What changed in this filing

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Item 1. Financial Statements

2022-02-14 compared with 2021-11-15 · 207 added, 208 removed, 786 unchanged (35% of the section changed)

FINANCIAL STATEMENTS

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

receivable, net of allowance for doubtful accounts of $- 0 -, respectively

22 unchanged sentences

50 shares authorized;

0 issued and outstanding as of September 30, 2021 and March

0 issued and outstanding as of December 31, 2021 and March

par value $ 0.001 ;

1 unchanged sentence

1,011,381,988 shares issued and 1,011,281,988 shares outstanding as of

September 30, 2021;

December 31, 2021;

1,009,276,752 shares issued and 1,009,176,752 shares outstanding as of March 31, 2021

paid-in capital

100,000 shares as of September 30, 2021 and March 31, 2021;

100,000 shares as of December 31, 2021 and March 31, 2021;

( 142,488,481 )

5 unchanged sentences

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

the Three Months Ended

September 30,

the Six Months Ended

September 30,

CONSOLIDATED STATEMENT OF OPERATIONS

the Three Months Ended December 31,

the Nine Months Ended December 31,

Manufacturing

17 unchanged sentences

1,009,176,752

1,010,416,823

weighted average Common Stock outstanding

1 unchanged sentence

1,009,176,752

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1,010,416,823

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

J Preferred Stock

Shareholders’

as of March 31, 2021

1,009,276,752

$ 164,407,480

Total Shareholders’

Balance as of March 31, 2021

1,009,276,752

( 148,957,989

of Preferred Stock to Common Stock

of Preferred Stock to Common Stock, shares

commitment shares issued pursuant to the 2020 Lincoln Park purchase agreement

Initial commitment shares issued pursuant to the 2020

Conversion of Preferred Stock to Common Stock

Conversion of Preferred Stock to Common Stock, shares

Initial commitment shares issued pursuant to the 2020 Lincoln Park purchase

agreement , shares

Common Stock sold pursuant to the 2020 Lincoln Park purchase agreement

Common Stock sold pursuant to the 2020 Lincoln Park purchase

agreement , shares

Common Stock issued as additional commitment shares pursuant to the 2020

Lincoln Park purchase agreement

Common Stock issued as additional commitment shares pursuant to the 2020

Lincoln Park purchase agreement , shares

Stock sold pursuant to the 2020 Lincoln Park purchase agreement

Common Stock sold pursuant to the 2020 Lincoln Park

purchase agreement, shares

Stock issued as additional commitment shares pursuant to the 2020 Lincoln Park purchase agreement

Common Stock issued as additional commitment shares

pursuant to the 2020 Lincoln Park purchase agreement, shares

associated with raising capital

issued in payment of Director fees

issued in payment of Director fees, shares

issued in payment of consulting expense

issued in payment of consulting expenses, shares

compensation through the issuance of employee stock options

issued in payment of salaries

at June 30, 2021

1,011,381,988

$ 164,565,685

Costs associated with raising capital

Shares issued in payment of Director fees

Shares issued in payment of Director fees , shares

Shares issued in payment of consulting expenses

Shares issued in payment of consulting expenses , shares

Non-cash compensation through the issuance of employee

stock options

Shares issued in payment of salaries

Balance at June 30, 2021

1,011,381,988

( 146,568,871

compensation through the issuance of employee stock options

at September 30, 2021

Non-cash compensation through the issuance of employee

stock options

Balance at September 30, 2021

1,011,381,988

( 144,771,894

Non-cash compensation through the issuance of employee

stock options

Balance at December 31, 2021

1,011,381,988

( 142,488,481

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Shareholders’

as of March 31, 2020

$ 150,264,605

$ ( 306,841 )

$ ( 154,046,410 )

compensation through the issuance of employee stock options

issued in payment of salaries

at June 30, 2020

$ 150,319,552

$ ( 306,841 )

$ ( 152,969,061 )

at June 30, 2020

$ 150,319,552

$ ( 306,841 )

$ ( 152,969,061 )

of Preferred Stock to Common Stock

( 13,903,960 )

commitment shares issued pursuant to the 2020 Lincoln Park purchase agreement

Stock sold pursuant to the 2020 Lincoln Park purchase agreement

Stock issued as additional commitment shares pursuant to the 2020 Lincoln Park purchase agreement

associated with raising capital

compensation through the issuance of employee stock options

issued in payment of Director fees

issued in payment of salaries

issued in payment of consulting expenses

at September 30, 2020

1,009,276,752

$ 164,401,909

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Preferred Stock

Additional Paid-In

Total Shareholders’

Balance as of March 31, 2020

( 154,046,410

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of salaries

Balance at June 30, 2020

( 152,969,061

at September 30, 2020

Conversion of Preferred Stock to Common Stock

Initial commitment shares issued pursuant to the 2020 Lincoln Park purchase

Common Stock sold pursuant to the 2020 Lincoln Park purchase agreement

Common Stock issued as additional commitment shares pursuant to the 2020

Lincoln Park purchase agreement

Costs associated with raising capital

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of Director fees

Shares issued in payment of salaries

Shares issued in payment of consulting expenses

Balance at September 30, 2020

1,009,276,752

( 150,487,499

Non-cash compensation through the issuance of employee stock options

Balance at December 31, 2020

1,009,276,752

3 unchanged sentences

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

the Six Months Ended September 30,

CONSOLIDATED STATEMENT OF CASH FLOWS

the Nine Months Ended December 31,

FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

( 1,523,394 )

( 1,645,042 )

compensation accrued

3 unchanged sentences

( 1,681,168 )

( 1,532,756 )

expenses and other current assets

50 unchanged sentences

which are, in the opinion of management, necessary for a fair presentation of such statements.

The results of operations for the six

months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the entire year.

The results of operations for the three

and nine months ended December 31, 2021 are not necessarily indicative of the results that may be expected for the entire year.

Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting ,

97 unchanged sentences

None of the Company’s contracts contained a significant financing

component as of September 30, 2021.

component as of December 31, 2021.

accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs.

10 unchanged sentences

the disaggregated revenue with the reportable segments:

SCHEDULE OF DISAGGREGATION OF REVENUE

the Three Months Ended September 30,

the Six Months Ended September 30,

OF DISAGGREGATION OF REVENUE

the Three Months Ended December 31,

the Nine Months Ended December 31,

Manufacturing

information on reportable segments and reconciliation of operating income by segment to income (loss) from operations before income taxes

are disclosed within Note 15.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

4 unchanged sentences

financial institutions and, to date has not experienced losses on any of its balances.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of September 30, 2021, and March 31, 2021, the Company had $ 405,019 and $ 405,013 , of restricted cash, respectively, related to debt service

of December 31, 2021, and March 31, 2021, the Company had $ 405,027 and $ 405,013 of restricted cash, respectively, related to debt service

reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 5).

28 unchanged sentences

and slower growth rates.

of September 30, 2021, the Company did not identify any indicators of impairment.

of December 31, 2021, the Company did not identify any indicators of impairment.

also see Note 4 for further details on intangible assets.

and Development

and development expenditures are charged to expense as incurred.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and Development

and development expenditures are charged to expense as incurred.

Contingencies

21 unchanged sentences

tax jurisdiction until the applicable statutes of limitation expire.

As of September 30, 2021, a summary of the tax years that remain

As of December 31, 2021, a summary of the tax years that remain

subject to examination in our major tax jurisdictions are:

United States – Federal, 2016 and forward, and State, 2013 and forward.

The Company did not record unrecognized tax positions for the six months ended September 30, 2021 and 2020.

The Company did not record unrecognized tax positions for the three and nine months ended December 31, 2021 and 2020.

and Preferred Shares

12 unchanged sentences

there is a contractual term for services in which case such compensation would be amortized over the contractual term.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

accordance with the Company’s Director compensation policy and certain employment contracts, director’s fees and a portion

2 unchanged sentences

Company’s Common Stock.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Per Share Attributable to Common Shareholders ’

7 unchanged sentences

following is the computation of earnings per share applicable to common shareholders for the periods indicated:

SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

the Three Months Ended

September 30,

the Six Months Ended

September 30,

OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

the Three Months Ended December 31,

the Nine Months Ended December 31,

income - basic

1 unchanged sentence

( 1,523,394 )

( 1,033,894 )

income - diluted

3 unchanged sentences

1,009,176,752

1,010,416,823

effect of stock options and convertible securities

2 unchanged sentences

1,009,176,752

1,010,416,823

Net income per share

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Value of Financial Instruments

6 unchanged sentences

own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for

18 unchanged sentences

fair value hierarchy within which those measurements fell:

SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Value Measurement Using

6 unchanged sentences

Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Non-Financial

17 unchanged sentences

of this update on the consolidated financial statements and does not expect a material impact on the consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant

1 unchanged sentence

consisted of the following:

SCHEDULE OF INVENTORY

Work-in-progress

1 unchanged sentence

and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

OF PROPERTY AND EQUIPMENT

building and improvements

4 unchanged sentences

( 12,153,626 )

expense was $ 295,491 and $ 255,118 for the three months ended, and $ 604,648 and $ 654,871 for the six months ended September 30, 2021 and

expense was $ 293,014 and $ 505,987 for the three months ended, and $ 897,662 and $ 980,227 for the nine months ended December 31, 2021 and

2020, respectively.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS

7 unchanged sentences

acquisition costs

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

application costs were incurred in relation to the Company’s abuse deterrent opioid

15 unchanged sentences

refinanced bonds.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following tables summarize the Company’s bonds payable liability:

SCHEDULE OF BONDS PAYABLE LIABILITY

OF BONDS PAYABLE LIABILITY

bonds payable

13 unchanged sentences

term portion of bonds payable, net of bond offering costs

expense was $ 3,545 and $ 3,545 for the three months ended, and $ 7,090 and $ 7,090 for the six months ended September 30, 2021 and 2020,

expense was $ 3,545 and $ 3,544 for the three months ended, and $ 10,635 and $ 10,634 for the nine months ended December 31, 2021 and 2020,

respectively.

As of September 30, 2021 and March 31, 2021, interest payable was $ 7,367 and $ 7,963 , respectively.

As of December 31, 2021 and March 31, 2021, interest payable was $ 29,467 and $ 7,963 , respectively.

PHARMACEUTICALS, INC.

4 unchanged sentences

SCHEDULE OF LOANS PAYABLE

and insurance financing loans payable, between 3.5% and 12.73% interest and maturing between June 2021 and October 2025

and insurance financing loans payable, between 3.5 % and 12.73 % interest and maturing between December 2021 and October 2025

Current portion of loans payable

1 unchanged sentence

interest expense associated with the loans payable was $ 14,692 and $ 19,422 for the three months ended, and $ 50,290 and $ 58,062 for the

six months ended September 30, 2021 and 2020, respectively.

nine months ended December 31, 2021 and 2020, respectively.

RELATED PARTY SECURED PROMISSORY NOTE WITH MIKAH PHARMA, LLC

6 unchanged sentences

The principal amount of $ 1,200,000 was repaid by the Company at maturity.

expense associated with the Note was $ 30,000

for the three months ended and $ 60,000

for the six months ended September 30, 2020.

A total of $ 435,000 in

accrued interest expense, representing interest expense accrued during the life of the Mikah Note, was due and owing as of the maturity

date of the Mikah Note.

Of the $ 435,000

accrued interest due at maturity, $ 435,000

accrued interest was satisfied by offset against amounts due from Mikah pursuant to the development agreement between the Company and

Mikah, dated December 3, 2018 (see Note 16) .

expense associated with the Note was $ 30,000 for the three months ended and $ 90,000 for the nine months ended December 31, 2020.

of $ 435,000 in accrued interest expense, representing interest expense accrued during the life of the Mikah Note, was due and owing as

of the maturity date of the Mikah Note.

Of the $ 435,000 accrued interest due at maturity, $ 435,000 of accrued interest was satisfied

by offset against amounts due from Mikah pursuant to the development agreement between the Company and Mikah, dated December 3, 2018

(see Note 16).

DEFERRED REVENUE

revenues in the aggregate amount of $ 52,225 as of September 30, 2021, were comprised of a current component of $ 13,333 and a long-term

revenues in the aggregate amount of $ 48,892 as of December 31, 2021, were comprised of a current component of $ 13,333 and a long-term

component of $ 35,559 .

11 unchanged sentences

The Company records a provision

for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated.

for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed

2 unchanged sentences

of complex judgments about future events and can rely heavily on estimates and assumptions.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Leases – 135 Ludlow Ave.

7 unchanged sentences

modified lease”).

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

135 Ludlow Ave.

24 unchanged sentences

Classification

September 30, 2021

of December 31, 2021

lease – right-of-use asset

5 unchanged sentences

Rent expense under the 135 Ludlow Ave.

modified lease for the three months ended September

30, 2021 and 2020 was $ 57,105 and $ 55,986 , respectively, and $ 114,210 and $ 111,972 for the six months ended September 30, 2021 and 2020,

modified lease for the three months ended December

31, 2021 and 2020 was $ 57,105 and $ 55,986 , respectively, and $ 171,315 and $ 167,958 for the nine months ended December 31, 2021 and 2020,

respectively.

Rent expense under the Pompano Office Lease the three months ended September 30, 2021 was $ 5,772 , and $ 11,544 for the six months ended September 30, 2021.

Rent expense is recorded in

general and administrative expense in the unaudited condensed consolidated statements of operations.

Rent expense under the Pompano Office Lease for the three and nine months ended December 31, 2021 was $ 6,144 and $ 17,688 ,

respectively.

There was no rent expense under the Pompano Office lease for the three and nine months ended December 31, 2020 as there

was a rent abatement period from November 2020 through February 2021.

Rent expense is recorded in general and administrative expense

in the unaudited condensed consolidated statements of operations.

PHARMACEUTICALS, INC.

3 unchanged sentences

lease and the Pompano Office Lease:

SCHEDULE OF THE FUTURE MINIMUM RENTAL PAYMENTS

OF FUTURE MINIMUM RENTAL PAYMENTS

ending March 31,

2 unchanged sentences

weighted-average remaining lease term and the weighted-average discount rate of our lease was as follows:

SCHEDULE OF WEIGHTED-AVERAGE REMAINING LEASE TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE

SCHEDULE OF WEIGHTED-AVERAGE

REMAINING LEASE TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE

Term and Discount Rate

8 unchanged sentences

Upon settlement of the liability, the Company records either a gain or

As of September 30, 2021, and March 31, 2021, the Company had a liability of $ 38,771 and $ 37,628 , respectively, recorded as a component

As of December 31, 2021, and March 31, 2021, the Company had a liability of $ 38,187 and $ 37,628 , respectively, recorded as a component

of other long-term liabilities.

4 unchanged sentences

A total of 50 shares of Series J Preferred were authorized, zero shares are

issued and outstanding, with a stated value of $ 1,000,000 per share and a par value of $ 0.01 as of September 30, 2021.

issued and outstanding, with a stated value of $ 1,000,000 per share and a par value of $ 0.01 as of December 31, 2021.

April 27, 2017, a total of 24.0344 shares of Series J Preferred were issued pursuant to an exchange agreement (the “Exchange Agreement”)

7 unchanged sentences

to purchase 79,008,661 shares of Common Stock at $ 0.1521 per share, and such warrants are classified as liabilities on the accompanying

unaudited condensed consolidated balance sheet as of September 30, 2021 (See Note 11).

unaudited condensed consolidated balance sheet as of December 31, 2021 (See Note 11).

PHARMACEUTICALS, INC.

28 unchanged sentences

exercised, forfeited and/or expired, net

at end of period

Balance at end of

April 28, 2017, the Company entered into an Exchange Agreement with Hakim, the Chairman of the Board, President, and Chief Executive

4 unchanged sentences

J Warrants was determined to be $ 6,474,674 upon issuance at April 28, 2017.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Series J Warrants are exercisable for a period of 10 years from the date of issuance, commencing April 28, 2020.

7 unchanged sentences

J Warrants also provide for other standard adjustments upon the happening of certain customary events.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

fair value of the Series J Warrants was calculated using a Black-Scholes model instead of a Monte Carlo Simulation because the probability

2 unchanged sentences

the fair value of the Series J Warrants:

SCHEDULE OF FAIR VALUE OF THE WARRANTS ISSUED

OF FAIR VALUE OF WARRANTS ISSUED

value of the Company’s Common Stock

1 unchanged sentence

term (in years)

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the six months ended September 30,

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the nine months ended December 31,

2021 were as follows:

3 unchanged sentences

( 1,523,394 )

at September 30, 2021

at December 31, 2021

SHAREHOLDERS’ EQUITY

4 unchanged sentences

share, from time to time over the term of the 2020 LPC Purchase Agreement, at the Company’s direction.

Company did not issue any shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the six months ended September

Company did not issue any shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the nine months ended December

In addition, there were no shares issued to Lincoln Park as additional commitment shares, pursuant to the 2020 LPC Agreement.

the six months ended September 30, 2020 the Company issued an aggregate of 5,975,857 shares of Common Stock in the amount of $ 469,105

the nine months ended December 31, 2020 the Company issued an aggregate of 5,975,857 shares of Common Stock in the amount of $ 469,105

to Lincoln Park as initial commitment shares.

The Company sold 640,543 shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement

during the six months ended September 30, 2020 for net proceeds totaling $ 42,223 .

during the nine months ended December 31, 2020 for net proceeds totaling $ 42,223 .

In addition, 10,094 shares were issued to Lincoln Park

10 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the six months ended September 30, 2021, the Company issued 886,710 shares of Common Stock to its Directors in payment of director’s

the nine months ended December 31, 2021, the Company issued 886,710 shares of Common Stock to its Directors in payment of director’s

fees totaling an aggregate of $ 60,000 and with such aggregate director’s fees being earned and accrued over the twelve-month period

2 unchanged sentences

in payment of director’s fees earned over the same twelve-month period.

the six months ended September 30, 2021, the Company accrued director’s fees totaling $ 45,000 , which will be paid via cash payments

the nine months ended December 31, 2021, the Company accrued director’s fees totaling $ 67,500 , which will be paid via cash payments

totaling $ 22,500 and the issuance of 969,319 shares of Common Stock.

of September 30, 2021, the Company owed its Directors a total of $15,000 in cash payments and 562,975 shares of Common Stock in payment

of December 31, 2021, the Company owed its Directors a total of $ 22,500 in cash payments and 969,319 shares of Common Stock in payment

of director fees totaling $ 67,500 due and owing.

6 unchanged sentences

and equal to the average closing price of the Company’s Common Stock.

the six months ended September 30, 2021, the Company issued 2,105,236 shares of Common Stock in payment of salaries totaling $ 157,500

pursuant to the employment contract of the Company’s former Chief Financial Officer, with such salaries being earned and accrued

over the thirty-month period beginning on October 1, 2018 and ending on March 31, 2021.

the six months ended September 30, 2021, the Company accrued salaries totaling $ 387,500

owed to the Company’s President and Chief

Executive Officer and certain other employees which will be paid via the issuance of 7,544,112

shares of Common Stock.

of September 30, 2021, the Company owed its President and Chief Executive Officer and certain other employees’ salaries totaling

the nine months ended December 31, 2021, the Company issued 1,218,526

shares of Common Stock in payment of salaries

totaling $ 97,500

pursuant to the employment contract of the

Company’s former Chief Financial Officer, with such salaries being earned and accrued over the thirty-month period beginning on

October 1, 2018 and ending on March 31, 2021.

the nine months ended December 31, 2021, the Company accrued salaries totaling $ 581,250 owed to the Company’s President and Chief

Executive Officer and certain other employees which will be paid via the issuance of 12,787,606 shares of Common Stock.

of December 31, 2021, the Company owed its President and Chief Executive Officer and certain other employees’ salaries totaling

$ 3,543,750 which will be paid via the issuance of 47,654,194 shares of Common Stock.

the nine months ended December 31, 2021, the Company accrued 2,228,004

shares of Common Stock in payment of consulting

fees totaling $ 153,333 ,

pursuant to engagement contracts with consultants, and with such consulting expenses being earned and accrued over the forty-eight-month

period beginning on January 1, 2018 and ending December 31, 2021.

its 2014 Stock Option Plan and prior options plans, the Company may grant stock options to officers, selected employees, as well as members

5 unchanged sentences

A summary of the activity of Company’s 2014 Stock Option Plan

for the six months ended September 30, 2021 is as follows:

SCHEDULE OF STOCK OPTION PLAN

Underlying Options

Average Exercise Price

Average Remaining Contractual Term (in years)

Intrinsic Value

at March 31, 2021

at September 30, 2021

aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards

and the quoted price of the Company’s Common Stock as of September 30, 2021 and March 31, 2021 of $ 0.09 and $ 0.07 , respectively.

for the nine months ended December 31, 2021 is as follows:

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SCHEDULE OF STOCK OPTION PLAN

Exercise Price

Weighted Average

Remaining Contractual Term (in years)

Aggregate Intrinsic

Outstanding at March 31, 2021

Forfeited and expired

Outstanding at December 31, 2021

Exercisable at December 31, 2021

aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards

and the quoted price of the Company’s Common Stock as of December 31, 2021 and March 31, 2021 of $ 0.11 and $ 0.06 , respectively.

CONCENTRATIONS AND CREDIT RISK

customers accounted for approximately 95 % of the Company’s revenues for the six months ended September 30, 2021.

customers accounted for approximately 96 % of the Company’s revenues for the nine months ended December 31, 2021.

These two customers

1 unchanged sentence

The same two customers accounted for 84 % and 9 % of revenues each,

respectively, for the three months ended September 30, 2021.

customers accounted for approximately 93 % of the Company’s revenues for the six months ended September 30, 2020.

respectively, for the three months ended December 31, 2021.

customers accounted for approximately 93 % of the Company’s revenues for the nine months ended December 31, 2020.

These two customers

1 unchanged sentence

The same two customers accounted for 82 % and 12 % of revenues

each, respectively, for the three months ended September 30, 2020.

customers accounted for approximately 99 % of the Company’s accounts receivable as of September 30, 2021.

each, respectively, for the three months ended December 31, 2020.

customers accounted for approximately 99 % of the Company’s accounts receivable as of December 31, 2021.

These two customers accounted

3 unchanged sentences

for approximately 73 %, 15 % and 11 % of accounts receivable each, respectively.

suppliers accounted for more than 74 % of the Company’s purchases of raw materials for the six months ended September 30, 2021.

These four suppliers accounted for approximately 61 %, 5 %, 5 % and 4 % of purchases each, respectively.

suppliers accounted for more than 83 % of the Company’s purchases of raw materials for the six months ended September 30, 2020.

suppliers accounted for more than 70 %

of the Company’s purchases of raw materials for the nine months ended December 31, 2021.

These four suppliers accounted for

approximately 55 %, 6 %, 5 %

of purchases each, respectively.

suppliers accounted for more than 81 % of the Company’s purchases of raw materials for the nine months ended December 31, 2020.

These four suppliers accounted for approximately 59 %, 12 %, 5 %, and 5 % of purchases each, respectively.

5 unchanged sentences

management disaggregates a company.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has determined that its reportable segments are ANDAs for generic products and NDAs for branded products.

7 unchanged sentences

SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

the Three Months Ended September 30,

the Six Months Ended September 30,

Income by Segment

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Operating Income by Segment

table below reconciles the Company’s operating income by segment to income from operations before provision for income taxes as

reported in the Company’s unaudited condensed consolidated statements of operations:

reported in the Company’s unaudited condensed consolidated statement of operations:

SCHEDULE OF OPERATING LOSS BY SEGMENT TO (LOSS) INCOME FROM OPERATIONS

the Three Months Ended September 30,

the Six Months Ended September 30,

income by segment

unallocated costs

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Operating income by segment

Corporate unallocated costs

( 2,288,461 )

expense and amortization of debt issuance costs

and amortization expense

non-cash items

in fair value of derivative instruments

from operations before income taxes

( 1,691,578 )

Interest income

Interest expense and amortization of debt issuance costs

Depreciation and amortization expense

Significant non-cash items

Change in fair value of derivative instruments

Income from operations before income taxes

RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC

27 unchanged sentences

The Company sold

the net tax benefits approved for sale for total proceeds of $ 946,407 during the six months ended September 30, 2020.

the net tax benefits approved for sale for total proceeds of $ 946,407 during the nine months ended December 31, 2020.

of New Jersey Net Operating Loss and Research and Development Tax Credit

2 unchanged sentences

The Company sold the net tax benefits approved for sale at a transfer price equal to ninety-three- and one-half cents for every benefit

dollar and incurred transaction fees of $ 12,861 , resulting in net proceeds to the Company of $ 857,379 , during the six months ended September

dollar and incurred transaction fees of $ 12,861 , resulting in net proceeds to the Company of $ 857,379 , during the nine months ended December

COVID-19 UPDATE

14 unchanged sentences

the Company has taken to date are, without limitation, further described below.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has taken and will continue to take, proactive measures to provide for the well-being of its workforce while continuing to safely

6 unchanged sentences

and Supply Chain

the three months ended September 30, 2021, and as of the date of this Quarterly Report on Form 10-Q, the Company has not experienced

the three and nine months ended December 31, 2021, and as of the date of this Quarterly Report on Form 10-Q, the Company has not experienced

material, detrimental issues related to COVID-19 in its manufacturing, supply chain, quality assurance and regulatory compliance activities,

8 unchanged sentences

SUBSEQUENT EVENTS

The Company has evaluated

subsequent events from the balance sheet date through November 15, 2021 and noted no material subsequent events.

Company has evaluated subsequent events from the balance sheet date through February 11, 2022 and noted no material subsequent

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