What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 298 added, 277 removed, 1037 unchanged (36% of the section changed)

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

This testing and approval process has been 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.

This testing and approval process is ongoing due

to 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

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On March 3, 2022, we entered into an Agreement of Sale and Purchase with Acellories, Inc.

the property for an estimated $3.9 million, with AIM’s intention to keep some space specifically for its Alferon activity.

sale was finalized on November 1, 2022, for $3.7 million net of normal closing cost.

the property for an estimated $3.9 million.

The sale was finalized on November 1, 2022, for $3.7 million net of normal closing cost.

June 2022 we entered into a lease agreement with the New Jersey Economic Development Authority for a 5,210 square-foot, state-of-the-art

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The New Brunswick facility,

was approved by the FDA under the Biological License Application, or BLA, for Alferon N Injection.

While we have sold the New Brunswick

facility, we maintain a certain amount of space at that facility for Alferon activities, the sale of the facility will move up the timeline

for contracting with a CMO, or CMOs, capable of producing Alferon, and receiving FDA approval to do so, prior to the commercial sale

of newly produced inventory product.

If and when we obtain a reaffirmation of FDA BLA status and have begun production of new Alferon

N Injection API, it will need FDA approval as to the quality and stability of the final product before commercial sales can resume.

may need additional funds to finance the validation process.

If we are unable to gain the necessary FDA approvals related to the manufacturing

process and/or final product of new Alferon N Injection 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.

which we no longer operate, was approved by the FDA under the Biological License Application, or BLA, for Alferon N Injection.

when we obtain a reaffirmation of FDA BLA status and have begun production of new Alferon N Injection API, we will need FDA approval

as to the quality and stability of the final product before commercial sales can resume.

We may need additional funds to finance the

validation process.

If we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of

new Alferon N Injection 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.

December 2020, we added Pharmaceutics International Inc.

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contracts augment our active and in-process fill and finish capacity.

to continuing delays and other obstacles related to importing Ampligen to China, on August 10, 2022, we ended our contract with Shenzhen

Smoore Technology for the development of an Ampligen delivery device for the treatment of SARS-CoV-2.

believe, and are investigating, Ampligen’s potential role in enhancing the activity of influenza vaccines.

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Ampligen is approved for commercial sale in the Argentine Republic for the treatment of severe CFS.

primary present business focus involves Ampligen.

primary business focus involves Ampligen.

Ampligen represents a dsRNA being developed for globally important cancers, viral diseases

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currently are proceeding primarily in four areas:

a randomized, controlled study to evaluate efficacy and safety of Ampligen compared to a

control group to treat locally advanced pancreatic cancer patients.

Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment

with the goal of increasing anti-tumor responses to check point inhibitors.

Ampligen’s antiviral activities and potential use as a prophylactic or treatment for

existing viruses, new viruses and mutated viruses thereof.

Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”)

and fatigue and/or Post-COVID conditions of fatigue.

a randomized, controlled study to evaluate efficacy and safety of Ampligen compared to a control group to treat locally advanced

pancreatic cancer patients.

and Evaluating Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment with the goal of

increasing anti-tumor responses to check point inhibitors and Dendritic Cell Therapeutic Vaccines.

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

viruses thereof.

Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and fatigue and/or Post-COVID

conditions of fatigue.

are prioritizing our activities in an order related to the stage of development, with those clinical activities such as pancreatic cancer,

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as a therapy for locally advanced or metastatic late-stage pancreatic cancer.

In August 2022, we received IRB approval of the trial protocol

and so announced the trial’s commencement.

The study is recruiting patients.

of the differences in the scale of necessary trials, our initial primary focus when it comes to pancreatic cancer will be cases that

are locally advanced, rather than metastatic.

The number of different approaches to treating metastatic pancreatic cancer —

approaches which would be determined by treating physicians — would require a much larger, far more expensive trial than would

a trial for locally advanced pancreatic cancer.

Therefore, we are focusing on patients who have completed FOLFIRINOX and have stable

In August 2022, we received Institutional Review Board (“IRB”) approval of the trial protocol in locally

advanced pancreatic cancer and so announced the trial’s commencement.

Assuming this trial and subsequent planned clinical

trials confirm the existing data, our goal is to then submit an NDA for use of Ampligen in pancreatic cancer patients.

The number of different approaches to treating metastatic pancreatic cancer — approaches

which would be determined by treating physicians — would require a much larger, far more expensive trial than would a trial for

locally advanced pancreatic cancer.

