What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-17 · 400 added, 1341 removed, 395 unchanged (82% of the section changed)

4 unchanged sentences

thousands, except for share and per share data)

June 30, 2021

December 31, 2020

Current assets:

Cash and cash

Cash and cash equivalents

Marketable securities

Funds receivable from New

Jersey net operating loss

Funds receivable from New Jersey net operating loss

Accounts receivable, net

expenses and other current assets

current assets

Property and equipment,

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Right of use asset, net

Patent and trademark rights,

Marketable securities, long

LIABILITIES AND STOCKHOLDERS’

Patent and trademark rights, net

Marketable securities, long term

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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Accrued expenses

Current portion of operating

lease liability

portion of financing obligation

current liabilities

Current portion of operating lease liability

Current portion of financing obligation

Total current liabilities

Long-term liabilities:

Operating lease liability

Financing obligation arising from sale leaseback

transaction (Note 13)

Financing obligation arising from sale leaseback transaction (Note 13)

Redeemable warrants

Commitments and contingencies (Notes 11, 12,

Stockholders’

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;

Commitments and contingencies (Notes 11, 12, 13, and 14)

Stockholders’ equity:

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

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Accumulated deficit

stockholders’

liabilities and stockholders’

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to consolidated financial statements.

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thousands, except share and per share data)

months ended March 31,

Clinical treatment

programs - US

treatment programs - Europe

Three months ended June 30,

Six months ended June 30,

Clinical treatment programs - US

Clinical treatment programs - Europe

Total Revenues

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Research and development

and administrative

General and administrative

Total Costs and Expenses

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Interest and other income

Interest expense and other

finance costs

Redeemable warrants valuation

from sale of Income tax operating losses

Interest expense and other finance costs

Extinguishment of financing obligation and note payable

Gain on sale of fixed assets

Redeemable warrants valuation adjustment

Gain 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

Reclassification adjustment for realized investment loss

Change in unrealized loss on marketable securities available for sale

Comprehensive loss

Basic and diluted loss per share

Weighted average shares outstanding basic and diluted

accompanying notes to consolidated financial statements.

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AND SUBSIDIARIES

Statement of Changes in Stockholders’

the Three Months Ended March 31, 2021 and 2020

Statement of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2021 and 2020

thousands except share data)

other Comprehensive

Income (Loss)

Stockholders’

Series B Preferred

Common Stock Shares

Common Stock Par Value

Additional Paid-in Capital

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholders’ Equity

Balance December 31, 2020

Shares issued for:

$ ( 341,974 )

Common stock issuances, net of costs

Warrant modification

Shares issued to pay accounts payable

Shares issued to pay accounts payable, shares

Equity-based compensation

Series B preferred shares converted to common

Comprehensive

Series B preferred shares converted to common shares

Comprehensive loss

Balance March 31, 2021

Paid-in Capital

other Comprehensive Income (Loss)

Stockholders’

$ ( 345,553 )

Equity-based compensation

Comprehensive loss

Balance June 30, 2021

$ ( 351,429 )

Series B Preferred

Common Stock Shares

Common Stock Par Value

Additional Paid-in Capital

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholders’ Equity

Balance December 31, 2019

Shares issued for:

$ ( 328,109 )

Common stock issuance, net of costs

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Shares issued to pay accounts payable

Series B preferred shares converted to common

Comprehensive

Series B preferred shares converted to common shares

Comprehensive loss

Balance March 31, 2020

$ ( 331,899 )

Common stock issuance, net of costs

Equity-based compensation

Series B preferred shares converted to common shares

Comprehensive loss

Balance June 30, 2020

$ ( 335,269 )

accompanying notes to consolidated financial statements.

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Statements of Cash Flows

the Three Months Ended March 31, 2021 and 2020

the Six Months Ended June 30, 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

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

Depreciation of property and equipment

Redeemable warrants valuation adjustment

Warrant modification

Amortization of patent,

trademark rights

Extinguishment of financing obligation and note payable

Amortization of patent, trademark rights

Changes in ROU assets

Loss on available for sale

marketable securities

Gain from sale of income

tax operating losses

Gain on sale of property and equipment

Gain from sale of income tax operating losses

Equity-based compensation

Amortization of finance

and debt issuance costs

Realized (loss) gain on sale of marketable securities

Amortization of finance and debt issuance costs

Change in assets and liabilities:

