increase

in research and development costs was due to increases in clinical expenses of $695,000, maintenance and engineering of $16,000 offset

by decreases in Ampligen compliance and stability of $168,000 and clinical research of $19,000 and cost recovery of $10,000.

and Administrative Expenses

and Administrative (“G&A”) expenses for the nine months ended September 30, 2020 and 2019 were approximately $6,070,000

and $5,555,000, respectively, reflecting an increase of approximately $515,000 or 9%.

The increase in G&A expenses during

the current period was mainly due to increases in salaries & benefits, including bonuses of $304,000, professional and legal

fees of $331,000 and warrant modification of $46,000 offset by decreases in public relations of $114,000 and stock market fees

Income-Expenses

and finance costs increased $80,000 in the nine months ended September 30, 2020 mostly due to the costs associated with the long-term

debt which were not in effect in the nine months ended September 30, 2019.

Interest income increased $87,000 in the nine months

ended September 30, 2020 from the proceeds from stock sales and exercised warrants.

There was gain on extinguishment of notes

payable of $142,000 in the nine months ended September 30, 2020, in the same nine months ending September 30, 2019 there was a

loss on extinguished debt of $250,000.

June 2019 the was a gain from settlement proceeds of $260,000 which did not occur in 2020.

quarterly revaluations of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for

the nine months ended September 30, 2020 which amounted to a loss of approximately $120,000 compared to a gain of $1,485,000 for

September 30, 2019 (see Note 13:

and Administrative (“G&A”) expenses for the quarters ended March 31, 2021 and 2020 were approximately $2,112,000

and $2,268,000, respectively, reflecting a decrease of approximately $156,000 or 7%.

The decrease in G&A expenses during the current

period was mainly due to a decrease in salaries, benefits and other compensation of $141,000, public relations of $54,000 and professional

fees of $24,000, offset by increases in insurance of $35,000 and taxes of $45,000.

income increased $51,000 in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, driven by

the increase in investments from the proceeds from stock sales.

Expense and Other Finance Costs

and other finance costs decreased $272,000 in the three months ended March 31, 2021 mostly due to the costs associated with the

long-term debt which were in effect in the three months ended March 31, 2020.

The long-term debt was extinguished in the second

quarter of 2020.

quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for the three

months ended March 31, 2021 which amounted to a loss of approximately $37,000 compared to a loss of $182,000 for March 31,

2020 (see Note 12:

Fair Value - for the various factors considered in the valuation of redeemable warrants).

Tax Operating Losses

quarterly income tax benefit for the three months ended March 31, 2021 amounted to a gain of approximately $181,000 due primarily

to the provision of the 2020 New Jersey NOL.

and Capital Resources

of September 30, 2020, we had approximately $38,496,000 in cash and cash equivalents.

As of December 31, 2019, we had approximately

$1,470,000 in cash and cash equivalents.

Cash used in operating activities for the nine months ended September 30, 2020 was $7,514,000

compared to $6,778,000.

The primary reasons for the increase was the decrease in accounts receivable and other receivables which

included the sale of New Jersey NOL in the period ended September 30, 2020.

used in investing activities for the nine months ended September 30, 2020 was approximately $8,982,000 compared to $858,000 for

the same period in 2019, representing an increase of $8,124,000.

The primary reason for the increase during the current period

is the purchase of marketable securities of $17,169,000 offset by the sale of marketable securities of $8,497,000.

provided by financing activities for the nine months ended September 30, 2020 was approximately $53,522,000 compared to approximately

$16,953,000 for the same period in 2019, an increase of $36,571,000.

The primary reason for the increase in the nine months ended

September 30, 2020 is our receipt of net proceeds of approximately $58,066,000 from the sale common stock pursuant to our 2019

EDA with Maxim Group and the exercise of warrants (see Note 8:

Stockholders’

Equity) compared to $15,307,000 for the same

period in 2019.

of March 31, 2021, we had approximately $63,601,000 in cash, cash equivalents and marketable securities.

As of December 31, 2020,

we had approximately $54,378,000 in cash, cash equivalents and marketable securities.

Cash used in operating activities for the

three months ended March 31, 2021 was $3,045,000 compared to $3,250,000.

The primary reasons for the decrease was the increase

in accounts payable offset by increased other receivables.

used in investing activities for the three months ended March 31, 2021 was approximately $523,000 compared to $3,683,000 for the same

period in 2020, representing a decrease of $3,160,000.

The primary reason for the decrease during the current period is the purchase

of marketable securities of $1,151,000 offset by the sale of marketable securities of $2,039,000.

provided by financing activities for the three months ended March 31, 2021 was approximately $12,794,000 compared to approximately

$25,687,000 for the same period in 2020, a decrease of $12,891,000.

The primary reason for the decrease in the three months ended

March 31, 2021 is our receipt of net proceeds of approximately $12,887,000 from the sale common stock pursuant to our 2019 EDA

with Maxim Group compared to $25,773,000 for the same period in 2020.

August 6, 2020, we contracted Amarex to act as our Clinical Research Organization and provide regulatory support with regard to

3 unchanged sentences

In Phase II we anticipate providing approximately an additional $650,000.

costs expected to be incurred by us for the clinical trial are estimated at $4,500,000.

(see “Covid-19”

we are unable to commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial

position and liquidity may be adversely impacted, and additional financing may be required.

are committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise

needed to commercialize the many potential therapeutic aspects of our experimental drugs and our FDA approved drug Alferon.

proceeds from our financings have been used to fund infrastructure growth including manufacturing, regulatory compliance and market

development along with our efforts regarding the Ampligen manufacturing, Ampligen NDA.

There can be no assurances that, if needed,

we will raise adequate funds from these or other sources, which may have a material adverse effect on our ability to develop our

Also, we have the ability to curtail discretionary spending, including some research and development activities, if

required to conserve cash.

“Covid-19”

are committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed

to commercialize the many potential therapeutic aspects of our experimental drugs and our FDA approved drug Alferon.

development of our products requires the commitment of substantial resources to conduct the time-consuming research, preclinical

development and clinical trials that are necessary to bring pharmaceutical products to market.

We believe, based on our current

financial condition, that we have adequate funds to meet our anticipated operational cash needs and fund current clinical trials

over approximately the next twenty-four months.

At present we do not generate any material revenues from operations, and

we do not anticipate doing so in the near future.

We may need to obtain additional funding in the future for new studies and/or

if current studies do not yield positive results, require unanticipated changes and/or additional studies.

If we are unable to

commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial position and

liquidity may be adversely impacted, and additional financing may be required.

There can be no assurances that, if needed, we

will be able to raise adequate funds or enter into licensing, partnering or other arrangements to advance our business goals.

We may seek to access the public equity market whenever conditions are favorable, even if we do not have an immediate need for

additional capital at that time.

We are unable to estimate the amount, timing or nature of future sales of outstanding common

stock or instruments convertible into or exercisable for our common stock.

Any additional funding may result in significant dilution

and could involve the issuance of securities with rights, which are senior to those of existing stockholders.

proceeds from our financings have been used to fund infrastructure growth including manufacturing, regulatory compliance and market development

along with our efforts regarding the Ampligen manufacturing, Ampligen NDA.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements