NANOVIRICIDES, INC. : DISCUSSION AND ANALYSIS BY THE DEPARTMENT OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

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The following discussion should be read in conjunction with the information
contained in the financial statements of the Company and the notes thereto
appearing elsewhere herein and in conjunction with the Company's Annual Report
on Form 10-K for the year ended June 30, 2021. Readers should carefully review
the risk factors disclosed in this Form 10-K and other documents filed by the
Company with the SEC.


As used in this report, the terms “Company”, “we”, “our”, “our” and “NNVC” refer to NanoViricides, Inc., a Nevada company.

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS



This Annual Report contains forward-looking statements within the meaning of the
federal securities laws. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
"NNVC believes," "management believes" and similar language. The forward-looking
statements are based on the current expectations of NNVC and are subject to
certain risks, uncertainties and assumptions, including those set forth in the
discussion under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in this report. Actual results may differ materially
from results anticipated in these forward-looking statements. We base the
forward-looking statements on information currently available to us, and we
assume no obligation to update them.



Investors are also advised to refer to the information in our previous filings
with the Securities and Exchange Commission (SEC), especially on Forms 10-K,
10-Q and 8-K, in which we discuss in more detail various important factors that
could cause actual results to differ from expected or historic results. It is
not possible to foresee or identify all such factors. As such, investors should
not consider any list of such factors to be an exhaustive statement of all risks
and uncertainties or potentially inaccurate assumptions.



Management plan of operation

The Company's drug development business model was formed in May 2005 with a
license to the patents and intellectual property held by TheraCour that enabled
creation of drugs engineered specifically to combat viral diseases in humans.
This exclusive license from TheraCour serves as a foundation for our
intellectual property. The Company was granted a worldwide exclusive license to
this technology for several drugs with specific targeting mechanisms for the
treatment of the following human viral diseases: Human Immunodeficiency Virus
(HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Rabies, Herpes
Simplex Virus (HSV-1 and HSV-2), Influenza and Asian Bird Flu Virus. The Company
entered into an Additional License Agreement with TheraCour granting the Company
the exclusive licenses for technologies developed by TheraCour for the
additional virus types: Dengue viruses, Japanese Encephalitis virus, West Nile
Virus, Viruses causing viral Conjunctivitis (a disease of the eye) and Ocular
Herpes, and Ebola/Marburg viruses. The Company completed a license agreement for
the field of VZV indications in November 2019 from TheraCour. The Company
completed a license agreement for the field of human Coronavirus indications in
September 2021 from TheraCour. TheraCour has not denied any licenses sought
by
the Company in the past.



                                Page 91 of 121





The Company discloses the risk that the Company may want to add further virus
types to its drug pipeline as the Company progresses further. The Company would
then need to negotiate with TheraCour appropriate license agreements to include
those of such additional viruses that the Company determines it wants to follow
for further development. We are seeking to add to our existing portfolio of
products through our internal discovery pre-clinical development programs and
through an in-licensing strategy.



The licenses granted by TheraCour are for entire set of pathologies that the
licensed virus is a causative agent for. The licenses are not for single
drug/indication pairs, which is the customary mode of licensing in the
Pharmaceutical industry. Thus these are very broad licenses and enable
NanoViricides to pursue a number of indications as well as develop drug
candidates with different characteristics as is best suited for the indications,
without having to license the resulting drugs for each indication separately, as
with normal pharmaceutical industry licensing.



The Company plans to develop several drugs through the preclinical studies and
clinical trial phases with the goal of eventually obtaining approval from the
United States Food and Drug Administration ("FDA") and International regulatory
agencies for these drugs. The Company plans, when appropriate, to seek
regulatory approvals in several international markets, including developed
markets such as Europe, Japan, Canada, Australia, and Emerging Regions such as
Southeast Asia, India, China, Central and South America, as well as the African
subcontinent. The seeking of these regulatory approvals would only come when and
if one or more of our drugs have significantly advanced through the US FDA and
international regulatory process. If and as these advances occur, the Company
may attempt to partner with more established pharmaceutical companies to advance
the various drugs through the approval process.



The Company intends to perform the regulatory filings and own all the regulatory
licenses for the drugs it is currently developing. The Company will develop
these drugs in part via subcontracts to TheraCour, the exclusive source for
these nanomaterials. The Company may manufacture these drugs itself, or under
subcontract arrangements with external manufacturers that carry the appropriate
regulatory licenses and have appropriate capabilities. The Company intends to
distribute these drugs via subcontracts with distributor companies or in
partnership arrangements. The Company plans to market these drugs either on its
own or in conjunction with marketing partners. The Company also plans to
actively pursue co-development, as well as other licensing agreements with other
pharmaceutical companies. Such agreements may entail up-front payments,
milestone payments, royalties, and/or cost sharing, profit sharing and many
other instruments that may bring early revenues to the Company. Such licensing
and/or co-development agreements may shape the manufacturing and development
options that the Company may pursue. The Company has received significant
interest from certain pharmaceutical companies for potential licensing or
co-development of some of our drug candidates. However, none of these
distributor or co-development agreements is in place at the current time.



There can be no assurance that the Company will be able to develop effective
nanoviricides, or if developed, that we will have sufficient resources to be
able to successfully manufacture and market these products to commence
revenue-generating operations.



There can be no assurance that other developments in the field would not impact
our business plan adversely. For example, successful creation and availability
of an effective vaccine may reduce the potential market size for a particular
viral disease, or an effective drug may be developed by competitors that becomes
difficult to compete against with our limited resources. Our goal, which we can
give no assurance that we will achieve, is for NanoViricides, Inc. to become the
premier company developing highly safe and effective drugs that employ an
integrated multiplicity of actions as enabled by our nanomedicine approach
for
anti-viral therapy.



                                Page 92 of 121





To date, we have engaged in organizational activities; developing and sourcing
compounds and preparing nano-materials; and experimentation involving
preclinical studies using cell cultures and animal models of efficacy and
safety. We have generated funding through the issuances of debt and the sales of
securities under our shelf registration and the private placement of common
stock (See, Item 5). The Company does not currently have any long-term debt. We
have not generated any revenues and we do not expect to generate revenues in the
near future. We may not be successful in developing our drugs and start selling
our products when planned, or we may not become profitable in the future. We
have incurred net losses in each fiscal period since inception of our
operations.



Current Financial Status



NanoViricides technology is now maturing rapidly toward clinical drug trials,
with the new facility, expanded staff, and the financial strength that we have
attained since uplisting to NYSE-MKT (now NYSE American) in September 2013.



As of June 30, 2021, the end of the reporting period, we had $20,516,677 in cash
and cash equivalents, prepaid expenses of $307,102 and $9,084,901 of property
and equipment, net of accumulated depreciation. Our liabilities at June 30, 2021
are $351,146 including a short term loan payable of $95,306 payable to
BankDirect, accounts payable of $200,016 payable to third parties and accounts
payable to TheraCour of $31,539. Stockholders' equity was $29,911,167 at
June 30, 2021. In comparison, as of June 30, 2020, we had $13,708,594 in cash
and cash equivalents, prepaid expenses of $277,063 and property and equipment
was $9,544,431, net of accumulated depreciation. Our liabilities at June 30,
2020 were $2,156,377, accounts payable of $380,727 payable to third parties, and
accounts payable to TheraCour of $561,580 of which $200,000 is deferred until an
IND filing. Stockholders' equity was $21,757,962 at June 30, 2020.



During the year ended June 30, 2021, we spent approximately $8.2 million in cash
toward operating activities and approximately $239,000 in capital investment. In
contrast, we spent approximately $6.7 million in cash toward operating
activities and approximately $8,600 in capital investment in the year ended
June 30, 2020. We anticipate capital costs of approximately $200,000 in the
next
twelve months.



As of June 30, 2021, we have a cash and cash equivalent balance of $20,516,677
that is expected to be sufficient to fund our currently budgeted operations for
more than one year from the filing of the Company's Form 10K. Additionally, on
July 8, 2020, the Company entered into an underwriting agreement (the
"Underwriting Agreement") with Kingswood Capital Markets, a Division of
Benchmark Investments, Inc. ("Kingswood"). The offering was consummated on July
10, 2020, whereby the Company sold 1,369,863 shares of Common Stock and a fully
exercised Underwriters' over-allotment option of 205,479 additional shares the
public offering price of $7.30 per share. No warrants were issued in this
Offering. The net proceeds to the Company from the offering was approximately
$10.4 million after deducting underwriting discounts and commissions and other
estimated offering expenses payable by the Company.



                                Page 93 of 121





On July 31, 2020, the Company entered into an At Market Issuance Sales Agreement
(the "Sales Agreement") with B. Riley Securities, Inc. and Kingswood Capital
Markets, a division of Benchmark Investments, Inc. (each a "Sales Agent" and
collectively, the "Sales Agents"), pursuant to which the Company may offer and
sell, from time to time, through or to the Sales Agents, shares of Common Stock
(the "Placement Shares"), having an aggregate offering price of up to $50
million (the "ATM Offering"). Sales pursuant to the Sales Agreement will be made
only upon instructions by the Company to the Sales Agents, and the Company
cannot provide any assurances that it will issue any Shares pursuant to the
Sales Agreement. Actual sales will depend on a variety of factors to be
determined by the Company from time to time, including (among others) market
conditions, the trading price of the Company's Common Stock, capital needs and
determinations by the Company of the appropriate sources of funding for the
Company. The Company is not obligated to make any sales of Common Stock under
the Sales Agreement and the Company cannot provide any assurances that it will
issue any shares pursuant to the Sales Agreement. The Company will pay a
commission rate of up to 3.5% of the gross sales price per share sold and agreed
to reimburse the Sales Agents for certain specified expenses, including the fees
and disbursements of its legal counsel in an amount not to exceed $50,000 and
have agreed to reimburse the Sales Agents an amount not to exceed $2,500 per
quarter during the term of the Sales Agreement for legal fees to be incurred by
the Sales Agents. The Company has also agreed pursuant to the Sales Agreement to
provide each Sales Agent with customary indemnification and contribution rights.



On March 2, 2021 the Company sold 814,242 shares of common stock at an average
price of approximately $7.83 per share under the sales agreement with B. Riley
Securities, Inc. The net proceeds to the Company from the offering was
approximately $6.1 million after placement agent fees and other estimated
offering expenses.



The Company has an accumulated deficit at June 30, 2021 of approximately $114.4
million and a net loss of approximately $8.8 million and net cash used in
operating activities of approximately $8.2 million for the fiscal year 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. As of June 30, 2021, the Company
had available cash and cash equivalents of approximately $20.5 million. The
Company believes that it has several important milestones that it will be
achieving in the ensuing year. Management believes that as it achieves these
milestones, the Company's ability to raise additional funds in the public
markets would be enhanced.



Management believes that the Company's existing resources will be sufficient to
fund the Company's planned operations and expenditures through October 2022.
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 accompanying audited
financial statements do not include any adjustments that may result from the
outcome of such unidentified uncertainties.



                                Page 94 of 121





Results of Operations


The Company is a biopharmaceutical company and has no sales for the years ended June 30, 2021, 2020 and 2019.

End of year comparison June 30, 2021 at the end of the year June 30, 2020

Income – The Company is a non-income producing entity.



Operating Expenses - Research and development expenses for the year ended
June 30, 2021 increased $1,419,017 to $6,114,541 from $4,695,524 for the year
ended June 30, 2020. This year-to-year increase is generally attributable to
increases in lab supplies and chemicals, employee compensation expenses and lab
fees for pre IND studies. General and administrative expenses decreased $671,370
to $2,629,565 for the year ended June 30, 2021 from $3,300,935 for the year
ended June 30, 2020. The decrease in general and administrative expenses is
generally attributable to decreases in legal and professional expenses and
office salaries.



Interest Income - Interest income was $9,348 and $17,079 for the years ended
June 30, 2021 and 2020, respectively. Interest income decreased due to lower
interest rates for the majority of the year ended June 30, 2021.



Interest Expense- The Company has incurred interest expense of $85,405 and
$93,670 for the years ended June 30, 2021 and June 30, 2020 respectively. The
decrease results from the payoff of a mortgage loan in December, 2020, offset by
an increase in interest paid on a short term loan payable.



Income Taxes - There is no provision for income taxes due to ongoing operating
losses. As of June 30, 2021, we had estimated cumulative tax benefits and
development tax credits and other deferred tax credits resulting in a deferred
tax asset of $35,266,699. This amount has been offset by a full valuation
allowance.



                                Page 95 of 121




Net Loss - For the year ended June 30, 2021, the Company had a net loss of
$8,822,189, or a basic and fully diluted loss per share of $0.81 compared to a
net loss of $13,446,538, or a basic and fully diluted loss per share of $2.39
for the year ended June 30, 2020. The decrease in the Company's net loss for the
year ended June 30, 2021 from the year ended June 30, 2020 of $4,624,349 is
generally attributable to the change in fair value of derivatives  and a loss on
issuance of Series A shares for accounts payable-related party in the year ended
June 30, 2020 offset by an increase in research and development costs in the
year ended June 30, 2021.


End of year comparison June 30, 2020 at the end of the year June 30, 2019

Income – The Company is a non-income producing entity.



Operating Expenses - Research and development expenses for the year ended
June 30, 2020 decreased $1,226,196 to $4,695,524 from $5,921,720 for the year
ended June 30, 2019. This year-to-year decrease is generally attributable to a
decrease in lab supplies and chemicals, and a decrease in employee compensation
expenses and by a decrease in lab fees for pre IND studies. General and
administrative expenses increased $562,973 to $3,300,935 for the year ended
June 30, 2020 from $2,737,962 for the year ended June 30, 2019. The increase in
general and administrative expenses is generally attributable to an increase in
legal and professional expenses offset by a decrease in salary and stock
compensation paid to retired executive officers and to employees other than
research scientists and a decrease in consultants costs unrelated to research
and development.



Interest Income - Interest income was $17,079 and $55,497 for the years ended
June 30, 2020 and 2019, respectively. Interest income decreased due to lower
cash and cash equivalents for the majority of the year ended June 30, 2020 as
well as lower interest rates.



Interest Expense- The Company has incurred interest expense of $93,670 and $0
for the years ended June 30, 2020 and June 30, 2019, respectively. The increase
is as a result of interest paid on the mortgage note, amortization of the
mortgage loan origination fee, and interest paid on a short term loan payable.



Loss on issuance of Series A preferred stock for accounts payable - related
party - Loss of $142,669 for the year ended June 30, 2020 represents the
difference on the exchange of 100,000 shares of Series A preferred stock with a
fair value of $392,669 for $250,000 of previously deferred development fees
owed
to TheraCour's.



Gain on Warrant Settlement- For the year ended June 30, 2020, the gain on
warrant settlement resulted from an Exchange Agreement with certain Investors
pursuant to a Settlement Agreement with the same investors. The Investors
exchanged 347,222 old warrants for 647,224 shares of common stock and 347,222
new warrants. The aggregate fair value of the common stock and New Warrants
issued as part of the Exchange Agreement was $7,788,968. The Old Warrants were
remeasured to a fair value of $8,403,462 on January 24, 2020 immediately prior
to the exchange. As a result of the Exchange Agreement, a gain on warrant
settlement was recognized in the amount of $614,494 calculated as the difference
between the fair value of the Old Warrants immediately prior to the exchange and
the aggregate fair value of the common stock and New Warrants issued in the
exchange.



Change in fair value of derivative - Change in fair value of derivative for the
year ended June 30, 2020 decreased $6,025,058 to ($5,845,313) from $179,745 for
the year ended June 30, 2019. For the year ended June 30, 2020, the change in
fair value of derivatives resulted from an Exchange Agreement with certain
Investors pursuant to a Settlement Agreement with the same investors. For the
year ended June 30, 2019, the change in the fair value of derivative liabilities
was calculated primarily on the change in fair value of 5.5 year warrants issued
on February 27, 2019.



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Income Taxes - There is no provision for income taxes due to ongoing operating
losses. As of June 30, 2020, we had estimated cumulative tax benefits and
development tax credits and other deferred tax credits resulting in a deferred
tax asset of $35,089,911. This amount has been offset by a full valuation
allowance.



Net Loss - For the year ended June 30, 2020, the Company had a net loss of
$13,446,538, or a basic and fully diluted loss per share of $2.39 compared to a
net loss of $8,424,440, or a basic and fully diluted loss per share of $2.35 for
the year ended June 30, 2019. The increase in the Company's net loss for the
year ended June 30, 2020 from the year ended June 30, 2019 of $5,022,098 is
generally attributable to the change in fair value of derivatives, and an
increase in general and administrative expenses, offset by a decrease in
research and development costs.



Liquidity and capital reserves

The Company had cash and cash equivalents of $20,516,677 and $13,708,594 as of
June 30, 2021 and 2020, respectively. On the same dates, current liabilities
outstanding totaled $351,146 and $2,156,377, respectively. As of June 30, 2021
and June 30, 2020, total current liabilities included short term loan payable of
$95,306 and $62,843, respectively



                                Page 97 of 121






Since inception, the Company has expended substantial resources on research and
development. Consequently, we have sustained substantial losses. The Company has
an accumulated deficit of $114,385,313 and $105,563,124 at June 30, 2021 and
2020, respectively.



The Company anticipates several important milestones that it will be achieving
in the ensuing year. Management believes that as it achieves these milestones,
the Company's ability to raise additional funds in the public markets would
be
enhanced.



Management believes that the Company's existing resources will be sufficient to
fund the Company's planned operations and expenditures through October, 2022.
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 accompanying audited
financial statements do not include any adjustments that may result from the
outcome of such unidentified uncertainties.



As of June 30, 2021, we have a cash and cash equivalent balance of $20,516,677
that is expected to be sufficient to fund our currently budgeted operations for
more than one year from the filing of the Company's Annual Report on Form 10K.
Additionally, on July 31, 2020, the Company entered into an At Market Issuance
Sales Agreement (the "Sales Agreement") with B. Riley Securities, Inc. and
Kingswood Capital Markets, a division of Benchmark Investments, Inc.
(collectively, the "Sales Agents"). Sales pursuant to the Sales Agreement will
be made only upon instructions by the Company to the Sales Agents, and the
Company cannot provide any assurances that it will issue any Shares pursuant to
the Sales Agreement. Actual sales will depend on a variety of factors to be
determined by the Company from time to time, including (among others) market
conditions, the trading price of the Company's common stock, capital needs and
determinations by the Company of the appropriate sources of funding for the
Company. The Company is not obligated to make any sales of common stock under
the Sales Agreement and the Company cannot provide any assurances that it will
issue any shares pursuant to the Sales Agreement. On March 2, 2021 the Company
sold 814,242 shares of common stock at an average price of $7.83 under the Sales
Agreement with B. Riley Securities, Inc. The net proceeds to the Company from
the offering was approximately $6.1 million after deducting underwriting
discounts and commissions and other offering expenses.



Research and development costs



The Company does not maintain separate accounting line items for each project in
development. The Company maintains aggregate expense records for all research
and development conducted. Because at this time all of the Company's projects
share a common core material, the Company allocates expenses across all projects
at each period-end for purposes of providing accounting basis for each project.
Project costs are allocated based upon labor hours performed for each project.



The Company has signed several research and development cooperation agreements with various agencies and institutions.



The Company expects to enter into additional cooperative agreements with other
governmental and non-governmental, academic, or commercial, agencies,
institutions, and companies. There can be no assurance that a final agreement
may be achieved and that the Company will execute any of these agreements.
However, should any of these agreements materialize, the Company will implement
a system to track these costs by project and account for these projects as
customer-sponsored activities and show these project costs separately.



The following table 4 summarizes the main components of our research and development expenses as allocated, during the periods presented in this annual report on Form 10-K.


                                Page 98 of 121




Table 4: Breakdown of R&D costs


                                                    Year Ended          Year Ended          Year Ended
                                                   June 30, 2021       June 30, 2020       June 30, 2019
HerpeCide™ Program. Herpes Simplex virus
infections (HSV-1, HSV-2) and VZV Indications:
Cold Sores, Genital Ulcers, Shingles and ARN      $       550,000     $     1,131,724     $     5,601,720
Covid -19                                               5,564,541           3,563,800                   -
All Influenzas: FluCide™                                        -                   -             150,000
HIV-Cide™                                                       -                   -              20,000
EKC-Cide™, other Eye Viral Infections                           -                   -                   -
Dengue                                                          -                   -                   -
Other (Ebola, and other projects)                               -                   -                   -
Unallocated stock compensation                                  -          
        -             150,000
Total                                             $     6,114,541     $     4,695,524     $     5,921,720



Budgets and expenses planned for the near future



The Company has ended the year on a reasonable financial footing by controlling
costs and expenditures. We project that our current available financing is
sufficient for accomplishing the goal of filing one IND or equivalent regulatory
applications and executing initial human trials. We will need additional
financing to execute on our business plan and to complete human clinical trials
of our drug candidates into drug approval. Our Coronavirus drug candidate has
completed IND-enabling studies, and is expected to rapidly move into human
clinical studies in response to the COVID-19 pandemic. Our Shingles Skin Cream,
has completed IND-enabling studies, and we intend to file an IND for this drug
once the COVID-19 situation abates. At present, we are working on the scale up
of manufacturing of these drug candidates in a manner that will be compliant
with US FDA cGMP and corresponding ICH guidelines. We intend to request a
pre-IND meeting with the USFDA for the Coronavirus drug candidate at an
appropriate time, as we develop the dataset for this discussion. A pre-IND
meeting will help us determine the level of detail needed in the cGLP
Safety/Toxicology study required for the IND application, and also to refine our
human clinical trials design. We anticipate that these drug candidates will move
forward into IND or equivalent regulatory filings, and ensuing human clinical
trials. As these drug candidates are advancing into the clinic, we believe that
our additional drug candidates, including two or more drug candidates in the
HerpeCide program will also move forward into IND-enabling studies. We intend to
further re-engage our FluCide and HIVCide drug development programs once we have
established our platform technology with the Coronavirus and HerpeCide program
drug candidates. We are thus poised for strong growth with a number of drug
candidates in a number of disease indications.



Financings



Management engaged in efforts to raise financing in September 2019. On September
24, 2019, the Company effected a reverse stock split of its outstanding shares
of common stock and shares of preferred stock at a ratio of one for twenty (the
"Reverse Stock Split"). The Reverse Stock split, which was approved by the
Company's Board of Directors under authority granted under the laws of the State
of Nevada, was consummated pursuant to a Certificate of Amendment filed with the
Secretary of State of Nevada on September 23, 2019.



