What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 289 added, 299 removed, 496 unchanged (54% of the section changed)

4 unchanged sentences

thousands, except for share and per share data)

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Funds receivable from New Jersey net operating loss

Accounts receivable, net

Accounts receivable

Prepaid expenses and other current assets

30 unchanged sentences

thousands, except share and per share data)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Clinical treatment programs - US

7 unchanged sentences

Operating loss

Interest and other income

Interest and other income, net

Interest expense and other finance costs

3 unchanged sentences

Gain from sale of Income tax operating losses

Other comprehensive (loss)

Other comprehensive (loss), net of tax

Reclassification adjustment for realized investment loss

7 unchanged sentences

Statement of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2021 and 2020

the Nine Months Ended September 30, 2021

thousands except share data)

Series B Preferred

Common Stock Shares

Common Stock Par Value

Additional Paid-in Capital

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Total Stockholders’ Equity

Accumulated other Comprehensive

Income (Loss)

Stockholders’

Balance December 31, 2020

2 unchanged sentences

Warrant modification

Shares issued to pay accounts payable

Shares issued to pay accounts payable, shares

Equity-based compensation

Shares issued to pay accounts

payable,shares

Series B preferred shares converted to common shares

6 unchanged sentences

$ ( 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

Common stock issuances, net of costs

Equity-based compensation

Comprehensive loss

Balance September 30, 2021

$ ( 355,255 )

accompanying notes to consolidated financial statements.

IMMUNOTECH INC.

AND SUBSIDIARIES

Statement of Changes in Stockholders’ Equity

the Nine Months Ended September 30, 2020

thousands except share data)

Accumulated other

Comprehensive

Income (Loss)

Stockholders’

Balance December 31, 2019

14 unchanged sentences

$ ( 335,269 )

Common stock issuance, net of costs

Equity-based compensation

Shares issued to pay accounts payable

Series B preferred shares converted to common shares

Comprehensive loss

Balance September 30, 2020

$ ( 338,575 )

accompanying notes to consolidated financial statements.

2 unchanged sentences

Statements of Cash Flows

the Six Months Ended June 30, 2021 and 2020

the Nine Months Ended September 30, 2021 and 2020

Cash flows from operating activities:

26 unchanged sentences

Purchase of patent and trademark rights

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Payment and note payable

Payment on note payable

Payment of financing obligation

2 unchanged sentences

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

10 unchanged sentences

ImmunoTech Inc.

(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

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

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

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

flagship products include Ampligen® (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

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, viral diseases 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 are Ampligen (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon

N Injection (Interferon Alfa-N3).

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 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

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

planning, presentation and filing of documents with the FDA.

These confidentiality and non-disclosure agreements are only the initial

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

No assurance can be given as

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

what research arrangements will develop and thereafter prove fruitful.

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

Ampligen has in

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

The Company has also seen success in increasing

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

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

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

There are currently multiple Ampligen clinical trials testing Ampligen in

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

Ampligen was used as a monotherapy to treat pancreatic

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

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

with locally advanced/metastatic pancreatic cancer after systemic chemotherapy.

AIM will work with its Contract Research Organization,

Amarex Clinical Research LLC, to seek FDA “fast-track” and possibly even FDA “breakthrough” designations and

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

MC under Prof.

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

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

AIM is currently sponsoring

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

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

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

Republic for the treatment of severe CFS.

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

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

distribution.

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

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

to Argentina.

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

tests before granting final approval to begin commercial sales.

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

Ampligen is approved

for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).

Company’s primary present business focus involves Ampligen.

Ampligen is a double-stranded RNA (“dsRNA”) molecule being

developed for globally important cancers, viral diseases and disorders of the immune system.

currently is proceeding primarily in three areas:

plus Standard of Care (“SOC”) to treat pancreatic cancer patients, and in other cancers, as a potential therapeutic that

modifies the tumor microenvironment with the goal of increasing anti-tumor responses to check point inhibitors and with SOC.

Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, mutations thereof or

as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and what we refer to as Post-COVID-19

Cognitive Dysfunction (“PCCD”).

some two years after COVID-19 first appeared, the world has a number of vaccines and some promising therapeutics.

AIM’s quest to

prove the antiviral activities of Ampligen continues.

If Ampligen has the broad-spectrum antiviral properties that the Company believes

that it has, it could be a very valuable tool in treating variants of existing viral diseases, including COVID-19, or novel ones that

arise in the future.

Unlike most developing therapeutics which attack the virus, Ampligen works differently.

AIM believes that it activates

antiviral immune system pathways that fight not just a particular virus or viral variant, but other similar viruses as well.

N Injection is approved in Argentina for a category of sexually transmitted disease infections and patients that are not responsive or

are intolerant to recombinant interferon.

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

in the United States for the intralesional treatment of refractory (i.e., resistant to other treatment) or recurring external condylomata

acuminata/genital warts in patients 18 years of age or older.

Certain types of human papilloma viruses cause genital warts.

has approval from ANMAT for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon

in Argentina.

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

for the intralesional

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

years of age or older.

Certain types of human papilloma viruses cause GW.

AIM also has approval from ANMAT for the treatment of refractory

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

Company owns and operates a 30,000 sq.

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

facility at 783 Jersey Ave, New Brunswick, N.J., where it conducts testing and has produced

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

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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:

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

to maximize its ability to fulfill future needs.

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.

May 13, 2021, the Company exercised its option to re-purchase the New Brunswick facility, pursuant to the terms of the March 16, 2018,

sale and lease-back agreement.

Subsequently, the Company sold certain equipment and machinery that it determined to be obsolete and

no longer needed for current or future manufacturing (See Note 13:

Financing Obligation Arising from Sale Leaseback Transaction).

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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.

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.

Revision of Previously Reported Amounts

to the preparation of the consolidated financial statements as of and for the period ended December 31, 2020, Management noted an error

in the Company’s previously issued Consolidated Financial Statements.

The error related to the Company’s income taxes footnote disclosure

that resulted in the reduction of approximately $ 37,900,000 of certain Federal NOL carryforward assets limited by Internal

Revenue Code Section 382 and the corresponding valuation allowance as of and for the period ended December 31, 2020.

The revised balances

of the NOL carryforward assets and valuation allowance are $ 8,775,000 and $ 8,473,000 , respectively, as of December 31, 2020.

In evaluating

whether the previously issued Consolidated Financial Statements were materially misstated, the Company applied the guidance in ASC 250,

Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Assessing Materiality and SAB

Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and

concluded that the effect of the error on prior period financial statements was immaterial.

The adjustment had no effect on the consolidated

balance sheet, statement of comprehensive loss, changes in stockholders’ equity or statement of cash flows for any annual or interim

Net Loss Per Share

1 unchanged sentence

Equivalent common shares, consisting of stock options and warrants which amounted to 1,617,145 and 534,283 , are excluded from the calculation

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.

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

due to the net loss.

Equity-Based Compensation

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

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:

There were no options granted in the nine months ended

September 30, 2021, and 2020.

option for employees’ activity during the nine months ended September 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

Schedule of Stock Option Activity

Outstanding January 1, 2021

Outstanding June 30, 2021

Vested and expected to vest June 30, 2021

Exercisable June 30, 2021

Outstanding September 30, 2021

Vested and expected to vest September 30, 2021

Exercisable September 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

Schedule of Unvested Stock Option Activity

Unvested January 1, 2021

Unvested June 30, 2021

Unvested September 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

Schedule of Stock Option Activity

Outstanding January 1, 2021

Outstanding June 30, 2021

Vested and expected to vest June 30, 2021

Exercisable June 30, 2021

Outstanding September 30, 2021

Vested and expected to vest September 30, 2021

Exercisable September 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

Schedule of Unvested Stock Option Activity

Unvested January 1, 2021

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 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.

