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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 1320 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended December 31, 2023

Commission File Number: 001-36081

NANOVIRICIDES, INC.

(Exact name of Company as specified in its charter)

Delaware

    

76-0674577

(State or other jurisdiction)

 

(IRS Employer Identification No.)

of incorporation or organization)

 

 

1 Controls Drive

Shelton, Connecticut 06484

(Address of principal executive offices and zip code)

(203) 937-6137

(Company’s telephone number, including area code)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No  

Indicate by check mark whether the Company is a larger accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      No  

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock

NNVC

NYSE-American

As of February 14, 2024 there were approximately 11,779,000 shares of common stock of the registrant issued and outstanding.

NanoViricides, Inc. 

FORM 10-Q 

INDEX

PART I FINANCIAL INFORMATION

3

Item 1. Financial Statements

3

Condensed Balance Sheets at December 31, 2023 and June 30, 2023 (Unaudited)

3

Condensed Statements of Operations for the Three and Six Months Ended December 31, 2023 and 2022 (Unaudited)

4

Condensed Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended December 31, 2023 and 2022 (Unaudited)

5

Condensed Statements of Cash Flows for the Six Months Ended December 31, 2023 and 2022 (Unaudited)

7

Notes to the Condensed Financial Statements (Unaudited)

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3. Quantitative and Qualitative Disclosures About Market Risk

35

Item 4. Controls and Procedures

35

PART II OTHER INFORMATION

36

Item 1. Legal Proceedings

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3. Defaults Upon Senior Securities

38

Item 4. Mine Safety Disclosures

38

Item 5. Other Information

38

Item 6. Exhibits and Reports on Form 8-K

39

Signatures

40

Certifications

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NanoViricides, Inc.

Condensed Balance Sheets

    

December 31, 

    

June 30, 

2023

2023

(Unaudited)

ASSETS

CURRENT ASSETS:

 

  

 

  

Cash and cash equivalents

$

5,245,374

$

8,149,808

Prepaid expenses

72,442

295,486

Total current assets

 

5,317,816

 

8,445,294

Property and equipment, net

 

7,746,092

 

8,106,647

Intangible assets, net

 

329,443

 

333,578

OTHER ASSETS

 

 

  

Service agreements

8,859

14,361

Total assets

$

13,402,210

$

16,899,880

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

  

CURRENT LIABILITIES:

 

 

  

Accounts payable

$

266,663

$

157,056

Accounts payable – related parties

 

504,039

 

233,434

Accrued expenses

 

180,372

 

143,760

Total current liabilities

 

951,074

 

534,250

Other non-current liability – related party

1,500,000

Total liabilities

951,074

2,034,250

COMMITMENTS AND CONTINGENCIES

 

  

 

  

STOCKHOLDERS’ EQUITY:

 

  

 

  

Series A convertible preferred stock, $0.00001 par value, 10,000,000 shares designated, 890,511 and 547,674 shares issued and outstanding, at December 31, 2023 and June 30, 2023, respectively

 

9

5

Common stock, $0.00001 par value; 150,000,000 shares authorized, 11,778,643 and 11,698,497 shares issued and outstanding, at December 31, 2023 and June 30, 2023, respectively

 

117

116

Additional paid-in capital

 

147,615,441

145,946,258

Accumulated deficit

 

(135,164,431)

(131,080,749)

Total stockholders’ equity

 

12,451,136

14,865,630

Total liabilities and stockholders’ equity

$

13,402,210

$

16,899,880

See accompanying notes to the condensed financial statements

3

Nanoviricides, Inc.

Condensed Statements of Operations

(Unaudited)

For the Three Months Ended

For the Six Months Ended

December 31, 

December 31, 

    

2023

    

2022

    

2023

    

2022

OPERATING EXPENSES

 

  

 

  

 

  

 

  

Research and development

$

1,573,879

$

1,170,710

$

3,040,544

$

2,283,369

General and administrative

 

610,877

663,284

 

1,175,803

 

1,172,985

Total operating expenses

 

2,184,756

1,833,994

 

4,216,347

 

3,456,354

LOSS FROM OPERATIONS

 

(2,184,756)

(1,833,994)

 

(4,216,347)

 

(3,456,354)

OTHER INCOME (EXPENSE)

 

 

 

 

Interest income

 

83,134

88,954

182,472

141,516

Interest expense

(13,315)

(94)

(49,808)

(938)

Other income (expense), net

 

69,819

88,860

132,664

140,578

NET LOSS

$

(2,114,937)

$

(1,745,134)

$

(4,083,683)

$

(3,315,776)

Net loss per common share- basic and diluted

$

(0.18)

$

(0.15)

$

(0.35)

$

(0.29)

Weighted average common shares outstanding- basic and diluted

 

11,745,906

11,610,303

11,732,349

11,601,335

See accompanying notes to the condensed financial statements

4

NanoViricides, Inc.

Condensed Statement of Changes in Stockholders’ Equity

For the six months ended December 31, 2023 

(Unaudited)

Series A Preferred

Common Stock:

Stock: Par $0.001

Par $0.001

Number

Number

Additional

Total

of

of

Paid-in

Accumulated

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance, June 30, 2023

 

547,674

$

5

11,698,497

$

116

$

145,946,258

$

(131,080,749)

$

14,865,630

Series A preferred stock issued for employee stock compensation

 

10,591

9,617

9,617

Common stock issued for consulting and legal services rendered

39,103

1

50,599

50,600

Warrants issued to Scientific Advisory Board

159

159

Common stock issued for Directors fees

7,947

11,250

11,250

Net loss

(1,968,746)

(1,968,746)

Balance, September 30, 2023

558,265

$

5

11,745,547

$

117

$

146,017,882

$

(133,049,494)

$

12,968,510

Series A preferred stock issued for employee stock compensation

 

387

 

 

 

 

9,358

 

 

9,358

Series A preferred stock issued upon conversion of related party promissory note

331,859

4

1,499,996

1,500,000

Common stock issued for consulting and legal services rendered

 

 

 

23,379

 

 

27,000

 

 

27,000

Warrants issued to Scientific Advisory Board

 

 

 

 

 

147

 

 

147

Common stock issued for Directors fees

 

 

 

9,717

 

 

11,250

 

 

11,250

Forgiveness of interest on related party debt

49,808

49,808

Net loss

 

 

 

 

 

 

(2,114,937)

 

(2,114,937)

Balance, December 31, 2023

890,511

$

9

11,778,643

$

117

$

147,615,441

$

(135,164,431)

$

12,451,136

5

NanoViricides, Inc.

Condensed Statement of Changes in Stockholders’ Equity

For the six months ended December 31, 2022 

(Unaudited)

Series A Preferred

Common Stock:

Stock: Par $0.001

Par $0.001

Number

Number

Additional

Total

of

of

Paid-in

Accumulated

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance, June 30, 2022

 

484,582

$

5

11,592,173

$

116

$

145,574,080

$

(122,492,176)

$

23,082,025

Series A preferred stock issued for employee stock compensation

 

10,591

13,864

13,864

Common stock issued for consulting and legal services rendered

12,710

27,000

27,000

Warrants issued to Scientific Advisory Board

480

480

Common stock issued for Directors fees

5,154

11,250

11,250

Net loss

(1,570,642)

(1,570,642)

Balance, September 30, 2022

495,173

$

5

11,610,037

$

116

$

145,626,674

$

(124,062,818)

$

21,563,977

Series A preferred stock issued for employee stock compensation

387

13,055

13,055

Common stock issued for consulting and legal services rendered

17,366

27,000

27,000

Warrants issued to Scientific Advisory Board

 

 

 

 

 

223

 

 

223

Common stock issued for Directors fees

 

 

 

7,173

 

 

11,250

 

 

11,250

Net loss

 

 

 

 

 

 

(1,745,134)

 

(1,745,134)

Balance, December 31, 2022

495,560

$

5

11,634,576

$

116

$

145,678,202

$

(125,807,952)

$

19,870,371

See accompanying notes to the condensed financial statements

6

Nanoviricides, Inc.

Condensed Statements of Cash Flows

(Unaudited)

For the Six Months Ended

    

December 31, 

    

December 31, 

2023

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(4,083,683)

$

(3,315,776)

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

 

 

Preferred shares issued as compensation

 

18,975

26,919

Common shares issued as compensation and for services

 

100,100

76,500

Warrants granted to Scientific Advisory Board

 

306

703

Depreciation

 

374,320

366,190

Amortization

4,135

4,135

Changes in operating assets and liabilities:

 

 

Prepaid expenses

 

223,044

245,476

Other assets

 

5,502

15,930

Accounts payable

 

109,607

(18,669)

Accounts payable - related party

 

270,605

159,027

Accrued expenses

 

86,420

6,185

NET CASH USED IN OPERATING ACTIVITIES

 

(2,890,669)

(2,433,380)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(13,765)

(89,845)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

  

Payment of loan payable

(94,788)

NET CASH (USED IN) FINANCING ACTIVITIES

(94,788)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

(2,904,434)

(2,618,013)

Cash and cash equivalents at beginning of period

 

8,149,808

 

14,066,359

Cash and cash equivalents at end of period

$

5,245,374

$

11,448,346

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:

Interest paid

$

$

938

NON-CASH INVESTING AND FINANCING ACTIVITIES

Fair value of Series A Preferred shares issued upon conversion of related party convertible promissory note

1,500,000

Forgiveness of interest on related party debt

49,808

See accompanying notes to the condensed financial statements

7

NANOVIRICIDES, INC.

December 31, 2023

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization and Nature of Business

NanoViricides, Inc. (the “Company”) is a clinical stage nano-biopharmaceutical company specializing in the discovery, development, and commercialization of drugs to combat viral infections using its unique and novel nanomedicines technology. NanoViricides possesses its own state of the art facility that supports research and development and drug discovery, drug candidate optimization, cGMP-compliant drug substance manufacturing, cGMP-compliant manufacturing and packaging of drug products for human clinical trials, and early commercialization. The Company has several drugs in various stages of development. The Company’s lead drug candidate for the treatment of COVID, NV-CoV-2, is in Phase1a/1b human clinical trials sponsored by our licensee and collaborator in India, Karveer Meditech Private Limited (KMPL). This candidate has shown effectiveness and safety in pre-clinical studies. The healthy subjects part of the Phase 1a/1b clinical trial was successfully completed recently with no adverse events in both single dose escalation studies and multiple dose escalation studies. NV-CoV-2 mechanism of action is orthogonal and complementary to that of the existing therapeutics, enabling combination therapy with the existing drugs in the market. Further, the active pharmaceutical ingredient (API) of NV-CoV-2, namely NV-387, was found to be active against Respiratory Syncytial Virus (RSV) in a lethal pre-clinical lung infection study. Therefore NV-387, a broad-spectrum antiviral, may be eligible for a Phase II clinical trial for RSV as well as Coronavirus infections after completing the current Phase 1 study. In addition, the Company reported on November 14, 2023 that NV-387 was found to be effective in a lethal animal model emulating smallpox disease, namely lethal intradigital footpad infection by ectromelia virus in mice. Smallpox therapeutics are important for biodefense purposes.

Additionally, the Company has previously developed a clinical drug candidate, NV-HHV-1 formulated as skin cream, for the treatment of Shingles. The Company plans on taking NV-HHV-1 into human clinical trials, and further develop the HerpeCide™ program after clinical trials of NV-CoV-2 (NV-387) that are expected to move rapidly from current Phase 1a/1b to Phase 2. In the HerpeCide program alone, the Company has drug candidates against at least five indications at different stages of development. The Company’s drug candidates against HSV-1 “cold sores” and HSV-2 “genital herpes” are in advanced pre-clinical studies and are expected to follow the shingles drug candidate into human clinical trials. In addition, the Company has drugs in development against all influenzas in its FluCide™ program, as well as drug candidates against HIV/AIDS, Dengue, Ebola/Marburg, and other viruses.

The Company’s drugs are based on several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour Pharma, Inc., a related party owned by Dr. Anil Diwan, (“TheraCour”), to which the Company has broad, exclusive licenses. The licenses are to entire fields and not to specific compounds. In all, the Company has exclusive, worldwide licenses for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Herpes Simplex Virus (HSV-1 and HSV-2), Influenza and Asian Bird Flu Virus, Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis virus, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes (restated), Varicella Zoster Virus (“VZV”) infections (i.e. Shingles and Chickenpox), and SARS-CoV-2 infections. In all cases, the discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour, a related party substantially owned by Dr. Anil Diwan, under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. Upon commercialization, NanoViricides will pay 15% of net sales to TheraCour. Milestone payments were made or are specified in certain of the license agreements, details of which have been disclosed at the time the agreements were entered into. The Company negotiates and licenses specific verticals of therapeutic applications from TheraCour if promising drug candidates are found in early research and development against a virus target. TheraCour has not denied any such licenses when requested.

The Company’s business plan is based on developing the drug candidates into regulatory approvals, and partnering and sub-licensing for commercialization of the drugs whenever possible.

The Company has out-licensed NV-CoV-2 and NV-CoV-2-R for further clinical drug development and commercialization in the territory of India to KMPL, a company of which Dr. Anil Diwan is a passive investor and advisor. KMPL sponsored NV-CoV-2 for human clinical trials and obtained regulatory approvals in India. KMPL has retained a local clinical research organization (CRO) to conduct the clinical trials. The Phase1a/1b human clinical trial of NV-CoV-2 began in India, sponsored by KMPL, on June 17, 2023. The clinical trial drug products, NV-CoV-2 Oral Syrup, and NV-CoV-2 Oral Gummies, were manufactured at the Company’s Shelton

8

campus, and then shipped to and received by KMPL. Under the agreement with KMPL, the Company will pay for the expenses of the clinical trials, and in return will benefit from having the data and reports made available for regulatory filings in other territories of the world. Upon commercialization, the Company will receive royalties from KMPL equal to 70% of sales to unaffiliated third parties.

Note 2 - Liquidity

The Company’s condensed financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. As reflected in the condensed financial statements, the Company has an accumulated deficit at December 31, 2023 of approximately $135.1 million and a net loss of approximately $4.0 million and net cash used in operating activities of approximately $2.9 million for the six months then ended. In addition, the Company has not generated any revenues and no revenues are anticipated in the foreseeable future. Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral drugs. The Company has not yet commenced any product commercialization. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. As of December 31, 2023, the Company had available cash and cash equivalents of approximately $5.2 million.

Since the onset of the COVID-19 pandemic, the Company has focused its efforts primarily on a single lead program to minimize cost outlays, namely, taking the COVID drug candidate against SARS-CoV-2 into human clinical trials. The same drug candidate, with the Active Pharmaceutical Ingredient (API) NV-387, demonstrated effectiveness against RSV, indicating that its broad-spectrum antiviral activity is not limited to coronaviruses. The prior lead program for a shingles drug will follow the regulatory development of the NV-387 drug program. The Company believes that it has several important upcoming milestones, including Phase 1a/1b human clinical trials for the Company’s broad-spectrum, pan-coronavirus drug NV-CoV-2, that is now in progress. Management believes that as it achieves these milestones, the Company’s ability to raise additional funds in the public markets would be enhanced. However, there is no guarantee that the Company will be able to raise funds on terms acceptable to it, or at all.

Management believes that the Company’s existing resources, including availability under its $2 million line of credit will be sufficient to fund the Company’s planned operations and expenditures for at least 12 months from the date of the filing of this Form 10-Q. However, the Company cannot provide assurance that its plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital to fund its long-term operations and research and development plans including human clinical trials for its various drug candidates until it generates revenue that reaches a level sufficient to provide self-sustaining cash flows. There can be no assurance that the Company will be able to raise the necessary capital or that it will be on acceptable terms. The accompanying condensed financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Note 3 - Summary of Significant Accounting Policies

Basis of Presentation – Interim Financial Information

The accompanying unaudited interim condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission for Interim Reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete condensed financial statements. The unaudited interim condensed financial statements furnished reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. The accompanying condensed financial statements and the information included under the heading “Management’s Discussion and Analysis or Plan of Operation” should be read in conjunction with the Company’s audited financial statements and related notes included in the Company’s Form 10-K for the fiscal year ended June 30, 2023 filed with the SEC on October 13, 2023.

The June 30, 2023 year-end balance sheet data in the accompanying interim condensed financial statements was derived from the audited financial statements.

9

For a summary of significant accounting policies, see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed on October 13, 2023.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options, warrants and convertible preferred stock.

The following table shows the number of potentially outstanding dilutive common shares excluded from the diluted net loss per common share calculation, as they were anti-dilutive:

Potentially Outstanding Dilutive Common Shares

For the

For the

For the

For the

Three Months

Three Months

Six Months

Six Months

Ended

Ended

Ended

Ended

    

December 31, 2023

    

December 31, 2022

December 31, 2023

    

December 31, 2022

Warrants

 

7,433

 

8,820

7,433

 

8,576

The Company has 890,511 shares of Series A preferred stock outstanding as of December 31, 2023. Only in the event of a “change of control” of the Company is each Series A preferred share is convertible to 3.5 shares of its new common stock. A “change of control” is defined as an event in which the Company’s shareholders become 60% or less owners of a new entity as a result of a change of ownership, merger or acquisition of the Company or the Company’s intellectual property. In the absence of a change of control event, the Series A preferred stock is not convertible into common stock, and does not carry any dividend rights or any other financial effects. At December 31, 2023, the number of potentially dilutive shares of the Company’s common stock into which these Series A preferred shares can be converted into is 3,116,789, and is not included in diluted earnings per share since the shares are contingently convertible only upon a change of control.

Note 4 - Related Party Transactions

Related Parties

Related parties with whom the Company had transactions are:

Related Parties

    

Relationship

Dr. Anil R. Diwan

 

Chairman, President, CEO, significant stockholder through TheraCour, and Director

TheraCour Pharma, Inc. (“TheraCour”)

An entity owned and controlled by Dr. Anil R. Diwan

Karveer Meditech, Pvt., Ltd (“KMPL”)

An entity of which Dr. Anil R. Diwan is a passive investor and advisor without operating control.

For the three months ended

For the six months ended

    

December 31, 

    

December 31, 

    

December 31, 

    

December 31, 

2023

2022

2023

2022

Property and Equipment

 

During the reporting period, TheraCour acquired property and equipment on behalf of the Company from third party vendors and sold such property and equipment, at cost, to the Company

$

5,474

$

3,493

$

13,765

$

29,369

10

As of

December 31, 

June 30, 

    

2023

    

2023

Account Payable – Related Party-TheraCour

Pursuant to an Exclusive License Agreement with TheraCour, the Company was granted exclusive licenses for technologies developed by TheraCour for the virus types: HIV, HCV, Herpes, Asian (bird) flu, Influenza and rabies. On November 1, 2019, the Company entered into the VZV Licensing Agreement with TheraCour. In consideration for obtaining these exclusive licenses, the Company agreed: (1) that TheraCour can charge its costs (direct and indirect) plus no more than 30% of certain direct costs as a development fee and such development fees shall be due and payable in periodic installments as billed, (2) the Company will pay $2,000 or actual costs each month, whichever is higher for other general and administrative expenses incurred by TheraCour on the Company’s behalf, (3) to make royalty payments of 15% (calculated as a percentage of net sales of the licensed drugs) to TheraCour and; (4) to pay an advance payment equal to twice the amount of the previous months invoice to be applied as a prepayment towards expenses. Accounts payable due TheraCour at December 31, 2023 and June 30, 2023 were $831,227 and $733,434, respectively, which were each offset by a two month advance of $500,000.

$

331,227

$

233,434

    

December 31,

    

June 30,

2023

2023 

Accounts Payable- Related Party-KMPL

The Company has out-licensed NV-CoV-2 and NV-CoV-2-R for further clinical drug development and commercialization in the territory of India to KMPL, a company of which Dr. Anil Diwan is a passive investor and advisor. KMPL sponsored NV-CoV-2 for human clinical trials and obtained regulatory approvals in India. KMPL has retained a local clinical research organization (CRO) to conduct the clinical trials. The Phase1a/1b human clinical trial of NV-CoV-2 began in India on June 17, 2023. Under the agreement with KMPL, the Company agreed to pay for the expenses of the clinical trials, and in return will benefit from having the data and reports made available for regulatory filings in other territories of the world. Upon commercialization, the Company will receive royalties from KMPL equal to 70% of sales to unaffiliated third parties. Accounts payable to KMPL at December 31, 2023 and June 30, 2023 were:

$

172,812

$

11

For the three months ended

For the six months ended

December 31, 

December 31, 

December 31, 

December 31, 

    

2023

    

2022

    

2023

    

2022

Research and Development Costs Related Party

Development fees and other costs charged by to TheraCour pursuant to the license agreements between TheraCour and the Company for the development of the Company’s drug pipeline. No royalties are due TheraCour from the Company at December 31, 2023 and June 30, 2023

$

682,258

$

633,247

$

1,321,335

$

1,245,958

    

For the three months ended

 

For the six months ended

December 31,

    

December 31,

    

December 31,

    

December 31,

 

2023

 

2022

    

2023

    

2022

Clinical Trial Costs - Related Party

Clinical trial related and other costs charged by KMPL pursuant to the license between KMPL and the Company were approximately $150,000 and $365,000 for the three and six months ended December 31, 2023. As of December 31, 2023 and June 30, 2023 approximately $150,000 and $100,000 of such costs were accrued by the Company pursuant to the license agreement between the Company and KMPL. The amounts has been recorded within accrued expenses in the accompanying condensed balance sheets.

$

150,000

$

$

365,000

$

License Milestone Fee – Related Party

On September 9, 2021, the Company entered into a COVID-19 License Agreement with TheraCour to use, promote, offer for sale, import, export, sell and distribute drugs that treat COVID-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. Pursuant to such license agreement, the Board of Directors authorized the issuance of 100,000 fully vested shares of the Company’s Series A preferred stock as a license milestone payment and recorded an expense to research and development of $935,088 for the year ended June 30, 2022. On April 20, 2023, the Company was notified that the Company’s licensee, KMPL was authorized to enter into Phase 1a/1b clinical trials of its COVID, NV-CoV-2 Oral Syrup and its NV-CoV-2 Oral Gummies after satisfying the conditions of a conditional authorization received on or about January 27, 2023. Pursuant to the COVID-19 License Agreement a milestone payment of 50,000 fully vested shares of the Company’s Series A preferred stock was issued as a license milestone payment and recorded as an expense to research and development of approximately $157,000 for the year ended June 30, 2023 representing the fair value of the shares on the date of grant. On June 19, 2023, the Company was notified that the Company’s licensee, KMPL had commenced volunteer recruitments for Phase 1a/1b clinical trials of the NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies. Pursuant to the COVID-19 License Agreement a milestone payment of $1,500,000 became due 5 days thereafter and was recorded as a non-current liability and research and development expense.

On July 19, 2023, the Company entered into an agreement with TheraCour, to accept the Company’s unsecured convertible promissory note (the “Note”) in payment of the milestone award. The Note accrues simple interest at the rate of 12% per annum and is due and payable on January 19, 2025, the maturity date. The principal of the Note is convertible, at TheraCour’s option, into 331,859 shares of the Company’s Series A preferred stock, par value $0.00001 at the conversion price, specified as the fair value of the Series A shares on July 19, 2023 in the terms and conditions contained within the promissory Note. On October 27, 2023 TheraCour exercised its right to convert the principal of the July 19, 2023 Note into 331,859 shares of the Company’s Series A preferred stock. Furthermore, TheraCour cancelled all of the accrued interest on the Note totaling approximately $50,000 which has been reported as a capital transaction credit to additional paid in capital on the accompanying condensed statements of changes in stockholder’s equity. Total interest incurred under the Note for the three and six months ended December 31, 2023 was $13,000 and $50,000, respectively.

Line of Credit - Related Party

On November 13, 2023, the Company’s President and CEO, Dr. Anil R. Diwan, entered into a Line of Credit Agreement whereby Dr. Diwan agreed to provide a standby Line of Credit to the Company in the maximum amount of $2,000,000. All amounts outstanding

12

under the Line of Credit, including principal, accrued interest and other fees and charges, will be due and payable on December 31, 2025. Amounts drawn down under the Line of Credit shall bear interest at a fixed rate of 12%. Advancements under the Line of Credit are collateralized by an Open End Mortgage Deed on the Company’s real property at 1 Controls Drive, Shelton, Connecticut and a Chattel Mortgage (U.C.C - 1 filing) against the Company’s equipment and fixtures. Any draw down under the Line of Credit requires the approval of the Company’s Board of Directors. The Company has not drawn against the facility as of December 31, 2023.

Note 5 - Property and Equipment

Property and equipment, stated at cost, less accumulated depreciation consisted of the following:

    

December 31, 

    

June 30, 

2023

2023

GMP Facility

$

8,168,045

$

8,168,045

Land

 

260,000

260,000

Office Equipment

 

63,056

60,347

Furniture and Fixtures

 

5,607

5,607

Lab Equipment

 

6,326,783

6,315,727

Total Property and Equipment

 

14,823,491

14,809,726

Less Accumulated Depreciation

 

(7,077,399)

(6,703,079)

Property and Equipment, Net

$

7,746,092

$

8,106,647

Depreciation expense for the three months ended December 31, 2023 and 2022 was $187,262 and $184,855, respectively, and for the six months ended December 31, 2023 and 2022 was $374,320 and $366,190, respectively.

Note 6 – Intangible Assets

Intangible assets, net consists of the following:

    

December 31, 2023

    

Total

    

June 30, 2023

    

Total

Finite Lived

Indefinite Lived

December 31,

Finite Lived

Indefinite Lived

June 30,

Intangible Assets

Intangible Assets

2023

Intangible Assets

Intangible Assets

2023

Intangible Assets

$

153,393

$

305,561

$

458,954

$

153,393

$

305,561

$

458,954

Less Accumulated Amortization

(129,511)

(129,511)

(125,376)

(125,376)

Intangible Assets, Net

$

23,882

$

305,561

$

329,443

$

28,017

$

305,561

$