# Q/C Technologies, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [Q/C Technologies, Inc.](/companies/qcls.md) (CIK 1321834)
- Form: 10-Q
- Filed: 2023-11-14
- Accepted by EDGAR: Nov 14, 2023, 22:25 ET
- Period: 2023-09-30
- Accession: 0001493152-23-041328
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1321834/000149315223041328/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1321834/000149315223041328/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2023-07-01 to 2023-09-30 | $1.9m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-01-01 to 2023-09-30 | $4.9m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$3.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$12.2m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $4.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$1.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.06 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | −$0.08 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.06 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | −$0.08 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 44,949,097 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 41,710,705 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | −$11.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2023-09-30 | $298.3k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $9.7m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $21.8m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $5.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $5.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $15.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 61,560 characters.

*The information set forth below should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements based on our current expectations, assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Part II, Item 1A of this Quarterly Report on Form 10-Q, entitled “Risk Factors.” References in this discussion and analysis to “us,” “we,” “our,” or “the Company” refer collectively to MyMD Pharmaceuticals, Inc.*

Our financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the Securities and Exchange Commission (the “SEC” and such reports, collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

- fluctuation and volatility in market price of our Common Stock due to market and industry factors, as well as general economic, political and market conditions;
- the impact of dilution on our shareholders;
- our ability to realize the intended benefits of the Merger (as defined below) and our investment in Oravax Medical, Inc.;
- the impact of our ability to realize the anticipated tax impact of the Merger;
- the outcome of litigation or other proceedings we may become subject to in the future;
- delisting of our Common Stock from the Nasdaq;
- our availability and ability to continue to obtain sufficient funding to conduct planned research and development efforts and realize potential profits;
- our ability to develop and commercialize our product candidates, including MYMD-1, Supera-CBD and other future product candidates;
- the impact of the complexity of the regulatory landscape on our ability to seek and obtain regulatory approval for our product candidates, both within and outside of the U.S.;
- the required investment of substantial time, resources and effort for successful clinical development and marketization of our product candidates;
- challenges we may face with maintaining regulatory approval, if achieved;
- the potential impact of changes in the legal and regulatory landscape, both within and outside of the U.S.;
- the impact of public health emergencies such as the COVID-19 pandemic on the administration, funding and policies of regulatory authorities, both within and outside of the U.S.;
- our dependence on third parties to conduct pre-clinical and clinical trials and manufacture its product candidates;
- the impact of public health emergencies such as the COVID-19 pandemic on our results of operations, business plan and the global economy;
- challenges we may face with respect to our product candidates achieving market acceptance by providers, patients, patient advocacy groups, third party payors and the general medical community;
- the impact of pricing, insurance coverage and reimbursement status of our product candidates;
- emerging competition and rapidly advancing technology in our industry;
- our ability to obtain, maintain and protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on its proprietary rights;
- our ability to maintain adequate cyber security and information systems;
- our ability to achieve the expected benefits and costs of the transactions related to the acquisition of Supera Pharmaceuticals, Inc. (“Supera”);
- our ability to effectively execute and deliver our plans related to commercialization, marketing and manufacturing capabilities and strategy;
- emerging competition and rapidly advancing technology in our industry;
- our ability to obtain adequate financing in the future on reasonable terms, as and when we need it;
- challenges we may face in identifying, acquiring and operating new business opportunities;
- our ability to retain and attract senior management and other key employees;
- our ability to quickly and effectively respond to new technological developments;
- changes in political, economic or regulatory conditions generally and in the markets in which we operate; and
- our compliance with all laws, rules, and regulations applicable to our business.

31

### Overview

MyMD Pharmaceuticals, Inc. (Nasdaq: MYMD), is a clinical stage biopharma company developing groundbreaking therapies for the treatment of serious and debilitating autoimmune and inflammatory diseases. MyMD’s lead clinical candidate, MYMD-1®, is an orally available next-generation TNF-α inhibitor with the potential to transform the way that TNF-α based diseases are treated. TNF-α is an immune modulating cytokine whose dysregulation can lead to prolonged inflammatory responses and is known to drive disease in a range of autoimmune and inflammatory disorders. While currently available TNF-alpha inhibitors, all of which are biologics, have improved outcomes, not all patients respond to them, and these inhibitors come with black box warnings around the risk of serious infections leading to hospitalization and death. Additionally, there are no approved oral TNF-α inhibitors.

We believe that MYMD-1®, with its small molecule design, improved safety profile and ability to cross the blood brain barrier, has the promise to provide meaningful therapeutic solutions to patients not served by current TNF-α inhibitors and as a potential therapy for central nervous system (“CNS”) based inflammatory and autoimmune diseases.

We believe that our preclinical data, as well as from independent research laboratories, supports the use of MYMD-1® across a range of serious inflammatory and TNF-α mediated diseases. Results indicate that MYMD-1® treatment almost completely prevented muscle wasting (frailty) and prolonged lifespan in old mice; MYMD-1® exhibited significantly more potent anti-inflammatory effects than Enbrel in a collagen antibody induced arthritis (“CAIA”) model of rheumatoid arthritis (“RA”), the industry standard for evaluating RA therapeutics; MYMD-1® decreased the incidence and severity of disease in an *in vivo* model of Hashimoto’s thyroiditis, and MYMD-1® improved the course of disease in an *in vivo* model of multiple sclerosis (“MS”) without causing global immunosuppression or toxicity.