Prepaid expenses and other

current assets and other non current assets

Accounts receivable

Funds Receivable from New Jersey net operating loss

Prepaid expenses and other current assets and other non-current assets

Lease liability

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Accrued interest expense

Net cash used in operating

Accrued expenses

Net cash used in operating activities

Cash flows from 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

Proceeds from sale of marketable securities

Purchase of marketable securities

Purchase of property and equipment

Proceeds from sale of property and equipment

Purchase of patent and trademark rights

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Payment and note payable

Payment of financing obligation

Financing obligation payments

from sale of stock, net of issuance costs

Net cash provided by

financing activities

Proceeds 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:

issued to settle accounts payable

of Series B preferred

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:

Stock issued to settle accounts payable

Unrealized loss on marketable securities

Conversion of Series B preferred

accompanying notes to consolidated financial statements.

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ImmunoTech Inc.

and its subsidiaries (collectively, “AIM”

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

(collectively with its subsidiaries, “AIM” or the “Company”) is 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

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

flagship products include Ampligen®

(rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules,

and Alferon N Injection®

(Interferon Alfa-N3).

flagship products include Ampligen® (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules,

and Alferon N Injection® (Interferon Alfa-N3).

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.

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.

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.

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 pandemic 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.

Management is actively monitoring the global

situation on its financial condition, liquidity, operations, scientific collaborations, suppliers, industry, and workforce.

daily evolution of the COVID-19 outbreak and the global responses to curb its impact, 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 pandemic 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

(see Note 13:

Financing Obligation Arising from Sale Leaseback Transaction).

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

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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.

humans — both underway and planned — at major cancer research centers.

Ampligen was used as a monotherapy to treat pancreatic

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AIM will work with its Contract Research Organization,

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

and possibly even FDA “breakthrough”

designations and

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

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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

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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.

Progress in Argentina is delayed, due to pandemic factors.

impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, the main priority of its regulators.

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

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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.

Company owns and 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.

AIM is in the planning stages of updating

the manufacturing and laboratory suites with state-of-the-art, mobile-ready equipment that can be used either there or in future alternate

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.

AIM’s current and active production plan is to shift to the utilization

of Contract Manufacturing Organizations (CMO), while maintaining on-site teams for QC, QA, R&D, bench and small-batch manufacturing.

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 buy-back purchase was

completed in May 2021.

(see Note 13:

Financing Obligation Arising from Sale Leaseback Transaction).

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

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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.

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

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Equivalent common shares, consisting of stock options and warrants which amounted to 1,621,928 and 526,266 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

of diluted net loss per share for the six months ended June 30, 2021, and 2020, respectively, since their effect is antidilutive due

to the net loss.

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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

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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 three months ended March 31, 2021 is as follows:

There were no options granted in the six months ended June

30, 2021, and 2020.

option for employees’ activity during the six months ended June 30, 2021, is as follows:

option activity for employees:

of Stock Option Activity

Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Outstanding January 1, 2021

Outstanding March 31, 2021

Vested and expected

to vest March 31, 2021

Exercisable March 31, 2021

Outstanding June 30, 2021

Vested and expected to vest June 30, 2021

Exercisable June 30, 2021

stock option activity for employees:

of Unvested Stock Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Unvested January 1, 2021

Unvested March 31, 2021

Unvested June 30, 2021

option activity for non-employees:

of Stock Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Outstanding January 1, 2021

Outstanding March 31, 2021

Vested and expected

to vest March 31, 2021

Exercisable March 31, 2021

Outstanding June 30, 2021

Vested and expected to vest June 30, 2021

Exercisable June 30, 2021

stock option activity for non-employees:

of Unvested Stock Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Unvested January 1, 2021

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

Unvested June 30, 2021

compensation expense was approximately $ 1,006 ,000 and $ 346 ,000 for the six months ended June 30, 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.

of June 30, 2021, and 2020, respectively, there was approximately $ 434 ,000 and $ 442 ,000 of unrecognized equity-based compensation cost

related to options granted under the Equity Incentive Plan.

Marketable Securities

securities consist of debt securities.

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

As of June 30, 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

As of June 30, 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.

As of June 30, 2021, and December 31, 2020, the Company held $ 16,135 ,000

and $ 15,877 ,000 in debt securities.

securities classified as available for sale consisted of:

(in thousands)

Unrealized Gains /(Losses)

of Available for Sale

Amortized Cost

Gross Unrealized Gains /(Losses)

Marketable Securities

Treasury notes

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Corporate bonds

(in thousands)

Unrealized Gains /(Losses)

Amortized Cost

Gross Unrealized Gains /(Losses)

Marketable Securities

Treasury notes

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Corporate bonds

following presents available-for-sale securities’

gross unrealized losses and fair value aggregated by the short- and long-term

(in thousands)

than 12 Months

following presents available-for-sale securities’ gross unrealized losses and fair value aggregated by the short- and long-term

12 Months or More

Unrealized Gains

Government mortgage backed

(in thousands)

than 12 Months

Treasury notes

Government mortgage-backed securities

Corporate bonds

Less than 12 Months

12 Months or More

Unrealized Gains

Gross Unrealized

Unrealized Gains

Treasury notes

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expenses consist of the following:

Schedule of Accrued Expenses

(in thousands)

June 30, 2021

December 31, 2020

Professional fees

Other expenses

Property and Equipment

Property and Equipment, net

Schedule of Property and Equipment

(in thousands)

June 30, 2021

December 31, 2020

Land, buildings and improvements

Furniture, fixtures,

and equipment

Furniture, fixtures, and equipment

Total property and equipment

accumulated depreciation

Property and equipment,

Property and equipment, net

and equipment are recorded at cost.

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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

(See Note 13:

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.

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.

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

On May 13, 2021, the Company completed its re-purchase of the land and building for $ 4,732,637 inclusive of closing costs, pursuant to

its repurchase option in the property lease.

April 2021, the Company sold some of the assets located at its facility at 783 Jersey Ave., New Brunswick, N.J.

The assets sold consist of equipment and machinery that the Company determined to be obsolete and no longer needed for current and future

manufacturing.

The assets were sold for an aggregate of $ 245 ,500, which resulted in a gain on the sale of assets of $ 216 ,000.

Schedule of Patents, Trademark Rights

(in thousands)

December 31, 2019

December 31, 2020

March 31, 2021

June 30, 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.

During the periods ending June 30, 2021, and December 31, 2020.

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

Schedule of Amortization of Patents and Trademarks

Year Ending December 31,

Stockholders’

(in thousands)

Stockholders’ Equity

Preferred Stock

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

As of March 31,

As of June 30,

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

to its holders of common stock and to holders of certain options and warrants as of February 14, 2019, at no charge, one non-transferable

subscription right for each share of common stock held or deemed held on the record date.

Each right entitled the holder to purchase

one unit, at a subscription price of $1,000 per unit, consisting of one share of Series B Convertible Preferred Stock with a face

value of $1,000 (and immediately convertible into common stock at an assumed conversion price of $8.80) and 114 warrants with

an assumed exercise price of $8.80.

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

holders of common stock and to holders of certain options and warrants as of February 14, 2019, at no charge, one non-transferable subscription

right for each share of common stock held or deemed held on the record date.

Each right entitled the holder to purchase one unit, at

a subscription price of $ 1,000 per unit, consisting of one share of Series B Convertible Preferred Stock with a face value of $ 1,000

(and immediately convertible into common stock at an assumed conversion price of $ 8.80 ) and 114 warrants with an assumed exercise price

The warrants are exercisable for five years after the date of issuance.

The net proceeds realized

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

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

The net proceeds realized from the rights offering

were approximately $ 4,700 ,000.

During the six months ending June 30, 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.

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

July 7, 2020, the board of directors approved a plan pursuant to which all directors, officers, and employees could

purchase from the company up to an aggregate of $ 500 ,000 worth of shares at the market price.

NYSE American rules, this plan was effective for a sixty-day period commencing upon the date that the NYSE American approved the Company’s

Supplemental Listing Application.

The Company issued 10,730 shares of its common stock at a price of $ 2.33 for a total of $ 25 ,000 under

When this plan expired, the board of directors approved subsequent similar $ 500 ,000 plans for all directors, officers and

employees to buy company shares from the Company at the market price.

Subsequent plans were approved by the board of directors upon the

expiration of prior plans.

The latest plan was approved by the board of directors on July 12, 2021.

the fiscal year ended December 31, 2020, the Company issued a total of 27,501 shares of its common stock at prices ranging from $ 1.72

to $ 2.03 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”)

the six months ended June 30, 2021, the Company issued a total of 21,700 shares of its common stock at prices ranging from $ 2.26 to

$ 2.35 for a total of $ 50 ,000.