Unvested September 30, 2021

compensation expense was approximately $ 1,320,000

and $ 596,000

for the nine months ended September 30, 2021,

and 2020, resulting in an increase in general and administrative expenses, respectively.

of September 30, 2021, and 2020, respectively, there was approximately $ 279,000 and $ 877,000 of unrecognized equity-based compensation

cost related to options granted under the Equity Incentive Plan.

Marketable Securities

securities consist of debt securities.

As of June 30, 2021, and December 31, 2020, it was determined that none of the marketable securities

had an other-than-temporary impairment.

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

and $ 15,877 ,000 in debt securities.

As of September 30, 2021, and December 31, 2020, it was determined that none of the

marketable securities had an other-than-temporary impairment.

As of September 30, 2021, and December 31, 2020, all securities were

measured as Level 1 instruments under the fair value measurements standard (See Note 12:

As of September 30, 2021, and

December 31, 2020, the Company held approximately $ 16,310,000

and $ 15,877,000 in

debt securities.

securities classified as available for sale consisted of:

of Available for Sale

Amortized Cost

Gross Unrealized Gains /(Losses)

Schedule of Available for Sale

(in thousands)

Gains /(Losses)

Marketable Securities

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Corporate bonds

Amortized Cost

Gross Unrealized Gains /(Losses)

Gains /(Losses)

Marketable Securities

3 unchanged sentences

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

(in thousands)

Less than 12 Months

12 Months or More

Gross Unrealized Gains

Gross Unrealized Gains /(Losses)

Gross Unrealized Gains

Treasury notes

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Corporate bonds

(in thousands)

Less than 12 Months

12 Months or More

Gross Unrealized Gains

Gross Unrealized Gains/ (Losses)

Gross Unrealized Gains

Treasury notes

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Schedule of Accrued Expenses

September 30, 2021

December 31, 2020

(in thousands)

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Other expenses

Accrued expenses

Property and Equipment, net

Schedule of Property and Equipment

September 30, 2021

December 31, 2020

(in thousands)

June 30, 2021

September 30, 2021

December 31, 2020

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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 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.

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

The lease payments were initially

$ 408,000 per

year for two years through March 31, 2020, and will escalate in subsequent years 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.

(See Note 13:

Financing Obligation Arising from Sale

Leaseback Transaction for more details on the sale leaseback of the property and equipment).

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.

The assets sold consist

of equipment and machinery that the Company determined to be obsolete and no longer needed for current and future manufacturing.

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

Schedule of Patents, Trademark Rights

2 unchanged sentences

December 31, 2020

June 30, 2021

September 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 periods ending June 30, 2021, and December 31, 2020.

The costs of provisional patents and pending

applications are not amortized until they are filed.

Patents are reviewed each reporting period to determine if it is likely that they

will be successfully filed.

The costs of provisional patents and pending applications for purposes of the amortization table below

are estimated for each year.

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,

Period Ending December 31,

(in thousands)

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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 June 30,

As of September

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.

Each 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

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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

During the nine months ended September 30, 2021, 7 shares of Series B Convertible Preferred stock were

converted into common stock, and for the twelve months ending December 31, 2020, 45 shares of Series B Convertible Preferred Stock were

converted into common stock.

Company has authorized 350,000,000 shares of common stock 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 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.

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.

Pursuant to 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 this plan.

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.

plan was approved by the board of directors on September 14, 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 .

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.

the nine months ended September 30, 2021, the Company issued a total of 37,325 shares of its common stock at prices ranging from $ 1.92

to $ 2.35 for a total of $ 80,000 .

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

27 unchanged sentences

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

2019 EDA replaced a prior EDA with Maxim.

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

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

During the period ending 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 replaced a prior EDA with Maxim.