On December 16, 2019, the Company entered into an Open End Mortgage Note (the
"Note") with Dr. Anil Diwan, the Company's founder, Chairman and President, to
loan the Company up to $2,000,000 in two tranches of $1,000,000 (the "Loan").
The Note bore interest at a rate of 12% per annum and was secured by a mortgage
granted against the Company's headquarters. Dr. Anil Diwan received 10,000
shares of the Company's Series A preferred stock as a loan origination fee. As
of June 30, 2020, the Company had drawn down $1.1 million on this loan. On April
30, 2020, the Company and Dr. Diwan have mutually agreed to extend the maturity
date of the note, at the Company's option, to May 15, 2021, with the rest of the
terms remaining the same. On December 16, 2020 the Company repaid the mortgage
loan.



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On December 17, 2019, the Company entered into a Deferred Expense Exchange
Agreement with TheraCour, whereby the Company and TheraCour agreed to exchange
100,000 shares of Series A preferred stock with a fair value of $392,669 for
$250,000 previously deferred development fees owed to TheraCour. The Company
recognized a loss on the exchange of $142,669. Dr. Diwan is principal
shareholder of TheraCour.



On January 24, 2020, the Company announced in a press release that it had
completed an underwritten public offering (the "Offering") with gross proceeds
of $8,625,000 before deducting underwriting discounts and other estimated
offering expenses. The Offering included 2,500,000 shares of the Company's
common stock, and 375,000 additional shares from the exercise of the
underwriter's option to purchase to cover over-allotments at the public offering
price of $3.00 per share. No warrants were issued in this Offering. The net
proceeds to the Company After deducting offering costs was $7,457,575.



On May 26, 2020, the Company announced in a press release that it had raised
$10,220,000 in gross proceeds from the sale of 1,400,000, shares of common
stock, at a price of $7.30 per share, in a previously announced registered
direct offering (the "May Offering"). No warrants were issued in this May
Offering. The net proceeds to the Company were approximately  $9,219,400 after
deducting placement agent fees and other costs. The May Offering closed on
May 22, 2020.



                                Page 100 of 121





On July 8, 2020, , the Company entered into an underwriting offering with
Kingswood Capital Markets, a Division of Benchmark Investments, Inc.
("Kingswood"). The offering was consummated on July 10, 2020, whereby the
Company sold 1,369,863 shares of Common Stock and a fully exercised
Underwriters' over-allotment option of 205,479 additional shares the public
offering price of $7.30 per share. No warrants were issued in this Offering. The
net proceeds to the Company from the offering was approximately $10.4 million
after deducting underwriting discounts and commissions and other estimated
offering expenses payable by the Company.



Additionally, on July 31, 2020, the Company entered into an At Market Issuance
Sales Agreement (the "Sales Agreement") with B. Riley Securities, Inc. and
Kingswood Capital Markets, a division of Benchmark Investments, Inc. (each a
"Sales Agent" and collectively, the "Sales Agents"), pursuant to which the
Company may offer and sell, from time to time, through or to the Sales Agents,
shares of Common Stock (the "Placement Shares"), having an aggregate offering
price of up to $50 million (the "ATM Offering"). Sales pursuant to the Sales
Agreement will be made only upon instructions by the Company to the Sales
Agents, and the Company cannot provide any assurances that it will issue any
Shares pursuant to the Sales Agreement. Actual sales will depend on a variety of
factors to be determined by the Company from time to time, including (among
others) market conditions, the trading price of the Company's common stock,
capital needs and determinations by the Company of the appropriate sources of
funding for the Company. The Company is not obligated to make any sales of
common stock under the Sales Agreement and the Company cannot provide any
assurances that it will issue any shares pursuant to the Sales Agreement. On
March 2, 2021 the Company sold 814,242 shares of common stock at an average
price of $7.83 under the Sales Agreement with B. Riley Securities, Inc. The net
proceeds to the Company from the offering was approximately $6.1 million after
deducting underwriting discounts and commissions and other offering expenses.



The Company thus believes that it is in a strong financial position now and can
undertake the COVID-19 clinical program, and also, when opportune, reengage the
NV-HHV-101 clinical program. The Company also believes that additional
non-dilutive financing will be available under the COVID-19 program upon
advancing it further toward or into human clinical trials. The Company also
believes that due to the pandemic, it will be possible to rapidly take our
anti-coronavirus drug into human clinical trials under the COVID-19 regulatory
pathways of the US FDA or other regulatory authorities.



Requirement for Additional capital



As of June 30, 2021, we had a cash and cash equivalent balance of $20,516,677
that is expected to be sufficient to fund our currently budgeted operations for
more than one year from the filing of the Company's Form 10-K.



The Company believes that our cash and cash equivalent balance and the proceeds
from the ATM offerings will provide sufficient funds for us to continue our
operations beyond October, 2022 and to be able to advance at least one of its
drug candidates into human clinical trial stage with the available cash. The
Company estimates that it will need additional funding to continue further
development of its drug candidates through later stages of human clinical trials
if it does not form a collaborative licensing or partnership agreement with a
party that would provide such funding  such as Big Pharma.