MYMD-1® has also demonstrated its potential to slow the aging process and extend healthy lifespan. In the Phase 1 dose-ranging study of MYMD-1® in healthy volunteers, treatment with MYMD-1® led to a statistically significant decrease in TNF-alpha levels (p-value \<0.05) compared to placebo. In the Phase 2 multi-center double-blind, placebo controlled, randomized study (NCT05283486) to investigate the efficacy, tolerability and pharmacokinetics of MYMD-1® in the treatment of chronic inflammation associated with sarcopenia/frailty in participants aged 65 years or older, both primary endpoints were made. MYMD-1® significantly reduced serum levels of three biomarkers: TNF-α (P=0.008), sTNFR1 (P=0.02), and IL-6 (P=0.03) and maintained appropriate plasma concentrations and parameters in pharmacokinetic evaluations. The study also achieved all secondary endpoints related to safety and tolerability with no treatment-emergent adverse events or serious adverse events in the study. We believe that the Phase 2 results support the unique advantages of MYMD-1® as the first oral, selective TNF-α inhibitor candidate and a potential future treatment option for sarcopenia and other autoimmune conditions with large markets such as rheumatoid arthritis.

The U.S. Food and Drug Administration (“FDA”) recently accepted the Company’s Investigational New Drug Application (“IND”) to evaluate the safety, efficacy, pharmacodynamics and pharmacokinetics of oral TNF-α inhibitor MYMD-1® in patients with active RA. The application was based on preclinical data showing that MYMD-1® significantly reduced swelling and other clinical arthritis measures compared to widely used RA therapy, Enbrel® (etanercept). Statistically significant biomarker data from the Phase 2 study in sarcopenia show MYMD-1® has the potential to disrupt the TNF-α inhibitor market and offer therapeutic benefit to patients with a range of chronic inflammatory conditions. The Company plans to initiate discussions with clinical research organization (“CRO”) vendor IQVIA on timing of a Phase 2 study in this indication. Additionally, study results shared at the Society of Toxicology 2023 Annual Meeting comparing MYMD-1® to placebo were very highly significant and showed MYMD-1® reduced histopathological changes and the severity of standard arthritis clinical trial measures. The double-blind, placebo-controlled study will be investigating the efficacy, tolerability, and pharmacokinetics of MYMD-1® in the treatment of participants with RA. Primary endpoints include demonstrating MYMD-1® added to MTX, in participants with moderate-to-severe active RA is effective for reduction of signs and symptoms of rheumatoid arthritis at 12 weeks, and to evaluate the biological activity of MYMD-1® added to methotrexate (“MTX”), in participants with moderate-to-severe active RA.

MyMD plans to present the data to FDA and intends to advance the clinical program for MYMD-1® based on the guidance received by the Agency.

Additionally, MyMD plans to submit annual reports to the Agency for Hashimoto’s Thyroiditis and Sarcopenia. Lastly, MyMD recently completed a reproductive study, *A Dose Range-Finding Embryo-fetal Development Study of MYMD-1® by Oral (Gavage) in Rats*, with Charles River Laboratories Inc. Results indicate that there were no MYMD-1®-related fetal external malformations or variations.

MyMD’s second therapeutic candidate is Supera-CBD, a novel, synthetic, non-toxic cannabidiol (“CBD”) analog that is 8000 times more potent a cannabinoid type 2 (“CB2”) receptor agonist (activator) than plant-based CBD. The U.S. Drug Enforcement Administration (“DEA”)’s scientific review concluded Supera-CBD will not be considered a controlled substance or listed chemical under the Controlled Substances Act (“CSA”) and its governing regulations or require scheduling during development. In addition to its potential role in managing addiction, anxiety, chronic pain and seizures, Supera-CBD has also been shown to have anti-inflammatory effects.

Our management believes that the Company has built a diversified, high-value IP portfolio and should be able to achieve value-generating milestones using funds currently on hand. MyMD has assembled a leadership team with a proven track record in the discovery, development and clinical evaluation of groundbreaking therapies that transform patient care. MyMD also has collaborations with institutions including the Johns Hopkins University School of Medicine which recently resulted in publication of a preclinical study in *Journal of Gerontology: Biological Sciences*, showing that MYMD-1® demonstrated four-fold greater improvements than rapamycin in delaying aging and extending the life of mice who began treatment at the human equivalent of 60 years of age.

#### Closing of the Merger and Reverse Stock Split

On April 16, 2021, pursuant to the previously announced Agreement and Plan of Merger and Reorganization, dated November 11, 2020 (the “Original Merger Agreement”), as amended by Amendment No. 1 thereto, dated March 16, 2021 (the Original Merger Agreement, as amended by Amendment No. 1, the “Merger Agreement”), by and among MyMD, a New Jersey corporation previously known as Akers Biosciences, Inc., XYZ Merger Sub, Inc. (“Merger Sub”), and MyMD Pharmaceuticals (Florida), Inc., a Florida corporation previously known as MyMD Pharmaceuticals, Inc. (“MyMD Florida”), Merger Sub was merged with and into MyMD Florida, with MyMD Florida continuing after the merger as the surviving entity and a wholly owned subsidiary of the Company (the “Merger”). At the effective time of the Merger, without any action on the part of any stockholder, each issued and outstanding share of pre-Merger MyMD Florida’s Common Stock, par value $0.001 per share (the “MyMD Florida Common Stock”), including shares underlying pre-Merger MyMD Florida’s outstanding equity awards, was converted into the right to receive (x) 0.7718 shares (the “Exchange Ratio”) of the Company’s Common Stock, no par value per share (the “Company Common Stock” or “Common Stock”), (y) an amount in cash, on a pro rata basis, equal to the aggregate cash proceeds received by the Company from the exercise of any options to purchase shares of MyMD Florida Common Stock outstanding at the effective time of the Merger assumed by the Company upon closing of the Merger prior to the second-year anniversary of the closing of the Merger (the “Option Exercise Period”), such payment (the “Additional Consideration”), and (z) potential milestone payment in shares of Company Common Stock up to the aggregate number of shares issued by the Company to pre-Merger MyMD Florida stockholders at the closing of the Merger (the “Milestone Payments”) payable upon the achievement of certain market capitalization milestone events (the “Milestone Events”) during the 36-month period immediately following the closing of the Merger (the “Milestone Period”). The Milestone Events and corresponding Milestone Payments are set forth in the table below.

| Milestone Event | Milestone Payment |
| --- | ---: |
| Market capitalization of the combined company for at least ten (10) trading days during any 20 consecutive trading day period during the Milestone Period is equal to or greater than $500,000,000 (the “First Milestone Event”). | $20,000,000 |
| For every $250,000,000 incremental increase in market capitalization of the combined company after the First Milestone Event to the extent such incremental increase occurs for at least 10 trading days during any 20 consecutive trading day period during the Milestone Period, up to a $1,000,000,000 market capitalization of the combined company. | $10,000,000 per each incremental increase (it being understood, however, that, if such incremental increase results in market capitalization equal to $1,000,000,000, such $10,000,000 payment in respect of such incremental increase shall be payable without duplication of any amount payable in respect of a Second Milestone Event, as defined below). |
| Market capitalization of the combined company for at least 10 trading days during any 20 consecutive trading day period during the Milestone Period is equal to or greater than $1,000,000,000 (the “Second Milestone Event”) | $25,000,000 |
| For every $1,000,000,000 incremental increase in market capitalization of the combined company after the Second Milestone Event to the extent such incremental increase occurs for at least 10 trading days during any 20 consecutive trading day period during the Milestone Period. | $25,000,000 per each incremental increase |

For purposes of the table above, “market capitalization” means, with respect to any trading day, the product of (i) the total outstanding shares of the combined company Common Stock and (ii) the volume weighted average trading price for the combined company Common Stock for such trading day.

Immediately following the effective time of the Merger, the Company effected a 1-for-2 reverse stock split of the issued and outstanding Company Common Stock (the “Reverse Stock Split”). Upon completion of the Merger and the transactions contemplated in the Merger Agreement, (i) the former MyMD Florida equity holders owned approximately 77.05% of the outstanding equity of the Company on a fully diluted basis, assuming the exercise in full of the pre-funded warrants to purchase 986,486 shares of Company Common stock and including 4,188,315 shares of Company Common Stock underlying options to purchase shares of MyMD Florida Common Stock assumed by the company at closing and after adjustments based on the Company’s net cash at closing; and (ii) former Akers Biosciences, Inc. stockholders own approximately 22.95% of the outstanding equity of the Company.

Effective as of 4:05 pm Eastern Time on April 16, 2021, we filed an amendment to its Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split. As a result of the Reverse Stock Split, immediately following the effective time of the Merger, every two shares of our Common Stock held by a stockholder immediately prior to the Reverse Stock Split were combined and reclassified into one share of our Common Stock. No fractional shares were issued in connection with the Reverse Stock Split. Each stockholder who did not have a number of shares evenly divisible pursuant to the Reverse Stock Split ratio and who would otherwise be entitled to receive a fractional share of our Common Stock was entitled to receive an additional share of our Common Stock.

In connection with the closing of the Merger, we changed our name to MyMD Pharmaceuticals, Inc. and our trading symbol on The Nasdaq Capital Market to MYMD. For additional information concerning the Merger, please see Note 3 to the Company’s condensed consolidated financial statements.

At the Company’s annual meeting of stockholders held on July 31, 2023, the stockholders approved a plan to merge the Company with and into a newly formed wholly-owned subsidiary, MyMD Pharmaceuticals, Inc., a Delaware corporation (“MyMD Delaware”), with MyMD Delaware being the surviving corporation, for the purpose of changing the Company’s state of incorporation from New Jersey to Delaware (the “Reincorporation”). As of the date of this Quarterly Report on Form 10-Q, MyMD Delaware has been formed in the State of Delaware and the Company is in the process of completing the Reincorporation.

#### Reduction in Workforce

During October 2023, the Company implemented a reduction in workforce, eliminating three of the Company’s ten employees. Separated employees were granted a severance package equal to one-quarter of their annual salary and will result in the recognition of $104,000 in personnel expenses in October 2023.

On June 7, 2023, the Company granted the employees options to purchase an aggregate of 230,000 shares of Common Stock with an exercise price of $1.66 per share. As consideration for a waiver and release in their separation agreements, the Company amended the employees’ respective June 7, 2023 option agreements to accelerate vesting of the portion of optioned shares that otherwise would have vested upon the first and second anniversaries of the date of grant. The options have an exercise period of twelve months from the date of separation.

### Financial Operations Overview

We will not generate revenue from product sales unless and until we successfully complete clinical development, obtain regulatory approval for, and successfully commercialize our MYMD-1 and Supera-CBD product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any significant delay or failure to obtain regulatory approvals would materially adversely affect our product candidate’s development efforts and our business overall. In addition, if we obtain regulatory approval for MYMD-1 and/or Supera-CBD, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

We anticipate that our expenses will increase significantly as we:

- advance the development of our MYMD-1 and Supera-CBD;
- initiate and continue research and preclinical and clinical development of potential new product candidates;
- maintain, expand and protect our intellectual property as it pertains to MYMD-1 and Supera-CBD;
- expand our infrastructure and facilities to accommodate our growing employee base and ongoing development activities;
- establish agreements with contract research organizations, or CROs, and third-party contract manufacturing organizations, or CMOs, in connection with our Supera-CBD preclinical studies, MYMD-1 ongoing and planned clinical trials, Supera-CBD clinical trials and the development of our manufacturing capabilities for MYMD-1 and Supera-CBD;
- develop the large-scale manufacturing processes and capabilities for the commercialization of our MYMD-1 and Supera-CBD drug product candidates;
- seek marketing approvals for our MYMD-1 and Supera-CBD product candidates that successfully complete clinical trials and
- establish a sales, marketing and distribution infrastructure to commercialize MYMD-1 and Supera-CBD should we obtain marketing approval

As a result of these anticipated expenditures, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

### Components of our Results of Operations

### Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the near future. If our research and development efforts with MYMD-1 and Supera-CBD are successful, we may generate revenue from product sales or through license agreements with third parties.

### Operating Expenses

Our operating expenses are broken into several components, including research and development and general and administrative costs.