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”) .

(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.

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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.

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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 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.

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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”).

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.

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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

During the period ending June 30, 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.

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

In August 2020, 400,000

options were issued to each of these officers with an exercise price range of $ 2.77

for a period of ten

years with a vesting period of one

During December 2020, 675,000

options were issued to employees with an exercise price range of $ 1.85

for a period of ten

years with a vesting period of one

of June 30, 2021, and December 31, 2020, there were 47,832,997 and 42,154,371 shares outstanding, respectively.

Cash and Cash Equivalents

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Recent Accounting Pronouncements

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”) .

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

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.

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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.

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.

(the “CV”).

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

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

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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

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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”).

of $ 66 ,000.

expense associated with the CV Note was approximately $ 0 , for the period ending June 30, 2021, and approximately $ 116 ,000, for the period

ending June 30, 2020.

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

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

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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

expense associated with AS Note for the period ending June 30, 2021, was $ 0 and was approximately $ 106 ,000 for the period ending June

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

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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

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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.

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

Schedule of Assumptions to Estimate Fair Value of Warrants

June 30, 2021

December 31, 2020

Underlying price per share

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

price per share

interest rate

holding period

dividend yield

June 30, 2021

December 31, 2020

Underlying price per share

Exercise price per share

$ 30.25 – 33.00

$ 30.25 - 33.00

Risk-free interest rate

0.08 - 0.10 %

Expected holding period

Expected volatility

Expected dividend yield

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

June 30, 2021

December 31, 2020

Underlying price per share

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

June 30, 2021

December 31, 2020

Underlying price per share

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

June 30, 2021

December 31, 2020

Underlying price per share

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

June 30, 2021

December 31, 2020

Underlying price per share

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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.

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nature of a life science company is heavily dependent on future funding and high costs, including research & development;

Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction

Company has minimal revenue streams which could be insufficient to meet the funding needs for the cost of operations or construction

at their manufacturing facility;

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

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:

of Probability

Schedule of Range of Probabilities

Range 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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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

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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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.

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requires significant management judgment or estimation.

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

settlement features as Level 3.

As of June 30, 2021, 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.

As 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

thousands) As of March 31, 2021

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

(in thousands)

As of June 30, 2021

Marketable securities

Redeemable warrants

thousands) As of December 31, 2020

(in thousands)

As of December 31, 2020

Marketable securities

Redeemable warrants

changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

Schedule of Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Redeemable warrants:

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Fair value adjustment

Balance at March 31, 2021

Balance at June 30, 2021

Financing Obligation Arising from Sale Leaseback Transaction

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 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 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

Less deferred issuance costs

Less discount on debt instrument

Less imputed interest

Total balance

Less current portion

Long term portion

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.

On 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 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 31, 2028.

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 sale of the property includes an option to repurchase the property based on a contractual

formula which does not permanently transfer all the risks and rewards of ownership to the buyer.

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 recorded the cash received and a financing obligation.

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.

On May 13, 2021, the Company completed

its repurchase of the property for cash of $ 4,732,637 .

The repurchase resulted in the related liability recorded upon sale being extinguished

on the date of the repurchase.

A loss on the extinguishment was recorded based on the difference between the carrying value of the financing

obligation including unamortized debt discount and the amount exchanged to extinguish the debt.

For the three months ended June 30, 2021, the loss on extinguishment

was $ 2,701,460 .

Interest expense relating to this financing agreement was $ 19 ,000 for the six months ended June 30, 2021, and $ 31 ,000

for the six months ended June 30, 2020.

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

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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,

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

of June 30, 2021, the weighted-average remaining term is 3.22 years.

Company has determined that the incremental borrowing rate is 10% as of June 30, 2021, based upon the most recently completed financing

transaction in December 2019.

Schedule of Operating lease Future Payments

Year Ending June 30,

(in thousands)

Less imputed interest

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.

of June 30, 2021, the balance of the right of use assets was $ 157 ,000 and the corresponding lease liability balance was $ 157 ,000.

rent expense was $ 22 ,000 for the six months ended June 30, 2021, and $ 21 ,000 for the six months end June 30, 2020.

Subsequent Events

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”

Part II, Item 1 “Legal Proceedings”;

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,”

“intend,”

“plan,”

“believe,”

“seek,”

“estimate,”

“think,”

“may,”

“could,”

“will,”

“would,”

“should,”

“continue,”

“potential,”

“likely,”

“opportunity”

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 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, 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.