Therefore, we are focusing on patients who have completed FOLFIRINOX and have stable disease.

August 2022, we received Institutional Review Board (“IRB”) approval of the trial protocol in locally advanced pancreatic

cancer and so announced the trial’s commencement.

Assuming this trial and subsequent planned clinical trials confirm the existing

data, our goal is to then submit an NDA for use of Ampligen in pancreatic cancer patients.

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

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

October 2022, our IND application cleared the FDA approval process and we are proceeding with a Phase 2 study evaluating Ampligen as

a therapeutic for patients with post-COVID conditions (“AMP-518”).

Additional comments were received from the FDA, which

have been addressed in an amended protocol approved by the IRB on March 30, 2023.

As of August 14, 2023, the study had met its full planned

enrollment of 80 subjects and subjects are being dosed.

July 2023, we enrolled and dosed the first patient in our Phase 2 study evaluating Ampligen® as a potential therapeutic for people

with post-COVID conditions (“AMP-518”).

We announced in August 2023 that the study had met the planned enrollment of 80 AMP-518

subjects ages 18 to 60 years who have been randomized 1:1 to receive twice-weekly intravenous infusions of Ampligen or placebo for 12

weeks, with a follow-up phase of two weeks.

We expect to complete dosing of the last study subject in Q4 2023.

Topline data is expected

as early as Q1 2024.

see “ Ampligen as a Potential Antiviral ” below.

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tests before granting final approval to begin commercial sales.

This testing and approval process is currently delayed due to ANMAT’s

internal processes and the ongoing effects of COVID-19.

Once final approval by ANMAT is obtained, GP Pharm will be responsible for distributing

Ampligen in Argentina.

This testing and approval process is ongoing due to ANMAT’s internal

Once final approval by ANMAT is obtained, GP Pharm will be responsible for distributing Ampligen in Argentina.

FDA authorized an open-label treatment protocol (“AMP-511”) allowing patient access to Ampligen for treatment in a study

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chronic fatigue-like symptoms that we refer to as Post-COVID conditions.

As of June 30, 2023, there were 11 patients enrolled in this

open-label expanded access treatment protocol (including five patients with Post-COVID Conditions).

As of September 30, 2023, there were 11 patients enrolled in

this open-label expanded access treatment protocol (including four patients with Post-COVID Conditions).

To date, there have been seven

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

and approval process is currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes.

The ongoing impact of COVID-19

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

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.

and approval process is ongoing due to ANMAT’s internal processes.

The ongoing impact of COVID-19 in Argentina is taxing the nation’s

health care system and is, understandably, the main priority of its regulators.

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 a study under which

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with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID

As of June 30, 2023, there are 11 patients enrolled in this open-label expanded access treatment protocol (including five

Post-COVID patients).

To date, there have been seven such Post-COVID patients treated.

As of September 30, 2023, there are 11 patients enrolled in this open-label expanded access treatment protocol (including

four Post-COVID patients).

To date, there have been eight such Post-COVID patients treated.

In July 2022, AIM reported positive preliminary

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or the terms of the agreement are met.

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 blockade 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

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 blockade therapy in the journal of Cancer Research

( http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985 ).

In a head-to-head study in explant

culture models, Ampligen activated the TLR3 pathway and promoted an accumulation of killer T cells but, unlike the other two TLR3

agonists, it did so without causing regulatory T cell (Treg) attraction.

These findings were considered important because they

indicate that Ampligen selectively reprograms the tumor microenvironment by inducing the beneficial aspects of tumor inflammation

(attracting killer T cells), without amplifying immune-suppressive elements such as regulatory T cells.

The study was conducted at the

University of Pittsburgh and Roswell Park as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized Program of Research

Excellence (“SPORE”).

The study was conducted at

the University of Pittsburgh and Roswell Park as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized Program of

Research Excellence (“SPORE”).

2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill & Finish”

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(https://clinicaltrials.gov/ct2/show/NCT05494697).

For the year ended December 31, 2022, we incurred expenses of approximately $1,730,000.

“Immuno-Oncology;

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● Early-Stage

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.

Interim results announced in March 2022

detailed data gathered from evaluating paclitaxel’s impact on chemokine production

in the human breast tumor microenvironment (TME) and the ability of a chemokine modulatory

regimen (CKM) of Ampligen and Interferon-α to mitigate potentially undesirable aspects

of taxane chemotherapy.

Based on the results, we believe that the combination chemokine modulatory

regimen including Ampligen has the potential to mitigate undesirable aspects of taxane chemotherapy.

