What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-31 compared with 2021-03-31 · 27 added, 383 removed, 8 unchanged (98% of the section changed)

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities.

common stock is listed and traded on the NYSE American under the symbol AIM.

1 unchanged sentence

of March 25 2022, there were approximately 150 holders of record of our Common Stock.

This number was determined from

records maintained by our transfer agent and does not include beneficial owners of our securities whose securities are held in

the names of various dealers and/or clearing agencies.

This number was determined from records

maintained by our transfer agent and does not include beneficial owners of our securities whose securities are held in the names of various

dealers and/or clearing agencies.

Authorized for Issuance Under Equity Compensation Plans

about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of

Part III of this Annual Report.

about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of Part III

of this Annual Report.

have not paid any cash dividends on our Common Stock in recent years.

It is management’s intention not to declare or pay

dividends on our Common Stock, but to retain earnings, if any, for the operation and expansion of our business.

It is management’s intention not to declare or pay dividends

on our Common Stock, but to retain earnings, if any, for the operation and expansion of our business.

Sales of Unregistered Securities

the year ended December 31, 2020, we issued and sold the following unregistered securities:

share and per share numbers in this have been adjusted to reflect the one-for-44 reverse stock split of our issued and outstanding

shares of common stock effected on June 10, 2019.

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

us at the market price.

As of August 31, 2020, we had issued 10,730 shares of our common stock at a price of $2.33 for a total

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 us at the market price.

As of October 31, 2020, we have issued 12,316 shares of our 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.

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

the year ended December 31, 2021, we issued and sold the following unregistered securities under the 2018 Equity Incentive Plan, effective

September 12, 2018 which will continue in effect for a period of 10 years from its effective date:

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.

As of June 28, 2019, the Company has issued 67,767 shares of its common stock at prices

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

This plan expired August 19, 2019.

2009 Equity Incentive Plan, effective June 24, 2009, as amended, authorizes the grant of non-qualified and incentive stock options,

stock appreciation rights, restricted stock and other stock awards.

A maximum of 500,000 shares of common stock is reserved for

potential issuance pursuant to awards under the 2009 Equity Incentive Plan.

Unless sooner terminated, the 2009 Equity Incentive

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

During 2018, there were 106,255 options granted

by the Company under this Plan.

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 159,091 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 26,234 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, 39,268 options were issued to the officers and directors with an exercise price of $9.68 for

a period of ten years with a vesting period of one year.

offers, sales and issuances of securities described above was deemed to be exempt from registration under the Securities Act in

reliance on either Section 4(a)(2) in that the issuance of securities to the accredited investors did not involve a public offering,

or Rule 701 in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided

under Rule 701.

Subsequent plans were approved by the board of directors upon the expiration of prior plans.

latest 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 fiscal year ended December 21, 2021, the Company issued a total of 132,238 shares of its common stock at prices ranging from $1.16

to $2.35 for a total of $205,000.

offers, sales and issuances of securities described above was deemed to be exempt from registration under the Securities Act in reliance

on either Section 4(a)(2) in that the issuance of securities to the accredited investors did not involve a public offering, or Rule 701

in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701.

Financial Data.

Management’s

Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis is related to our financial condition and results of operations for the two years ended December

31, 2020 This information should be read in conjunction with our consolidated financial statements and related notes thereto beginning

on F-1 of this Form 10-K.

Please also see “Special Note Regarding Forward Looking Statements”

Risk Factors.

have issued warrants (the “Warrants”) in August 2016, February 2017, June 2017, August 2017, April 2018, and March

2019 that are single compound derivatives containing both an embedded right to obtain stock upon exercise (a “Call”)

and a series of embedded rights to settle the Warrants for cash upon the occurrence of certain events (each, a “Put”).

Generally, the Put provisions allow the Warrant Holders liquidity protection;

the right to receive cash in certain situations

where the Holders would not have a means of readily selling the shares issuable upon exercise of the Warrants (e.g., where there

would no longer be a significant public market for our common stock).

However, because the contractual formula used to determine

the cash settlement value of the embedded Put requires use of certain assumptions, the cash settlement value of the embedded Put

can differ from the fair value of the unexercised embedded Call option at the time the embedded Put option is exercised.

recompute the fair value of the Warrants at the end of each quarterly reporting period.

Such value computation includes subjective

input assumptions that are consistently applied each period.

If we were to alter our assumptions or the numbers input based on

such assumptions, the resulting fair value could be materially different.

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

Research and Trading, L.P.

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

stock (the “Origination Shares”).

We collected $3,000,000 in cash from the Holder during September 2018 and the remainder

$170,000 was retained by the Holder for the Holder’s legal fees of $20,000 for the issuance of the IR Note and the Original

Issue Discount of $150,000.

We incurred $210,000 in third-party fees directly attributed to the issuance of the IR Note.

to pay the principal amount, together with guaranteed interest at the annual rate of 10%, with principal and accrued interest

on the IR Note due and payable on September 28, 2019, unless converted under terms and provisions as set forth within the IR Note.

The IR Note provided the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued

but unpaid interest into shares of our common stock at a conversion price of $0.30 per share.

In addition, beginning on March

28, 2019, the IR Note also provided the Holder with the right to redeem all or any portion of the IR Note (“Redemption Amount”).

The payments of each Redemption Amount may be made, at our option, in cash, by converting such Redemption Amount into shares of

common stock (“Redemption Conversion Shares”), or a combination thereof.

The number of Redemption Conversion Shares

equals the portion of the applicable Redemption Amount being converted divided by the lesser of $0.30 or 80% of the lowest Volume

Weighted Average Price (“VWAP”) during the ten (10) trading days immediately preceding the applicable measurement

date (the “Market Price”).

The Purchase Agreement required us to reserve at least 8,900,000 shares of common stock

from our authorized and unissued common stock to provide for all issuances of common stock under the IR Note.

However, the IR

Note provided that the aggregate number shares of common stock issued to the Holder under the IR Note and Purchase Agreement shall

not exceed 19.99% of the total number of shares of common stock outstanding as of the closing date unless we have obtained stockholder

approval of the issuance.

The Origination Shares were to be returned to us in the event that we could provide within 30 days of

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

The security was not provided

so the Origination Shares remained with the Holder.

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

This conclusion

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

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

defined within the IR Note.

The choice of cash redemption or conversion of the IR Note for common shares was at our option.

feature may require us to issue a variable number of common shares to settle the IR Note which was determined to have a predominantly

fixed monetary value at inception.

On March 13, 2019, we amended the Purchase Agreement pursuant to which we issued the Convertible

IR Note (the “Amendment”).

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

the redemption conversion rates were revised to a price to be determined by mutual agreement between us and the Holder.

event that we and the Holder were unable to reach a mutually agreeable price, we would be required to pay the applicable redemption

amount in cash.

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

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

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

As a result, we derecognized the liability and recorded a loss

on the extinguishment of debt of $345,000 in 2019 which was equal to the difference between the reacquisition price of the debt

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

Subsequently,

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

recorded through earnings at each reporting period.

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

into stockholders’

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

The number of shares issued in

these conversions were 204,246 shares.

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

the terms of the modification.

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

See Note 14 Convertible Note Payable.

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

(“CV”).

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

unless earlier paid in accordance with its terms.

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

of CV’s legal fees.

Pursuant to a Security Agreement between us and CV, repayment of the Convertible Note is secured by

substantially all of our assets other than our intellectual property.

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

On May 29, 2020, we paid

off the outstanding CV Note which consisted of principal of $1,985,000, and accrued interest payable of $220,000.

The net payment

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

extinguishment of $66,000.

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

(“AS”).

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

unless earlier paid in accordance with its term.

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

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

the IR Note in accordance with ASC 470, Debt (“ASC 470”) and determined the exchange is considered an extinguishment

of the existing debt and issuance of new debt.