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

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.

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

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.

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.

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.

flagship products include Ampligen®

(rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules,

and Alferon N Injection®

(Interferon Alfa-N3).

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 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 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).

We are currently sponsoring

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

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 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.

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.

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, 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®

is approved for sale in Argentina for severe Chronic Fatigue Syndrome (CFS) and is an experimental drug in the United States currently

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”

or “Compassionate”

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 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.

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

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 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.

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.

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.

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®

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.

are a group of proteins produced and secreted by cells to combat diseases.

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.

Alpha interferons are manufactured commercially in three ways:

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 also glycosylated (partially covered with sugar molecules).

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

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”

and “Marketing/Distribution”

sections below for more details on the manufacture and marketing/distribution

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, we have supplied Ampligen (rintatolimod) to the University.

The study, under the leadership of Robert P.

Edwards, MD, chair of gynecologic services at Magee-Women’s Hospital of the

University of Pittsburgh School of Medicine, and Professor of Surgery Pawel Kalinski, M.D., Ph.D., at Roswell Park, Buffalo, N.Y.,

involved the chemokine modulatory regimen developed by Dr.

Kalinski’s group and successfully completed the Phase 1 dose

escalation in patients with resectable colorectal cancer.

In the 1st quarter of 2017, Dr.

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 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;

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

up to 45 patients to be enrolled;

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.

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;

the majority of the 12 planned patients enrolled and treated.

https://clinicaltrials.gov/ct2/show/NCT03403634

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.

Patient enrollment has been initiated in this study designed for up to 45 patients.

https://clinicaltrials.gov/ct2/show/NCT03899987

Triple Negative Breast Cancer - Phase 1 study of chemokine modulation plus neoadjuvant chemotherapy in patients with early-stage

triple negative breast cancer has received FDA authorization;

the objective of this study is to evaluate the safety and tolerability

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.

This study is recruiting patients designed for up to 24 patients.

https://clinicaltrials.gov/ct2/show/NCT04081389

Ampligen clinical trials are planned for initiation in 2021:

Brain-Metastatic

Breast Cancer —

Phase 2 study to assess the effectiveness of a three-pronged strategy combining distinct immunotherapy

approaches, including Ampligen.

Roswell Park and Moffitt Cancer Center have both received “Breakthrough Awards”

Department of Defense (DOD).

Together, these separate but parallel proposed clinical trials are receiving approximately

$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.

4 Refractory Metastatic Colorectal Carcinoma —

Phase 2 study that will evaluate Ampligen in combination with pembrolizumab

in refractory metastatic colorectal carcinoma at Roswell Park.

Up to 25 patients to be enrolled.

This is expected to be funded by

grants, testing Ampligen and pembrolizumab.

https://www.clinicaltrials.gov/show/NCT04119830

Melanoma —

Phase 2 study that will evaluate polarized dendritic cell vaccine, interferon alpha-2, Ampligen and celecoxib

for the treatment of HLA-A2+ refractory melanoma at Roswell Park.

Up to 24 patients to be enrolled.

https://www.clinicaltrials.gov/show/NCT04093323

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

Protocol design and funding currently being finalized.

Cell Lung Cancer —

First-line therapy for non-small cell lung cancer with SOC chemotherapy that will evaluate Ampligen

in combination with pembrolizumab at University of Nebraska Medical Center.

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.

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.

Protocol and budget being developed.

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, 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”)

Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”)

and Chronic Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem.

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.

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.

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.

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.

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, 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

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, etc.).

MARKETING/DISTRIBUTION

May 2016, we entered into a five-year exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”)

with GP Pharm.

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

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

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.

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.

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.

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

Recent Accounting Pronouncements”.

About Off-Balance Sheet Arrangements

Accounting Policies

have been no material changes in our critical accounting policies and estimates from those disclosed in Part II;

“Management’s

Discussion and Analysis of Financial Condition and Results of Operations;

Critical Accounting Policies”

contained in our Annual

Report on Form 10-K for the year ended December 31, 2020.

OF OPERATIONS

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 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.

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 March 31, 2021 was 45,726,855 as compared to 17,490,322 as of March 31,

from our 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 $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 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 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 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

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.

In Phase II we anticipate providing approximately an additional $650,000.

“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