Investigators are currently analyzing data.

Triple Negative Breast Cancer - The objective of this Phase 1 study is to evaluate the

safety and tolerability of a combination of Ampligen, celecoxib with or without Intron A,

when given along with chemotherapy in patients with early-stage triple negative breast cancer.

The now completed (as of September 2022) topline results from the study confirm the positive

findings that were previously presented at the 2022 Society for Immunotherapy of Cancer

(SITC) 37 th Annual Meeting in a poster presentation titled Safety and efficacy

of de-escalated neoadjuvant chemoimmunotherapy of triple negative breast cancer (TNBC) using

chemokine-modulating regimen (rintatolimod, IFN-α2b, celecoxib) .

The primary endpoint

of the study was safety and tolerability.

The results demonstrated that treatment was well-tolerated

with mostly grade 1 or 2 treatment-related adverse events (TRAEs) without dose-limiting toxicities

(DLTs) or delayed or immune-related toxicities.

DLT was defined as grade 3 or higher toxicities

within the first 3 weeks.

Secondary endpoints included pCR rate where 5/9 (56%) of patients

attained pCR and 1 more patient attained ypTmic.

Tumor and blood biomarkers were also analyzed

in exploratory studies

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

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

or Unresectable Triple Negative Breast Cancer - This phase 1/2a trial tests the safety,

side effects, and best dose of chemokine modulation therapy (CKM) (rintatolimod, celecoxib,

and interferon alpha 2b) in combination with pembrolizumab for the treatment of patients

with triple negative breast cancer that has spread from where it first started (primary site)

to other places in the body (metastatic) or that cannot be removed by surgery (unresectable).

https://clinicaltrials.gov/study/NCT05756166

Progress and Analysis Related to Pancreatic Cancer

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compared with historical control patients.

Additional patients have since been enrolled and, we believe, the data

further confirms the original findings.

We are working with our Contract Research Organization, Amarex Clinical Research LLC, to seek

FDA “fast-track.” We have applied for fast-track status;

Additional patients have since been enrolled and, we believe, the data further confirms the

original findings.

We are working with our Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track.”

We have applied for fast-track status;

have received denials to date;

and are currently working through

the FDA process to provide all the materials and information required to achieve fast-track status.

The IND authorization to proceed

with the Phase 2 pancreatic cancer clinical trial has been received with potential sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research centers in the United States such as The Buffett Cancer Center at the University

of Nebraska Medical Center (UNMC).

and are currently working through the FDA process to provide all

the materials and information required to achieve fast-track status.

The IND authorization to proceed with the Phase 2 pancreatic cancer

clinical trial has been received with potential sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major

cancer research centers in the United States such as The Buffett Cancer Center at the University of Nebraska Medical Center (UNMC).

January 2023, we entered into an external sponsored collaborative clinical research agreement with Erasmus MC and AstraZeneca.

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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 of the act.

The status helps incentivize

the treatment of therapies to treat unmet medical needs by providing a company with seven

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.

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.

June 2021, Ampligen was featured in a publication containing state-of-the-art methodologies in the peer-reviewed medical journal Cancers

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cancer cells”, including:

● Stimulation

of interferon regulatory factors and activation of the interferon signaling pathway,

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of pancreatic cancer.

June 27, 2023, we announced the publication of pre-clinical

data that suggests Ampligen has the potential to act directly on tumor cells to reduce tumor cell growth in pancreatic cancer patients

with sufficient tumor levels of TLR-3, suggesting a potential biomarker to identify patients who may respond to Ampligen.

The anti-tumor

analysis was published in the peer-reviewed journal American Journal of Cancer Research in the paper “Rintatolimod:

treatment in patients with pancreatic cancer expressing Toll-like receptor 3.”

June 27, 2023, we announced the publication of pre-clinical data that suggests Ampligen has the potential to act directly on tumor cells

to reduce tumor cell growth in pancreatic cancer patients with sufficient tumor levels of TLR-3, suggesting a potential biomarker to

identify patients who may respond to Ampligen.

The anti-tumor analysis was published in the peer-reviewed journal American Journal

of Cancer Research in the paper “Rintatolimod:

A potential treatment in patients with pancreatic cancer expressing Toll-like

Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS)

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of their filings.

April 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.

The MTA was extended for two years in May 2021.

Due to continuing delays and other obstacles related to importing Ampligen to China,

we ended our contract with Smoore on August 10, 2022.