As a result, we derecognized the liability and recorded a loss on the extinguishment

of debt of $250,000 which was equal to the difference between the reacquisition price of the debt and the net carrying amount

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

Subsequently, the AS Note will be recorded

in accordance with ASC 470 whereby we will record a liability equal to the proceeds received on December 5, 2019.

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

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

a gain on extinguishment of $76,000.

OF OPERATIONS

ended December 31, 2020 versus year ended December 31, 2019

net loss was approximately $14,400,000 and $9,404,000 for the years ended December 31, 2020 and 2019, respectively, representing

an increase in loss of approximately $4,996,000 or 53% when compared to the same period in 2019.

This increase in loss

for the year ended December 31, 2020 was primarily due to the following:

increase in the loss of the quarterly revaluation of certain redeemable warrants of $1,633,000 which resulted in a non cash

loss of $123,000 in the year-ended December 31, 2020 compared to a non-cash gain of $1,510,000 in the year ended December

increase in research and development expenses of $1,069,000 or 23%;

increase in general and administrative expenses of $1,615,000 or 23%;

increase in other assets impairment losses of $135,000;

increase in interest expense and finance costs of $245,000;

decrease in the gain resulting from a settlement with as insurance claim of $1,217,000 in 2019 which did not occur in 2020;

decrease of $90,000 in the gain for the fair value adjustment for the convertible note which was paid in full in 2019;

decrease in the extinguishment of debt of $487,000 which resulted in a gain of $142,000 for the year ended December 31, 2020

compared to a loss of $345,000 in the year-ended December 31, 2019:

decrease in production costs of $87,000 or 10%;

increase in interest/other income of $130,000;

increase in revenue from cost recovery of $23,000.

loss per share was $ (0.45) and $(2.58) for the years ended December 31, 2020 and 2019, respectively.

The weighted average

number of shares of our common stock outstanding as of December 31, 2020 was 31,842,799 as compared to 3,642,717 as of December

from our Ampligen®

Cost Recovery Program were $163,000 and $140,000 for the years ended December 31, 2020 and 2019, respectively.

The increase in revenues of $23,000, or 16%, between periods was primarily due to the clinical sites usage.

the years ended December 31, 2020 and 2019, we had no Alferon N Injection®

Finished Good product to commercially sell and

all 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 $806,000 and $893,000, respectively, for the years ended December 31, 2020 and 2019, representing a decrease

of $87,000 related to repairs and maintenance in the current period.

and Development Costs

Research and Development (“R&D”) costs for the year ended December 31, 2020 were approximately $5,720,000 as compared

to $4,651,000 for the same period a year ago, reflecting an increase of approximately $1,069,000.

The primary reason for the increase

in research and development costs was due to increases in Scrap from expired material of $1,095,000, clinical trials of $197,000,

outside labs $194,000, patent and trademark abandonments of $113,000 offset by decreases in wages and benefits of $401,000 and

outside contractors $123,000.

and Administrative Expenses

and Administrative (“G&A”) expenses for the years ended December 31, 2020 and 2019, were approximately $8,654,000

and $7,039,000, respectively, reflecting an increase of approximately $1,615,000 or 23%.

The increase in G&A expenses during

the current period was mainly due to increases in salaries and benefits of $973,000, accounting, professional and legal fees of

$349,000, stock compensation of $184,000, taxes and licenses of $163,000, scientific advisory board of $159,000, offset

by decreases in public relations of $90,000 and investment bank fees of $135,000, and travel of $31,000.

and Other Income

and other income for the years ended December 31, 2020 and 2019 was approximately $219,000 and $89,000, respectively, representing

an increase of approximately $130,000 or 146%.

The primary cause for the increase in investment income during the current

period was primarily due to higher balances available to invest in the current period as compared to the prior period.

of other assets

the year ended December 31, 2020 there was a loss of $135,000 related to the impairment of other assets consisting of the loss

of a deposit to a supplier for use of technology which we are no longer utilizing and was written off.

Expense and Finance Costs

and finance costs for the year ended December 31, 2020 was $672,000 compared to $427,000 in the prior year, an increase

of $245,000 or 57%.

The increase is mainly attributed to the interest and amortization of costs of the Chicago Ventures and Atlas

notes which were extinguished in the second quarter of 2020.

Extinguishment

extinguishment costs decreased $487,000.

There was a gain of $142,000 for the year ended December 31, 2020 compared to a loss

of $345,000 in the year-ended December 31, 2019.

quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability amounted

to a loss of $123,000 for the year ended December 31, 2020 compared to a gain of approximately $1,510,000 in December 31, 2019

which represents a decrease of $1,633,000 or 108% (see “Financial Statements:

Fair Value”

for the various

factors considered in the valuation of redeemable warrants).

from sale of income tax operating losses

December 2020, we effectively sold $11,000,000 New Jersey state net operating loss for approximately $1,090,000 and recorded a

deferred tax asset of 96,000.

In December 2019, we effectively sold $10,000,000 New Jersey state net operating loss for approximately

$776,000 and recorded a deferred tax asset of $129,000.

quarterly revaluation of the convertible note resulted in a non-cash adjustment in 2020 of zero and in 2019 amounted to a gain

the year ended December 31, 2020 there were no gains or losses from insurance claims, however, in 2019 there was a gain from the

insurance loss claim of $1,217,000.

and Capital Resources

September 2019, we raised approximately $8,000,000 in a public offering underwritten by A.G.P./Alliance Global Partners, LLC (“AGP”)

pursuant to which we issued (i) 1,740,550 shares of our common stock;

(ii) pre-funded warrants exercisable for 7,148,310 shares

of common stock (the “Prefunded Warrants”), (iii) warrants to purchase up to an aggregate of 8,887,860 shares of common

stock (the “Warrants”);

and (iv) a Representative’s Warrant to purchase up to an aggregate of 266,665 shares

of common stock (the “Representative’s Warrant”).

During 2020, an aggregate of 8,874,000 shares of common stock

were issued upon exercise of the Prefunded Warrants.

the first quarter of 2020 an aggregate of 8,746,990 shares were issued upon exercise of the Warrants for gross proceeds of approximately

$8,658,000 and an aggregate of 1,870,000 shares were issued upon exercise of the Prefunded Warrants.

In addition, on March 25,

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

the first quarter of 2020, the amended warrants were exercised and an aggregate of 266,665 shares are being issued

upon exercise of the warrant for gross proceeds of approximately of $264,000.

entered into an Equity Distribution Agreement (the “2019 EDA”) with Maxim Group LLC (“Maxim”), pursuant

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

the year ended December 31, 2020, we sold 20,444,807 shares under the 2019 EDA for total gross proceeds of $53,936,615, which

included a 3.5% fee to Maxim of $1,888,727.

During 2021, we sold 5,655,731 shares under the 2019 EDA for total gross proceeds

of $13,301,526, which includes a 3.5% fee to Maxim of $465,553.

The 2019 EDA was terminated in early February 2021.

used in operating activities for the year ended December 31, 2020 was approximately $10,368,000 compared to approximately

$9,067,000 for the same period in 2019, an increase of $1,301,000.

The primary reasons for this increase in cash used in

operations in 2020 was related production cost of 2 Ampligen batches in the amount of $664,000, increase in New

Jersey NOL of $314,000, and decrease in accounts payable of $89,000.

used in investing activities for the year ended December 31, 2020 was approximately $9,164,000 compared to $6,147,000 for

the same period in 2019, representing a change of $3,017,000.

The primary reason for the increase in cash used in investing

activities resulted from the purchase of marketable securities of approximately $12,831,000 offset by the sale of marketable securities

provided by financing activities for the year ended December 31, 2020 was approximately $56,563,000 compared to approximately

$16,385,000 for the same period in 2019, an increase of $40,178,000.

The primary reasons for this increase was our receipt

of $61,216,000 in net proceeds from the sale of shares compared to $15,303,000 from the sale of shares in 2019.

of December 31, 2020, we had approximately $54,378,000 in cash, cash equivalents and marketable securities, inclusive of approximately

$15,877,000 in Marketable Securities, representing an increase of approximately $45,600,000 from December 31, 2019.