For the year ended December 31, 2020, the Company sold 20,444,807

shares under the 2019 EDA for total gross proceeds

of $ 53,936,615 ,

which includes a 3.5 %

fee to Maxim of $ 1,888,727 .

During the period ended September 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.

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

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 .

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

On January 28, 2019, 27,570

options were issued to each of these officers with an exercise price of $ 9.68

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

years with a vesting period of one year .

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

years with a vesting period of one year .

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.

of September 30, 2021, and December 31, 2020, there were 47,848,622 and 42,154,371 shares outstanding, respectively.

Cash and Cash Equivalents

18 unchanged sentences

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

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

earlier paid in accordance with its terms.

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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.

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

September 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

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

earlier paid in accordance with its term.

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a gain on extinguishment of $ 76,000 .

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

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

September 30, 2020.

Company is required under U.S.

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

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

Monte Carlo Simulation.

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

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

As an additional factor to determine the fair value of the

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

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

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

accepted and fairly presented the fair value of the Warrants.

As an additional factor to determine the fair value of the Put’s

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

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

3 unchanged sentences

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

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

Schedule of Assumptions to Estimate Fair Value of Warrants

June 30, 2021

December 31, 2020

Underlying price per share

Exercise price per share

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

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

June 30, 2021

Schedule of Assumptions to Estimate Fair Value of Warrants

September 30, 2021

December 31, 2020

2 unchanged sentences

$ 30.25 - 33.00

Risk-free interest rate

0.08 - 0.10 %

Expected holding period

2 unchanged sentences

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

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

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

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

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

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

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

June 30, 2021

September 30, 2021

December 31, 2020

90 unchanged sentences

requires significant management judgment or estimation.

As of June 30, 2021, the Company has classified the warrants with cash settlement

features as Level 3.

As of September 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.

As discussed above,

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

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

1 unchanged sentence

(in thousands)

As of June 30, 2021

As of September 30, 2021

Marketable securities

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Fair value adjustment

Balance at June 30, 2021

Balance at September 30, 2021

Financing Obligation Arising from Sale Leaseback Transaction

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,

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 73,314 shares of Company common stock

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

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

The 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.

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

the nine months ended September 30, 2021, the loss on extinguishment was $ 2,701,460 .

Interest expense relating to this financing agreement

was $ 19,000 for the nine months ended September 30, 2021, and $ 51,000 for the nine months ended September 30, 2020.

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

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

The base of $ 1,415 per month.

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

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

June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

The base rent increases by 3 % each year, and

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

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

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

May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 pursuant to which the Company agreed to lease approximately 3,000 rentable square feet.

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

3 unchanged sentences

The Company’s leases have remaining lease terms between 3 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

of September 30, 2021, the weighted-average remaining term is 2.97 years.

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

transaction in December 2019.

Schedule of Operating lease Future Payments

Year Ending June 30,

Period December 31,

(in thousands)

Less imputed interest

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.

of September 30, 2021, the balance of the right of use assets was $ 144,000 and the corresponding lease liability balance was $ 144,000 .

Total rent expense was $ 39,000 for the nine months ended September 30, 2021, and $ 38,000 for the nine months end September 30, 2020.

Research, Consulting and Supply Agreements

July 2021, the Company executed a Reservation and Start-Up Agreement (the “Agreement”) with hVIVO Services Limited (“hVIVO”),

and subsequently signed a clinical trial agreement (“CTA”) in September.

The Company has paid hVIVO approximately $ 672,000 ,

representing half of the booking fee for use of its quarantine facility.

The balance of the agreement is approximately $ 3,398,000 .

January 2021, the Company entered into a Sponsor Agreement with the Centre for Human Drug Research (“CHDR”) for a Phase 1

clinical study to assess the safety, tolerability, and biological activity of Ampligen as a potential intranasal therapy.

has paid CHDR approximately $ 1,010,000 .

The balance of the agreement is approximately $ 70,000 .

Subsequent Events

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