August 2020, we contracted Amarex to act as our Clinical Research Organization and provide regulatory support with regard to a possible

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patients continues in the study.

November 2020, we entered into a Material Transfer and Research Agreement with Leyden Laboratories B.V.

(“Leyden”) to supply

Ampligen and related expertise for two research projects involved SARS-CoV-2 and lethal influenza.

The MTA has since expired and we have

no active projects with Leyden.

January 2021, we entered into a Sponsor Agreement with CHDR to manage a Phase 1 randomized, double-blind study to evaluate the safety

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Cognitive Dysfunction (PCCD) and has been revised to Post-COVID conditions).

October 2022, our IND application cleared the FDA approval process and we are proceeding with a Phase 2 study evaluating Ampligen as

a therapeutic for patients with post-COVID conditions (“AMP-518”).

Additional comments were received from the FDA, which

have been addressed in an amended protocol approved by the IRB on March 30, 2023.

As of August 14, 2023, the study had met its full planned enrollment of

80 subjects and subjects are being dosed.

July 2023, we enrolled and dosed the first patient in our Phase 2 study evaluating Ampligen® as a potential therapeutic for people

with post-COVID conditions (“AMP-518”).

We announced in August 2023 that the study had met the planned enrollment of 80 AMP-518

subjects ages 18 to 60 years who have been randomized 1:1 to receive twice-weekly intravenous infusions of Ampligen or placebo for 12

weeks, with a follow-up phase of two weeks.

We expects to complete dosing of the last study subject in Q4 2023.

Topline data is expected

as early as Q1 2024.

May 9, 2023, we were granted a U.S.

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In this regard, on December 5, 2022, we entered into a Master Service Agreement and a Quality Agreement with Sterling Pharma Solutions

(“Sterling”) for the manufacture of our Poly I and Poly C12U polynucleotides and transfer of associated test methods at Sterling’

(“Sterling”) for the manufacture of our Poly I and Poly C12U polynucleotides and transfer of associated test methods at Sterling’s

Dudley, UK location to produce the polymer precursors to manufacture the drug Ampligen.

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refine our approach to polymer production.

In March 2023, we submitted a work order for a total of $1,432,257 to manufacture additional

lots of Ampligen at Jubilant.

While we believe we have sufficient Ampligen API to meet current needs, we are also continually

exploring new efficiencies in order to maximize its ability to fulfill future obligations.

In March 2023, we submitted a work order for

a total of $1,432,257 to manufacture additional lots of Ampligen at Jubilant.

second product, Alferon N Injection, is approved by the FDA for commercial sales in the United States for the treatment of genital warts.

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of commercial filled and finished product are produced and released by the FDA.

The New Brunswick facility was approved by the FDA under

the Biological License Application, or BLA, for Alferon N Injection.

While we have sold the New Brunswick facility, we maintain a certain

amount of space at that facility for Alferon activities.

We will need the FDA’s approval to release commercial product once we

have identified our new manufacturing approach and submitted satisfactory stability and quality release data.

Currently, we are not manufacturing

Alferon N Injection and there is no definitive timetable to resume production.

We will need the FDA’s approval to release commercial

product once we have identified our new manufacturing approach and submitted satisfactory stability and quality release data.

we are not manufacturing Alferon N Injection and there is no definitive timetable to resume production.

LICENSING/COLLABORATIONS/JOINT

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and registration of in-licensed products;

and a therapeutic area fit (ME/CFS, immuno-oncology, e.g.).

and a therapeutic area fit (e.g., ME/CFS, immuno-oncology).

MARKETING/DISTRIBUTION

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of Ampligen in the Territory.

The agreement was automatically extended for a period of 12 months on May 20, 2021, and again for an additional

12 months on May 20, 2022.

The agreement was automatically extended for a period of 12 months on May 20, 2021;

has been automatically

extended for 12 months on each subsequent May 20;

and will continue to be automatically extended for periods of 12 months every May 20

until terminated or the terms of the agreement are met.

January 2017, ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection (under the brand

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This extended the approval until 2022.

extend the approval beyond 2022 has been filed and is still under review.

In February 2013, we received ANMAT approval for the treatment

of refractory patients that failed or were intolerant to treatment with recombinant interferon, with Naturaferon in Argentina.

A request to extend the approval beyond 2022 has

been filed and is still under review.

In February 2013, we received ANMAT approval for the treatment of refractory patients that failed

or were intolerant to treatment with recombinant interferon, with Naturaferon in Argentina.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients was extended to

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all EAP activities relating to the pancreatic cancer extension of the program.