Based on our current rate of expenditures and anticipated changes, we have
estimated a total cash expenditure budget of approximately $15.2 million from
October 2021 through October 2022, of which approximately $11.2 million is
expected to go towards research and development for our drug candidates,
including IND-enabling studies and anticipated human critical trial of our
antiviral treatment for COVID, and approximately $4.0 million is budgeted for
general and administrative expenses.



                                Page 101 of 121




These planned expenses for the period of one year starting from approximately
October 2021 can be summarized as follows:

1. Scheduled search and the development costs of $ 5,000000: Expected costs for

in vivo and in vitro studies for indications of the Coronavirus program, VZV

Drug Development Program (shingles) and other indications in HerpeCide

program, indications in the FluCide, Eye Nanoviricide, DengueCide and

HIVCide and other programs (see Table 2). This includes the personnel costs of

approximately $ 2,500,000, for scientific staff and design offices of

assist with FDA compliance, material characterization, pharmacokinetics,

pharmacodynamic and toxicological studies, and other items related to the FDA

compliance, as required for the development of the data necessary for the filing of a

        Investigational New Drug with the United States Food and Drug
        Administration.



2. Batch of pharmaceutical product produced in clinical trial approximately $ 2,000,000

        for Phase 1 and 2a for the first Coronavirus (COVID-19) program drug
        candidate.




    3.  Anticipated Clinical Trial Costs for the COVID-19 drug candidate of
        approximately $5,000,000 for Phase 1 and 2a. We anticipate that these
        clinical trials will be designed with the goal of an emergency use

approval during the current pandemic provided it continues to persist. We

may need to modify the program to get full approval for our

broad-spectrum coronavirus drug candidate if the pandemic is resolved by

        the time we are completing Phase 2a human clinical trials of this drug
        candidate.



4. Company overheads $ 3,000000: This amount includes the budgeted office

salaries, legal, accounting, investor relations, public relations,

business development and other costs expected to be incurred by being a

        public reporting company.



5. Capital costs of $ 200000: this is the estimated cost for

        equipment and laboratory improvements.




We estimate that beyond the current budgetary one-year period ending October 15,
2022, to the period ending October 15, 2023 human clinical development of the
Skin Cream for Topical Treatment of Shingles, for further clinical studies
towards full-fledged approval of our Coronavirus drug candidate as may be
necessary, and for developing additional drug indications based on the Shingles
skin cream candidate, NV-HHV-101, in the HerpeCide program, we  may need
approximately an additional $13 million, or approximately $13 million more than
our current cash reserves. The additional funds will be needed to pay
additional, subcontract costs related to the expansion and further development
of our drug pipeline, for human clinical trials, and for additional capital
and
operational expenditures


These additional expenses planned for the two-year period beginning October 16, 2022 can be summarized as follows:

1. Scheduled search and the development costs of $ 10,000000: Expected costs for

additional indications in the HerpeCide program, indications in FluCide

program, Eye Nanoviricide, DengueCide and HIVCide, and other programs

(see table 2). This includes staff costs of approximately $ 5,000,000,

for scientific staff and consulting firms to assist the FDA

compliance, material characterization, pharmacokinetics, pharmacodynamics

and toxicology studies, and other items related to FDA compliance, such as

required for the development of the data necessary for the filing of a survey

        New Drug with the United States Food and Drug Administration.



2. Batch of pharmaceutical product produced in clinical trial approximately $ 4,000,000

for Phases 2b and 3 for the candidate for the Coronavirus program, and $ 1,000,000

        for Phase 1 and 2a for the  VZV Shingles program drug candidate.




    3.  Clinical Trials Costs budgeted as follows: anticipated Phase 2b and 3
        Clinical Trial Costs for the Covid-19 of approximately $10,000,000, and
        1,000,000 for the Phase 1 and 2a clinical trials for the skin cream for
        Shingles for the Skin Cream for Shingles.




  4. Corporate overhead of $5,000,000.




                                Page 102 of 121





    5.  Capital costs for laboratory and pilot manufacturing equipment of
        $2,000,000.




    6.  As our programs mature and as we are able to move additional drug
        candidates into human clinical trials we will continue to require

additional funding for such activities. As a rule, we estimate

that, for each drug candidate entering clinical trials, if phase I

and phase II are successful, we expect approximately $ 10 million for

Phase III human clinical trials for this drug candidate to enable us to

file a New Drug Application (NDP) with the US FDA to get commercialization

        approval. These estimates are based on rough quotes from potential
        investigators, and assumptions relative to additional costs. These
        estimates assume that our drug candidates are highly effective and
        therefore would require relatively few patients in each arm of the each
        trial in order to establish statistically significant results.