We expect operating expenses to increase as we progress through the various clinical trials in the development of MYMD-1 and Supera-CBD.

#### Research and Development

Our research and development expenses primarily consist of costs associated with the development of MYMD-1 and Supera-CBD. These costs include, but are not limited to:

- Salaries, wages and benefits of the research and development staff;
- Contractual agreements with third parties including contract research organizations, preclinical activities and clinical trials;
- Outside consultants including fees and expenses;
- Laboratory supplies and equipment;
- Regulatory compliance; and
- Patent application and maintenance costs to protect our intellectual property.

Three of our five employees are principally involved in research and development activities for either MYMD-1 or Supera-CBD. Their salaries, wages and benefits are captured as a component of research and development but not allocated to specific projects.

We utilize third party contractors and consultants with expertise in specific research or development activities to perform work under the supervision of our researchers. We believe this allows us to control costs and to progress through the development cycle and to utilize our staff more efficiently.

It is difficult to project with absolute accuracy the duration or final cost of the development of MYMD-1 and Supera-CBD or if revenue will be generated from the commercialization of these components. The process of achieving regulatory approval is very costly and time consuming. A few of the many factors that contribute to costs of duration include:

- Size and scope of pre-clinical trials;
- The phases of clinical development and the stage of our product candidates in the cycle;
- Per subject trial costs;
- The number of sites required for the trials and the availability of appropriate sites to perform the trials;
- The time that is required to enroll the appropriate number of trial participants; and
- The time required to achieve the approval of regulatory agencies.

34

#### General and Administrative

General and administrative expenses primarily consist of salaries, wages and benefits for our employees in the executive, legal and accounting functions and third-party costs for legal, accounting, insurance, investor relations, stock market and board expenses.

Although treated as components of general and administrative expenses, we have chosen to disclose the following significant items separately:

#### Stock Based Compensation

Stock-based compensation includes the fair market value, as determined by Black-Scholes option pricing model, of stock options issued to key staff and consultants.

#### Warrant Issuance Expenses

Warrant issuance expenses represent the portion of the fees and offering expenses incurred in connection with the February 2023 Offering (as defined below) attributable to the issuance of the February 2023 Warrants (as defined below).

#### Other Income (Expense), net

Other income (expense), net consists of interest and dividends earned on our cash, cash equivalents, and investments, gains/(losses) on the sale marketable securities, gains/(losses) on the changes of fair value of equity investments, gains/(losses) on the changes of fair value of warrant liabilities, gains/(losses) on the changes of fair value of derivative liabilities, and an uninsured casualty loss.

### Results of Operations

### Summary of Statements of Operations for the Three Months Ended September 30, 2023 and 2022

We are focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MYMD-1 and Supera-CBD. The following table summarized the results of operations for the three months ended September 30, 2023 and 2022.

| Description Operating Expenses | For the Three Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| General and Administrative | $1,334,690 | $1,554,244 |
| Research and Development | 1,912,322 | 1,803,229 |
| Stock-Based Compensation | 595,576 | 352,417 |
| Total Operating Expenses | 3,842,588 | 3,709,893 |
| Loss from Operations | (3,842,588) | (3,709,893) |
| Other Income (Expense), net | 7,885,582 | (16,152) |
| Net Income/(Loss) | $4,042,994 | $(3,693,741) |

### Revenue

We had no revenue from operations during the three months ended September 30, 2023 and 2022.

### General and Administrative Expenses

The table below summarizes our general and administrative expenses for the three months ended September 30, 2023 and 2022:

| Description | For the Three Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Personnel Costs | $337,948 | $331,647 |
| Professional Service Costs | 351,430 | 549,321 |
| Stock Market & Investor Relations Costs | 257,740 | 209,959 |
| Other Administrative Costs | 387,572 | 463,317 |
| Total General and Administrative Expenses | $1,334,690 | $1,554,244 |

35

Personnel costs increased $6,301 during the three months ended September 30, 2023. Certain salaries, bonuses and related payroll expenses are allocated to the appropriate department based upon the employee’s responsibilities.

Professional services costs decreased $197,891 during the three months ended September 30, 2023. These costs included legal and accounting and specialized consulting services regularly incurred in the normal course of business. The decrease is primarily related to a decrease in fees for legal and general consulting services.

Stock market and investor relations costs increased $47,781 during the three months ended September 30, 2023. These costs include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases, presentations and other communication efforts and the costs of annual shareholder meetings. The increase is primarily due to the costs associated with the 2023 annual shareholder meeting.

Other administrative expenses decreased $75,745 during the three months ended September 30, 2023. These costs include Board expenses, business insurance, corporate travel and other general operating expenses. The decrease is associated with a reduction in business insurance expenses and smaller decreases across a range of administrative expense categories.

### Stock-Based Compensation

For the three months ended September 30, 2023 and 2022, we recognized $595,576 and $352,417 for stock-based compensation for options issued during 2022 and 2023.to directors, officers and key staff members.

### Warrant Issuance Expenses

There were no warrant issuance expenses for the three months ended September 30, 2023 and 2022.

### Research and Development Expenses

The table below summarizes our research and development expenses for the three months ended September 30, 2023 and 2022:

| Description | For the Three Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Salaries and Wages | $575,772 | $416,739 |
| Development Programs | 1,153,178 | 556,265 |
| Professional Services | 95,010 | 97,254 |
| Regulatory Expenses | 12,684 | 732,971 |
| Other Research and Development Expenses | 75,678 | - |
| Total Research and Development Expenses | $1,912,322 | $1,803,229 |

Salaries and wages increased $159,033 during the three months ended September 30, 2023. During the three months ended September 30, 2023, a salary was adjusted for a key employee retroactively to January 1, 2023. Certain salaries, bonuses and related payroll expenses are allocated to the appropriate department based upon the employee’s responsibilities.

Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs. Costs increased $596,911 during the three months ended September 30, 2023 primarily due to the completion of the Phase II study for Sarcopenia and the preparation of the results data.

Professional services costs decreased $2,244 during the three months ended September 30, 2023. These costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees associated with the protection of our intellectual property.

Regulatory expenses decreased $720,287 during the three months ended September 30, 2023. These expenses are allocated to specific development programs during the three months ended September 30, 2023 and are now included in the Development Programs total described above. During the three months ended September 30, 2022 regulatory expenses included clinical research organizations (CRO) and regulatory consulting fees associated with the Phase II clinical study design, protocol preparation and the maintenance of the investigator brochures for the Rheumatoid Arthritis trial.

Other research and development expenses increased $75,678 during the three months ended September 30, 2023. These expenses include laboratory supplies, training and travel for department personnel while working with third-party trial sites. The increase during the three months ended September 30, 2023 is primarily related to expenses for shipping costs and travel.

### Other Income and Expense

The table below summarizes our other income and expenses for the three months ended September 30, 2023 and 2022:

| Description | For the Three Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Interest and Dividend Income | $(139,056) | $(15,453) |
| Loss on Sale of Marketable Securities | 500 | 1,200 |
| Gain on changes in fair value of Marketable Securities | (2,324) | (1,899) |
| Gain on changes in fair value of Derivative Liabilities | (2,566,900) | - |
| Gain on changes in fair value of Warrant Liabilities | (5,356,000) | - |
| Casualty Loss | 178,198 | - |
| Total Other (Income)/Expense | $(7,885,582) | $(16,152) |

Other income, net of expenses, totaled $7,885,582 for the three months ended September 30, 2023, and other income, net of expenses, totaled $16,152 for the three months ended September 30, 2022.

During the three months ended September 30, 2023 and 2022 interest and dividend income totaled $139,056 and 15,453. The changes in fair value of our marketable securities and realized losses from the sale of marketable securities were primarily the result of rising interest rates and the availability of cash for investments.

During the three months ended September 30, 2023, we recorded a gain of $2,566,900 related to the change in fair value of the derivative liabilities. We estimated the $898,100 fair value of the bifurcated embedded derivative at September 30, 2023 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $0.59 on the valuation date, estimated equity volatility of 130.0%, estimated traded volume volatility of 120.0%, the time to maturity of 0.75 year, a discounted market interest rate of 5.49%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 8.2%.

During the three months ended September 30, 2023, we recorded a gain of $5,356,000 related to the change in fair value of the warrant liabilities. The fair value of the Warrants of approximately $2,457,000 was estimated at September 30, 2023 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.66%.

For the three months ended September 30, 2023, we identified a casualty loss of $178,198 related to wire fraud due to a compromised electronic mail account. This incident occurred on May 17, 2023 and was discovered on July 20, 2023 when the vendor notified us of a delinquent invoice. We filed an insurance claim with our carrier on November 9, 2023 and an investigation is pending. During the nine months ended September 30, 2022, we recovered $4,442 from a financial institution involved in an October, 2021 incident.

### Summary of Statements of Operations for the Nine Months Ended September 30, 2023 and 2022

We are focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MYMD-1 and Supera-CBD. The following table summarized the results of operations for the nine months ended September 30, 2023 and 2022.

| Description Operating Expenses | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| General and Administrative | $4,202,594 | $4,296,119 |
| Research and Development | 4,907,196 | 6,596,942 |
| Stock-Based Compensation | 2,341,915 | 581,663 |
| Warrant Issuance Expenses | 762,834 | - |
| Total Operating Expenses | 12,214,539 | 11,474,724 |
| Loss from Operations | (12,214,539) | (11,474,724) |
| Other Income (Expense), net | 10,578,148 | (22,906) |
| Net Loss | $(1,636,391) | $(11,451,818) |

### Revenue

We had no revenue from operations during the nine months ended September 30, 2023 and 2022.

### General and Administrative Expenses

The table below summarizes our general and administrative expenses for the nine months ended September 30, 2023 and 2022:

| Description | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Personnel Costs | $1,022,522 | $994,219 |
| Professional Service Costs | 799,320 | 1,232,703 |
| Stock Market & Investor Relations Costs | 667,101 | 727,975 |
| Other Administrative Costs | 1,713,651 | 1,341,222 |
| Total General and Administrative Expense | $4,202,594 | $4,296,119 |

Personnel costs increased $28,303 during the nine months ended September 30, 2023. A salary was adjusted retroactively to January 1, 2023 for a corporate officer. Certain salaries, bonuses and related payroll expenses are allocated to the appropriate department based upon the employee’s responsibilities.

Professional services costs decreased $433,383 during the nine months ended September 30, 2023. These costs included legal and accounting and specialized consulting services regularly incurred in the normal course of business. The decrease is primarily related to a decrease in the use of outside consultants, reduced fees for accounting services related to our annual audit and quarterly reviews and a reduction in legal expenses.

Stock market and investor relations costs decreased $60,874 during the nine months ended September 30, 2023. These costs include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases, presentations and other communication efforts and the costs of annual shareholder meetings. The decrease is associated with the elimination of several investor relations programs that were not performing as expected during 2022.

Other administrative expenses increased $372,429 during the nine months ended September 30, 2023. These costs include Board expenses, business insurance, corporate travel and other general operating expenses. The increase is associated with a reimbursement of expenses to a related party as authorized by the Board of Directors in April 2023.

### Stock-Based Compensation

For the nine months ended September 30, 2023 and 2022, we recognized $2,341,915 and $581,663 for stock-based compensation for options issued during 2022 and 2023.to directors, officers, key staff members and external consultants.

### Warrant Issuance Expenses

During the nine months ended September 30, 2023, we issued February 2023 Warrants to purchase up to 6,651,885 shares of Common Stock in connection with the February 2023 Offering. The portion of the fees and offering expenses incurred in connection with the February 2023 Offering attributable to the issuance of the February 2023 Warrants totaled $762,834.

There were no warrant issuance expenses for the nine months ended September 30, 2022.

### Research and Development Expenses

The table below summarizes our research and development expenses for the nine months ended September 30, 2023 and 2022:

| Description | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Salaries and Wages | $1,365,490 | $843,933 |
| Development Programs | 3,148,782 | 2,782,561 |
| Professional Services | 231,634 | 108,680 |
| Regulatory Expenses | 19,784 | 2,852,145 |
| Other Research and Development Expenses | 141,506 | 9,623 |
| Total Research and Development Expenses | $4,907,196 | $6,596,942 |

Salaries and wages increased $521,557 during the nine months ended September 30, 2023. A salary was adjusted retroactively to January 1, 2023 for a corporate officer and bonuses were awarded to key employees.

Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs. Costs increased $366,221 during the nine months ended September 30, 2023 primarily due to the completion of the Phase II study for Sarcopenia and the preparation of the results data.

Professional services costs increased $122,954 during the nine months ended September 30, 2023. These costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees associated with the protection of our intellectual property.

Regulatory expenses decreased $2,832,3631 during the nine months ended September 30, 2023. These expenses are allocated to specific development programs during the three months ended September 30, 2023 and are now included in the Development Programs total described above. During the nine months ended September 30, 2022 regulatory expenses included clinical research organizations (CRO) and regulatory consulting fees associated with the Phase II clinical study design, protocol preparation and the maintenance of the investigator brochures for the Rheumatoid Arthritis trial.

Other research and development expenses increased $131,883 during the nine months ended September 30, 2023. These expenses include laboratory supplies, training and travel for department personnel while working with third-party trial sites. The increase during the nine months ended September 30, 2023 is primarily related to expenses for freight, seminars and travel.

### Other Income and Expense

The table below summarizes our other income and expenses for the nine months ended September 30, 2023 and 2022:

| Description | For the Three Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Interest and Dividend Income | $(339,731) | $(21,559) |
| Loss on Sale of Marketable Securities | 714 | 4,849 |
| Loss on changes in fair value of Marketable Securities | 371 | (1,754) |
| Loss on changes in fair value of Derivative Liabilities | (2,251,700) | - |
| Gain on changes in fair value of Warrant Liabilities | (8,166,000) | - |
| Casualty Loss/(Gain) | 178,198 | (4,442) |
| Total Other (Income), net of expenses | $(10,578,148) | $(22,906) |

Other income, net of expenses, totaled $10,578,148 and $22,906 for the nine months ended September 30, 2023 and 2022.

During the nine months ended September 30, 2023 interest and dividend income, the changes in fair value of our investments and realized losses from the sale of investments were primarily the result of rising interest rates and the increased availability of cash for investments.

During the three months ended September 30, 2023, we recorded a gain of $2,251,700 related to the change in fair value of the derivative liabilities. We estimated the $898,100 fair value of the bifurcated embedded derivative at September 30, 2023 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $0.59 on the valuation date, estimated equity volatility of 130.0%, estimated traded volume volatility of 120.0%, the time to maturity of 0.75 year, a discounted market interest rate of 5.49%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 8.2%.

During the three months ended September 30, 2023, we recorded a gain of $8,166,000 related to the change in fair value of the warrant liabilities. The fair value of the Warrants of approximately $2,457,000 was estimated at September 30, 2023 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.66%.

For the nine months ended September 30, 2023, we identified a casualty loss of $178,198 related to wire fraud due to a compromised electronic mail account. This incident occurred on May 17, 2023 and was discovered on July 20, 2023 when the vendor notified us of a delinquent invoice. We filed an insurance claim with our carrier on November 9, 2023 and an investigation is pending. During the nine months ended September 30, 2022, we recovered $4,442 from a financial institution involved in an October, 2021 incident.

### Liquidity and Capital Resources

As of September 30, 2023, the Company’s cash on hand was $298,318 and marketable securities were $8,174,283. The Company has incurred a net loss from operations of $1,636,391 for the nine months ended September 30, 2023. As of September 30, 2023, the Company had working capital of $4,040,337 and stockholders’ equity of $15,500,682 including an accumulated deficit of $97,085,475. During the nine months ended September 30, 2023, cash flows used in operating activities were $11,047,995 consisting primarily of a net loss of $1,636,391, an increase in prepaid expenses of $697,691, a reduction in trade and other payables of $639,381 and a non-cash change in the fair value of the warrant and derivative liabilities of $10,417,700 offset by non-cash stock based compensation of $2,341,915. Since its inception, the Company has met its liquidity requirements principally through the sale of its Common Stock, Preferred Stock and warrants in public and private placements.

Holders of the Company’s Series F Preferred Shares (as defined below) are entitled to certain dividends and amortization payments as described in the section titled “Series F Preferred Shares” below. Each payment may be made in cash or, at the Company’s option and subject to certain conditions, either in shares of Common Stock in an amount based on the Conversion Price (as defined below) in effect at the time that such payment is due or in a combination of cash and shares of Common Stock. If the Company elects to make all payments to the holders of the Series F Preferred Shares that fall due within the twelve-month period following September 30, 2023 in cash, the Company estimates that it will pay to the holders of the Series F Preferred Shares up to $14.3 million, assuming that a Triggering Event (as defined in the Certificate of Designation) has not occurred. The dividend rate is subject to adjustment, and the actual amount due to the holders of the Series F Preferred Shares may exceed such amount. If the Company elects to make all such payments in shares of Common Stock, based on the Conversion Price of $2.255 per share of Common Stock in effect as of September 30, 2023 and 9,859 shares of Series F Preferred Stock outstanding as of September 30, 2023, the Company estimates that it will issue to the holders of the Series F Preferred Shares up to 4.4 million shares of Common Stock. The Conversion Price is subject to adjustment, including based on the market price of the Company’s Common Stock during the thirty trading day period immediately prior to the date on which a payment is due to the holders of the Series F Preferred Shares, and the actual number of shares issuable to the holders of the Series F Preferred Shares may exceed such number. For more information regarding payments due to the holders of the Series F Preferred Shares, see the section titled “Series F Preferred Shares” below.