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.

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.

This agreement has expired.

We were in discussions with Asembia about the

possibility of continuing the relationship, while also exploring the possibility of working with other, similar companies.

we still do not foresee an immediate need for this service and continue to push this search further out in our

expected timeline.

We were in discussions with Asembia about the possibility

of continuing the relationship, while also exploring the possibility of working with other, similar companies.

However, we still do not

foresee an immediate need for this service and continue to push this search further out in our expected timeline.

February 2018, we signed an amendment to the EAP with myTomorrows.

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imposed by federal tax laws, participants are eligible to contribute up to 15% of their salary (including bonuses and/or commissions)

Participants’ contributions to the 401(k) Plan may be matched by us at a rate determined annually by the Board of Directors.

participant immediately vests in his or her deferred salary contributions, while our contributions will vest over one year.

A 6% matching

contribution by us was reinstated effective January 1, 2021.

For the six months ended June 30, 2023, we made $77,100 in contributions,

and for the year ending December 31, 2022 $122,000 was contributed.

Participants’ contributions to the 401(k) Plan may be matched by us at a rate determined annually by the Board.

participant immediately vests in his or her deferred salary contributions as well as our safe harbor contributions.

A 6% safe harbor

matching contribution by us was reinstated effective January 1, 2021.

For the nine months ending September 30, 2023, we made $116,881

in contributions, and for the year ending December 31, 2022 $122,000 was contributed.

Accounting Pronouncements

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OF OPERATIONS

months ended June 30, 2023 versus three months ended June 30, 2022

losses were $4,909,000 and $4,851,000 for the three months ended June 30, 2023, and 2022, respectively, representing an increase in loss

of $58,000 or 1%.

months ended September 30, 2023 versus three months ended September 30, 2022

losses were $7,816,000 and $6,385,000 for the three months ended September 30, 2023, and 2022, respectively, representing an increase

in loss of $1,431,000 or 22%.

This increase in loss was primarily due to the following:

increase in research and development expenses of $1,361,000

increase in general and administrative expenses of $369,000;

increase in gain from sale of Income tax operating of $96,000;

increase in production costs of $30,000;

decrease in gain from sale of income tax operating losses of $10,000

an increase in general and administrative expenses of $269,000;

increase in interest and other income of $122,000,

decrease in production costs of $69,000;

decrease in loss on investments, net of $55,000,

net loss per share was $(0.10) and $(0.10) for the three months ended June 30, 2023, and 2022, respectively.

The weighted average number

of shares of our common stock outstanding as of June 30, 2023, was 48,411,251 as compared to 48,034,100 as of June 30, 2022.

from our Ampligen® Cost Recovery Program were $42,000 and $30,000 for the three months ended June 30, 2023 and 2022, respectively.

an increase in the gain on sale of fixed assets of $39,000.

net loss per share was $(0.16) and $(0.13) for the three months ended September 30, 2023, and 2022, respectively.

The weighted average

number of shares of our common stock outstanding as of September 30, 2023, was 48,635,165 compared with 48,079,210 as of September 30,

from our Ampligen® Cost Recovery Program were $46,000 and $21,000 for the three months ended September 30, 2023 and 2022, respectively.

The change was due primarily to the increase in drug utilization for the AMP-511 study for the two sites that are open and treating patients.

were no production costs for the three months ended June 30, 2023 and approximately $69,000 for the three months ended June 30, 2022,

representing a decrease of $69,000 in production costs in the current period.

The decrease was due primarily to the sale of the facility

and no production in 2023 compared to 2022.

costs were approximately $30,000 and $0 for the three months ended September 30, 2023, and 2022, respectively, representing an increase

of $30,000 in production costs in the current period.

The increase was due to the cost incurred for production of Ampligen that will

occur in the last quarter of 2023.

and Development Costs

Research and Development (“R&D”) costs for the three months ended June 30, 2023, were approximately $2,953,000, as compared

to $2,475,000 for the same period a year ago, reflecting an increase of approximately $478,000.

The primary reason for the increase in

research and development costs was largely due to increases in manufacturing costs of $1,492,000 and regulatory costs of $77,000 net

of decreases in clinical trial costs of $1,062,000, engineering and maintenance costs of $37,000 and quality control costs of $29,000.

Research and Development (“R&D”) costs for the three months ended September 30, 2023, were $2,734,000, compared with

$1,372,000 for the same period a year ago, reflecting an increase of $1,362,000.