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.

See Part I, Item

1A - “Risk Factors;

We may require additional financing which may not be available ”.

Relationships and Related Transactions

to PART III, ITEM 13 - “Certain Relationships and Related Transactions, and Director Independence.”

Accounting Pronouncements

to “Note 2(h) –

Recent Accounting Standards and Pronouncements”

under Notes to Consolidated Financial Statements.

about Off-Balance Sheet Arrangements

Accounting Policies

Reporting Release No.

60 requires all companies to include a discussion of critical accounting policies or methods used in the

preparation of financial statements.

Our significant accounting policies are described in the Notes to Consolidated Financial

The significant accounting policies that we believe are most critical to aid in fully understanding our reported financial

results are the following:

assess long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of the assets

or the asset grouping may not be recoverable.

Factors that we consider in deciding when to perform an impairment review include

significant under-performance of a business or product line in relation to expectations, significant negative industry or economic

trends, and significant changes or planned changes in its use of the assets.

We measure the recoverability of assets that it will

continue to use in its operations by comparing the carrying value of the asset grouping to our estimate of the related total future

undiscounted net cash flows.

If an asset grouping’s carrying value is not recoverable through the related undiscounted cash

flows, the asset grouping is considered to be impaired.

measure the impairment by comparing the difference between the asset grouping’s carrying value and its fair value.

assets are considered a non-financial asset and are recorded at fair value only if an impairment charge is recognized.

are determined for groups of assets related to the lowest level of identifiable independent cash flows.

We make subjective judgments

in determining the independent cash flows that can be related to specific asset groupings.

In addition, as we review our manufacturing

process and other manufacturing planning decisions, we must make subjective judgments regarding the remaining useful lives of

When we determine that the useful lives of assets are shorter than originally estimated, we accelerate the rate of depreciation

over the assets’

new, shorter useful lives.

utilize the guidance contained in ASC 480 in the determination of whether to record warrants and options as Equity and/or Liability.

If the guidance of ASC 480 is deemed inconclusive, we continue our analysis utilizing ASC 815.

method of recording the related value is consistent with the standards as defined by the Financial Accounting Standards

Board utilizing the concept of “Fair Value”

from ASC 820-10-55-1 that states that any fair value measurement requires

that the reporting entity, to determine the valuation technique(s) appropriate for the measurement, consider the availability

of data with which to develop inputs that represent the assumptions that market participants would use in pricing the asset or

liability and the level in the fair value hierarchy within which the inputs fall.

recomputed the value of the redeemable warrants at the end of each quarterly period.

We use the Monte Carlo Simulation approach

which includes subjective input assumptions that are consistently applied each quarter.

If we were to alter our assumptions or

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

As discussed in greater detail

in “Fair Value”

at the beginning of this ITEM 7, the significant assumptions using this model are:

(i) Risk-Free Interest

(ii) Expected Holding Period;

(iii) Expected Volatility;

(iv) Expected Dividend Yield;

(v) Expected Probability of a Fundamental

(vi) Expected Timing of Announcement of a Fundamental Transaction;

(vii) Expected 100 Day Volatility at Announcement

of a Fundamental Transaction;

(viii) Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction;

and (ix) Expected

Time Between Announcement and Consummation of a Fundamental Transaction.

Concentration

of Credit Risk

policy is to limit the amount of credit exposure to any one financial institution and place investments with financial institutions

evaluated as being credit worthy, or in short-term money markets, which are exposed to minimal interest rate and credit risks.

We have had bank deposits and overnight repurchase agreements that exceed federally insured limits.

Concentration

of credit risk, with respect to receivables, is limited through our credit evaluation process.

We do not require collateral on

our receivables.

Our receivables historically consisted principally of amounts due from wholesale drug companies.

and Qualitative Disclosures About Market Risk.

Statements and Supplementary Data.

see the “Index to Financial Statements and Financial Statement Schedule”

in and Disagreements with Accountants on Accounting and Financial Disclosures.

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-K

Item 5. Market for Registrant’s Common Equity