Management has evaluated the Company’s current cash requirements for operations in conjunction with management’s strategic plan and believes that the Company’s current financial resources as of the date of the issuance of these condensed consolidated financial statements, are sufficient to fund its current operating budget and contractual obligations as of September 30, 2023 as they fall due within the next twelve-month period, alleviating any substantial doubt raised by the Company’s historical operating results and satisfying its estimated liquidity needs for twelve months from the issuance of these condensed consolidated financial statements.

In November 2023, we amended the employment agreements of certain executive officers. We also reduced the overall compensation paid to the Company’s directors and entered into a mutual employment separation agreement with one executive officer. For more information, see Part II, Item 5 below.

#### Operating Activities

During the nine months ended September 30, 2023, cash flows used in operating activities were $11,047,995 consisting primarily of a net loss of $1,636,391, an increase in prepaid expenses of $697,691, a reduction in trade and other payables of $639,381 and a non-cash change in the fair value of the warrant and derivative liabilities of $10,417,700 offset by non-cash stock based compensation of $2,341,915.

Our net cash used by operating activities totaled $10,021,664 during the nine months ended September 30, 2022. Net cash used consisted principally of the net loss of $11,451,818 partially offset by non-cash stock based compensation of $581,663 and an increase in trade and other payables of $730,683.

#### Investing Activities

Our net cash used in investing activities totaled $4,088,466 for the nine months ended September 30, 2023 as compared to cash provided by investing activities totaling $4,225,595 during the nine months ended September 30, 2022. During the nine months ended September 30, 2023 we purchased securities totaling $13,338,466 and sold securities totaling $9,250,000. During the nine months ended September 30, 2022 we purchased securities totaling $4,774,405 and sold securities totaling $9,000,000.

#### Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2023 was $14,685,689, which consisted of the net proceeds from the sale of the Series F Preferred Shares, net of offering costs. Net cash provided by financing activities during the nine months ended September 30, 2022 was $5,550,028.

#### August 2022 Offering

On August 15, 2022, we entered into a securities purchase agreement (the “August 2022 SPA”) with certain accredited and institutional investors pursuant to which we agreed to issue 1,411,764 shares of Common Stock (the “August 2022 Shares”) in a registered direct offering and unregistered warrants to purchase up to an aggregate of 1,411,764 shares of Common Stock in a concurrent private placement (the “August 2022 Warrants”). The August 2022 Warrants have an exercise price of $5.25 per share, became exercisable six months following the date of issuance and have a term of exercise equal to five years from the initial exercise date. We received net proceeds from the sale of the August 2022 Shares and the August 2022 Warrants, after deducting fees and other estimated offering expenses payable by the Company, of approximately $5.5 million. As of September 30, 2023, none of the August 2022 Warrants have been exercised and 1,411,764 of the August 2022 Warrants remain outstanding.

#### February 2023 Offering

On February 21, 2023, we entered into a Securities Purchase Agreement (the “February 2023 SPA”) with certain accredited investors, pursuant to which we agreed to sell in a registered direct offering (the “February 2023 Offering”) (i) an aggregate of 15,000 shares (the “Series F Preferred Shares”) of our newly-designated Series F Convertible Preferred Stock, with a stated value of $1,000 per Preferred Share and without par value (the “Series F Preferred Stock”), convertible into shares of Common Stock (the “Series F Conversion Shares”) pursuant to the terms of the Certificate of Designations of the Series F Preferred Stock (the “Certificate of Designation”), and (ii) 6,651,885 warrants (the “February 2023 Warrants”) to acquire up to an aggregate of 6,651,885 shares of Common Stock, subject to adjustment (the “February 2023 Warrant Shares”). The Conversion Price (as defined below) is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).

At closing, we received net proceeds from the February 2023 Offering of approximately $13.9 million, after deducting various fees and expenses. We intend to use the net proceeds from this offering for general corporate purposes.

#### Series F Preferred Shares

The terms of the Series F Preferred Shares are as set forth in the form of Certificate of Designation. The Series F Preferred Shares are convertible into the Conversion Shares at the election of the holder at any time at an initial conversion price of $2.255 (the “Conversion Price”). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). The Company is required to redeem the Series F Preferred Shares in 12 equal monthly installments, commencing on July 1, 2023. The amortization payments due upon such redemption are payable, at the company’s election, in cash, or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Company’s Common Stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) a “Floor Price” of $0.22 (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) or, in any case, such lower amount as permitted, from time to time, by the Nasdaq Stock Market. The Company may require holders to convert their Series F Preferred Shares into Conversion Shares if the closing price of the Common Stock exceeds $6.765 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 20 consecutive trading days and the daily dollar trading volume of the Common Stock exceeds $3,000,000 per day during the same period and certain equity conditions described in the Certificate of Designation are satisfied.

The holders of the Series F Preferred Shares are entitled to dividends of 10% per annum, compounded monthly, which are payable in cash or shares of Common Stock at the Company’s option, in accordance with the terms of the Certificate of Designation. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designation), the Series F Preferred Shares will accrue dividends at the rate of 15% per annum. In connection with a Triggering Event, each holder of Series F Preferred Shares will be able to require the Company to redeem in cash any or all of the holder’s Series F Preferred Shares at a premium set forth in the Certificate of Designation. Upon conversion or redemption, the holders of the Series F Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of Series F Preferred Shares have no voting rights on account of the Series F Preferred Shares, other than with respect to certain matters affecting the rights of the Series F Preferred Shares. During the three and nine months ending September 30, 2023, the Company recorded dividends totaling $1,158,051 and 1,690,180, which are reported as Preferred Stock Dividends on the Condensed Consolidated Statement of Comprehensive Income (Loss).

The Company is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designation), distributions or redemptions, and the transfer of assets, among other matters. There is no established public trading market for the Series F Preferred Shares and the Company does not intend to list the Series F Preferred Shares on any national securities exchange or nationally recognized trading system.

#### February 2023 Warrants

The February 2023 Warrants are exercisable immediately upon issuance at an exercise price of $2.255 per share (the “Exercise Price”) and expire five years from the date of issuance. The Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Exercise Price (subject to certain exceptions). Upon any such price-based adjustment to the Exercise Price, the number of Warrant Shares issuable upon exercise of the Warrants will be increased proportionately. There is no established public trading market for the February 2023 Warrants and the Company does not intend to list the February 2023 Warrants on any national securities exchange or nationally recognized trading system.

#### Nasdaq Stockholder Approval

Our ability to issue Series F Conversion Shares and February 2023 Warrant Shares using shares of Common Stock is subject to certain limitations set forth in the Certificate of Designation and the February 2023 Warrants, including certain beneficial ownership limitations. When the Series F Preferred Shares and the February 2023 Warrants were issued, we were restricted from issuing Series F Conversion Shares and February 2023 Warrant Shares in excess of 19.99% of the shares of Common Stock outstanding as of the date immediately prior to the issuance of the Series F Preferred Shares and the February 2023 Warrants (the “Issuable Maximum”) until the Company obtained stockholder approval for the issuance of shares of Common Stock in excess of the Issuable Maximum (“Stockholder Approval”). The Company received the Stockholder Approval on July 31, 2023.

### Critical Accounting Policies

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with US GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, costs and expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our condensed consolidated financial statements are prepared. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

Except as noted below, our critical accounting estimates have not changed materially from those previously reported in our Annual Report for the year ended December 31, 2022, on Form 10-K.

#### Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “*Derivatives and Hedging.”* If liability accounting is required, the Company’s derivative instruments are recorded at fair value at the issuance date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.

The Company has determined that the Series F Convertible Preferred Stock warrants are derivatives that are required to be accounted for as liabilities. The Company has also determined that the following embedded features in the preferred stock are not clearly and closely related to the debt host instrument: 1) make-whole interest upon a contingent redemption event, 2) make-whole interest upon a conversion event, 3) an installment redemption upon an Equity Conditions Failure (as defined in the Certificate of Designation), and 4) variable share-settled installment conversion and as such are bifurcated from the preferred stock and accounted for as liabilities. The fair value of the warrants and embedded features are estimated using internal valuation models. The Company’s valuation models utilize inputs and other assumptions and may not be reflective of the price at which they can be settled.

## Market risk

As filed, 182 characters.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

## Controls and procedures

As filed, 1,212 characters.

### Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 13a-15(c) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended September 30, 2023 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

## Risk factors

As filed, 6,674 characters.

The following description of risk factors includes any material changes to, and supersedes the description of, risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report for the year ended December 31, 2022 on Form 10-K, as filed with the SEC on March 31, 2023. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.

***We do not satisfy all continued listing requirements of Nasdaq. There can be no assurance that we will be able to comply with the continued listing requirements of Nasdaq.***

As previously disclosed, on October 11, 2023, we received a written notice (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market indicating that for the last 30 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The Notice had no immediate effect on the listing of our Common Stock and our Common Stock will continue to be listed on Nasdaq under the symbol “MYMD.”

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until April 8, 2024, to regain compliance with the Minimum Bid Price Requirement. If at any time before April 8, 2024, the bid price of our Common Stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will provide us with a written confirmation of compliance with the Minimum Bid Price Requirement.

If we do not regain compliance with the Minimum Bid Price Requirement by April 8, 2024, we may be eligible for an additional 180-day compliance period, provided that on the 180th day of the first compliance period we meet the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of the Minimum Bid Price Requirement, and notifies Nasdaq of our intent to cure the deficiency with the Minimum Bid Price Requirement during the second compliance period by effecting a reverse stock split, if necessary. If we do not regain compliance with the Minimum Bid Price Requirement when required, Nasdaq will provide written notification to us that our Common Stock is subject to delisting. In the event of such a notification, the Company may appeal the Nasdaq staff’s determination to delist its securities.

We intend to actively monitor the bid price for our Common Stock between now and April 8, 2024, and will consider our available options to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement or maintain compliance with any of the other Nasdaq continued listing requirements.

If Nasdaq delists our shares of Common Stock or warrants from trading on its exchange for failure to meet Nasdaq’s listing requirements, we and our stockholders could face significant material adverse consequences including:

- a limited availability of market quotations for our securities;
- reduced liquidity for our securities;
- a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
- a limited amount of news and analyst coverage; and
- a decreased ability to issue additional securities or obtain additional financing in the future.

***We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position.***

Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We will primarily rely on patent, copyright, trademark and trade secret laws, as well as nondisclosure agreements and other methods, to protect our proprietary technologies or processes. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose proprietary technologies and processes, despite efforts by the us to protect our proprietary technologies and processes. While we hold rights in several patents, there can be no assurances that any additional patents will be issued, or additional rights will be granted, to us. Even if new patents are issued, the claims allowed may not be sufficiently broad to adequately protect our technology and processes. Our competitors may also be able to develop similar technology independently or design around the patents to which we have rights.

Currently, MyMD has 16 issued U.S. patents, 63 foreign patents, three pending U.S. patent applications and 11 foreign patent applications pending in such jurisdictions as Australia, Canada, China, European Union, Israel, Japan and South Korea, which if issued are expected to expire between 2036 and 2041. Although we expect to obtain additional patents and in-licenses in the future, there is no guarantee that we will be able to successfully obtain such patents or in-licenses in a timely manner or at all. Further, any of our rights to existing patents, and any future patents issued to us, may be challenged, invalidated or circumvented. As such, any rights granted under these patents may not provide us with meaningful protection. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. If our patents or rights to patents do not adequately protect our technology or processes, competitors may be able to offer products similar to our products.

Filed Nov 14, 2023.
Source: SEC EDGAR, the filing index for accession 0001493152-23-041328. Last ingested by Listed: Oct 24, 2026, 15:11 ET. No prices; not investment advice.