The primary reason for the increase in research and

development costs was largely due to increases in manufacturing costs of $1,502,000, clinical trial costs of $1,404,000 and engineering

and maintenance costs of $40,000, net of decreases in regulatory cost of $1,402,000 and quality control costs of $189,000.

and Administrative Expenses

and Administrative (“G&A”) expenses for the three months ended June 30, 2023, and 2022, were approximately $2,550,000

and $2,181,000, respectively, reflecting an increase of approximately $369,000.

The increase in G&A expenses during the current period

was primarily due to an increase in professional fees of $766,000 offset by a decrease in stock compensation of $385,000.

on Investments, net

on Investments for the three months ended June 30, 2023, and 2022 were approximately, $94,000 and $470,000, respectively, reflecting

a decrease in loss of approximately $376,000.

This decrease in loss on investments for the three months ended June 30, 2023, was due

to the change in fair value of equity investments.

and Administrative (“G&A”) expenses for the three months ended September 30, 2023, and 2022, were approximately $5,439,000

and $5,170,000, respectively, reflecting an increase of $269,000.

The increase in G&A expenses during the current period was primarily

due to an increase in professional fees of $570,000 and salaries of $113,000 net with a decrease in stock compensation of $225,000, insurance of $87,000, taxes and licenses of

$65,000 and moving expenses of $40,000.

on Investments

on Investments for the three months ended September 30, 2023, and 2022 were $310,000 and $365,000, respectively, reflecting a decrease

in loss of approximately $55,000.

This decrease in loss on investments for the three months ended September 30, 2023, was due to the

change in fair value of equity investments.

and Other Income

and other income for the three months ended June 30, 2023, and 2022 was $318,000 and $79,000, respectively.

This represents a net increase

of approximately $239,000.

and other income for the three months ended September 30, 2023, and 2022 was $294,000 and $172,000, respectively.

This represents a net

increase of approximately $122,000.

from sale of income tax operating losses

quarterly income tax benefit for the three months ended June 30, 2023 resulted in a gain of approximately $328,000 compared to a gain

of $232,000 for the three months ended June 30, 2022 due primarily to a deferred tax asset recorded in 2023 for the New Jersey NOL to

be sold in 2024.

months ended June 30, 2023 versus six months ended June 30, 2022

losses were $8,570,000 and $8,671,000 for the six months ended June 30, 2023, and 2022, respectively, representing a decrease in loss

of $101,000 or 1%.

This decrease in loss was primarily due to the following:

quarterly income tax benefit for the three months ended September 30, 2023 resulted in a gain of $318,000 compared to a gain of $328,000

for the three months ended September 30, 2022 due primarily to a deferred tax asset recorded in 2023 for the New Jersey NOL.

months ended September 30, 2023 versus nine months ended September 30, 2022

losses were $16,386,000 and $15,056,000 for the nine months ended September 30, 2023, and 2022, respectively, representing an increase

in loss of $1,330,000 or 9%.

This increase in loss was primarily due to the following:

increase in research and development expenses of $2,856,000,

● an increase in general and administrative expenses of $712,000,

increase in production costs of $30,000;

decrease in loss on investments of $1,568,000

increase in interest and other income of $515,000,

increase in gain from sale of Income tax operating of $151,000.

decrease in loss on investments, net of $1,513,000;

decrease in production costs of $147,000;

increase in research and development expenses of $1,494,000;

increase in general and administrative expenses of $588,000.

loss per share was $(0.18) and $(0.18) for the years ended June 30, 2023, and 2022, respectively.

The weighted average number of shares

of our common stock outstanding as of June 30, 2023, was 48,405,675 as compared with 48,014,713 as of June 30, 2022.

from our Ampligen® Cost Recovery Program were $91,000 and $64,000 for the six month periods ended June 30, 2023 and 2022, respectively.

The change is primarily related to the increase in drug utilization for the AMP-511 study for the two sites that are open and treating

were no production costs for the six months ended June 30, 2023, and approximately $147,000 for the six months ended June 30, 2022, representing

a decrease of $147,000 in production costs.

The decrease was due primarily to the sale of the facility and no production in 2023 compared

loss per share was $(0.34) and $(0.31) for the nine months ended September 30, 2023, and 2022, respectively.

The weighted average number

of shares of our common stock outstanding as of September 30, 2023, was 48,483,802 as compared with 48,036,559 as of September 30, 2022.

from our Ampligen® Cost Recovery Program were $137,000 and $85,000 for the nine months ended September 30, 2023 and 2022, respectively.