We believe that as we become a clinical stage company, and as our programs
mature towards FDA approval, the Company's market capitalization should improve
substantially, based on market capitalizations of comparable public companies in
clinical stages. If so, we believe that we will be able to raise the additional
necessary funds through public financings as needed. We believe that our
coronavirus program is maturing rapidly towards human clinical trials, and if we
are successful in achieving an emergency use approval for a coronavirus drug
candidate, we may be able to generate substantial revenues during the current
pandemic using our existing cGMP-capable manufacturing capacity itself.



We believe we have sufficient funding to take our Coronavirus drug candidate
into initial human clinical trials. We will need to raise additional funds to
take NV-HHV-101 and additional Topical HerpeCide drug candidate indications into
an IND application stage. There is no assurance that the Company will be
successful in obtaining sufficient financing on terms acceptable to the Company
to fund these programs. Management believes that as a result of the management
plan, the Company's existing resources and access to the capital markets will
permit the Company to fund planned operations and expenditures. 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 has limited experience with pharmaceutical drug development. Thus,
our budget estimates are not based on experience, but rather based on advice
given by our associates and consultants. As such these budget estimates may not
be accurate. In addition, the actual work to be performed is not known at this
time, other than a broad outline, as is normal with any scientific work. As
further work is performed, additional work may become necessary or change in
plans or workload may occur. Such changes may have an adverse impact on our
estimated budget. Such changes may also have an adverse impact on our projected
timeline of drug development.



We believe that the coming year's work plan will lead us to obtain certain
information about the safety and efficacy of some of the drugs under development
in animal models and very likely, our coronavirus drug candidate in human
clinical trials. If our studies are not successful, we will have to develop
additional drug candidates and perform further studies. If our studies are
successful, then we expect to be able to undertake further studies in animal
models to obtain necessary data regarding the pharmaco-kinetic and
pharmaco-dynamic profiles and further human clinical studies, expanding into
Phase 2b, and Phase 3 human clinical trials of our drug candidates.



                                Page 103 of 121




Our strategy is to minimize capital expenditure. We therefore rely on collaborations with third parties to test our drug candidates. We continue to engage with our former collaborators.

Our animal efficacy studies as well as our safety / toxicology studies are carried out by third parties. We opt for the development of drugs against specific disease indications for which we have appropriate partners who can perform the necessary cell culture and animal efficacy studies.

The Company reports summaries of its studies as the data becomes available to
the Company, after analyzing and verifying same, in its press releases. The
studies of biological testing of materials provide information that is
relatively easy to understand and therefore readily reported. In addition, we
continue to engage in substantial work that is needed for the optimization of
synthesis routes and for the chemical characterization of the nanoviricide drug
candidates. We also continue to work on improving the drug candidates and the
virus binding ligands where necessary. We continue to work on creating the
information needed for the development of controlled chemical synthesis
procedures that is vital for developing c-GMP manufacturing processes.



We cannot accurately project the timeline of when we would be able to take a
drug candidate into clinical studies, nor can we predict when we may be able to
achieve our first drug approval, if any. As such we do not provide any guidance
on expected timelines. The Company has no experience in having taken a single
drug through the US FDA or any international drug approval process as of now. As
such, we may not be able to estimate the time or cost of these studies
accurately. However, we try to do our best by using expert consultants and
preparing reasonable estimates based on quotations from various contract
research organizations.



Our timelines depend on several assumptions, many of which are beyond the control of the Company, and are therefore subject to delays.

Management intends to use capital and debt financing, as required, to fund the
Company's operations. There can be no assurance that the Company will be able to
obtain the additional capital resources.



The Company is considered to be a development stage company and will continue in
the development stage until it generates revenues from the sales of its products
or services.


Off-balance sheet provisions

We did not enter into any off-balance sheet arrangements during the year ended. June 30, 2021.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES



Accounting for Stock Based Compensation - The Company follows the provisions of
ASC 718 - Stock Compensation, which requires the measurement of compensation
expense for all shared-based payment awards made to employees, non-employee
directors, and non-employees including employee stock options. Shared-based
compensation expense is based on the grant date fair value estimated in
accordance with the provisions of ASC 718 and is generally recognized as an
expense over the requisite service period, net of forfeitures.



                                Page 104 of 121




RECENT ACCOUNTING POSITION STATEMENTS

Recently published accounting position papers

The Company considers the applicability and impact of all updates to accounting standards (“ASU”). There have been no recent ASUs that are expected to have a material impact on the Company’s balance sheets or income statements.

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