The change of $52,000 is primarily related to the increase in drug utilization for the AMP-511 study for the two sites that are open

and treating patients.

costs were approximately $30,000 and $0 for the nine months ended September 30, 2023, and 2022, respectively, representing an increase

of $30,000 in production costs in the current period.

The increase was due to the cost incurred for production of Ampligen that will

occur in the last quarter of 2023.

and Development Costs

costs for the six months ended June 30, 2023, were $5,005,000 compared with $3,511,000 for the same period a year ago, reflecting an

increase of $1,494,000.

The primary cause of the increase in research and development costs was attributable to increases in manufacturing

costs of approximately $1,804,000 and quality control costs of approximately $50,000 net of decreases in clinical trials expense of approximately

$223,000, engineering and maintenance costs of approximately $72,000 and regulatory costs of approximately $52,000.

Overall R&D costs for the nine months

ended September 30, 2023, were $7,739,000 compared with $4,883,000 for the same period a year ago, reflecting an increase of $2,856,000.

The primary cause of the increase in research and development costs was attributable to increases in manufacturing costs of $1,872,000

and clinical trial expense of $1,212,000, net of a decrease in quality control costs of $215,000.

and Administrative Expenses

expenses for the six months ended June 30, 2023, and 2022, were $4,841,000 and $4,253,000, respectively, reflecting an increase of approximately

The increase in G&A expenses was mainly due to an increase in professional fees of $766,000 and travel costs of $53,000

offset by a decrease in stock compensation of $385,000.

(Loss) on Investments, net

Gain (Loss) on Investments for

the six months ended June 30, 2023, and 2022 were approximately, $109,000 and ($1,404,000), respectively, reflecting a decrease in loss

of approximately $1,513,000.

This decrease in loss on investments for the six months ended June 30, 2023, was due to the change in fair

value of equity investments.

expenses for the nine months ended September 30, 2023, and 2022, were approximately $10,280,000 and $9,569,000, respectively, reflecting

an increase of $711,000.

The increase in G&A expenses during the current period was primarily due to an increase in professional

fees of $1,336,000 net with a decrease in stock compensation of $610,000.

on Investments

Loss on Investments for the nine months ended September 30, 2023, and 2022 were $201,000 and $1,769,000, respectively, reflecting a

decrease in loss of approximately $1,568,000.

This decrease in loss on investments for the nine months ended September 30, 2023, was

due to the change in fair value of equity investments.

and Other Income

and other income for the six months ended June 30, 2023, and 2022 was $517,000 and $124,000, respectively.

This represents a net increase

of approximately $393,000.

and other income for the nine months ended September 30, 2023, and 2022 was $811,000 and $296,000, respectively.

This represents a net

increase of approximately $515,000.

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

no change for the six months ended June 30, 2023, compared with a gain of $34,000 for the six months ended June 30, 2022 (see “Financial

no change for the nine months ended September 30, 2023, compared with a gain of $35,000 for the nine months ended September 30, 2022

(see “Financial Statements:

Fair Value” for the various factors considered in the valuation of redeemable warrants).

from sale of income tax operating losses

quarterly income tax benefit for the six months ended June 30, 2023, was $582,000 compared with $422,000 for the six months ended June

30, 2022, due primarily to a change in the deferred tax asset recorded for the New Jersey NOL to be sold.

quarterly income tax benefit for the nine months ended September 30, 2023, was $900,000 compared with $749,000 for the nine months ended

September 30, 2022, due primarily to a change in the deferred tax asset recorded for the New Jersey NOL.

and Capital Resources

used in operating activities for the six months ended June 30, 2023, was $5,838,000 compared with $5,071,000 used in operating activities

during first six months of 2022, representing a change of $767,000.

The primary reasons for this change in cash used in operations in

2023 was related to non-cash charges which primarily consisted of $385,000 in stock compensation, $1,513,000 of loss on investments,

net, and $160,000 of gain from sale of income tax operating losses.

The main changes in working capital were an increase in accounts

payable and prepaid expenses and a decrease in accrued expenses.

used in investing activities for the six months ended June 30, 2023, was approximately $282,000 compared with cash provided by investing

activities for the same period in 2022 of approximately $7,375,000, representing a change of $7,657,000.

The primary reason for the change

for the periods ended June 30, 2023, and June 30, 2022, is the sale of marketable securities of $598,000 and $8,713,000, respectively,

net with the purchase of marketable securities for the same time period of $712,000 and $1,262,000, respectively.

provided by financing activities for the six months ended June 30, 2023, was approximately $105,000 compared with $55,000 provided

used in operating activities for the nine months ended September 30, 2023, was $11,509,000 compared with $10,039,000 used in operating

activities during first nine months of 2022, representing a change of $1,470,000.

The primary reasons for this change in cash used in

operations in 2023 was related to non-cash charges which primarily consisted of a decrease of $610,000 in stock compensation, $1,567,000

of loss on investments and $35,000 of gain from sale of income tax operating losses.

The main changes in working capital were an increase

in accounts payable and prepaid expenses a decrease in accrued expenses.

used in investing activities for the nine months ended September 30, 2023, was $618,000 compared with cash provided by investing activities

for the same period in 2022 of $7,625,000, representing a change of $8,243,000.

The primary reason for the change for the periods ended

September 30, 2023, and September 30, 2022, is the sale of marketable investments of $924,000 and $9,082,000, respectively, net with

the purchase of marketable investments for the same time period of $1,155,000 and $1,661,000, respectively.

provided by financing activities for the nine months ended September 30, 2023, was approximately $338,000 compared with $80,000 provided

during the same period in 2022, an increase of 258,000.

The primary reason for this increase was our receipt of $105,000 in net

proceeds from the sale of shares in the first six months of 2023 compared with the receipt of $55,000 in net proceeds from the sale

of shares for the same period in 2022.

of June 30, 2023, we held $28,398,000 in cash, cash equivalents and marketable securities, which included $7,360,000 of Marketable Securities,

representing a decrease of approximately $5,792,000 from December 31, 2022.

The primary reason for this increase was our receipt of $338,000 in net proceeds

from the sale of shares in the first nine months of 2023 compared with the receipt of $80,000 in net proceeds from the sale of shares

for the same period in 2022.

of September 30, 2023, we held $22,431,000 in cash, cash equivalents and marketable investments, which included $7,167,000 of marketable

investments, representing a decrease of approximately $11,759,000 from cash and investments held at December 31, 2022.

The decrease was primarily due

to cash used by operations ($11,500,000).

Operating cash usage stemmed primarily from an operating loss of $16,400,000 during the nine

months ended September 30, 2023, which was offset by $1,600,000 received from the sale of our tax net operating loss in New Jersey, and

$2,400,000 of increased accounts payable utilization.

For the nine months ended September

30, 2023, our largest expenditures were professional fees (31.7%), the largest portion of which related to the ongoing shareholder dispute,

clinical trials, and research (30.7%) and salaries and wages (18.6%).

Clinical trials and research expenses

vary based on multiple factors, but primarily relate to the number of participants enrolled in the studies.

The costs related to these

studies have increased in 2023 when compared with 2022, as the number of participants has risen.

This is positive news for the advancement

of our developing product but requires substantial cash outlays to operate the studies.

As discussed in the general overview

section, we are proceeding in four primary areas.

Proceeding simultaneously in these areas should allow our product to reach the market

more quickly than if they were each conducted consecutively but requires additional capital resources to do so.

A portion of the increase

related to the $1,400,000 purchase of product needed to supply our ongoing trials.

This purchase provided sufficient product to sustain

the studies for an extended period and is not expected to be normally recurring.

and wages have not increased materially compared with the prior year.

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 N Injection.

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.

In this regard, in April, 2023, we entered into an Equity Distribution Agreement (the “EDA”), with Maxim

Group LLC (“Maxim”), pursuant to which we may sell from time to time, shares of our common stock having an aggregate offering

price of up to $8.5 million through Maxim, as agent.

For the six months ended June 30, 2023, we sold 11,937 shares under the EDA for

total gross proceeds of $5,593, which includes a 3.0% fee to Maxim of $168.

Subsequent to the period ended June

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 sixteen months from September 30, 2023.

In this regard, in April 2023, we entered into an Equity Distribution Agreement (the

“EDA”), with Maxim Group LLC (“Maxim”), pursuant to which we may sell from time to time, shares of our

common stock having an aggregate offering price of up to $8.5 million through Maxim, as agent.

For the nine months ended September

30, 2023, we sold 327,055 shares under the EDA for total gross proceeds of $209,000, which includes a 3.0% fee to Maxim of $6,271.

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

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 from the EDA or otherwise 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

We may require additional financing which may not be available ” in our Annual Report on Form 10-K for the year

ended December 31, 2022.

At present we do not generate any material revenues from operations, and we do not anticipate doing so in the near future.

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 from the EDA or otherwise 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 ” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis